Posts Tagged: "Lanham Act"

The U.S. Supreme Court agreed yesterday to review a Federal Circuit ruling that held unconstitutional a law prohibiting registration of trademarks that “may disparage” people or groups. In a case involving an Asian-American dance band’s bid to register its name THE SLANTS as a trademark, the court will consider whether the bar on registering disparaging marks in Section 2(a) of the Lanham Act, 15 U.S.C. § 1052(a), violates the First Amendment guarantee of free speech. In the meantime, the Court is expected to rule soon on the Washington Redskins’ cert petition in Pro-Football, Inc. v. Blackhorse, No. 15-1874, challenging a decision of the Eastern District of Virginia upholding the PTO’s cancellation of the REDSKINS trademarks under that same provision.

Trader Joe’s sued Hallatt (d/b/a Pirate Joe’s) for trademark infringement in the Western District of Washington, invoking the court’s federal question and supplemental jurisdiction. Trader Joe’s alleged that: (1) Hallatt misled consumers into falsely believing Pirate Joe’s was authorized or approved by Trader Joe’s; (2) utilized a confusingly similar “South Pacific” trade dress for his Pirate Joe’s store; (3) displayed Trader Joe’s trademarks in connection with the sale of products at Pirate Joe’s; and (4) resold Trader Joe’s products without authorization and without adherence to Trader Joe’s’ strict quality control practices. Trader Joe’s claimed Hallatt’s behavior diluted its trademarks, confused consumers, and damaged Trader Joe’s reputation by associating it with high price, lower quality products. Trader Joe’s sought damages and to permanently enjoin Hallatt from reselling its goods or using its trademarks in Canada.

Every year countless stories arise of individuals, churches, and small businesses, receiving cease and desist letters from the NFL or NCAA for unauthorized use and reference to their respective SUPER BOWL, MARCH MADNESS, and other trademarks. The success of these enforcement letters comes from a mixture of the organizations’ trademark rights under the Lanham Act and the fear that these financially well-endowed organizations could sue. The International Olympic Committee (“IOC”), and its national governing bodies, like the USOC (collectively the “Olympic Committee”), also aggressively enforce their rights in their Olympic trademarks, slogans, and symbols (the “Olympic properties”). The Olympic Committee not only employs the traditional methods of other sport organizations, but has several additional weapons that provide a true monopoly on the Olympic properties; thus, significantly increase its success.

Two cases making their way through the Federal courts may force the Supreme Court to consider the issue of what sorts of trademarks should be considered “disparaging,” and whether the government may lawfully prevent the registration of such trademarks… The Redskins appealed to the Fourth Circuit in August 2015 and the parties’ and amici briefs have been rolling ever since. As of April 25, 2016, the Redskins have petitioned the United States Supreme Court to review their case, skipping over the Fourth Circuit Court of Appeal.

Tam appealed to the Trademark Trial and Appeal Board (the “Board”), but the Board affirmed the Trademark Examiner’s refusal to register the mark. The Board found that although THE SLANTS has several meanings, the record demonstrated that it was “abundantly clear” that the likely meaning of the mark referred to people of Asian descent. Mr. Tam again appealed, this time to the Federal Circuit, arguing that § 2(a) is unconstitutional. The first time around, the Federal Circuit agreed with the Examiner and the Board. In a rare procedure, the Federal Circuit sua sponte ordered a rehearing en banc to review the constitutionality of § 2(a). Upon rehearing en banc, the Federal Circuit overturned McGinley in its 9-3 decision.

Yesterday the Federal Circuit in an en banc decision held that the portion of Section 2(a) of the Trademark Act, which bars federal registration for trademarks that are disparaging, is unconstitutional under the First Amendment. The government advanced three principal arguments for why §2(a) did not violate the First Amendment: (1) because §2(a) does not “prohibit” or suppress speech at all; (2) because trademark registration is government speech; and (3) because §2(a) merely withholds a government subsidy. The Court rejected all three of the government’s arguments, and in doing so issued holdings on three separate issues that have divided other tribunals.

Section 1071(b)(3) does not expressly or implicitly permit the award of “attorney fees” to the PTO. Specifically, Section 1071(b)(3) states simply that all the expenses of the proceeding shall be paid by the party bringing the case, whether the final decision is in favor of such party or not. By its express terms, the statute merely allows for the award of “expenses,” and not “attorney fees.”

Last week the Federal Circuit scheduled oral argument en banc in THE SLANTS trademark case for the morning of October 2, 2015, taking up the question of whether §2(a) of the Lanham Act (15 U.S.C. § 1052(a)) can withstand First Amendment scrutiny. Writing separately after the panel decision, Judge Moore offered 24 pages of “additional views” on the matter, encouraging the Federal Circuit to “revisit McGinley’s holding on the constitutionality of §2(a),” noting that “the protection accorded to commercial speech has evolved significantly since the McGinley decision.”