But Judge Moore also wrote a separate opinion, in which she argued in favor of overturning the Federal Circuit precedent on which the panel relied. (The panel can’t overrule the precedent, but the entire Federal Circuit sitting en banc can, as can the Supreme Court.) An excerpt from her opinion:
It is time for this Court to revisit McGinley’s holding on the constitutionality of § 2(a) of the Lanham Act…. More than thirty years have passed since McGinley, and in that time both the McGinley decision and our reliance on it have been widely criticized. Furthermore, First Amendment jurisprudence on the “unconstitutional conditions” doctrine and the protection accorded to commercial speech has evolved significantly since the McGinley decision…. The constitutionality of § 2(a) is an important and timely issue that raises a number of constitutional questions. The time has come to give this issue the consideration it is due….The Supreme Court has repeatedly held that the government cannot deny access to a benefit because of the recipient’s exercise of constitutionally protected speech. Under the “unconstitutional conditions” doctrine,Perry v. Sindermann, 408 U.S. 593, 597 (1972). Under this doctrine, the Supreme Court held that a state college could not refuse to retain a professor because of his public criticism of that college’s policy, even though the professor had no right to reemployment and even though the government had not directly prohibited the professor from speaking. This is because “[t]o deny [a benefit] to claimants who engage in certain forms of speech is in effect to penalize them for such speech.” …Neither the court in McGinley nor any other court has analyzed § 2(a) under the “unconstitutional conditions” doctrine. This is error. Federal trademark registration confers valuable benefits, and under § 2(a), the government conditions those benefits on the applicants’ choice of a mark. Because the government denies benefits to applicants on the basis of their constitutionally protected speech, the “unconstitutional conditions” doctrine applies.However, we are faced with a fundamental predicate question: does the “unconstitutional conditions” doctrine apply with full force in the context of trademark registration, or is it tempered by virtue of Congress’ spending power? The benefits of trademark registration, while valuable, are not monetary. Unlike tangible property, a subsidy, or a tax exemption, bestowal of a trademark registration does not result in a direct loss of any property or money from the public fisc. Rather, a trademark redefines the nature of the markholder’s rights as against the rights of other citizens, depriving others of their rights to use the mark. Like the programs in Bullfrog and Texas Lottery Commission [two cases from the Ninth and Fifth Circuits -EV], the system of trademark registration is a regulatory regime, not a government subsidy program.Furthermore, the act of registering a trademark does not involve the federal treasury. In 1981, as noted by the McGinley court, trademark registration was “underwritten by public funds.” That is no longer true today. Since 1991, PTO operations have been funded entirely by registration fees, not the taxpayer….The purpose and nature of trademark registration support the conclusion that trademark registration is not a government-funded benefit. The Lanham Act derives from the Commerce Clause, not the Spending Clause, and its purpose is to regulate marks used in interstate commerce — not to subsidize the markholders. Furthermore, it is the markholder, and not the government, that must spend money (on advertising using its mark) to obtain the benefits of trademark registration. Registration of a trademark is not a federally funded financial benefit to the applicant.McGinley was written only one year after Central Hudson [an earlier precedent defining the protection given commercial speech-EV] and was decided against a background of law where the First Amendment had only recently begun to apply to commercial speech. Given the drastic changes since McGinley in constitutional jurisprudence and the PTO’s shift from a taxpayer-funded organization to a user-funded program, the McGinley court’s analysis of the constitutionality of § 2(a) of the Lanham Act no longer suffices….“Content-based regulations are presumptively invalid.” Viewpoint-based regulations are even more suspect, as they “raise the specter that the government may effectively drive certain ideas or viewpoints from the marketplace.” As a result, these regulations receive the strictest of scrutiny….Section 2(a) of the Lanham Act bars the registration of disparaging speech. Under this law, it is possible to register trademarks that refer to a certain group in a positive, or non-disparaging manner, but not trademarks that refer negatively to the same group. See R.A.V. v. City of St. Paul (finding that an ordinance forbidding the use of “fighting words” that insulted “on the basis of race, color, creed, religion or gender” was viewpoint discriminatory because certain fighting words could be used only by those arguing in favor of tolerance, not their opponents). Section 2(a) discriminates against disparaging or offensive viewpoints. Under this analysis, § 2(a) is presumptively invalid, and must satisfy strict scrutiny to be found constitutional.Although the Supreme Court has yet to decide whether strict scrutiny attaches to restrictions on commercial speech that are viewpoint discriminatory, there is reason to believe it is an issue worth considering. Sorrell, 131 S. Ct. at 2664. This uncertainty is likely of no consequence, however, because it seems likely that section 2(a) cannot survive even the intermediate scrutiny that any restriction on commercial speech receives under Central Hudson…. While the government may argue that it has an interest in discouraging the use of disparaging marks that may be offensive to persons, institutions, beliefs, or national symbols, this is not a legitimate government interest. The Supreme Court has “consistently held that the fact that protected speech may be offensive to some does not justify its suppression.” Bolger v. Youngs Drug Prods. Corp., 463 U.S. 60, 71 (1983). It is a “bedrock principle underlying the First Amendment . . . that the Government may not prohibit the expression of an idea simply because society finds the idea itself offensive or disagreeable.”Courts have attributed an additional government interest to § 2(a), reasoning that it acts as “a judgment by the Congress that such marks not occupy the time, services, and use of funds of the federal government.” See, e.g., McGinley, 660 F.2d at 486. This cannot warrant the government’s regulation of these marks. Trademark registration is entirely user-funded, not taxpayer-funded, so registering these marks costs the government little money. Furthermore, the government must expend significant funds defending its refusal decisions under the statute as it currently stands, so it is not clear that the statute succeeds in saving the government money. See McGinley, 660 F.2d at 487 (Rich, J., dissenting) (“More ‘public funds’ are being expended in the prosecution of this appeal than would ever result from the registration of the mark.”).Finally, labeling this sort of interest as substantial would create an end-run around the “unconstitutional conditions” doctrine, as virtually all government benefits involve the time, services, or funds of the federal government. Nearly every benefit could be justified under this ground, no matter how minimal….Trademarks — which are applied to private goods to identify the source of the goods for consumers — are private speech, not “government speech.” Although the government publishes registered trademarks in the Trademark Principal Register, it does so not to communicate a particular message or select a particular viewpoint; rather, it publishes trademarks to provide notice that a mark has been registered. Despite this, supporters of § 2(a) have claimed that the government has an interest in not being seen to give a stamp of approval, imprimatur, to scandalous and disparaging terms. For this interest to be substantial, the public must believe that trademarks carry the stamp of government approval…. [But t]he public is not likely to believe that a registered trademark conveys the imprimatur of the government. The trademark is printed on private property, in fact commercial goods, not on any government property. The purpose served by trademarks, to identify the source of the goods, is antithetical to the notion that the trademark is tied to the government….We have yet to be presented with any substantial government interests that would justify the PTO’s refusal to register disparaging marks. Without this, § 2(a) cannot satisfy the Central Hudson test. It is time to revisit the holding in McGinley in light of subsequent developments in the law and the trademark registration funding regime.
For a similar argument, see the ACLU brief in the Redskins appeal. I tend to agree that the exclusion of disparaging marks makes the program unconstitutionally viewpoint-based, even if it is seen as similar to a “limited public forum” government benefit program; it will be interesting to see whether Judge Moore’s opinion leads to a change in the legal rules, whether coming from the en banc Federal Circuit or the Supreme Court