Lanham Act Disparagement Provision Held Unconstitutional

Cutting to the chase, because this is a noteworthy decision, but many people are busy getting ready for the holidays and might appreciate receiving the result up front.

We hold that the disparagement provision of Lanham Act § 2(a) is unconstitutional because it violates the First Amendment. We vacate the Board’s holding that Mr. Tam’s mark is unregistrable, and remand this case to the Board for further proceedings.

(Opinion page 62).

The USPTO is prohibited from registering scandalous, immoral, or disparaging marks by the Lanham Act, §2(a), also known as 15 U.S.C. §1052(a).  Simon Shiao Tam leads the Asian-American dance-rock band The Slants.  Twice Tam filed a trademark registration application for the mark THE SLANTS and was twice refused by the USPTO on the basis that the USPTO examiner found the mark to be disparaging to people of Asian descent.  Tam appealed to the Trademark Trial and Appeal Board.  The Board affirmed the examiner’s refusal to register the mark.  Tam appealed to the Federal Circuit.  A Federal Circuit panel affirmed the Board’s decision.  On its own initiative, the Federal Circuit ordered a hearing en banc.  The Federal Circuit en banc ruled that §2(a) of the Lanham Act, relied on by the UPSTO and Federal Circuit panel in rejecting Tam’s trademark registration application, is unconstitutional.

The en banc Federal Circuit made the following determinations.  The Federal Circuit referred to §2(a) as the “disparagement provision.”

  1. Section 2(a)’s Denial of Important Legal Rights to Private Speech Based on Disapproval of the Message Conveyed Is Subject to, and Cannot Survive, Strict Scrutiny.  (Page 17).
  2. The Disparagement Provision, Which Discriminates Based on Disapproval of the Message, Is Not Content or Viewpoint Neutral.  (Page 17).
  3. The Disparagement Provision Regulates the Expressive Aspects of the Mark, Not Its Function As Commercial Speech.  (Page 23).
  4. Section 2(a) Is Not Saved From Strict Scrutiny Because It Bans No Speech or By Government-Speech or Government-Subsidy Doctrines.  (Page 26).
  5. Strict Scrutiny Applies to § 2(a), Which Significantly Chills Private Speech on Discriminatory Grounds, Though It Does Not Ban Speech.  (Page 27).
  6. Trademark Registration Is Not Government Speech.  (Page 38).
  7. Section 2(a) Is Not a Government Subsidy Exempt from Strict Scrutiny.  (Page 45).
  8. Section 2(a) Is Unconstitutional Even Under the Central Hudson Test for Commercial Speech.  (Page 56).

In Central Hudson, the Supreme Court laid out the intermediate scrutiny framework for determining the constitutionality of restrictions on commercial speech. First, commercial speech must concern lawful activity and not be misleading. If this is the case, we ask whether the asserted governmental interest is substantial, and whether the regulation directly and materially advances the government’s asserted interest and is narrowly tailored to achieve that objective. Under a commercial speech inquiry, it is the State’s burden to justify its content-based law as consistent with the First Amendment.

(Opinion pdf page 57).

Applying the Central Hudson test to this case, the Federal Circuit concluded:

We conclude that the government has not presented us with a substantial government interest justifying the § 2(a) bar on disparaging marks. All of the government’s proffered interests boil down to permitting the government to burden speech it finds offensive. This is not a legitimate interest. With no substantial government interests, the disparagement provision of § 2(a) cannot satisfy the Central Hudson test. We hold the disparagement provision of § 2(a) unconstitutional under the First Amendment.

(Opinion pdf page 61).

This case is In re Tam, No. 2014-1203, Federal Circuit Court of Appeals.

The Federal Circuit’s decision was not unanimous.

Circuit Judge Moore wrote the majority opinion and was joined by Chief Judge Prost and Circuit Judges Newman, O’Malley, Wallach, Taranto, Chen, Hughes and Stoll.

Circuit Judge O’ Malley wrote a concurring opinion and was joined by Circuit Judge Wallach.

Circuit Judge Dyk concurred in part and dissented in part and was joined by Circuit Judges Lourie and Reyna with respect to parts I, II, III, and IV.

Circuit Judge Lourie filed a dissenting opinion.

Circuit Judge Reyna filed a dissenting opinion.

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