News analysis: A new slant on trademark law

You had probably never heard of The Slants until their legal battle with the US Patent and Trademark Office (USPTO).

The Asian-American band, more famous for doggedly pursuing a trademark than making music, are waiting for the US Supreme Court to rule on their case. After several setbacks, the band claimed victory in late 2016 as the US Court of Appeals for the Federal Circuit said the disparagement provision of section 2(a) of the Lanham Act unconstitutionally restricts free speech.

The USPTO and its Trademark Trial and Appeal Board (TTAB) had earlier denied the application for ‘The Slants’ because they found the mark to disparage Asians. Now the highest court will decide whether the disparagement provision of the Lanham Act violates the free speech clause of the First Amendment.

After hearing oral arguments in January, the court’s justices are expected to issue their ruling in June. Based on the questions asked in that hearing, the justices seem generally sceptical that the disparagement provision can survive First Amendment scrutiny, says John O’Quinn, partner Kirkland & Ellis.

“That said, many of the justices also seemed concerned about how and where to draw the line between protected speech and legitimate governmental prerogatives,” he says.

“As with many cases involving the First Amendment, this one may yield multiple opinions, even if the justices agree unanimously on the outcome.”

If the court upholds the Federal Circuit’s position, the USPTO will have to begin examining—and probably issuing—a slew of provocative trademarks, which have been suspended pending the Supreme Court’s decision, says Michael Kelber, partner at Neal Gerber & Eisenberg.

“These pending marks include various expletives, words that The New York Times finds unfit to print.”

Implications for IP

While reversing the Federal Circuit’s opinion will be an important First Amendment precedent, in part because the case involves the intersection of expressive and commercial speech, the practical implications for IP law in general and trademark law in particular will be “at the margins”, whichever way the court rules, says O’Quinn.

“It has been long settled under First Amendment jurisprudence that copyright protection cannot be denied merely because it is negative, offensive or disparaging. Moreover, even if a trademark cannot be federally registered, it may still be entitled to protection under state law as well as section 43 of the Lanham Act,” he says.

The case has proved divisive, perhaps because it focuses on a fiercely guarded liberty in the US: freedom of speech.

Kelber sympathises with The Slants’ goal of reclaiming and recasting a traditionally derogatory word relating to their ethnicity.

“However, I support the government’s power to enforce reasonable restrictions on the registration of trademarks, which are inherently commercial speech,” he says.

“Trademark registrations confer the right to restrict competitors’ speech, and that right should be withheld from entities that offend members of society,” he argues.

"even if a trademark cannot be federally registered, it may still be entitled to protection under state law as well as section 43 of the Lanham Act."

The Slants will not be the only ones watching the ruling closely: National Football League team the Washington Redskins will be holding their collective breath between now and June. That’s because both the TTAB and the US District Court for the Eastern District of Virginia have agreed that several marks incorporating the term ‘Redskins’ should be cancelled. The reason? The marks disparage Native Americans.

If the Supreme Court upholds the Federal Circuit’s finding in The Slants’ battle, it would probably mean the Washington Redskins could revive their federal registrations, according to O’Quinn.

However, he adds, if the court reverses, the Redskins could still argue that their situation is factually different and could ultimately appeal to the Supreme Court (which has already declined to hear the case once).

“Regardless of what the Supreme Court does, the Washington Redskins would still have certain common law trademark rights,” says O’Quinn.

More to come

For now, all eyes are on The Slants and their long battle in the courts. However, even a ruling in June may not be the end of the story, for at least two reasons.

As Kelber notes, the Supreme Court could find that the restriction is unconstitutional as currently drafted—for example because it is impermissibly vague or too broad—but leave open the possibility that an amended restriction against derogatory marks “might pass constitutional muster if narrowed or otherwise restructured”.

In that case, he adds, Congress may attempt to fix the provision “and then it will be up to future challenges to see if such a revised provision can survive”.

The second reason is partly political. The Supreme Court currently has eight sitting justices and in January President Donald Trump nominated Judge Neil Gorsuch to fill the ninth seat. Gorsuch, who at the time of writing had yet to be finally approved, is likely to sit out the decision, but Kelber explains that if there is a 4-4 tie, the court may rehear arguments and therefore Gorsuch could later rule on the case.

O’Quinn adds that assuming the Supreme Court reaches a unanimous decision in this case, “whatever the outcome, one can imagine legislative efforts to try to change the result”.

“If the Federal Circuit’s decision is reversed but Congress believes that the disparagement provision has become overly intrusive on free speech, Congress obviously can repeal that part of the law.

“However, if the Federal Circuit’s decision is affirmed, it would be very difficult for Congress to change the Lanham Act to exclude certain trademarks from registration in a way that would not implicate the same First Amendment concerns at issue here,” he says.

At least one thing is certain: a band that formed on the West Coast of the US more than ten years ago probably never expected to become a household name among trademark lawyers.