2(a) avoids First Amendment challenge, for now

In re Tam, — F.3d –, 
No. 2014-1203 (Fed. Cir. Apr. 20, 2015)
 
The Federal Circuit affirmed the refusal to register THE
SLANTS for entertainment (a band) because it was disparaging, with “additional
views” from one judge suggesting that it’s time for the Federal Circuit to
reconsider its precedent upholding §2(a) against First Amendment challenge.
 
The TTAB pointed to record evidence that THE SLANTS would
likely be perceived as referring to people of Asian descent, and that this was
offensive to a substantial component of such people.  The band’s website displayed the mark next to
“a depiction of an Asian woman, utilizing rising sun imagery and using a
stylized dragon image,” and the applicant said that he selected the mark in
order to “own” the stereotype it represents. Nonetheless, “[t]he dictionary
definitions, reference works, and all other evidence unanimously categorize the
word ‘slant,’ when meaning a person of Asian descent, as disparaging,” and
there was record evidence of individuals and groups in the Asian community
objecting to Tam’s use of the word.
 
The test for disparagement asks “(1) what is the likely
meaning of the matter in question, taking into account not only dictionary
definitions, but also the relationship of the matter to the other elements in
the mark, the nature of the goods or services, and the manner in which the mark
is used in the marketplace in connection with the goods or services; and (2) if
that meaning is found to refer to identifiable persons, institutions, beliefs
or national symbols, whether that meaning may be disparaging to a substantial
composite of the referenced group.”
 
The TTAB appropriately took into account evidence gathered
with respect to a prior abandoned application for a version of the mark with an
Asian-inspired graphic; evidence outside the application can be relevant to
determine the manner of a mark’s use. 
Substantial evidence supported the Board’s finding that the mark
referred to people of Asian descent. 
Though the term “slant” has a number of alternative meanings, one of
them is (according to Tam’s own cited dictionaries) “a disparaging term for a
person of East Asian birth or ancestry,” (The American Heritage Dictionary of
the English Language), and “[a] person with slanting eyes, spec. one of Oriental
descent” (Oxford English Dictionary). 
Its innocuous meanings, and trademarks based thereupon, don’t prevent it
from being used in an offensive manner. Instead, those meanings require the PTO
to examine how the applicant uses the mark in the marketplace to determine its
likely meaning.
 
The factual record included Tam’s explanation of the band’s
name: “I was trying to think of things that people associate with Asians.
Obviously, one of the first things people say is that we have slanted eyes. . .
.” and “We want to take on these stereotypes that people have about us, like
the slanted eyes, and own them. We’re very proud of being Asian—we’re not going
to hide that fact. The reaction from the Asian community has been positive.” The
band’s website sets the mark against “a depiction of an Asian woman, utilizing
rising sun imagery and using a stylized dragon image.”  Individuals and Asian groups perceived the
term as referring to people of Asian descent.
 
Likewise, substantial evidence supported the finding of
likely offensiveness to a substantial composite of people of Asian descent. The
definitions in the record “universally characterize the word … as disparaging,
offensive, or an ethnic slur when used to refer to a person of Asian descent.” The
Japanese American Citizens League published a brochure describing the term as a
“derogatory term” that is “demeaning” and “cripple[s] the spirit.” The  offensive 
nature  of  the band’s name led to the cancellation of
the band’s scheduled performance at a conference for Asian youth. No survey or
other quantitative measure was required. 
 
Tam’s constitutional challenges were also unavailing.
Binding precedent establishes that §2(a) doesn’t violate the First Amendment
because it doesn’t ban use of a mark. In re McGinley, 660 F.2d 481 (C.C.P.A.
1981). (Note that the majority doesn’t say anything about whether §43(a) might
provide protection; the reasoning that “lack of registration doesn’t bar use
and so it’s not a problem” is equally applicable to refusing §43(a) protection.)  Nor was the §2(a) disparagement standard
unconstitutionally vague.  Although there
is inherent difficulty in finding an objective measure, the two-part test is “sufficiently
precise to enable the PTO and the courts to apply the law fairly and to notify
a would-be registrant that the mark he adopts will not be granted a federal
registration.”
 
Tam argued that the arbitrary application of the standard,
allowing registrations for “slurs against homosexuals such as DYKES ON BIKES,”
violated due process. But due process was satisfied by a full opportunity to
prosecute an application and appeal any denial. Moreover, “allegations
regarding similar marks are irrelevant because each application must be
considered on its own merits.” Past errors don’t bind the PTO to improperly
register an applicant’s mark.
 
Tam finally argued that the rejection hinged on his and his
bandmates’ ethnic identities, thus denying him equal protection.  Instead, the registration was rejected
because it used the mark in a disparaging matter; as the TTAB said, “[a]n
application by a band comprised of nonAsian-Americans called THE SLANTS that
displayed the mark next to the imagery used by applicant . . . would also be
subject to a refusal under Section 2(a).”
 
Judge Moore offered “additional views,” though this isn’t
styled a concurrence or a dissent.  Judge
Moore wrote to argue that it was time to revisit McGinley’s holding on the constitutionality of §2(a).  First Amendment jurisprudence on
unconstitutional conditions and commercial speech, she noted, has evolved
significantly since McGinley.
 
First, Judge Moore noted, trademarks are commercial speech
and thus “unquestionably … protected” (skipping over the question of whether a
mark is truthful and nonmisleading, but ok). And the mark here was more than a
source identifier.  (Which, incidentally,
undermines the articulated justification for commercial speech—that it provides
consumers with useful information.) 
Instead, Tam sought to “reclaim” and “take ownership” of Asian
stereotypes. This name “weigh[ed] in on cultural and political discussions
about race and society that are within the heartland of speech protected by the
First Amendment.”
 
True, banning registration doesn’t mean banning use.  But, as B&B
v. Hargis
just told us, “[t]he 
Lanham  Act  confers 
important  legal  rights 
and benefits on trademark owners who register their marks.” These
benefits were both substantive and procedural, including nationwide rights even
without nationwide use and a presumption of validity/possible
incontestability. 
 
Moreover, “[n]ot only is a disparaging trademark denied
federal registration, but it cannot be protected by its owner by virtue of a §
43(a) unfair competition claim.”  We know
this because the Supreme Court made “clear” in Taco Cabana “that § 43(a) protection is only available for unregistered
trademarks that could have qualified for federal registration.” See also Donchez
v. Coors Brewing Co., 392 F.3d 1211, 1215 (10th Cir. 2004) (plaintiff must
establish that its mark is protectable to prevail in a claim under § 43(a));
Yarmuth-Dion, Inc. v. D’ion Furs, Inc., 835 F.2d 990, 992 (2d Cir. 1987)
(requiring a plaintiff to “demonstrate that his [unregistered] mark merits
protection under the Lanham Act”).  “Thus,
no federal cause of action is available to protect a trademark deemed disparaging,
regardless of its use in commerce.”
 
And further, the Model State Trademark Bill was patterned
after the Lanham Act and includes similar prohibitions.  “[V]irtually all states have adopted the
Model Bill and its disparagement provision. Thus, not only are the benefits of
federal registration unavailable to Mr. Tam, so too are the benefits of
trademark registration in nearly all states.” 
Plus, the common law mirrors the Lanham Act, so that means any state
protection is unlikely. The denial of any rights “severely burdens” the use of
disparaging marks.  Indeed, the
content-based restrictions of §2(a) were adopted to reduce use of
government-deprecated marks, creating a chilling effect.
 
The unconstitutional conditions doctrine says that the
government cannot deny access to a benefit because of the recipient’s exercise
of constitutionally protected speech. Of course the government can grant
benefits predicated on compliance with certain policies, so “when the
Government appropriates public funds to establish a program it is entitled to
define the limits of that program.” However, Congress does not have the
authority to attach “conditions that seek to leverage funding to regulate
speech outside the contours of the program itself,” and outside the spending
power.
 
Here, Judge Moore reasoned, “[b]ecause the government denies
benefits to applicants on the basis of their constitutionally protected speech,
the ‘unconstitutional conditions’ doctrine applies.”  The benefits of registration, while valuable,
weren’t monetary.  “Unlike tangible
property, a subsidy, or a tax exemption, bestowal of a trademark registration
does not result in a direct loss of any property or money from the public fisc.
Rather, a trademark redefines the nature of the markholder’s rights as against
the rights of other citizens, depriving others of their rights to use the mark.”
This was a regulatory regime, not a government subsidy program.  And registration doesn’t drain the public
fisc; PTO operations are funded by registration fees. There might be an
attenuated connection to spending, such as when ICE agents seize counterfeit
goods because of a registration, but that wasn’t enough.
 
Thus, §2(a) had to survive First Amendment scrutiny, and as
a content-based and viewpoint-based regulation it was presumptively invalid.
One can register a mark referring to a certain group in a positive,
nondisparaging manner, but not a mark referring negatively to the same
group.  “Section 2(a) discriminates
against disparaging or offensive viewpoints,” contrary to R.A.V. v. City of St. Paul, which doesn’t allow the government to
punish only fighting words directed at one group. It was thus presumptively
invalid and had to satisfy strict scrutiny.
 
Comment: this is the wrong comparator.  Defamation carried out with actual malice is
actionable, but lying positively about someone with actual malice is not
actionable, absent associated fraud (see Alvarez).  The government may punish fighting words
without punishing hugging words, as long as it punishes all fighting words, or
some subset that’s related to the reason it can punish fighting words in the
first place.  By the same logic, the mere
fact that only disparaging marks are barred is not itself a constitutional
problem.
 
Regardless, Judge Moore continued, §2(a) couldn’t even
survive Central Hudson.
 
Note an interesting presupposition here: that the bar on
registration restricts or suppresses commercial speech.  Arguably the better analogy is a mandatory
disclosure requirement, which may raise the cost of commercial speech—just as
denying registration may raise the cost of using a particular disparaging
symbol as a mark—but is not judged under Central
Hudson
, but rather under a test much closer to rationality review.  We’d ask if the cost-raising requirement was
reasonably related to the government’s legitimate interests, and if it was not
so unduly burdensome as to be functionally speech-suppressive.  One could come out either way on this
inquiry, it seems to me, but it’s not Central
Hudson
.
 
Anyway, Judge Moore continued, the speech here—the use of a
disparaging mark—was lawful and not misleading. 
The governmente thus needed a substantial interest independent of
disapproving the speech’s message to justify the regulation. There was none;
Congress disapproved of the message carried by disparaging marks.  That’s not a legitimate government interest. The
Supreme Court has “consistently held that the fact that protected speech may be
offensive to some does not justify its suppression.” It is a “bedrock principle
underlying the First Amendment . . . that the Government may not prohibit the
expression of an idea simply because society finds the idea itself offensive or
disagreeable.” (Note again the suppression language here.)
 
The alleged interest in not devoting government resources to
disparaging marks is makeweight/bunk. 
Nor did the ban harmonize longstanding state and federal law, because
§2(a) didn’t codify a common law bar on disparaging marks (which are different
from vulgar and misleading marks, which do have a history of state refusal to
recognize); §2(a) created new law.  (Of
course, the ban does harmonize now,
as she pointed out above.) 
 
Further, trademarks aren’t government speech.  Publication on the Principal Register is not
for the purpose of communicating a particular message or viewpoint; it is for
providing notice that a mark has been registered.  (That actually seems like a particular
message.)  The government would only have
a substantial interest in avoiding the appearance of giving a stamp of approval
to disparaging marks if the public believed that trademarks carry the stamp of
government approval.  But that’s not what
registration is.  The PTO’s job is to
register marks that are functioning to identify and distinguish goods and
services in the marketplace. “The purpose served by trademarks, to identify the
source of the goods, is antithetical to the notion that the trademark is tied
to the government.”

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