Symposium: The Constitution prohibits government’s “happy-talk” requirement for trademark registration

Caleb R. Trotter is an attorney at Pacific Legal Foundation, which filed an amicus brief in support of Simon Shiao Tam in the U.S. Supreme Court.

Simon Shiao Tam is the leader and bass player of the Portland, Oregon-based dance rock band, The Slants. Tam, an Asian-American, formed his band in 2006 and recruited other Asian-Americans to join in order to provide an interesting and entertaining platform for discussing discrimination against Asian-Americans. In 2011, Tam sought to register The Slants as a trademark with the United States Patent and Trademark Office. But the government refused to register the mark, on the ground that The Slants disparages “persons of Asian descent.”

Section 2(a) of the Lanham Act states that trademarks that “disparage” persons, living or dead, may be denied registration with the federal government. After the government rejected registration of The Slants, Tam appealed to the Trademark Trial and Appeal Board. The appeal board acknowledged that Tam was not attempting to disparage persons of Asian descent, and was wresting “ownership” of the term from those with negative intentions. But because many Asian-Americans find the band’s name objectionable regardless of intent, the board affirmed the government’s denial of registration. Tam then sought judicial review of the denial as a violation of the First Amendment.

Today, in an opinion written by Justice Samuel Alito, the Supreme Court held that the disparagement clause violates the First Amendment. All eight participating justices agreed that trademarks are private, not government, speech, and that the disparagement clause discriminates based on viewpoint. Because Justices Anthony Kennedy, Ruth Bader Ginsburg, Sonia Sotomayor, and Elena Kagan agreed that the disparagement clause constitutes viewpoint discrimination that cannot withstand rigorous constitutional scrutiny, they found it unnecessary to consider additional constitutional arguments by the parties. Nevertheless, Alito, Chief Justice Roberts, and Justices Clarence Thomas and Stephen Breyer rejected the government’s contentions that the disparagement clause is proper either under the cases upholding government subsidies of speech expressing viewpoints or under the cases involving special government programs.

Alito’s opinion also considered whether trademark regulation should be analyzed as a restriction on commercial speech. In its briefs, the government focused on arguing that the disparagement clause is not a speech restriction. But the government alternatively argued that “[b]ecause the essential function of trademarks is to identify goods and services as emanating from a particular commercial source, trademarks are ‘commercial speech’ and receive ‘a limited form of First Amendment protection.’” Fortunately, the government’s argument was not persuasive.

In previous cases, the Supreme Court has defined commercial speech as speech that “does no more than propose a commercial transaction,” or that advocates for the sale of commercial goods or services. But trademarks serve much broader purposes than merely proposing or advocating for commercial transactions. Take Simon Tam’s naming of his band The Slants, for example. By naming the band The Slants, Tam sought to reappropriate the traditionally derogatory word and turn it into a badge of pride. Indeed, according to the lower court, “[w]ith his band name, Mr. Tam conveys more about our society than many volumes of undisputedly protected speech.”

Granted, there is a commercial component to trademarks and band names such as The Slants. After all, the band sells records and merchandise, and gives live performances before ticketed audiences. But when expressive speech is “inextricably intertwined” with commercial components — as it is with The Slants — then courts must apply one test to the entire phrase. In other words, the court must either apply the test for commercial speech or it must employ heightened scrutiny. Alito and the three justices who joined his opinion declined to decide which test was appropriate in this case because they determined that the disparagement clause could not withstand scrutiny even if the less rigorous standard for commercial speech applied.

In Central Hudson Gas & Elec. Corp. v. Public Serv. Comm’n of New York, the Supreme Court held that restrictions on commercial speech must serve “a substantial interest” and be “narrowly drawn.” In this case the government claimed that two interests were served by the disparagement clause. The first interest can be summed up as “preventing speech expressing ideas that offend.” But as the court has routinely explained, the First Amendment protects the freedom to express thoughts many may find hateful. The second interest was articulated as “protecting the orderly flow of commerce.” The government analogized this to an interest in preventing discriminatory conduct, which is recognized as adversely affecting commerce. But because the disparagement clause is not narrowly drawn to prevent only trademarks that support discrimination, the clause does not properly serve the government’s interest. In other words, because the disparagement clause is broadly written to prevent disparagement of any person or group, even trademarks that oppose discriminators would be rejected. Thus, the clause is more like a “happy-talk” requirement than an anti-discrimination requirement.

Furthermore, Alito’s opinion identifies a fundamental concern with the government’s argument: the broad implications of restricting commercial speech that is likely to offend. Because the line between commercial and noncommercial speech is increasingly difficult to draw (as evidenced in this case), and the commercial market is full of products that disparage people and groups, the risk to free speech is too great if speech that may lead to social or political volatility may be suppressed by simply labeling it as “commercial.”

Even if the government’s stated interests were sufficient to satisfy scrutiny under Central Hudson, Kennedy’s concurring opinion stated that he would apply Sorrell v. IMS Health, Inc. to give heightened scrutiny to the disparagement clause because the clause discriminates against speech based on viewpoint. Employing the “marketplace of ideas” metaphor, Kennedy reiterated that restrictions on commercial speech still require viewpoint neutrality. Here, were the government allowed to engage in viewpoint discrimination among trademarks, the actual, not just the metaphorical, marketplace would be restricted, because products, services, and even nonprofit organizations would have to satisfy government trademark censors before registering their marks.

Alhough a majority of the court declined to decide the case on that basis, heightened scrutiny — rather than the more deferential test for commercial speech — would have been the appropriate test in this case because the rationales for affording commercial speech less protection do not apply to Mr. Tam’s attempt to register The Slants as a trademark. The court has previously stated that the reasons justifying government restrictions on commercial speech are to protect the public from “commercial harms” or to lessen the risk of fraud. Because neither of those concerns is implicated by The Slants’ band name, it would have been entirely appropriate for the court to decide the case using heightened scrutiny rather than the Central Hudson framework.

The concern for protecting the public from “commercial harms” centers on preventing financial losses suffered as a result of untruthful or misleading advertising. But trademarks — and registration with the government — already address this concern. One of the primary purposes of trademarks is to keep the public from being confused or misled by competing merchants. If the government were truly concerned about the potential for misleading or untruthful speech in the case of The Slants, then granting Tam registration of The Slants would best protect the public from any confusion. For example, if Tam were denied trademark protection, another band could call themselves The Slants, and, regardless of their intent, diminish Tam’s positive message through his use of the name. Fans of Tam’s band could even mistakenly spend money purchasing tickets to a concert or on albums from the hypothetical impostor band. But if Tam were granted trademark registration of The Slants, he would possess powerful tools to prevent and end the confusion.

Likewise, Tam’s use of The Slants does not present a risk of fraud. The government never contended that denying Tam registration of The Slants was necessary to combat fraud. But even if it had, the most effective way to prevent fraud is to grant registration. And in any event, fraud concerns are a poor rationale for giving more lenient judicial scrutiny to denials of trademark registration because the “First Amendment does not shield fraud.” Thus, rather than apply the commercial-speech test in this case, it would have been appropriate for the court to apply heightened scrutiny and leave the government to rely on existing anti-fraud laws to prosecute and deter speech that defrauds the public.

Unsurprisingly, Thomas also concurred separately today to confirm his belief that “when the government seeks to restrict truthful speech in order to suppress the ideas it conveys, strict scrutiny is appropriate, whether or not the speech in question may be characterized as ‘commercial.’”

In sum, today’s decision declaring the Lanham Act’s disparagement clause unconstitutional reaffirms the First Amendment’s requirement of viewpoint neutrality when government attempts to regulate private speech. Furthermore, the opinions provide a timely and forceful reminder not only that dissenting views and unpopular speech are protected by the First Amendment, but also that their protection is necessary to realize free speech and expression for all.