Section 2 of the Lanham Act, the federal law governing trademarks, lists a number of bars that preclude registration of a trademark on the federal register. (1) These reasons include: the claimed matter is functional, meaning it affects the cost or quality of the underlying product or service; the claimed matter is merely descriptive, meaning that consumers don't understand that it indicates source and instead think that it just describes some characteristic of the product; the claimed matter is deceptively misdescriptive, which is like descriptiveness except not true; the claimed matter is deceptive, meaning that the untruth would be material to consumers; the claimed matter is confusingly similar to an existing registered mark or mark in use in the United States; the claimed matter is the name, photo, or signature of a living person and there's no written consent from that person to register the mark; the claimed matter is the flag or insignia of a nation or state or other U.S. political subdivision; the claimed matter creates a false association with people or institutions; the claimed matter is a geographic indication for wine or spirits but identifies a place other than the origin of the goods; and, last but not least, the claimed matter is scandalous, immoral, or disparaging.
The constitutionality of section 2 is now in doubt. Washington's football team had its disparaging marks cancelled, a decision upheld by a district court in mid-2015 and now on appeal to the Fourth Circuit. (2) But in December 2015, the Federal Circuit, en banc, held that section 2(a)'s disparagement bar was unconstitutional in the case of Simon Tam, an Asian-American seeking to register an anti-Asian slur in order to reclaim its negative meaning.* (3) The government apparently agrees that this holding also invalidates section 2 (a) 's scandalousness bar, (4) and the Supreme Court granted certiorari to review the decision in September 2016.
The Federal Circuit's In re Tam decision drew on significant developments in First Amendment doctrine. For example, earlier in 2015, in Reed v. Town of Gilbert, (5) the Supreme Court struck down a city's sign regulations on the theory that they were content-based and didn't survive strict scrutiny. The rule suggested by Reed is that all state regulations of speech that depend on an evaluation of the content of the speech to determine whether the regulation has been violated are content-based and must survive strict scrutiny. Section 2 is almost nothing but content-based.
This Article analyzes the First Amendment arguments against section 2(a)'s disparagement bar with reference to the consequences of any invalidation on the rest of the trademark statute. My fundamental conclusions are that In re Tam is wrongly reasoned even given the Supreme Court's increased scrutiny of commercial speech regulations, and that to hold otherwise and preserve the rest of trademark law would require unprincipled distinctions within trademark law. More generally, the Supreme Court's First Amendment jurisprudence has become so expansive as to threaten basic aspects of the regulatory state; the result of subjecting economic regulations such as trademark registration to strict First Amendment scrutiny shows the damage that can be done thereby.
I will first discuss the difficulty of applying the First Amendment to trademark law, which grants one private entity the right to suppress others' commercial speech, but also facilitates commercial transactions. Then, assuming that the First Amendment will apply in some ways, I discuss trademark registration as a kind of government endorsement, as well as other arguments that have evolved to justify the disparagement bar. I conclude that section 2 is generally constitutional as a government determination about what speech it is willing to enforce as a trademark. (6) I then specifically turn to the unconstitutional conditions doctrine as a useful lens through which to view the problem. Unconstitutional conditions cases suggest that the government can ask private entities for some speech-related things in exchange for discretionary benefits, but not for others; I conclude that the disparagement bar is not an unconstitutional condition on registration, because registration--unlike other programs that have raised unconstitutional conditions questions--is speech-based all the way down.
However, for those who disagree, I then argue that disparagement can't coherently be distinguished from a number of the other bars to registration once the harsh logic of the First Amendment applies. If trademark registration as a whole is constitutionally vulnerable under a particular vision of the First Amendment, that very result counsels against adopting that vision as constitutional doctrine. Then, I defend registration as a government program inherently shaping the speech environment against some further objections drawing on analogies to other regulations, primarily copyright.
I conclude by explaining how all of this work of distinguishing and defending ordinary trademark registration--an activity that happens over one hundred thousand times per year--is a consequence of misguided application of tough First Amendment scrutiny to the modern regulatory state. Many people think the government has no business rejecting trademark registration because the claimed mark is disparaging. That may be good policy. But if the Supreme Court strikes down the disparagement bar, it will face a difficult job distinguishing other aspects of trademark law. And these difficulties signal a greater problem: the Court has lost touch with the reasons that some content-based distinctions might deserve special scrutiny. Often, as the concurrences in Reed noted, perfectly sensible and by no means censorious regulations that depend on identifying the semantic content of speech would fall afoul of a real application of heightened scrutiny, to no worthwhile end.
SHOULD THE FIRST AMENDMENT EVEN APPLY?
It's possible to argue that trademark is a First Amendment-free zone, (7) as copyright basically is except for the internal restraints of the fact/expression division and fair use. (8) This argument has heretofore been made only in the context of suppressing third parties' speech at the behest of trademark owners: trademark law creates property rights, and private property rights can be enforced without involving the government in the suppression of speech. (9) But one can imagine the same argument for registration: registration's benefits are also property rights, and the government doesn't implicate the First Amendment by creating property rights, or declining to create them.
In 1987, San Francisco Arts & Athletics, Inc. v. U.S. Olympic Committee (10) ("SFAA") upheld a law granting the United States Olympic Committee authority to suppress any unauthorized commercial or noncommercial but "promotional" uses of "Olympic" and related symbols, going beyond ordinary trademark law. (11) SFAA was wrong when decided--among other things, it implausibly characterized a law governing specified symbols as content-neutral (12)--and its acceptance of suppressing noncommercial, non-deceptive speech without any showing of harm is even more dubious today, after United States v. Alvarez (13) found that lies can't be constitutionally punished in the absence of some kind of harm. (14) Nonetheless, the rationale that the U.S. Olympic Committee deserved a "limited" property right clearly had persuasive force to the Court, and the Alvarez Court did not reject SFAA. (15)
The last notable Lanham Act case to follow the property-loophole reasoning was also in 1987. (16) The continuing expansion of trademark liability to movies, art, and newspaper polls started to worry the courts of appeal, leading most of them to adopt a highly speech-protective standard, at least as applied to uses of trademarks in noncommercial speech (that is, in books, movies, and other non-advertising speech). (17) SFAA did nothing to slow this shift, and understandably so. If government has a completely free hand to create property rights to trump the First Amendment, after all, then all it would need to do to overturn New York Times v. Sullivan is define a person's good reputation as her property. (18) In fact, if avoiding the First Amendment were that simple, a state could simply provide Native Americans property rights in their collective image, at which point they could prevent the Washington team from using disparaging--or any--references to them. (19)
Even apart from property reasoning, infringing uses may have been historically unprotected because they were considered low-value, misleading commercial speech integral to a commercial transaction. However, denial of trademark registration is not solely an issue of speech being unprotected because it's low-value. Denying registration is a determination that the government chooses not to support the speech at issue (whether or not that support is characterized as the creation of a property right). A registration may bar future registrations of similar marks; a trademark right allows its owner to suppress other uses. If denying the right to use a mark to other parties isn't a violation of a First Amendment right, why would denying trademark protection to the claimant be a violation of a First Amendment right, when both would be using it in the same way: to indicate the source of goods or services? (20) The reason has to lie in the government's justification for its action. For stopping infringement, the justification is the prevention of consumer deception, but, as we will see, the justifications for denying registration are rather more complicated. (21)
Another constitutional jurisprudence could use the fact that a trademark confers a private right to suppress other people's speech as a reason that the government can make balancing decisions about whom to favor. If the Washington team has trademark...