In a decision that should bring some comfort to the fans of the Washington Redskins football team, the U.S Court of Appeals for the Federal Circuit in In Re Simon Shiao Tam declared unconstitutional Section 2(a) of the Lanham Act’s prohibition on the United States Patent and Trademark Office (USPTO) registration of “disparaging marks.” The court found that the USPTO cannot refuse to register disparaging marks because:
[I]t disapproves of the messages conveyed by the marks. It cannot refuse to register marks because it concludes that such marks will be disparaging to others. The government regulation at issue amounts to viewpoint discrimination and under the strict scrutiny review appropriate for government regulation of message or viewpoint, we conclude that the disparagement proscription of §2(a) is unconstitutional.
The applicant, Mr. Tam, an Asian American, was the “front man” for an Asian-American dance-rock band. Mr. Tam chose as the name for his band a word which is widely considered a racial slur directed towards Asian Americans. Mr. Tam claimed that he named his band with the racial slur to “reclaim” and “take ownership” of Asian stereotypes. Mr. Tam argued that his band’s use of this racial slur was in accordance with the band’s strong belief that: “Asians should be proud of their cultural heritage and not be offended by stereotypical descriptions…” The Federal Circuit found that: “With their lyrics, performances, and band name, Mr. Tam and his band weigh in on cultural and political discussions about race and society that are within the heartland of speech protected by the First Amendment.”
Mr. Tam filed an application with the USPTO seeking to register the mark for the racial slur as used as the name of the band. The examiner refused to register the mark, finding it likely “disparaging to persons of Asian descent under §2(a)” because the term had “a long history of being used to deride and mock a physical feature of people of Asian descent.” The Trademark Trial and Appeal Board (the Board) upheld the examiner’s decision and disqualified the mark for registration under Section 2(a). The Board relied, in part, on In Re McGinley, 660 F.2d 481,484 (C.C.P.A. 1981) for the holding that “the refusal to register a mark under §2(a) does not bar the applicant from using the mark and therefore does not impact the First Amendment.”
The Federal Circuit, noting both that the trademark registration provides extremely valuable benefits to a registrant and that the government cannot deny a benefit to a person because of their exercise of constitutionally protected speech, rejected the holding in In Re McGinley. The Federal Circuit further noted the chilling impact that Section 2(a)’s vague prohibition on the registration of disparaging marks has on free speech: “The uncertainty as to what might be deemed disparaging is not only evident on its face, given the subjective-reaction element and shifting usage in different parts of society. It is confirmed by the record of USPTO grants and denial over the years, from which the public would have had a hard time drawing much reliable guidance.”
The court found the vague disparagement standard was not only an issue when a party chooses a particular mark to register but continues to be a discouragement to the use and maintenance of the mark as the mark may be challenged in a cancellation proceeding years later. At all times, the registrant will operate under the Sword of Damocles in the form of a constant risk of losing the registration. Therefore, the Section 2(a) disparagement prohibition coerces applicants away from choosing a mark that might result in problems and litigation expenses at any time in the future.
The Federal Circuit concluded that: “Federal trademark registration brings with it valuable substantive and procedural rights unavailable in the absence of registration… Denial of Federal trademark registration on the basis of the government’s disapproval of the message conveyed by certain trademarks violates the guarantees of the First Amendment.” The unanswered question of In Re Simon Shiao Tam is whether the remaining prohibitions in Section 2(a) that bar the registration of marks that the registrar deems “scandalous” or “immoral” would survive scrutiny under the Federal Circuit’s In Re Simon Shio Tam analysis. The likely answer to that question is that they would not.
On July 8, 2015, approximately six months before the Federal Circuit’s decision in In Re Simon Shiao Tam, the District Court for the Eastern District of Virginia in Pro-Football, Inc. v. Amanda Blackhorse, et al., rejected the Washington Redskins’ argument that Section 2(a)’s bar on the registration of disparaging marks violates the First Amendment. The District Court relied on In Re McGinley and on a finding that “trademark registration is government speech and is therefore exempt from First Amendment scrutiny.” The Federal Circuit has now expressly rejected the argument that trademark registration is government speech exempt from First Amendment scrutiny and has rejected the holding in In Re McGinley. Therefore, under the analysis and holding in In Re Simon Shiao Tam, the District Court decision upholding the cancellation of the registration of the Washington Redskins trademark would not stand.
On August 4, 2015, the Washington Redskins appealed the lower court’s decision to the United States Court of Appeals for the Fourth Circuit. The Fourth Circuit is not required to follow the Federal Circuit’s precedent in In Re Simon Shiao Tam. Indeed, the Fourth Circuit could uphold the District Court’s decision and create a split in law between the Circuits, which would likely make this issue ripe for review and final binding determination by the United States Supreme Court. The Washington Redskins franchise has been given an opportunity for a final victory in the fight over its trademarks, the equivalent of which its sad-sack football team has not been able to achieve on the field in more than two decades.
 The Federal Circuit also noted that a mark disqualified for federal registration is also barred from registration in every state, which is nearly all states, that adopted the Model States Trademark Act.