Clear and Convincing Disparagement: an Argument for a Higher Evidentiary Standard for When the T.t.a.b. Considers Cancelling a Well-known, Tenured Trademark

• Publication year: 2015

Clear and Convincing Disparagement: An Argument for a Higher Evidentiary Standard for When the T.T.A.B. Considers Cancelling a Well-Known, Tenured Trademark

John C. Thomas III

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Thomas: Clear and Convincing Disparagement: An Argument for a Higher Evid

CLEAR AND CONVINCING DISPARAGEMENT: AN ARGUMENT FOR A HIGHER EVIDENTIARY STANDARD FOR WHEN THE T.T.A.B. CONSIDERS CANCELLING A WELL-KNOWN, TENURED TRADEMARK

John C. Thomas III^*

Table of Contents

I. INTRODUCTION..........................................................................................436

II. BACKGROUND.............................................................................................438

A. THE PRINCIPLES OF TRADEMARK LAW............................................438
B. THE LANHAM ACT................................................................................441
C. THE ADVANTAGES OF FEDERAL TRADEMARK REGISTRATION.....................................................................................442
D. SECTION 2(A) CASE LAW.....................................................................445
E. PREPONDERANCE OF THE EVIDENCE VS. CLEAR AND CONVINCING EVIDENCE....................................................................449
F. THE REDSKINS' CONTINUING LEGAL BATTLE...............................450

III. THE ARGUMENT FOR A HIGHER EVIDENTIARY STANDARD IN TRADEMARK CANCELLATION PROCEEDINGS BASED ON DISPARAGEMENT........................................................................................455

A. LEGAL ARGUMENT..............................................................................455
B. ECONOMIC ARGUMENT......................................................................457
C. POLICY ARGUMENT.............................................................................459

IV. CONCLUSION...............................................................................................461

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I. Introduction

Consider a corporation that has a longstanding and profitable business line with millions of customers who recognize the corporation's national brand by its federally registered trademarks. Then, after decades of use and multiple federal trademark renewals, the corporation suddenly loses its federal trademark protection because the trademark is determined to be scandalous, offensive, or disparaging to a small portion of the U.S. population by the Trademark Trial and Appeal Board. For Pro-Football's Washington Redskins franchise, this scenario is their reality, as the team's federal trademark protection has been in jeopardy for over two decades now,¹ accompanied by a dark cloud of negative economic consequences. Although there is a common misperception about what the loss of federal trademark protection really means for Pro-Football,² the economic effects are more indirect. Nevertheless, the sudden loss of a trademark is still problematic to a corporation who has built customer loyalty, identification, and goodwill through its national brand.

As American culture has changed over the last century, racial stereotypes in advertising have diminished, and once-acceptable but now offensive trademarks have been cancelled, simply not renewed, or adapted to become more "politically correct" over time.³ Offensive or disparaging marks are generally bad for business, since people who are offended will not support the offensive product or service.⁴ Native Americans, however, do not have the same population size, political influence, and economic consumer power that many other ethnic groups have, and so their protests against disparaging trademarks have largely been ignored.⁵

Racially charged brand names and advertising imagery are therefore less common in U.S. culture, except in regards to sports teams. Ethnically related team names include the New York Knickerbockers, the Boston Celtics, and the Notre Dame Fighting Irish, but no team name and trademark has received

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more direct scrutiny than the Washington Redskins. Although multiple team names reference Native Americans—the Atlanta Braves, Chicago Blackhawks, Cleveland Indians, Florida State Seminoles, and Kansas City Chiefs, to name a few—"[t]he Washington Redskins are the only . . . sports team whose name is an unequivocal racial slur . . . [T]he name of Washington's team—unlike the [other teams listed above]--is more than a mere racial reference. It is an actual racial epithet."⁶

While the Redskins owner, Daniel Snyder, continues to argue that his team's name represents "honor," "pride," and respect for Native Americans, others feel that the Redskins name is distasteful and offensive.⁷ University of Georgia Professor Claudio Saunt wrote, "[i]n light of the manifold struggles that America's first inhabitants have faced, attaching any Indian name to a multimillion-dollar sports franchise seems the most incongruous of honors."⁸ A recent poll of over a thousand Americans showed that over seventy percent voted for the Washington Redskins to keep their nickname, but the percentage of people who believe the name should be changed has tripled in the last twenty years.⁹

While many high school and college teams have changed their names as a result of societal pressure against the use of these Native American references, professional sports teams have been much less willing.¹⁰ The economic scale of professional sports teams like the Redskins may provide a strong reason for this resistance. Forbes recently financially valued the Washington Redskins at $2.4 billion (third highest of all NFL teams), with $214 million of that valuation attributable to its national "brand."¹¹ Changing their national brand would be very costly, considering the large investment the team has made in using its federal trademarks in advertising, the cost of designing and advertising a new name and logo, and the potential loss of brand equity and fan loyalty.¹² The time and money to clear out old inventory and change hundreds of references

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to the Redskins name in their stadium and with their sponsors raises additional concerns.¹³ On the other hand, if the Redskins ultimately decided not to change their team name and logo, losing its federal trademark protection could alternatively inflict indirect economic harm.

This Note will not take a position on whether the "Redskins" trademarks are disparaging to Native Americans. Instead, because of the economic harm that may result from suddenly losing federal protection, this Note will argue that there should be a higher evidentiary standard necessary to prove disparagement when the Trademark Trial and Appeal Board considers cancelling a well-known and tenured trademark, in comparison to when a trademark is initially reviewed for registration.

Part II begins by discussing the fundamental principles of trademark protection, followed by a detailed overview of the Lanham Act and the benefits of federal registration.¹⁴ Of particular focus is Section 2(a), which deals with content-based prohibitions to registration, such as scandalous matter and disparagement.¹⁵ This part additionally summarizes the requirements and procedure for registration and subsequent petitions for cancellation and relevant precedent demonstrating the key differences in two specific federal evidentiary standards of proof. Finally, this part provides a background of the Redskins' trademark battle, including each side's arguments, the previous court decisions, and where the case of Pro-Football v. Blackhorse¹⁶ currently stands.

Part III will then provide legal analysis and economic reasoning for why a higher evidentiary standard should be required when the Trademark Trial and Appeal Board considers cancelling a well-known, tenured trademark based on disparagement. Part IV concludes.

II. Background

A. THE PRINCIPLES OF TRADEMARK LAW

The Commerce Clause of the United States Constitution, which provides Congress the power to regulate commerce with foreign nations and among the several states, establishes the foundation for the federal regulation of trademarks.¹⁷ A trademark is "any word, name, symbol, or device, or any combination thereof used in commerce "to identify and distinguish [a trademark owner's] goods, including a unique product, from those

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manufactured or sold by others and to indicate the source of the goods."¹⁸ Justice Frankfurter described trademark protection as "the law's recognition of the psychological function of symbols."¹⁹

Trademark law evolved from unfair competition laws developed in the 1700s in both the Courts of Chancery (Equity) and Courts of Law.²⁰ The Courts of Law treated trademarks as a way to protect the public from fraud and deceit, while the Courts of Chancery viewed trademark rights as a form of property.²¹ This dual view of trademark law provides the fundamental policy reasons for trademark protection: (1) to protect consumers from confusion and deception as to the source of the product, and (2) to protect the trademark owner's property rights.²²

Modern courts still recognize these two statutory goals. As a Senate Report accompanying the Lanham Act's introduction in 1946 states:

The purpose underlying any trademark statute is twofold. One is to protect the public so it may be confident that, in purchasing a product bearing a particular trade-mark which it favorably knows, it will get the product which it asks for and wants to get. Secondly, where the owner of a trademark has spent energy, time, and money in presenting to the public the product, he is protected in his investment from its misappropriation by pirates and cheats. This is the well-established rule of law protecting both the public and the trademark owner.²³

A trademark serves various economic functions for both the consumer and the owner.²⁴ Trademarks allow consumers to recognize and identify products over time, making it easier for consumers to choose products that they like and avoid products that they do not.²⁵ In turn, since consumers are able to...