6 BANNER & WITCOFF | INTELLECTUAL PROPERTY UPDATE | SPRING/SUMMER 2017 involving real-lifegoods(e.g.,movies, painting), functionaluse,ordetaileddepictions (e.g., AndyWarhol’s famousCampbell’s Soup in comparativeadvertising,creativeworks sense. Thesethird-partyusestypicallyarise or touseinapurelydescriptiveexpressive identify thetrademarkedproductorservice, unrelated thirdpartymightwanttouse whichan the registeredgoodsandservices, have applicabilityincontextsunrelatedto text, orsuggestivenamesslogansthat descriptive (for unrelatedgoodsandservices), trademark registrationsincludegenericwords Compounding theissue,manyfederal the rightsgrantedtotrademarkowner. the registration,therebydeprivingothersof thatarethesubjectof the goodsandservices use theregisteredmarkinconnectionwith hand, grantsitsownerthe A federaltrademarkregistration,ontheother known rightsintheworld:freedomofspeech. Constitution securesoneofthemostwell- The FirstAmendmenttotheUnitedStates difficult toharmonizeexclusive trademark marks. Asaresult,itisbecoming increasingly policy ofprohibitingregistrationdisparaging Trademark Office (USPTO)rigidlyenforcing its trademark lawasaresultoftheU.S.Patentand Amendment hasfurtherclashedwithfederal owner. Overthelastseveralyears,First may notbeviewedfavorablybythemark’s real-life scenarios),eachofwhichmayor television, andsoftwaresimulationsinvolving TRADEMARK RIGHTS BALANCING FREESPEECHAND exclusive SMITH-CARRA AND HEATHER R. DANNENBERG BY ROSSA. rightto of the goods or services. TheU.S.Courtof of thegoodsorservices. no likelihoodofconfusionastothesource trademark infringementbecausethereis Specifically, nominativefairuseisnot andnotmisleadingtoconsumers. necessary party touseorreferanother’s markwhen of nominativefairuse,whichallowsathird trademark rights,courtsadoptedthedoctrine between theFirstAmendmentandfederal In ordertoresolvethisinherenttension as guaranteedbytheFirstAmendment. rights underU.S.lawwithfreedomofspeech service, then theusemaybefunctionaland service, identifier forthetrademark owner’s goodor owner’s markinawaythatisnotsource If athirdpartyisusinganothertrademark indicator ofthesource ofgoodsorservices. manner andnotasatrademark,i.e.,an infringement ifthemarkisusedinafunctional Use ofaregisteredmarkisalsonot a useofthemarkisnotinfringement. Ifthesethreecriteriaaremet,then services. to thesource ofthethirdparty’s goodsor of themark,andnotmisleadconsumersas relationship betweenitselfandtheowner the thirdpartymustaccuratelyportray may weighinfavorofinfringement.Third, the designorlogoinadditiontotext favor ofnominativefairuse,whereascopying a distinctivedesignorlogomayweighin For example,useofawordmarkinstead toidentifythegoodorservice. necessary so muchoftheowner’s markasisreasonably mark. Second,thethirdpartymustonlyuse must notbereadilyidentifiedwithoutthe nominative fairuse. three-part testtodeterminewhetherthereisa Appeals fortheNinthCircuit developeda 1 First, the good or service First,thegoodorservice non-infringing. In Pagliero v. Wallace China Turning to more recent developments Co., Wallace created several china patterns, regarding allegedly disparaging marks, the which it sold both directly and through its Supreme Court ruled in 1976 that commercial authorized dealers.2 Pagliero Brothers, one speech is protected by the First Amendment. of Wallace’s competitors, used several of the The Supreme Court stated that the First same designs on its china. The court found Amendment protects “[e]ntertainment, Pagliero Brothers’ use of Wallace’s designs was as well as political and ideological speech, not infringement because the features of the … [including] motion pictures, programs china patterns were aesthetically functional. broadcast by radio and television, and live The court stated “where the features are entertainment, such as musical and ‘functional’ there is normally no right to relief. dramatic works.”7 ‘Functional’ in this sense might be said to connote other than a trade-mark purpose.”3

In another well-known example, Christian Louboutin sued Yves Saint Laurent (YSL) when YSL started selling a competing shoe with a red sole. Despite Christian Louboutin shoe’s being well known for having red 7 soles, the court held that YSL’s use of a red BANNER & WITCOFF | & WITCOFF BANNER sole was functional because YSL was selling a monochrome red shoe, and preventing YSL from being able to use a red sole on The Slants logo such a shoe would detract from the aesthetic functionality of a completely red shoe. More recently, a Portland, Oregon-based

The court held that Louboutin’s trademark rock band named “The Slants” requested UPDATE PROPERTY INTELLECTUAL was limited to a red sole that contrasts in federal trademark registration of its name appearance to the rest of the shoe, and was not in 2011 for “Entertainment in the nature infringed by YSL’s monochrome red shoe.4 of live performances by a musical band.” Despite the name’s reputation as a racial Another issue that arises in the balance slur, the name was adopted as a nod to the of trademarks and free speech concerns band members’ Asian-American heritage. product placement in the entertainment The USPTO refused registration of the mark industry, such as in movies, television, and under Section 2(a) of the Lanham Act, video games. However, the Supreme Court finding that the mark is disparaging. stated that entertainment speech should be | SPRING/SUMMER 2017 | SPRING/SUMMER afforded a high degree of First Amendment Section 2(a) of the Lanham Act bars federal protection.5 As such, use of an otherwise trademark registration of a mark that “consists protectable mark in an expressive context of or comprises immoral, deceptive, or scandalous is often protected free speech or otherwise matter; or matter which may disparage or falsely considered fair use.6 Many articles and books suggest a connection with persons, living or have addressed product placement and related dead, institutions, beliefs, or national symbols, issues, so we do not address them further here. or bring them into contempt, or disrepute.”8

MORE 8 BANNER & WITCOFF | INTELLECTUAL PROPERTY UPDATE | SPRING/SUMMER 2017 USPTO’s refusaltoregisteritsmark a positiveone.TheSlantsappealedthe negative connotationoftheterminto specifically chosethenametoturn The Slantsargued,however, thatthey disparaging underTrademark ActSection2(a): determining whetheramattermaybe considers thefollowingtwofactorswhen of personsAsiandescent.TheUSPTO term directedtowardsthephysicalfeatures is aninherentlyoffensiveandderogatory because thelikelymeaningofmark USPTO foundthatthemarkisunregistrable term willbeviewedasdisparaging.The definitions of“slant”andstatedthatthe In itsrefusal,theUSPTOcitedtodictionary [ writ ofcertiorari petitioned theSupremeCourtin2016for should beregistrable. thus statedthatthemarkTHESLANTS Section 2(a)tobeunconstitutionaland Circuit. In2015,theFederalCircuit found the U.S.CourtofAppealsforFederal FREE SPEECHANDTRADEMARKRIGHTS 2. 1. the referencedgroup. to asubstantialcompositeof that meaningmaybedisparaging beliefs ornationalsymbols,whether identifiable persons,institutions, If thatmeaningisfoundtorefer and with thegoodsand/orservices; used inthemarketplaceconnection and themannerinwhichmarkis nature ofthegoodsand/orservices, the otherelementsinmark, also therelationshipofmatterto definitions,but not onlydictionary matter inquestion,takingintoaccount What isthelikelymeaningof , whichtheCourtgranted. 10 TheU.S.government 9 , FROMPAGE 7] Amendment rightsareimplicatedbecause to usethemarks.” not burden,restrict,orprohibitPFI’s ability First Amendmentasthecancellationsdo of theLanhamActdoesnotimplicate of theRedskinsMarksunderSection2(a) court stated“cancellingtheregistrations registrations fortheREDSKINSmark.The order cancellingsixofitsfederaltrademark Trademark Trial andAppealBoard(TTAB) Inc. (PFI)soughtreversalofaUSPTO Redskins. League’s franchiseknownasthe by Pro-Football,Inc.,theNationalFootball canceled severaltrademarkregistrationsowned In anothersimilarcase,theUSPTOin2014 Redskins logo disparaging andunregistrablebytheUSPTO. registrations willcontinuetobeviewedas below) willimpactwhethertheREDSKINS THE SLANTSmark(discussedinmoredetail appeal, howeverthedecisionregarding The SupremeCourtdeclinedtohearPFI’s court upheldtheTTAB’s cancellations. Court fora April 2016,PFIpetitionedtheSupreme “drive ideasfromthemarketplace.” cancelling itstrademarkregistrationwill 11 InthatcaseplaintiffPro-Football, writ ofcertiorari 12 PFIassertsthatFirst afterthedistrict Washington 13 In Federal registration has its advantages, and The to get its mark registered. A by-product of the Slants and PFI argue they are being deprived decision is that the Washington Redskins will of those federal rights. However, advocates for likely be allowed to keep its federal trademark maintaining the anti-disparagement clause registrations for various REDSKINS marks. argue that the alleged disparaging marks Will there be a rush to the trademark office are still protected by common law rights. to register new disparaging marks? Unlikely, While the Redskins may continue using its in view of the fact that disparaging marks name without federal protection, The Slants just don’t sell as well as more marketable require federal trademark protection to sign names. However, The Slants case increases a record deal. The Slants argue they are not the strength of trademark rights and provides seeking registration of this name to use it businesses one more option to pursue fringe in a disrespectful way. On the contrary, The customers. Coupling trademark rights with Slants seek to turn the negative connotation nominative fair use and aesthetic functionality, into a positive one for Asian-Americans. As both brand owners and third parties have noted above, the USPTO has not been swayed a number of resources to both defend and by a trademark applicant’s intent or purpose attack in brand battles yet to come. to counter a rejection on the ground of disparagement, whereas the Federal Circuit 9 sided with The Slants in 2015, finding that 1. New Kids on the Block v. News America Publishing, Inc., 971 F.2d 302, 306 (9th Cir. 1992) (newspaper’s use of New Kids on the “[t]he First Amendment allows even hurtful Block as the subject matter of a reader poll where readers were | & WITCOFF BANNER required to dial a 1-900 number for a fee in order to vote for their speech.”14 In their respective briefs before favorite New Kid was a nominative fair use of the mark).AIA §§ 3(n)(1) and 6(f)(2)(A).AIA § 3(n)(1)(B), 125 Stat. at 293. the Supreme Court, the government argues 2. Pagliero v. Wallace China Co., 198 F.2d 339, 339 (9th Cir. 1952). that while the First Amendment protects free 3. Id. at 343. See also Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 863 (1982) (Functionality is a complete defense to speech, it is not required to promote hurtful contributory infringement as it is “an important ingredient in the commercial success of the product.”) speech such as racial slurs, whereas The Slants 4. Christian Louboutin S.A. v. Yves Saint Laurent America Holdings

Inc. et al., 2012 WL 3832285 (2nd Cir. 2012). UPDATE PROPERTY INTELLECTUAL argue that the government does not endorse 5. Schad v. Borough of Mount Ephraim, 452 U.S. 61, 65 (1981) or promote all federal trademark registrations. (stating “[e]ntertainment, as well as political and ideological speech, is protected; motion pictures, programs broadcast by radio and television, and live entertainment, such as musical and Meanwhile, other marks that would seem dramatic works fall within the First Amendment guarantee.”) 6. See, e.g., Rogers v. Grimaldi, 875 F.2d 994 (2d. Cir. 1989) disparaging have been granted federal (Defendant’s title of its movie Ginger and Fred not an infringement of plaintiff Ginger Rogers’ rights because the title is registrations. The USPTO denied registrations at least minimally relevant to the movie’s content, and because the title does not explicitly denote authorship, sponsorship, or for two groups called “Democrats Shouldn’t endorsement by Ms. Rogers or explicitly mislead as to content.). See also, The Sporting Times, LLC v. Orion Pictures Inc. et al., Breed” and “Abort the Republicans.” Yet No. 1:17-cv-00033 (W.D. Ky., filed February 2017) (in aMotion to Dismiss filed May 1, 2017, MGM argues that because there is no registration of the band name N.W.A., confusion as to the source of the film the trademark infringement claims are barred, and that “the Lanham Act does not grant which stands for “Niggaz Wit Attitudes” was trademark owners [] veto power over the content of expressive

works.”). 2017 | SPRING/SUMMER allowed, so the USPTO has not been entirely 7. Schad at 65. consistent regarding where it draws the line. 8. 15 U.S.C. § 1052(a).

9. In re Squaw Valley Dev., 80 USPQ2d at 1267 (citing Harjo, 50 However, in a somewhat convoluted decision, USPQ2d at 1740-41); TMEP §1203.03(c). 10. In re Tam, 808 F.3d 1321 (Fed. Cir. 2015). the Supreme Court on June 19, 2017, affirmed 11. Pro-Football, Inc. v. Blackhorse, 112 F.Supp.3d 439 (E.D. Va. 2015) the Federal Circuit’s finding that section 2(a) is 12. Id. at 455. unconstitutional, thereby drawing the line for 13. Id. at 456. 14. 808 F.3d 1321, 1328. the USPTO and paving the way for The Slants