Last month, the U.S. Court of Appeals for the Federal Circuit overturned a decision of the United States Patent and Trademark Office (“USPTO”) which was based on a law that bars the registration of “disparaging” trademarks.1
Simon Tam, member of the rock band The Slants, sought to register the band’s name as a trademark in the U.S. for “entertainment, namely, live performances by a musical band.” The trademark was deemed by the USPTO to be disparaging to people of Asian descent and registration was refused. The Federal Circuit held that the USPTO’s refusal, done pursuant to Section 2(a) of the Lanham (Trademark) Act 2, constituted a violation of the First Amendment to the United States Constitution (i.e. free speech rights).3
This decision is likely to have repercussions for other owners of controversial trademarks in the U.S., including the Washington Redskins.
In a well-publicized June 2014 ruling, the District Court for the Eastern District of Virginia granted summary judgment in favour of several individual defendants seeking affirmation of the USPTO’s decision to cancel six registrations of the Washington football team’s “Redskins” trademarks on the grounds that the marks may be disparaging to Native Americans and thus do not qualify for federal registration under Section 2(a) of the Lanham Act.4 The District Court held that cancellation of the “Redskins” registrations did not impinge on the trademark owner’s First Amendment rights since its use of the marks was not precluded.
The Washington Redskins have appealed this decision to the U.S. Court of Appeals for the 4th Circuit. Since the football team is defending its registrations in a different appellate circuit, the ruling of the Federal Circuit that decided the Slants case is not binding. However, the reasoning applied in the Slants case may warrant additional consideration. In the Slants case, the Court found that the denial of the (significant) benefits of registration would have the effect of forcing people to refrain from using certain terms in trademarks, for fear that registration would be denied. Thus, even though Section 2(a) does not prohibit use, the prospect of refusal of registration has a chilling effect on speech that was held to violate the First Amendment.
These decisions raise interesting questions for owners of Canadian trademark rights. For example, there are Canadian “Redskins” registrations; could they face similar challenges in Canada?5
In Canada, similar “policy-type” limits to an applicant’s ability to register a trademark are provided by Section 9(1)(j) of the Canadian Trade-marks Act, which prohibits any person from adopting “in connection with a business, as a trade-mark or otherwise, any mark consisting of, or so nearly resembling as to be likely to be mistaken for any scandalous, obscene or immoral word or device.” However, this provision is distinguishable from Section 2(a) of the Lanham Act.
In the United States, only registration is prohibited by Section 2(a).6 However, in Canada, Section 9(1)(j) prohibits any adoption of the offending mark, be it registered or unregistered. Other provisions of the Trade-marks Act prohibit both the registration (section 12(1)(e)7) and the use (section 118) of such marks. Since it is the adoption, use, and registration of “scandalous, obscene or immoral” marks that are barred under the Canadian Trade-marks Act, the Canadian legislation seems even more restrictive than the United States legislation (though there is very little Canadian jurisprudence relating to what is deemed in Canada to be unacceptable). Thus, some commentators speculate that similar freedom of expression issues9 may arise in Canada to those raised in the U.S. cases above.10
Canada’s Charter of Rights and Freedoms permits reasonable limits to be placed on rights so long as they are demonstrably justified in a free and democratic society.11 Thus, denial of adoption of a trademark under Section 9(1)(j) may potentially be seen as an acceptable limitation on free speech rights in Canada.12
In RJR-MacDonald Inc. v. Canada (Attorney General)13, the Supreme Court of Canada (“SCC”) considered whether limitations on tobacco companies’ rights to freedom of expression could be justified under section 1 of the Charter. In 1988, the Canadian government enacted legislation to limit the harm caused by tobacco consumption. The tobacco companies challenged, amongst other things, a provision that banned the use of tobacco trademarks on goods other than tobacco products (e.g. t-shirts, etc.). The government conceded that the provision violated the companies’ rights to freedom of expression. The SCC found that no rational connection had been demonstrated between the ban on the use of tobacco trademarks and the goal to reduce tobacco consumption and held the provision to be unconstitutional.
The government of Canada then enacted the Tobacco Act14 to address the same public health goals while remedying the flaws of the previous legislation. Under the Tobacco Act, the display of tobacco-related brand elements15 or corporate names in sponsorship activities, or on permanent facilities was prohibited. The SCC found the provision to violate section 2(b) of the Charter, but held that the limitations were justifiable.16
In view of the Slants and Washington Redskins rulings in the United States, it could be argued that a prohibition on the adoption, use, and registration of a trademark subjectively17 determined to be “scandalous, obscene or immoral” is not minimally impairing and, accordingly, is an unjustifiable limit on free speech rights in Canada.18 No one has yet challenged the “Redskins” or similar registrations in Canada, but it is fathomable that these registrations could be susceptible to a challenge under Section 9(1)(j). It remains to be seen what the approach of the Canadian judiciary to offensive trademarks as free speech will be. See In re Tam, en banc Federal Circuit, No. 2014-1203 issued 22 December 2015.  Section 2(a) of the Lanham Act, 15 U.S.C. §1052(a) (“Lanham Act”) states: “No trademark by which the goods of the applicant may be distinguished from the goods of others shall be refused registration on the principal register on account of its nature unless it— (a) Consists of or comprises immoral, deceptive, or scandalous matter; or 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 . . .”  The United States government has the option to appeal the decision of the Federal Circuit.  Pro-Football, Inc. v. Blackhorse, et al., No. 1:14-cv-01043-GBL-IDD (E.D. Va. 8 July 2015).  The Canadian “Redskins” registrations, owned by Pro-Football Inc., have not, to date, been the subject of a challenge under Section 9(1)(j) of the Canadian Trade-marks Act, R.S.C., 1985, c. T-13 (“Trade-marks Act”).  This was critical to the Washington Redskins’ decision, where the District Court held that cancellation of the “Redskins” registrations did not impinge on the trademark owner’s First Amendment rights since its use of the marks was not precluded.  Section 12(1)(e) of the Trade-marks Act prohibits the registration of a trademark of which the adoption is prohibited by section 9.  Section 11 of the Trade-marks Act prohibits the use “in connection with a business, as a trade-mark or otherwise, any mark adopted contrary to section 9 or 10 of this Act”.  Section 2(b) of the Canadian Charter of Rights and Freedoms, Part I of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (U.K.), 1982, c. 11 (the “Charter”) guarantees that “[e]veryone has the following fundamental freedoms: freedom of thought, belief, opinion and expression, including freedom of the press and other media of communication.”  David Vaver, Intellectual Property Law: Copyright, Patents, Trade-marks, 2d ed. (Toronto: Irwin Law, 2012, at 483); Teresa Scassa, Antisocial Trademarks, (2003) Trademark Reporter 103(5): 1172-1213.  See section 1.  Freedom of expression challenges to a similar provision in Europe have failed under the European Charter of Human Rights in view of considerations comparable to section 1 of Canada’s Charter of Rights and Freedoms (see note 18).   3 S.C.R. 1999.  SC 1997, c. 13 (“Tobacco Act”).  Under section 2 of the Tobacco Act, “brand element” was defined to include “a brand name, trade-mark, trade-name, distinguishing guise, logo, graphic arrangement, design or slogan that is reasonably associated with, or that evokes a product, a service or a brand of product or service, but does not include a colour.”  The SCC found that the limitations were rationally connected to the legislative goal and were minimally impairing.  The Canadian Intellectual Property Office’s Trademarks Examination Manual provides some guidance as to the interpretation of section 9(1)(j). It states: “A scandalous word or design is one which is offensive to the public or individual sense of propriety or morality, or is a slur on nationality and is generally regarded as offensive. It is generally defined as causing general outrage or indignation. A word is obscene if marked by violations of accepted language inhibitions or regarded as taboo in polite usage. This word is generally defined as something that is offensive or disgusting by accepted standards of morality or decency; or offensive to the senses. A word or design is immoral when it is in conflict with generally or traditionally held moral principles, and generally defined as not conforming to accepted standard of morality.”
Obviously, assessing whether a mark is “scandalous, obscene or immoral” is a subjective determination and may be vulnerable to arbitrariness in the absence of clear and detailed guidance. However, boards in the United Kingdom and Europe that have considered similar freedom of expression issues have found that so long as a trademark registration is denied where “an accepted principle of morality is being offended against”, then any limit on freedom of expression is justifiable: see Ghazilian’s Trade Mark Application,  RPC 33, para. 20; Basic Trademark SA’s Trademark Application,  RPC 25, para. 6; and In the Matter of Registered Trade Mark No. 218549 in the Name of French Connection Ltd. , O-137-06, para. 60.