The Lanham Act’s Disparagement Clause is in Trouble

By Jason M. Russell (Rutgers Law Student)

Simon Tam, an Asian-American musician, author, speaker, and political activist, applied to the federal government to register the phrase “THE SLANTS” as a trademark to identify and distinguish his rock band. According to Mr. Tam, he chose this phrase to reclaim a racial stereotype, hoping that his use would minimize its pejorative connotation. But the U.S. Patent and Trademark Office (USPTO) rejected his application, citing Section 2(a) of the Lanham Act, which states that a mark consisting of disparaging matter shall be refused registration. The U.S. Court of Appeals for the Federal Circuit reviewed his appeal en banc and determined that the USPTO impermissibly infringed upon Tam’s right to free speech, and the government subsequently appealed.

The pending case of Lee v. Tam, which was recently heard by the eight Justices of the U.S. Supreme Court on January 18, 2017, raises the question of whether the Lanham Act’s disparagement clause violates the First Amendment. Much of the argument focused on whether a federally registered trademark—defined by Congress as “any word, name or symbol” used by a person to “identify and distinguish his or her goods” and to “indicate the source of the goods”—is capable of representing the expression of an idea worthy of protection from government intrusion.

The fundamental issue at the heart of the case is whether a federally registered trademark is merely a commercial statement designed only to increase the profit of its owner, or is a trademark also capable of something more—a communicative expression intended by its owner to make a noncommercial statement about him or herself and to contribute to the marketplace of ideas.

After listening to the parties’ oral arguments before the Court, it is clear that the government’s restriction on disparaging marks is in serious trouble. The main thrust of the government’s argument is that a trademark is purely commercial speech without an expressive element; and, since the federal trademark registry is akin to a government program, similar to the allocation of subsidies or the distribution of grant monies, the prohibition against disparaging marks is merely a reasonable limit on an applicant’s access to a government benefit rather than a wholesale restriction on private speech.

Right from the start, a number of the Justices were skeptical of the premise of this argument. Justice Kennedy noted that we now live in “a culture in which we have tee shirts and logos and rock bands” that are used in the marketplace to express the owner’s point of view. Justice Breyer went even further, pointedly asking the government what the purpose of the disparagement provision is. Counsel responded that the prohibition protects the free flow of commerce, since disparaging marks can distract the purchasing public from the underlying purpose of the trademark: to identify the source of the particular product, and to distinguish it from its competition. This articulation of the government’s interest, which completely overlooks any expressive, noncommercial element within a trademark, did not seem to satisfy any of the Justices’ free speech concerns.

In addition, Justice Kagan, after conceding that the federal trademark registry could be considered a government program, noted that it is still impermissible for the government to make viewpoint-based distinctions based on what the USPTO examiner finds objectionable. When she asked counsel to explain how Section 2(a) is different from a “fairly classic case of viewpoint discrimination,” he responded that the statute broadly prevents disparagement of all groups, rather than providing protection to certain groups but not others. This exchange underscores a fatal flaw in Section 2(a): even though on its face the statute seems to cast a wide net and provide protection from offense to everyone, in reality it gives the USPTO examiner almost unlimited discretion to review the expressive element of the mark and determine whether a substantial composite of the community will find it offensive. This violates two bedrock principles of the Court’s First Amendment jurisprudence: 1) that the “government may not prohibit the expression of an idea simply because society finds the idea itself disagreeable”; and 2) that the government’s discretion should be limited out of a fear of arbitrary action. At the end of the day, do we really want a government bureaucrat deciding for us what may be offensive?

The government assured the Court in its brief that it is capable of drawing an objective line in the sand as to what is disparaging, and that it can apply this principle in an evenhanded and judicious manner. Many commentators doubt that this is possible. The federal trademark registry is replete with examples of other marks that received clearance, but are arguably more offensive than THE SLANTS, which indicates that the disparaging clause is not enforced in a predictable manner. Regardless, even if the USPTO were capable of objectively enforcing the statute, the question still remains as to whether it is appropriate for the government (and the courts) to act as arbiter for what constitutes an offensive mark.

Notably, both Chief Justice Roberts and Justice Alito signaled deep-seated concerns about the ability of courts to parse out the commercial, non-expressive content of a trademark from the noncommercial, expressive content. Given the Court’s hesitancy in undertaking subjective line-drawing exercises as to what is or is not expressive speech within a trademark, the Court will likely hold that these types of inquiries are best left to the public marketplace of ideas rather than the government or the courts.

If Section 2(a) is struck down, the government argues that the USPTO will be flooded with an overwhelming number of applications for trademarks that contain hurtful or offensive content—the primary fear is that without the ability to reject these disparaging marks, the government will be essentially stamping offensive speech with its imprimatur by registering them. This concern, however, is unwarranted, as those trademarks will be judged by the market—a far more efficient actor than the government. At the end of the day, it is not a very wise business plan for an owner to have his goods or services associated with a controversial or offensive mark.

Interestingly, only four months before hearing Lee v. Tam, the Court declined to hear the Washington Redskins’ appeal of a lower court ruling that canceled the team’s logo and mark under Section 2(a). Given the identical legal questions, the cases seemed tailor-made to be heard together, but the Court chose to hear only Mr. Tam’s challenge, while the Redskins remain in legal limbo awaiting the outcome of this case. The Court’s procedural move here was certainly no accident, and it is a strong signal that the Court will invalidate the disparagement clause. Even though the cases share the same legal question, Mr. Tam and the Washington Redskins could not be more different. His intent behind using THE SLANTS, as a member of the Asian-American community, is to reclaim a negative racial slur, while the Washington Redskins are a corporation that has made billions of dollars using a logo that a substantial composite of the American Indian community finds offensive. Certainly Mr. Tam is a much more palatable party than the Redskins, if the Court were to strike down Section 2(a) of the Lanham Act.

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Friends Don’t Let Friends Share “Fake News”: FTC Cannot Effectively Regulate “Fake News,” So It’s up to Us to Make News True(ish) Again

By Samuel E. Bordoni-Cowley (Rutgers Law Student)

Should we invite the Federal Trade Commission (FTC) to extend its reach in regulating online content in the name of stopping the spread of “fake news”?

Some scholars might say the marketplace of ideas should not be filtered, others that only public discourse will solve the issue, and others yet who would contend the marketplace of ideas occasionally fails and may need regulation to survive “fake news.” The FTC might even envision having for itself having an increased role in saving the online “truth,” but for now the Commission’s potential for regulating “fake news” is limited by its administrative scope and consumer-protection creed.

Assuming that “fake news” has a deleterious effect on the marketplace of ideas in the U.S., but knowing that the FTC has limited power to act, do we really need the FTC to expand its reach or perhaps another company to save us from “fake news”? I think not, because public discussion is a duty of the American citizen. Through participation in public discourse, speech functions to sow democratic principles and lead to the right outcomes and decisions.

So, why is this important?

The issue with “fake news” is generally in its hindrance of the truth, open public discourse, and promotion of irrationality. “Fake news” is now virtually synonymous with political news. However, the digital information people surround themselves with no longer necessarily relies on verifiable, empirical discourse, or sources—discourse on social media of all kinds works quickly, and has been reduced to Tweets and memes.

The differences between political and commercial speech are many, but it is the fact that commercial speech that is also political has become so ubiquitous through social media and other online platforms, which indicates that it might be changing the marketplace of ideas. It is for that reason that the FTC (and FCC) have been increasingly involved in the discussion around “fake news.”

The FTC can and should regulate counterfeit, fraudulent commercial speech. The Commission is ultimately toothless, by virtue of its scope as an agency, against the vast majority of what could be categorized as “fake news”—misinformation and falsehoods, particularly political in nature. But the commercial content that pushes such misinformation and falsehoods into the marketplace, that can sometimes be regulated by the FTC.

The FTC is broadly tasked with preventing business practices that are anticompetitive, deceptive, or unfair, and aims to enhance transparency. Its jurisdiction in this area is, however, limited to commercial speech: i.e., advertising or purely business communications.

Therefore, as several experts have concluded, the FTC must make the argument that “fake news” qualifies as commercial material. Much like the agency’s crackdown on the bogus health claims of the infamous acai-berry, the FTC could be able to regulate some of the more obvious fake political news, so long as the agency can claim that the product—i.e., “counterfeit” American news—was not merely political expression by an American.

The FTC regulates deceptively formatted advertisements (the acai-berry litigation), uses the phrase “fake news” in its policy statements, and enforces truth-in-advertising standards in a digital context. The Commission’s regulations on native advertising for businesses hold that an act or practice is deceptive if there is a material misrepresentation or omission likely to affect and mislead a consumer. Effectively, the FTC regulates deceptive ads that are commercial in nature but which mislead consumers.

The limited scope of the FTC’s reach is inhibiting.

Ultimately, the government can protect us, the people, from harm caused by misleading commercial content. But it cannot protect us from the “harm” in the sharing of, for example, political content that is seemingly legitimate but which spews hyperbole and fiction. The distinction is difficult to make, but the fact is that fake news is muddying the marketplace of ideas. To the degree that is caused or augmented by commercial speech that is misleading or false, the FTC might expand its enforcement efforts.

Regardless, though, Americans must fight misinformation in the same public forums we see the perceived misinformation being spread. If it is true that fake news altered the 2016 Presidential Election, for example, then we must address that with increased public discourse.

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SCOTUS to Rule on Social Media Rights of Sex Offenders

By Jace Brown (Rutgers Law Student)

To what extent can states regulate the use of social media by registered sex offenders, without infringing their First Amendment free speech rights?  That is the issue to be decided in Packingham v. North Carolina, 777 S.E.2d 738 (N.C. 2016), which has recently been granted certiorari by the Supreme Court.

In 2010, convicted sex offender Lester Gerard Packingham had just beaten a traffic ticket in court and celebrated on his Facebook page saying “God is good! . . . Praise be to GOD, WOW! Thanks JESUS!”  For this post, Packingham was sentenced to 6–8 months’ imprisonment, suspended, and was given 12 months of supervised probation.  As a convicted sex offender, Packingham’s Facebook post violated N.C. Gen. Stat. § 14-202.5, which prohibits all sex offenders in North Carolina from knowingly accessing certain social media websites in which children are permitted to create or maintain personal web pages.  The websites prohibited under the statute’s definition include Facebook, Twitter, LinkedIn, MySpace, Pinterest, Instagram, Reddit, Google+, and many others.  Packingham appealed the conviction, alleging that the statute violated his First Amendment free speech rights.

A unanimous appellate court agreed with Packingham, and held that N.C. Gen. Stat. § 14-202.5 violated the First Amendment, and was impermissibly vague.  The court noted that the statute was “content neutral” and therefore applied intermediate scrutiny.  The Supreme Court of North Carolina, however, in a 4-2 decision, reversed the appellate court and found that the statute was constitutional.  Applying intermediate scrutiny, the court held that the statute was sufficiently justified and that it was narrowly tailored, so that the incidental First Amendment burden imposed upon defendant by the statute was not greater than necessary.  Moreover, the court held that the statute left open “ample alternative channels for communication,” such as the Paula Deen Network, WRAL.com, Glassdoor.com, and Shutterfly.  On October 28, 2016, the United States Supreme Court granted certiorari.

Other courts that have considered the issue have found similar statutes to be unconstitutional. In fact, the statutes examined in those courts—the Seventh Circuit, District of Nebraska, and Middle District of Louisiana—were actually narrower than the statute in North Carolina, and were nevertheless found to be unconstitutional.  The statutes in those cases only applied to a certain subset of sex offenders, those that had been convicted of offenses targeting minors.  In contrast, the North Carolina statute applies to all sex offenders.

The outcome of the Packingham case has significant First Amendment implications.  The North Carolina statute is meant to prevent communications between sex offenders and minors but its broad sweep restricts substantial protected speech.  The websites that are affected by the statute are widely utilized in the lives of everyday Americans and some of them, such as Facebook and Twitter, provide a substantial platform for which users to express themselves.

One of the central purposes of the First Amendment is to protect the speech of disfavored minorities—a category which certainly includes sex offenders.  Though there is—as Packingham himself concedes—a substantial government interest in preventing convicted sex offenders from communicating with minors, the practical effect of the North Carolina statute is to prevent sex offenders from communicating with not only minors, but the rest of the world as well.

Unquestionably, the state of North Carolina has the right to restrict the First Amendment rights of convicted sex offenders.  It is no different than the right of states to take away a felon’s constitutional right to vote or right to possess a firearm.  But the statute at issue here is far too broad and imposes a substantial infringement on First Amendment speech.  To survive intermediate scrutiny, North Carolina must show that the statute is narrowly tailored and that it leaves open ample alternatives for communication.  But proscribing the use of nearly all social media websites to all sex offenders within the state surely cannot meet this test.  As the Seventh Circuit noted in its case, the statute amounts to what is essentially a complete “social media ban.”  Following the lead of the other jurisdictions, the Supreme Court will almost certainly find that North Carolina’s statute is unconstitutional.

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The $2.2 Million Lawn Sign and the First Amendment

By Christopher J. D’Alessandro  (Rutgers Law Student)

It’s difficult to imagine how a political lawn sign could come with a price tag of $2,263.489.  What could make a flimsy cardboard sign for a Paterson, New Jersey mayoral candidate warrant such an astronomical price?  Well let’s do a simple calculation and see how the variables add up:

1 political lawn sign + employer retaliation – common sense + hubris ÷ SCOTUS = $2,263,489.

From the 30 years of Frank Hague’s political machine, to Jim McGreevy’s career crash and burn in 2004 and most recently Chris Christie’s Bridgegate scandal, New Jersey holds a storied place in the chronicles of political intrigue.  New Jersey is so steeped in political corruption, it has been described disparagingly as the “Soprano State,” a nod to the notorious crime syndicate of HBO fame.  Political intrigue, dirty tricks and retaliation permeate municipal government in New Jersey, and politically unfaithful municipal police officers often find themselves the target of a city hall Machiavelli.

Unsurprisingly, a review of New Jersey police employment lawsuits finds a disturbingly familiar fact pattern:  (1) constitutionally protected political speech by an officer, (2) followed by disciplinary action from politically opposed superiors, (3) spawning legal action by the aggrieved officer alleging retaliation.   Most actions allege retaliation for the officer’s critical speech directed at real, or perceived political opponents.  What may surprise you to learn, is suits filed by police officers in New Jersey against their employer (and often each other) contribute to litigation costs far surpassing those for defending against actions brought by the public.  The facts in Heffernan’s case show the City of Paterson is not immune to this costly phenomena.

In a 2003 article reporting intense acrimony between the police department and newly elected mayor Joey Torres, the New York Times described Paterson as a “post-industrial poster child of a city legendary for its bare-knuckle style of labor dealings.

In 2006, Heffernan was a Detective assigned to the office of Chief James Wittig, who in turn reported directly to Paterson Mayor Joey Torres.  Paterson’s 2006 mayoral campaign was tense, with Torres challenged by former Police Chief Lawrence “Larry” Spagnola, who himself had recently concluded a bitter and public legal feud with Torres.  Setting a political collision course, Spagnola’s successor Wittig was a Torres supporter and appointee, while Detective Heffernan was a close friend of Spagnola.

While off duty on April 13th, 2006 Heffernan visited Spagnola campaign headquarters to retrieve a “Spagnola for Mayor” lawn sign for his mother.  Observed by a detective assigned to mayoral security, Heffernan’s visit was promptly reported to Torres and Wittig.  The following day, Wittig demoted Heffernan to patrolman and assigned him to a walking beat on the graveyard shift.  Paterson claimed this personnel action was legitimately based on Heffernan’s “overt involvement in a political election,” however Heffernan viewed these materially adverse employment actions as retaliation for perceived support of Spagnola’s mayoral run.  Heffernan brought suit in federal court against the City of Paterson under 42 U. S. C. §1983 alleging the demotion and transfer were retaliatory acts in violation of his First Amendment right to free association and speech.
Rather than moving directly to the Supreme Court decision on this matter, a discussion of the lower court proceedings will help us understand why Heffernan v Paterson is a rare, yet important case.

Heffernan initially prevailed at trial with the Federal District Court awarding him $105,000 in damages based on the freedom of association claim.  (Reader, pause and take note that had Paterson let this matter rest here, the sign would have only cost taxpayers around $150k.)  On retrial, Paterson was granted summary judgement against Heffernan, the trial judge ruling Heffernan had “failed to produce evidence that he actually exercised his First Amendment rights, and . . . was foreclosed from seeking compensation . . . for retaliation based on . . . perceived exercise of those rights.”

The 3rd Circuit affirmed the trial court ruling on appeal, delivering a decision described by critics such as Gilad Edelman of New Yorker Magazine as an “absurd First Amendment Doctrine.”  The 3rd Circuit effectively ruled retaliation taken against an employee based on political speech is not actionable, if the employer made a factual mistake about the political nature of the behavior.

As Edelman points out, this decision set an absurd precedent where retaliation could be meted out with impunity based on perceived political associations, if not aimed at intentional political activity. Edelman further argues that under this doctrine, a truck driver delivering the political sign could be punished, as could the printer of the sign, or a non-political employee who merely attended a campaign event to enjoy the entertainment.

It is unsurprising Heffernan sought to bring his case before the Supreme Court, but it is surprising they agreed to hear it.  How many cases beginning with ad hoc disciplinary action delivered by the stroke of a police chief’s pen, find their way to the highest court in the land? Heffernan v City of Paterson may be the first and as Justice Alito mentioned, cases such as Heffernan v City of Paterson are likely to be rare.

The question before the Court was whether “the First Amendment bars the government from demoting a public employee based on a supervisor’s perception that the employee supports a political candidate.”   Rare or not, the Court’s decision in this case could hold vast import for public employees.

In a victory for Heffernan, the Court reversed and remanded, holding that “When an employer demotes an employee out of a desire to prevent the employee from engaging in protected political activity, the employee is entitled to challenge that unlawful action under the First Amendment and §1983 even if, as here, the employer’s actions are based on a factual mistake about the employee’s behavior.”

Guiding the Court’s decision was their assumption “. . . the activities that Heffernan’s supervisors mistakenly thought he had engaged in are of a kind that they cannot constitutionally prohibit or punish.”  Thus ended the absurd 3rd Circuit notion that government employers can retaliate against their employees for protected speech, as long such retaliation is only based on perception of, rather than actual constitutionally protected behavior.

Following the Supreme Court decision, Paterson settled with Heffernan for $1.6 million.  Including the settlement, Paterson had spent over $2,263,489 in their failed defense of the demotion and transfer of this low ranking police officer.  The Paterson City Council initially rejected the settlement, but common sense prevailed and the council ultimately voted to accept.  The matter closed with the tab at $2,263,489, but the true costs of Paterson’s abridgement of Heffernan’s First Amendment rights will never be known, since related matters such as the 2010 ouster of Wittig and his $473,000 severance package could rightly be added to the tab.

So now that we reached the end of this tale of municipal intrigue, it’s time for the Reveal. What in fact, is a $2.2 million lawn sign made of?  Well, it’s anticlimactic really, because here we find no masterpiece ready to be hung on the walls of the Louvre, nor some treasure encrusted with gold and jewels, but rather art brut crudely shaped from good ole’ New Jersey political hubris.  In the words of Paterson Councilman Adre Sayegh, “This is all for a lawn sign. Spin it anyway in which you want, but a lawn sign is going to cost us over $2.2 million.”

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