Fifth Circuit Strikes Down Total Ban on Use of Service Mark

Appellate Alert

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Bradley’s Appellate Practice Group recently won an important case before the United States Court of Appeals for the Fifth Circuit on behalf of Express Oil Change LLC. Michael Bentley and Simon Bailey from the firm’s Jackson, Mississippi, office handled the appeal.

On February 19, 2019, the Fifth Circuit struck down a total ban on the use of the trade name and registered service mark “Tire Engineers” to refer to a chain of automotive service stations. In doing so, the Fifth Circuit became the first federal appeals court to declare that the First Amendment prohibits a professional licensing board from banning the use of the term “engineer” in a trade name and federally registered service mark.

The Mississippi Board of Licensure for Professional Engineers & Surveyors had banned the mark, reasoning that the term “engineer” can only refer to a professional engineer licensed by the state or professional engineering services performed by such a person. Any other usage, in the board’s view, constitutes “misleading” speech from which consumers need protection. The Fifth Circuit held that the ban violated the First Amendment rights of the mark holder, Express Oil Change. This is a significant intellectual property and commercial speech precedent.

The district court, on summary judgment, had upheld the board’s ban, deeming the “Tire Engineers” mark misleading when compared to the State of Mississippi’s statutory definition of the term “engineer”—a technical definition that requires professional licensure. The district court relied on survey evidence to buttress this conclusion.

The Fifth Circuit reversed the district court’s judgment and rendered judgment for Express Oil Change , which was doing business under the trade name “Tire Engineers.” It rejected the district court’s approach of using the state’s definition of “engineer” as the measuring stick in the First Amendment context.  That Express Oil Change’s use of the “Tire Engineers” mark did “not meet the Board’s preferred definition does not make its use inherently misleading” commercial speech because the term “engineer” can “mean many things in different contexts.” 

Next, the Fifth Circuit noted the absence of any evidence that the registered mark was “actually misleading” for real consumers. Importantly, the court refused to accept survey evidence—the responses of mere hypothetical consumers—as a substitute for real people deceived by the mark. 

Finally, the court reasoned that the state had demonstrated, at most, that the “Tire Engineers” mark had the potential to mislead. But “potentially misleading” speech cannot be banned outright when “alternative, less-restrictive means, such as a disclaimer,” could accomplish the “stated goal of protecting the public.” The State of Mississippi had insisted on a total ban on the use of the service mark and refused any disclaimer as a solution. The Fifth Circuit observed that “other states with similar statutes have not challenged the use” of the mark, or have accepted the use of a disclaimer, making Mississippi an “outlier.”

This case sends an important message to other licensing boards across the country that their mandate to protect the public, while important, does not override First Amendment guarantees. The case also strongly embraces the commercial value and constitutional protection of registered marks as a form of commercial speech.