Federal Circuit's Opinion In <i>In re Tam</i>

In a boon to the Washington Redskins and other similarly-situated trademark owners, the era of decency and inoffensiveness in federal trademark law may be coming to an end. Last December, the United States Court of Appeals for the Federal Circuit reviewed en banc a previous panel decision that affirmed a refusal to register THE SLANTS mark for musical/band services due to its potential to disparage those of Asian descent. In In re Tam, __ F.3d __, 2014-1203, 2015 WL 9287035 (Fed. Cir. Dec. 22, 2015), Plaintiff-Appellant Simon Shiao Tam had attempted to register THE SLANTS in 2011. Mr. Tam was the “front-man” for an electronic rock and roll band of the same name, and according to the record upon which the Federal Circuit relied, Mr. Tam named his band THE SLANTS as a way to reclaim a term that had traditionally been used in reference to those of Asian descent in a pejorative manner. His application, however, was repeatedly refused on the ground that it violated the Lanham Act's prohibition against disparaging or offensive marks.

On appeal to the Federal Circuit, Mr. Tam again was refused registration. The court first noted that the trademark Examining Attorney's, and later the Trademark Trial and Appeal Board's, determination that THE SLANTS may disparage Asian individuals was correct. Accordingly, the only real question was whether the Lanham Act's prohibition against registration of such marks was constitutional, or whether it violated the First Amendment. Rather than examine the merits of Mr. Tam's claim that this Lanham Act provision ran afoul of the First Amendment, a three judge panel of the court relied on numerous and longstanding precedent, concluding that the provision was constitutional because a refusal to register did not amount to a denial of the applicant's right to use a mark. The result was a quick, though shallow, dismissal of Mr. Tam's constitutional challenge: “This [freedom of speech] argument is foreclosed by our precedent. ' With respect to appellant's First Amendment rights, it is clear that the [US]PTO's refusal to register appellant's mark does not affect his right to use it. ' Consequently, appellant's First Amendment rights would not be abridged by the refusal to register his mark.” In re Tam, 785 F.3d 567 (Fed. Cir. 2015) (quotation omitted).

The court's terse dismissal of Mr. Tam's constitutional challenge, however, belied what must have been a more vigorous debate on the constitutionality of the Lanham Act disparagement provision, because the Federal Circuit, acting sua sponte , ordered an en banc rehearing on Mr. Tam's claims. The opinion resulting from this rehearing turned the tables on everything that had occurred below in In re Tam, ultimately vacating and remanding the Trademark Trial and Appeal Board's order refusing to register THE SLANTS.

On rehearing, the court first called into question a fundamental assumption underlying prior opinions' determinations that the Lanham Act provision was constitutional: that a refusal to register does not affect freedom of speech because the applicant may still use the mark. The court noted:

Registration is significant. The Lanham Act confers important legal rights and benefits on trademark owners who register their marks. These benefits ' unavailable in the absence of federal registration ' are numerous, and include both substantive and procedural rights. The holder of a federal trademark has a right to exclusive nationwide use of that mark where there was no prior use by others. Because the common law grants a markholder the right to exclusive use only in the geographic areas where he has actually used his mark, holders of a federally registered trademark have an important substantive right they could not otherwise obtain.

2015 WL 9287035, at 2.

With the foregoing in mind, the court analyzed the disparagement provision of the Lanham Act. It found that this provision burdens markholders' speech rights by conditioning the bestowal of legal rights on the government's approval or disapproval of the content of the message conveyed by the mark. Even though a markholder would be free to use its mark with or without registration, that alone was determined to be insufficient to overcome the fact that the Lanham Act's prohibition against disparaging marks “discriminates on the basis of the message conveyed” and therefore ran afoul of the First Amendment. Accordingly, the court invalidated this Lanham Act provision and remanded the Tam matter to the Trademark Trial and Appeal Board.

Implications

What is the upshot of this significant change in federal trademark law? For the Washington Redskins football team, for example, the consequence seems fairly apparent. The team will very likely rely heavily on the December In re Tam opinion in its appeal to the Fourth Circuit and argue that “REDSKINS,” even if it is arguably a highly offensive and/or disparaging term, is nevertheless entitled to registration. The Fourth Circuit, therefore, will be put in the position either of affirming the district court decision to cancel the team's REDSKINS marks and setting up a circuit court split, or reversing the district court and aligning with the Federal Circuit. Irrespective of what the Fourth Circuit does, In re Tam unquestionably places the Washington Redskins in a position of greater strength in its appeal.

On a more general level, the upshot of In re Tam will no doubt be that mark owners and prospective mark owners will file applications to register disparaging or scandalous marks with a very defensible belief that these marks will be granted registration, and obtain the advantages inherent therein. Indeed, just one week after In re Tam was decided, for example, an applicant applied to register “HOLY SHIT” for tee shirts. If In re Tam goes unchallenged by other circuit courts, or if the Supreme Court ultimately affirms the Federal Circuit's rationale, there can be little doubt that this mark, and many marks like it, will be allowed to register.

This final result, however, was foreseen by the Federal Circuit, and was determined simply to be the worthwhile cost of getting out of the business of determining what should or should not be registered based on the level of obscenity or offensiveness:

We recognize that invalidating this provision may lead to the wider registration of marks that offend vulnerable communities. ' But much the same can be (and has been) said of many decisions upholding First Amendment protection of speech that is hurtful or worse. Whatever our personal feelings about the mark at issue here, or other disparaging marks, the First Amendment forbids government regulators to deny registration because they find the speech likely to offend others.

2015 WL 9287035, at 29.

Zachary C. Eyster is a member of the franchise team at Kilpatrick Townsend & Stockton. He can be reached at [email protected]. Christopher P. Bussert is a Partner in the Intellectual Property Group at the firm who specializes in copyright law. He can be reached at [email protected].