August 28, 2017 | By Oliver Herzfeld, Chief Legal Officer, Beanstalk
The U.S. Supreme Court recently decided Matal v. Tam, holding unconstitutional an old provision of the U.S. Trademark Act that barred registration of “disparaging” trademarks. Many expect there to be a flood of applications to register marks containing raunchy or offensive marks. It was reported in The Forward that Steve Maynard, a former employee of the U.S. Patent and Trademark Office, decided to apply for registration of certain offensive symbols and terms – the Swastika and a variation of the N-word – as trademarks in an attempt to prevent their use by racist groups. Unfortunately for him, that attempt, while noble, betrays a basic misunderstanding of trademark law and the effect of owning trademark rights in a word or symbol.
Almost a hundred years ago, the Supreme Courtsummarized the meaning of a trademark right, a summary which still well encapsulates what a trademark is and what it is not. Almost every important legal principle in trademark law has its roots in this summary:
There is no such thing as property in a trademark except as a right appurtenant to an established business or trade in connection with which the mark is employed. The law of trademarks is but a part of the broader law of unfair competition; the right to a particular mark grows out of its use, not its mere adoption; its function is simply to designate the goods as the product of a particular trader and to protect his goodwill against the sale of another’s product as his, and it is not the subject of property except in connection with an existing business.
The best analogy to a trademark is a person’s name – a name is a shorthand way to refer to a person, and brings to mind the person’s characteristics and reputation. Similarly, a trademark is the identifier of the business that puts out the product or service and stands behind it. It is a quick and convenient way to answer the questions: Who put out this product (or service)? Who is responsible for its quality? Who will stand behind it if I need post-sale servicing? Just as a name is inseparable from the person, so too, a trademark is inseparable from an ongoing business and its reputation.
The following key principles of trademark law are all rooted in the seminal Supreme Court quote above:
● Trademark rights require use in a business. Registration does not grant trademark rights, use does. To obtain rights at all, one needs to use the mark in connection with some business. That means the individual would have to sell actual goods using the mark.
● Trademark rights are only in the field of use.If (as was reported) the individual were, for example, to start selling T-shirts with swastikas, that would only give him rights as to T-shirts, not every kind of product. To be sure, sometimes goods are considered “related,” for example other kinds of clothing, and the rights may extend to these related goods, too. But not to unrelated goods. DELTA is a registered mark for both an airline company and plumbing fixture company. APPLE is the name of a computer and electronic devices company, as well as a record label. These marks operate in different fields, and the same mark can co-exist in two different markets.
● Public perception is all-controlling. When the public sees the mark, does it think it is being used as a trademark – to symbolize the maker and source of the product? Or does it think it has some other function – decorative, or political? The overriding power of public perception in trademark law is something that companies have learned to their chagrin when their marks become generic. ASPIRIN was originally the trademark of a particular manufacturer of acetylsalicylic acid. The public, however, began using it as the generic term for that drug, and that stuck. That ended the company’s trademark rights because every competitor is entitled to use a generic term to refer to their product.
● Only confusing uses infringe. “Likelihood of confusion” is the cornerstone of any trademark infringement case. Trademark rights are not a monopoly on use of a word or symbol. Only when someone uses the mark in a way that creates confusion as to who produced or sold the product or service is there an infringement.
● Only commercial uses infringe. Any infringement requires a “use in commerce” of another’s trademark or something similar. Some courts require use of the symbol as an actual trademark; others hold it is sufficient to use the mark in some way in connection with an ongoing business. But non-commercial uses – political, opinion, artistic or commentary – do not infringe.
These principles would make any attempt to monopolize offensive symbols seem doomed. Even if the individual were to start selling products bearing the marks (e.g. T-shirts with swastikas on them), the question is, what does the public perceive that as, a brand name (i.e., symbol of the manufacturer of the shirt) or a political (or ideological) statement? Given the strong historical association of these symbols with particular ideologies, we think that most people would perceive it as a political/ideological statement. That means no trademark rights would be available because the public does not view the symbols as anyone’s trademark.
Even if Mr. Maynard were to obtain some trademark rights, that begs the question whether anyone could be charged as an infringer. Again, if someone sees a swastika on a T-shirt (sold by someone else), do they perceive that as a statement of who made the shirt, or a political statement? We suspect the latter. That means no likelihood of confusion and no infringement.
Additionally, the individual’s trademark rights would have no effect on use for other, unrelated goods, nor, more importantly, on non-commercial uses of the same symbols. A trademark is simply not a monopoly on a word or symbol; it is a much more limited right to use a symbol or word to represent a business’ reputation or good will. The notion that registering an offensive term as a trademark would prevent its use by offensive political groups is legally baseless.
A trademark right is not a monopoly on symbols and words – it is a right to use symbols and words to represent the commercial identity of a business. Despite their legal limitations, trademarks are often the most valuable asset a company has. A trademark, of course, is only as valuable as the company’s commercial reputation: whether the public perceives it as putting out quality products or services, and standing behind them when problems arise. If that reputation is positive, trademark rights can be a very valuable business tool. Once it is appreciated that trademark rights are not a monopoly, but a more limited right to use symbols and words to represent the commercial identity of a business, then businesses can maximize the benefits extracted from their trademarks.
Tal Benschar is a partner in the law firm of Springut Law, and practices all types of intellectual property law. He has represented such companies as Gucci, Cartier, Montblanc and Van Cleef and Arpels, both before the PTO and in federal courts.