Guest Post by Prof. McKenna: The Implications of Blackhorse v. Pro-Football, Inc.

Professor Mark P. McKenna of The University of Notre Dame Law School is one of the leading scholars of trademark law.  Below, he provides his thoughts on the legal consequences of the TTAB’s decision in Blackhorse v. Pro-Football, Inc.

The Trademark Trial and Appeal Board (TTAB) just wrote another chapter in the long-running battle over the registration of the Washington Redskins trademarks. In Blackhorse v. Pro-Football, Inc., the Board cancelled 6 federal registrations of various Redskins marks (including stylized versions and logos – though not the one currently used by the team) on the ground they were disparaging to a significant proportion of Native Americans at the time of registration. As most readers of this blog likely know, this is the second time the TTAB has ordered cancellation of the marks – in 1999, after seven years of litigation, the Board cancelled the marks, finding them scandalous and disparaging. That ruling did not stand up on appeal, and the petitioners in this case are different. (Significantly, unlike the petitioner in Harjo, the petitioners’ claims here were not barred by laches.)

There are many things one could say about this ruling – about its societal significance, about the legal standard the TTAB applied (especially the focus on a “substantial composite” of the affected group), or about the likelihood that the decision with withstand appellate review. I am going to focus here on the legal consequences of the decision, assuming it stands. (The PTO will not actually remove the marks from the register until the team has exhausted its appeals.) Contrary to some of the press reports on the decision, cancellation does not entail loss of exclusivity of the marks. In particular it does not mean that the marks are not enforceable under federal law. It simply means that the marks will no longer be federally registered and therefore will not receive any of the benefits of registration.

The team will lose the benefits of the statutory presumption of validity and incontestability. And it will lose the benefit of nationwide constructive use. For many other parties, limiting protection to the geographic areas of actual use would be a significant consequence, but here that is unlikely to be important since the team very likely has nationwide rights by virtue of its actual use. Of perhaps greatest economic consequence, the government will no longer seize imported goods bearing any of the cancelled marks, since only goods bearing registered trademarks are subject to forfeiture. 19 U.S.C. § 1526. And none of the civil or criminal counterfeiting provisions will apply, as counterfeits are by definition making unauthorized use of registered marks. 15 U.S.C. § 1116; 18 U.S.C. § 2320.

These consequences are not meaningless, of course, but they are not nearly as significant as some have made them out to be. ESPN’s report, for example, claimed that the decision stripped the team of all federal rights, and that, if the decision stands, “any fan can produce and sell Washington Redskins gear without having to pay the league or the team for royalties and wouldn’t be in violation of any law for doing so.” It’s obviously not news that press reports mischaracterize legal decisions, but these kinds of statements pretty egregiously overstate things, in my view. That would be true even if there were no federal enforcement of the cancelled marks, since the logos themselves were not cancelled and any merchandise bearing both the word marks and the logos is almost certainly subject to enforcement. But it’s not even true that there will be no federal enforcement of the cancelled marks.

Of course, all of this depends on the assumption that courts do not interpret §2(a) to impose a limitation on one’s ability to enforce rights in an unregistered mark under §43(a). I would have thought that assumption was pretty uncontroversial, but some discussions of the new decision suggest that not all my colleagues in the academy share my view. One recent district court decision (Renna v. County of Union, N.J., 2014 WL 2435775, No. 2:11–3328 (D.N.J. May 29, 2014)) is on their side – that case held that marks barred from registration (in that case, under § 2(b)) could not be enforced under §43(a) either. (See here for Rebecca Tushnet’s analysis of the case). If that conclusion were generalizable, then today’s decision on the Redskins marks would have much more significant effect, since it would leave the football team with only state law rights, and those rights might be uncertain given courts’ general tendency to interpret state law as identical to federal law. But I think people are reading far too much into a single district court case, and that in any case Renna is wrong to conflate registrability under § 2 with protectability under §43(a).

Section 2 of the Lanham Act begins “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 …”. Thus, to be registrable, the claimed designation must (1) be a trademark; and (2) not run afoul of any of the limitations in subsections (a)-(f). That is to say that only a subset of trademarks qualify for registration, and the subsections of § 2 identify the boundaries of that subset. When the Lanham Act was originally drafted, it was fair to say that the limitations on registrability demarcated the universe of trademarks that warranted federal protection. When the Lanham Act was passed, it was clear that only federally registered marks were enforceable under federal law; unregistered marks could be enforced, if at all, only through a common law unfair competition claim. Thus, the unfair competition cases primarily involved unregistrable marks. As I explained here, those common law unfair competition claims were, post-Erie, state law claims. But federal courts were (probably unjustifiably) concerned that this would give rise to a lack of uniformity in the law, and beginning around the mid-1960’s they began to interpret §43(a) to embrace a cause of action for infringement of unregistered marks. In other words, they expanded the federal statute to embrace the claims that previously would have been relegated to the common law.

With this very brief history in mind, one can see just how radical is the claim that the registration bars apply in § 43(a) cases – the claim fully conflates registered and unregistered marks, applying all of the same limitations to unregistered marks despite the fact that § 43(a) was expanded specifically for the purpose of providing a federal cause of action for unregistrable marks. That would be a truly remarkable departure, and one that draws no support from the text of § 43(a), which makes actionable use of “any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which … is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person.” Note that nothing in the section requires that the confusion result from use of a designation that meets the registrability requirements. There’s a reason for that.

It is therefore wrong, in my view, to say that the § 2 bars apply in § 43(a) cases, at least categorically. Nevertheless, one can understand why a court might be attracted to the argument that bars to registrability should be understood as bars to protection, full stop. After all, courts, with the active encouragement of trademark plaintiffs, have spent the last several decades eviscerating the substantive differences between trademark infringement and unfair competition. Indeed, the project has been so successful that courts and commentators alike now routinely say that registration status is largely irrelevant for purposes of enforcement. Such a sweeping claim is, of course, somewhat overstated, since registration obviously can affect priority and the geographic scope of rights in addition to the statutory presumptions and incontestability. Nevertheless, for most purposes courts have treated registered and unregistered marks the same, and the Supreme Court said in Two Pesos that “it is common ground that § 43(a) protects qualifying unregistered trademarks and that the general principles qualifying a mark for registration under § 2 of the Lanham Act are for the most part applicable in determining whether an unregistered mark is entitled to protection under § 43(a).”

I think courts that say this mean to say that the distinctiveness and functionality rules are the same for registered and unregistered marks (save for the question of which party bears the burden), and that infringement is determined the same way in either context. In this respect it is telling that these kinds of statements nearly always precede general statements of legal principles and that they rarely, if ever, accompany any real statutory analysis. The reason is that the registrability requirements and fundamental questions of trademark validity are, and have long been, understood to be distinct issues.  It is not simply that trademark rights arise through use such that one can develop trademark rights without having ever applied for a trademark registration. It is that the Lanham Act imposes requirements for registrability that simply do not apply to unregistered marks. (Some of the registrability requirements – non-genericness, for example – go to validity, and those obviously do apply in §43(a) cases, but not because they are registration requirements.)

It is, of course, possible that courts would import into § 43(a) cases some particular bars to registration for policy reasons, just as common law courts might have had policy reasons to refuse to provide unfair competition remedies in particular cases. And perhaps there are good policy reasons for courts to deny protection to disparaging marks in any context. But it is worth noting that nothing has precluded parties from making these policy arguments before, and hardly anyone has done so. We have not, for example, seen defendants disputing the validity of unregistered marks on the ground that they are primarily geographically deceptively misdescriptive. That could be because it has just taken a long time for litigants to discover these arguments, given how much § 43(a) has changed over time. But I think it’s much more likely that most people have assumed that arguments about registrability have no purchase in the context of enforcement of an unregistered mark.

Finally, even if one thought the § 2 bars ought to apply generally in § 43(a) cases, we should be reluctant to import the § 2(a) bars specifically, since barring enforcement of scandalous, immoral, or disparaging marks raises even more serious constitutional questions than does refusing registration. Section 2(a) has occasionally been challenged on the ground that it denies government benefits on the basis of the content of speech. Courts have rejected that argument primarily on the ground that § 2 only precludes registration and does not proscribe conduct or prevent use of a mark. That reasoning has always been suspect to me, but it is significantly more questionable if it is to be understood to mean that the restrictions are constitutional simply because they do not forbid use rather than because they leave the user with the ability to rely on use-based rights. If we can expect courts to start applying the § 2(a) bars in the context of unregistered marks, we can expect to see this issue litigated much more pointedly.

Mark P. McKenna is the Associate Dean for Faculty Development, Professor of Law, and Notre Dame Presidential Fellow at the Notre Dame Law School.

29 thoughts on “Guest Post by Prof. McKenna: The Implications of Blackhorse v. Pro-Football, Inc.

  1. Hey. There is still common law protection. If anything this should be a wake up call to the US on the frivolity of federal rule. Remember the 4th amendment- out the window. Remember the 1st Amendment-out the window. These things never happen at common law. There is no mechanism at common law to cancel a mark for political gain as was done in this case. In short, Federal Law is employed by the political class for political reasons. Common law is for the organization of the masses. For me this debacle is another example of the weakness of the Federal system of our government. Along side our crippling debt, the strategic blunder of our foray into Iraq, inability to control our borders etc. But hey, we Americans deserve it, because we failed to heed the warning of the Founding Fathers on the dangers of a powerful central government. Maybe when your local police grenade your baby sleeping in a crib in furtherance of getting grant money from the Feds as part of the war on drugs you too will pay for not heeding those warnings

  2. Hey. There is still common law protection. If anything this should be a wake up call to the US on the frivolity of federal rule. Remember the 4th amendment- out the window. Remember the 1st Amendment-out the window. These things never happen at common law. There is no mechanism at common law to cancel a mark for political gain as was done in this case. In short, Federal Law is employed by the political class for political reasons. Common law is for the organization of the masses. For me this debacle is another example of the weakness of the Federal system of our government. Along side our crippling debt, the strategic blunder of our foray into Iraq, inability to control our borders etc. But hey, we Americans deserve it, because we failed to heed the warning of the Founding Fathers on the dangers of a powerful central government. Maybe when your local police grenade your baby sleeping in a crib in furtherance of getting grant money from the Feds as part of the war on drugs you too will pay for not heeding those warnings.

    1. Hmmm,

      Any time I hear the mantra of “organization of the masses,” the LAST thing that comes to mind is something free and clear of “political gain,” and “Employed by the political class for political reasons.”

      Do they not teach history anymore in our school systems?

        1. Thanks!

          I too fall into the “ [Whether my view of the matter is in tune with current doctrine is another question entirely]” bucket.

      1. Correction it is § 1052(a) that we are talking about, which prevents registration of trademarks that are, “immoral, deceptive, or scandalous matter; or matter which may disparage or falsely suggest a connection with persons…”

        The Lanham Act grants substantive rights, including causes of action and other protections (like import protections). 1052(a) is explicit viewpoint discrimination in that it allows protecting trademarks that are moral or commend a person or group (the restrictions on deceptive or false trademarks likely passes First Amendment scrutiny).

        A perfect way to think about this would be the NAACP vs. a hypothetical group called the NASCP (National Association for the Suppression of Colored Peoples), it is clear that the government could not allow one, but not the other to petition the government, walk in a parade, protest on the sidewalk, etc. In the same way, trademark registration is essentially a public forum (or limited public forum, at worst) subject only to reasonable time, place, and manner restrictions. There is no argument being put forward that the Redskins trademark is disturbing the peace any more than another trademark, so these restrictions cannot stand up to Constitutional challenges.

        That is just a rudimentary argument, that an actual First Amendment lawyer could do much more with, but it essentially boils down to: You cant allow speech X without allowing anti-X.

      2. I’m sorry, but LOL.

        Let’s flip this around and look at it the other way.

        Why doesn’t the grant of federal registration of a mark much more significantly implicate the First Amendment?

        The government, by granting registration, is saying that the registrant, and only the registrant, may use that word/wording in conjunction with the products or services in that class.

        The other 300,000,000 people in the country are forbidden, by the power of the government, from using that speech in conjunction with the products/services for which the mark is registered.

        As between the government refusing to grant a prospective registrant monopoly over the commercial use of certain speech (your complained-of viewpoint discrimination), and the government forbidding all others but the registrant to commercially use the same speech, the latter is clearly more of a potential 1A issue than the former.

  3. Bingo, JAQT!

    I noted the same issue regarding the difference between unregistered marks (clearly protectable under Section 43(a)) and unregistrable marks.

    In fact, I covered this topic briefly in a portion of my law review article entitled: “Moral Intervention in the Trademark Arena: Banning the Registration of Scandalous and Immoral Trademarks,” 83 Trademark Reporter 661, 788-795 (1993) — this article won the Ladas Memorial Award back in 1992.

    Among other support there, I noted how the Restatement of Torts excepts from its definition of a trademark that which violates a defined public policy: “A designation cannot be a trade-mark or trade name if it is scandalous or indecent, or otherwise violates a defined public policy.” Section 726 at 587.

    There is also the possibility of a successful unclean hands affirmative defense if the team seeks to enforce unregistrable (as opposed to unregistered) trademark rights through common law or state law.

    The inability to stop counterfeits at the border is huge, and anyone who doesn’t appreciate the significance of that right doesn’t understand trademark enforcement.

    If this weren’t a big deal, the team and the NFL wouldn’t have invested millions upon millions of dollars in defending these six registrations over the past twenty years.

    link to duetsblog.com

  4. One premise in this article is that for purposes of § 43(a) cases, there are only two kinds of marks, registered and unregistered.

    In fact, there is a third kind of mark: unregistrable marks.

    Unregistrable marks differ from unregistered marks: an unregistered mark is a mark that is simply unregistered in the sense that an application has not yet been made, whereas an unregistrable mark is a mark for which registration is not or would not be available, under any circumstances, even if an application had been made.

    I think the Supreme Court in Two Pesos recognized this distinction, when it spoke about protection under § 43(a) for “qualifying” unregistered marks.

    IMHO, it is a shortcoming of the article to fail to recognize the distinction between unregistered marks and unregistrable marks.

    – JAQT

    1. The post mentions both unregistered and unregistrable marks, and it’s quite clear from the history that most unfair competition cases were about the latter. Many of the early 43(a) cases extending the federal cause of action to unregistered marks involved designators not then registrable. Of course, the range of registrable subject matter has expanded significantly over time as well.

      1. Not sure what your point is Mark with the sleight of “Of course, the range of registrable subject matter has expanded significantly over time as well.“…

        Are you saying that legislation explicitly expanding trademark subject matter has successively passed, or are you merely commenting on the realization that the law – as written – covered more than what was originally thought (the latter only being the impression and not the actuality of expansion).

  5. 1) Won’t Canceling the Trademark just make the term MORE prevalent?

    2) Who is offended by this reference to a particular kind of potato?

    1. Les, those who think the courts will ignore the holding of the courts that a mark is disparaging are viewing a dark world through pink lenses and thinking everything is OK.

      I daresay, if I were a court anywhere in the land, I would refuse to enforce any trademark rights in a disparaging mark. I think the Redskins management knows this. This case is for the whole enchilada. If they lose, they will have to change their name.

  6. No comment on judging disparaging as of the time of registration instead of 50 years later?

  7. Mark, do you think the “disparagement” argument can be used in the state courts to undermine the common law trademark rights? I’d think it would be a difficult argument as a defense to infringement — hard for a party to argue that the mark is disparaging if they are using it themselves. But I wonder whether the hyper-creative plaintiff could assert some sort of other intangible injury or public policy claim to attack those rights via DJ.

    1. pikku, think if this way. If you want to infringe sell “name the mark” merchandise and receive a notice to cease and desist, one way you could respond is that your mark disparages native Americans. If you persist, we will seek cancellation.

      The holding in this case is going to create chaos; and I don’t believe for a second that the Redskins marks is still enforceable under any legal theory if the Supreme Court eventually upholds this ruling.

    2. You would not need to be a defendant in order to “conveniently” find a third party so traumatized to knock out the common law trademark rights – you could even use your own client base as the issue is not (directly) whether the holder’s mark alone is disparaging, but that the mark itself (with use by EITHER the holder OR you) is “disparaging.”

      You as a non-rights transgressor really don’t care that you are selling “disparaging” goods in the first place.

      1. I see what you mean. The infringer could well admit that its intent was to disparage. So certainly they could make the argument.

        The larger question, I think, is whether disparagement is a basis for invalidating common law rights in the mark. Ned seems to think so, but I’ve not seen any case law that says so. The registration statute was the basis of the cancellation action, and of course that only affects registration of the mark but not the underlying common law rights in the mark.

        So if disparagement is not relevant to common law rights, then the Prof’s piece about still being able to use 43(a) to assert infringement in federal court would still hold, and the team would also be able to assert infringement in state courts.

  8. The problem is that the PTO will no longer register any mark that describes any characteristic of native Americans, even when intended to praise. The principle will be extended to any ethic group that currently exists. There ARE broad implications here.

    All marks involving our native Americans are now subject to cancellation. That is a problem for their owners, at least in the uncertainty of their legal position. If this decision stands, we might need an act of Congress to put an end to the uncertainty, one way or another. Kill all the marks, or authorize them all.

    1. Or use a little common sense and realize that the purpose of a mascot is de facto not to disparage, as that is not how team mascots work.

      Has no one played organized sports in their life in this sector of law?

  9. So a fan making a hat with one of the logos in say Virginia that was banned would still be able to be sued by the team, but rather than the court assuming they have the right to use the trademark based on the federal registration they would have to prove they have used it and it has recognition in the area as would anyone with an unregistered trademark? Hmm…yeah that does make this ruling almost kind of meaningless doesn’t it. Good catch and something I should have seen. Thanks!

  10. Mark, thanks for the tutorial. For me anyway (someone heavily focused on patents), a lot of your information, particularly ongoing federal rights despite (now) lack of registration, was surprising.

    P.S. When do you reckon we can expect to hear about the suit of O’CALLAGHAN V. NOTRE DAME, seeking cancellation of registration of The Fighting Irish?

    :-)

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