Resolving the Controversy Over Third-party Challenges to Allegedly Scandalous or Disparaging Trademarks
ANN ARBOR, Mich.---High-profile challenges to federal registrations of allegedly scandalous or disparaging trademarks---notably, the 1999 decision of the Trademark Trial and Appeal Board in Harjo v. Pro Football to cancel the registration of the Washington Redskins marks---have stirred controversy over third parties who initiate opposition or cancellation actions against the registration of such marks. (The Harjo decision was overturned by a federal court on Sept. 30, 2003, but the new decision went to the merits of the claim, not the scandalousness issue.)
Though the Lanham Act of 1946 opened the door for a public role in restricting federal trademark registration, vague statutory language and imprecise court rulings have created confusion over who has standing to sue to challenge a mark as being scandalous or disparaging, says Lynda J. Oswald, a professor of business law at the University of Michigan Business School.
In a recent article, Oswald urges the courts and the Board to take steps to formulate a functional test for standing in scandalous and disparaging marks cases. Standing refers to whether a party has a sufficient stake in a controversy---i.e., a "real interest" and "reasonable basis" for belief that his or her interest will be damaged---to obtain judicial resolution.
"Standing doctrine is the mechanism by which we can strike that delicate balance between preventing the federal registration of inappropriate marks and yet simultaneously ensuring that mere intermeddlers are prevented from pursuing inappropriate challenges," Oswald says. "Although existing case law does much to achieve this goal, further refinement is necessary."
Her article, "Challenging the Registration of Scandalous and Disparaging Marks Under the Lanham Act: Who Has Standing to Sue?" is forthcoming in the American Business Law Journal.
First, Oswald says, the courts and the Board must recognize and respect the distinction between marks that are alleged to be "scandalous" as opposed to "disparaging." Scandalous marks are generally defined as matter that is considered immoral, deceptive or scandalous by a "substantial composite" of the general public.
In contrast, disparaging marks are those that "may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt or disrepute." In short, scandalousness looks to the conscience of a significant portion of the public whereas disparagement has an identifiable object, often associated with a targeted group or individual.
The scandalous bar and the disparagement bar, as outlined in the Lanham Act, are separate, independent grounds for prohibiting the federal registration of a mark, according to Oswald. This distinction, she says, impacts not only the tests for determining whether federal registrations are proper or improper, but also the criteria for evaluating whether plaintiffs have standing to pursue their challenges.
"When the courts and the Board use the two terms imprecisely or interchangeably, they confuse the foundations of the statutory bars to registration and obscure the basis for determining whether the challenger or opposer has standing to pursue the action," Oswald says.
An incorrect interpretation on standing, for example, may result in a private determination of a challenge rather than a public debate on an issue (claimants, however, can continue to use marks that have been denied federal registration and claim the common-law rights that might attach to them; claimants simply cannot obtain the benefits that flow from federal registration, which puts them at some disadvantage).
To better substantiate scandalousness challenges, Oswald suggests the courts require petitioners to provide scientifically sound studies, indicating that a significant number (say, five percent) of the general population believe they would be harmed by the registration of a trademark. This requirement, she says, would enable legitimate scandalousness causes of action to proceed while blocking proceedings where the challenger or opposer is unable to garner sufficient support for his or her allegation.
Although the costs of obtaining this data could be substantial, placing such a hurdle in front of third-party petitioners would help to weed out claims by intermeddlers, she adds.
"Though it is impossible to ensure that challenges will always lead to consistent applications and predictable outcomes, the fluid nature of the statutory bars does ensure that federal-trademark law is able to accommodate broader societal concerns than just the commercial application of marks and the promotion of fair competition," Oswald says. "By formulating more precise standing rules, the courts and the Board can continue to strike the proper balance between these competing concerns."
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