Category: Non-AI Legal Issues

In recent years, the courts have been grappling with some long-standing legal issues which – believe it or not – do not involve AI. Some involve trademark rights. The United States Supreme Court has been grappling with the thorny question of how the First Amendment applies to trademarks. In this blog post, attorney Thomas B. James attempts a reconciliation of recent pronouncements.

The Slants (Matal v. Tam)

Simon Tam, lead singer of the band, The Slants, tried to register the band name as a trademark. The USPTO denied the application, citing 15 U.S.C. § 1052(a). That provision prohibited the registration of any trademark that could “disparage . . . or bring . . . into contemp[t] or disrepute” any persons. The Fifth Circuit Court of Appeals declared the statute facially unconstitutional under the First Amendment. The U.S. Supreme Court affirmed. Matal v. Tam. 

The USPTO argued that the issuance of a registration certificate is “government speech.” Since the government and its members are not required to maintain neutrality in the views they express and are only required to maintain viewpoint neutrality when regulating private speech, the USPTO contended that it was not required to maintain viewpoint neutrality when deciding whether to issue a trademark registration certificate or not. The Court rejected that argument, holding that a trademark is private speech. As such, the government is not free to engage in viewpoint discrimination when deciding which ones to favor with a registration certification.

“If the federal registration of a trademark makes the mark government speech, the Federal Government is babbling prodigiously and incoherently.”

— Hon. Samuel Alito, in Matal v. Tam

Commercial speech

At one time, the Court took the position that the First Amendment does not protect commercial speech (speech relating to the marketing of products or services). Valentine v. Chrestensen (1942) (“[T]he Constitution imposes no . . . restraint on government as it respects purely commercial advertising.”)

In Virginia State Pharmacy Bd. v. Virginia Citizens Consumer Council (1976) the Court reversed its position on this point, declaring that “the free flow of commercial information” is important enough to warrant First Amendment protection.

The Court announced a framework for assessing the constitutionality of a restriction on commercial speech a few years later, in Central Hudson Gas & Elec. Co. v. Public Serv. Comm. of N.Y. (1980).

The Central Hudson test, as it has come to be known, holds, first, that commercial speech receives First Amendment protection only if it concerns lawful activity and is not false or misleading. If it clears those two hurdles, then government regulation of it is permissible only if the regulation directly advances a substantial government interest and is not more extensive than necessary to serve that interest. That is to say, the regulation must be narrowly tailored to advance a substantial government interest.

In other words, commercial speech receives an intermediate level of scrutiny. Unlike regulations of political speech, the government only needs to identify a “substantial” interest, not necessarily a “compelling” one. Also unlike political speech, the regulation in question does not have to be the least speech-restrictive means of achieving it. It is required to be no more extensive than necessary to serve the interest in question, however.

In Tam, the Court held that it did not need to decide whether trademarks are commercial speech or not. The Court rejected the government’s contention that it has a substantial interest in protecting people from hearing things they might find offensive, declaring that “the proudest boast of our free speech jurisprudence is that we protect the freedom to express ‘the thought that we hate.'” See United States v. Schwimmer, 279 U. S. 644, 655 (1929) (Holmes,
J., dissenting).

The Court also rejected the second justification the government offered, that disparaging trademarks disrupt the flow of commerce. The statute, the Court held, is not narrowly drawn to eradicate invidious discrimination. Prohibiting registration of trademarks that disparage any person, group or institution, it would also prohibit registration of marks like “Down with racists” or “Slavery is an evil institution.”

The Court also identified what it described as a “deeper problem”:

If affixing the commercial label permits the suppression of any speech that may lead to political or social “volatility,” free speech would be endangered.

— Hon. Samuel Alito, in Matal v. Tam

In short, the Court acknowledged that commercial speech can have non-commercial expressive content. When that is the case, courts should zealously guard against government encroachment on private speech rights.

FUCT

Two years later, the Court was asked to review the USPTO’s refusal to register FUCT as a trademark. The Court came to the same conclusion about the portion of the statute that prohibited the registration of “scandalous” or “immoral” trademarks as it did about the prohibition against registering “disparaging” trademarks. Because this, too, involves viewpoint discrimination, the Court held that this prohibition, too, violates the First Amendment. Iancu v. Brunetti, 139 S. Ct. 2294 (2019)

Bad Spaniels (Jack Daniels v. VIP Properties)

The Court revisited trademark speech rights in 2023, in Jack Daniel’s Properties v. VIP Products.

I’ve written about this case before. (See Balancing the First Amendment on Whiskey and Dog Toys. See also Court Agrees to Hear Parody Goods Case.)  Basically, Jack Daniel’s Property owned (and still owns) trademarks in the Jack Daniel’s bottle and in many of the words and graphics on its label for its alcoholic beverages. VIP Products began making and marketing a dog toy designed to look like a Jack Daniel’s whiskey bottle. The toy had labels affixed to it parodying the Jack Daniel’s label. For example, it used the phrase “Bad Spaniels” in place of “Jack Daniel’s.” And instead of “Old No. 7 Brand Tennessee Sour Mash Whiskey,” it displayed “The Old No. 2 On Your Tennessee Carpet.” Jack Daniel’s issued a cease-and-desist demand. In response, VIP Products filed a declaratory judgment action seeking a declaration that its parody neither infringed nor diluted Jack Daniel’s trademarks and, in any event, was a protected “fair use” under the First Amendment.

The district court rejected these claims, essentially holding that the First Amendment does not establish a “fair use” exception for the expressive aspect(s) of a trademark when it is used as a source-identifier for a product. The Ninth Circuit Court of Appeals reversed.

The United States Supreme Court reversed the Ninth Circuit. The Court opined that although using a trademark for an expressive purpose might qualify for First Amendment protection, that protection does not insulate the user from trademark infringement or dilution liability if it is also used as a source-identifier. Parodic uses are exempt from liability only if they are not used to designate the source of a product or service.

The Court did not mention Central Hudson or discuss the commercial speech doctrine. It is likely the Court did not feel a need to do that because trademark infringement involves trademarks that are claimed to be likely to confuse consumers about the source of a product or service. Such trademarks would not clear one of the first hurdles for commercial speech protection under Central Hudson, namely, that the speech must not be misleading.

“Trump Too Small” (Vidal v. Elster)

Steve Elster applied to federally register the trademark “Trump too small” to
use on shirts and hats. The USPTO denied the application, citing 15 U. S. C. §1052(c). That provision prohibits the registration of a mark that “[c]onsists of or comprises a name . . . identifying a particular living individual except by
his written consent.” Elster appealed, asserting that this statute infringed his First Amendment right to free speech.

The Federal Circuit Court of Appeals agreed with him. The U.S. Supreme Court, however, reversed the Federal Circuit, holding that this provision of the Lanham Act does not violate the First Amendment. Vidal v. Elster, 602 U.S. __ (2024).

The decision in this case is consistent with Jack Daniel’s. Unlike Jack Daniel’s, this case did not involve a claim that the use of the trademark was likely to cause consumer confusion about the source of the product. (After all, how likely would consumers be to mistakenly believe that Trump was marketing products ridiculing his own size?) In this case, the first two hurdles for commercial speech protection under Central Hudson would appear to have been cleared.

Reconciling this decision with Tam is not as easy. What happened to the idea the Court voiced in Tam that when commercial speech has non-commercial expressive content, courts should zealously guard against government encroachment on private speech rights?

The legislative history of Section 1052(c) demonstrates that the prohibition against using a living person’s name as part of a trademark was enacted for essentially the same reason that the prohibitions against disparaging, scandalous or immoral trademarks were: Members of Congress found the “idea of prostituting great names by sticking them on all kinds of goods” — like the idea of including scandalous, immoral or disparaging content in a trademark — to be “very distasteful,” and wanted “to prevent such outrages of the sensibilities of the American people.”¹ That was the very same kind of “interest” that the government invoked in Tam and that the Court found insufficient and not tailored narrowly enough to sustain the speech restriction at issue in that case. What was different here?

By requiring consent, Section 1052(c) effectively precludes the registration of a mark that criticizes an elected government official while allowing the official to register positive messages about himself or herself. HILLARY FOR AMERICA was permitted to be registered, but HILLARY FOR PRISON was not. It seems an awful lot like viewpoint discrimination, doesn’t it?

Why shouldn’t the politically expressive aspect of a trademark (as distinguished from the purely source-identifying aspect) receive the same exacting strict scrutiny analysis that normally applies to regulations of political speech?

Well, the Supreme Court did not think this case involved viewpoint discrimination. The requirement of consent to use a person’s name in a trademark applies to people of all political persuasions, the Court reasoned. Consent would be required to register a politician’s name as a trademark whether the politician in question is a Democrat, a Republican, a Communist, or anything else, and consent would be required whether the politician in question supports or opposes, say, abortion rights, or gun rights, or anything else.

Nevertheless, the fact remains that the statute, as applied, requires an elected official’s prior approval of a trademark before it can be registered. Maybe that doesn’t rise to the level of a direct prior restraint on speech, but it would certainly seem to have a chilling effect on political speech at the core of the First Amendment.

Conclusion

It is not at all clear to me that the cases can be reconciled on a logically coherent doctrinal basis. Reliance on the common law history of trademarks might support a determination that Section 1052(c) is not unconstitutional on its face. I am not completely convinced, however, that the Court was adequately responsive to the argument that the statute is unconstitutional as applied to the names of elected officials. But what do I know? I’m just some guy living next to a cornfield in the middle of nowhere.

1. See Respondent’s Brief at p. 7. ↩︎