Supreme Court Strikes Down Ban on Disparaging Trademarks

The Supreme Court on Monday in Matal v. Tam unanimously struck down part of a 70-year old federal trademark law, holding that it violates the Free Speech Clause of the First Amendment.

Background

Simon Tam leads a four-person band. All four band members are Asian-Americans, and their band name is The Slants—€”a name for which Simon Tam sought trademark registration. The U.S. Trademark Office denied Tam's application, citing the disparagement clause of Section 2(a) of the Lanham Act, which prohibits registration of trademarks that "disparage . . . persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute." 15 U.S.C. 1052(a). Tam challenged this law on First Amendment grounds, arguing that the disparagement clause is unconstitutional because it discriminates based on the viewpoint of the speech—€”€”i.e., that the law prohibits disparaging trademarks but permits non-disparaging trademarks. The Supreme Court agreed, and struck down the disparagement clause as unconstitutional.

The Supreme Court's Decision

The Court held (1) that Tam's mark was in fact disparaging, (2) that trademarks are not government speech, and (3) that the disparagement clause is facially unconstitutional. The Court split 4-4 on the reason why the clause is unconstitutional. (Justice Gorsuch did not participate.) The Court appears to agree that the disparagement clause is a form of viewpoint discrimination. But the Court seems to disagree about the meaning of "viewpoint discrimination" and its place in First Amendment law.

At the outset, the Court held 7-1 that Tam's mark was in fact disparaging. (Justice Thomas would have found that Tam waived this argument.) Tam tried to convince the Court that his mark did not disparage any "person" within the meaning of Section 2(a) because racial or ethnic groups are not individual "persons." The Court swiftly rejected this argument as "meritless." Op. at 9.

The Court also held 8-0 that trademarks are private speech, not government speech. In a 2015 case, Walker v. Sons of Confederate Veterans, the Court held 5-4 that license plates with personally chosen designs are government speech, not private speech. The Court on Monday was careful to distinguish trademarks from personalized license plates. The latter, said the Court, "have long been used by the States to convey state messages"; "are often closely identified in the public mind with the State, since they are manufactured, . . . owned, and . . . designed by the State, and serve as a form of government ID"; and whose messages are "direct[ly] control[led]" by the State. Op. at 17. For these reasons, said the Court, trademarks are not akin to the government speech in Walker. The Court went on to suggest that, if trademarks constituted government speech, then copyrighted works might too constitute government speech, which could permit broad censorship of copyrighted works such as books, songs, and films. See Op. at 18.

Four justices (Kennedy, Ginsburg, Sotomayor, and Kagan) viewed the disparagement clause as a straightforward case of viewpoint discrimination. "[A]n applicant may register a positive or benign mark but not a derogatory one. The law thus reflects the Government's disapproval of a subset of messages it finds offensive. This is the essence of viewpoint discrimination." Op. of Kennedy, J., at 2-3. For those four justices, that determination resolved the case because viewpoint-based discrimination of non-government speech is not permitted.

The other four justices (Alito, Roberts, Thomas, and Breyer) reached the same conclusion, but by a different path. They found that the disparagement clause failed the test for permissible regulations of commercial speech as laid out in the Central Hudson case, which requires that such regulations must serve "a substantial interest" and must be "narrowly drawn." Op. of Alito, J., at 23-26. (These four justices found it unnecessary to decide whether trademarks constitute commercial speech.) They also found that the disparagement clause was neither a government "subsidy" nor a government "program" that might be permissible under the First Amendment. Op. of Alito, J., at 18-23.

In concluding that the disparagement clause is not a government "program," these four justices appear to agree with their colleagues that the disparagement clause is a form of viewpoint-based discrimination, but not in the same matter-of-fact way: "Our cases use the term 'viewpoint' discrimination in a broad sense, and in that sense, the disparagement clause discriminates on the bases of 'viewpoint.' . . . We have said time and again that ‘the public expression of ideas may not be prohibited merely because the ideas are themselves offensive to some of their hearers.' For this reason, the disparagement clause cannot be saved by analyzing it as a type of government program." Op. of Alito, J., at 22-23.

So what does this mean for trademark law going forward?

In the short term, this decision means that the Trademark Office cannot use the disparagement clause to deny registration for disparaging marks.

Going forward, the next most likely legal challenges will be to other words in Section 2(a)€—€”specifically that "scandalous" and "immoral" marks cannot be registered. (Think marks that are sexually explicit in nature.) The Court's opinion technically did not foreclose First Amendment challenges to "scandalous" or "immoral" marks, but it's hard to see how a court could distinguish (in a legally significant way) between "disparaging" marks and "scandalous" or "immoral" marks. No doubt that litigants will try.

Additionally, the Court's decision puts the trademark-law ball in Congress's court. Congress could amend Section 2(a) in a variety of ways to try and prevent certain marks from being registered. It remains to be seen what those amendments might look like, whether such amendments would survive court challenges, or even if Congress decides to do anything at all in response to the Court's decision.

What does the Court's decision mean for First Amendment law more generally?

Notably absent from Monday's decision is one of the primary arguments that the government advanced: the disparagement clause does not restrict Tam's speech. He is free to call his band 'The Slants' and the government is not stopping him. That argument appears to have fallen on deaf ears, as the Court seems to have foreclosed the 'no-speech-restricted' argument when the government engages in viewpoint-based discrimination of non-government speech (or maybe even conduct).

The Court also left some important questions unanswered. First, the scope of what is a government "subsidy" remains uncertain. Four justices endorsed that view that a government "subsidy" is limited to cash payments and tax breaks—€”€”it does not include government "services." Op. of Alito, J., at 19-20. The other justices did not express a view on that issue. Second, the Court did not decide whether or how First Amendment challenges to trademark laws (or state unfair-competition laws) fit within the Court's First Amendment cases on commercial speech. The Court expressly left those questions unanswered, with no justices expressing any view them. Finally, it is unclear what role viewpoint discrimination will play in First Amendment law going forward, as evidenced by the split among the participating justices. Stay tuned for further developments now with a full court of nine.

Fish & Richardson represented several Members of Congress as amici curiae in this case in support of neither party.

Author: Brian Apel