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Can You Really Say That in Your Business? Trademark Disparagement Clause Found Unconstitutional

Trademark Disparagement

Do what you want and say what you will. Trademark decorum has left the USA.

Rarefied institutions like the United States Patent and Trademark Office (USPTO) must now accept all sorts of brands that do not follow appropriate standards of decorum. Trademark holders, whether in a company or group, can file for marks that were at one time considered disparaging. In fact, the mere fact that the Washington Redskins still have that name was becoming an issue in trademark legal circles.

Many people considered the term offensive. But the question is, offensive to whom? The term ‘kush’ was rejected as a mark for product because it was a term used in the marijuana industry prior to the general movement towards legalization. Will that mark now be accepted, if it is deemed to still be arbitrary and fanciful, rather than descriptive or generic? It appears that many claims that were rejected in the past because they could be disparaging to persons or groups may, if independently protectable, be registered.

Economists and business gurus have long argued that free markets determine which products and brands are consumed, what decorum is rewarded at the cash register, and which conduct will be punished in the marketplace. Now, it seems, the United States Supreme Court finally agrees.

Matal v. Tam and the Disparagement Clause

The United States Supreme Court recently decided Matal v. Tam, where an Asian American rock group calling itself “The Slants” filed a trademark on the name of the group. The USPTO refused to grant registration of the mark because the trademark examiner believed it violated the disparagement clause of the Lanham Act, the federal statute that governs trademarks. This law prohibits the registration of trademarks that may “disparage . . . or bring . . . into contempt or disrepute . . . any persons, living or dead, institutions, beliefs, or national symbols,” 15 USC 1052(a). In reviewing this provision of the Lanham Act, the United States Supreme Court noted the USPTO traditionally allows an applicant to register a positive or benign mark, but not a derogatory one. However, there were constitutional concerns with that practice.

Although the Government argued that the disparagement clause applies to marks that disparage members of a racial or ethnic group, the United States Supreme Court had to decide whether a governmental agency making decisions on such matters violated the Free Speech Clause of the First Amendment. The First Amendment prohibits Congress and other government entities and actors from “abridging the freedom of speech.”

Is Filing for a Trademark Government Speech?

The government argued that filing for a trademark through a governmental agency, the USPTO, constituted a form of government speech, thus entitling it to an exemption from the First Amendment. Although government speech (the government’s own speech) is typically exempt from First Amendment scrutiny, the Supreme Court stated that “the First Amendment forbids the government to regulate speech in ways that favor some viewpoints or ideas at the expense of others.” The high Court noted that the federal government does not dream up trademarks, and a trademark examiner may not reject a mark based on the viewpoint that it appears to express. Thus, “an examiner does not inquire whether any viewpoint conveyed by a mark is consistent with government policy.”

In rejecting the Government’s argument that a trademark may be construed as government speech, the Supreme Court stated that such an analysis would be a “huge and dangerous extension of the government speech doctrine.” The Supreme Court went on to state that “it is far-fetched to suggest that the content of a registered mark is government speech. If the federal registration of a trademark makes the mark government speech, the Federal Government is babbling prodigiously and incoherently. It is saying many unseemly things.”

Supreme Court Decision

The Supreme Court concluded the trademarks are private, not government, speech. That means the American consumer, and not the government (or the USPTO) determines whether a business name is offensive and worth existing in commerce.

To quote Mel Gibson, “Freedom!” Or something like that...

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