SCOTUS: Supreme Court Holds Disparagement Clause of the Lanham Act Violates the Free Speech Clause of the First Amendment

Authored by Anthoula Pomrening and George “Trey” Lyons, III

This morning, in Matal v. Tam, previously Lee v. Tam, the Supreme Court handed down its most impactful interpretation of the disparagement clause of the Lanham Act to date by holding that at its intersection with the First Amendment, the disparagement clause violates the First Amendment’s Free Speech Clause.  

Background of the Case 

Simon Tam applied for a federal trademark with the U.S. Patent and Trademark Office (“the Office”) in 2011 for the mark, The Slants, in connection with his Asian-American rock band. The Office found that the mark would be disparaging to those of Asian descent, and refused to register the mark. In doing so, the Office cited Section 2(a) of the Lanham Act, commonly known as the “disparagement clause,” which prohibits the registration of a mark that “[c]onsists of or comprises immoral, deceptive, or scandalous matter; or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute.”  Tam appealed, and both the Trademark Trial and Appeal Board and the first three-judge panel at the U.S. Court of Appeals for the Federal Circuit affirmed the Office’s refusal for registration.  The Federal Circuit, sitting en banc, however then reversed the three-judge panel decision and held that any prohibition of registration for disparaging marks was unconstitutional.  Answering the Trademark Office’s Petition for Writ of Certiorari, the Supreme Court granted the petition in September of last year, heard oral argument in January of this year, and issued its opinion striking down the constitutionality of the disparagement clause today—affirming the judgment of the en banc Federal Circuit. 

The Parties’ Positions  

Before the Supreme Court, the parties’ positions were relatively straightforward. 

First, the Office argued that the disparagement clause is constitutional in spite of the First Amendment as it “does not in any way restrict respondent’s freedom of speech.”  Second, the Office argued that even if the disparagement clause does limit speech in some regard, the non-grant of a federal trademark is nonetheless constitutional because the Government has some involvement with what is ultimately issued (whether by virtue of the marks being governmental speech or a form of governmental subsidy) and should be tested under a new “government-program” doctrine as it “has significant discretion to decide which activities to fund and what criteria to use for inclusion in government programs.”  Third, the Government reiterated that the non-grant of a federal trademark does not impact the use a trademark as remedies are still available under § 43(a) of the Lanham Act—regardless of whether it is federally registered. 

In response, Tam contended that the Office’s prohibition and the disparagement clause as a whole run contrary to the First Amendment by imposing substantial viewpoint-based and content-based restrictions on free speech. More specifically, Tam alleged that, as private speech (as opposed to governmental speech), “[t]he First Amendment does not allow the government to impose burdens on speech for the purpose of protecting listeners against offense.”  Additionally, for the first time on appeal before the Supreme Court, Tam argued for a narrow interpretation of the disparagement clause as applying only to “natural or juristic persons,” and does not reach marks that disparage racial or ethnic groups. 

The Supreme Court Decision 

The Court, taking Tam’s last point first held that under the plain language of the disparagement clause, the Lanham Act applies to “persons,” which are necessarily those that make a substantial portion of a disparaged group and found Tam’s arguments unconvincing. 

Turning to the Government’s contention that trademarks are government speech, the Supreme Court noted the Office cannot “silence or muffle the expression of disfavored viewpoints” simply because it has “affixed a government seal of approval”—a granted federal trademark.  S.Ct. Decision at 14.  Specifically, the Court reiterated that the Office registers the content of a trademark; it does not “dream up” or edit the marks sought to be registered.  Id.  Further, the Court found that an examiner does not “inquire whether any viewpoint conveyed by a mark is consistent with Government policy or whether any such viewpoint is consistent with that expressed by other marks already on the principal register.” Id.  Rather, if the Lanham Act’s viewpoint-neutral requirements are met, registration of the mark “is mandatory.”  Id.  In view of this reasoning, the Supreme Court found that trademarks are not government speech, but rather private speech.  S.Ct. Decision at 18. 

After addressing and dismissing the Government’s additional arguments as whether the disparagement clause is constitutional as subsidized-speech or under a government-program doctrine, the Supreme Court next focused on whether trademarks are commercial speech and thus subject to a relaxed scrutiny outlined in Central Hudson Gas & Elec. V. Public Serv. Comm’n of N.Y., 447 U.S. 557.  S.Ct. Decision at 23.  The Supreme Court did not answer the ultimate question because the disparagement clause could not withstand even this relaxed review as the restriction of speech by the clause does not serve a “substantial interest” because it “strikes at the heart of the First Amendment.”  Further, the restriction is not “narrowly drawn” to drive out marks that support unjust discrimination, but rather, extends to “any trademark that disparages any person, group, or institution,” thereby going much farther than needed to serve the asserted interest.  S.Ct. Decision at 25.  

In view of the above, the Supreme Court held that the disparagement clause of the Lanham Act violates the Free Speech Clause of the First Amendment. “It offends a bedrock First Amendment principle: Speech may not be banned on the ground that it expresses ideas that offend.”  Id. at 1-2.

Potential Impact of the Supreme Court Decision

Today’s Supreme Court decision may open the rest of Section 2(a) of the Lanham Act to challenge.  The remainder of Section 2(a) prevents registration of marks that are immoral, deceptive, and scandalous.  Further, the decision will also have an impact on the Redskins trademark case, Pro Football Inc. v. Blackhorse, 112 F. Supp. 3d 439 (E.D. Va. 2015), which involves the same section of the Lanham Act, and which had been appealed to the Fourth Circuit, but was placed in abeyance pending decision by the Supreme Court in Tam. 

Decided June 19, 2017

The opinion can be found at https://www.supremecourt.gov/opinions/16pdf/15-1293_1o13.pdf.

Anthoula Pomrening, an MBHB partner and Chair of the firm’s Mechanical & Materials Practice Group, has experience in all aspects of intellectual property law, with a particular emphasis on litigating and counseling clients on patent and trademark issues. pomrening@mbhb.com

George “Trey” Lyons, III, an MBHB associate, helps clients protect their intellectual property by providing advice and crafting solutions related to the validity, enforcement, and infringement of patent, copyright, and trademark rights. lyons@mbhb.com

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