Choosing the Right Name: How the U.S. Supreme Court Changed Trademark Law in 2017

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Names are important, especially for organizations. They are meant to distinguish one thing from another in the marketplace. However, names are more than just identifiers. They can evoke an organization’s culture and attitude, stir emotions, and, when chosen poorly, can cause an otherwise good product or organization to be a failure. This summer the U.S. Supreme Court struggled with all of these aspects of names when it decided whether the U.S. Patent and Trademark Office (USPTO) could deny a trademark because a name disparages others.

The case Matal v. Tam (2017), decided by the U.S. Supreme Court on June 19, 2017, concerned a band’s attempt to register its name, The Slants, with the USPTO. The band, whose members are Asian American, wanted to use the racially charged name in an attempt to “‘reclaim’ the term and drain its denigrating force” (Matal v. Tam, 2017, p. 1751). To protect their trademark the band applied for registration of The Slants, but were ultimately denied because federal law under 15 U.S.C §1052(a) denies registration for trademarks that “disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute.”

Under this law, a trademark’s potential disparagement is determined by using a two-step process. First the trademark examiner evaluates the trademark and determines its “likely meaning” (Matal v. Tam, 2017, p. 1753). During this process the examiner determines whether the meaning refers to persons (i.e. groups) or individuals. If the mark does refer to persons, the examiner then determines if the meaning was disparaging to a “substantial composite” of the persons (Matal v. Tam, 2017, p. 1754). This composite does not have to be the majority, and even if the applicant is a member of the group (as was the case with The Slants) the trademark can still be denied based on disparagement. If the mark is considered disparaging then the applicant has the burden to prove the mark is not (Matal v. Tam, 2017).

The Slants went through this process, and ultimately their mark was denied by the USPTO because of the disparagement analysis. The band challenged the denial of their trademark in federal court on several grounds. Ultimately the U.S. Court of Appeals for Federal Circuit held that the statute was unconstitutional under the First Amendment. The case was appealed and the U.S. Supreme Court unanimously agreed that the disparagement clause in the Lanham Act was unconstitutional (Justice Neil Gorsuch did not take part in the decision).

Writing the majority opinion Justice Samuel Alito found that the statute violated the First Amendment. In his opinion, the U.S. Supreme Court affirmed the en banc decision made by the U.S. Court of Appeals for the Federal Circuit, which found that the disparagement clause in trademark applications amounted to a viewpoint based speech restriction that could not survive strict scrutiny analysis.

The U.S. government argued that trademark registration was government speech (which is not subject to scrutiny under the First Amendment) or, in the alternative, speech in the form of a government subsidy (which constitutes speech the government can restrict). The court rejected both of these arguments, as well as the government’s request for a new speech standard for “government program” speech (Matal v. Tam, 2017, p. 1757). The majority opinion made note that merely because the government grants a trademark does not mean it is endorsing the message of that mark. The U.S. Supreme Court held that trademarks were private, not government, speech.

The government also argued that under commercial speech a trademark would not be subject to strict scrutiny but a lower level of scrutiny that would allow for more restrictive regulation. That argument was also rejected by the court. The court noted that Tam and other amici briefs argued that trademarks, aside from being a name for an organization, have an “expressive component” that “do not simply identify the source of a product or service but go on to say something more, either about the product or service or some broader issue” (Matal v. Tam, 2017, p. 1764). The U.S. Supreme Court stopped short of saying that trademarks were not commercial speech, but instead held that even if the trademark disparagement statute was evaluated under the commercial speech analysis outlined in the Central Hudson test it would still be unconstitutional because the law was not narrowly tailored (Central Hudson Gas & Electric Co. v. Public Service Commission, 1980).

Justice Anthony Kennedy’s concurring opinion pointed out that that the new decision on trademark regulations does not impact other trademark laws found in the Lanham Act, which has regulated trademarks since 1946 (Matal v. Tam, 2017). Infringing trademarks or marks that cause consumer confusion are still prohibited under the law. However, this case has some major implications for other trademark cases, notably that of the Washington Redskins’ controversial trademark that refers to Native Americans. In 2014, the USPTO voted to cancel the team’s trademark because of the offensive nature of the term Redskins (Pro-Football v. Blackhorse, 2015). The Redskins were appealing their case to the U.S. Court of Appeals for the Fourth Circuit, but in light of the decision in Matal v. Tam (2017) the lawsuit over the Redskins’ name was rendered moot because the disparagement clause was found unconstitutional.

What does this mean for public relations and organizations concerned with brand management? There are three important things to take away:

Registering a Trademark Became Easier: Prior to the June 2017 U.S. Supreme Court decision in Matal v. Tam (2017), trademark examiners were able to deny applications that they deemed disparaging.  The U.S. Supreme Court said the disparagement clause of the 1946 Lanham Act, prohibiting the registration of trademarks that are likely to disparage people or groups, was unconstitutional as it violates the Free Speech Clause First Amendment. Had the government prevailed on its arguments about the nature of trademarks there was speculation that the government could have restricted other forms of intellectual property, notably copyright. Shifting norms in society also allowed for the standard of disparagement to change. While it may not be advisable to create “offensive” trademarks to a “substantial composite” of a group, the end result of Matal v. Tam (2017) is that the government cannot scrutinize trademarks or take them away based on subjective norms and tastes (p. 1754).

Trademark May Not Constitute Commercial Speech: The U.S. Supreme Court did not directly embrace the idea that trademarks are not commercial speech, but it did discuss the application of the commercial speech doctrine to trademarks. Justice Alito’s opinion recognized that there is a view that organizational brands, i.e. trademarks, stand for something more than organizational identification. He wrote that the name The Slants showed this duality of organizational names noting that “the name ‘The Slants’ not only identifies the band but expresses a view about social issues” (Matal v. Tam, 2017, p. 1764). Although U.S. Supreme Court dicta is not a precise indicator of future decisions, the majority opinion in Matal v. Tam (2017) suggests the court may agree that brands and organizational identities go beyond merely commercial purposes. This is important news for PR practitioners, who have for over a decade speculated whether their speech was commercial or not.

Public Opinion Still Matters: Sometimes it is easy to get wrapped up in the news and lose the perspective of what a case actually means. Simply because restrictions have been loosened for trademark applicants the rules of public opinion still matter. Choosing a potentially offensive trademark still runs the risk of alienating publics at an organization’s expense. However, the removal of subjective barriers to trademark applications, such as that found in 15 U.S.C1052, give organizations greater freedom, and provide those organizations who wish to make a provocative statement the freedom to do so. The practical result is that there will no longer be trademarks that are rejected because of disparagement concerns. However, the viability of those marks will be determined by the court of public opinion, not by a court of law.

Matal v. Tam (2017) is a case that gives greater First Amendment protection, and limits government control of speech. However, it also permits individuals and organizations to create and use trademarks that can be offensive to various segments of society. Perhaps in light of this case the role of the public relations professional, as the conscious of an organization, is ever more important. After all, they may be the person who has the most at stake in creating, maintaining, and communicating all the aspects of a name.

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Cayce Myers, Ph.D., LL.M., J.D., APR is the legal research editor for the Institute for Public Relations.  He is an assistant professor at Virginia Tech’s department of communication where he teaches public relations. Follow him on Twitter @caycemyers.

 

 


References

Central Hudson Gas & Electric Co. v. Public Service Commission, 447 U.S. 557 (1980).

Matal v. Tam, 582 U.S. _____ , 137 S.Ct. 1744 (2017).

Pro-Football v. Blackhorse, 112 F. Supp.3d 439 (E.D.Va. 2015).

Posted in [Blog], [Research Library], Law and Public Relations.

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