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Trump Conflicts Watch, 2: Where trademark law meets the foreign emoluments clause


Zhong Jiye, a co-founder of Shenzhen Trump Industrial Co., demonstrates the use of one of his firm's high-end Trump-branded toilets. (Mark Schiefelbein/Associated Press)

The Associated Press (along with Japan Times and the Voice of America's China Service) reports that President Trump, "after suffering rejection after rejection in China's courts," has finally gotten something "that he has been trying to get from China for a decade: trademark rights to his own name."

In 2006, Trump applied for a trademark for "Trump" in connection with a company providing construction services in China. China's Trademark Office rejected the application, on the grounds that someone else (Dong Wei) had filed a similar application about two weeks earlier, and had priority under China's first-come-first-served trademark rule.*

* There are, apparently, more than 200 other "Trump" marks on the Chinese trademark register—for everything from Trump toilets to Trump pacemakers, Trump condoms and even a "Trump International Hotel"—that have been claimed by persons other than Trump (or any of the Trump Organizations). This, as all good trademark nerds will recognize, is a concrete illustration of a common problem in "first-to-file" jurisdictions, where it can be relatively easy to "reserve" a mark by filing an application, without evidence that you are actually using the mark in question.

Trump appealed the adverse ruling to the Trademark Review and Adjudication Board, then to the Beijing Intermediate People's Court, and finally to the Beijing High People's Court, but his appeal was rejected at every turn. He also instituted a separate action to invalidate Dong's trademark, but the Trademark Office, and the Review Board, ruled against him on that one as well.

The latest of these adverse rulings was in May 2015, the month before Trump declared his candidacy for president.

Then, in April 2016, with Trump's presidential campaign in full swing, Trump's lawyers went back to the Review Board, and asked it to reconsider its earlier ruling and to invalidate Dong's trademark.* This time, it worked; On Sept. 6, the Trademark Office announced that it was voiding Dong's trademark. Trump's competing mark was then published in China's Trademark Gazette on Nov. 13—less than a week after he won the presidential election—and it became effective Tuesday.

* At around this time, Trump also submitted 49 new trademark applications for the "Trump" mark in China in connection with a wide variety of goods and services. Those applications are all still pending.

So there you have it. An agency of the Chinese government has granted our president a valuable benefit, in the form of a trademark for "Trump construction services."

Let's review the Constitution, Art. I Sec. 9 (the "foreign emoluments clause"):

No Person holding any Office of Profit or Trust under [the United States] shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State. [emphasis added]

We've been hearing a lot about the meaning of "emolument" over the past few weeks, and we will, I predict, be hearing a great deal more in the coming months. Much of the discussion to date has centered on whether a market exchange—the Kuwaiti government, say, renting out the Trump International Ballroom at the going rate for a function there, or China's state-owned bank renting out an entire floor of Trump Tower in New York City—constitutes an "emolument" under this clause.

Trump's spokespersons have said that it does not. I think—for the reasons set forth here in a paper by Norm Eisen, Richard Painter and Laurence Tribe—that it does, that the word, as understood in the 1790s, encompassed any "conferral of a benefit or advantage, whether through money, objects, titles, offices, or economically valuable waivers or relaxations of otherwise applicable requirements."

But put that question aside for the moment. This Chinese trademark matter raises a different issue regarding the meaning of "emolument." The Chinese government hasn't engaged in a like-for-like market exchange with Trump; rather, it has conferred a legal benefit that has some, non-trivial value, on him. Is receiving trademark rights a constitutionally-prohibited "emolument … of any kind whatever … from a foreign State"?

I think it is. I'm even willing to give Trump the benefit of the doubt here, and to assume that everything that has taken place here is on the up-and-up and strictly by the book, i.e., that there's been no quid pro quo, that this is simply a case where Trump received a benefit to which he (or anyone similarly situated) would be lawfully entitled under the relevant provisions of Chinese trademark law, and that it is simply a coincidence that, after a number of rejections, the application was approved after Trump was elected president of the United States.

Why do I think this is an "emolument"? The meaning of "emolument"—an "archaic term," as the Office of Legal Counsel noted in a lengthy analysis, back in 1982, and one that may well have already been somewhat antiquated in the 1790s—is, to be sure, not crystal clear. My Webster's Unabridged tells me that it comes from the Latin emolumentum, or "gain, profit, or advantage," and it defines it as "the profit arising from office or employment," with the "archaic" meaning of "advantage, or gain in general."

Nobody disputes that it covers gifts; one of the practices that the framers clearly were targeting was the practice of several foreign monarchs—the French King Louis XVI was a particular offender—of giving valuable gifts to officials of the newly-independent United States. (Both Franklin and Jefferson, for example. received diamond-encrusted snuff boxes from the king while they were serving in ambassadorial positions in Paris, and this had become something of a scandal).

But "emoluments" must cover more than just gifts; the Clause already prohibits receiving "present[s]," so by ordinary rules of textual interpretation, "emoluments" must include something additional.

One clue to what it means comes from asking: What were the Founders concerned about? What's the purpose of this clause (and its sister "domestic emoluments clause" in Art. I Sec. 7)? What's the harm—a harm serious enough to include in the new Constitution? Why shouldn't Jefferson be allowed to take a nice snuff box from the French king?

The answer, as Hamilton put it, is that the receipt of the gift would "weaken his fortitude [and] corrupt his integrity by appealing to his avarice," giving him a "pecuniary inducement to renounce or desert the independence intended for him by the Constitution." Men are avaricious; give them a nice snuff box and they'll be more likely to treat you with special favor down the road, perhaps out of a desire not to show ingratitude, perhaps out of a desire to obtain additional valuable gifts, perhaps both. In either case, dealing with the foreign sovereign will be compromised, no longer having the interests of the people of the United States as the sole motivating factor in all decisions and actions.

It's not bribery, exactly, that we're trying to prevent in this clause. We don't need a special constitutional provision prohibiting office-holders from taking bribes, because taking bribes is already illegal under the common law, and it is also one of the "high crimes and misdemeanors" for which office-holders can be impeached.

But it's a close cousin to bribery; accepting an emolument introduces an improper element—personal gain—into the decision-maker's calculus, less obviously and overtly than in cases of actual bribery, but no less serious for that.

And that is precisely the situation Trump is now in. He has 49 additional applications pending before the Chinese Trademark Office. He has been given a nice, valuable gift, and he could be forgiven for thinking that other similar gifts could follow (if he behaves himself well).

You might object by saying that it's not a "gift" at all. Not like those snuff boxes. He's just been given what he's legally entitled to—the trademark rights—under Chinese law.

And it's true, of course, that it is not a gift. He's legally entitled (as we're assuming—see above) to the trademark; they're not giving it to him as a present.

But why should that matter for purposes of the foreign emoluments clause? If France had had a law that gave all visiting Americans a snuff box (if they came at a certain time to the Hotel de Ville and submitted an application), would Jefferson have been able to keep his? Wouldn't it have been just as troublesome in those circumstances as an outright gift would have been?

With the Trump presidency in crisis mode already and at some risk of unraveling completely, violating the foreign emoluments clause is hardly the most serious charge that can be leveled against the president. If I were sketching an outline of a preliminary Bill of Particulars for an impeachment proceeding, it would certainly not top the list, which might include such more worrisome matters as discussing and displaying classified information in a public restaurant, or running a campaign that may well have been colluding with foreign governments to sabotage the election. But it would be on there somewhere—the violation of an express constitutional prohibition is a serious matter, and I just hope that it is not getting drowned out amidst all the other noise.