On June 19, the Supreme Court ruled in Matal v. Tam that the Patent and Trademark Office (PTO) could no longer deny trademark registrations for “marks that disparage the members of a racial or ethnic group.” Before this decision, the PTO used the Lanham Act’s Disparagement Clause as its legal basis for prohibiting protection for offensive names. The Court held, however, that the Disparagement Clause violated the First Amendment, reasoning that “Speech may not be banned on the ground that it expresses ideas that offend.”
The Court’s decision has important ramifications for the NFL’s Washington Redskins and other sports teams with names and mascots that many consider to be offensive. The “Redskins” was considered racially offensive on several occasions by the PTO and was held to be ineligible for federal trademark registration. The Supreme Court’s decision allows for the Redskins name to receive the benefits of federal registration.
On May 22, the Supreme Court reversed a ruling from the Federal Circuit which allowed for patent infringement cases to be brought in any district where the defendant conducts business. Liquid sweetener brand TC Heartland was sued by Kraft Food Brands in Delaware, its state of incorporation, and unsuccessfully moved to transfer venue to the Southern District of Indiana, where it primarily conducts business.
The relevant patent venue statute, 18 U.S.C. § 1400(b), states that any patent infringement case may be brought in the district where the defendant resides or has a regular and established place of business. However, the 1957 Supreme Court decision in Fourco Glass Co. v. Transmirra Products Corp. provided a more narrow definition of “resides,” holding that “resides” refers only to the defendant’s state of incorporation. TC Heartland appealed to the Supreme Court to instead adopt the definition from the 1990 Federal Circuit case VE Holding Corp. v. Johnson Gas Appliance, which more broadly interpreted “resides” to include any venue in which a defendant conducts business.
In the 8-0 majority opinion written by Justice Thomas, the Court concluded that a domestic corporation “resides” only in its state of incorporation and thus a patent holder invoking § 1400(b) is limited to bring suit only in the defendant’s state of incorporation. The Court’s decision is a significant defeat for the many patent holders who hope to file in the Eastern District of Texas, which has become a popular forum for plaintiffs. As the majority of the defendants in these patent cases are not incorporated in the Eastern District of Texas, the VE Holding Corp. decision would likely cause many patent cases to transfer to Delaware, a common state of incorporation for domestic companies.
The majority opinion was written by Justice Thomas and joined by four other justices. Justice Thomas’ opinion held that an element of clothing could be protected if it “can be perceived as a two- or three-dimensional work of art separate from the useful article” and it would qualify for copyright “if it were imagined separately from the useful article into which it is incorporated.” The Court found that the designs represented on the surface of the cheerleading uniform could meet that standard in principle. (The Court demurred on the issue of whether the particular designs in question are actually sufficiently original to be copyrightable and limited its ruling to surface designs in general.)