Gerlich v. Leath: The First Amendment and Trademarks in the Midst of Tam

Meg Franklin, Associate Member, University of Cincinnati Law Review

The past year has been notable in the area of the First Amendment and trademark law.  Yet, the most noteworthy case is expected to be decided by the Supreme Court during the summer of 2017.[1]  In that case, Lee v. Tam, the Supreme Court will decide whether the United States Patent and Trademark Office (USPTO) can refuse to register marks that “disparage” people.[2]  The Court recently granted certiorari after the Federal Circuit held this practice to be an unconstitutional violation of the First Amendment’s freedom of speech.[3]  Exactly one month after the Federal Circuit’s decision in In re Tam, the District Court for the Southern District of Iowa in Gerlich v. Leath permanently enjoined Iowa State University (ISU) from applying its trademark licensing guidelines in a viewpoint discriminatory manner.[4]

Both Gerlich and Tam struck down a trademark licensing practice because it encroached on free expression.  This First Amendment analysis appears on point, but the Supreme Court may see it differently when it hears the Tam case.  However, another way to view this issue is through the lens of trademark law.  First, trademarks identify the mark holder—not an administrative body—as the source of the good.  Therefore, the USPTO or a university licensing office should not be able to claim control over the mark’s registration because the office fears the public opinion regarding the mark holder will reflect badly on the office.  Second, trademarks are typically[5] only protected to the extent they protect consumers from confusion as to the source of a good.[6]  Therefore, since trademarks are source identifying and not expressive, trademarks should not be evaluated on their expressive nature.

Free Speech Reigns in Tam

The Federal Circuit in In re Tam held the “disparaging bar of Lanham Act § 2(a), 15 U.S.C.A. § 1052(a) was unconstitutional and in violation of the First Amendment as an impermissible restraint on freedom of speech.”[7]  The disparaging bar prohibits registration of a mark[8] that “[c]onsists of or comprises . . . matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute.”[9]  In this case, the Federal Circuit reversed the administrative board which affirmed the USPTO’s rejection of an application for registering an Asian-American rock band named “The Slants.”[10]

Section 2(a) did not survive the majority’s strict scrutiny test, partly because the statutory bar “cannot be justified on the basis that [it] further[s] the Lanham Act’s purpose in preventing consumers from being deceived.”[11]  Therefore, the court found that rejection of a mark under Section 2(a) is viewpoint-based because it implicates the expressive character of the mark and not “the ability to serve as a source identifier.”[12]  The regulation was deemed to be viewpoint discriminatory on its face and in practice.[13]  To underscore the importance of upholding the First Amendment, the court noted that “[e]ven when speech ‘inflicts great pain,’ our Constitution protects it ‘to ensure that we do not stifle public debate.”[14]

The Supreme Court’s decision on this case will “cap off more than 20 years of contentious litigation by Native American activists intent on stripping the Washington Redskins of trademark registrations on a name they say is an ethnic slur.”[15]  Certiorari was granted, and the case is expected to be decided in the summer of 2017.[16]

Shutting Down Marijuana Advocacy is Viewpoint Discrimination

Similarly, the Gerlich v. Leath court struck down a trademark licensing practice because it was contrary to the First Amendment.  Using First Amendment precedent such as Rosenberger,[17] the court determined that ISU’s conduct was viewpoint discrimination.[18]  The court noted that “[v]iewpoint discrimination is especially dangerous on university campuses” due to the role of universities as centers for intellectual life.[19]  The Gerlich court struck down the violation of free speech as it related to the individual plaintiff, unlike the Tam court that struck down Section 2(a) as unconstitutional.

The plaintiffs in Gerlich v. Leath, Paul Gerlich and Erin Furleigh, had been in student leadership positions in the ISU student chapter of the National Organization for the Reform of Marijuana Laws (NORML).[20]  This group is “a political group that advocates for reform of federal and state marijuana laws.”[21]  In contrast, the defendants were various ISU administrators relevant to the enforcement of ISU trademark licensing policies.[22]  At issue in the case was whether the trademark licensing policies were a violation of the First Amendment as applied to NORML.[23]  It was undisputed that NORML was a recognized campus organization and that the university’s recognition of student groups did not equate to endorsing their missions.[24]  Similarly, ISU also recognized that “licensing a trademark to a student group does not mean that ISU takes a position on what the group represents.”[25]  Under this regime, the Trademark Office licensed the ISU logo for use on NORML tee shirts.[26]

A month after NORML received a license to print shirts bearing the ISU mark; the local newspaper published an article regarding the legalization of marijuana that featured a photo of NORML’s president wearing the ISU-branded NORML tee shirts.[27]  In response to this article, the university administration received significant political push-back.[28]  Concerned about public perceptions, the president of ISU explained that “there are some issues that are clearly going to cause controversy and it’s better to manage them on the front end.”[29]  Therefore, ISU took action by requiring NORML—unlike any other student group[30]—to receive preapproval before submitting designs to the Trademark Office.[31]  Yet, any design containing the cannabis leaf—an element of the national organization’s marks—was rejected.[32]  Also, NORML’s faculty advisor was replaced by a member of ISU’s administration who remained even after the position was filled by another member of the faculty.[33]  The court found that these actions were “specifically directed at NORML ISU based on their views and the political reaction to those views so that Defendants could maintain favor with Iowa political figures.”[34]  Therefore, the court concluded that ISU was discriminating against NORML on the basis of viewpoint and permanently enjoined ISU from applying the trademark guidelines in a viewpoint discriminatory way against NORML.[35]

Trademarks Are Source Identifying of the Mark Holder

Distinctive marks accurately identify the source of the goods.  In other words, the average consumer understands that a brand or service mark points to the seller of a good.  This underlying policy of trademark law weakens government speech arguments in cases like Gerlich[36] and Tam.  Therefore, when a mark identifies the mark holder, the USPTO or a university licensing office should not be able to claim control over the mark’s registration because the office fears the public opinion regarding the mark holder will reflect badly on the office.

Federal registration[37] is governed under  15 U.S.C.S. § 1051, also known as the Lanham Act.[38]  The Lanham Act defines a “trademark” as any “word, name, symbol, or device used by a manufacturer or merchant to identify his goods and distinguish them from those manufactured by others.”[39]  In other words, “the purchaser of goods bearing a given label believes that what he buys emanated from the source, whatever its name or place, from which goods bearing that label have always been derived.”[40]

In considering the government speech doctrine defense, the Gerlich court reasoned that due to the nature of universities, the public would understand that the student groups’ speech is not the university’s speech.[41]  In fact, this was the university’s original perspective before it received political pushback.  Yet, after the local newspaper article, political figures and university administrators worried that placing ISU branding next to NORML branding equated ISU with NORML.  Instead, it is more likely that the ISU logo only provided additional source identifying information.  Thus, the two marks together identify the ISU Chapter of NORML as the source of the tee shirt.  It is not likely that someone would see the NORML tee shirt and assume that the ISU administration was now sponsoring certain advocacy campaigns on campus.[42]  Similarly, it is more likely that the average American associates the band’s activities with the band and not the USPTO.

A Trademark Should Not Be Evaluated for its Expressive Nature

The second trademark law-related argument for the unconstitutionality of Section 2(a) of the Lanham Act and ISU’s oversight is that trademarks should not be evaluated for their expressive nature.  The Tam court recognized this contradiction when it reasoned, “that when the USPTO refuses registration to a mark believed to be “disparaging” of a group, it is because the government disapproves of the expressive message conveyed in the mark.”[43]  The court found this unconstitutional because it “violated ‘a bedrock principle underlying the First Amendment that the government may not penalize private speech merely because it disapproves of the message it conveys.’”[44]  However, this practice also violates a bedrock distinction between trademark and copyright law.  Trademarks should be evaluated for their ability to identify the source of a good or service.  Otherwise, the law risks blurring the difference between the source identification of trademarks and the expression of copyrights.

Under 17 U.S.C. § 102(a), copyright protection is conferred to “original works of authorship fixed in any tangible medium of expression.”  Expression is further limited in 17 U.S.C. §102(b) to exclude “any idea, procedure, process, system, method of operation, concept, principle, or discovery.”  In contrast, trademark law pertains to marks that identify the source of a good or service.[45]  Yet, the Tam court pointed out that the trademark “disparagement bar regulates the expressive content of words used as a mark, not their purpose as a commercial symbol of origin.”[46]  First Amendment arguments aside, perhaps the USPTO and the ISU Trademark Office should not reject marks based on their expressive nature.  Ironically, copyright is not rejected based on underlying meaning of the expressive work.  Therefore, if an expressive work is not evaluated for its message, then a source-identifying mark should not be evaluated based on a perceived message.  Before receiving political pushback, the ISU Trademark Office licensed its marks without evaluating the student organizations’ marks for their expressive nature.  To stay true to the purpose of trademark law, ISU should consider returning to this practice.

Conclusion

The Gerlich decision is an example of the issues courts face when the First Amendment and trademark law overlap.  Yet, more interestingly, Gerlich and Tam indicate the court’s shifting tolerance for administrative overreach.  The Court’s decision in Lee v. Tam next summer may be the final word on the matter.  Until then, the issue should be considered from the perspective of the First Amendment and trademark law.

[1] See, Bill Donahue, USPTO Urges High Court To Uphold Ban On ‘Racial Slurs,’ Law360 (Nov. 10, 2016), http://www.law360.com/articles/861945/print?section=ip.

[2] The case number is 151293. Id.

[3] In re Tam, 808 F.3d 1321 (Fed. Cir. 2015).

[4] 152 F. Supp. 3d 1152 (S.D. Iowa 2016).

[5] Dilution issues aside. 15 U.S.C.A. § 1125(c) (West).

[6] Infra, note 40, page 6.

[7] 3 McCarthy on Trademarks and Unfair Competition § 19:77.25 (4th ed.).

[8] “The denial of a federal registration does not necessarily eliminate all federal or common law rights

to the underlying mark, and the court should reject any suggestion to the contrary.”  The American Bar Association was worried that the Federal Circuit confused this important distinction of trademark law.  Thus, the ABA recently filed an amicus brief to the Supreme Court.  See, Bill Donahue, Offensive TMs Are Still Enforceable, ABA Tells High Court, Law360 (Nov. 16, 2016), http://www.law360.com/articles/863310/print?section=ip.

[9] 15 U.S.C.A. § 1052 (West).

[10] 3 McCarthy on Trademarks and Unfair Competition § 19:77.25 (4th ed.).

[11] In re Tam, 808 F.3d 1321, 1329 (Fed. Cir. 2015).

[12] Id. at 1338.

[13] Id. at 1341-42.

[14] Id. at 1358 (quoting Snyder v. Phelps, 562 U.S. 443, 461 (2011)).

[15] Bill Donahue, USPTO Urges High Court To Uphold Ban On ‘Racial Slurs,’ Law360 (Nov. 10, 2016), http://www.law360.com/articles/861945/print?section=ip.

[16] Id.

[17] Rosenberger v. Rector & Visitors of the Univ. of Va., 515 U.S. 819, 823 (1995) (which mentioned that, “it is axiomatic that the government may not regulate speech based on its substantive content or the message it conveys”).

[18] Gerlich, 152 F. Supp. 3d at 1170-76.

[19] Id. at 1171.

[20] Id. at 1157.

[21] Id.

[22] See, id. at 1158.

[23] Id. at 1164.

[24] Gerlich v. Leath, 152 F. Supp. 3d 1152 at 1158.

[25] Id.

[26] Id. at 1159.

[27] Id. at 1159-1160.

[28] Id.

[29] Id. at 1160 (internal quotations omitted); (where the university administration worried that, “NORML ISU’s use of University logos would be understood as endorsement of the group’s political message.”).

[30] The opinion lists other controversial or political groups that have received licenses, such as: CUFFS, a sexual bondage student club; LGBTAA, a recognized student organization that supports the rights of gay, lesbian, bisexual, and transgender people; ” Iowa State University Students for Life, an anti-abortion group; ISU College Republicans; Iowa State Democrats; ISU Tea Party; the Navy Marine Corps Drill Team, including designs with Cy the Cardinal holding a rifle; the American Society of Biosystem Engineers, including designs with Cy the Cardinal holding a sword; the Iowa State University Fencing Club, including designs with Cy the Cardinal leaning on an epee; the Rifle and Pistol Club; and the ISU Trap and Skeet Club, including designs with Cy the Cardinal holding a shotgun.” Gerlich v. Leath, 152 F. Supp. 3d 1152, 1159 (S.D. Iowa 2016).

[31] Id. at 1161.

[32] Id. at 1162.

[33] Id.

[34] Id. at 1172.

[35] Gerlich v. Leath, 152 F. Supp. 3d 1152, 1172, 1181 (S.D. Iowa 2016).

[36] Trademark law governs deception and unfair competition within the marketplace. See, 15 U.S.C.S. § 1051.  Therefore, a student group within a university is not a perfect analogy.  However, since the university had a pseudo-USPTO practice, it bears an interesting analytical connection to In re Tam.

[37] Note that federal registration is only one of the protections offered under trademark law.  “A designation that identifies and distinguishes a service: can be federally registered under the Lanham Act; can be registered under almost all state trademark registration statutes; can be protected in federal courts under Lanham Act § 43(a); and, can be protected under state common law as a ‘common law service mark.’” 1 McCarthy on Trademarks and Unfair Competition § 9:12 (4th ed.).

[38] (LexisNexis, Lexis Advance through PL 114-244, approved 10/14/16).

[39] 1 McCarthy on Trademarks and Unfair Competition § 3:4 (4th ed.)

[40] 1 McCarthy on Trademarks and Unfair Competition § 3:9 (4th ed.) (quoting Manhattan Shirt Co. v. Sarnoff-Irving Hat Stores, 19 Del. Ch. 151, 164 A. 246 (1933), aff’d, 20 Del. Ch. 455, 180 A. 928 (1934); Shredded Wheat Co. v. Humphrey Cornell Co., 250 F. 960 (2d Cir. 1918) (“single, though anonymous maker”)).

[41] Id. at 1175.

[42] Cf., University Book Store v. University of Wis. Bd. of Regents, 33 U.S.P.Q.2d 1385, 1994 WL 747886 (Trademark Trial & App. Bd. 1994) (college mascot imprinted on apparel is protected as a mark of the college).

[43] 3 McCarthy on Trademarks and Unfair Competition § 19:77.25 (4th ed.) (discussing In re Tam, 808 F.3d 1321, 1327, 44 Media L. Rep. (BNA) 1037, 117 U.S.P.Q.2d 1001 (Fed. Cir. 2015)).

[44] 3 McCarthy on Trademarks and Unfair Competition § 19:77.25 (4th ed.) (quoting In re Tam, 808 F.3d 1321, 1327, 44 Media L. Rep. (BNA) 1037, 117 U.S.P.Q.2d 1001 (Fed. Cir. 2015)).

[45] See, supra, note 40, page 6.

[46] 3 McCarthy on Trademarks and Unfair Competition § 19:77.25 (4th ed.).

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