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Matal v. Tam

United States Supreme Court

June 19, 2017

JOSEPH MATAL, INTERIM DIRECTOR, UNITED STATES PATENT AND TRADEMARK OFFICE, PETITIONER
v.
SIMON SHIAO TAM

          Argued January 18, 2017

         ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT

Simon Tarn, lead singer of the rock group "The Slants, " chose this moniker in order to "reclaim" the term and drain its denigrating force as a derogatory term for Asian persons. Tam sought federal registration of the mark "THE SLANTS." The Patent and Trademark Office (PTO) denied the application under a Lanham Act provision prohibiting the registration of trademarks that may "disparage ... or bring . . . into contemp[t] or disrepute" any "persons, living or dead." 15 U.S.C. §1052(a). Tam contested the denial of registration through the administrative appeals process, to no avail. He then took the case to federal court, where the en banc Federal Circuit ultimately found the disparagement clause facially unconstitutional under the First Amendment's Free Speech Clause.

         Held: The judgment is affirmed.

         808 F.3d 1321, affirmed.

          JUSTICE Alito delivered the opinion of the Court with respect to Parts I, II, and III-A, concluding:

1. The disparagement clause applies to marks that disparage the members of a racial or ethnic group. Tarn's view, that the clause applies only to natural or juristic persons, is refuted by the plain terms of the clause, which uses the word "persons." A mark that disparages a "substantial" percentage of the members of a racial or ethnic group necessarily disparages many "persons, " namely, members of that group. Tarn's narrow reading also clashes with the breadth of the disparagement clause, which by its terms applies not just to "persons, " but also to "institutions" and "beliefs." §1052(a). Had Congress wanted to confine the reach of the clause, it could have used the phrase "particular living individual, " which it used in neighboring §1052(c). Tarn contends that his interpretation is supported by legislative history and by the PTO's practice for many years of registering marks that plainly denigrated certain groups. But an inquiry into the meaning of the statute's text ceases when, as here, "the statutory language is unambiguous and the statutory scheme is coherent and consistent." Barnhart v. Sigmon Coal Co., 534 U.S. 438, 450 (internal quotation marks omitted). Even if resort to legislative history and early enforcement practice were appropriate, Tam has presented nothing showing a congressional intent to adopt his interpretation, and the PTO's practice in the years following the disparagement clause's enactment is unenlightening. Pp. 8-12.
2. The disparagement clause violates the First Amendment's Free Speech Clause. Contrary to the Government's contention, trademarks are private, not government speech. Because the "Free Speech Clause . . . does not regulate government speech, " Pleasant Grove City v. Summum, 555 U.S. 460, 467, the government is not required to maintain viewpoint neutrality on its own speech. This Court exercises great caution in extending its government-speech precedents, for if private speech could be passed off as government speech by simply affixing a government seal of approval, government could silence or muffle the expression of disfavored viewpoints.
The Federal Government does not dream up the trademarks registered by the PTO. Except as required by §1052(a), an examiner may not reject a mark based on the viewpoint that it appears to express. If the mark meets the Lanham Act's viewpoint-neutral requirements, registration is mandatory. And once a mark is registered, the PTO is not authorized to remove it from the register unless a party moves for cancellation, the registration expires, or the Federal Trade Commission initiates proceedings based on certain grounds. It is thus farfetched to suggest that the content of a registered mark is government speech, especially given the fact that if trademarks become government speech when they are registered, the Federal Government is babbling prodigiously and incoherently. And none of this Court's government-speech cases supports the idea that registered trademarks are government speech. Johanns v. Livestock Marketing Assn., 544 U.S. 550; Pleasant Grove City v. Summum, 555 U.S. 460; and Walker v. Texas Div., Sons of Confederate Veterans, Inc., 576 U.S., distinguished. Holding that the registration of a trademark converts the mark into government speech would constitute a huge and dangerous extension of the government-speech doctrine, for other systems of government registration (such as copyright) could easily be characterized in the same way. Pp. 12-18.

          Justice Alito, joined by The Chief Justice, Justice Thomas, and JUSTICE BREYER, concluded in Parts III-B, III-C, and IV:

(a) The Government's argument that this case is governed by the Court's subsidized-speech cases is unpersuasive. Those cases all involved cash subsidies or their equivalent, e.g., funds to private parties for family planning services in Rust v. Sullivan, 500 U.S. 173, and cash grants to artists in National Endowment for Arts v. Finley, 524 U.S. 569. The federal registration of a trademark is nothing like these programs. The PTO does not pay money to parties seeking registration of a mark; it requires the payment of fees to file an application and to maintain the registration once it is granted. The Government responds that registration provides valuable non-monetary benefits traceable to the Government's resources devoted to registering the marks, but nearly every government service requires the expenditure of government funds. This is true of services that benefit everyone, like police and fire protection, as well as services that are utilized by only some, e.g., the adjudication of private lawsuits and the use of public parks and highways. Pp. 18-20.
(b) Also unpersuasive is the Government's claim that the disparagement clause is constitutional under a "government-program" doctrine, an argument which is based on a merger of this Court's government-speech cases and subsidy cases. It points to two cases involving a public employer's collection of union dues from its employees, Davenport v. Washington Ed. Assn., 551 U.S. 177, and Ys-ursa v. Pocatello Ed. Assn., 555 U.S. 353, but these cases occupy a special area of First Amendment case law that is far removed from the registration of trademarks. Cases in which government creates a limited public forum for private speech, thus allowing for some content- and speaker-based restrictions, see, e.g., Good News Club v. Milford Central School, 533 U.S. 98, 106-107; Rosenberger v. Rector and Visitors of Univ. of Va., 515 U.S. 819, 831, are potentially more analogous. But even in those cases, viewpoint discrimination is forbidden. The disparagement clause denies registration to any mark that is offensive to a substantial percentage of the members of any group. That is viewpoint discrimination in the sense relevant here: Giving offense is a viewpoint. The "public expression of ideas may not be prohibited merely because the ideas are themselves offensive to some of their hearers." Street v. New York, 394 U.S. 576, 592. Pp. 20-23.
(c) The dispute between the parties over whether trademarks are commercial speech subject to the relaxed scrutiny outlined in Central Hudson Gas & Elect, v. Public Serv. Comm'n of N. Y., 447 U.S. 557, need not be resolved here because the disparagement clause cannot withstand even Central Hudson review. Under Central Hudson, a restriction of speech must serve "a substantial interest" and be "narrowly drawn." Id., at 564-565 (internal quotation marks omitted). One purported interest is in preventing speech expressing ideas that offend, but that idea strikes at the heart of the First Amendment. The second interest asserted is protecting the orderly flow of commerce from disruption caused by trademarks that support invidious discrimination; but the clause, which reaches any trademark that disparages any person, group, or institution, is not narrowly drawn. Pp. 23-26.

          Justice Kennedy, joined by Justice Ginsburg, Justice So-TOMAYOR, and JUSTICE Kagan, agreed that 15 U.S.C. §1052(a) constitutes viewpoint discrimination, concluding:

(a) With few narrow exceptions, a fundamental principle of the First Amendment is that the government may not punish or suppress speech based on disapproval of the ideas or perspectives the speech conveys. See Rosenberger v. Rector and Visitors of Univ. of Va., 515 U.S. 819, 828-829. The test for viewpoint discrimination is whether-within the relevant subject category-the government has singled out a subset of messages for disfavor based on the views expressed. Here, the disparagement clause identifies the relevant subject as "persons, living or dead, institutions, beliefs, or national symbols, " §1052(a); and within that category, an applicant may register a positive or benign mark but not a derogatory one. The law thus reflects the Government's disapproval of a subset of messages it finds offensive, the essence of viewpoint discrimination. The Government's arguments in defense of the statute are unpersuasive. Pp. 2-5.
(b) Regardless of whether trademarks are commercial speech, the viewpoint based discrimination here necessarily invokes heightened scrutiny. See Sorrell v. IMS Health Inc., 564 U.S. 552, 566. To the extent trademarks qualify as commercial speech, they are an example of why that category does not serve as a blanket exemption from the First Amendment's requirement of viewpoint neutrality. In the realm of trademarks, the metaphorical marketplace of ideas becomes a tangible, powerful reality. To permit viewpoint discrimination in this context is to permit Government censorship. Pp. 5-7.

          ALITO, J., announced the judgment of the Court and delivered the opinion of the Court with respect to Parts I, II, and III-A, in which Roberts, C. J., and Kennedy, Ginsburg, Breyer, Sotomayor, and KAGAN, JJ., joined, and in which THOMAS, J., joined except for Part II, and an opinion with respect to Parts III-B, III-C, and IV, in which Roberts, C. J., and Thomas and Breyer, JJ., joined. Kennedy, J., filed an opinion concurring in part and concurring in the judgment, in which Ginsburg, Sotomayor, and Kagan, JJ., joined. Thomas, J., filed an opinion concurring in part and concurring in the judgment. GORSUCH, J., took no part in the consideration or decision of the case.

          ALITO JUSTICE

         JUSTICE ALITO announced the judgment of the Court and delivered the opinion of the Court with respect to Parts I, II, and III-A, and an opinion with respect to Parts III-B, III-C, and IV, in which THE CHIEF JUSTICE, Justice Thomas, and Justice Breyer join.

         This case concerns a dance-rock band's application for federal trademark registration of the band's name, "The Slants." "Slants" is a derogatory term for persons of Asian descent, and members of the band are Asian-Americans. But the band members believe that by taking that slur as the name of their group, they will help to "reclaim" the term and drain its denigrating force.

         The Patent and Trademark Office (PTO) denied the application based on a provision of federal law prohibiting the registration of trademarks that may "disparage ... or bring . . . into contemp[t] or disrepute" any "persons, living or dead." 15 U.S.C. §1052(a). We now hold that this provision violates the Free Speech Clause of the First Amendment. It offends a bedrock First Amendment principle: Speech may not be banned on the ground that it

         Opinion of the Court expresses ideas that offend.

         I

         A

         "The principle underlying trademark protection is that distinctive marks-words, names, symbols, and the like- can help distinguish a particular artisan's goods from those of others." B&B Hardware, Inc. v. Hargis Industries, Inc., 575 U.S.__, __(2015) (slip op., at 3); see also Wal-Mart Stores, Inc. v. Samara Brothers, Inc., 529 U.S. 205, 212 (2000). A trademark "designate[s] the goods as the product of a particular trader" and "protect[s] his good will against the sale of another's product as his." United Drug Co. v. Theodore Rectanus Co., 248 U.S. 90, 97 (1918); see also Hanover Star Milling Co. v. Metcalf, 240 U.S. 403, 412-413 (1916). It helps consumers identify goods and services that they wish to purchase, as well as those they want to avoid. See Wal-Mart Stores, supra, at 212-213; Park TV Fly, Inc. v. Dollar Park & Fly, Inc., 469 U.S. 189, 198 (1985).

         "[F]ederal law does not create trademarks." B&B Hardware, supra, at__(slip op., at 3). Trademarks and their precursors have ancient origins, and trademarks were protected at common law and in equity at the time of the founding of our country. 3 J. McCarthy, Trademarks and Unfair Competition §19:8 (4th ed. 2017) (hereinafter McCarthy); 1 id., §§5:1, 5:2, 5:3; Pattishal, The Constitutional Foundations of American Trademark Law, 78 Trademark Rep. 456, 457-458 (1988); Pattishall, Two Hundred Years of American Trademark Law, 68 Trademark Rep. 121, 121-123 (1978); see Trade-Mark Cases, 100 U.S. 82, 92 (1879). For most of the 19th century, trademark protection was the province of the States. See Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 780-782 (1992) (Stevens, J., concurring in judgment); id., at 785 (THOMAS, J., concurring in judgment). Eventually, Congress stepped in to provide a degree of national uniformity, passing the first federal legislation protecting trademarks in 1870. See Act of July 8, 1870, §§77-84, 16 Stat. 210-212. The foundation of current federal trademark law is the Lanham Act, enacted in 1946. See Act of July 5, 1946, ch. 540, 60 Stat. 427. By that time, trademark had expanded far beyond phrases that do no more than identify a good or service. Then, as now, trademarks often consisted of catchy phrases that convey a message.

         Under the Lanham Act, trademarks that are "used in commerce" may be placed on the "principal register, " that is, they may be federally registered. 15 U.S.C. §1051(a)(1). And some marks "capable of distinguishing [an] applicant's goods or services and not registrable on the principal register . . . which are in lawful use in commerce by the owner thereof" may instead be placed on a different federal register: the supplemental register. §1091(a). There are now more than two million marks that have active federal certificates of registration. PTO Performance and Accountability Report, Fiscal Year 2016, p. 192 (Table 15), https://www.uspto.gov/sites/default/files/ documents/USPTOFY16PAR.pdf (all Internet materials as last visited June 16, 2017). This system of federal registration helps to ensure that trademarks are fully protected and supports the free flow of commerce. "[N]ational protection of trademarks is desirable, " we have explained, "because trademarks foster competition and the maintenance of quality by securing to the producer the benefits of good reputation." San Francisco Arts & Athletics, Inc. v. United States Olympic Comm., 483 U.S. 522, 531 (1987) (internal quotation marks omitted); see also Park TV Fly, Inc., supra, at 198 ("The Lanham Act provides national protection of trademarks in order to secure to the owner of the mark the goodwill of his business and to protect the ability of consumers to distinguish among competing producers").

         B

         Without federal registration, a valid trademark may still be used in commerce. See 3 McCarthy §19:8. And an unregistered trademark can be enforced against would-be infringers in several ways. Most important, even if a trademark is not federally registered, it may still be enforceable under §43(a) of the Lanham Act, which creates a federal cause of action for trademark infringement. See Two Pesos, supra, at 768 ("Section 43(a) prohibits a broader range of practices than does §32, which applies to registered marks, but it is common ground that §43(a) protects qualifying unregistered trademarks" (internal quotation marks and citation omitted)).[1] Unregistered trademarks may also be entitled to protection under other federal statutes, such as the Anticybersquatting Consumer Protection Act, 15 U.S.C. §1125(d). See 5 McCarthy §25A:49, at 25A-198 ("[T]here is no requirement [in the Anticybersquatting Act] that the protected 'mark' be registered: unregistered common law marks are protected by the Act"). And an unregistered trademark can be enforced under state common law, or if it has been registered in a State, under that State's registration system. See 3 id., §19:3, at 19-23 (explaining that "[t]he federal system of registration and protection does not preempt parallel state law protection, either by state common law or state registration" and "[i]n the vast majority of situations, federal and state trademark law peacefully coexist"); id., §22:1 (discussing state trademark registration systems).

         Federal registration, however, "confers important legal rights and benefits on trademark owners who register their marks." B&B Hardware, 575 U.S., at__(slip op., at 3) (internal quotation marks omitted). Registration on the principal register (1) "serves as 'constructive notice of the registrant's claim of ownership' of the mark, " ibid. (quoting 15 U.S.C. §1072); (2) "is 'prima facie evidence of the validity of the registered mark and of the registration of the mark, of the owner's ownership of the mark, and of the owner's exclusive right to use the registered mark in commerce on or in connection with the goods or services specified in the certificate, '" B&B Hardware, 575 U.S. __(slip op., at 3) (quoting § 1057(b)); and (3) can make a mark "'incontestable'" once a mark has been registered for five years, " ibid, (quoting §§1065, 1115(b)); see Park 'N Fly, 469 U.S., at 193. Registration also enables the trademark holder "to stop the importation into the United States of articles bearing an infringing mark." 3 McCarthy §19:9, at 19-38; see 15 U.S.C. §1124.

         C

         The Lanham Act contains provisions that bar certain trademarks from the principal register. For example, a trademark cannot be registered if it is "merely descriptive or deceptively misdescriptive" of goods, § 1052(e)(1), or if it is so similar to an already registered trademark or trade name that it is "likely ... to cause confusion, or to cause mistake, or to deceive, " § 1052(d).

         At issue in this case is one such provision, which we will call "the disparagement clause." This provision prohibits the registration of a trademark "which may disparage . . . persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute." § 1052(a).[2] This clause appeared in the original Lanham Act and has remained the same to this day. See §2(a), 60 Stat. 428.

         When deciding whether a trademark is disparaging, an examiner at the PTO generally applies a "two-part test." The examiner first considers "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." Trademark Manual of Examining Procedure §1203.03(b)(i) (Apr. 2017), p. 1200-150, http://tmep.uspto.gov. "If that meaning is found to refer to identifiable persons, institutions, beliefs or national symbols, " the examiner moves to the second step, asking "whether that meaning may be disparaging to a substantial composite[3] of the referenced group." Ibid. If the examiner finds that a "substantial composite, although not necessarily a majority, of the referenced group would find the proposed mark ... to be disparaging in the context of contemporary attitudes, " a prima facie case of disparagement is made out, and the burden shifts to the applicant to prove that the trademark is not disparaging. Ibid. What is more, the PTO has specified that "[t]he fact that an applicant may be a member of that group or has good intentions underlying its use of a term does not obviate the fact that a substantial composite of the referenced group would find the term objectionable." Ibid.

         D

         Simon Tarn is the lead singer of "The Slants." In re Tarn, 808 F.3d 1321, 1331 (CA Fed. 2015) (en banc), as corrected (Feb. 11, 2016). He chose this moniker in order to "reclaim" and "take ownership" of stereotypes about people of Asian ethnicity. Ibid, (internal quotation marks omitted). The group "draws inspiration for its lyrics from childhood slurs and mocking nursery rhymes" and has given its albums names such as "The Yellow Album" and "Slanted Eyes, Slanted Hearts." Ibid.

         Tarn sought federal registration of "THE SLANTS, " on the principal register, App. 17, but an examining attorney at the PTO rejected the request, applying the PTO's two-part framework and finding that "there is ... a substantial composite of persons who find the term in the applied-for mark offensive." Id., at 30. The examining attorney relied in part on the fact that "numerous dictionaries define 'slants' or 'slant-eyes' as a derogatory or offensive term." Id., at 29. The examining attorney also relied on a finding that "the band's name has been found offensive numerous times"-citing a performance that was canceled because of the band's moniker and the fact that "several bloggers and commenters to articles on the band have indicated that they find the term and the applied-for mark offensive." Id., at 29-30.

         Tarn contested the denial of registration before the examining attorney and before the PTO's Trademark Trial and Appeal Board (TTAB) but to no avail. Eventually, he took the case to federal court, where the en banc Federal Circuit ultimately found the disparagement clause facially unconstitutional under the First Amendment's Free Speech Clause. The majority found that the clause engages in viewpoint-based discrimination, that the clause regulates the expressive component of trademarks and consequently cannot be treated as commercial speech, and that the clause is subject to and cannot satisfy strict scrutiny. See 808 F.3d, at 1334-1339. The majority also rejected the Government's argument that registered trademarks constitute government speech, as well as the Government's contention that federal registration is a form of government subsidy. See id., at 1339-1355. And the majority opined that even if the disparagement clause were analyzed under this Court's commercial speech cases, the clause would fail the "intermediate scrutiny" that those cases prescribe. See id., at 1355-1357.

         Several judges wrote separately, advancing an assortment of theories. Concurring, Judge O'Malley agreed with the majority's reasoning but added that the disparagement clause is unconstitutionally vague. See id., at 1358-1363. Judge Dyk concurred in part and dissented in part. He argued that trademark registration is a government subsidy and that the disparagement clause is facially constitutional, but he found the clause unconstitutional as applied to THE SLANTS because that mark constitutes "core expression" and was not adopted for the purpose of disparaging Asian-Americans. See id., at 1363-1374. In dissent, Judge Lourie agreed with Judge Dyk that the clause is facially constitutional but concluded for a variety of reasons that it is also constitutional as applied in this case. See id., at 1374-1376. Judge Reyna also dissented, maintaining that trademarks are commercial speech and that the disparagement clause survives intermediate scrutiny because it "directly advances the government's substantial interest in the orderly flow of commerce." See id., at 1376-1382.

         The Government filed a petition for certiorari, which we granted in order to decide whether the disparagement clause "is facially invalid under the Free Speech Clause of the First Amendment." Pet. for Cert, i; see sub. nom. Lee v. Tarn, 579 U.S.__(2016).

         II

         Before reaching the question whether the disparagement clause violates the First Amendment, we consider Tarn's argument that the clause does not reach marks that disparage racial or ethnic groups. The clause prohibits the registration of marks that disparage "persons, " and Tarn claims that the term "persons" "includes only natural and juristic persons, " not "non-juristic entities such as racial and ethnic groups." Brief for Respondent 46.

         Tarn never raised this argument before the PTO or the Federal Circuit, and we declined to grant certiorari on this question when Tarn asked us to do so, see Brief Responding to Petition for Certiorari, pp. i, 17-21. Normally, that would be the end of the matter in this Court. See, e.g., Yee v. Escondido,503 U.S. 519, 534-538 (1992); Freytag v. ...


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