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Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio.

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Speaker 1: Sam bankman Fried has taken a big gamble, taking a

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Speaker 1: stand in his own defense to try to convince stures

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Speaker 1: that he didn't orchestrate one of the biggest frauds of

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Speaker 1: all time. During direct examination, the thirty one year old

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Speaker 1: painted himself as a disengaged CEO who didn't code, didn't

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Speaker 1: oversee Alameda research, or do little more than skim the

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Speaker 1: firm's terms of service. Prosecutors say that he directed the

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Speaker 1: transfer of FTX customer money into Alameda for investments, political donations,

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Speaker 1: and expensive real estate before both companies filed for bankruptcy,

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Speaker 1: and on cross examination, the prosecutor confronted him with many

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Speaker 1: of his public and private statements that contrasted with his

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Speaker 1: story about his role in the collapse of FTX. Joining

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Speaker 1: me is Bloomberg Legal reporter Ava Benny Morrison, who covering

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Speaker 1: the trial. How did he seem today? During the direct

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Speaker 1: part of his testimony.

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Speaker 2: He seems to relaxed. He was using very simple explanations

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Speaker 2: to go through the final days at FTX, the relationship

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Speaker 2: between FTX and Alameda. He'd got a warning from the

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Speaker 2: judge earlier that he shouldn't use sort of vague generalities

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Speaker 2: to explain his version of events. It wouldn't go well

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Speaker 2: with the jury. So it seems like he took that

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Speaker 2: on board. So he seemed to pre relax when he

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Speaker 2: was giving answers. He was talking directly to the jury,

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Speaker 2: and he seemed pretty comfortable that demeanors seemed to change

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Speaker 2: a little bit under cross examination.

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Speaker 1: Did the prosecutor come at him right out of the gate?

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Speaker 2: She did, And she went through dozens of comments he

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Speaker 2: had made before and just after FTX collapsed, comments on Twitter,

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Speaker 2: comments during press interviews before Congress, even in internal flack

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Speaker 2: messages with other FTX executives, and she asked him, did

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Speaker 2: you say this? Did you say words to this effect?

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Speaker 2: And at some point contrasted it with other comments he

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Speaker 2: had made, so trying to show the Jewy that there

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Speaker 2: may beholds in the versions of events that he has

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Speaker 2: provided so far. He seemed to be a little bit

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Speaker 2: combative and a little bit vague. He repeated again and again,

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Speaker 2: I'm not sure. I can't recall or he would quibble

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Speaker 2: with the exact wording or the nuance of a comment

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Speaker 2: in a Financial Times article, or a New York Times

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Speaker 2: article or even a Bloomberg article. So it was painstaking

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Speaker 2: at times because she would ask him if he said something,

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Speaker 2: then he would dispute it, and then she would pull

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Speaker 2: up the article and then put it to him again,

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Speaker 2: and then he would say, oh, I don't recall I

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Speaker 2: don't necessarily agree with that context.

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Speaker 1: So what was the main thrust of her questions? What

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Speaker 1: areas was she trying to get into or disprove From.

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Speaker 2: The get go, she definitely used his words against him,

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Speaker 2: really seizing on public statements he had made about what

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Speaker 2: the problems were at FTX and his reaction to it.

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Speaker 2: She also tried to shape him as a good storyteller

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Speaker 2: who was tailoring his testimony after months of reviewing the

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Speaker 2: government's evidence against him, also suggesting that he was tailoring

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Speaker 2: his earlier media interviews to serve human to serve his

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Speaker 2: case under directed domination. He was asked why did you

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Speaker 2: go on this so called apology press tour after FTX collapsed,

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Speaker 2: and he said he felt like it was the right

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Speaker 2: thing to do, and he felt like he had to

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Speaker 2: explain himself to the world.

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Speaker 1: You call the shots as CEO, the prosecutor asked, I

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Speaker 1: call some of them. He said, you think of yourself

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Speaker 1: as a smart guy in many ways, not always. He said,

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Speaker 1: you thought highly of yourself, and he said I did.

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Speaker 1: You can see what it's like reading it. What was

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Speaker 1: that like in the courtroom? Did it seem very antagonistic?

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Speaker 2: Not really? Well, most of her coffee nomination was focused

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Speaker 2: on his public statements and pointing out any holes in

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Speaker 2: everything that he has said since FTX collapsed. She seemed

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Speaker 2: to thread through some characterizations of him, you know, asking

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Speaker 2: if he thought he was a good storyteller, if he

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Speaker 2: was a CEO who called all the shops, and if

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Speaker 2: he thought he was smart. He didn't seem to be

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Speaker 2: personally affronted by that or offended at all. He was

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Speaker 2: very dead tam when he was replying. In many ways,

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Speaker 2: yes he thought he was smart. In other ways he didn't. Yes,

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Speaker 2: he did think he was a good CEO. So it

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Speaker 2: was interesting to get those little characterizations into his testimony.

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Speaker 1: Where was she able to, you know, crack some holes

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Speaker 1: in his testimony?

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Speaker 2: So she scored a couple of concessions, namely that bankman

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Speaker 2: Freed made the decision on a number of very costly

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Speaker 2: venture investments, at Alameda. She was really trying to hone

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Speaker 2: in on how involved he was with Alameda day to

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Speaker 2: day previously, to distance himself from it publicly and in

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Speaker 2: this trial as well. He definitely did that during direct examination,

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Speaker 2: trying to put himself at armslan from other corporating witnesses,

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Speaker 2: including Mishad Sing and Gary Wong, who will remember changed

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Speaker 2: fdx's code to give Alameda special privileges on the exchange.

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Speaker 2: He also sought to downplay Alameda's ten million liability to FTX,

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Speaker 2: saying at the time, yes, it warranted further analysis, but

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Speaker 2: if it was more, he would have been in christis no,

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Speaker 2: but he wasn't at the time. So during cross examination,

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Speaker 2: Sasson really tried to challenge that arm's length characterization that

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Speaker 2: he had provided, and she did get a couple of

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Speaker 2: wins there.

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Speaker 1: How much did he blame Caroline Allison or one of

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Speaker 1: the other two main witnesses for what.

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Speaker 2: Happened, It was very subtle, to be honest. Today, he

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Speaker 2: mentioned a meeting that he had with Caroline in twenty

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Speaker 2: twenty two and he had discussed the need for Alim

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Speaker 2: to hedge to protect against market volatility. At the time.

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Speaker 2: He said that when he brought this up to her,

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Speaker 2: she didn't do it initially, and then he brought it

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Speaker 2: up again during this meeting and she started crying and

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Speaker 2: then offer to resign. So he didn't explicitly say this

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Speaker 2: was her fold and she's the one to blame, but

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Speaker 2: that was the tone of what he was saying as well.

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Speaker 2: With Mischad and Gary, he mentioned during his dress examination

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Speaker 2: that yes, he directed them to change the code, but

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Speaker 2: he was not a software developer or a coder, and

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Speaker 2: he wasn't fully all over exactly what they were doing,

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Speaker 2: and he trusted them to do the work.

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Speaker 1: There seemed to be a lot about backdating of documents.

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Speaker 1: Did he do a lot of backdating?

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Speaker 2: Allegedly they asked him about a document that he had

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Speaker 2: signed apparently a year after it came into effects, and

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Speaker 2: so Food asked him was this something that he did regularly,

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Speaker 2: which he denied. We've heard earlier in the trial that

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Speaker 2: these documents were backdated and quite frequently. This sort of

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Speaker 2: ties into bateman free defense that he was relying on

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Speaker 2: the presence and the advice and the guidance of lawyers

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Speaker 2: within FTX and outside of FTX as well on matters

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Speaker 2: like this.

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Speaker 1: I mean, would you say he held up well.

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Speaker 2: During cross bankman Fred didn't seem to lose his call

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Speaker 2: during cross examination, but the sheer volume of his public

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Speaker 2: statements was quite compelling just to hear Sassoon lay them

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Speaker 2: out one by one, asking him firstly, did you say this?

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Speaker 2: And then he would approval with it, or say he

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Speaker 2: didn't remember, or sort of give some vague answer, and

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Speaker 2: then she would pull it up. But the jury could

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Speaker 2: see it there clear as day in writing. I think

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Speaker 2: that was quite compelling.

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Speaker 1: So he's back on the stand tomorrow. Is the trial

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Speaker 1: coming to.

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Speaker 2: An endswer certainly getting to the pointy end of the trial.

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Speaker 2: We're expecting across the conomination to last for a couple

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Speaker 2: more hours on Tuesday, and then there will probably be

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Speaker 2: some redirect from Bateman Freed's attorneys, and then we may

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Speaker 2: hear from some rebuttal witnesses. So we're thinking that the

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Speaker 2: evidence might be all done dusted by Tuesday afternoon or

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Speaker 2: Wednesday morning.

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Speaker 1: And who were there rebuttal witnesses that the prosecution is

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Speaker 1: going to call.

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Speaker 2: We could hear from potentially two rebuttal witnesses. One is

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Speaker 2: a FBI agent and another was a investor in FDx

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Speaker 2: and what was.

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Speaker 1: The courtroom like today? Mean? Was it packed again?

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Speaker 2: The courtroom was absolutely packed. Reporters have been lining up

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Speaker 2: outside the courthouse since last night to try and get

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Speaker 2: one of twenty twenty three on press seats inside the courtroom.

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Speaker 2: If they couldn't get a seat there, they had to

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Speaker 2: go to a number of overflow rooms in other areas

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Speaker 2: at the courthouse, So there was a lot of competition

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Speaker 2: to get inside to get a front row seat to

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Speaker 2: his testimony. Obviously, this is a major point in the trial,

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Speaker 2: and the.

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Speaker 1: US Attorney was there for the Southern District.

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Speaker 2: Yes, the US Attorney Damian Williams was seated in the

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Speaker 2: front row with a few other senior officials from his office.

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Speaker 2: He watched mainly the cross examination of Bateman free this afternoon.

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Speaker 2: He's also popped in for other important parts in the trial,

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Speaker 2: the evidence of Caroline Ellison and also the opening statement.

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Speaker 1: So coming down to the wire, we'll check in with

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Speaker 1: you again tomorrow, Eva to hear about the conclusion of

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Speaker 1: Sam bagman Fried's testimony. That's Bloomberg Legal reporter Eva. Benny

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Speaker 1: Morrison coming up next on the Bloomberg Last Show, We'll

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Speaker 1: talk to former federal prosecutor Michael Weinstein about the tactics

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Speaker 1: and strategy at play during SBF's testimony. I'm June Grasso,

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Speaker 1: and you're listening to Bloomberg. It would seem and like

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Speaker 1: this is the time for a judge to give some

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Speaker 1: leeway to the defense when the defendants on the stand yes.

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Speaker 3: And I'm sure the judge did that, And I'm sure

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Speaker 3: the judge gave him great latitude because the judge does

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Speaker 3: not want to be seen as tipping the scales one

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Speaker 3: way or the other, or have it become an appeal

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Speaker 3: issue if he's too heavy handed in what he does

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Speaker 3: and the way he handles the witnesses and the evidence.

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Speaker 3: So I'm sure you know us seeing the judge react

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Speaker 3: in that way, which was just answer yes or no,

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Speaker 3: was not out of the blue. There was a build

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Speaker 3: up to that. There was questions that were asked. There

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Speaker 3: was probably a lot of language that the defendant used

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Speaker 3: which was not really clear and concise in order to

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Speaker 3: answer specifically the question. And so it got to the

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Speaker 3: point that the judge felt is he had to rain

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Speaker 3: him in a little bit and tell him, please answer

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Speaker 3: yes or no. Obviously the judge has to also be

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Speaker 3: mindful that, you know, Juri's look at the judge in

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Speaker 3: somewhat of a high light. And so if a judge

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Speaker 3: is being heavy handed with an attorney or heavy handed

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Speaker 3: with the defendant, or calls out a defendant and acts

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Speaker 3: as though he doesn't even believe him, that may influence

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Speaker 3: directly or indirectly the jury. So the judge has to

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Speaker 3: be mindful of that and be careful what he says,

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Speaker 3: how he says it, so that he always is impartial.

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Speaker 1: So what's the defense's goal to make him likable to

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Speaker 1: the jury or you know, to try to contradict some

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Speaker 1: of the testimony of the three main witnesses against him.

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Speaker 1: I mean, if you were the defense attorney, what would

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Speaker 1: you be going there to accomplish?

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Speaker 3: To try to provide a justification for the collapse of

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Speaker 3: the business and that it did not come back to

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Speaker 3: the defendant and that there are other people that he

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Speaker 3: entrusted to make decisions right or wrong which did not

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Speaker 3: end up positively for investors. I mean, look, the bottom

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Speaker 3: line here is that the defendant is trying to make

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Speaker 3: the evidence out as as possible for him. It's like

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Speaker 3: putting lips to k on a pig. He can only

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Speaker 3: make it look that good, but in the end it's

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Speaker 3: still bacon.

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Speaker 1: The defense also spent time asking him about the massive

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Speaker 1: spending of FTX on the marketing, the way he dressed

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Speaker 1: and his hair, which Ellison said was to create an

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Speaker 1: image for himself. How important are those little things what

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Speaker 1: I would call little things to the jury.

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Speaker 3: So I think in the long run, it's not going

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Speaker 3: to be material to the jury, but it adds little

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Speaker 3: elements to the government's case in that he was doing

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Speaker 3: it not for genuine purposes, that that was his personality,

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Speaker 3: but he was doing it to create an aura of himself,

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Speaker 3: and they're tried to show that he had some ulterior

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Speaker 3: motivation when he did these types of things, dressed in

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Speaker 3: a certain way, kept his hair in a certain way,

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Speaker 3: and it wasn't just you know, that was him, because look,

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Speaker 3: there are business people who are very eccentric and do

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Speaker 3: very well and that's just them, and they're genuine in

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Speaker 3: that regard. But I think that can come back to

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Speaker 3: hurt people, and hurt defend it when they look like

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Speaker 3: they're being a little bit conniving and they're being a

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Speaker 3: little calculating in the way they act, the way they speak,

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Speaker 3: the way they dress, And I think that's what the

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Speaker 3: government's trying to get across, is that he had some

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Speaker 3: type of ulterior motive to act that way and dress

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Speaker 3: that way, which reflects, you know, him being a little

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Speaker 3: shady or a little sinister in the way he ran

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Speaker 3: the business. So I don't think it's material insofar as

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Speaker 3: the charges, but I think it reflects the government's push

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Speaker 3: to have him seen as not just eccentric, but you know,

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Speaker 3: trying to push a narrative about himself in a certain

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Speaker 3: way as a mastermind of this crypto space.

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Speaker 1: And the defense also spent some time on his relationship

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Speaker 1: with Caroline Ellison. He said he wasn't able to give

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Speaker 1: her the time and attention she wanted in their personal relationship.

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Speaker 1: Why do you think there's time being spent on why

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Speaker 1: they broke up.

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Speaker 3: Every juror every person is thinking, is she testifying because

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Speaker 3: she was a jilted lover although they may not express it.

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Speaker 3: So when someone testifies against someone who they had a

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Speaker 3: relationship with, and they're giving testimony which is harmful, which

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Speaker 3: you know, really goes at the heart of and criticizing them.

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Speaker 3: If you're a human being and you're watching this you're going, Wow,

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Speaker 3: they must have had a really bad breakup. I wonder

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Speaker 3: if he wronged her and as a result of that,

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Speaker 3: whether she's now getting back at him by testifying, and

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Speaker 3: so that's why it came up.

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Speaker 1: I mean, how can the defense possibly attack all the

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Speaker 1: evidence against him.

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Speaker 3: I think what the defense is trying to do is

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Speaker 3: give the jury pause and have the jury get back

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Speaker 3: into the jury room and not immediately say he's dead

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Speaker 3: in the water. He's guilty. You know, the evidence was

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Speaker 3: so overwhelming. I think what the defense wants the jury

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Speaker 3: to do is get back in that jury room and

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Speaker 3: be thoughtful in their deliberations, which I'm sure they'll try

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Speaker 3: to be, but also maybe give him the benefit of

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Speaker 3: the doubt and and not just convict him, because you know,

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Speaker 3: you had fifteen people testify against him, and you had,

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Speaker 3: you know, ten thousand pages of materials about what he

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Speaker 3: did wrong. Maybe the defense is trying to have the

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Speaker 3: jury give him the benefit of the doubt so that

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Speaker 3: they pause in their deliberations and look at him as

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Speaker 3: a human being and not just as this sinister, you know,

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Speaker 3: crypto mogul who was trying to one up people and

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Speaker 3: just take money and abuse money, so on.

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Speaker 1: Cross, the defendant has given the prosecution a lot to

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Speaker 1: work with, not only his direct testimony, but the commentary

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Speaker 1: that he offered as FTX rose and crashed. So she

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Speaker 1: had a lot to work with.

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Speaker 3: Yes, a tremendous amount. And that's from his own mouth.

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Speaker 3: And that's both internal messages, external messages, text messages, interviews posts,

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Speaker 3: congressional testimony. I mean, I think it's actually hard for

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Speaker 3: the prosecutor to decide what to use because there is

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Speaker 3: so much. And I think that's the problem he's going

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Speaker 3: to run into, is that everything he testified to on

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Speaker 3: direct can be contrasted with things he said previously which

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Speaker 3: are different from that. And I think that's when the

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Speaker 3: jury is really going to look at him and say, Okay,

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Speaker 3: maybe he was okay on direct, but when he wasn't

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Speaker 3: under the hot lights and he was just free flowing

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Speaker 3: in his opinion about his business and about the money flow,

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Speaker 3: you know, during congressional testimony or during text messages of

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Speaker 3: during interviews six eight ten months ago, look what he said.

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Speaker 3: And so I think the jury's really gonna have a

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Speaker 3: problem with the testimony on direct and things he said

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Speaker 3: six a ten months ago, which is what the government

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Speaker 3: is alleging is where the truth lies.

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Speaker 1: I mean, it seems like though he almost had no

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Speaker 1: choice because there was so much evidence against him.

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Speaker 3: Yes, it appeared I agree with you. I think his

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Speaker 3: only chance at this point, after three insiders testified against him,

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Speaker 3: after all the testimony and direct evidence came in about

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Speaker 3: his actions, I think, was him to try and convince

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Speaker 3: the jury out of his own mouth that what they're

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Speaker 3: suggesting he did was not illegal or criminal. He made

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Speaker 3: bad decisions, but it wasn't unlawful. So I agree with you.

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Speaker 3: I think that you know, this is one of those

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Speaker 3: situations where if he didn't testify, it's almost a slam

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Speaker 3: dunk that he would have been convicted. But by putting

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Speaker 3: him up to testify, maybe there's a shot that you'll

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Speaker 3: get a juror too who believe his story.

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Speaker 1: How harmful is it to his case that the judge,

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Speaker 1: after listening to him testify for hours outside the presence

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Speaker 1: of the jury on Thursday, decided that he could not

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Speaker 1: use an advice of council defense.

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Speaker 3: I think that was a real problem that could potentially

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Speaker 3: be another nail in the coffin for him, because that

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Speaker 3: was one very significant thing that they were trying to

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Speaker 3: suggest and use, you know, on his behalf, and the judge,

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Speaker 3: you know, made a ruling, which is what the judges

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Speaker 3: have to do. But the consequence of that is that,

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Speaker 3: you know, the defense is fighting with one hand tied

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Speaker 3: behind their back because they can't point to lawyers who

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Speaker 3: are advising the company as being the ones that made

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Speaker 3: the mistake.

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Speaker 1: Do you think that's a reversible error on appeal.

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Speaker 3: It's certainly going to be something that goes up on appeal,

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Speaker 3: But the judge, you know, had a solid grounding to

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Speaker 3: make that decision. There was even obviously testimony as to

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Speaker 3: that outside the presence of the jury, So the judge

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Speaker 3: took every step possible to avoid this being in a

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Speaker 3: pellet issue. Although of course if there's a conviction, it

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Speaker 3: will probably go up on appeal, but I think that's

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Speaker 3: likely not to be a material issue.

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Speaker 1: It's a real uphill battle for bankman Freed.

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Speaker 3: I don't think it's going to be enough. June. I

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Speaker 3: think that, you know, the defense did the best they could,

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Speaker 3: but the evidence it was so overwhelming, and you had

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Speaker 3: really firsthand test money from the people in the room,

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Speaker 3: and even though he might have come off on direct

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Speaker 3: as best as possible. The cross is going to undermine

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Speaker 3: that and mitigate that, and the Cross is going to

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Speaker 3: be able to show how, you know, he was doing

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Speaker 3: all of this with full knowledge and had directed people

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Speaker 3: to do this and was in control, and you know,

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Speaker 3: there's no way for him to get around that. And

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Speaker 3: he's laid out so much, so many statements previously that

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Speaker 3: there's really nothing now he can say which can't be

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Speaker 3: contrasted with things that he's previously said. And that's a

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Speaker 3: real problem for the defense.

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Speaker 1: And he's the last defense witness. So the case we'll

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Speaker 1: probably go to the jury this week. Thanks for your insights, Michael.

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Speaker 1: That's former federal prosecutor Michael Weinstein of Cole's Shots. Coming

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Speaker 1: up next, Supreme Court arguments over the phrase trump too Small.

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Speaker 1: This is Bloomberg. On Wednesday, the Supreme Court will hear

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Speaker 1: arguments in a free speech showdown over a man trying

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Speaker 1: to get federal trademark protection for the phrase trump too Small.

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Speaker 1: Attorney Stephen Elstra says he wants to use the phrase

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Speaker 1: on T shirts, but he was refused a trademark by

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Speaker 1: the US Patent in Trademark Office because of a provision

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Speaker 1: in federal law barring registration of marks that identify a

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Speaker 1: living person without that person's consent. However, the US Court

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Speaker 1: of Appeals for the Federal Circuit said that provision violates

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Speaker 1: the First Amendment when the trademark includes criticism of a

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Speaker 1: government official or public figure. Now the justices will decide.

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Speaker 1: Joining me is far As sunder G, a partner at

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Speaker 1: Dorsey and Whitney. In twenty eighteen, the Patent and Trademark

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Speaker 1: Office rejected the application for Trump too small. Tell us why?

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Speaker 3: So?

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Speaker 4: The rejection was issued on two grounds. Actually, the first

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Speaker 4: is the one that the Supreme Court is going to

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Speaker 4: take up. So initially the Trademark Office rejected the trademark

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Speaker 4: application based on the consent of a living individual, and

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Speaker 4: that living individual is obviously Trump. There's actually another rejection

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Speaker 4: that is not being considered on the appeal, which will

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Speaker 4: still stand if the case gets remanded, which is false association.

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Speaker 1: So explain what that means. So when you.

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Speaker 4: Piper trademark and you include a person's name in it,

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Speaker 4: the Trademark Office will say, hey, we need you to

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Speaker 4: get the consent of that person, so we're not violating

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Speaker 4: their rights of privacy and their rights of publicity. And

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Speaker 4: so when you're applying for it in the name of

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Speaker 4: let's say, in the case of Bloomberg, Bloomberg Radio, Bloomberg News,

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Speaker 4: you'd go and get the consent of mister Bloomberg, and

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Speaker 4: you get that consent because Bloomberg is associated with the company,

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Speaker 4: and of course he knows that it's being done.

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Speaker 1: Is this based on a trademark law or is it

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Speaker 1: based on a court interpretation.

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Speaker 4: It's based on a statute. It is based on a

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Speaker 4: section of the Lanham Act. So it's a congressionally enacted statute.

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Speaker 1: Okay. So now the Federal Circuit, which handles these appellate

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Speaker 1: cases of trademarks, reversed. Why did the Federal Circuit reverse?

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Speaker 4: So the Federal Circuit reversed on First Amendment grounds. They

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Speaker 4: actually approached the case from the following angle. They asked.

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Speaker 4: They said, the question here is whether the government has

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Speaker 4: an interest in limiting speech on privacy or publicity grounds

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Speaker 4: if that speech involves criticism of government officials, speech that

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Speaker 4: is otherwise at the heart of the First Amendments. And interestingly,

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Speaker 4: there's actually an intermediate step that we didn't discuss initially.

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Speaker 4: What happens is that a trademark Examiner refuses an application,

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Speaker 4: and then there's an initial refusal, there's a final refusal,

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Speaker 4: and then the Trademark Trial and Appeal Board is the

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Speaker 4: one who takes it up first. And the trademark Examiner

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Speaker 4: and the Trademark Trial and Appeal Board, they actually don't

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Speaker 4: have the ability to say that something is unconstitutional. The

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Speaker 4: applicant did make all of the First Amendment arguments to

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Speaker 4: the trademark office, both to the examiner and to the

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Speaker 4: Trademark Trial and Appeal Board, but being an administrative agency,

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Speaker 4: they don't have the ability to say that something is unconstitutional.

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Speaker 4: That's obviously left to the courts. And so that's exactly

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Speaker 4: what the Federal Circuit did.

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Speaker 1: This appeal to the Supreme Court. Which side is the

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Speaker 1: Biden administration on.

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Speaker 4: So the government is the one who actually filed the appeal,

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Speaker 4: and the government believes that the ruling of the refusal

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Speaker 4: should stand.

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Speaker 1: Let's go into a little more detail about what Elster

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Speaker 1: is arguing to the Supreme Court.

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Speaker 4: So Elster is arguing that his First Amendment rights are

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Speaker 4: being abridged by this refusal of the trademark application. He's

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Speaker 4: making these arguments along with a couple of there are

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Speaker 4: a couple of third parties who filed a Vegas brief

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Speaker 4: here too, And in general, what they're arguing is that

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Speaker 4: a rejection of a trademark application ends up chilling speech

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Speaker 4: when the Trademark Office says that you cannot have a

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Speaker 4: trademark registration that disfavors speech, and so it chills it,

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Speaker 4: and so First Amendment grounds are important here. And Elster

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Speaker 4: actually made his case a little bit more narrow and

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Speaker 4: he is making an argument that this doesn't apply to

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Speaker 4: all cases everywhere that involve any trademark that includes any

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Speaker 4: person's name. He's really narrowing it and thinks it's almost

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Speaker 4: really just a one off case. When he submitted his

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Speaker 4: materials to the Supreme Court, he actually said, the question

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Speaker 4: presented is whether the Trademark Office violated the First Amendment

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Speaker 4: when it applied this refusal of registration to a political

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Speaker 4: slogan on a T shirt that criticized former President Trump

438
00:25:34,359 --> 00:25:38,359
Speaker 4: without his consent. So you can see that he's not

439
00:25:38,440 --> 00:25:42,879
Speaker 4: even arguing that it's for political commentary in general, but

440
00:25:43,000 --> 00:25:46,359
Speaker 4: he's really just arguing political slogan on a T shirt

441
00:25:46,480 --> 00:25:51,600
Speaker 4: that criticizes President Trump without his consent. The government is

442
00:25:51,640 --> 00:25:55,720
Speaker 4: taking a much broader view of it, and they're talking

443
00:25:56,720 --> 00:25:59,359
Speaker 4: about it in a way that makes more sense and

444
00:25:59,440 --> 00:26:02,639
Speaker 4: has more impact, as I think the Supreme Court will

445
00:26:02,680 --> 00:26:05,840
Speaker 4: address it in that way where it has farther reaching

446
00:26:05,920 --> 00:26:09,840
Speaker 4: concerns for various parties, not just people who want to

447
00:26:09,880 --> 00:26:12,960
Speaker 4: put a trademark slogan on a T shirt that criticizing

448
00:26:13,640 --> 00:26:17,240
Speaker 4: President Trump or any other political figure.

449
00:26:17,560 --> 00:26:21,119
Speaker 1: So go into a little more depth about the government's

450
00:26:21,160 --> 00:26:22,240
Speaker 1: broader argument.

451
00:26:23,240 --> 00:26:27,480
Speaker 4: So the government's broader argument, they want the Court to

452
00:26:27,560 --> 00:26:31,680
Speaker 4: look at this section, it's called Section ten fifty two

453
00:26:31,840 --> 00:26:35,520
Speaker 4: C and to see whether it violates the free speech

454
00:26:35,640 --> 00:26:39,639
Speaker 4: clause of the First Amendment when a trademark contains a

455
00:26:39,640 --> 00:26:42,960
Speaker 4: criticism of a government figure or a public figure. And

456
00:26:43,480 --> 00:26:48,439
Speaker 4: the interesting thing I think about the two sides of

457
00:26:48,480 --> 00:26:52,080
Speaker 4: this case, the government and the applicants, they're starting from

458
00:26:52,200 --> 00:26:57,159
Speaker 4: different premises. So, as I said before, the applicant his

459
00:26:57,320 --> 00:27:02,560
Speaker 4: position is that denying a trademark registration practically suppresses speech

460
00:27:03,040 --> 00:27:06,359
Speaker 4: because when the Trademark Office says you can't have a registration,

461
00:27:07,400 --> 00:27:11,360
Speaker 4: that's chilling the speech that's in the registration. The government

462
00:27:12,000 --> 00:27:15,639
Speaker 4: is coming at it from a completely opposite angle, where

463
00:27:15,800 --> 00:27:20,840
Speaker 4: they're arguing that denial of a trademark registration doesn't restrict speech.

464
00:27:21,560 --> 00:27:24,040
Speaker 4: It is a government benefit and it is not a

465
00:27:24,080 --> 00:27:30,040
Speaker 4: restriction of speech. Because you have a trademark registration or

466
00:27:30,080 --> 00:27:33,359
Speaker 4: you get a trademark registration denied. It doesn't mean you

467
00:27:33,400 --> 00:27:35,800
Speaker 4: can't put those words on a T shirt. It doesn't

468
00:27:35,840 --> 00:27:37,919
Speaker 4: mean you can't use those words in a slogan or

469
00:27:37,960 --> 00:27:40,359
Speaker 4: say them. And so they're coming at it from two

470
00:27:40,440 --> 00:27:44,920
Speaker 4: different angles. And I think that is the most important

471
00:27:45,160 --> 00:27:48,560
Speaker 4: thing and interesting thing that the Court hopefully will end

472
00:27:48,640 --> 00:27:53,520
Speaker 4: up deciding whether the denial of a trademark registration is

473
00:27:53,560 --> 00:27:55,199
Speaker 4: a restriction of speech or not.

474
00:27:56,160 --> 00:28:01,280
Speaker 1: So the Supreme Court in recent years has struck down

475
00:28:01,480 --> 00:28:04,840
Speaker 1: to trademark laws based on free speech concerns. Tell us

476
00:28:04,840 --> 00:28:05,840
Speaker 1: about those cases.

477
00:28:07,080 --> 00:28:11,800
Speaker 4: So the other two cases that are from recent history.

478
00:28:12,400 --> 00:28:16,919
Speaker 4: So in twenty seventeen and twenty nineteen, So twenty seventeen

479
00:28:17,400 --> 00:28:22,000
Speaker 4: the Supreme Court struck down the disparaging part of the

480
00:28:22,040 --> 00:28:25,080
Speaker 4: refusal on the Lanham Act, and in twenty nineteen the

481
00:28:25,119 --> 00:28:30,240
Speaker 4: follow on case dealt with immoral and scandalous marks. Now,

482
00:28:30,560 --> 00:28:33,400
Speaker 4: both of these, these parts of the statute that got

483
00:28:33,440 --> 00:28:38,520
Speaker 4: struck down as unconstitutional are different, the government argues, than

484
00:28:38,880 --> 00:28:44,360
Speaker 4: the current statutory provision that we're dealing with, because the disparaging, immoral,

485
00:28:44,400 --> 00:28:51,040
Speaker 4: and scandalous were all situations where the Trademark Office needed

486
00:28:51,200 --> 00:28:57,600
Speaker 4: to decide what their viewpoint was on these specific marks,

487
00:28:57,600 --> 00:29:00,320
Speaker 4: and so whether something is disparaging or not was a

488
00:29:00,400 --> 00:29:05,600
Speaker 4: judgment call that had to be made by the Trademark Office. Here,

489
00:29:06,040 --> 00:29:09,760
Speaker 4: the government is arguing that the statute itself is viewpoint

490
00:29:09,840 --> 00:29:13,280
Speaker 4: neutral because it's just a simple consent. You can say

491
00:29:13,800 --> 00:29:16,600
Speaker 4: Trump too small, or you can say Trump is great,

492
00:29:16,720 --> 00:29:20,880
Speaker 4: You're still going to need Trump's consent, And in that way,

493
00:29:20,960 --> 00:29:25,400
Speaker 4: the government is arguing that it's viewpoint neutral. Now on

494
00:29:25,440 --> 00:29:29,000
Speaker 4: the other side of it, the applicant is arguing that

495
00:29:29,160 --> 00:29:32,880
Speaker 4: it's not viewpoint neutral. It's speaker based. And some of

496
00:29:32,920 --> 00:29:36,680
Speaker 4: the amicus briefs filed actually talked about this, and there

497
00:29:36,720 --> 00:29:40,200
Speaker 4: was one in particular that was really interesting that was

498
00:29:40,760 --> 00:29:44,080
Speaker 4: filed by the Foundation of Individual Rights and Expressions in

499
00:29:44,120 --> 00:29:48,680
Speaker 4: the Manhattan Institute, and they they characterized this clause as

500
00:29:48,720 --> 00:29:54,040
Speaker 4: a happy talk clause. And so how they're characterizing it

501
00:29:54,080 --> 00:29:58,160
Speaker 4: that way is that, of course, any trademark application that

502
00:29:58,320 --> 00:30:01,920
Speaker 4: includes men to of a person's name especially a political

503
00:30:02,000 --> 00:30:05,480
Speaker 4: figure that is positive more likely to get a sign

504
00:30:05,520 --> 00:30:09,040
Speaker 4: off on that. If it's negative, the chances of you

505
00:30:09,080 --> 00:30:11,640
Speaker 4: getting a sign off from that person are really low.

506
00:30:12,000 --> 00:30:15,760
Speaker 4: And so it is not viewpoint neutral because it favors

507
00:30:16,280 --> 00:30:21,240
Speaker 4: the positive, happy talk speech as opposed to anything that

508
00:30:21,320 --> 00:30:24,680
Speaker 4: criticizes the person who's referenced in the trademark application.

509
00:30:25,080 --> 00:30:28,560
Speaker 1: So how do you think the Supreme Court will rule.

510
00:30:29,240 --> 00:30:31,800
Speaker 4: It's hard to say how they're going to rule. There's

511
00:30:31,920 --> 00:30:36,680
Speaker 4: actually really good arguments on both sides. One thing that

512
00:30:36,760 --> 00:30:39,400
Speaker 4: I haven't talked about with you that I did want

513
00:30:39,400 --> 00:30:42,720
Speaker 4: to mention is that the International Trademark Association stiles a

514
00:30:42,800 --> 00:30:49,600
Speaker 4: great brief in this case, and they actually argued that

515
00:30:49,800 --> 00:30:52,840
Speaker 4: they're in support of the government, and so that's support

516
00:30:52,880 --> 00:30:56,240
Speaker 4: of the refusal. They made this really good argument that

517
00:30:56,760 --> 00:31:01,239
Speaker 4: the refusal of a trademark application and is not a

518
00:31:01,280 --> 00:31:05,840
Speaker 4: denial of speech. It doesn't actually limit speech. It does

519
00:31:05,960 --> 00:31:10,840
Speaker 4: quite the opposite. They argue that the refusals under this

520
00:31:11,040 --> 00:31:15,000
Speaker 4: section two see as it's called, actually permit more speech,

521
00:31:15,200 --> 00:31:21,040
Speaker 4: not less. And so their argument goes, when the USPTO

522
00:31:21,240 --> 00:31:24,840
Speaker 4: grants somebody a trademark registration, so say they granted Elster

523
00:31:24,960 --> 00:31:28,480
Speaker 4: a trademark registration for Trump too small. Mister Elsterer then

524
00:31:28,560 --> 00:31:33,800
Speaker 4: now has the ability to stop other people from using

525
00:31:33,880 --> 00:31:39,800
Speaker 4: that phrase on T shirts and possibly in other ways,

526
00:31:40,600 --> 00:31:45,000
Speaker 4: and so that's actually limiting speech. And so it's an

527
00:31:45,680 --> 00:31:50,520
Speaker 4: It's an interesting argument, I think in terms of how

528
00:31:50,600 --> 00:31:52,840
Speaker 4: the Supreme Court is going to come out. Like I said,

529
00:31:52,880 --> 00:31:56,320
Speaker 4: I think there are really good arguments on both sides.

530
00:31:56,400 --> 00:32:01,320
Speaker 4: It's hard to tell, especially ahead of the arguments, really

531
00:32:01,320 --> 00:32:04,000
Speaker 4: what's going to happen. I think that a key thing

532
00:32:04,120 --> 00:32:09,560
Speaker 4: here is that hopefully the Supreme Court will realize that

533
00:32:11,080 --> 00:32:14,000
Speaker 4: parsing this in a small way is going to be

534
00:32:14,080 --> 00:32:17,440
Speaker 4: difficult to enforce. And what I mean by that is

535
00:32:18,520 --> 00:32:24,400
Speaker 4: it would be very difficult for the Trademark Office to

536
00:32:24,680 --> 00:32:29,920
Speaker 4: be the arbiter of does this particular trademark involve a

537
00:32:29,960 --> 00:32:35,000
Speaker 4: political criticism or a parody or political speech that we

538
00:32:35,080 --> 00:32:39,440
Speaker 4: want to protect with free speech, whereas some other version

539
00:32:39,480 --> 00:32:42,640
Speaker 4: of a trademark doesn't fall into that category and can

540
00:32:43,320 --> 00:32:47,040
Speaker 4: continue to be refused under this section to see because

541
00:32:47,080 --> 00:32:51,040
Speaker 4: for example, it's not about a political figure. I think

542
00:32:51,080 --> 00:32:54,120
Speaker 4: that's going to be a dangerous road to go down,

543
00:32:54,200 --> 00:32:57,239
Speaker 4: and I hope that the Suprene Court doesn't end up

544
00:32:57,320 --> 00:33:00,280
Speaker 4: giving that ability to the Trademark Office because it's going

545
00:33:00,320 --> 00:33:03,840
Speaker 4: to be very hard for them to make those determinations

546
00:33:03,880 --> 00:33:05,440
Speaker 4: and for them to enforce it.

547
00:33:05,880 --> 00:33:08,760
Speaker 1: We'll learn more during the oral arguments on Wednesday. Thanks

548
00:33:08,800 --> 00:33:12,360
Speaker 1: so much, Fara. That's Fara Sunderg of Dorsey and Whitney.

549
00:33:12,800 --> 00:33:15,120
Speaker 1: And that's it for this edition of The Bloomberg Law Show.

550
00:33:15,480 --> 00:33:17,800
Speaker 1: Remember you can always get the latest legal news on

551
00:33:17,880 --> 00:33:22,160
Speaker 1: our Bloomberg Law Podcast. You can find them on Apple Podcasts, Spotify,

552
00:33:22,320 --> 00:33:27,360
Speaker 1: and at www dot Bloomberg dot com slash podcast slash Law,

553
00:33:27,760 --> 00:33:30,360
Speaker 1: and remember to tune into The Bloomberg Law Show every

554
00:33:30,400 --> 00:33:34,320
Speaker 1: weeknight at ten pm Wall Street Time. I'm June Grosso

555
00:33:34,440 --> 00:33:36,040
Speaker 1: and you're listening to Bloomberg