Seattle Trademark Lawyer

No question, the PTO got it right.

The PTO’s administrative law branch, the U.S. Trademark Trial and Appeal Board, finally decided the REDSKINS trademark is too offensive to continue to justify the expanded rights that stem from federal registration. So it canceled the team’s six registrations on the ground the mark is “immoral or scandalous.”

The mark has been so offensive to Native Americans for so long, it’s a shame it took the government this long to strip the mark of the additional rights it had granted.

However, its doing so in no way means the team has to stop using the mark or that others can sell merchandise bearing the trademark without liability. Both of those things were widely reported, but they’re wrong. Unless and until a court makes the same determination the TTAB made, the Washington Redskins can continue to enforce their common law rights in their mark — rights that date back decades. Hopefully someday soon a court will decide as the TTAB did, but it is not obligated to do so. Unlike other federal agency decisions, U.S. courts do not defer to PTO decisions.

For that reason, the TTAB’s decision is mostly symbollic. Since we recognize common law trademark rights in the United States — rights that automatically arise through trademark use — cancellation of the team’s registrations doesn’t cancel the mark itself.

KIRO interviewed me about this issue on the radio. Text of the story is viewable here. Unlike other news coverage, KIRO didn’t overstate the decision’s limited implications.

During Washington’s last legislative session, Olympia considered taxing marijuana trademarks.

It’s a bad idea.

But first, a little background on the bill.

If passed, House Bill 1976, would have levied a “tax of three dollars and sixty cents per thousand dollars of assessed value upon the assessed valuation of all trademarks, trade names, brand names, patents, and copyrights that are related to marijuana.” Revenue collected from the tax would go into the state’s Life Sciences Discovery Fund and be earmarked for marijuana farming research.

Rep. Jeff Morris (D - Mt. Vernon) introduced the bill, which was referred to the House finance committee. No further action was taken on the bill before the legislative session ended.

The bill states it was intended “to enable Washington to capitalize on its unique position” of being the only other state besides Colorado to legalize recreational marijuana. Presumably, the idea is for the state to skim a little off the top from those competing in our legal marijuana industry.

Like I said, it’s a bad idea. Here’s four reasons why. (Believe me, there are more, but I’m trying to be brief.)

First, Washington already has a tax on trademarks. It’s called a filing fee. Every trademark owner wishing to register its mark with the state must pay the state $55 per mark — plus another $50 if the owner wants the state to expedite the processing of its application. The proposed new tax on trademarks would add to this existing fee structure, which is nothing more than a tax.

Second, doesn’t the state want to encourage businesses to protect their intellectual property, as well as to compete in our legal marijuana industry? Voters have already made the policy judgment of wanting to create that industry. One would think the state would seek to benefit from the economic boost the new industry should create, along with the attendant sales and other taxes the state should expect to collect as a result. Singling out for an additional tax those who seek to maximize the value of their intellectual property in a particular industry seems counterproductive and strange.

Third, the bill says nothing about how the tax would be calculated. Exactly who is supposed to assess the value of the trademarks, trade names, and other intellectual property that’s to be taxed? The bill doesn’t say. That’s a critical omission.

Finally — and for this blog, most importantly — the bill seems to misunderstand the purpose and value of trademarks. Trademarks indicate who makes the good or service sold with the brand. A trademark that’s never been used in an industry that does not yet exist has no value at all. A trademark becomes valuable only when a seller earns a good reputation. Therefore, the tax would target the companies with the best reputation — the responsible ones that have provided good, consistent quality, and who treat their customers right. Burdening the best corporate citizens with a tax aimed specifically at them would not seem to encourage the type of behavior this state should want.

Let’s hope the bill stays where it is — just one legislator’s bad idea — and never becomes law.