Disparaging marks and the First Amendment

by Kate E. Rieber

Under Section 2(a) of the Trademark Act, certain marks are restricted from registration if they contain immoral or scandalous matter; essentially, if the mark would offend a large portion of the general public, or considered vulgar, that is sufficient to deem it immoral or scandalous, and thus deprive it of federal registration. For example, the mark “BULLSH*T” (without the asterisk!) registration was refused based on 2(a), immoral or scandalous matter. This section further goes on to state that if the mark disparages or brings into “contempt or disrepute” persons (alive or dead), institutions, beliefs and/or national symbols, such mark will be refused registration.

However, in In re Tam, Appeal No. 2014-1203 (Fed. Cir. December 22, 2015)

[precedential], a recent appeal decided by the Federal Circuit, the Court determined that refusing to register marks considered “disparaging” violates free speech and the First Amendment. In Tam, the applicant sought to register THE SLANTS for “entertainment in the nature of live performances by a musical band.” The Examiner refused it, determining that it would be disparaging to a substantial portion of people of Asian descent. While the Applicant stated, among other things, that the mark was intended to take back, or “reclaim,” the stereotype of people of Asian descent, Applicant also argued that the provision itself was unconstitutional, as it was inhibiting free speech. While the government argued that it has a compelling interest is in fostering racial tolerance, the Court ultimately determined that the government cannot refuse to register disparaging marks because it disapproves of the message conveyed by the speech, further noting that refusing to register a potentially disparaging mark accomplished nothing towards promoting racial tolerance.

The government’s argument that refusal to register does not mean that the applicant cannot use the mark – and thus does not constitute censorship – was deemed unpersuasive. After all, a Registered trademark affords owners with certain rights and remedies to protect its mark, and thus its business. The Court further went on the state that the denial of the rights afforded to trademark owners under the Lanham Act would further inhibit free speech, as it would discourage others from using potentially disparaging marks for their goods and services.

This decision comes on the heels of the past few years’ focus on the NFL’s Washington Redskins team name and logo. While the USPTO cancelled the football team’s trademarks in mid-2014 for disparagement, In re Tam provides a potential foothold for the team, and others of its ilk, should its case find its way to the Supreme Court.

Kate E. Rieber is an intellectual property lawyer and an associate at Knull P.C., as well as a member of the N.Y. and N.J. bars.

What Happens to Trademarks When You Reorganize?

By Kate E. Rieber

Did you know that you can lose control of your trademarks because of a simple corporate reorganization or business name change?  Trademarks and their related goodwill are assets and need to be moved from one entity to another in the right way to avoid losing your rights.

For a variety of reasons, some business owners may decide to change their name.  Sometimes this can be because of a merger, or deciding that a corporation is more advantageous than an LLC, or simply because he or she wanted a business name that accurately reflected the goods and services of the business.  Moving from a DBA to an LLC, incorporating, or making seemingly minor changes in the wording of your business name can create confusion about who owns your brand and, on occasion, can actually undermine the value of long-held trademarks. Changing a business name can be a seamless transition with the help of a qualified attorney, but make sure you mind your trademarks.

If you have registered a trademark (or trademarks) under the first business, it is important to speak with your trademark attorney before dissolving the business and changing the name.  This is because legally the trademark is owned by that first business.  Once that business is dissolved, ownership does not automatically transfer to your new business.  In order to keep you (and your new business) as the recorded, legal owner of your trademarks, you would need to file an “assignment” with the United States Patent and Trademark Office (“USPTO”), transferring (or “assigning”) the trademark from your initial business to your new business.  Without showing a verifiable chain of ownership from the initial business to your new business, the trademark is at risk of being abandoned or cancelled.

Just as you were able to apply for and register your trademark online, the USPTO has an online form for submitting assignments.  At its most basic definition, an assignment is when a trademark, and all of its attending goodwill, is literally assigned to another owner.  For example, your trademark attorney would file an assignment, assigning your mark or marks from your first business to your new business.  Once the assignment is accepted and recorded, you would then be free to dissolve your first company, safe in the knowledge that your trademarks are still valid and under your ownership.

If you have, however, dissolved a business and are now operating under a new one, it is not the end of the world (or your trademarks).  It is imperative that you speak with your trademark lawyer about the next best steps to ensure that your trademark remains valid, and that you are still the legal owner on record.