Summary: It is rare that decisions from the Federal Circuit make news, and even rarer that Federal Circuit decisions are reported on by "The Worldwide Leader in Sports," but that is exactly what happened when the Federal Circuit recently affirmed the U.S. Patent and Trademark Office Trademark Trial and Appeal Board's decision to cancel six trademark registrations owned by Pro-Football, Inc., which does business as The Washington Redskins.  The marks were canceled on the basis that the marks "may disparage" a "substantial composite" of Native Americans.  However, does a ruling based on these grounds fly in the face of the First Amendment?  An upcoming decision by an en banc Federal Circuit may soon tell us when it determines whether an Asian-American band is allowed to register the trademark "THE SLANTS" for entertainment in the nature of live performances by a musical band.

FULL ARTICLE

The U.S. District Court for the Eastern District of Virginia recently affirmed the U.S. Patent and Trademark Office" (USPTO) Trademark Trial and Appeal Board's (TTAB) June 2014 cancellation of six REDSKINS trademark registrations (three text marks and three including designs, an example of which is provided to the right) on the basis that the marks "may disparage" a "substantial composite" of Native Americans.  The U.S. Court of Appeals for the Federal Circuit soon will be engaging in a review of the constitutionality of the Lanham Act disparaging mark refusals, upon which the REDSKINS decision relied, in a review of an application for the trademark "THE SLANTS."  The Federal Circuit's decision in THE SLANTS case could have strong implications for the REDSKINS and similar decisions.

The REDSKINS Decision

In Pro Football, Inc. v. Blackhorse, the District Court affirmed the TTAB's finding that survey evidence indicating the 30% of surveyed Native Americans who viewed the term "redskins" to disparage them amounted to a "substantial composite" of Native Americans.  The fact that as few as 30% of a representative sample of Native Americans would find "redskin" disparaging will surprise many.  The fact that the 30% disparagement level was found to be sufficient to constitute a "substantial composite" also might surprise many, but one must keep in mind the "may disparage" language in Section 2(a) of the Lanham Act.  That is, registration is to be refused where the applied-for mark "may disparage . . . persons, living or dead, institutions, beliefs or national symbols, or bring them into contempt or disrepute."  As the statute is written with the phrase "may disparage," the bar for characterizing a mark as sufficiently disparaging is low.

First Amendment Concerns

Those uncomfortable with the government's refusing registration protection for marks that "may disparage" a minority of an ethnic, racial or religious group cite First Amendment concerns.  In fact, the Federal Circuit recently vacated its decision affirming the TTAB's upholding of a Section 2(a) disparagement examination refusal in In re Tam, a case that involves a musical group's effort to register its name THE SLANTS.  The Slants is an Oregon-based musical group that describes itself as performing "Chinatown dance rock."  The band, comprised of Asian-Americans, attempted to register THE SLANTS in relation to musical entertainment services, but the USPTO refused on the basis that the word "slants" is a racial slur referring to Asians, which the USPTO determined is not registrable under the Lanham Act Section 2(a) "may disparage a substantial composite" standard.  The TTAB affirmed, and the TTAB was upheld by the initial three-member panel Federal Circuit decision, which has now been vacated.  The Federal Circuit will be reconsidering the decision en banc with particular focus on whether Lanham Act Section 2(a) is constitutional under a First Amendment analysis.

The District Court for the Eastern District of Virginia REDSKINS decision and the vacated Federal Circuit THE SLANTS decision each stressed that the USPTO's granting trademark registrations is government speech that does not merit First Amendment scrutiny.  The en banc Federal Circuit panel now faces a tough task.  On the one hand, there is a strong argument that the USPTO's issuing registrations amounts to its acting merely as a conduit for private expression of applicants' commercial speech given the USPTO's lack of editorial control over applicants' marks.  The applicant in the THE SLANTS case has a more sympathetic profile – they are of Asian descent themselves and are using the phrase in a self-deprecating sense.  On the other hand, a ruling that Section 2(a) is unconstitutional would reverse the cancellation of the REDSKINS registrations, which would trigger outcry.

If the Federal Circuit finds Section 2(a) to be unconstitutional as written, the long-term answer to restoring proper balance between government versus free speech interests might entail a statutory revision that changes the phrase "may disparage," which is a relatively lax standard, to wording more narrowly tailored to achieve the government's interest.

In Conclusion

The NFL's and the Slants' actual use of and ownership of the REDSKINS and THE SLANTS marks, respectively, have not been questioned or jeopardized by the recent decisions – only their ability to register their marks is at stake.  Registration is not a precondition to owning and asserting trademark rights.  Securing a federal trademark registration does, however, confer a range of benefits, including blocking and deterring others from registering marks likely to be confused with yours and shifting the burden onto a defendant to disprove your rights (as opposed to your having to demonstrate rights through evidence, which can be time consuming and costly) when you bring suit to enforce your mark.  The cancellation of or refusal of registration is not quite a "death penalty" for a mark, but a lot is at stake.

Apart from registrability, and no matter how the Federal Circuit decision comes down with respect to THE SLANTS, brand owners need to think expansively about the connotation of, and possible unintended consequences stemming from, trademark candidates at an early stage, e.g., during the brand name development or clearance stage.  This is not just important in the U.S., but should also be considered for foreign markets where translations and transliterations of brand names can cause consumers to smirk, blush or – even worse – be offended.

Finally, while the specific question presented to the en banc Federal Circuit in the In re Tam case is specific to the constitutionality of the Lanham Act's disparaging marks prohibition, a successful constitutional challenge could have broader implications, including for marks that have suffered, or that would be vulnerable to, registration refusals on the basis that they are allegedly "immoral" or "scandalous."  Success for the Slants would likely lead to fresh applications for numerous marks refused in the past as deemed disparaging, immoral or scandalous.

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