Federal Circuit Approves Disparaging Marks for Registration

On December 22, 2015, the Lanham Act’s prohibition on the registration of disparaging trademarks was held unconstitutional by the Federal Circuit, paving the way for federal registrations for REDSKINS, HEEB, N.I.G.G.A. and other marks previously denied federal trademark status.

In re Simon Shiao Tam, Case No. 14-1203 (Decision filed on December 22, 2015)

The United States Court of Appeals for the Federal Circuit declared Section 2(a) of the Lanham Act (15 U.S.C. § 1052(a)) unconstitutional. Section 2(a) bars the US Patent and Trademark Office (“USPTO”) from registering scandalous, immoral or disparaging marks.[1]

The case came to the Federal Circuit by way of appeal from a decision by the Trademark Trial and Appeal Board (“TTAB”) in In Re Simon Shiao Tam. The TTAB upheld the USPTO’s refusal to register the name of Mr. Tam’s Asian-American dance-rock band, the SLANTS. Mr. Tam purposely named his band with a pejorative term in order to make a statement about racial and cultural issues. A panel of the Federal Circuit upheld the TTAB decision earlier this year, but shortly thereafter, the Court granted, sua sponte, a rehearing en banc on the issue of constitutionality. Oral argument was held on October 2, 2015.

The Federal Circuit decision was resolute: “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.” Thus, the court concluded,

[t]he government cannot refuse to register disparaging marks because it disapproves of the expressive messages conveyed by the marks… 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.

Actually, in this case, it isn’t clear that the government disapproved of the expressive message conveyed by the mark. In his application, Mr. Tam stated that the band “feel[s] strongly that Asians should be proud of their cultural heri[ta]ge and not be offended by stereotypical descriptions,” and that their aim was to “reclaim” and “take ownership” of stereotypes.

Despite the message that Mr. Tam intended to convey, the TTAB found that the applied for mark was disparaging to a substantial component of people of Asian descent because “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.”

The USPTO has refused to register numerous marks on the ground of disparagement — most notoriously REDSKINS for the Washington football team. Other rejected marks include STOP THE ISLAMISATION OF AMERICA, THE CHRISTIAN PROSTITUTE, MORMON WHISKEY, KHORAN (for wine), HAVE YOU HEARD THAT SATAN IS A REPUBLICAN?, RIDE HARD RETARD, ABORT THE REPUBLICANS, HEEB, SEX ROD, MARRIAGE IS FOR FAGS, DEMOCRATS SHOULDN’T BREED, REPUBLICANS SHOULDN’T BREED, 2 DYKE MINIMUM, WET BAC, URBAN INJUN, SQUAW, DON’T BE A WET BACK, FAGDOG, and N.I.G.G.A. NATURALLY INTELLIGENT GOD GIFTED AFRICANS. As with SLANTS, applications for some of these intended marks (e.g., HEEB and N.I.G.G.A.) were filed by people from the very communities that the marks were held to disparage. The application for HEEB, for instance, was filed by a progressive Jewish organization. In that case, the TTAB rejected the applicant’s argument that the Examining Attorney “ignored the context and manner in which applicant’s mark is used when determining whether the likely meaning of applicant’s mark is disparaging to the Jewish community” and that “many of this country’s most established Jewish philanthropies and cultural organizations have openly and actively supported Applicant’s magazine and events through their continued funding and sponsorship.” The Board ruled that “[w]hether a proposed mark is disparaging must be determined from the standpoint of a substantial composite of the referenced group (although not necessarily a majority) in the context of contemporary attitudes.” In re Heeb Media, LLC, 89 USPQ2d 1071 (TTAB 2008) [precedential]. In other words, the particular viewpoint of the applicant was irrelevant to whether the mark was “disparaging.” Given prior decisions, the USPTO’s and TTAB’s rejection of Mr. Tam’s application for SLANTS came as no surprise.

A disparaging mark is defined as one which “dishonors by comparison with what is inferior, slights, deprecates, degrades, or affects or injures by unjust comparison.” In order to determine whether a mark is disparaging, the USPTO considers the following:

(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 Examining Procedure, § 1203.03(b)(i) (Jan. 2015 ed.)

Viewpoint Discrimination

The Federal Circuit found that since the test for disparagement is determined by whether “a substantial composite of the referenced group would find the mark disparaging,” it is “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.” Under principles of constitutional law, regulations that are not content neutral, i.e, that target speech based on its communicative content, are upheld only if the government proves they are narrowly tailored to serve compelling state interests. Viewpoint discrimination, which targets the substance of the particular viewpoint being expressed, is subject to even greater scrutiny. The Federal Circuit found that Section 2(a) “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.”

The Court’s decision is ultimately hinged on its finding that the effect, if not the very purpose, of Section 2(a) is to disfavor certain viewpoints. According to the government, Section 2(a) is important because the government disagrees with the message that disparaging marks convey, based on how the message is received by an identifiable community or portion thereof. Although the government claimed that the USPTO doesn’t reject marks based on their viewpoints, this appears to be true only with respect to the narrow category of racial, religious and sexual epithets.

The Court cited several examples that it claimed were examples of viewpoint discrimination: the refusal to register 2 DYKE MINIMUM and registration of DYKES ON BIKES; the refusal to register SLANT and the registration of CELEBRASIANS and ASIAN EFFICIENCY, and the refusal to register STOP THE ISLAMISATION OF AMERICA and the registration of THINK ISLAM. However, DYKES ON BIKES was registered (after refusal by the USPTO and reconsideration in the TTAB) because the applicant was able to present evidence that the lesbian community did not consider DYKES to be disparaging, and also because the USPTO’s own evidence merely suggested that it “might” be disparaging. The comparison between SLANT and CELEBRASIONS or ASIAN EFFICIENCY also falls short: this is a comparison between a mark consisting of a pejorative term and two marks that contain no pejorative terms. Viewpoint discrimination, however, was apparently determinative in refusing to register STOP THE ISLAMISATION OF AMERICA. In refusing to register the latter mark, the TTAB “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.’” That decision, the Court found, was a moral judgment “based solely and indisputably on the mark’s expressive content.”

Common Law Trademark Rights are Insufficient and Discourage Free Expression

The government attempted to counter this argument on three grounds. First, that Section 2(a) doesn’t prohibit free speech, “but leaves Mr. Tam free to name his band as he wishes and use this name in commerce;” second, that trademark registration constitutes a kind of government speech; and third, that trademark registration is a government subsidy, which (if true) the government may have the right to withhold.

With respect to the first argument, while it is true that Mr. Tam can continue to use his band name, it is not true that he can do so “as he wishes.” As the Court rightly found, Section 2(a) registration “bestows truly significant and financially valuable benefits upon markholders,” citing B&B Hardware, Inc. v. Hargis Industries, Inc., 135 S. Ct. 1293, 1300 (2015); Park ’N Fly, Inc. v. Dollar Park & Fly, Inc., 469 U.S. 189, 199–200 (1985) (valuable new rights were created by the Lanham Act); and McCarthy on Trademarks 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.”)

As examples of the rights that registration bestows upon the registrant, the Court cited the exclusive nationwide right to use the mark anywhere there is not already a prior user that precedes registration. (15 U.S.C. §§ 1072, 1115). By contrast, marks protected by common law rights are “limited to the territory in which the mark is known and recognized by those in the defined group of potential customers,” citing McCarthy on Trademarks at § 26:2. Without a federal trademark registration, a competitor can swoop in and adopt the same mark for the same goods in a different location. Non-registrants also have no prima facie evidence of their trademark’s validity, ownership and exclusive use. (See 15 U.S.C. § 1057(b)). Federal marks become incontestable after five years; common law trademarks never become incontestable. Finally, a common law trademark owner cannot stop importation of goods bearing its mark, or recover treble damages for willful infringement. (See 15 U.S.C. §§ 1117, 1124.) Nor can the common law trademark owner prevent “cybersquatters” from misappropriating its mark in a domain name. (See 15 U.S.C. § 1125(d).)

Given the limited protection that common law marks receive, if a group fears that a mark might be deemed offensive or disparaging by the USPTO, it will be less likely to adopt the mark, at least in part because the group may not be able to establish exclusive nationwide ownership. There is also a disincentive to choose a mark that might be deemed offensive or disparaging because litigating to obtain registration can be expensive and futile. (The USPTO does not give refunds for applications that are refused.)[2]

Furthermore, the Court pointed out, “the disincentive does not stop there, because the disparagement determination is not a onetime matter. Even if an applicant obtains a registration initially, the mark may be challenged in a cancellation proceeding years later. Thus, after years of investment in promoting a registered mark and coming to be known by it, a mark’s owner may have to (re)litigate its character under § 2(a) and might lose the registration.”

Although the Court didn’t squarely address the subject, common law rights in a band name offers the band no real protection at all. It is fairly commonplace in the music industry for start-up bands inadvertently to adopt the same or a similar name as another band in some other city. Consider two bands with the same name, one popular in and around New York City, the other hailing from Austin, Texas, and popular in the Southwest. Each band is able to co-exist within its respective geographic area. But if one signs with a nationally distributed record company, or even begins releasing records that receive national distribution, it can be hit by a trademark infringement claim from the other. Typically what happens is that the more successful band ends up changing its name. (To give a famous example, one of two bands called Hybrid Theory was forced to change its name in order to avoid a trademark dispute. The band members chose Linkin Park as their new name, probably a fortuitous result.) The problem can also have international implications. The U.S. applicant who is refused registration in the USPTO will face registration difficulties, resulting in many thousands of dollars in legal fees, where it also filed trademark applications internationally, either under the Madrid Protocol or via direct country filings, using the U.S. application as the filing basis, as is ordinarily the case.

In short, a denial of registration is tantamount to punishment, with an added effect of inhibiting people from engaging in potentially disparaging speech in the first place.

Trademark Registration is Not Government Speech

The government’s second argument — that trademark registration is government speech — is specious. As the Court pointed out, trademark registration is, like copyright registration, a regulatory activity that does not involve either approval or endorsement by the U.S. government. One cannot distinguish between trademark from copyright registration on the basis that trademark is “commercial speech” (and thus subject to greater regulation) because advertising and other utterances by businesses are protectable by copyright regardless of their viewpoint. As the Court pointed out,

[T]he logical extension of the government’s argument is that these indicia of registration convert the underlying speech into government speech unprotected by the First Amendment. Thus, the government would be free, under this logic, to prohibit the copyright registration of any work deemed immoral, scandalous, or disparaging to others.

The government cited Walker v. Texas Division, Sons of Confederate Veterans, 135 S. Ct. 2239 (2015) to support its contention that trademark registration is government speech, but the facts of that case are easily distinguishable. There, the Supreme Court found specialty license plates to be government speech, even though state law permitted individuals and organizations to request their own expressions, because “[t]he history of license plates shows that, insofar as license plates have conveyed more than state names and vehicle identification numbers, they long have communicated messages from the States.” (Examples include “Live Free or Die,” “The Show Me State,” and “Land of Opportunity.”) Furthermore, the Supreme Court observed that the State of Texas “places the name ‘TEXAS’ in large letters at the top of every plate,” designs the license plates, and requires vehicle owners to display them. As a consequence, the Supreme Court reasoned, “Texas license plate designs ‘are often closely identified in the public mind with the State.’” In addition, the Supreme Court found that “a person who displays a message on a Texas license plate likely intends to convey to the public that the State has endorsed that message.”

No one seriously views trademark registration as speech by the government endorsing or approving the mark or the goods and services thereunder. Anyone who did would have to explain why the government was endorsing these registered marks: RADICALLY FOLLOWING CHRIST IN MISSION TOGETHER (4759522); THINK ISLAM (4719002); GANJA UNIVERSITY (4070160); CAPITALISM SUCKS DONKEY BALLS (4744351); TAKE YO PANTIES OFF (4824028); and MURDER 4 HIRE (3605862). (The Federal Circuit named just a few but examples are legion.) Furthermore, as the government stated in its brief, “the USPTO does not endorse any particular product, service, mark, or registrant” when it registers a mark, and “just as the issuance of a trademark registration by this Office does not amount to government endorsement of the quality 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.”

Trademark Registration is not a Government Subsidy

The government contended that “trademark registration is a form of government subsidy that the government may refuse where it disapproves of the message a mark conveys.” However, the benefits of trademark registration are not monetary: trademark registration does not involve government funding or a concession to use or benefit from government property. That the USPTO is partially funded by appropriations does not make it a subsidy. Moreover, since 1991, all of the USPTO’s operating expenses associated with registering marks “have been funded entirely by registration fees, not the taxpayer.” The fact that some federal funds are spent on PTO employee benefits such as pensions, health insurance, and life insurance, is not enough to make it a subsidy. Nor is the benefit of being able to seek enforcement of a trademark by the U.S. Customs and Border Patrol. The analogy, the Court persuasively argued, is again copyright:

Under the logic of the government’s approach, it follows that the government could refuse to register copyrights without the oversight of the First Amendment. Congress could pass a law prohibiting the copyrighting of works containing “racial slurs,” “religious insults,” “ethnic caricatures,” and “misogynistic images.”

As a Regulation Aimed at Commercial Speech, Section 2(a) is Unconstitutional

The government’s main objection to the Court’s trademark-copyright analogy is that § 2(a) is intended to regulate commercial speech. However, the regulation of commercial speech is only permissible where the government has some compelling interest (e.g., to prevent misleading claims about a product or service) and the statute has been “narrowly tailored to achieve that objective.” Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 555–56 (2001). “Under a commercial speech inquiry, it is the State’s burden to justify its content-based law as consistent with the First Amendment,” said the Federal Circuit, citing Sorrell v. IMS Health Inc., 131 S. Ct. 2653, 2667 (2011).

On its face, the Court found, Section 2(a) “does not address misleading, deceptive, or unlawful marks. There is nothing illegal or misleading about a disparaging trademark like Mr. Tam’s mark.” Indeed, the government’s entire interest in § 2(a) appears to be the denial of registration to trademarks whose messages the government disapproves.

Conclusion

Whether or not the Supreme Court lets the Federal Circuit’s decision stand, the Federal Circuit’s view that Mr. Tam was unjustly refused registration is compelling:

[I]t seems clear that the result as to Mr. Tam 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.

On the other hand, if Mr. Tam can now register SLANTS for a salutary purpose, there is no constitutional justification that would prohibit an organization to register the same word for a racist purpose, for example, “No Slants Allowed.” Nor would there be a constitutional justification for preventing registration of REDSKINS for a football team. (The owner of the REDSKINS trademark certainly claims not to have disparaging intent.) It seems to us that Congress could narrowly prohibit the registration of racial, religious and gender-based epithets that disparage “a substantial composite of the referenced group” on a viewpoint-neutral basis (i.e., regardless of the trademark applicant’s purpose in using the epithet), but Section 2(a) reaches too far when it prohibits disparaging messages whose words, standing alone, are not inherently disparaging. Of course, whether Congress should pass a law prohibiting the registration of epithets is another matter. The marketplace of ideas may be the best way to determine the worth of any mark.

The fight over Section 2(a) is far from over. The case is expected to be appealed to the Supreme Court and, of course, Congress may look for a legislative solution, leading to further litigation. In addition, the Federal Circuit limited its holding to the disparagement provision of Section 2(a), “[r]ecognizing, however, that other portions of § 2 may likewise constitute government regulation of expression based on message, such as the exclusions of immoral or scandalous marks…”

FOOTNOTES

[1] Section 2(a) provides in full as follows:
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 it —
(a) Consists 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; or a geographical indication which, when used on or in connection with wines or spirits, identifies a place other than the origin of the goods and is first used on or in connection with wines or spirits by the applicant on or after one year after the date on which the WTO Agreement (as defined in section 3501(9) of title 19) enters into force with respect to the United States.
[2] At WebTM, our basic registration fee covers office actions, but not appeals to the TTAB or interventions by third parties. Buyer beware: some registration services charge high fees for office actions, which are issued in a majority of trademark applications. What looks like a cheap deal could turn into disaster.

 

Trademark Trolls & Trademark Bullies

Trademark Trolls

You have to expect it. There are domain name trolls who register domain names in an attempt to extract money from its rightful owner; and there are patent trolls, who attempt to enforce patent rights far beyond their patent’s actual value or contribution to prior art. Enter the trademark troll and trademark bully.

Trademark trolls attempt to (or actually do) register a mark with the intent of demanding payment from companies that have adopted the same or similar marks, often in another country. This is common in China. For example, as reported by Peter Mendelson in the International Trademark Association (INTA) Bulletin on December 1, 2015, Li Dao Zhi (Li), a Shanghai company, registered the mark Ka Si Te (a transliteration of “Castel”) in China in 2002, a year after French winemaker Castel Frères SAS began selling wine under the mark, Zhang Yu Ka Si Te. It wasn’t until 2005 that Castel Frères was aware of Li’s registration. Castel filed a request to cancel based on Li’s non-use, but while the request was pending, Li initiated use and sued Castel for infringement. The Court ruled in favor of Li and ordered Castel to pay over USD $5 million, but the Chinese high court suspended the decision and fine and ordered the case retried.

Similar situations in China, few with happy endings, have affected such companies as Tesla Motors and New Balance Athletic Shoes.

As this problem is not necessarily limited to China, but can happen in any country (particularly those in which a trademark belongs to the party who is “first to file”), the lesson is that whenever a company is contemplating doing business in a country, that company should apply to register its marks well in advance of entering the marketplace. (Winemaker Castel actually entered the Chinese market in 1998, possibly tipping off Li that there was a trademark up for grabs.) WebTM files and prosecutes trademark applications in the United States and worldwide directly through the Madrid Protocol and National applications through local counsel. (“Prosecutes” in this context means doing the necessary work to see that a mark is registered.) A description of our services and a listing of our fees are provided elsewhere on this website.

 

Trademark Bullies

Trademark bullies are a bit different from trolls. The trademark bully is the company that sends cease and desist letters to, or actually sues, other companies, claiming infringement on their trademarks beyond what is really justified. Most trademark bullies are big companies with well-known or “famous” trademarks, and big budgets to go after smaller companies. While the law recognizes that “famous” marks (a term of art in trademark law) are entitled to a wider scope of protection than regular trademarks, many companies use their power to go beyond what the law really provides, knowing full well that the smaller company won’t have the resources or economic interest to fight.

arcuateSometimes, of course, these companies send cease and desist letters or initiate actions with good cause. In other cases, there is clear overreaching. Levi Strauss is a good example of a trademark bully when it comes to their back-pocket “Arcuate” trademark, shown at left. Levi Strauss has, over the years, gone after dozens of companies (including our clients) for allegedly mimicking the Arcuate mark, and has been successful (mainly by settlement) in the pretrial phases of most of those cases. The resolve of Levi Strauss to create a wide scope of protection around its Arcuate mark can be seen in a litigation it brought against Abercrombie & Fitch Trading Co. in 2007. In that case, Levi Strauss alleged that Abercrombie’s back pocket design (below right) was confusingly similar to the Arcuate mark, and therefore infringing. Levi Strauss also alleged that Abercrombie’s mark would dilute the distinctiveness of the Arcuate mark, which is “famous.” (Whether a mark is “famous” is determined by looking at such factors as general public recognition, duration of use, amount of advertising and promotion, and the economic value of the mark. The term applies only to widely recognized trademarks.)

Having the resources to fight, Abercrombie took the case to trial, where the jury ruled in favor of Abercrombie, finding that although the Arcuate mark is famous, the two marks were not confusingly similar. However, that still left the question of trademark dilution, which is decided by courts, not juries, under a special statute designed to protect famous trademarks, the Trademark Dilution Revision Act of 2006 (the “TDRA”), Section 43(c) of the Lanham Act, 15 U.S.C. § 1125(c). To that end, the jury gave an advisory (non-binding) opinion that the two marks were not so similar that they were essentially the same mark, and the District Court found in Abercrombie’s favor. Levi Strauss appealed to the Ninth Circuit, arguing that the District Court’s requirement for applying the TDRA (i.e., that the two marks be so similar so as to be essentially the same mark) was in error. The Ninth Circuit agreed, ruling that neither a finding that the two marks were essentially the same, nor even a finding of confusing similarity, was required before Abercrombie could be found guilty of violating the TDRA. Abercrombie’s mark only needed to be similar enough in the court’s eyes, based on such criteria as the degree of fame and distinctiveness of the mark. Levi Strauss ultimately won the case, but had the Arcuate mark not been famous, the lower court decision would have stood. (The back-pocket design for which Levi Strauss went after our client wasn’t even a tenth as close to the Arcuate mark as Abercrombie’s mark was.)

a&fThe United States Department of Commerce looked at the issue of trademark bullying in 2010-2011, but concluded that if there was any overreach, it was better dealt with by Rule 11 sanctions (for bringing a frivolous lawsuit) or awarding of attorneys’ fees to prevailing parties. Three factors make this suggestion rather unhelpful. First, courts are reluctant to decide what is frivolous when a claim is “colorable” (i.e., not stark raving mad). Second, the “American rule” provides that legal fees are not awarded to a prevailing party unless expressly authorized by statute, this wasn’t the most helpful of suggestions. Section 35(a)(3) of the Lanham Act provides that courts “may award reasonable attorney fees to the prevailing party” in exceptional cases, but courts rarely find that a case is “exceptional,” and many require evidence of fraud or bad faith (e.g., evidence that the plaintiff knew that it had no case and brought it anyway for malicious reasons).

The issue of trademark bullying is still alive, however, and there is probably greater awareness today of the problem of trademark bullying with websites such as www.lumendatabase.org, dedicated to exposing overreaching practices of (mostly) economically powerful trademark holders. In 2014, the Supreme Court visited the issue of when legal fees should be awarded to a defendant in a patent case, involving a statute with the exact same discretionary language as in the Lanham Act. In Octane Fitness, LLC v. Icon Health and Fitness, Inc., 134 S.Ct. 1749 (2014), the Supreme Court reversed the Federal Circuit’s definition of the “exceptional case” as one which was, by clear and convincing evidence, “objectively baseless” and brought in “subjective bad faith.” (In support of its decision, the Supreme Court pointed to the Federal Circuit’s decision Noxell Corp. v. Firehouse No. 1 Bar-B-Que Restaurant, 771 F.2d 521 (D.C. Cir. 1985), a trademark case that defined “exceptional” under the Lanham Act as “uncommon” or “not run-of-the-mill.” Oddly enough, the Federal Circuit didn’t even discuss Noxell in its decision in Octane Fitness.)

While the reasoning in Octane Fitness has found its way into a few Lanham Act cases in which attorneys’ fees have been granted to defendants (see, e.g., Fair Wind Sailing, Inc. v. Dempster, 764 F. 3d 303 (3d Cir. 2014) (where the complaint failed to allege sufficient facts to establish trade dress infringement); and Renna v. County of Union N.J., 2015 WL 93800, (D.N.J. 2015) (awarding legal fees to party who displayed the un-registrable seal of Union County, NJ, during a public access TV exposé regarding government shenanigans — but that really was an egregious case), in the Second Circuit (covering New York, Connecticut and Vermont) the prevailing test for awarding legal fees in trademark cases still appears to be the presence of smoking-gun evidence of fraud or bad faith. This is an almost impossible standard to meet except in the worst of circumstances.

If you receive a cease and desist letter and think you are being bullied, don’t simply roll over and sign any document that is demanded by the aggrieved trademark owner. Rather, contact an attorney experienced in handling these matters. (You can contact us. We regularly handle trademark claims of all kinds in addition to bringing trademark infringement lawsuits.) Many times, with a little pushback, satisfactory settlements can be reached or, at any rate, damage can be contained.

REDSKINS Marks Cancelled, Found to Disparage Native Americans

REDSKINS

On June 18th, the United States Trademark Trial and Appeal Board (TTAB) granted a petition to cancel six registrations for word and design marks containing the word, REDSKINS for entertainment services. The action, Amanda Blackhorse, Marcus Briggs-Cloud, Philip Gover, Jillian Pappan, and Courtney Tsotigh v. Pro-Football, Inc., Cancellation No. 92046185 (June 18, 2014) (“Blackhorse”), was brought by six Native Americans (later narrowed to five), who argued that the word “Redskin” was disparaging to Native Americans. Two of the three judges on the TTAB panel agreed and one dissented.

This was the second cancellation action brought by Native Americans against trademarks owned by the Washington Redskins. In the first, Harjo v. Pro Football, Inc., brought in 1992, the TTAB granted the petition for cancellation, but the federal courts ruled that the petitioners were barred by the doctrine of laches — i.e., they had waited too long after reaching the age of majority to file their action.

The registrations sought to be cancelled in Blackhorse were registered between 1974 and 1990. When the petition was filed in 2006 (shortly after the federal courts dismissed the Harjo petition), each of the petitioners had only recently reached the age of majority. Laches was no longer at issue.

Under 15 USC § 1052 of the Lanham Act, marks that “may disparage” persons or institutions “or bring them into into contempt or disrepute” are forbidden from being registered. Moreover, while the Lanham Act requires many cancellation petitions to be brought within five years of registration of the disputed mark, it provides no statute of limitation for cancellation petitions based on disparagement. Under 15 U.S.C. § 1064(3), such petitions may be brought “[a]t any time.” In the final Harjo appeal, Pro-Football, Inc. v. Harjo, 415 F.3d 44 (2005),the Court speculated that Congress “may well have denied companies the benefit of a statute of limitations for potentially disparaging trademarks for the very purpose of discouraging the use of such marks,” citing In re Riverbank Canning Co., 25 C.C.P.A. 1028, 95 F.2d 327, 329 (1938), which noted that the “field is almost limitless from which to select words for use as trademarks, and one who uses debatable marks does so at the peril that his mark may not be entitled to registration.”

Nevertheless, there was no fixed test for determining whether a mark is disparaging until Harjo. As re-stated in Blackhorse, the test is two-fold:

  1. What is the meaning of the matter in question, as it appears in the marks and as those marks are used in connection with the goods and services identified in the registrations?
  2. Is the meaning of the marks one that may disparage Native Americans?

In answer to the first question, the TTAB found that REDSKINS, even when used in connection with the presentation of football games, clearly refers to Native Americans. This is demonstrated by the design marks (visible on Washington Redskins helmets and elsewhere) and by the use of Native American garb and headdresses by the Washington Redskins’ band and cheerleaders (called “Redskinettes”).

In answering the second question, the TTAB noted that in addition to other evidence, it must take into account the views of a “substantial composite,” but not necessarily a majority, of the group which the mark is claimed to disparage. In addition, it had to find that REDSKINS was disparaging in connection with entertainment services (i.e., the presentation of football games) at the time the marks were registered.

Petitioners submitted two types of evidence to prove their case. General evidence as to the meaning of the word REDSKINS consisted of dictionary definitions, reference books and testimony from experts in linquistics. Specific evidence as to the views of Native Americans consisted of personal testimony and letters, newspaper articles and official records, including a 1993 Resolution of the National Congress of American Indians declaring that the REDSKINS trademarks were “offensive and disparaging.” The evidence left no doubt in the minds of the majority that REDSKINS was disparaging at the time the marks were filed. The respondent’s argument, that REDSKINS had acquired a separate meaning as the name of a football team, thereby neutralizing any disparaging effect, was rejected.

The dissent, on the other hand, believed that the petitioners failed to prove that the term was disparaging at the time of registration when used in connection with football. Furthermore, he said, dictionary definitions that labelled REDSKIN as “usually offensive” left open the possibility that it might not be in certain contexts, one of which could be football.

The TTAB ruling does not affect the ability of the Washington Redskins owner to continue using its REDSKINS trademarks. The only issue at stake in the case was whether federal law permitted registration of the mark in the US Patent and Trademark Office, thereby invoking the additional protections that registration provides. There is no question but that the USPTO made the right decision. Indeed, no federal agency should put a stamp of approval on conduct (or a trademark) that plainly disparages a segment of the population on the basis of race, religion, ethnicity, gender or sexual orientation.