Can You Cash in By Claiming a Trademark on a Trending Nickname, Slang Word, or Phrase?
The Supreme Court just provided some guideance.
It’s as predictable as the sunrise. Some new trending term bubbles up – some new nickname, or slang word or phrase - and people rush to the U.S. Trademark Office to file trademark registration applications covering it.
For example, 65 people applied to register the term GOAT (“greatest of all time”), and 51 people sought to register the term YOLO (“you only live once”).
Is this a viable business? Can you register a trademark on a trending term? If so, would that give you a monopoly on commercializing it and enable you to stop others from doing so? On the flip side, what are the perils of using a trending term in business if you don’t have a trademark registration for it?
The Supreme Court Just Gave Some Guidance.
The Supreme Court just decided a case that provides a partial answer. The larger answer requires understanding what trademarks are and how they work.
Quick aside – technically, a trademark applies to goods, and a service mark applies to services. I’ll refer to them collectively as “marks.”
The recent case concerned a vulgar moment during the 2016 Republican presidential campaign. Florida Senator Marco Rubio accused Donald Trump of having small hands and implied that means a different, private part of his anatomy is also tiny. Of course, that set Trump off. That insult inspired entrepreneur Steve Elster to apply to federally register the mark TRUMP TOO SMALL for T-shirts.
The federal Trademark Office rejected Elster’s application based upon the “Names Clause” in the Lanham Act, which is the federal trademark law. The Names Clause prohibits federal registration of a mark that contains someone else’s name or likeness without that person’s permission. Elster argued this refusal violated his First Amendment right to free speech because his purported mark criticized Trump.
Elster initially won in a federal appellate court. The Supreme Court just reversed that decision unanimously.
All justices agreed that a restriction on mark registration that discriminates based on viewpoint violates the Free Speech Clause. They also agreed that the Names Clause is viewpoint neutral, because its ban doesn’t discriminate between applied-for marks that praise the named person and those that criticize that person.
They agreed they faced a different issue: despite being viewpoint neutral, the Names Clause isn’t content neutral because it prohibits registration of marks that contain certain subject matter, specifically the names of third parties used without consent. They faced this question: Does this specific content-based registration ban violate the Free Speech Clause?
The justices agreed that the Names Clause passes constitutional muster, but they disagreed as to why. Five justices held that the U.S. history and tradition of the regulation of names in trademarks made the provision constitutional, while the other four rejected that approach but found the Names Clause constitutional for various other reasons. All the justices also agreed that the case produced only a narrow holding and that other content-based but viewpoint-neutral restrictions on trademark registration would need independent scrutiny for constitutionality. Some justices also argued that the effect of the Names Clause on free speech is light because the lack of a federal mark registration doesn’t prevent you from making and selling things that contain the message at issue, such as TRUMP TOO SMALL.
Some Necessary Background on Trademark Law
What does this ruling mean for those looking to cash in on or just use in business trending terms?
To understand the answer, you must know a few things about trademark law.
Trademark law is really consumer protection law. A mark is a statement of who made the good bearing the mark or performed the service branded with it. The purpose is to enable consumers to know something about the quality of what they are buying or receiving based on their knowledge of the manufacturer's or service provider's reputation. For example, if you buy an expensive hiking garment bearing the PATAGONIA brand, you probably know of that company’s reputation for well-made goods. If you go to a CHICK-FIL-A restaurant, you likely expect courteous customer service and tasty food.
Next, you don’t have mark rights in, and can’t get a mark registration for, something that doesn’t function as a mark. For example, you can’t get a mark registration on something that’s just a commonplace message (e.g., DRIVE SAFELY), is merely informational (e.g., SAVE HERE ON GAS), or is the generic name for that thing or service (e.g., calling an automobile a CAR). Also, you cannot have mark rights for something that merely describes some feature, function, or characteristic of a good or service unless you can prove that the public recognizes that name as pointing uniquely to your good or service. In addition, you can’t get a mark registration on something that’s merely ornamental rather than source-indicating, such as a cute phrase displayed on the front of a T-shirt. In each of these cases, the word or phrase doesn’t tell you who made the product bearing it or provided the service associated with that phrase.
Another important thing to know is that you create mark rights by using that mark when selling goods or services. You can’t register something as a mark until you use it as a mark. Mark registration doesn’t create mark rights; it just strengthens them. For that reason, it’s wrong to say that you “trademark” something. “Trademark” isn’t a verb.
For example, if I open a hot dog stand in downtown Richmond and call it FARMER’S FAMOUS FRANKS, I might have “common-law” mark rights to that phrase even without mark registration. Those rights would be limited to the type of goods I sell (food) and the geographic marketplace in which I use the mark (downtown Richmond). I could strengthen those rights by obtaining a federal registration for that phrase. If I seek federal registration, I’ll have to prove that I’ve already achieved a first sale of the good or service using the mark.
Also, mark rights don’t give you a monopoly on all uses of the term. Mark rights cover only the goods and services you sell or give away using the mark. When you apply to federally register a mark, you must list the goods and services you are branding with it. Even if you have mark rights and perhaps a mark registration, you usually can’t stop someone from using an identical or similar mark for unrelated goods or services.
Also, you can’t stop someone else from using an identical or similar word or phrase in a way that’s not a mark. For example, even if Steve Elster succeeded in getting a mark registration for TRUMP TOO SMALL for a brand of T-shirts, he might not be able to stop other people from selling T-shirts that say TRUMP TOO SMALL on the front because consumers likely would perceive that phrase is just a political statement and not an indication of who made the T-shirt.
Previous Supreme Court Decisions Make the Elster Ruling Surprising
The decision in the Elster case was somewhat surprising because the Supreme Court struck down two other Lanham Act limitations on registering things as marks in recent years.
In 2017, the Court struck down the restriction on registering a term that is derogatory towards a person, group of people, or institution. Specifically, it reversed the refusal of federal registration for the phrase THE SLANTS as the name of a rock band composed of Asian men. The Court said this part of the statute was unconstitutional viewpoint discrimination in violation of the Free Speech Clause because it permits registering terms that praise a person, group, or institution but not one that disparages them.
Similarly, in 2019, the Supreme Court struck down a prohibition in the Lanham Act on registering marks containing dirty words. Here, someone applied to register as a mark the made-up word FUCT for use on T-shirts. The Court held that this restriction also was unconstitutional viewpoint discrimination since the law permitted registering nice words but not naughty ones.
Many thought that the TRUMP TOO SMALL case would result in a similar ruling, but as noted above, the Court upheld the Names Clause because it doesn’t discriminate based on viewpoint – you can’t register a mark referencing Trump whether the mark praises or vilifies him.
What Does This Mean for Business?
First, it’s a bad business idea to think you can make money by trying to claim a trending term as a mark. You probably can’t get a mark registration for a trending term if you use it only as an ornamental statement on things such as t-shirts, hats, and bumper stickers. Those aren’t trademark uses because they don’t identify the maker of those items. Even if you get a registration, many uses by others won’t be uses as marks but instead will be just public commentary, so you probably can’t stop them.
On the other hand, you do not need a mark registration to make and sell things like T-shirts, hats, buttons, and bumper stickers that contain trending terms.
But be careful. Anything you produce that uses someone else’s name, image, or likeness might make you liable for creating a false association with that person or for infringing upon that person’s sole right to commercialize his or her NIL. Also, if someone else has somehow managed to register that trending term as a mark, that person has a powerful legal weapon that could be used to threaten you with litigation. While you would have a good chance of defeating the threat in court, litigating might not be economically worthwhile.
What if you want to playfully use the trending term on your website or in a brochure or social media post promoting your business? Check to see if someone has federally registered the trending term. If so, get legal advice as to whether your use would be an infringement. Be careful never to use a trending term that contains someone else’s name without permission if someone might interpret the use as indicating you are endorsed by or associated with the referenced person. Also, if the trending term references a specific person, and you are using it to promote a product or service, that use might be illegal even if no one would think you are endorsed by or associated with that person.
So don’t be fooled when you hear someone “trademarked” a trending phrase. The venture will probably fail “bigly,” and the entrepreneur will likely end up financially “Sad!”
Written on June 20, 2024
by John B. Farmer
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