In re Tam, -- F.3d --, No. 2014-1203 (Fed. Cir. Apr. 20, 2015)
The Federal Circuit affirmed the refusal to register THE SLANTS for entertainment (a band) because it was disparaging, with “additional views” from one judge suggesting that it’s time for the Federal Circuit to reconsider its precedent upholding §2(a) against First Amendment challenge.
The TTAB pointed to record evidence that THE SLANTS would likely be perceived as referring to people of Asian descent, and that this was offensive to a substantial component of such people. The band’s website displayed the mark next to “a depiction of an Asian woman, utilizing rising sun imagery and using a stylized dragon image,” and the applicant said that he selected the mark in order to “own” the stereotype it represents. Nonetheless, “[t]he dictionary definitions, reference works, and all other evidence unanimously categorize the word ‘slant,’ when meaning a person of Asian descent, as disparaging,” and there was record evidence of individuals and groups in the Asian community objecting to Tam’s use of the word.
The test for disparagement asks “(1) what is the likely meaning of the matter in question, taking into account not only dictionary definitions, but also the relationship of the matter to the other elements in the mark, the nature of the goods or services, and the manner in which the mark is used in the marketplace in connection with the goods or services; and (2) if that meaning is found to refer to identifiable persons, institutions, beliefs or national symbols, whether that meaning may be disparaging to a substantial composite of the referenced group.”
The TTAB appropriately took into account evidence gathered with respect to a prior abandoned application for a version of the mark with an Asian-inspired graphic; evidence outside the application can be relevant to determine the manner of a mark’s use. Substantial evidence supported the Board’s finding that the mark referred to people of Asian descent. Though the term “slant” has a number of alternative meanings, one of them is (according to Tam’s own cited dictionaries) “a disparaging term for a person of East Asian birth or ancestry,” (The American Heritage Dictionary of the English Language), and “[a] person with slanting eyes, spec. one of Oriental descent” (Oxford English Dictionary). Its innocuous meanings, and trademarks based thereupon, don’t prevent it from being used in an offensive manner. Instead, those meanings require the PTO to examine how the applicant uses the mark in the marketplace to determine its likely meaning.
The factual record included Tam’s explanation of the band’s name: “I was trying to think of things that people associate with Asians. Obviously, one of the first things people say is that we have slanted eyes. . . .” and “We want to take on these stereotypes that people have about us, like the slanted eyes, and own them. We’re very proud of being Asian—we’re not going to hide that fact. The reaction from the Asian community has been positive.” The band’s website sets the mark against “a depiction of an Asian woman, utilizing rising sun imagery and using a stylized dragon image.” Individuals and Asian groups perceived the term as referring to people of Asian descent.
Likewise, substantial evidence supported the finding of likely offensiveness to a substantial composite of people of Asian descent. The definitions in the record “universally characterize the word … as disparaging, offensive, or an ethnic slur when used to refer to a person of Asian descent.” The Japanese American Citizens League published a brochure describing the term as a “derogatory term” that is “demeaning” and “cripple[s] the spirit.” The offensive nature of the band’s name led to the cancellation of the band’s scheduled performance at a conference for Asian youth. No survey or other quantitative measure was required.
Tam’s constitutional challenges were also unavailing. Binding precedent establishes that §2(a) doesn’t violate the First Amendment because it doesn’t ban use of a mark. In re McGinley, 660 F.2d 481 (C.C.P.A. 1981). (Note that the majority doesn’t say anything about whether §43(a) might provide protection; the reasoning that “lack of registration doesn’t bar use and so it’s not a problem” is equally applicable to refusing §43(a) protection.) Nor was the §2(a) disparagement standard unconstitutionally vague. Although there is inherent difficulty in finding an objective measure, the two-part test is “sufficiently precise to enable the PTO and the courts to apply the law fairly and to notify a would-be registrant that the mark he adopts will not be granted a federal registration.”
Tam argued that the arbitrary application of the standard, allowing registrations for “slurs against homosexuals such as DYKES ON BIKES,” violated due process. But due process was satisfied by a full opportunity to prosecute an application and appeal any denial. Moreover, “allegations regarding similar marks are irrelevant because each application must be considered on its own merits.” Past errors don’t bind the PTO to improperly register an applicant’s mark.
Tam finally argued that the rejection hinged on his and his bandmates’ ethnic identities, thus denying him equal protection. Instead, the registration was rejected because it used the mark in a disparaging matter; as the TTAB said, “[a]n application by a band comprised of nonAsian-Americans called THE SLANTS that displayed the mark next to the imagery used by applicant . . . would also be subject to a refusal under Section 2(a).”
Judge Moore offered “additional views,” though this isn’t styled a concurrence or a dissent. Judge Moore wrote to argue that it was time to revisit McGinley’s holding on the constitutionality of §2(a). First Amendment jurisprudence on unconstitutional conditions and commercial speech, she noted, has evolved significantly since McGinley.
First, Judge Moore noted, trademarks are commercial speech and thus “unquestionably … protected” (skipping over the question of whether a mark is truthful and nonmisleading, but ok). And the mark here was more than a source identifier. (Which, incidentally, undermines the articulated justification for commercial speech—that it provides consumers with useful information.) Instead, Tam sought to “reclaim” and “take ownership” of Asian stereotypes. This name “weigh[ed] in on cultural and political discussions about race and society that are within the heartland of speech protected by the First Amendment.”
True, banning registration doesn’t mean banning use. But, as B&B v. Hargis just told us, “[t]he Lanham Act confers important legal rights and benefits on trademark owners who register their marks.” These benefits were both substantive and procedural, including nationwide rights even without nationwide use and a presumption of validity/possible incontestability.
Moreover, “[n]ot only is a disparaging trademark denied federal registration, but it cannot be protected by its owner by virtue of a § 43(a) unfair competition claim.” We know this because the Supreme Court made “clear” in Taco Cabana “that § 43(a) protection is only available for unregistered trademarks that could have qualified for federal registration.” See also Donchez v. Coors Brewing Co., 392 F.3d 1211, 1215 (10th Cir. 2004) (plaintiff must establish that its mark is protectable to prevail in a claim under § 43(a)); Yarmuth-Dion, Inc. v. D’ion Furs, Inc., 835 F.2d 990, 992 (2d Cir. 1987) (requiring a plaintiff to “demonstrate that his [unregistered] mark merits protection under the Lanham Act”). “Thus, no federal cause of action is available to protect a trademark deemed disparaging, regardless of its use in commerce.”
And further, the Model State Trademark Bill was patterned after the Lanham Act and includes similar prohibitions. “[V]irtually all states have adopted the Model Bill and its disparagement provision. Thus, not only are the benefits of federal registration unavailable to Mr. Tam, so too are the benefits of trademark registration in nearly all states.” Plus, the common law mirrors the Lanham Act, so that means any state protection is unlikely. The denial of any rights “severely burdens” the use of disparaging marks. Indeed, the content-based restrictions of §2(a) were adopted to reduce use of government-deprecated marks, creating a chilling effect.
The unconstitutional conditions doctrine says that the government cannot deny access to a benefit because of the recipient’s exercise of constitutionally protected speech. Of course the government can grant benefits predicated on compliance with certain policies, so “when the Government appropriates public funds to establish a program it is entitled to define the limits of that program.” However, Congress does not have the authority to attach “conditions that seek to leverage funding to regulate speech outside the contours of the program itself,” and outside the spending power.
Here, Judge Moore reasoned, “[b]ecause the government denies benefits to applicants on the basis of their constitutionally protected speech, the ‘unconstitutional conditions’ doctrine applies.” The benefits of registration, while valuable, weren’t monetary. “Unlike tangible property, a subsidy, or a tax exemption, bestowal of a trademark registration does not result in a direct loss of any property or money from the public fisc. Rather, a trademark redefines the nature of the markholder’s rights as against the rights of other citizens, depriving others of their rights to use the mark.” This was a regulatory regime, not a government subsidy program. And registration doesn’t drain the public fisc; PTO operations are funded by registration fees. There might be an attenuated connection to spending, such as when ICE agents seize counterfeit goods because of a registration, but that wasn’t enough.
Thus, §2(a) had to survive First Amendment scrutiny, and as a content-based and viewpoint-based regulation it was presumptively invalid. One can register a mark referring to a certain group in a positive, nondisparaging manner, but not a mark referring negatively to the same group. “Section 2(a) discriminates against disparaging or offensive viewpoints,” contrary to R.A.V. v. City of St. Paul, which doesn’t allow the government to punish only fighting words directed at one group. It was thus presumptively invalid and had to satisfy strict scrutiny.
Comment: this is the wrong comparator. Defamation carried out with actual malice is actionable, but lying positively about someone with actual malice is not actionable, absent associated fraud (see Alvarez). The government may punish fighting words without punishing hugging words, as long as it punishes all fighting words, or some subset that’s related to the reason it can punish fighting words in the first place. By the same logic, the mere fact that only disparaging marks are barred is not itself a constitutional problem.
Regardless, Judge Moore continued, §2(a) couldn’t even survive Central Hudson.
Note an interesting presupposition here: that the bar on registration restricts or suppresses commercial speech. Arguably the better analogy is a mandatory disclosure requirement, which may raise the cost of commercial speech—just as denying registration may raise the cost of using a particular disparaging symbol as a mark—but is not judged under Central Hudson, but rather under a test much closer to rationality review. We’d ask if the cost-raising requirement was reasonably related to the government’s legitimate interests, and if it was not so unduly burdensome as to be functionally speech-suppressive. One could come out either way on this inquiry, it seems to me, but it’s not Central Hudson.
Anyway, Judge Moore continued, the speech here—the use of a disparaging mark—was lawful and not misleading. The governmente thus needed a substantial interest independent of disapproving the speech’s message to justify the regulation. There was none; Congress disapproved of the message carried by disparaging marks. That’s not a legitimate government interest. The Supreme Court has “consistently held that the fact that protected speech may be offensive to some does not justify its suppression.” It is a “bedrock principle underlying the First Amendment . . . that the Government may not prohibit the expression of an idea simply because society finds the idea itself offensive or disagreeable.” (Note again the suppression language here.)
The alleged interest in not devoting government resources to disparaging marks is makeweight/bunk. Nor did the ban harmonize longstanding state and federal law, because §2(a) didn’t codify a common law bar on disparaging marks (which are different from vulgar and misleading marks, which do have a history of state refusal to recognize); §2(a) created new law. (Of course, the ban does harmonize now, as she pointed out above.)
Further, trademarks aren’t government speech. Publication on the Principal Register is not for the purpose of communicating a particular message or viewpoint; it is for providing notice that a mark has been registered. (That actually seems like a particular message.) The government would only have a substantial interest in avoiding the appearance of giving a stamp of approval to disparaging marks if the public believed that trademarks carry the stamp of government approval. But that’s not what registration is. The PTO’s job is to register marks that are functioning to identify and distinguish goods and services in the marketplace. “The purpose served by trademarks, to identify the source of the goods, is antithetical to the notion that the trademark is tied to the government.”