Matal and Brunetti: When Derogatory isn’t Derogatory
In 2017, two registration prohibiting provisions of the Trademark Act of 1946 (“The Lanham Act”) were found unconstitutional under the First Amendment. These decisions raise important considerations for persons and companies whose trademarks may have been previously denied registration on such grounds or those considering registration of plausibly disparaging or scandalous marks.
In Matal v. Tam, 137 S. Ct. 1744, 1765 (2017), the lead singer of the rock group “THE SLANTS” appealed The United States Patent and Trademark Office’s (USPTO) refusal to register his band name as a trademark on the principal register due to a Lanham Act provision which prohibits registration of marks that may “disparage . . . or bring . . . into contemp[t] or disrepute” any “persons, living or dead.” 15 U.S.C. §1052(a).
The band members sought to take control of an Asian ethnic stereotype commonly used to criticize them but were denied registration because “slants” is a derogatory remark used to disparage those of Asian descent.
The trademark examiner employed an established two-part test in determining whether the applied for mark was disparaging. First, he considered the likely meaning of the matter in question, and if that meaning referred to identifiable persons, institutions, beliefs, or national symbols, and second, he considered whether that meaning may be disparaging to a substantial composite of the referenced group. If both criteria were met, the mark was deemed disparaging and denied registration unless the applicant proved that the mark was not disparaging.
The examiner for the SLANTS mark, relying on reports of a past performance that was cancelled due to the band’s name and various online angry blog and article commentator posts, found that “THE SLANTS” was disparaging under the Lanham Act and refused registration.
After a series of appeals to various courts, the Supreme Court of the United States found the disparagement provision facially invalid under the First Amendment’s free speech clause. The Supreme Court rejected the three arguments advanced by the USPTO as to why the provision did not violate the Free Speech clause:
Trademarks are government speech immune to First Amendment attacks;
Trademarks are a form of government subsidy; and,
The constitutionality of the disparagement clause should be tested under a new “government-program” doctrine.
Normally, the free speech clause does not regulate government speech, which means the government is exempt from First Amendment scrutiny, however, the Supreme Court concluded that trademark registration is private, not government, speech given that the government “does not open the principal register to any exchange of ideas”—it is merely ancillary to trademark registration. Thus, the government cannot escape the ambit of the Free Speech clause in deciding to grant or reject a trademark application.
Next, the government argued that trademark registration was a government subsidy, obligating the Court to uphold the constitutionality of government programs that subsidized speech expressing a particular viewpoint the way they had previously done in cases prior to Matal. But the Court distinguished Matal from prior government subsidy cases because those cases all involved cash subsidies or their equivalent.
The Justices found that trademark registration was not a subsidy because the USPTO does not pay money to people seeking trademark registration; rather applicants pay the government a filing fee. And finally, the Court refused to adopt the so-called government-program doctrine analysis, which is basically a merger of the government-speech and subsidy cases.
The two cases the government cited, which implemented the doctrine, were far removed from the registration of trademarks. Accordingly, the Court found that the government discriminated on the basis of viewpoint, i.e. whether the mark offends, which violates the principle that public idea expression could not be censored merely because its ideas are offensive to some listeners.
Because the disparagement clause did not fall into any of the above categories, the parties disputed what level of scrutiny applied to analyze the provision. Strict scrutiny is triggered when the government discriminates on the basis of viewpoint, while a more relaxed, intermediate scrutiny test applies for commercial speech.
The Court declined to resolve which test applied to trademark registration because it found that the disparagement clause could not withstand even the less-strict commercial speech test. Restrictions on commercial speech must serve a substantial interest and be narrowly drawn. Here, the USPTO could not assert a substantial interest in preventing speech that offends, and the subject provision was overly broad in that it applied to more than just discriminatory marks and encompassed dead persons and institutions.
Therefore, The Matal Court struck down the disparagement clause as violative of the First Amendment’s Free Speech clause.
After the Matal decision, many intent-to-use applications for disparaging marks were filed, such as “Young Niggah World” for multimedia entertainment and “Niggademus” for clothing. The USPTO has approved registration of “Dykes on Bikes” for a nonprofit lesbian motorcycle organization and has dropped an ongoing dispute with the Washington Redskins football team over the team’s trademark “Redskins,” which the USPTO viewed as disparaging toward Native Americans.
Several months after Matal, the Court of Appeals for the Federal Circuit in In re Brunetti, 877 F.3d 1330, 1357 (Fed. Cir. 2017), reversed the USPTO’s denial of the registration of the mark “FUCT,” finding the immoral or scandalous provision of the Lanham Act unconstitutional. In Brunetti, an applicant sought to register his trademark “FUCT” for a clothing brand, but the USPTO denied registration, finding the mark comprised immoral or scandalous matter in violation of §2(a) of the Lanham Act.
In determining which test applied to free speech challenges to the Lanham Act, the Court of Appeals found that trademarks are not commercial speech because they go beyond “propos[ing] a commercial transaction” and “often have an expressive content.” The court found that the immoral or scandalous provision of the Lanham Act was aimed primarily at the expressive, and not the product-identification, aspects of a trademark, thus subjecting the Lanham Act provision to strict scrutiny for its content-based restriction on speech. Citing Reed v. Town of Gilbert, 135 S. Ct. 2218 (2015), the court followed the rule that strict scrutiny requires “the government to ‘prove that the restriction furthers a compelling interest and is narrowly tailored to achieve that interest.’”
There was no dispute that the immoral or scandalous provision of the Lanham Act would fail the strict scrutiny speech restriction test, but the parties disputed whether the provision could satisfy intermediate scrutiny under the commercial speech test. Restrictions on commercial speech are subject to a four-part test that looks at whether
The speech concerns lawful activity and is not misleading;
The asserted government interest is substantial;
The regulation directly advances that government interest; and
The regulation is “not more extensive than necessary to serve that interest.”
With the first element undisputed, the court rejected the government’s purported substantial interests in promoting certain trademarks over others and/or protecting the general public or the government from marks that are off-putting or profane.
The court found that trademarks are not forced upon unsuspecting listeners, and registration of marks does not make them more accessible to children. Even if shielding the public from these types of marks was a substantial interest, the government could not satisfy the third element of the test—that “the regulation directly advances that government interest”—because the provision does not prevent applicants from using their marks on clothing, TV/radio advertisements, or billboards; it only prevents them from being registered.
Finally, the government could not prove that the regulation was “not more extensive than necessary” because the USPTO’s inconsistent application of the provision supported the inference that the provision had not been narrowly tailored. For example, the USPTO had approved of the mark “Fugly” for use on clothing yet refused registration for use on alcoholic beverages. Similarly, registration of “Turd Herders” was approved, while “Roll Turd” was rejected. With the scandalous or immoral provision unable to withstand even intermediate scrutiny, the Court of Appeals held the provision unconstitutional under First Amendment free speech principles.
Currently the period to file a petition for a writ of certiorari to the U.S. Supreme Court expires on July 11, 2018, unless extended. In the interim, the USPTO has released Examination Guidelines stating that it “will continue to examine applications for compliance with the scandalousness provision while the constitutionality of the provision remains subject to potential  review.” Current or future suspensions of a trademark application based on violation of the scandalous or immoral provisions of the Lanham Act will remain in place until the period to petition ends, or if a petition is filed, the later of denial of certiorari or termination of Supreme Court proceedings in the case. Then the USPTO will decide whether continued suspension or new procedural guidance is necessary.