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I apologize in advance for the clumsiness of the footnotes. WordPress isn’t fully functional when it comes to footnotes.

The Lowdown on the Federal Court Ruling Against the Washington Redskins

You may have seen the news that a federal judge has ordered the Washington Redskins’ trademark registrations to be cancelled. You may also have seen that the team plans to appeal the decision, as is their right, and that they are claiming a violation of their right to freedom of speech. The case is an interesting intersection of intellectual property and First Amendment law. Here’s a primer for those of you who are not lawyers but want to be able to speak intelligently about the situation, or just want to learn something.

Background

The National Football League team based in Washington, DC (1) has been named the Redskins since before they were even based in Washington, DC. The club was founded in Boston in 1932 as the Boston Braves, changed its name to the Boston Redskins (2) in 1933, and moved to DC in 1937. Sporting clubs named after terms associated with Native Americans (or “Indians” as we called them back then, thanks to Christopher Columbus and his ignorance) were common at the time, but have gradually come to be recognized by society as disparaging and racist.

Pro Football, Inc. (PFI), the corporation that owns and controls the team, has multiple “Redskins” trademarks, the oldest of which was registered in 1967. It uses these trademarks to identify itself as the team that plays professional football in Washington, DC, and to indicate its seal of approval on merchandise bearing the team’s name and insignia. By registering these trademarks, the United States government, specifically the Patent and Trademark Office, has given PFI the exclusive right to use the marks for those purposes. Once a trademark is registered, anyone wishing to petition to have the registration cancelled does so by filing a proceeding with the Trademark Trial and Appeal Board.

In 2006, six individuals of Native American descent filed a petition to cancel all of the “Redskins” trademarks on the grounds that the term is “a pejorative, derogatory, denigrating, offensive, scandalous, contemptuous, disreputable, disparaging, and racist designation for a Native American person.” [They kind of took the kitchen-sink approach when drafting that sentence.] The petitioners claimed that PFI’s use of the registered marks “brings them into contempt, ridicule, and disrepute . . . causing them to be damaged by the continued registration of the marks.”

Without going into the gory (and boring) details, on June 18, 2014, the Board upheld the petitioners’ claim, ordering that the trademark registrations be cancelled on the grounds that the registrations are disparaging to Native Americans, based on the evidence presented. U.S. trademark law contains a provision, Section 2(a), preventing registration of a trademark “which may disparage . . . persons . . . or bring them into contempt, or disrepute . . . .” (3) The Board found that the marks were subject to cancellation for violating that section.

PFI objected to the Board’s decision and filed suit against the petitioners in the U.S. District Court for the Eastern District of Virginia. Judge Gerald Bruce Lee (4) issued his opinion on July 8, 2015,(5) affirming the Board’s decision. PFI’s next course of action will be to appeal to the U.S. Court of Appeals for the Fourth Circuit. If the Fourth Circuit affirms, PFI may (and probably will) appeal to the U.S. Supreme Court.

Now for the meat of the discussion: what does trademark cancellation really mean for the team? And how likely is it that PFI will ultimately prevail?

What Does Cancellation Mean for the Team?

PFI uses its registered trademarks to identify its services as a professional football team and to indicate its approval of merchandise bearing its name and logos. The government gives it the exclusive right to use those markings. I can’t start selling sweatshirts with the Redskins logo on them without first getting approval (i.e., a license) from PFI.

The primary purpose of a trademark is to serve as a source identifier. It protects the consumer. For example, I’ve purchased something, I liked the quality, I want to purchase it again, but I want to make sure the quality will be the same. So I look for the mark of the producer I’ve purchased from in the past. (I assume that they care enough about their brand to maintain their quality standards.)

When a trademark owner licenses the use of its mark to third-party producers, it always includes a quality control clause in the contract. If the third-party producer doesn’t make quality goods, the license can be revoked. In this way, PFI controls the quality of goods in the marketplace bearing the Redskins name and logos.

Without a federal trademark registration, it would be significantly harder for PFI to control the quality of goods in the marketplace. Anyone could start slapping the Redskins logo on poorly made goods. This could damage the Redskins brand, because consumers would never know what level of quality they would receive when buying Redskins merchandise. But more important, from PFI’s perspective, would be the loss of licensing revenue. It’s all about those dolla dolla bills, yo.

According to Forbes magazine, the Redskins brand is currently worth $214 million, and their total revenue in 2013 was $395 million. With only $82 million of that revenue figure coming from gate receipts, we can surmise that a significant percentage of revenue is the result of licensing deals. Without a federal trademark registration, the licensing money would dramatically decrease.

It may not disappear entirely though. If enough bargain-basement producers selling shoddy merchandise flooded the market, consumers could be willing to pay more for merchandise that has PFI’s stamp of approval. PFI could still charge a fee for that approval, but licensing revenue would not be nearly what it has been for them.

Will PFI Prevail in its First Amendment Argument?

Obviously there’s no way to know for sure how any given court will rule in a case. There are always arguments to be made for both sides—that’s what makes it a case. But looking at past court rulings (precedent) and what laws actually say, one can make an educated guess about the outcome.

PFI claims that a cancellation of its federal trademark registrations violates its right to free speech. One could argue that PFI is a corporation and can’t speak; therefore, it has no right to free speech. But the Supreme Court has held that corporations have free speech rights, and lower courts are obligated to follow that precedent (until the Supreme Court comes to its senses and overrules that decision), so we’ll leave that argument aside.

Judge Bruce Lee dispensed with PFI’s First Amendment claims rather quickly, holding that the First Amendment is not implicated in the first place, because cancellation of the registrations does not “burden, restrict, or prohibit PFI’s ability to use the marks.” (6) There’s an important distinction between telling someone they can’t use a mark and telling them they can’t have federal trademark protection for the mark.

Judge Lee’s First Amendment reasoning is sound and likely to be upheld by an appeals court without further analysis. For the sake of argument, however, I’ll walk through what a full First Amendment analysis would look like.

Many people throw around the terms “free speech” and “First Amendment” without really knowing what the amendment says. Let’s get that out of the way up front:

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

The relevant portion for this discussion is “Congress shall make no law abridging the freedom of speech.” Read literally, a great number of laws passed by Congress would be prohibited by the First Amendment. Almost no one seriously argues that the amendment should be read literally. (7)

The U.S. Supreme Court wasn’t faced with a First Amendment challenge to a law until 1919, and ever since then, the courts have been massaging First Amendment law into the complicated balancing test that exists today. Over the past century, the Supreme Court has allowed for abridgement of: speech critical of the government (how self-serving!), political speech, commercial speech, obscenity, speech taking place at schools, and defamatory speech. So much for “no law.”

Lawyers love a good balancing test, and First Amendment analysis is a doozy. First, the court determines whether the law or regulation in question is based on the content of the speech (content-based) or not (content-neutral). If it’s content-based, strict scrutiny applies; content-neutral laws are subject to intermediate scrutiny. Commercial speech is also routinely subjected to intermediate scrutiny (which means laws regulating commercial speech are more likely to be upheld).

If strict scrutiny applies, the government must show that the law is necessary to achieve a compelling government interest, and it must use the least restrictive means to achieve that compelling interest. With intermediate scrutiny, the government must show only that the law is substantially related to an important government interest, and the law must be narrowly tailored to that interest, but the government is not required to use the least restrictive means of achieving its interest. (Are your eyes glazing over yet? Bear with me.)

The speech interest at issue here is unquestionably commercial speech. A trademark’s purpose is to prevent consumer confusion as to the source of goods in commerce. Use in commerce is the fundamental requirement for acquiring a federal trademark registration to begin with. The fact that false or misleading commercial speech is unprotected by the First Amendment and may be regulated by the government is the very basis for U.S. trademark law. A finding that PFI’s speech is anything other than commercial would undermine the foundation of trademark law, so let’s assume no court is going to find the speech anything other than commercial.

In that case, intermediate scrutiny applies to the law in question, namely, Section 2(a) and its prohibition against registration of disparaging marks. The first question is whether Section 2(a) is substantially related to an important government interest. A federal trademark registration confers a number of benefits to the holder. It’s basically a government imprimatur allowing you to prevent others from using an identical or too-similar mark for similar goods. A federal registration is, in a way, an indication that the government approves of your use of the mark.

The government’s role is to support its citizens—all of its citizens, not just its corporate citizens or its wealthy citizens. It’s in the business of protecting everyone, including minority groups, from harassment, discrimination, and disparagement. Conferring benefits on the user of a word that arguably disparages an entire ethnic group does not comport with the government’s role as protector and supporter of all its citizens.

Having determined that the government has an important interest in not putting its imprimatur on disparaging speech, the next question is whether Section 2(a) is narrowly tailored to achieve that interest.

PFI argued that Section 2(a) was unconstitutionally vague. Laws are required to be written in a way that allows people to understand what it is that the law is prohibiting or regulating. If people can’t understand what they’re not allowed to do, they can’t very well follow the law.

PFI claimed that Section 2(a) doesn’t fully explain which words will be refused registration because they disparage others. Unfortunately for PFI, the Constitution doesn’t require laws to have the level of specificity that PFI would like Section 2(a) to have. Section 2(a) enumerates a list of categories of marks that will be refused registration, which is sufficient for a reasonable person to ascertain what is prohibited. Anything further would be unwieldy and borderline ridiculous. Thus, Section 2(a) is narrowly tailored to serve the government’s purpose, which is to not lend its imprimatur to disparaging words and trademarks.

Having met both criteria of intermediate scrutiny, Section 2(a) is not likely to be ruled unconstitutional, nor is a court likely to find that it impermissibly abridges PFI’s speech rights. (8) PFI will continue to lose if it presses its First Amendment claims through the appellate process. (9)

The Take-Away

Even if PFI appeals this case all the way to the Supreme Court and loses, that doesn’t mean the team has to change its name. The government can’t require or force anyone to speak a particular speech, and it can’t constitutionally prevent the team from calling itself what it likes. The government can, however, refuse to countenance speech it finds disparaging to others.

So even without federal trademark protection, PFI can continue to use the Redskins name. It can emblazon it on hats, t-shirts, sweatshirts, etc. or license others to do so (if it can find a licensee willing to pay for the privilege). It can bar unauthorized sellers from hawking their unauthorized wares inside the stadium where the Redskins play. And it may be able to rely on some common law trademark rights to bar others from using the Redskins name and logos without its permission.

In short, PFI has lost the federal government’s support of its Redskins name and logos, but not much else.

(1) They don’t actually play in Washington, DC. They used to play at RFK Stadium in southeast DC but in 1997 moved to FedEx Field, which is located in Prince George’s County, Maryland. The team is interested in building a new stadium on the site of RFK; however, the land on which RFK stands is owned by the U.S. government and controlled by the Department of the Interior. You know what else the Department of the Interior is responsible for? Native American relations. Boom! Thus, the Redskins will not be allowed to play on the RFK site unless they change their name. Your move, Dan Snyder.

(2) Interestingly, the NFL stills owns a trademark for the Boston Redskins logo.

(3) Lanham Act §2(a), 15 U.S.C. §1052.

(4) Do you think he includes the “Bruce” because it’s badass to have “Bruce Lee” be part of his name? I do.

(5) The case didn’t go to trial, which explains the speedy disposition. The judge granted a motion for summary judgment, meaning he decided the case based only on written documents submitted to the court without hearing in-court testimony. It also means there was no jury involved.

(6) Slip opinion at 15.

(7) Former Supreme Court Justice Hugo Black was of the opinion that “no law” meant “no law,” but he was decidedly in the minority. For a fascinating take on what would happen to intellectual property law if the amendment were taken literally, I recommend No Law: Intellectual Property in the Image of an Absolute First Amendment by David L. Lange and H. Jefferson Powell (my IP and Constitutional Law professors, respectively, at Duke Law School, by the way—holla!).

(8) This analysis is actually dramatically simplified from the exercise a court would undertake in a full First Amendment analysis, but this is a blog post, not a court opinion or law review article. Normal people don’t care that much!

(9) PFI claimed that cancellation of its registrations violates the due process and takings clauses of the Fifth Amendment as well, but that’s outside the scope of this article, and those claims aren’t any more likely to succeed.

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