Opinion ID: 2795022
Heading Depth: 3
Heading Rank: 2

Heading: Central Hudson Test for Commercial Speech

Text: In Central Hudson, the Supreme Court laid out the framework for determining the constitutionality of restrictions on commercial speech. 447 U.S. at 566. First, commercial speech “must concern lawful activity and not be misleading.” Id. If this is the case, we ask whether (1) “the asserted governmental interest is substantial,” (2) “the regulation directly advances the governmental interest asserted,” and (3) the regulation “is not more extensive than is necessary to serve that interest.” Id. First, we ask whether the regulated activity is lawful and not misleading. Id. at 563–64. There is nothing illegal about a disparaging trademark such as THE SLANTS, and Mr. Tam does not challenge the Lanham Act’s proscription on the registration of misleading marks. Disparaging trademarks satisfy the first prong of the Central Hudson framework. acquire distinctiveness or secondary meaning. 15 U.S.C. § 1052(f). Once a laudatory or descriptive mark attains secondary meaning as a source identifier, such marks are eligible for registration; disparaging trademarks are never eligible for registration. IN RE TAM 19 Next, for speech that is lawful and not misleading, a substantial government interest independent of disapproving the speech’s message must justify the regulation. Id. at 566; Sorrell, 131 S. Ct. at 2668 (2011) (law must not “seek to suppress a disfavored message”); Sorrell, 131 S. Ct. at 2670 (rejecting message-based interest as “contrary to basic First Amendment principles”). The government has not put forth any substantial interests that would justify § 2(a)’s bar against disparaging marks. One purpose of the disparagement provision of § 2(a) is evident on its face, and it is message-based: to discourage the use of trademarks that are disparaging to persons, institutions, beliefs, or national symbols. The legislative history reinforces the conclusion that Congress enacted § 2(a) because it disapproved of the message conveyed by disparaging marks. See Hearings on H.R. 4744 Before the Subcomm. on Trademarks of the House Comm. on Pa- tents, 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.”). This is plainly true of the reason for denying registration here, as in other disparagement cases. See, e.g., In re Geller, 751 F.3d 1355 (Fed. Cir. 2014) (affirming rejection of STOP THE ISLAMISATION OF AMERICA); Blackhorse v. Pro- Football, Inc., 111 U.S.P.Q.2d 1080 (TTAB June 18, 2014) (cancelling registration of REDSKINS); In re Lebanese Arak Corp., 94 U.S.P.Q.2d 1215 (TTAB Mar. 4, 2010) (refusing to register KHORAN for wine); In re Heeb Media, LLC, 89 U.S.P.Q.2d 1071 (TTAB Nov. 26, 2008) (refusing to register HEEB); In re Squaw Valley Dev. Co., 80 U.S.P.Q.2d 1264 (TTAB May 23, 2006) (refusing to register SQUAW VALLEY for one class of goods, but registering it for another). And there is no doubt that 20 IN RE TAM these marks are protected speech, not categorically excluded from First Amendment protection. 3 While the government may argue that it has an interest in discouraging the use of disparaging marks that may be offensive to persons, institutions, beliefs, or national symbols, this is not a legitimate government interest. See Sorrell, 131 S. Ct. at 2670. The Supreme Court has “consistently held that the fact that protected speech may be offensive to some does not justify its suppression.” Bolger v. Youngs Drug Prods. Corp., 463 U.S. 60, 71 (1983). It is a “bedrock principle underlying the First Amendment . . . that the Government may not prohibit the expression of an idea simply because society finds the idea itself offensive or disagreeable.” United States v. Eichman, 496 U.S. 310, 319 (1990). 3 Disapproval of the message is also the apparent basis for denying under § 2(a) the registration of many “scandalous” marks that are not obscene. See, e.g., In re Fox, 702 F.3d 633 (Fed. Cir. 2012) (affirming rejection of COCK SUCKER for chocolate rooster lollipops); In re Boulevard Entm’t, Inc., 334 F.3d 1336 (Fed. Cir. 2003) (affirming rejection of 1-800-JACK-OFF and JACK-OFF for adult entertainment services over telephone); In re Betty Bangs, LLC, 2013 WL 5407261 (TTAB July 9, 2013) (refusing to register I BANGED BETTY); In re Kirby, 2008 WL 4674566 (TTAB Sept. 22, 2008) (refusing to register COCAINE for energy drinks); In re Love Bottling Co., 2005 WL 1787238 (TTAB June 22, 2005) (refusing to register W.B. WIFE BEATER); In re Zaharoni, 2005 WL 363392 (TTAB Jan. 4, 2005) (refusing to register THE COMPLETE AHOLE'S GUIDE TO . . .); In re Runsdorf, 171 U.S.P.Q. 443 (TTAB 1971) (refusing to register BUBBY TRAP for brassieres). IN RE TAM 21 Courts have attributed an additional government interest to § 2(a), reasoning that it acts as “a judgment by the Congress that such marks not occupy the time, services, and use of funds of the federal government.” See, e.g., McGinley, 660 F.2d at 486. This cannot warrant the government’s regulation of these marks. Trademark registration is entirely user-funded, not taxpayer-funded, so registering these marks costs the government little money. Furthermore, the government must expend significant funds defending its refusal decisions under the statute as it currently stands, so it is not clear that the statute succeeds in saving the government money. See McGinley, 660 F.2d at 487 (Rich, J., dissenting) (“More ‘public funds’ are being expended in the prosecution of this appeal than would ever result from the registration of the mark.”). Finally, labeling this sort of interest as substantial would create an end-run around the “unconstitutional conditions” doctrine, as virtually all government benefits involve the time, services, or funds of the federal government. Nearly every benefit could be justified under this ground, no matter how minimal. Another interest that has been proposed to justify § 2(a)’s ban on disparaging marks is the government’s interest in maintaining a well-functioning trademark system that harmonizes state and federal trademark law. In enacting the Lanham Act, Congress codified a number of long-standing common law trademark principles; the argument posits that striking down § 2(a)’s bar on disparaging marks would disrupt these principles. However, this argument relies on the notion that § 2(a)’s bar on disparaging marks is merely a codification of a common law bar on disparaging marks. That is not the case. While states have long refused to enforce vulgar or misleading trademarks, there is no similar history of a bar on disparaging marks. In drafting § 2(a)’s bar on disparaging marks, Congress was creating new law, not codifying 22 IN RE TAM clear and established principles. See Univ. of Notre Dame Du Lac v. J.C. Gourmet Food Imports Co., 703 F.2d 1372, 1376 (Fed. Cir. 1983) (“Although not articulated as such, it appears that the drafters sought by § 2(a) to embrace concepts of the right to privacy, an area of the law then in an embryonic state.”); see also Act of Feb. 20, 1905, ch. 592, § 5, 33 Stat. 724 (1905) (barring registration of scandalous and immoral marks, but not disparaging marks). Section 2(a)’s bar on disparaging marks was employed only rarely until recently, and its application was inconsistent. See, e.g., Doughboy Indus., Inc., 88 U.S.P.Q. (BNA) ¶ 227 (P.T.O. Jan. 25, 1951) (refusing to register mark “Dough-boy” in connection with “a prophylactic preparation for the prevention of venereal diseases); In re Anti-Communist World Freedom Cong., Inc., 161 U.S.P.Q. (BNA) ¶ 304 (TTAB Feb. 24, 1969) (refusing to register mark consisting of hammer and sickle with an “X” over it); In re Condas S.A., 188 U.S.P.Q. (BNA) ¶ 544 (P.T.O. July 31, 1975) (finding mark JAP not disparaging to Americans of Japanese ancestry); Greyhound Corp. v. Both Worlds, Inc., 6 U.S.P.Q.2d 1635 (TTAB Mar. 30, 1988) (finding that mark depicting a defecating dog disparaged Greyhound’s trademarked running dog logo). And in the early disparagement cases, courts did not base the contours of what it means to be disparaging on the common law. See generally id. Striking down § 2(a)’s bar on disparaging marks would not disrupt long-standing, well-balanced common law traditions. Trademarks—which are applied to private goods to identify the source of the goods for consumers—are private speech, not “government speech.” Cf. Pleasant Grove City v. Summum, 555 U.S. 460, 467 (2009) (“The Free Speech Clause restricts government regulation of private speech; it does not regulate government speech.”). Although the government publishes registered trademarks in the Trademark Principal Register, it does so not to communicate a particular message or select a particular IN RE TAM 23 viewpoint; rather, it publishes trademarks to provide notice that a mark has been registered. Despite this, supporters of § 2(a) have claimed that the government has an interest in not being seen to give a stamp of approval, imprimatur, to scandalous and disparaging terms. For this interest to be substantial, the public must believe that trademarks carry the stamp of government approval. The U.S. government recently explained that “‘issuance of a trademark registration’ does not ‘amount[] to the awarding of the U.S. Government’s ‘imprimatur.’” Brief of United States at 21, Pro-Football, Inc. v. Blackhorse, No. 14-cv-1043 (GBL/IDD) (E.D. Va. Mar. 23, 2015), ECF No. 109 (quoting In re Old Glory Condom Corp., 26 U.S.P.Q.2d 1216, 1219–20 n.3 (TTAB Mar. 3, 1993) (alterations in original)). As the Trademark Trial and Appeal Board wrote: The duty of this Office . . . in reviewing applica- tions for registration is nothing more and nothing less than to register those marks that are func- tioning to identify and distinguish goods and services in the marketplace . . . . Just as the issuance of a trademark registration by this Office does not amount to a government endorsement of the qual- ity of the goods to which the mark is applied, the act of registration is not a government imprimatur or pronouncement that the mark is a “good” one in an aesthetic, or any analogous, sense. Old Glory Condom Corp., 26 U.S.P.Q.2d at 1219–20 n.3 (emphasis added). The public is not likely to believe that a registered trademark conveys the imprimatur of the government. The trademark is printed on private property, in fact commercial goods, not on any government property. The purpose served by trademarks, to identify the source of the goods, is antithetical to the notion that the trademark is tied to the government. 24 IN RE TAM We have yet to be presented with any substantial government interests that would justify the PTO’s refusal to register disparaging marks. Without this, § 2(a) cannot satisfy the Central Hudson test. It is time to revisit the holding in McGinley in light of subsequent developments in the law and the trademark registration funding regime.