U.S. appeals court says gov't cannot censor offensive trademarks

By Andrew Chung

NEW YORK, Dec 22 (Reuters) - A U.S. appeals court on Tuesday struck down part of a federal law that barred the registration of offensive trademarks, in a ruling that could affect an attempt by the NFL's Washington Redskins to overturn the cancellation of its trademarks.

In its decision vacating the U.S. Patent and Trademark Office's refusal to register the name of the Asian-American rock band The Slants, the U.S. Court of Appeals for the Federal Circuit said the ban violates the First Amendment of the U.S. Constitution. The Washington, D.C.-based court acknowledged its ruling could lead to more hateful trademarks in the future.

"We recognize that invalidating this provision may lead to the wider registration of marks that offend vulnerable communities," Circuit Judge Kimberly Moore said in the majority opinion. Twelve judges took part in hearing the case.

"Whatever our personal feelings about the mark at issue here, or other disparaging marks, the First Amendment forbids government regulators to deny registration because they find the speech likely to offend others," she wrote.

The Portland, Oregon-based band, which plays "Chinatown dance rock," appealed because the trademark agency had rejected its name for a trademark twice since 2010 on the grounds it disparages Asians.

Slants front man Simon Tam argued the band adopted the name as a way to reclaim the racial slur. In an interview Tuesday, he rejected any concern that the ruling would open the floodgates for racism or hate speech.

"People are going to be racist whether or not they have a trademark registration."

In April, a three-judge Federal Circuit panel upheld the agency's rejection, but the court then vacated that decision in order to tackle the prickly constitutional question.

Tuesday's ruling sends the case back to the trademark office for further proceedings.

Interest in the case is high because it raises similar issues to an ongoing appeal by the Redskins in a different court of a decision last year by the trademark office to cancel several of the American football team's trademarks on the grounds that they disparage Native Americans.

University of Notre Dame Law School professor Mark McKenna said Tuesday's ruling is very likely to be appealed to the U.S. Supreme Court, whose own ruling "will also control the fate of the Redskins marks."

The U.S. Department of Justice, which argued the case for the trademark office, said it was reviewing the decision.