Lee v. Tam – Disparaging Mark or Free Speech? – Pending Decision

By Michael Small

 

Section 2(a) of the Lanham Trademark Act, 15 U.S.C. §1052(a) allows the United States Patent and Trademark Office (USPTO) to refuse registration of marks that contain immoral or scandalous matter.[1]  Known as the disparagement clause, the USPTO enforces the rule in the Trademark Manual of Examining Procedure (TMEP) Section 1203.01, specifying the types of rejected marks that fall under immoral or scandalous nature, such as obscene graphics or disparaging terms.[2]  Examples of rejected trademark applications include the following: Stop the Islamisation of America; Democrats Shouldn’t Breed; Naturally Intelligent God Gifted Africans; and most recently, the cancellation of the Washington Redskins NFL football team’s trademark name in 2014.  Rejected trademarks are void from government benefits, such as preventing registration from other confusingly similar marks during the application process, receiving sole ownership of the mark for advertising purposes, and prevent foreign companies with similar marks to import their trademarked goods.  In the pending U.S. Supreme Court case Lee v. Tam, the justices will make a decision that determines whether Section 2(a) of the Trademark Act violates the First Amendment.[3]  If the justices confirm that Section 2(a) violates the First Amendment, it would mark one of the most significant changes to the Lanham Act since the amendment of the Trademark Counterfeiting Act of 1984.[4]

Background

Before the case began, Tam created an all-Asian American band in 2006, named “The Slants.”  According to Tam, the name addressed issues with racism that Asian Americans face and share the band members’ experiences with the term, ultimately reclaiming the word for Asians.[5] Tam attempted to register the band name with the USPTO in 2011; however, an USPTO examiner rejected the application, arguing that the name is derogatory of Asians and those of Asian descent, despite the band’s intent.  Tam appealed to the USPTO’s Trademark Trial and Appeal Board, but the Board affirmed the examiner’s position.  Tam filed an appeal to the United States Court of Appeals for the Federal Circuit, arguing that the USPTO’s rejection of his mark is unconstitutional in accordance to the First Amendment.  Although the Federal Court initially affirmed the USPTO’s decision, Tam filed a petition for a rehearing en banc.  The en banc panel found that the government erred in treating the case with strict scrutiny because the government did not take into consideration Tam’s accusation of First Amendment violation.  The en banc panel reversed the USPTO’s rejection of the trademark, arguing that the USPTO examiner’s rejection under Section 2(a) despite the band’s ideology is viewpoint discrimination and therefore violates the First Amendment.  The panel further clarifies that the First Amendment protects even hurtful speech.  The director of the USPTO, Lee, filed a writ of certiorari to the Supreme Court.  The Supreme Court accepted the writ and heard oral arguments of the case in January 2017.  A final decision from the Supreme Court is pending.

 

Analysis

The Supreme Court’s decision on this case will have a huge impact on U.S. Trademark Law should the Court rule in favor of Tam.  If the Court agrees that Section 2(a) of the Trademark Act is unconstitutional, it would mean the readjustment of the Lanham Act to accommodate trademark registration that contained restrictions on immoral or scandalous materials.  Trademark registrants would have to depend on other regulations to take down purposeful slanders of their marks, such as dilution or likelihood of confusion.  Consumers would also be at risk of exposure to trademarks that may offend them, which could discourage their investment into U.S. markets.  For instance, consumers and entrepreneurs of black descent in the U.S. would not be open to purchasing goods whose mark consists of material that may offend them, such as marks that refer to hate groups or openly mocks their descendent.  The approval of Tam’s mark, despite the owner’s intent, may bring about a challenge as to how the consumers will react to future disparaging marks.

There is a previous Supreme Court case that dealt with a similar situation as Lee v. Tam.  In 2015, the Court reviewed Walker v. Texas Division, Sons of Confederate Veterans, Inc., in which the state of Texas rejected the Sons of Confederate Veteran’s confederate flag design for license plates.  The Board’s reasoning for this rejection centered around the public’s view, who may find the confederate flag offensive due to its association with organizations that express hatred directed towards specific people and/or groups.[6]  In this case, the Supreme Court ruled that license plates are government speech because of their maintenance and distribution by the state of Texas.  Therefore, license plates are exempt from the First Amendment defense, even from the expression of private individuals.  As the USPTO also mandates the marks that will receive protection, it is likely that the Supreme Court could also decree trademarks government speech and rule in favor of Lee.  However, the ruling in Walker had a 5-4 decision amongst the justices, making the ruling a narrow victory for government speech.  It is evident that there is a divide between justices in determining the eligibility of protection under government speech or the First Amendment.

Conclusion

Based on evidence from previous Supreme Court decisions and the treatment of government speech and the First Amendment, one can conclude that the court’s ruling on this case will have an impact on how the legal system views trademark law.  If Tam acquires the court’s favor and receives registration of his mark, it would open the opportunity for other groups to register marks for similar purposes as Tam.  However, the intent to use said marks will vary for each group, bringing about a concern of whether future registered marks will be used in good or bad faith.  If the court rules in favor of Lee, then trademarks could be identified as government speech.  Therefore, it may be recommended for future owners of rejected trademarks not to rely exclusively on the First Amendment to defend their trademark.  Debate might also arise as to whether other aspects of government-protected intellectual property rights are government speech, such as trade dress or patents.  This would bring about confusion in IP law as to whether the acquisition of government protection is enough to warrant government speech.  One can hope that regardless of the Supreme Court’s decision, the outcome will further clarify what terms are eligible for protection under the First Amendment or government speech for trademark registration.

 

[1] See 15 U.S.C. §1052(a)

[2] E.g. Greyhound Corp. v. Both Worlds Inc., 6 U.S.P.Q.2d 1635, 1639 (T.T.A.B. 1988) (holding that a mark of a defecating dog as a logo for polo shirts and t-shirts was scandalous, and thus barring the mark from registration under Section 2(a)).

[3] Lee v. Tam, No. 15-1293, 2016 U.S. LEXIS 4462 (U.S. Sept. 29, 2016) (granting certiorari).

[4] The Trademark Counterfeiting Act of 1984 enforces a penalty for the unauthorized or intentional usage of counterfeit trademark, with the maximum sentence of five years imprisonment or a $250,000 – $1 million fine.  See 18 U.S. Code § 2320.

[5] See Katy Steinmetz, “The Slants” Suit: Asian-American Band Goes to Court Over Name,” Time, Oct. 23, 2013, http://entertainment.time.com/2013/10/23/the-slants-suit-asian-american-band-goes-to-court-over-name/ (“Prior to the term Asian becoming in vogue, the term that the Asian-American community used [to describe themselves] was “yellow.” It’s empowering when people use it and embrace it as part of their identity.”).

[6] See Walker v. Tex. Div., Sons of Confederate Veterans, Inc., 135 S. Ct. 2239 (2015).

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Royalty Fee? Wasn’t Peter and the Wolf Free?

By Rob Lower and Michael Stein

Summary

In Golan v. Holder (Decided 18 January 2012) the Supreme Court upheld the constitutionality of amendments to US copyright law made in 1994. The practical effect of the holding is that the authors of foreign works may receive copyright protection for works in the public domain.

In 1994, Congress amended 17 U.S.C. §104A to bring the US into compliance with the Berne Convention for the Protection of Literary and Artistic Works, an international treaty joined by the US in 1989. Under Berne, member countries must provide all other member countries with the same level of copyright protection available to their own citizens.

While there is little opposition to providing foreign authors with US copyright protection, the decision to provide such protection for works in the public domain has been the subject of much criticism.

Affected Foreign Works

There are three circumstances under which US authors could have received copyright protection in the US, while foreign authors could not. The Court stated this could have occurred if the “United States did not protect works from the country of origin at the time of publication; the United States did not protect sound recordings fixed before 1972; or the author had failed to comply with U.S. statutory formalities . . . “

 Who Sued?

This lawsuit was brought by a group of orchestra conductors, musicians, publishers, and others (Petitioners) who may now be forced to pay royalties before performing foreign works such as Prokofiev’s Peter and the Wolf.

Petitioners argued that removal of works from the public domain would unduly interfere with Petitioners’ First Amendment free speech rights, and that removal of the works from the public domain would exceed the authority given to Congress in the Copyright Clause of the Constitution. The Court dismissed both of these arguments, citing the Court’s own precedent and past grants of retroactive copyright protection by Congress.

Supreme Court Precedent — Eldred v. Ashcroft

The Court leaned heavily on its own 2003 Ashcroft decision in dismissing Petitioners’ arguments. In Ashcroft, the Court upheld the constitutionality of a 20 year extension of copyright protection for works that had never reached the public domain. While Ashcroft clearly supports extending the time remaining before works enter the public domain, the Court had to reach beyond Ashcroft to find support the extension of copyright protection to work already in the public domain.

Petitioner’s First Amendment Free Speech Rights

Petitioners maintained that the First Amendment’s freedom of expression guarantee would be offended by retroactive grants of copyright protection. Specifically, Petitioners argued that Ashcroft did not support interference with Petitioners’ “vested rights” in works in the public domain.

The Court acknowledged that “some restriction on  expression is  the  inherent  and  intended effect of every grant of copyright,” before concluding that “built-in First Amendment accommodations” such as the “idea/expression dichotomy” and “fair use” defense adequately protected Petitioners’ free speech rights. Golan, p23–24.

The Copyright Clause

Petitioners also argued that Congress had exceeded both the authority delegated to them in the Copyright Clause, and the scope of the copyright term extension approved in Ashcroft.

The Court cited the Copyright Act of 1790 as a past grant of “protection to many works previously in the public domain.” Prior to the 1790 Act, copyright regulation was a matter of state law, and because three states provided no copyright protection in 1790, the 1790 Act allowed authors in those states to remove their works from the public domain.

The Copyright Clause empowers Congress “[t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”  Art. I, §8, cl. 8.

Petitioners argued that because the works being removed from the public domain have, by definition, already been created, an unanticipated windfall for foreign authors cannot promote the progress of science. Petitioners also argued that removal of works from the public domain would likely result, effectively slowing the progress of science.

Although the creation of existing works cannot be inspired by a post-creation windfall, Petitioners’ focus on this narrow class of works seems too constricted to address the panoply of ways the progress of science can be promoted.

For example, providing a foreign author copyright protection for his or her past writings could incentivize investment in the dissemination of works presently unavailable in the US. By the same token, retroactive copyright protection could incentivize dissemination of previously created works in new languages and formats (e.g., Kindle). This conclusion is fortified by the United States’ stature as the world’s largest economy, likely able to incentivize the creation of new works along with further dissemination of past works in more consumable formats.

Finally, the progress of science can also be advanced by providing US authors with reciprocal intellectual property rights in Berne countries that have previously disregarded US intellectual property rights, citing the United States’ noncompliance with Berne as a reason.[1] 

Conclusion

Providing foreign authors with the level of copyright protection that has been available to domestic authors seems to be a rational means of “promot[ing] the Progress of Science“ here in the US.


[1] “Thailand and Russia balked at protecting U. S. works, copyrighted here but in those countries’ public domains, until the United States reciprocated with respect to their authors’ works.” Golan, p6.