Trademarks – Not What They Used To Be: Courts expected to seriously revisit First Amendment issues

Thursday, September 3, 2015 - 10:22

Marsha Gentner, a senior counsel in Dykema’s Intellectual Property Group, specializes in trademark portfolio management worldwide, encompassing everything from clearing and registering marks to enforcing rights and defending companies against trademark claims. Here, she highlights some recent trademark cases that involve novel or emerging issues, and she outlines what corporations should be aware of in managing their most successful brands. She can be reached at mgentner@dykema.com.

MCC: One highly publicized trademark case involves the NFL team the Washington Redskins. The team’s longstanding trademark has been deemed to be disparaging to Native Americans. What are the issues and any decisions from the court around disparagement and federal trademark registration as government speech?

Gentner: It's a difficult situation because the petitioners had to prove disparagement as of a window in time, from 1967 to 1990. Typically, you would do a survey to determine how a relevant population, in this case Native Americans, views a mark, but in this case, it was literally impossible to conduct a survey going back to 1967 to 1990 perceptions. Instead, for disparagement purposes, this case required looking at different references, such as dictionaries, scholarly articles and press from the time period, and statements and positions that had been taken by various Native American groups.

The court came away, not surprisingly, with the idea that even in 1967, and certainly by 1990, a significant portion of the Native American population viewed the term “Redskins” as disparaging, and the court decided in favor of canceling the Washington Redskins’ registrations because they were disparaging and offensive.

An interesting aspect of this case is the First Amendment issue raised in the recent Supreme Court decision on Confederate license plates, where the court found that the Texas license plate program – where you could submit for a certain type of license, like a vanity plate – was actually government speech. Therefore, the state could control its “message” so to speak, without violating the First Amendment.

In the Redskins case, the judge adopted the viewpoint that trademark registrations, too, are government speech, and so the provision prohibiting registration of a disparaging trademark does not offend the First Amendment because the government has a right to say that they don't want to speak in that voice, if you will.

Concurrent with the Redskins decision, there was an applicant who had filed for registration of the mark “The Slants” for an Asian band, and the applicant was Asian. The application was refused registration on the same grounds as the Washington Redskins’ registrations were cancelled – that the name was disparaging.

The Slants application refusal then went to the Trademark Trial and Appeal Board (TTAB), which sustained the refusal, and then it went to the Court of Appeals for the Federal Circuit, where you can appeal TTAB decisions. The applicant challenged the provision regarding disparagement on First Amendment grounds, and initially, the three-judge panel said that, based on well-established law before the Federal Circuit, the First Amendment challenge could not stand. A member of the panel said that even though he concurred in the decision, it seemed to him that, in fact, there were substantial First Amendment questions with this provision against disparaging terms. As a result, the full Court of Appeals for the Federal Circuit vacated that panel’s decision and reset the Slants application for consideration of the First Amendment issue.

So here you have a district court in Virginia, which is governed by the Fourth Circuit Court of Appeals, squarely facing this issue and ruling that in the case of the Redskins, the First Amendment does not bar the prohibition on registration of disparaging trademarks. Then you have that very same issue before the Federal Circuit by virtue of its role as the court of direct appeals for the TTAB, and therefore, a significant voice on trademark registrability matters under the Lanham Act. The Court of Appeals for the Federal Circuit is going to have an opinion on this First Amendment issue, and the Washington team has appealed the district court ruling, so conceivably the Fourth Circuit is going to have an opinion on the First Amendment, as well. It will be very interesting to see what happens.

MCC: A word like “slant” has multiple definitions. To what degree is context a consideration?

Gentner: There is an assessment of the context in which a mark is being applied for and if it was meant in a certain way. The big joke has always been that the Washington Redskins should change their logo to a redskin potato. As silly as that sounds, if a mark had a disparaging context in one form but a non-­disparaging significance in another, and it was clear from the record that the use set forth in the application was intended to be in the non-­disparaging context, the application would be allowed. And there have been cases before the TTAB where they found exactly that.

In both these cases, however, it was quite clear from the record that the applicable context is disparaging. The Washington football team, while they adamantly say the name is not intended to be offensive, don't deny that “Redskins” was used to refer to Native Americans. In the Slants case, the band did not deny that the name was a reference to their Asian heritage. They were saying that they had no intent to use it in a disparaging manner. So, yes, context is a consideration that cuts both ways, and in the cases we are discussing, it didn’t help either applicant.

MCC: In terms of the trademark connection, please discuss two recent cases involving motorcycle biker groups, one of which involved a violent clash this past May.

Gentner: The two motorcycle cases implicating trademark issues surfaced about the same time. I would never have thought biker groups and trademarks have anything to do with each other, but it turns out they do because the groups rely on trademarks – insignias that they wear on their jackets – to identify themselves and, in some instances apparently, to finance themselves.

The first case in Waco involves two groups, the Bandidos and the Cossacks. The Bandido patch, a registered logo, includes what’s known as the Texas rocker: an inverted crescent containing the word “Texas.” The Cossacks used a very similar logo, and the Bandidos wanted the Cossacks to pay a $100 licensing fee per month for each of their more than 100 chapters, which amounts to substantial money. This case is fascinating in that it involves a trademark licensing arrangement with a significant financial component in a novel context . . . which became the cause of a deadly dispute. Tensions arising, in part, from this demand culminated in an armed confrontation that left at least nine people dead and at least 170 people arrested. 

The other case involves the Mongols Nation, a biker club in California that has a registered logo. The Justice Department went after the club and its members with a host of criminal charges, resulting in an epic court battle that’s been going on since 2008. The DOJ is seeking to seize the Mongols Nation trademark. That raises a host of problems because while the government can seize intangible assets, such as trademarks, as part of a criminal proceeding, it then has to sell the assets at auction. Now, who is going to buy a mark that identifies people as belonging to a certain organization, and further, will the new owner be able to stop anyone, including members of the Mongols Nation, from wearing that patch?

The theory of trademark ownership is essentially that marks exist only in the context of use, meaning that a trademark that isn't used really isn’t a trademark. It has no value, no existence apart from its goodwill and its use. So the idea that the government can prevent the group from using the mark to identify themselves, and then at auction maintain the mark’s value without abandoning it – well that’s a tall order. To win, the government will have to successfully assert that everybody associated with this group cannot wear a membership badge, but others can, which to my eye raises basic First Amendment issues of the right of association.  

MCC: How might these potential precedents affect the way corporations design or execute their trademarks?

Gentner: The essential point is that trademarks disputes are arising in new and different contexts. The Washington Redskins case is not your typical brand battle; it's not two competing commercial entities going head-to-head. As a result, in the corporate context, you wonder if trademark issues might not be used in the future by all sorts of noncompetitive parties as a way to challenge policies, convey a different message or bring a topic to the forefront that really has nothing to do with the mark.

MCC: Let’s talk about the NAACP’s trademark case against The Radiance Foundation, which published an article online entitled “NAACP: National Association for the Abortion of Colored People,” criticizing the NAACP’s stance on abortion. Does this case also have implications for corporations?

Gentner: This was sort of the flip side, where the NAACP tried to use the trademark not in a commercial competitive sense but in order to get somebody to stop attacking them. A lot of what was at stake, and much of what controlled the decision, pertained to the commercial versus noncommercial nature of what was going on. We see similar situations involving the “sucks” websites (for example: “xyzcorporationsucks.com”) or use of the company name metatags – all to draw people to a website that disparages the company. In that sense, the NAACP’s position resembles what corporations face. Some have tried the trademark infringement route, but again it bucked against the First Amendment.  

MCC: What are some of the enduring issues coming out of these cases?

Gentner: Fundamentally, trademarks just aren’t what they used to be, in terms of how and for what purpose they are being used, who's using them, who's registering them, and what the related disputes are really about. It's very much evolving right now. Traditionally, it was difficult to maintain a First Amendment defense against trademark infringement because the underlying expression was not considered protected speech. Now, trademarks are being used in much broader, noncommercial or noncompetitive contexts; therefore, some of these issues are percolating once again and being rethought – and not only for the NAACP, the Redskins, the Slants, and the Mongols Nation. We're going to see these issues being confronted going forward. What we all thought was settled is not so settled anymore. Over the next year or so the courts will very seriously revisit these First Amendment issues as they affect trademark complaints.

MCC: Is it safe to say that companies will want to keep their finger on the pulse of these developments, and maybe consider looking back at their portfolios to see if there are any vulnerabilities?

Gentner: Yes, and thinking it through, they will also need to pick their battles with a fresh outlook on whom to target and why, all with an understanding of how the dispute process might be complicated in the future.