Less Offensive - US Supreme Court Takes on Disparaging Trademarks

Issues surrounding race are incredibly difficult and complex things, and clearly have no single answer to address them fully. Many efforts have been made to address various nuances of race and racial negativity, one of which is the prevention of the registration of trademarks in the US that could disparage individuals of a given race. Even so, trademarks exist that could be deemed to be offensive and disparaging (more on which here and here), and this has created a great deal of discourse on their continued existence, and similarly on the registration of other potentially disparaging marks. Should these types of marks be allowed, or should society move on and reject all trademarks that might be considered disparaging? The US Supreme Court endeavoured to answer this question once and for all this summer.

The case of Joseph Matal v Simon Shiao Tam dealt with a rock band, The Slants, who sought to register their name as a trademark in the US. The term "slants" is a derogatory term for persons of Asian descent, and the band sought to, through the use of the negative term as their moniker of choice, to reclaim it and take away its negative meaning. After filing their application for the trademark, the USPTO denied the application on disparagement grounds under 15 USC section 1052(a). The band, under the name of its lead singer Mr Tam, challenged the ruling and took the matter all the way to the Supreme Court.

The crux of the case remained that would the clause preventing the registration of disparaging be unconstitutional, particularly in terms of the First Amendment right to free speech.

At first, after setting out the legislative history of trademarks, Justice Alito (delivering the majority's opinion) considered that, while there is a valid registration system for trademarks, one does not have to register a mark to enjoy its use. In the same vein, the marks can be protected on a federal level under the Lanham Act, particularly through common law rights in those marks. Even so, certain rights are conferred to the holders of the marks through registration, and it does therefore add value and further protections over those marks, making registration very important.

Justice Alito then moved onto the test of whether a trademark is disparaging. This is whether "…the likely meaning of the matter in question, taking into account not only dictionary definitions, but also the relationship of the matter to the other elements in the mark, the nature of the goods or services, and the manner in which the mark is used in the marketplace in connection with the goods or services… [and] whether that meaning may be disparaging to a substantial composite of the referenced group". Even if the applicant is of the 'disparaged' group of people does not negate any possible findings under the test. At first instance, both the USPTO and the Appeal Board determined that the mark sought was indeed disparaging.

Before discussing whether the clause is unconstitutional or not, the Court had to first look at whether the mark was, as determined at first instance, disparaging. Tam argued that, while the disparagement provision speaks of 'persons', it cannot apply to non-juristic entities such as ethnic groups, but only to natural and juristic persons (i.e. individuals and not undefined, albeit legally defined groups). The Court swiftly rejected this argument, as Tam's narrow construction does not match with that of the provision of USPTO's definitions, which set out much broader terms, speaking of not just 'persons', but also 'institutions' and 'beliefs'. Therefore, as the Court concluded, disparagement can apply to non-juristic entities just as well as juristic entities.

Justice Alito then moved onto the main focus of the case, i.e. the constitutionality of the disparagement clause itself.

Washington's newest football team's logo (trademarked of course)

The first arguments circled around whether trademarks are government speech, not private speech or a form of government subsidy. As a primer, all government speech is exempt from First Amendment scrutiny, and can therefore say whatever it pleases (at least in theory). Even though trademarks are registered by the USPTO, the office does not itself regulate what the message of each mark is, unless it is considered disparaging under the provision. The viewpoint of any particular mark is irrelevant, and registration does not mean approval of the mark by the government. Justice Alito rejected the cases referred to in the matter, and concluded that the registration of a mark is not government speech, but private speech. In her view: "…if the registration of trademarks constituted government speech, other systems of government registration could easily be characterized in the same way". She also aligned the matter with copyright registration as "…if trademark registration amounts to government speech, then copyright registration which has identical accoutrements would “likewise amount to government speech".

The US government also argued that precedent set shows that government programs that subsidized speech expression specific viewpoints are constitutional. Justice Alito quickly rejected this argument, since "…[t]he federal registration of a trademark is nothing like the programs at issue in these cases". While registration does, arguably at least, confer certain non-monetary benefits to registrants, it does not provide a direct monetary subsidy, which the cases discussed did.

Finally, the government argued that the disparagement clause should be sustained applying only in cases that involved 'government-programs'. Justice Alito, again, rejected this argument, setting out that "…the public expression of ideas may not be prohibited merely because the ideas are themselves offensive to some of their hearers". The Court deemed that you cannot discriminate against a particular viewpoint, and the disparagement clause does do so, even if the subject matter is potentially offensive to a given group of people. The Court therefore concluded that "…the disparagement clause cannot be saved by analyzing it as a type of government program in which some content- and speaker-based restrictions are permitted".

The Court then finally moved onto the question of constitutionality. whether trademarks are commercial speech, and therefore can be restricted under limited scrutiny under Central Hudson. The case allows for a restriction of free speech that has to "…serve a substantial interest and it must be narrowly drawn". Justice Alito concluded that the clause fails the Central Hudson scrutiny on the outset. It was also argued that it serves two interests, including protecting underrepresented groups from abuse in commercial advertising. The Court dismissed this interest, as the First Amendment protects even hateful speech. The second one is protecting the orderly flow of commerce, where the trademarks, through their offense, prevent or reduce commerce through their use. Justice Alito dismissed this argument as well, as the disparagement provision is not 'narrowly drawn' to prevent the registration of only trademarks that support invidious discrimination, while applying to a very broad type of people, including the dead. In her final view "…If affixing the commercial label permits the suppression of any speech that may lead to political or social “volatility,” free speech would be endangered". The Supreme Court therefore deemed that the disparagement clause violates the First Amendment.

The case is a hugely influential one, which opens the door for a myriad of trademarks, particularly those that are offensive or have the potential to cause offense. Free speech is a double-edged sword, and an American near free-for-all free speech is a source of pride, but can cause issues for those who face abuse or humiliation at the hands of those using that right. The case will also have a knock-on effect in the Redskins litigation, undoubtedly clearing the path for the mark to remain registered. In the end, the Supreme Court seems to be completely right here, but this writer, being a proponent of a more limited free speech (although only for very narrow and specific exceptions), can't help but feel that this will pave the way for more offensive marks in the long term.

Press Pause - Sale of Multimedia Players to Facilitate Copyright Infringement is a Communication to the Public

The question of what amounts to a 'communication to the public' under EU law has been debated and adjudicated on fiercely in the last couple of years (discussed more here, here, here, here and here) with very little or no end in sight in the near future. Every decision seems to make an ultimate determination more and more elusive, and this writer for one thinks that the matter will never be decided. Even so, the Court of Justice of the EU has been busy yet again, and a recent decision discussing the sale of devices that aid the infringement of copyright was awaited keenly by many. After some time, the CJEU finally rendered its verdict last week.

The case of Stichting Brein v Jack Wullems dealt with the sale of a multimedia player (Filmspieler) that came pre-loaded with applications and open-source software that allowed you to access pay-for content online for free using your own TV. The Filmspieler was sold on a variety of websites, including Mr Wullems' own website. Stichting Brein found out about the sale of the Filmspieler, and requested that Mr Wullems stop selling the device, which he refused to do. Stichting Brein then took the matter to court, which ultimately ended up in the CJEU, where Stichting Brein asked four questions from the Court.

The first and second questions were dealt with together by the CJEU, which asked in essence "...whether the concept of ‘communication to the public’, within the meaning of Article 3(1) of [the InfoSoc Directive], must be interpreted as covering the sale of a multimedia player… on which there are pre-installed add-ons, available on the internet, containing hyperlinks to websites… on which copyright-protected works have been made available to the public without the consent of the right holders".

What 'communication to the public' entails requires a certain set of criteria to be fulfilled, namely an ‘act of communication’ of a work and the communication of that work to a ‘public’. Whether there has been an act of communication requires a more flexible approach where certain complementary criteria, taken holistically, are applied to the act. A particular focus is on whether, in making the act of communication, in full knowledge of the consequences, intervenes to give access to a protected work to a customer, and without their intervention, the customer would not have had access to the work in question.

A 'public' is defined as an indeterminate number of potential viewers, but implies a fairly large number of people viewing the work. The works have to, however, be communicated to a 'new public' or via new means that were not used in its prior communication. Finally, whether the communication makes a profit or not is not a wholly irrelevant criterion in this determination.

The Court therefore had to assess whether the sale of a multimedia player, as described above, would amount to a 'communication to the public'.

Dave was too lazy to care about his Filmspieler no longer working

While the InfoSoc Directive does expressly exclude the provision of physical facilities enabling or making a communication to the public, the Court determined that this didn't in itself limit it from the sale of such devices. The CJEU focussed on the pre-installation of the applications allowing for the infringing activities, which, according to the Court: "...enable[ed] a direct link to be established between websites broadcasting counterfeit works and purchasers of the multimedia player, without which the purchasers would find it difficult to benefit from those protected works", separating it from the mere provision of physical facilities for doing so.

Through this the CJEU considered that "...the provision of a multimedia player such as that at issue in the main proceedings enables, in view of the add-ons pre-installed on it, access via structured menus to links that those add-ons which, when activated by the remote control of that multimedia player, offer its users direct access to protected works without the consent of the copyright holders and must be regarded as an act of communication". Clearly the Court distinguishes between the provision of a device that would have the capability of utilizing such applications, and the pre-installation of those applications on the same device, where the proactive step of installation puts it beyond the 'mere provision of physical facilities' under the Directive.

Whether the act of communication had been done to a 'public' still remained, and the Court decided that, as the Filmspieler had been purchased by a large amount of people, and continued to be available for further purchases, and clearly the communication was therefore aimed at an indeterminate number of people amounting to a 'public' under the Directive. The Filmspieler made the protected works also available to a 'new' public, as the material accessed was not freely available online for all to view, and the Filmspieler made it available to a 'new' public beyond the contemplation of the rightsholder when the works were published. Mr Wullems knew, or ought to have known, that the hyperlinks posted provided access to works illegally placed online. Finally, if the posting of the hyperlinks is done seeking gain or profit, it is expected that the poster would check the links for legality, presuming that any illegal hyperlinks would have been included within the full knowledge of the poster. Mr Wullems sought profit through the sale of the multimedia player, and thus, his sale of the Filmspieler amounted to a communication to the public.

The CJEU was then faced with two questions, which dealt with the streaming of content, but the questions themselves were only treated as hypotheticals and didn't directly apply to the case at hand. The questions asked "...whether the provisions of Article 5(1) and (5) of [the InfoSoc] Directive… must be interpreted as meaning that acts of temporary reproduction, on an multimedia player such as that at issue in the main proceedings, of a copyright protected work obtained by streaming from a website belonging to a third party offering that work without the consent of the copyright holder satisfies the conditions set out in those provisions". The Article in question provides that, in essence, any temporary reproductions that are transient or incidental (e.g. streaming) are exempt from the rights afforded in the Directive in Article 2.

For Article 5 to apply, certain conditions need to be fulfilled, namely: the act is temporary; it is transient or incidental; it is an integral and essential part of a technological process; the sole purpose of that process is to enable a transmission in a network between third parties by an intermediary or a lawful use of a work or protected subject matter; and that act does not have any independent economic significance. All of the conditions are cumulative, and need to be fulfilled for the exemption to apply. Additionally, the use under the exemption cannot conflict with a normal exploitation of the work and prejudice the interests of the author.

The key aim of Article 5 is therefore to protect innocent conduits between two parties or entities, such as the ISP, not causing liability for transient copying of works for the facilitation of services between other parties.

The Court ultimately saw that "...temporary acts of reproduction, on a multimedia player such as that at issue in the main proceedings, of copyright-protected works obtained from streaming websites belonging to third parties offering those works without the consent of the copyright holders are such as to adversely affect the normal exploitation of those works and causes unreasonable prejudice to the legitimate interests of the right holder, because... that practice would usually result in a diminution of lawful transactions relating to the protected works, which would cause unreasonable prejudice to copyright holders". Due to the prejudice to the legitimate interests of the rightsholders through the streaming of content through the Filmspieler, the temporary copies made for the purpose of streaming would not be exempt by Article 5.

The decision in the case is clearly a positive one for rightsholders, particularly trying to combat the sale of multimedia devices such as in the case. What remains key in the case is the provision of physical facilities (in itself not infringing) in addition to facilitating copyright infringement can turn the provision of physical facilities into an infringing act. One would have to therefore be careful about the content and usability of devices that have the capability of infringing copyright, particularly with pre-installed software. While the case does not settle things once and for all, it remains an important step in the progression of the definition of a 'communication to the public' under the Directive.

Source: IPKat

Clear Enough? - CJEU Further Clarifies Communication to the Public

The CJEU does not seem to be able to make its mind up on the topic of what amounts to a 'communication to the public', as is perfectly illustrated by the recent decisions in Svensson, C More Entertainment, BestWater and the Advocate General's opinion prior to the decision in GS Media (the very decision so many are waiting for). This difficulty in establishing a firm position on this very important subject has created many headaches for IP practitioners, who, by now, are grasping for any concrete and consistent judgments to this effect. While we have to still wait on the CJEU tackling GS Media, there is potentially some respite in the air via a decision discussing, yet again, what a 'communication to the public' might entail.

The case of Reha Training Gesellschaft für Sport- und Unfallrehabilitation mbH v GEMA dealt with the a rehabilitation center, Reha Training, which provides post-operative treatment to better rehabilitate those who needed it after their medical procedures. The center itself included two waiting rooms and a training room (similar to a gym), where, between June 2012 and June 2013, they showed television programs for the patients who used the facilities in their recovery in installed TVs in the rooms. No permission was requested from GEMA (a German collection society) to display the content for the patients. GEMA then took Reha Training to court, asserting that the display of the TV content amounted to a 'communication to the public' under the InfoSoc Directive.

The referring court essentially asked whether the broadcasting of TV programmes in a rehabilitation center constitutes a communication to the public under several provisions (including the above Directive).

The CJEU first observed that, as the question referred to dealt with two Directives that mention a 'communication to the public', the provision in the InfoSoc Directive applies without prejudice to the application of the Rental Right and Lending Right Directive (which, similarly, offers the exclusive right to the author to communicate to the public a work, though through a more monetary provision). Although the wordings in each of the above Directives differs somewhat from each other, the Court concluded that their interpretation should be the same in order to keep a unified and coherent legal standard. They further clarified this, establishing that "...the different nature of the rights protected under those directives cannot hide the fact that, according to the wording of those directives, those rights have the same trigger, namely the communication to the public of protected works". Arguably, the interpretation of what amounts to a 'communication to the public' should be clear across the board, and this writer would agree that, unless specifically needed, the interpretation should be the same irrespective of the context of a given directive.

The Court then moved onto discussing the actual interpretation of the phrase. As the Court stated, this involves the assessment of several criteria, and the phrase has to be interpreted broadly. The criteria that are looked at are whether there has been an 'act of communication', and if that has been done to a 'public'.

No, Chuck, you can't communicate what you want,
even with a megaphone

In putting things in simple terms, the Court stated, as established, that an 'act of communication' is "...any transmission of the protected works, irrespective of the technical means or process used", and that every such transmission, to be legal, has to be authorized by the author of that work. Following on, the transmission of the work, to be an infringement of the above rights, has to be communicated to a 'public', which is deemed as "...an indeterminate number of potential recipients and implies, moreover, a fairly large number of persons". The public cannot be a restricted, small subset of people, but 'persons in general'. The CJEU has also established that the communication has to happen to a 'new public', meaning people who the author did not take into account when they authorized the communication of the work (i.e. if the content is paywalled, any people who do not have access through said paywall would be, prima facie, a 'new public'). This also involves a clear and calculated part by the person communicating the work to the new public, where their intervention is essential for the user to receive that broadcast. Without the intervention and the clear 'targeting' by the communicator, there would be no communication to a public.

In the earlier decision in SCF v Marco Del Corso the Court discussed this type of communication in a similar context, holding that the broadcast of TV programming in a dentist's office is not a communication to the public, as the patients do not visit the office to primarily watch TV, which in turn does not increase the users of that particular practice (or its attractiveness to a new public).

The Court concluded that Reha Training had indeed communicated the works to a public, as, drawing an analogy to previous case law involving restaurants, spas and hotels "...the operators of... [the] establishment carry out an act of communication where they intentionally broadcast protected works to their clientele by intentionally distributing a signal by means of television or radio sets which they have installed in their establishment". The clientele would not be an insignificant number, and the intervention of the operator of the center is key for their enjoyment of those works, and were not in the contemplation of the original broadcaster as an audience for the works, making them a 'new' public. The communication of the works also makes the center more attractive to prospective clients, giving it a competitive advantage (and thus benefiting from the communication).

The case is a curious development, and further cements the CJEU's position on the concept of a 'new public', which has been somewhat rejected in the Advocate General's opinion in GS Media. As the decision in the case looms in the horizon, it will be interesting to see whether this decision has a big impact on it, and whether the mere provision of hyperlinks would be an intervention that is indispensable for the enjoyment of the works, especially considering the material is freely accessible online to begin with (rather than locked behind a paywall). This writer believes the CJEU will not deem the sharing of hyperlinks to be a communication to the public, but the Court's track record does show that there are no guarantees to this effect.

Source: IPKat

A Different Slant on Things - Disparaging Trademarks Infringe US First Amendment

As a global society we have come a long way when it comes to racial equality and acceptance. Whether there is true equality and no lingering issues is a strong point of contention, and arguably something that will never be wholly equal, but we have come a long way when it comes to the terminology employed when discussing those of different ethnic background. Even so, there still are huge tensions when it comes to the use of racially derogatory terms, and in the light of the recent Washington Redskins litigation (discussed more here) it has become more poignant than ever in conjunction with trademarks. In similar proceedings, in In Re Tam (discussed more here), the Court of Appeals saw that the use of derogatory terminology would not infringe free speech under the First Amendment to the US Constitution, and would, therefore, not be registrable. The Court then issued a rehearing of the case sua sponte (without any applications from either party to do so), for which a decision was handed down just before Christmas 2015.

As the case's facts have been presented in the article published on this very blog earlier, they will be discussed only briefly. The case of In Re Simon Shiao Tam dealt with Mr. Tam and his band The Slants. The name, a term described as offensive to Asians, was used by the band in an effort to reclaim the negative term and to use it to inspire those of Asian heritage to embrace who they are, even in the face of negativity. Mr. Tam filed an application to register the name as a trademark in the US; however, his application was rejected as being 'disparaging' towards Asians under 15 USC § 1052. He appealed the subsequent decisions, arguing that the rejection impeded his rights under the First Amendment (an argument that was also rejected in earlier proceedings), finally ending up in the sua sponte proceedings in question.

Does section 2(a) restrict freedom of speech?

The Court, in the judgment of Judge Moore, goes onto great lengths discussing the impact that the section has, or could have, on the expression embodied in a given (applied for or registered) trademark. The Court asserts that the section "... does more than discriminate on the basis of
topic... [but] also discriminates on the basis of message conveyed". As the government, through the USPTO, rejects marks on a prima facie assessment of the message contained or conveyed through them, it will in some instances prevent the expression using those marks by rejecting them. It should, arguably allow all expression or none of it, should it be disparaging or potentially disparaging. Although they defend that the rejections only reject certain words and not viewpoints, one could argue, and the Court agreed, that this is indeed a rejection of a particular viewpoint, rather than a mere word or words (i.e. a negative viewpoint).

The Court further highlighted the often dual-expression contained in a trademark, and the regulation of its 'commercial speech', rather than its concrete expression, would not deflect its standards under the First Amendment. By rejecting a mark the government is rejecting the expression contained in that mark, no matter if its used for a commercial purpose (as commercial speech) or not. The Court concluded that the government did indeed restrict speech through section 2(a).

Trademarks can be used even if not registered, or are government speech

The government defended the section through asserting that it does not prevent the party from using the mark (i.e. they can still call themselves The Slants, just will not be able to register the name). The Court's focus on this was in relation to the benefits lost by the parties who faced rejection, even though they could use the name, deeming it an imposition of their freedom of speech. Arguably, the loss of a trademark through registration might push the parties to changes names to ones where they can enjoy the benefit of registration, which would prevent free speech indirectly. The value in registration if significant, and preventing the parties from enjoying this would create a disincentive to register potentially disparaging marks.

Little Timmy didn't realize just how insensitive
he was with his expression

In Judge Moore's mind this would be a significant chilling effect on free speech in the marketplace, and contrary to the First Amendment. Mr. Tam would, even in the absence of a registration, be able to defend the band's name under common law (although, Judge Moore pointed out, this would be highly unlikely), the rejection would still deny him the significant benefits that registration would afford him.

The government also asserted that a trademark registration is government speech, and therefore not covered by the First Amendment. This does not, however, include the registrant's use of the mark, but merely the act of registration or rejection of that mark. One can appreciate that the registration of a mark does not convey any endorsement or approval of a product or service adorning the mark registered, and thus, arguably at least, would not amount to any form of government speech, nor would the inclusion of the ® symbol do the same (contrary to the government's argument to the latter). Clearly, the conversion of any speech into government speech by the mere registration or affixing of the ® symbol would allow for the government to regulate that speech without infringing the First Amendment. The Court therefore swiftly rejected this argument, acknowledging the slippery slope this would create with all government registrations and their suppression on a whim. As Judge Moore summarized: "When the government registers a trademark, it regulates private speech. It does not speak for itself".

Is the registration of a trademark a subsidy?

The Court also discussed whether the registration of a mark would amount to a subsidy, but in the end strongly rejected this notion, as the denial of a benefit to a citizen under the rationale of restricting their speech (by disincentivizing their expression through the loss of these benefits). Also, as the Lanham Act derives itself from the Commerce Clause and not the Spending Clause (which allows the government to set conditions to the benefits that derive from it), it is further evidence that the registration of a trademark is not a subsidy. The Court concluded that the section is not a subsidy, and does not therefore avoid strict scrutiny.

Conclusion

The Court rejected the government's arguments and deemed section 2(a) to be unconstitutional. The case did provoke a great deal of discussion among the judges, with several concurring and/or dissenting judgments being handed down, demonstrating just how unsure the judiciary is on the section. Yet, this writer is sure that all of the judges can agree on one position, expressed by Judge Moore: "Even when speech “inflict[s] great pain,” our Constitution protects it “to ensure that we do not stifle public debate“".

The case does have a significant effect on the up-coming Redskins case, which is set for its appeals hearing later this year. Whether they adopt the position set by the Court in this case remains to be seen, but this writer would imagine the assertion that section 2(a) is unconstitutional to stick, unless the Fourth Circuit conjures up a novel way of avoiding the extensive considerations above. Nevertheless, it would set the stage for a Supreme Court decision on the case; one which many would undoubtedly welcome.

Source: Washington Post

Raising the Bar

Legislation not endorsed by the TV show

Tomorrow, on the 15th of April, a new piece of legislation will come into force here in Australia regarding patents, trade marks and designs, although the main emphasis is on the former two. The Intellectual Property Laws Amendment (Raising the Bar) Act 2012 will make some changes into existing laws, mainly amending the Patents Act 1990, the Trade Marks Act 1995 and the Designs Act 2003. 

As explained by IP Australia, the legislation makes some key changes, including:

- Raising the quality of granted patents by implementing changes to the key tests for patentability and more closely aligning these with international standards.

- Reducing delays in the resolution of opposition proceedings concerning patents and trade marks.

- Implementing changes to the regulation of patent and trade marks attorney professions and the increasing the ways in which they can operate.

- Implementing procedures for dealing with imports suspected of infringing IP rights and making it harder for importers of counterfeit goods to evade an IP right holder.

- Providing access to a simplified and more effective IP system.

The Act seems to amend some practical aspects, as well as attempt to speed up some of the processes, which no doubt are all welcome changes to all patent practitioners. However, as I lack the direct knowledge of patents in practice, whether these changes will actually impact the field will be left for someone to clarify for me.

A more comprehensive guide to the IP Reforms is provided for all to read, and gives more insight into the changes brought in via the Act.