Houska: Federal Circuit Ruling Could Harm Blackhorse Case; NFL No Longer Tax-Exempt

Tara Houska

In 2010, an Asian-American band calling themselves “The Slants” applied to the U.S. Patent and Trademark Office to trademark their name. Citing the “record of individuals and groups in the Asian community objecting to…use of the word ‘slant’,” the Trademark Board disqualified the trademark application as disparaging to people of Asian descent.

Trademark law is governed by the Lanham Act, which prevents the registration of marks deemed to be disparaging. Last week, a 3-judge panel on the U.S. Court of Appeals for the Federal Circuit ruled against the band and upheld the Trademark Board’s decision. The court based its decision on legal precedent, namely a 1981 ruling titled In re: McGinley that agreed with disqualification based on disparagement. 

But the court was not entirely pleased with the ruling – Judge Kimberly Moore wrote a separate 24-page opinion discussing whether the Lanham Act violates First Amendment rights.   At its conclusion, she strongly urged the court to revisit the issue, and argued in favor of overturning In re: McGinley. A 3-judge panel cannot overturn precedent, but a hearing before the entire court can. 

On Monday, the court granted Judge Moore’s wish. In a surprise order, the court announced it would abandon its earlier decision and rehear the case en banc, which means all 12 active judges will hear the case. The Asian-American band now has 43 days to file a brief alleging the Lanham Act is unconstitutional. 

So what does all of this have to do with the Washington football team?

Currently, Pro-Football, Inc. v. Blackhorse sits in the U.S. Federal Court for the Eastern District of Virginia. Dan Snyder’s lawyers have alleged that the Lanham Act unconstitutionally violates Freedom of Speech.

Although a ruling out of the Federal Circuit will not be binding on Pro-Football, it would certainly change the field of trademark law. The privilege of trademark law would now implicate fundamental rights. Marks formerly barred as disparaging, like “Squaw One” and “Redskins Hog Rinds” could be eligible for federal protection.

Further, the Department of Justice heavily cites In re: McGinley in its defense of the Lanham Act; if the case is overturned, the DOJ will be relying on bad law. All parties of Pro-Football, Inc. v. Blackhorse have filed their briefs on the Lanham Act and Freedom of Speech, the court’s decision remains pending.

So Long, Tax-Exempt Status

While the legal battles rage on, yesterday the NFL announced that it will drop its tax-exempt status. The organization has been under increasing scrutiny in past years, notably in connection with Congress introducing several bills to force a name change of the Washington football team.

NFL Commissioner Roger Goodell gave a minimal answer regarding the decision, saying only that it eliminated a “distraction”. U.S. Senator Maria Cantwell is one of those lawmakers who sponsored legislation to end the NFL’s tax-exempt status due to its refusal to take action on the Washington team name.

In response to Tuesday’s announcement, Cantwell noted, “Giving up a tax break on $9.5 billion in revenue doesn’t mean you can ignore the need for the NFL to abandon a racial slur as a team name.”

Tara Houska (Couchiching First Nation) is a tribal rights attorney in the Washington, D.C. office of Hobbs, Straus, Dean & Walker LLP and a founding member of NotYourMascots.org. Follow her on Twitter @zhaabowekwe.

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