Matal v. Tam: A Game Changer for the Adult Industry?

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Adult Industry Sex Tech Blog

On June 19, 2017, the U.S. Supreme Court issued a landmark decision in the case of Matal vs. Tam, 582 U.S. __ (2017). There, the Court held that a provision in the law that prohibits trademark registrations for “…matter which may disparage … persons, living or dead, institutions, beliefs, or national symbols…”, violates the Free Speech Clause of the First Amendment. The Court reasoned that “[i]t offends a bedrock First Amendment principle: Speech may not be banned on the ground that it expresses ideas that offend.” Decision, pages 1-2. It is because of this reasoning that the decision may have astounding and sweeping ramifications for the adult industry.

Trademarks are words, phrases, symbols, designs, or other identifiers used in “commerce” to identify the source of goods and distinguish them from the goods of others. For example, yellow double arches on signage of a restaurant lets consumers know that food served inside is a product of McDonald’s. Accordingly, those double arches function as a trademark.

The U.S. Government, via The Lanham Act, established a system for registration of trademarks at the federal level. “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.” Decision, page 2, quoting, Park ’N Fly, Inc. v. Dollar Park & Fly, Inc., 469 U. S. 189, 198 (1985).

Under the Lanham Act, some types of marks have been barred from registration. At issue here is Section 2(a) of the Act , which states that a trademark may not be refused registration on account of its nature unless it includes:

1) “immoral, deceptive, or scandalous matter”, or

2) “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…”.

For decades, trademarks containing adult language have been denied based on the first prong above, i.e. the “scandalous provision.”

At issue in Matal vs. Tam is the second prong, referred to in short as the “disparagement clause.” In that case, Simon Shiao Tam, front man for his band out of Portland, filed an application in 2011 with the U.S. Patent & Trademark Office (USPTO) for the band’s name, “THE SLANTS.” The USPTO rejected the application under the disparagement clause as allegedly disparaging to Asian Americans, arguing that the term “slants” has historically been used to mock a physical feature of people of Asian descent. The case eventually made its way to the U.S. Court of Appeals for the Federal Circuit, where Tam contended that: the band name “reclaim[s]” and “take[s] ownership” of Asian stereotypes, and that Asians should be proud of their heritage and not offended by stereotypes. The Court, divided in opinion, issued its decision on December 22, 2015, holding that the prohibition of disparaging trademarks violates First Amendment free speech rights. After petition by the USPTO, the U.S. Supreme Court agreed to hear the case.

The First Amendment to the U.S. Constitution prohibits Congress and other government entities and actors from “abridging the freedom of speech.” Case law has recognized that the Free Speech Clause does not regulate government speech. So, the question in the Tam case was whether trademarks are considered government speech because they are registered by the USPTO, an arm of the federal government. In the Decision, page 14, the Court answers this question as follows:

The Federal Government does not dream up these marks, and it does not edit marks submitted for registration.

Except as required by the statute involved here, 15 U. S. C. §1052(a), an examiner may not reject a mark based on the viewpoint that it appears to express. Thus, unless that section is thought to apply, an examiner does not inquire whether any viewpoint conveyed by a mark is consistent with Government policy or whether any such viewpoint is consistent with that expressed by other marks already on the principal register. Instead, if the mark meets the Lanham Act’s viewpoint-neutral requirements, registration is mandatory. Ibid. (requiring that “[n]o trademark . . . shall be refused registration on the principal register on account of its nature unless” it falls within an enumerated statutory exception). 

…it is far-fetched to suggest that the content of a registered mark is government speech. If the federal registration of a trademark makes the mark government speech, the Federal Government is babbling prodigiously and incoherently. It is saying many unseemly things. See App. to Brief for Pro-Football, Inc., as Amicus Curiae. It is expressing contradictory views.  It is unashamedly endorsing a vast array of commercial products and services. And it is providing Delphic advice to the consuming public.

For example, if trademarks represent government speech, what does the Government have in mind when it advises Americans to “make.believe” (Sony), “Think different” (Apple), “Just do it” (Nike), or “Have it your way” (Burger King)? Was the Government warning about a coming disaster when it registered the mark “EndTime Ministries”?

[In addition, t]he PTO has made it clear that registration does not constitute approval of a mark. See In re Old Glory Condom Corp., 26 USPQ 2d 1216, 1220, n. 3 (TTAB 1993) (“[I]ssuance of a trademark registration . .. is not a government imprimatur”).

The Court went through many additional reasons as to why trademarks are private speech, rather than government speech. If you would like to see the “complete picture,” you can read the full decision here. Accordingly, since trademarks remain private speech, even when registered with the USPTO, the First Amendment’s protection of free speech applies.

In the Decision, pages 24-25, the Court stated that “[i]t is claimed [by the USPTO, i.e. the government] that the disparagement clause serves two interests,” and addressed each separately.

Regarding the “first interest,” the Court explained:

The first is phrased in a variety of ways in the briefs. Echoing language in one of the opinions below, the Government asserts an interest in preventing “ ‘underrepresented groups’” from being “ ‘bombarded with demeaning messages in commercial advertising.’ ” Brief for Petitioner 48 (quoting 808 F. 3d, at 1364 (Dyk, J., concurring in part and dissenting in part)). An amicus supporting the Government refers to “encouraging racial tolerance and protecting the privacy and welfare of individuals.” Brief for Native American Organizations as Amici Curiae 21. But no matter how the point is phrased, its unmistakable thrust is this: The Government has an interest in preventing speech expressing ideas that offend. And, as we have explained, that idea strikes at the heart of the First Amendment. Speech that demeans on the basis of race, ethnicity, gender, religion, age, disability, or any other similar ground is hateful; but the proudest boast of our free speech jurisprudence is that we protect the freedom to express “the thought that we hate.” United States v. Schwimmer, 279 U. S. 644, 655 (1929) (Holmes, J., dissenting).

[emphasis added]. Remember that the case here deals with the second prong regarding disparaging subject matter, rather than the first prong regarding immoral and scandalous subject matter. However, with the logic shown in the cited passage above, it appears that the Court is making a sweeping decision that encompasses more than just the first prong. If offensiveness of speech is not a ground for restricting a trademark, it would appear that such logic would also mean that marks considered “immoral” or “scandalous,” although offensive to some, are not restrictable. This could open the floodgates to allow players in the adult entertainment industry to protect marks, which have previously been denied based on the first prong above.

The decision addressed the second interest as follows:

The second interest asserted is protecting the orderly flow of commerce. See 808 F. 3d, at 1379–1381 (Reyna, J., dissenting); Brief for Petitioner 49; Brief for Native American Organizations as Amicus Curiae 18–21. Commerce, we are told, is disrupted by trademarks that “involv[e] disparagement of race, gender, ethnicity, national origin, religion, sexual orientation, and similar demographic classification.” 808 F. 3d, at 1380–1381 (opinion of Reyna, J.). Such trademarks are analogized to discriminatory conduct, which has been recognized to have an adverse effect on commerce. See ibid.; Brief for Petitioner 49; Brief for Native American Organizations as Amici Curiae 18–20.

A simple answer to this argument is that the disparagement clause is not “narrowly drawn” to drive out trademarks that support invidious discrimination. The clause reaches any trademark that disparages any person, group, or institution. It applies to trademarks like the following: “Down with racists,” “Down with sexists,” “Down with homophobes.” It is not an anti-discrimination clause; it is a happy-talk clause. In this way, it goes much further than is necessary to serve the interest asserted.

[emphasis added]. Accordingly, the Court is saying that the disparagement clause is much broader than only a denial of marks including discriminatory language. It appears that the Court would have found such an anti-discrimination provision acceptable.

On June 26, 2017, the USPTO issued new guidance based on the Tam decision. The guidance states, in pertinent part:

The portions of Trademark Manual of Examining Procedure (TMEP) §1203 that relate specifically to examination under the disparagement provision no longer apply.  Applications that received an advisory refusal under the disparagement provision and were suspended … will be removed from suspension and examined for any other requirements or refusals.  If an application was previously abandoned after being refused registration under the disparagement provision, and is beyond the deadline for filing a petition to revive, a new application may be filed.

Accordingly, the USPTO will withdraw any outstanding rejections based on the disparagement clause in pending applications, and will not reject any new applications based on such.  With regard to the scandalousness provision, the guidance states:

Because the constitutionality of the scandalousness provision remains pending before the Federal Circuit in Brunetti, the USPTO continues to examine applications for compliance with that provision according to the existing guidance in the TMEP and Examination Guide 01-16.  Any suspension of an application based on the scandalousness provision of Section 2(a) will remain in place until the Federal Circuit issues a decision in Brunetti, after which the USPTO will re-evaluate the need for further suspension.

In In re Brunetti, the Trademark Trial and Appeal Board affirmed a trademark examining attorney’s refusal to register “FUCT” for a line of “streetwear” apparel on the ground that the mark was a “vulgar” term that was barred from registration based on the scandalousness provision (prong 1 above). The appeal will be heard at the Federal Circuit (No. 2015-1109). In light of this pending litigation,the USPTO has refrained from providing guidance on it. Currently, the USPTO is suspending (holding off on) all applications that would normally be rejected based on this prong until the Brunetti decision is issued.

I believe that the decision in Tam, although technically only controlling on the disparagement clause, requires that the ban on marks potentially considered “immoral” or “scandalous” be lifted in addition to that on marks considered “disparaging.” We will find out soon whether the Federal Circuit agrees. In the meantime, The Department of Justice is on our side. The DOJ had submitted a letter brief to the Federal Circuit in January based on that Court’s decision in Tam striking down the constitutionality of the disparagement clause (which the Supreme Court affirmed), explaining the following:

Although a court could draw constitutionally significant distinctions between these two parts of Section 2(a), we do not believe, given the breadth of the Court’s Tam decision and in view of the totality of the Court’s reasoning there, that there is any longer a reasonable basis in this Court’s law for treating them differently. We therefore agree that the proper disposition of this case under the law of this Court is to vacate and remand the Board’s decision for further proceedings, as in Tam, because the reasoning of Tam requires the invalidation of Section 2(a)’s prohibition against registering scandalous and immoral marks as well.

The Tam decision is an enormous breakthrough with regard to trademarks, as will be Brunetti. Beyond trademarks, I believe the Tam decision, and soon Brunetti, will also have a very significant impact in an even broader sense on First Amendment issues in general. The adult industry’s ability to make and sell pornography has continually been challenged and burdened. For example, the Human Trafficking Prevention Act (HTPA), variations being reviewed currently by many state legislatures, would limit the accessibility of porn from consumer electronics devices. In a nutshell, the various versions of the law would require personal computing devices sold in the particular state to have a blocker of “obscenity” installed on such devices. The blocker would only be disabled if the user pays a fee, essentially a tax. Quite literally, the blocked speech is no longer free – the government would be imposing a tax for a person to be allowed access to third party, privately owned and created content. This translates to government restricting dissemination of protected speech because some find offensive, arguing that it somehow promotes human trafficking. The Tam case, slashing any notion that offensive speech may be blocked, will cast a shadow of doubt on validity of any laws passed based on version of the HTPA. You can read my full article on the HTPA bill proposed in South Carolina here.

In the meantime, we’ll hurry up and wait for the decision in Brunetti. It would be quite the win for the industry to have the ban of immoral and scandalous marks be removed. It’s certainly been a long time “coming.” 😉

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