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SCOTUS Declares That the PTO Is Not A Safe Space

John Shu June 26, 2017
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Yesterday, the U.S. Supreme Court released its opinion, Matal v. Tam, previously known as Lee v. Tam, regarding viewpoint discrimination and the First Amendment.  The name changed when Michelle Kwok Lee,[1] the U.S. Patent & Trademark Office (“PTO”) director at the time of the original lawsuit and appeals, resigned and Secretary of Commerce Wilbur Ross appointed Joseph Matal as interim PTO director on June 7, 2017.

The heart of the case was whether the PTO could deny registration to those trademarks which it deems “may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute” (emphasis added) under § 2 of the Lanham Act of 1946, 15 U.S.C. § 1052(a).[2], [3]  The trademark in question was the name of a dance-rock band, “The Slants,” of which Mr. Simon Tam and his fellow band members, all Asian-Americans, belonged. In other words, did the Lanham Act authorize the PTO to make an offense-free “safe space” out of trademark applications?

While SCOTUS unanimously answered “no” in a 8-0 vote (Justice Gorsuch was not part of the case), the reasoning was split.  Chief Justice Roberts and Justices Kennedy, Ginsburg, Breyer, Sotomayor, and Kagan joined Justice Alito’s opinion on Parts I, II, and III-A, and Justice Thomas joined Parts I and III-A but not Part II; and Chief Justice Roberts and Justices Thomas and Breyer joined Parts III-B, III-C, and IV.  Justice Kennedy filed a separate opinion in which Justices Ginsburg, Sotomayor, and Kagan joined.  Justice Thomas filed a separate opinion.

The essence of the opinions is that the First Amendment does not permit the PTO to decide which trademark applications “may disparage” because that is viewpoint discrimination.  The Court rejected all of the PTO’s constitutional arguments.  For example, the PTO unsuccessfully argued, inter alia, that trademarks are government speech, not private speech; trademarks are a limited public forum; trademarks are commercial speech; the Lanham Act was viewpoint neutral because it applies in equal measure to any trademark that demeans or offends, even though it is the government that decides what is considered “demeaning” or “offensive.”

One of the PTO’s self-inflicted problems was that over the years the PTO granted many trademarks that the average reasonable person might find disparaging.  For example, the PTO granted the rap group N.W.A. its trademark.  Moreover, it granted trademarks to the San Francisco motorcycle club “Dykes on Bikes” and the hit television show “Queer Eye For The Straight Guy” because those applicants claimed that they were “taking back” the offensive terms as a show of strength, the exact same argument that Simon Tam made and the PTO rejected.[4]

The PTO used a two-part test when deciding whether a trademark is considered “disparaging.”  According to § 1203.03(b)(i) of the Trademark Manual of Examining Procedure:

“The following two-part test applies in determining whether a proposed mark is disparaging:

  1. What is the likely meaning of the matter in question, taking into account not only dictionary definitions, but also the relationship of the matter to the other elements in the mark, the nature of the goods or services, and the manner in which the mark is used in the marketplace in connection with the goods or services; and
     
  2. If that meaning is found to refer to identifiable persons, institutions, beliefs or national symbols, whether that meaning may be disparaging to a substantial composite of the referenced group.”

The manual also states that “In such cases, the examining attorney must make a prima facie showing that a substantial composite, although not necessarily a majority, of the referenced group would find the proposed mark, as used on or in connection with the relevant goods or services, to be disparaging in the context of contemporary attitudes (emphasis added).”[5][6]  At this point, the PTO has made its prima facie case of disparagement, and the burden shifts to the trademark applicant to rebut the PTO’s finding and prove that the trademark is not disparaging.  Moreover, the manual states that “The fact that an applicant may be a member of that group or has good intentions underlying its use of a term does not obviate the fact that a substantial composite of the referenced group would find the term objectionable.”

This was the constitutional infirmity. Justice Alito wrote that “[t]he disparagement clause denies registration to any mark that is offensive to a substantial percentage of the members of any group.  That is viewpoint discrimination in the sense relevant here:  Giving offense is a viewpoint (emphasis added). The ‘public expression of ideas may not be prohibited merely because the ideas are themselves offensive to some of their hearers.’ (citing Street v. N.Y., 394 U. S. 576, 592 (1969).”

Justice Kennedy’s opinion shared these sentiments, writing that the government’s position “misses the point,” and that

“a subject that is first defined by content and then regulated or censored by mandating only one sort of comment is not viewpoint neutral. … Indeed, a speech burden based on audience reactions is simply government hostility and intervention in a different guise.  The speech is targeted, after all, based on the government’s disapproval of the speaker’s choice of message.  And it is the government itself that is attempting in this case to decide whether the relevant audience would find the speech offensive … A law that can be directed against speech found offensive to some portion of the public can be turned against minority and dissenting views to the detriment of all.  The First Amendment does not entrust that power to the government’s benevolence.  Instead, our reliance must be on the substantial safeguards of free and open discussion in a democratic society.”

The three opinions seemed to disagree on the level of scrutiny which should have been used to analyze this case:  strict scrutiny, or a lesser-but-still-heightened scrutiny which the Court used in Central Hudson Gas & Elec. v. Public Serv. Comm’n of N.Y., 447 U.S. 557 (1980) (SCOTUS instituted a four-step analysis for government regulation of commercial speech).  Because Justice Alito’s opinion stated that the PTO’s actions and the Lanham Act would not even satisfy a Central Hudson analysis, it left the specific question unanswered.

Matal v. Tam means that the Washington Redskins football team and other organizations may keep or apply for trademarks which might offend or disparage some undefined “substantial composite” of a particular subset of the population.  The case declares that the government may not create a statutory or regulatory “safe space” which forbids anything and everything that any person might find offensive or disparaging.  At the same time, if a person dislikes a particular trademark or brand name, for any reason, it is up to that person to decide whether or not to purchase those products.

 

[1]           Ms. Lee, an Obama appointee, is the first woman to serve as Director of the U.S. Patent and Trademark Office.

 

[2]           The Lanham Act is named after Congressman Frederick Garland “Fritz” Lanham of Texas.  President Truman signed it into law.  It took effect on July 6, 1947.

 

[3]           The law theoretically forbids trademarks which “may disparage,” for example, Donald Trump, Barack Obama, John F. Kennedy, Ronald Reagan, Idi Amin, Aum Shinrikyo, the Climate Change Institute at the University of Maine, etc.

[4]           There is some speculation that the PTO rejected “The Slants” because Ms. Lee is Asian-American.

 

[5]           In this case, the PTO claimed that it consulted www.urbandictionary.com and received several submissions from special interest groups to determine that “The Slants” was disparaging to Asian-Americans.

 

[6]           The PTO likely relied on this “contemporary attitudes” language to strip the Washington Redskins of its trademark, as presumably the trademark was not considered “disparaging” when the football organization first applied for it.

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