Wednesday, December 23, 2015

The CAFC determines part of the Lanham Act is unconstitutional in IN RE SIMON SHIAO TAM

In 1997, in a talk at SSI-11, LBE mentioned the Lanham Act case involving the American Physical Society (APS), which turned on a distinction of protected free speech and commercial speech:


A recent case of interest to scientists involved the allegation that use of citation impact
data (by the physics societies AIP and APS) could, in part, sustain a charge of false advertising.
In a preliminary decision (Gordon and Breach v American Institute of Physics, 37 USPQ2d 1289
(SD NY 1995)), a federal district court distinguished citation data published in a journal
(protected free speech) from the same data specifically addressed to librarians (commercial
speech). A decision on the merits of the latter supported the position of the societies (see
Science, 277, 1611, Sept. 12, 1997; Physics Today, pp. 93-94 (Oct. 1997); Intellectual Property
Today, p. 5 (Oct. 97) and pp. 28-29 (Nov. 97) [The text of the November article is available at
http://www.lawworks-iptoday.com/11-97/ebert.htm.]. On a lighter note, the publisher of a book
on the Kennedy assassination ("Case Closed") was found not to violate the false advertising
provision of the Lanham Act for an advertisement featuring pictures of conspiracy theorists with
the caption "GUILTY OF MISLEADING THE AMERICAN PUBLIC" (Groden v Random
House, 35 UPSQ2d 1547 (2d Cir 1995)).



There was also a reference to the Wilcher case: However,
scandalous or obscene material cannot be registered. (In re Wilcher, 40 USPQ2d 1930 (TTAB
1996)).

Link: http://www4.eng.hawaii.edu/~ssi11/SSI-11Papers/P3.pdf

** On December 22, 2015, the CAFC decided IN RE SIMON SHIAO TAM, and determined that part of
the Lanham Act was unconstitutional:


The government cannot refuse to register disparaging
marks because it disapproves of the expressive messages
conveyed by the marks. It cannot refuse to register marks
because it concludes that such marks will be disparaging
to others. 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.



link: http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/14-1203.Opinion.12-18-2015.1.PDF

Fragments from the various parts of the decision/dissents are included:

--
The fact that the Lanham Act derives from the Commerce Clause, not the Spending Clause, is further evidence that trademark registration is not a subsidy. The purpose of the Lanham Act is to regulate marks used in interstate commerce, prevent customer confusion, and protect the goodwill of markholders, 15 U.S.C. § 1127, not to subsidize markholders. Moreover, the government funding cases have thus far been limited to situations where the government has chosen to limit funding to individuals that are advancing the goals underlying the program the government seeks to fund. See generally Agency for Int’l Dev., 133 S. Ct. at 2324–25; Rust, 500 U.S. at 191; cf. American Library Ass’n, 539 U.S. at 211 (it is not unconstitutional for the government to insist that “public funds be spent for the purposes for which they were authorized”). The restriction on the registration of disparaging marks bears no relation to the objectives, goals, or purpose of the federal trademark registration program.


--
The government also argues that it has a legitimate interest in “declining to expend its resources to facilitate the use of racial slurs as source identifiers in interstate commerce.” Appellee’s En Banc Br. 43. The government’s interest in directing its resources does not warrant regulation of these marks. As discussed, trademark registration is user-funded, not taxpayer-funded. The government expends few resources registering these marks. See supra at 53–55. Its costs are the same costs that would be incidental to any governmental registration: articles of incorporation, copyrights, patents, property deeds, etc.


--Reyna dissent

The Majority holds today that Mr. Tam’s speech, which disparages those of Asian descent, is valuable political speech that the government may not regulate except to ban its use in commerce by everyone but Mr. Tam. I believe the refusal to register disparaging marks under § 2(a) of the Lanham Act is an appropriate regulation that directly advances the government’s substantial interest in the orderly flow of commerce. Because I would uphold the constitutionality of § 2(a), I respectfully dissent


--
Because “the Constitution accords less protection to commercial speech than to other constitutionally safeguarded forms of expression,” Bolger v. Youngs Drug Products Corp., 463 U.S. 60, 64-65 (1983), the government may regulate the use of trademarks to ensure the orderly flow of commerce. For example, the government may disallow trade names that create “[t]he possibilities for deception,” even if the names are not untruthful. Friedman, 440 U.S. at 13. The government may similarly implement a trademark registration program, as it did through the Lanham Act, which provides certain speakers exclusive rights to their chosen marks in commerce. Such regulation is permissible under the First Amendment only because the speech being regulated is commercial and because the government has a substantial interest in facilitating commerce by “insuring that the stream of commercial information flows cleanly as well as freely.” Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748, 771-72 (1976).

--

The Lanham Act declares unequivocally that “[t]he intent of this chapter is to regulate commerce.” 15 U.S.C.A. § 1127.
--
The marketplace of ideas differs dramatically from the marketplace of goods and services. While the marketplace of ideas may tolerate or even benefit from the volatility that accompanies disparaging and insulting speech, the marketplace of goods and services is a wholly different animal. Commerce does not benefit from political volatility, nor from insults, discrimination, or bigotry. Commerce is a communal institution regulated for the mutual economic benefit of all. Commercial speech that discredits or brings reproach upon groups of Americans, particularly based on their race, has a discriminatory impact that undermines commercial activity and the stability of the marketplace in much the same manner as discriminatory conduct.


--

Nearly every disparaging mark identified in the voluminous briefing and opinions in this case has involved disparagement of race, gender, ethnicity, national origin, religion, sexual orientation, and similar demographic classification. The impact of advancing these bigoted messages through the ubiquitous channels of commerce may be discriminatory, and even if not discriminatory, at least disruptive to commerce. The only question is whether the government’s interest in avoiding this commercial disruption outweighs the modest “burden” that its refusal to register the offending marks places on the freedom of speech. I believe it does.

--
but only denies him a government-created benefit—the exclusive right to use that speech in commerce in connection with the sale of particular goods or services. At bottom, the only burden the application of § 2(a) imposes in this case is that Mr. Tam is free to communicate his chosen message within or without commerce, so long as he is willing to permit others to do the same.

--

Additionally, any minimal value disparaging speech might offer in the marketplace of ideas is far diminished in the marketplace of goods and services, which is the only context at issue in this appeal. One can hardly imagine what legitimate interest a vendor of goods or services may have in insulting potential customers. Whatever value disparaging speech might possess when used in private life, it loses when used in commerce.
--

When we balance the government’s substantial interest in the orderly flow of commerce against the modest imposition of § 2(a) on a narrowly tailored portion of particularly low-value speech, the standards of intermediate scrutiny are satisfied. Whatever modest imposition the statute makes on the free flow of public discourse, it is nothing more than an “incidental restriction on First Amendment freedom [that] is no greater than is essential to the furtherance of the governmental interest” in the orderly flow of commerce. See Barnes, 501 U.S. at 561. For the foregoing reasons, I believe that § 2(a) is constitutional. I respectfully dissent.


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