Last Wednesday the Eastern District of Virginia issued its opinion and order on cross-motions for summary judgment in Pro-Football v. Blackhorse, the case in which the National Football League (NFL) appealed the Trademark Trial and Appeal Board’s (TTAB) precedential cancellation of the REDSKINS trademark on Lanham Act 2(a) disparagement grounds. The long and short of it is, it didn’t turn out well for the Redskins, who will almost certainly appeal the decision, which affirmed the TTAB’s 2014 cancellation.
The opinion, authored by Judge Lee, weighs in at 70 pages and addresses the First Amendment implications of 2(a), ultimately concluding that the Patent and Trademark Office’s (PTO) practice of denying federal registration to disparaging trademarks does not run afoul of the First Amendment or chill speech. The opinion comes at an interesting time as the full Federal Circuit readies to hear oral argument in THE SLANTS case in early October on the same provision.
Among other constitutional challenges, the NFL in their brief contended that Section 2(a) of the Lanham Act violates the First Amendment by restricting protected speech, imposing burdens on trademark holders, and conditioning access to federal benefits on restrictions of trademark owners’ speech. In denying the NFL’s motion, the district court stated that “Section 2(a) of the Lanham Act does not implicate the First Amendment” and that “the federal trademark registration program is government speech and is therefore exempt from First Amendment scrutiny.”
I predicted in a post earlier this month that courts dealing with 2(a) First Amendment challenges would likely look to the Supreme Court’s June 2015 decision in Walker v. Texas Division, Sons of Confederate Veterans (“Walker”) for guidance as to whether the federal trademark registration program can be considered “government speech” for purposes of First Amendment analysis. Judge Moore, in her “additional views” calling for en banc review of the constitutionality of 2(a), explicitly stated that “[t]rademarks – which are applied to private goods to identify the source of the goods for consumers – are private speech, not ‘government speech.’” She further stated that “[a]lthough the government publishes registered trademarks in the Trademark Principal Register, it does so not to communicate a particular message or select a particular viewpoint; rather, it publishes trademarks to provide notice that a mark has been registered.”
Judge Lee’s decision however, relied on the Supreme Court’s recent decision in Walker, and held that “the federal trademark registration program is government speech and is therefore exempt from First Amendment scrutiny,” a conclusion at odds with Judge Moore’s thoughts just three months earlier (and before the Walker decision). Furthermore, Judge Lee (correctly) cites In re McGinley for the proposition that the Federal Circuit has held that the PTO’s refusal to register an applicant’s mark does not infringe upon the mark owner’s First Amendment rights as “[no] conduct is proscribed and no tangible form of expression is suppressed.” McGinley provided the basis by which the Federal Circuit affirmed the TTAB’s cancellation of THE SLANTS trademark on 2(a) grounds in April, but is also the same case that Judge Moore suggested the Federal Circuit should “revisit” in light of significant evolution in First Amendment jurisprudence since it was issued.
Discussing the constitutionality of 2(a) under the First Amendment in particular, Judge Lee noted that “[n]othing about Section 2(a) impedes the ability of members of society to discuss a trademark that was not registered by the PTO,” echoing the sentiments expressed by the court in In re McGinley. Lee noted that 2(a) does not prohibit or penalize speech at all (Judge Moore, on the other hand, argued it amounted to viewpoint discrimination). Specifically, 2(a) differs from many of the recent First Amendment cases cited by Pro Football, including Clatterbuck v. City of Charlottesville, 703 F.3d 549 (4th Cir. 2013) and Sorrell v. IMS Health Inc., 131 S. Ct. 2653 (2011) because 2(a) imposes no restriction whatsoever on protected expression. Pro Football also cited Simon & Schuster, Inc. v. Members of N.Y. State Crime Victims Bd., 502 U.S. 105 (1991) in their brief, arguing that 2(a) might nevertheless drive ideas from the marketplace. Simon & Schuster involved a New York statute that required publishers to pay a fee to the State Crime Victims Board for any monies derived from the sales of books where criminals spoke of their conduct. Simon & Schuster, 502 U.S. at 116. Judge Lee called this an “unsuccessful attempt to map incongruent First Amendment jurisprudence onto the Lanham Act” and stated that 2(a) imposes no financial penalty on speech, it simply cancels or denies registration.
Judge Lee went on to characterize the federal trademark registration program as government speech exempt from First Amendment scrutiny, an outcome at odds with Judge Moore’s views in THE SLANTS case. Discussing federal trademark registration itself, rather than trademarks, Judge Lee held that the registration program “is not commercial speech” because federal registration does more than merely “propose a commercial transaction.” Harris v. Quinn, 134 S. Ct. 2618, 2639 (2014). This is because the Principal Register, which functions to inform the public of marks registered with the federal government, does not propose a commercial transaction and is therefore not commercial speech. Both Blackhorse and the United States argued that the federal trademark program is government speech, while Pro Football (and Judge Moore, in THE SLANTS decision) contended that the program is a restriction of purely private speech.
Judge Lee laid out three reasons for why the court believed federal trademark registration is government, rather than private speech, the first of which turns on the Supreme Court’s recent decision in Walker. As I discussed earlier this month, Walker involved Texas’ specialty license plate program. The Texas of Department of Motor Vehicles retains the power to refuse to create a newly proposed specialty license plate if, among other things, “the design might be offensive to any member of the public.” In 2009, the Sons of Confederate Veterans had applied to have a specialty license plate created that included a picture of the confederate flag (see here). The Texas DMV Board rejected the design because members of the public would find it offensive. The district court sided with the Board, while the Fifth Circuit (echoing many of Judge Moore’s views expressed in THE SLANTS case) held that the license plate designs were private speech and that the Texas DMV Board, in denying plate designs on the grounds that they might offend the public, had engaged in constitutionally forbidden viewpoint discrimination. The Supreme Court rejected this, finding that the specialty license plate program was government speech.
Judge Lee held that pursuant to the Supreme Court’s analysis in Walker, the federal trademark registration program constitutes government speech for many of the same reasons the Texas specialty license plate program is government speech. First, “federal trademark registration … communicates the message that the federal government has approved the mark.” Second, “the public closely associates federal trademark registration with the federal government as the insignia for federal registration, ®, is a manifestation of the federal government’s recognition of the mark.” This second conclusion is directly at odds with Judge Moore’s views in THE SLANTS case, where she more noted that “the public must believe that trademarks carry the stamp of government approval” and that they currently do not. For this proposition, Moore cited the two-decade old TTAB case In re Old Glory Condom Corp., 26 U.S.P.Q.2d 1216, 1219–20 n.3 (TTAB Mar. 3, 1993), which is not mentioned in the REDSKINS decision.
Lastly, Judge Lee held that the third factor analyzed by the Supreme Court in Walker – editorial control – was present in the federal trademark registration program. The PTO, under Section 2 of the Lanham Act, retains the authority to deny or cancel a mark’s registration, and thereby control the appearance of the Principal Register on a number of grounds. Judge Lee noted on that on this basis, “the First Amendment does not preclude the government from exercising editorial discretion over its own medium of expression.” Muir v. Ala. Educ. Television Comm’n, 688 F.2d 1033, 1044 (5th Cir. 1982).
In addition to the Walker test articulated by the Supreme Court, Judge Lee also found that the federal trademark registration program qualified as government speech under the “mixed/hybrid speech” test used by the Fourth Circuit. SCV, 288 F.3d 610 (4th Cir. 2002). Under the mixed/hybrid speech test, the Federal Circuit considers:
(1) “the central purpose of the program in which the speech in question occurs”;
(2) “the degree of editorial control exercised by the government or private entities over the content of the speech”;
(3) “the identity of the literal speaker”; and
(4) “whether the government or the private entity bears the ultimate responsibility for the content of the speech[.]”
SCV, 288 F.3d at 618. Judge Lee found that under this test, the government has long played a role in protecting trademarks, and the federal registration program was created as a way to help do this. Furthermore, any protected expression here is tied to the creation of the mark itself, which is done by the owner by using the mark in commerce. The central purpose of the federal trademark registration program, however, declares that the federal government has approved that mark. As discussed in relation to the Walker test, the federal government also exercises significant editorial discretion with regards to the content of the Principal Register. Under the third factor, the literal speaker for the purposes of the Principal Register is the PTO. The fourth factor – who bears ultimate responsibility for the content of the speech – is the only factor that weighs in favor of private speech, because when a federal registration is challenged the trademark owner, not the federal government, must defend it. Because three of the four factors weighed in favor of a finding of government speech, however, the federal trademark program was determined to be government speech.
After determining that the federal registration program was government speech, Judge Moore also concluded that engaging in viewpoint discrimination was permissible under the standard articulated by the Supreme Court in Rust v. Sullivan, 500 U.S. 173 (1991), which granted government the right to determine the content and limits of its programs. Rust held that the government can “selectively fund a program to encourage certain activities it believes to be in the public interest, without at the same time funding an alternative program” without violating the Constitution. Rust, 500 U.S. at 193. Judge Lee also cited the Supreme Court’s 2013 decision Agency for Int’l Dev. V. Alliance for Open Soc’y Int’l Inc. (Open Society). Open Society involved a federal grant program to help fund the fight against HIV/AIDS, and conditioned the distribution of funds upon applicants adopting a “policy explicitly opposing prostitution and sex trafficking.” This was unconstitutional, the Court held, because it extended to “protected conduct outside the scope of the federally funded program” by forcing grantees to adhere to the government’s viewpoints even when grant funds were not being used. Unlike the situation in Open Society, however, the REDSKINS and THE SLANTS trademarks may continue to be used regardless of whether federal registration is granted.
Judge Lee’s reliance on cases like Rust and Open Society, where the government acted as a subsidizer, may not be as persuasive in the federal trademark registration context, however, because, as Judge Moore pointed out in THE SLANTS case, “PTO operations [are now] funded entirely by registration fees, not the taxpayer.” As a result, Congress is not acting directly pursuant to its Spending Clause powers by conveying a federally funded benefit to trademark applicants. Instead, it may only be creating a regulatory regime under its Commerce Clause powers. In that case, the “unconstitutional conditions” doctrine would apply.
Pro Football will almost certainly appeal Judge Lee’s decision. The decision is provocative, however, not because it affirms the denial of the REDSKINS trademark on disparagement grounds, but because of its construal of and reliance on the Supreme Court’s reasoning in Walker to reach the conclusion that the federal trademark registration program (and not trademarks themselves) constitutes government speech, allowing the PTO to engage in otherwise-Constitutionally-abhorred viewpoint discrimination. Judge Moore, in authoring her additional views in THE SLANTS case, did not have the benefit of the Supreme Court’s ruling in Walker, but many of the basic premises of Judge Lee’s argument – such as what the “speech” in question actually consists of and whether or not the government is really acting as a “subsidizer” as in Rust or Open Society – seem at odds with Moore’s views, teeing up a confrontation.
Whether the Federal Circuit decides to interpret Walker in the same way, or at all in light of their jurisprudence stemming from In re McGinley, are questions that will be decided in October. In the meantime, Section 2(a) of the Lanham Act remains alive and well.