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In re Tam

United States Court of Appeals, Federal Circuit

December 22, 2015

IN RE SIMON SHIAO TAM

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Appeal from the United States Patent and Trademark Office, Trademark Trial and Appeal Board in No. 85/472,044.

RONALD D. COLEMAN, Archer & Greiner, P.C., Hackensack, NJ, argued for appellant. Also represented by JOEL GEOFFREY MACMULL; JOHN C. CONNELL, Haddonfield, NJ; DARTH M. NEWMAN, Martin Law Firm LLC, Pittsburgh, PA.

DANIEL TENNY, Appellate Staff, Civil Division, United States Department of Justice, Washington, DC, argued for appellee Michelle K. Lee. Also represented by BENJAMIN C. MIZER, MARK R. FREEMAN, JOSHUA MARC SALZMAN; NATHAN K. KELLEY, THOMAS W. KRAUSE, MOLLY R. SILFEN, CHRISTINA HIEBER, THOMAS L. CASAGRANDE, Office of the Solicitor, United States Patent and Trademark Office, Alexandria, VA.

LEE ROWLAND, Speech, Privacy & Technology, American Civil Liberties Union Foundation, New York, NY, argued for amici curiae American Civil Liberties Union, American Civil Liberties Union of Oregon, American Civil Liberties Union of the National Capital Area. Also represented by ESHA BHANDARI, BRETT MAX KAUFMAN; ARTHUR B. SPITZER, American Civil Liberties Union of the National Capital Area, Washington, DC; MATHEW W. DOS SANTOS, ACLU of Oregon, Portland, OR.

JEFFREY JOSEPH LOPEZ, Drinker Biddle & Reath LLP, Washington, DC, for amici curiae Amanda Blackhorse, Marcus Briggs-Cloud, Phillip Gover, Jillian Pappan, Courtney Tsotigh. Also represented by JESSE A. WITTEN.

MEGAN LEEF BROWN, Wiley Rein, LLP, Washington, DC, for amici curiae Cato Institute, The Rutherford Institute. Also represented by CHRISTOPHER J. KELLY, JOSHUA S. TURNER, JENNIFER L. ELGIN, DWAYNE D. SAM; Cato Institute also represented by ILYA SHAPIRO, Cato Institute, Washington DC; The Rutherford Institute also represented by DOUGLAS R. MCKUSICK, JOHN W. WHITEHEAD, Charlottesville, VA.

MARC J. RANDAZZA, Randazza Legal Group, Las Vegas, NV, for amicus curiae First Amendment Lawyers Association. Also represented by RONALD D. GREEN, JR.

CHARANJIT BRAHMA, Troutman Sanders LLP, San Francisco, CA, for amici curiae Fred T. Korematsu Center for Law and Equality, National Asian Pacific American Bar Association, South Asian Bar Association of Washington, DC. National Asian Pacific American Bar Association also represented by GEORGE C. CHEN, Bryan Cave LLP, Phoenix, AZ.

HUGH C. HANSEN, Fordham University School of Law, New York, NY, as amicus curiae Pro se.

LAWRENCE KURT NODINE, Ballard Spahr LLP, Atlanta, GA, for amicus curiae International Trademark Association. Also represented by ROBERT D. CARROLL, Goodwin Procter LLP, Boston, MA.

ROBERT LLOYD RASKOPF, Quinn Emanuel Urquhart & Sullivan, LLP, New York, NY, for amicus curiae Pro-Football, Inc. Also represented by SANFORD IAN WEISBURST, TODD ANTEN.

PHILLIP R. MALONE, Juelsgaard Intellectual Property and Innovation Clinic, Mills Legal Clinic, Stanford Law School, Stanford, CA, for amicus curiae Public Knowledge. Also represented by JEFFREY THEODORE PEARLMAN.

RICHARD L. STANLEY, Law Office of Richard L. Stanley, Houston TX, for amicus curiae Richard L. Stanley.

Before PROST, Chief Judge, NEWMAN, LOURIE, DYK, MOORE, O'MALLEY, REYNA, WALLACH, TARANTO, CHEN, HUGHES, and STOLL, Circuit Judges. OPINION filed by Circuit Judge MOORE, in which Chief Judge PROST and Circuit Judges NEWMAN, O'MALLEY, WALLACH, TARANTO, CHEN, HUGHES, and STOLL join. Concurring opinion filed by Circuit Judge O'MALLEY, in which Circuit Judge WALLACH joins. Opinion concurring in part and dissenting in part filed by Circuit Judge DYK, in which Circuit Judges LOURIE and REYNA join with respect to parts I, II, III, and IV. Dissenting opinion filed by Circuit Judge LOURIE. Dissenting opinion filed by Circuit Judge REYNA.

OPINION

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[117 U.S.P.Q.2d 1003] Moore, Circuit Judge.

Section 2(a) of the Lanham Act bars the Patent and Trademark Office (" PTO" ) from registering scandalous, immoral, or disparaging marks. 15 U.S.C. § 1052(a). The government enacted this law--and defends it today--because it disapproves of the messages conveyed by disparaging marks. It is a bedrock principle underlying the First Amendment that the government may not penalize private speech merely because it disapproves of the message it conveys. That principle governs even when the government's message-discriminatory penalty is less than a prohibition.

Courts have been slow to appreciate the expressive power of trademarks. Words--even a single word--can be powerful. Mr. Simon Shiao Tam named his band THE SLANTS to make a statement

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about racial and cultural issues in this country. With his band name, Mr. Tam conveys more about our society than many volumes of undisputedly protected speech. Another rejected mark, STOP THE ISLAMISATION OF AMERICA, proclaims that Islamisation is undesirable and should be stopped. Many of the marks rejected as disparaging convey hurtful speech that harms members of oft-stigmatized communities. But the First Amendment protects even hurtful speech.

The government cannot refuse to register disparaging marks because it disapproves of the expressive 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. Because the government has offered no legitimate interests justifying § 2(a), we conclude that it would also be unconstitutional under the intermediate scrutiny traditionally applied to regulation of the commercial aspects of speech. We therefore vacate the Trademark Trial and Appeal Board's (" Board" ) holding that Mr. Tam's mark is unregistrable, and remand this case to the Board for further proceedings.

Background

I. The Lanham Act

Congress enacted the Lanham Act in 1946 to provide a national system for registering and protecting trademarks used in interstate and foreign commerce. Congress's purpose in enacting the Lanham Act was to advance the two related goals of trademark law. First, the purpose of the Lanham Act is to " protect the public so it may be confident that, in purchasing a product bearing a particular trademark which it favorably knows, it will get the product which it asks for and wants to get." Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 782 n.15, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992) (Stevens, J., concurring) (quoting S. Rep. No. 79-1333, at 3 (1946)). Second, the Lanham Act ensures that a markholder can protect " his investment from . . . misappropriation by pirates and cheats." Id. ; see also Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U.S. 844, 854 n.14, 102 S.Ct. 2182, 72 L.Ed.2d 606 (1982) (" By applying a trademark to goods produced by one other than the trademark's owner, the infringer deprives the owner of the goodwill which he spent energy, time, and money to obtain. At the same time, the infringer deprives consumers of their ability to distinguish among the goods of competing manufacturers." (citations omitted)).

" Registration is significant. The Lanham Act confers important legal rights and benefits on trademark owners who register their marks." B& B Hardware, Inc. v. Hargis Ind., Inc., 135 S.Ct. 1293, 1300, 191 L.Ed.2d 222 (2015) (quotation marks omitted). These benefits--unavailable in the absence of federal registration--are numerous, and include both substantive and procedural rights. [117 U.S.P.Q.2d 1004] The holder of a federal trademark has a right to exclusive nationwide use of that mark where there was no prior use by others. See 15 U.S.C. § § 1072, 1115. Because the common law grants a markholder the right to exclusive use only in the geographic areas where he has actually used his mark, see 5 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 26:32 (4th ed.) (hereinafter " McCarthy" ), holders of a federally registered trademark have an important substantive right they could not otherwise obtain. Also, a registered mark is presumed

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to be valid, 15 U.S.C. § 1057(b), and the mark becomes incontestable (with certain exceptions) after five years of consecutive post-registration use, id. § 1065; see also B& B Hardware, 135 S.Ct. at 1310 (" Incontestability is a powerful protection." ). A markholder may sue in federal court to enforce his trademark, 15 U.S.C. § 1121, and he may recover treble damages if he can show infringement was willful, id. § 1117. He may also obtain the assistance of U.S. Customs and Border Protection in restricting importation of infringing or counterfeit goods, id. § 1124, 19 U.S.C. § 1526, prevent " cybersquatters" from misappropriating his domain name, 15 U.S.C. § 1125(d), and qualify for a simplified process for obtaining recognition and protection of his mark in countries that have signed the Paris Convention, see id. § 1141b (Madrid Protocol); Paris Convention for the Protection of Industrial Property art. 6 quinquies, July 14, 1967, 21 U.S.T. 1583, 828 U.N.T.S. 305. Lastly, registration operates as a complete defense to state or common law claims of trademark dilution. 15 U.S.C. § 1125(c)(6).

Under the Lanham Act, the PTO must register source-identifying trademarks unless the mark falls into one of several categories of marks precluded from registration. Id. § 1052 (" No trademark by which the goods of the applicant may be distinguished from the goods of others shall be refused registration on the principal register on account of its nature unless . . . ." (emphasis added)). Many of these categories bar the registration of deceptive or misleading speech, because such speech actually undermines the interests served by trademark protection and, thus, the Lanham Act's purposes in providing for registration. For example, a mark may not be registered if it resembles a registered mark such that its use is likely to " cause confusion, or to cause mistake, or to deceive," § 2(d), or if it is " deceptively misdescriptive," § 2(e). These restrictions on registration of deceptive speech do not run afoul of the First Amendment. See Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n, 447 U.S. 557, 563, 100 S.Ct. 2343, 65 L.Ed.2d 341 (1980) (" The government may ban forms of communication more likely to deceive the public than to inform it." ); see also Friedman v. Rogers, 440 U.S. 1, 13, 15-16, 99 S.Ct. 887, 59 L.Ed.2d 100 (1979); Ohralik v. Ohio State Bar Ass'n, 436 U.S. 447, 462-63, 98 S.Ct. 1912, 56 L.Ed.2d 444 (1978).

Section 2(a), however, is a hodgepodge of restrictions. Among them is the bar on registration of a mark that " [c]onsists of or comprises immoral, deceptive, or scandalous matter; or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt or disrepute." Section 2(a) contains proscriptions against deceptive speech, for example, the prohibition on deceptive matter or the prohibition on falsely suggesting a connection with a person or institution. But other restrictions in § 2(a) differ in that they are based on the expressive nature of the content, such as the ban on marks that may disparage persons or are scandalous or immoral. These latter restrictions cannot be justified on the basis that they further the Lanham Act's purpose in preventing consumers from being deceived. These exclusions from registration do not rest on any judgment that the mark is deceptive or likely to cause consumer confusion, nor do they protect the markholder's investment in his mark. They deny the protections of registration for reasons quite separate from any ability of the mark to serve the consumer and investment interests underlying trademark protection. In fact, § 2(a)'s exclusions can undermine those interests because they can even be employed in cancellation proceedings challenging a mark many years after its issuance

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and after the markholder has invested millions of dollars protecting its brand identity and consumers have come to rely on the mark as a brand identifier.

This case involves the disparagement provision of § 2(a).[1] Section 2(a)'s ban on the federal registration of " immoral" or " scandalous" [117 U.S.P.Q.2d 1005] marks originated in the trademark legislation of 1905. See Act of Feb. 20, 1905, ch. 592, § 5(a), 33 Stat. 724, 725. The provision barring registration based on disparagement first appeared in the Lanham Act in 1946. Pub. L. 79-489, § 2(a), 60 Stat. 427, 428 (codified at 15 U.S.C. § 1052(a)). It had no roots in the earlier trademark statute or the common law. There were few marks rejected under the disparagement provision following enactment of the Lanham Act. Only in the last several decades has the disparagement provision become a more frequent ground of rejection or cancellation of trademarks. Marks that the PTO has found to be disparaging include: REDSKINS, Pro-Football, Inc. v. Blackhorse, No. 1-14-CV-01043-GBL, 2015 WL 4096277 Va. (July 8, 2015) (2014 PTO cancellation determination currently on appeal in Fourth Circuit); STOP THE ISLAMISATION OF AMERICA, In re Geller, 751 F.3d 1355 (Fed. Cir. 2014); THE CHRISTIAN PROSTITUTE (2013); AMISHHOMO (2013); MORMON WHISKEY (2012); KHORAN for wine, In re Lebanese Arak Corp., 94 U.S.P.Q.2d 1215 (T.T.A.B. Mar. 4, 2010); HAVE YOU HEARD THAT SATAN IS A REPUBLICAN? (2010); RIDE HARD RETARD (2009); ABORT THE REPUBLICANS (2009); HEEB, In re Heeb Media, LLC, 89 U.S.P.Q.2d 1071 (T.T.A.B. Nov. 26, 2008); SEX ROD, Bos. Red Sox Baseball Club L.P. v. Sherman, 88 U.S.P.Q.2d 1581 (T.T.A.B. Sept. 9, 2008) (sustaining an opposition on multiple grounds, including disparagement); MARRIAGE IS FOR FAGS (2008); DEMOCRATS SHOULDN'T BREED (2007); REPUBLICANS SHOULDN'T BREED (2007); 2 DYKE MINIMUM (2007); WET BAC/WET B.A.C. (2007); URBAN INJUN (2007); SQUAW VALLEY, In re Squaw Valley Dev. Co., 80 U.S.P.Q.2d 1264 (T.T.A.B. June 2, 2006); DON'T BE A WET BACK (2006); FAGDOG (2003); N.I.G.G.A. NATURALLY INTELLIGENT GOD GIFTED AFRICANS (1996); a mark depicting a defecating dog, Greyhound Corp. v. Both Worlds, Inc., 6 U.S.P.Q.2d 1635 (T.T.A.B. Mar. 30, 1988) (found to disparage Greyhound's trademarked running dog logo); an image consisting of the national symbol of the Soviet Union with an " X" over it, In re Anti-Communist World Freedom Cong., Inc., 161 U.S.P.Q. 304 (T.T.A.B. Feb. 24, 1969); DOUGH-BOY for " a prophylactic preparation for the prevention of venereal diseases," Doughboy Indus., Inc. v. Reese Chem. Co., 88 U.S.P.Q. 227 (T.T.A.B. Jan. 25, 1951).

A disparaging mark is a mark which " dishonors by comparison with what is inferior, slights, deprecates, degrades, or affects or injures by unjust comparison." Geller, 751 F.3d at 1358 (alterations omitted). To determine if a mark is disparaging under § 2(a), a trademark examiner of the PTO considers:

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(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.

Trademark Manual of Exam. Proc. (" TMEP" ) § 1203.03(b)(i) (Jan. 2015 ed.) (citing Geller, 751 F.3d at 1358). If the examiner " make[s] a prima facie showing that a substantial composite, although not necessarily a majority, of the referenced group would find the proposed mark, as used on or in connection with the relevant goods or services, to be disparaging in the context of contemporary attitudes," the burden shifts to the applicant for rebuttal. Id. If the applicant fails to rebut the prima facie case of disparagement, the examiner refuses to register the mark. The Trademark Manual of Examining Procedure does not require an examiner who finds a mark disparaging to consult her supervisor or take any further steps to ensure the provision is applied fairly and consistently across the agency. Compare TMEP § 1203.03 (no discussion of action to take if examiner finds mark disparaging), with TMEP § 1203.01 (requiring examiner who finds a mark scandalous or immoral to consult his supervisor). A single examiner, with no input from her supervisor, can reject a mark as disparaging by determining that it would be disparaging to a substantial composite of the referenced group.

II. Facts of This Case

Mr. Tam is the " front man" for the Asian-American dance-rock band The Slants. Mr. Tam named his band The Slants to " reclaim" [117 U.S.P.Q.2d 1006] and " take ownership" of Asian stereotypes. J.A. 129-30. The band draws inspiration for its lyrics from childhood slurs and mocking nursery rhymes, J.A. 130, and its albums include " The Yellow Album" and " Slanted Eyes, Slanted Hearts." The band " feel[s] strongly that Asians should be proud of their cultural heri[ta]ge, and not be offended by stereotypical descriptions." J.A. 52. 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.

On November 14, 2011, Mr. Tam filed the instant application (App. No. 85/472,044) seeking to register the mark THE SLANTS for " Entertainment in the nature of live performances by a musical band," based on his use of the mark since 2006.[2] The examiner refused to register Mr. Tam's mark, finding it likely disparaging to " persons of Asian descent" under § 2(a). The examiner found that the mark likely referred to people of Asian descent in a disparaging way, explaining that the term " slants" had " a long history of being used to deride and mock a physical feature" of people of Asian descent. J.A. 42. And even though Mr. Tam may have chosen the mark to " reappropriate the disparaging term," the examiner found that a substantial

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composite of persons of Asian descent would find the term offensive. J.A. 43.

The Board affirmed the examiner's refusal to register the mark. The Board wrote that " it is abundantly clear from the record not only that THE SLANTS . . . would have the 'likely meaning' of people of Asian descent but also that such meaning has been so perceived and has prompted significant responses by prospective attendees or hosts of the band's performances." In re Tam, No. 85472044, 2013 WL 5498164, at *5 (T.T.A.B. Sept. 26, 2013) (" Board Opinion" ). To support its finding that the mark likely referred to people of Asian descent, the Board pointed to dictionary definitions, the band's website, which displayed the mark next to " a depiction of an Asian woman, utilizing rising sun imagery and using a stylized dragon image," and a statement by Mr. Tam that he selected the mark in order to " own" the stereotype it represents. Id. The Board also found that the mark is disparaging to a substantial component of people of Asian descent because " [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 because there was record evidence of individuals and groups in the Asian community objecting to Mr. Tam's use of the word. Id. at *7. The Board therefore disqualified the mark for registration under § 2(a).

Mr. Tam appealed, arguing that the Board erred in finding the mark disparaging and that § 2(a) is unconstitutional. On appeal, a panel of this Court affirmed the Board determination that the mark is disparaging.[3] In re Tam, 785 F.3d 567, 570-71 (Fed. Cir. 2015) (" Panel Opinion" ), reh'g en banc granted, opinion vacated, 600 Fed.Appx. 775 (Fed. Cir. 2015) (" En Banc Order" ). Although the term " slants" has several meanings, the panel found that substantial evidence supported the Board's finding that the mark likely refers to people of Asian descent. Panel Op. at 570-71. This included an article in which Mr. Tam described the genesis of the band's name by explaining: " 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. . . ." Id. at 570 (quoting J.A. 130). Moreover, the band's Wikipedia page stated that the band's name is " derived from an ethnic slur for Asians." Id. (quoting J.A. 57). The Wikipedia entry quoted Mr. Tam: " 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." J.A. 57. The record included an image from the band's website in which the mark THE SLANTS is set against Asian imagery. Id. (citing J.A. 59). Finally, the record included unrebutted evidence that both individuals and Asian groups have perceived the term as referring to people of Asian descent. Id. at 570-71 (citing, e.g., J.A. 95 (" [Mr. Tam] was initially slated to give the keynote address at the 2009 Asian American Youth Leadership Conference in Portland. But some conference supporters and attendees felt the name of the band was offensive [117 U.S.P.Q.2d 1007] and racist, and out of respect for these opinions the conference organizers decided to choose someone less controversial." )).

The panel also found that substantial evidence supported the Board's finding that the mark is disparaging to a substantial composite of people of Asian descent. Panel Op. at 571. It noted that the definitions in evidence universally characterize the word " slant" as disparaging, offensive, or an ethnic slur when used to refer to a person of Asian descent, including the dictionary

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definitions provided by Mr. Tam. Id. The record also included a brochure published by the Japanese American Citizens League describing the term " slant," when used to refer to people of Asian descent, as a " derogatory term" that is " demeaning" and " cripple[s] the spirit." Id. (quoting J.A. 48-49). Finally, the record included news articles and blog posts discussing the offensive nature of the band's name. Id. (citing Board Op. Id. at *2-3; J.A. 45, 51, 94-98, 100).

Having found the mark disparaging under § 2(a), the panel held that binding precedent foreclosed Mr. Tam's arguments that § 2(a) is unconstitutional, including Mr. Tam's argument that § 2(a) violates the First Amendment on its face. Panel Op. at 572-73. As the panel explained, in McGinley, our predecessor court held that the refusal to register a mark under § 2(a) does not bar the applicant from using the mark, and therefore does not implicate the First Amendment. Id. at 572 (citing In re McGinley, 660 F.2d 481, 484 (C.C.P.A. 1981)). The entirety of the McGinley analysis was:

With respect to appellant's First Amendment rights, it is clear that the PTO's refusal to register appellant's mark does not affect his right to use it. No conduct is proscribed, and no tangible form of expression is suppressed. Consequently, appellant's First Amendment rights would not be abridged by the refusal to register his mark.

660 F.2d at 484 (citations omitted). In subsequent cases, panels of this Court relied on the holding in McGinley. See In re Fox, 702 F.3d 633, 635 (Fed. Cir. 2012); In re Blvd. Entm't, 334 F.3d 1336, 1343 (Fed. Cir. 2003); In re Mavety Media Grp., 33 F.3d 1367, 1374 (Fed. Cir. 1994). Additional views by the panel's authoring judge questioned whether the en banc court should reconsider the constitutionality of § 2(a) en banc. Panel Op. at 573-85 (Moore, J., additional views).

More than thirty years have passed since the decision in McGinley, and in that time both the McGinley decision and our reliance on it have been widely criticized.[4] Id. at 573-74. Furthermore, the McGinley analysis was cursory, without citation

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to legal authority, and decided at a time when the First Amendment had only recently been applied to commercial speech. Id. at 574, 581 (citing Cent. Hudson, 447 U.S. at 566). First Amendment jurisprudence on the unconstitutional conditions doctrine and the protection accorded to commercial speech has evolved significantly since the McGinley decision. Id. at 574; see also id. at 574-580 (describing evolution of commercial speech doctrine and unconstitutional conditions doctrine).

Other courts' reliance on the reasoning in McGinley further reinforces the importance of taking this case en banc. Without analysis, the Fifth Circuit wrote that " [w]e join our sister circuit in rejecting [the applicant's] argument [117 U.S.P.Q.2d 1008] that prohibiting him from registering a mark with the PTO violates his [F]irst [A]mendment rights." Test Masters Educ. Servs., Inc. v. Singh, 428 F.3d 559, 578 n.9 (5th Cir. 2005). And a district court in the Eastern District of Virginia relied upon McGinley when it concluded that the cancellation of trademark registrations under § 2(a) did not implicate the First Amendment. Pro-Football, Inc., 2015 WL 4096277, at *8-10 (" [T]he Court agrees with the Federal Circuit and Fifth Circuit and holds that Section 2(a) of the Lanham Act does not implicate the First Amendment." ).

For these reasons, we sua sponte ordered rehearing en banc. We asked the parties to file briefs on the following issue:

Does the bar on registration of disparaging marks in 15 U.S.C. § 1052(a) violate the First Amendment?

En Banc Order at 775. In addition to the parties' briefs, we received ten amicus briefs. We heard oral argument on October 2, 2015.

Discussion

I. 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

Strict scrutiny is used to review any governmental regulation that burdens private speech based on disapproval of the message conveyed. Section 2(a), which denies important legal rights to private speech on that basis, is such a regulation. It is therefore subject to strict scrutiny. It is undisputed that it cannot survive strict scrutiny.

A. The Disparagement Provision, Which Discriminates Based on Disapproval of the Message, Is Not Content or Viewpoint Neutral

" Content-based regulations are presumptively invalid." R.A.V. v. City of St. Paul, 505 U.S. 377, 382, 112 S.Ct. 2538, 120 L.Ed.2d 305 (1992); see also Ashcroft v. ACLU, 542 U.S. 656, 660, 124 S.Ct. 2783, 159 L.Ed.2d 690 (2004). " Content-based laws--those that target speech based on its communicative content--are presumptively unconstitutional and may be justified only if the government proves that they are narrowly tailored to serve compelling state interests." Reed v. Town of Gilbert, 135 S.Ct. 2218, 2226, 192 L.Ed.2d 236 (2015); see also Police Dep't of Chi. v. Mosley, 408 U.S. 92, 95, 92 S.Ct. 2286, 33 L.Ed.2d 212 (1972) (" [A]bove all else, the First Amendment means that the government has no power to restrict expression because of its message, its ideas, its subject matter, or its content." ). A message is content based even when its reach is defined simply by the topic (subject matter) of the covered speech. See Reed, 135 S.Ct. at 2230.

Viewpoint-based regulations, targeting the substance of the viewpoint

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expressed, are even more suspect. They are recognized as a particularly " egregious form of content discrimination," id., though they have sometimes been discussed without being cleanly separated from topic discrimination, see, e.g., Mosley, 408 U.S. at 95. Such measures " raise[] the specter that the government may effectively drive certain ideas or viewpoints from the marketplace." Simon & Schuster, Inc. v. Members of N.Y. State Crime Victims Bd., 502 U.S. 105, 116, 112 S.Ct. 501, 116 L.Ed.2d 476 (1991); see also Sorrell v. IMS Health Inc., 131 S.Ct. 2653, 2667, 180 L.Ed.2d 544 (2011); Rosenberger v. Rector & Visitors of Univ. of Va., 515 U.S. 819, 828, 115 S.Ct. 2510, 132 L.Ed.2d 700 (1995). " The First Amendment requires heightened scrutiny whenever the government creates 'a regulation of speech because of disagreement with the message it conveys.'" Sorrell, 131 S.Ct. at 2664 (quoting Ward v. Rock Against Racism, 491 U.S. 781, 791, 109 S.Ct. 2746, 105 L.Ed.2d 661 (1989)). This is true whether the regulation bans or merely burdens speech. " [H]eightened judicial scrutiny is warranted" when an act " is designed to impose a specific, content-based burden on protected expression." Id. ; see also Rosenberger, 515 U.S. at 828 (" [T]he government offends the First Amendment when it imposes financial burdens on certain speakers based on the content of their expression." ). " The distinction between laws burdening and laws banning speech is but a matter of degree. The Government's content-based burdens must satisfy the same rigorous scrutiny as its content-based bans." United States v. Playboy Entm't Grp., Inc., 529 U.S. 803, 812, 120 S.Ct. 1878, 146 L.Ed.2d 865 (2000). " Lawmakers may no more silence unwanted speech by burdening its utterance than by censoring its content." Sorrell, 131 S.Ct. at 2664; see also infra at 27-38.

It is beyond dispute that § 2(a) discriminates on the basis of content in the sense that it " applies to particular speech because of the topic discussed." Reed, 135 S.Ct. at 2227. Section 2(a) prevents the registration of disparaging marks--it cannot reasonably be argued that this is not a content-based restriction or that it is a content-neutral regulation of speech. And the test for disparagement-- [117 U.S.P.Q.2d 1009] whether a substantial composite of the referenced group would find the mark disparaging--makes clear that it is the nature of the message conveyed by the speech which is being regulated. If the mark is found disparaging by the referenced group, it is denied registration. " Listeners' reaction to speech is not a content-neutral basis for regulation." Forsyth Cty. v. Nationalist Movement, 505 U.S. 123, 134, 112 S.Ct. 2395, 120 L.Ed.2d 101 (1992).

And § 2(a) does more than discriminate on the basis of topic. It also discriminates on the basis of message conveyed, " the idea or message expressed," Reed, 135 S.Ct. at 2227; it targets " viewpoints [in] the marketplace," Simon & Schuster, 502 U.S. at 116. It does so as a matter of avowed and undeniable purpose, and it does so on its face.[5]

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First, the government enacted and continues to defend § 2(a) " because of disagreement with the message [disparaging marks] convey[]." Sorrell, 131 S.Ct. at 2664. When the government refuses to register a mark under § 2(a), it does so because it disapproves of " the message a speaker conveys" by the mark. Reed, 135 S.Ct. at 2227. Underscoring its hostility to these messages, the government repeatedly asserts in its briefing before this court that it ought to be able to prevent the registration of " the most vile racial epithets and images," Appellee's En Banc Br. 1, and " to dissociate itself from speech it finds odious," id. 41. The legislative history of § 2(a) reinforces this conclusion. See Hearings on H.R. 4744 Before the Subcomm. on Trademarks of the House Comm. on Patents, 76th Cong., 1st Sess. 18-21 (1939) (statement of Rep. Thomas E. Robertson) (Rep. Maroney) (" [W]e would not want to have Abraham Lincoln gin." ); id. (Rep. Rogers) (stating that a mark like " Abraham Lincoln gin ought not to be used," and that § 2(a) " would take care of [such] abuses" ). From its enactment in 1946 through its defense of the statute today, the government has argued that the prohibited marks ought not to be registered because of the messages the marks convey. When the government discriminates against speech because it disapproves of the message conveyed by the speech, it discriminates on the basis of viewpoint. Sorrell, 131 S.Ct. at 2664.

The legal significance of viewpoint discrimination is the same whether the government disapproves of the message or claims that some part of the populace will disapprove of the message. This point is recognized in the Supreme Court's long-standing condemnation of government impositions on speech based on adverse reactions among the public. See, e.g., Snyder v. Phelps, 562 U.S. 443, 460-61, 131 S.Ct. 1207, 179 L.Ed.2d 172 (2011); R.A.V., 505 U.S. 377, 112 S.Ct. 2538, 120 L.Ed.2d 305; Texas v. Johnson, 491 U.S. 397, 414, 109 S.Ct. 2533, 105 L.Ed.2d 342 (1989).

Second, the disparagement provision at issue is viewpoint discriminatory on its face. The PTO rejects marks under § 2(a) when it finds the marks refer to a group in a negative way, but it permits the registration of marks that refer to a group in a positive, non-disparaging manner. In this case the PTO refused to register Mr. Tam's mark because it found the mark " disparaging" and " objectionable" to people of Asian descent. Tam, 2013 WL 5498164, at *6. But the PTO has registered marks that refer positively to people of Asian descent. See, e.g., CELEBRASIANS, ASIAN EFFICIENCY. Similarly, the PTO has prohibited the registration of marks that it found disparaged other groups. See, e.g., Pro-Football, 2015 WL 4096277 (affirming cancellation of REDSKINS); Geller, 751 F.3d 1355 (affirming rejection of STOP THE ISLAMISATION OF AMERICA); Lebanese Arak Corp., 94 U.S.P.Q.2d 1215 (refusing to register KHORAN for wine); Heeb Media, 89 U.S.P.Q.2d 1071 (refusing to register HEEB); Squaw Valley Dev. Co.,

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80 U.S.P.Q.2d 1264 (refusing to register SQUAW VALLEY for one class of goods, but registering it for another). Yet the government registers marks [117 U.S.P.Q.2d 1010] that refer to particular ethnic groups or religions in positive or neutral ways--for example, NAACP, THINK ISLAM, NEW MUSLIM COOL, MORMON SAVINGS, JEWISHSTAR, and PROUD 2 B CATHOLIC.

The government argues that § 2(a) is viewpoint neutral because it does not eliminate any particular view-point--only particular words. Appellee's En Banc Br. 39-40. It argues that under § 2(a), two marks with diametrically opposed viewpoints will both be refused, so long as those marks use the same disparaging term. Id. 39-40. It points to Mr. Tam--who does not seek to express an anti-Asian viewpoint--as proof. It cites a statement in R.A.V. that a hypothetical statute that prohibited " odious racial epithets . . . to proponents of all views" would not be viewpoint discriminatory. Id. 40 (quoting 505 U.S. at 391); see also Ridley v. Mass. Bay Transp. Auth., 390 F.3d 65, 90-91 (1st Cir. 2004) (holding that " guidelines prohibiting demeaning or disparaging ads are themselves view-point neutral" ).

The R.A.V. statement does not apply here. The government's starting point--that it rejects marks conveying diametrically opposed viewpoints, if they contain the same offensive word--is incorrect. The PTO looks at what message the referenced group takes from the applicant's mark in the context of the applicant's use, and it denies registration only if the message received is a negative one. Thus, an applicant can register a mark if he shows it is perceived by the referenced group in a positive way, even if the mark contains language that would be offensive in another context. For example, the PTO registered the mark DYKES ON BIKES, U.S. Reg. No. 3,323,803, after the applicant showed the term was often enough used with pride among the relevant population. In Squaw Valley, the Board allowed the registration of the mark SQUAW VALLEY in connection with one of the applied-for classes of goods (namely, skiing-related products), but not in connection with a different class of goods. 80 U.S.P.Q.2d at *22. Section 2(a) does not treat identical marks the same. A mark that is viewed by a substantial composite of the referenced group as disparaging is rejected. It is thus the viewpoint of the message conveyed which causes the government to burden the speech. This form of regulation cannot reasonably be argued to be content neutral or viewpoint neutral.

The government's argument also fails because denial of registration under § 2(a) turns on the referenced group's perception of a mark. Speech that is offensive or hostile to a particular group conveys a distinct viewpoint from speech that carries a positive message about the group. STOP THE ISLAMISATION OF AMERICA and THINK ISLAM express two different viewpoints. Under § 2(a), one of these viewpoints garners the benefits of registration, and one does not. The government enacted § 2(a), and defends it today, because it is hostile to the messages conveyed by the refused marks. Section 2(a) is a viewpoint-discriminatory regulation of speech, created and applied in order to stifle the use of certain disfavored messages. Strict scrutiny therefore governs its First Amendment assessment--and no argument has been made that the measure survives such scrutiny.

B. The Disparagement Provision Regulates the Expressive Aspects of the Mark, Not Its Function As Commercial Speech

The government cannot escape strict scrutiny by arguing that § 2(a) regulates

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commercial speech. True, trademarks identify the source of a product or service, and therefore play a role in the " dissemination of information as to who is producing and selling what product, for what reason, and at what price." Va. State Bd. of Pharmacy v. Va. Citizens Consumer Council, Inc., 425 U.S. 748, 765, 96 S.Ct. 1817, 48 L.Ed.2d 346 (1976). But they very commonly do much more than that. And, critically, it is always a mark's expressive character, not its ability to serve as a source identifier, that is the basis for the disparagement exclusion from registration. The disparagement provision must be assessed under First Amendment standards applicable to what it targets, which is not the commercial-speech function of the mark.

This case exemplifies how marks often have an expressive aspect over and above their commercial-speech aspect. Mr. Tam explicitly selected his mark to create a dialogue on controversial political and social issues. With his band name, Mr. Tam makes a statement about racial and ethnic identity. He seeks to shift the meaning of, and thereby reclaim, an emotionally charged word. He advocates for social change and challenges perceptions of people of Asian descent. His band name pushes people. It offends. Despite this--indeed, because of it--Mr. Tam's band name is expressive speech.

Importantly, every time the PTO refuses to register a mark under § 2(a), it does so because it believes the mark conveys an expressive [117 U.S.P.Q.2d 1011] message--a message that is disparaging to certain groups. STOP THE ISLAMISATION OF AMERICA is expressive. In refusing to register the mark, the Board explained that the " mark's admonition to 'STOP' Islamisation in America 'sets a negative tone and signals that Islamization is undesirable and is something that must be brought to an end in America.'" Geller, 751 F.3d at 1361. And by finding HEEB and SQUAW VALLEY disparaging, the PTO necessarily did so based on its finding that the marks convey an expressive message over and above their function as source identifiers--namely, an expressive message disparaging Jewish and Native American people. It was these expressive messages that the government found objectionable, and that led the government to refuse to register or to cancel the marks. In doing so, the government made moral judgments based solely and indisputably on the marks' expressive content. Every single time registration is refused or cancelled pursuant to the disparagement provision, it is based upon a determination by the government that the expressive content of the message is unsuitable because it would be viewed by the referenced group as disparaging them.

" Commercial speech is no exception" to the need for heightened scrutiny of content-based impositions seeking to curtail the communication of particular information or messages. Sorrell, 131 S.Ct. at 2664. Indeed, " [a] consumer's concern for the free flow of commercial speech often may be far keener than his concern for urgent political dialogue." Id. (internal quotation marks omitted). Strict scrutiny must apply to a government regulation that is directed at the expressive component of speech. That the speech is used in commerce or has a commercial component should not change the inquiry when the government regulation is entirely directed to the expressive component of the speech. This is not a government regulation aimed at the commercial component of speech. See Va. State Bd. of Pharmacy, 425 U.S. at 765 (commercial speech involves the " dissemination of information as to who is producing and selling what product, for what reason, and at what price" ); see id. at 762 (defining

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" commercial speech" as speech that does " no more than propose a commercial transaction" ); Board of Trustees v. Fox, 492 U.S. 469, 473-74, 109 S.Ct. 3028, 106 L.Ed.2d 388 (1989); City of Cincinnati v. Discovery Network, Inc., 507 U.S. 410, 423, 113 S.Ct. 1505, 123 L.Ed.2d 99 (1993).

In R.A.V., the Supreme Court explained the key point: under First Amendment law, government measures often affect speech that has a dual character, and when they do, which First Amendment standard is applicable depends on which aspect of the speech is targeted by the measure being reviewed. See 505 U.S. at 385 (" The proposition that a particular instance of speech can be proscribable on the basis of one feature ( e.g., obscenity) but not on the basis of another ( e.g., opposition to the city government) is commonplace and has found application in many contexts." ). In particular, commercial speech that is " inextricably intertwined" with expressive speech is treated as expressive speech under the First Amendment when the expressive aspect is being regulated. Riley v. National Federation of Blind, Inc., 487 U.S. 781, 796, 108 S.Ct. 2667, 101 L.Ed.2d 669 (1988). Here, § 2(a) targets speech that is of " public concern," because it " can be fairly considered as relating to any matter of political, social, or other concern to the community." Snyder v. Phelps, 562 U.S. 443, 453, 131 S.Ct. 1207, 179 L.Ed.2d 172 (2011) (internal quotation marks omitted). It therefore " occupies the highest rung of the hierarchy of First Amendment values, and is entitled to special protection." Id. at 452 (internal quotation marks omitted).

Because § 2(a) discriminates on the basis of the content of the message conveyed by the speech, it follows that it is presumptively invalid, and must satisfy strict scrutiny to be found constitutional. " In the ordinary case it is all but dispositive to conclude that a law is content-based and, in practice, viewpoint-discriminatory." Sorrell, 131 S.Ct. at 2667. The government here does not even argue that § 2(a) satisfies strict scrutiny.

II. Section 2(a) Is Not Saved From Strict Scrutiny Because It Bans No Speech or By Government-Speech or Government-Subsidy Doctrines

Faced with the daunting prospect of defending a content-and viewpoint-discriminatory regulation of speech, the government argues that § 2(a) does not implicate the First Amendment at all. First, the government suggests that § 2(a) is immune from First Amendment scrutiny because it prohibits no speech, but leaves Mr. Tam free to name his band as he wishes and use this name in commerce. Second, the government suggests that trademark registration is government speech, and thus the government can grant and reject trademark registrations without implicating the First Amendment. Finally, the government [117 U.S.P.Q.2d 1012] argues that § 2(a) merely withholds a government subsidy for Mr. Tam's speech and is valid as a permissible definition of a government subsidy program. We reject each of the government's arguments.

A. Strict Scrutiny Applies to § 2(a), Which Significantly Chills Private Speech on Discriminatory Grounds, Though It Does Not Ban Speech

The government argues that § 2(a) does not implicate the First Amendment because it does not prohibit any speech. Appellee's En Banc Br. 17. The government's argument is essentially the same as that of our predecessor court in McGinley : " it is clear that the PTO's refusal to register appellant's mark does not affect his right to use it. No conduct is

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proscribed, and no tangible form of expression is suppressed." 660 F.2d at 484 (citations omitted). But the First Amendment's standards, including those broadly invalidating message discrimination, are not limited to such prohibitions. See Pitt News v. Pappert, 379 F.3d 96, 111-12 (3d Cir. 2004) (Alito, J.) (" The threat to the First Amendment arises from the imposition of financial burdens that may have the effect of influencing or suppressing speech, and whether those burdens take the form of taxes or some other form is unimportant." ).

The point has been recognized in various doctrinal settings. " For if the government could deny a benefit to a person because of his constitutionally protected speech or associations, his exercise of those freedoms would in effect be penalized and inhibited. This would allow the government to produce a result which it could not command directly." Perry v. Sindermann, 408 U.S. 593, 597, 92 S.Ct. 2694, 33 L.Ed.2d 570 (1972) (internal quotation marks and alterations omitted). This premise--that denial of a benefit would chill exercise of the constitutional right--undergirds every unconstitutional conditions doctrine case, discussed infra. See, e.g., Speiser v. Randall, 357 U.S. 513, 518, 78 S.Ct. 1332, 2 L.Ed.2d 1460 (1958) (" It is settled that speech can be effectively limited by the exercise of the taxing power. To deny an exemption to claimants who engage in certain forms of speech is in effect to penalize them for such speech." (citation omitted)); Bd. of Cty. Comm'rs v. Umbehr, 518 U.S. 668, 674, 116 S.Ct. 2342, 135 L.Ed.2d 843 (1996) (loss of a valuable benefit " in retaliation for speech may chill speech on matters of public concern" ); Legal Servs. Corp. v. Velazquez, 531 U.S. 533, 545, 121 S.Ct. 1043, 149 L.Ed.2d 63 (2001); Rosenberger, 515 U.S. at 835 (explaining that " [v]ital First Amendment speech principles are at stake here," including danger arising " from the chilling of individual thought and expression" ).

The general principle is clear: " Lawmakers may no more silence unwanted speech by burdening its utterance than by censoring its content." Sorrell, 131 S.Ct. at 2664. " [T]he government's ability to impose content-based burdens on speech raises the specter that the government may effectively drive certain ideas or viewpoints from the marketplace." Simon & Schuster, 502 U.S. at 116. A law may burden speech even when it does so indirectly. In Sorrell, the challenged statute did not directly ban speech, but rather forbade certain pharmaceutical marketing executives from obtaining and using information that could help them market their products more effectively. 131 S.Ct. at 2659-60. The Court found that the state " ha[d] burdened a form of protected expression," while leaving " unburdened those speakers whose messages are in accord with its own views." Id. at 2672.

Here, too, § 2(a) burdens some speakers and benefits others. And while it is true that a trademark owner may use its mark in commerce even without federal registration, it has been widely recognized that federal trademark registration bestows truly significant and financially valuable benefits upon markholders. B& B Hardware, 135 S.Ct. at 1300; Park 'N Fly, Inc. v. Dollar Park & Fly, Inc., 469 U.S. 189, 199-200, 105 S.Ct. 658, 83 L.Ed.2d 582 (1985) (valuable new rights were created by the Lanham Act); McCarthy at § 19:9, :11 (" Registration of a mark on the federal Principal Register confers a number of procedural and substantive legal advantages over reliance on common law rights. . . . Registration on the Principal Register should be attempted if it is at all possible." ); McCarthy at § 2:14 (" Businesspeople regard trademarks as valuable assets

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and are willing to pay large sums to buy or license a wellknown mark." ); Lee Ann W. Lockridge, Abolishing State Trademark Registrations, 29 Cardozo Arts & Ent. L.J. 597, 605 (2011) (" [T]he incentives to pursue federal registration. . . are now so significant as to make federal registration indispensable for any owner making an informed decision about its trademark rights. A federal registration is the only rational choice." ); Susan M. Richey, The Second Kind of Sin: Making the Case for a Duty to Disclose Facts Related to Genericism and Functionality in the Trademark Office, 67 Wash. & Lee L.Rev. 137, 174 (2010) (" Federal registration has evolved into a powerful tool for trademark holders . . . ." ); Patricia Kimball Fletcher, [117 U.S.P.Q.2d 1013] Joint Registration of Trademarks and the Economic Value of a Trademark System, 36 U. Miami L.Rev. 297, 298-99 (1982) (" Federal registration under the Lanham Act is advantageous, however, because it increases the owner's legal rights in the mark, making the mark itself more valuable. Thus, trademark owners have significant legal and economic interests in obtaining federal registration of trademarks." ).

Denial of these benefits creates a serious disincentive to adopt a mark which the government may deem offensive or disparaging. Br. of Amici Curiae ACLU 12 (" If a group fears that its chosen name will be denied federal trademark protection by the government's invocation of Section 2(a), it will be less likely to adopt the name, at least in part because the associative value of the trademark itself is lessened when it is unlikely that a group will be the exclusive holder of that mark." ); Br. of Amicus Curiae Pro-Football, Inc. 15 (" Section 2(a) certainly works to chill speech . . . . Through it, the Government uses threatened denial of registration to encourage potential registrants not to use 'disparaging' names. Faced with the possibility of being denied a registration--or worse, cancellation after years of investment-backed brand development--new brand owners are more likely to avoid brand names that may be arguably controversial for fear of later being deemed 'disparaging.'" ); Br. of Amicus Curiae First Amendment Lawyers Ass'n 7 (" Individuals and businesses refrain from using certain terms as trademarks for fear the PTO might see the terms as immoral, scandalous, or derogatory, in violation of section 2(a). Such self-censorship narrows the spectrum of speech in the public marketplace." ); Br. of Amici Curiae Rutherford Inst. 12 (" Denial of registration indisputably has the effect of placing applicants at a legal and financial disadvantage." ); Jeffrey Lefstin, Does the First Amendment Bar Cancellation of Redskins ?, 52 Stan. L.Rev. 665, 678 (2000) (" [I]t is clear that section 2(a) of the Lanham Act, by denying the valuable registration right to scandalous or disparaging trademarks, imposes a financial disincentive to the use of such marks in commercial communication." ); Michelle B. Lee, Section 2(a) of the Lanham Act as a Restriction on Sports Team Names: Has Political Correctness Gone Too Far ?, 4 Sports L.J. 65, 69 (1997) (" Use [of disparaging marks] is discouraged by cancellation of registration by a loss of the benefits that go along with it. These benefits go well beyond those granted by the common law, and a loss of them will remove advantages which make the property more valuable." ).

For those reasons, the § 2(a) bar on registration creates a strong disincentive to choose a " disparaging" mark. And that disincentive is not cabined to a clearly understandable range of expressions. The statute extends the uncertainty to marks that " may disparage." 15 U.S.C. § 1052(a). The uncertainty as to what might be deemed disparaging is not only ...


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