By: Amanda McGovern and Daniel Alvarez Sox

As published in the Daily Business Review, June 26, 2017

The U.S. Supreme Court’s decision in Matel v. Tam paves the way for trademarking racial slurs.

Simon Shaio Tam, an Asian-American who sought to trademark a racially derisive term for Asians, is happy about the court’s ruling. He’s happy because the court ruled in his favor, invalidating on First Amendment grounds a 71-year old statutory provision of the Lanham Act called the disparagement clause, or as Justice Samuel Alito called it the “happy-talk clause.”

Relying on the disparagement clause, the U.S. Patent and Trademark Office, or USPTO, had denied Tam’s application to register the name of his band, “The Slants,” because the name would offend Asians. Agreeing that it would, Tam believed he could combat its denigrating force by owning it, both legally, vis-a-vis a trademark, and symbolically, as a defiant proclamation that he could not be offended by a term that he chose to reclaim and transform. Paradoxically, the court’s ruling was a blow to a group of Native Americans fighting the same battle with a different strategy.

Since 1992, certain Native American tribes have been trying to discourage the use of the term Redskins. In June 2014, the USPTO’s Appeal Board, relying on the disparagement clause, voted to revoke six Washington Redskins trademarks that it concluded were disparaging to Native Americans. The team appealed to the U.S. Court of Appeals for the Fourth Circuit, which decided to wait for a ruling in Tam before rendering its decision.

After Tam, the disparagement clause is no more. Noble as the happy-talk clause’s purpose might have been, the court concluded that it threatened freedom of speech, emphasizing two fundamental principles of First Amendment jurisprudence: The government cannot shield you from speech merely because you are offended by it, and the speech we hate is the one that most needs protection from the government.

The cornerstone of federal trademark legislation is the Lanham Act. Passed in 1946, it gave the federal government authority to register trademarks, like Tide and Kleenex. Section 1052(a) of the Lanham Act prohibited the USPTO from registering trademarks that may “disparage … or bring … into contempt or disrepute” any “persons, living or dead.” In practice, USPTO examiners would determine whether the proposed trademark referred to certain people and reject it if it would offend a “substantial composite” (not necessarily a majority) of the people to whom it referred. The USPTO relied on the disparagement clause when it rejected Tam’s application to trademark The Slants.

Worth Defending

In defense of the disparagement clause, the government hoped to convince the court that trademarks are government as opposed to public speech. The court’s opinion, written by Justice Alito, rejected that argument.

Just shy of calling it absurd, the court stated that if trademarks are government speech, then the government “is babbling prodigiously and incoherently.” The court added, “What does the government have in mind when it advises Americans to ‘Just do it’ or ‘Have it your way?’ ” “What does the government have in mind when it advises Americans to ‘make.believe’ (Sony), ‘Think different’ (Apple), ‘Just do it’ (Nike), or ‘Have it your way’ (Burger King)? Was the government warning about a coming disaster when it registered the mark ‘EndTime Ministries’? ”

In the alternative, the government argued that trademarks are “commercial speech” that it is justified in restricting because of its “substantial interest” in preventing “underrepresented groups from being bombarded with demeaning messages in commercial advertising.” The government’s argument raises issues implicated by recent debates over political correctness and the government’s role in protecting women and minorities.

And though the court did not address the Washington Redskins trademark dispute, it is likely that its decision ended the efforts of Native Americans to prevent the Washington Redskins from profiting from names and logos that the USPTO agreed were disparaging. Unanimously, the court found that the interest in protecting free expression was paramount and that the disparagement clause was an overly broad harbinger for the type of viewpoint discrimination prohibited by the First Amendment.

Regardless of how the government sought to characterize the disparagement clause, the court continually returned to the same bottom line, namely that its purpose was to protect certain people from offensive speech.

While acknowledging that speech that disparages one’s race, ethnicity, gender or religion is hateful, the court, in a nod to a 1929 dissenting opinion by Justice Oliver Wendell Holmes Jr., stated, “The proudest boast of our free speech jurisprudence is that we protect the freedom to express ‘the thought that we hate.’ ”

In other words, disparaging terms and happy talk are worth defending.

 

About Rivero Mestre LLP

Rivero Mestre, from its offices in Miami and New York, represents clients from investigation to verdict and appeal in complex business disputes in U.S. federal courts, state courts, and domestic and international arbitration proceedings. The firm’s practice focuses primarily on representing corporate and institutional clients in a broad range of complex commercial disputes including financial institution matters, intellectual property disputes, and litigation and arbitration relating to Latin American trade and investment. For more information, visit www.riveromestre.com.