The Lanham Trademark Act, at 15 U.S.C. 1121, prohibits states, and their political subdivisions, for requiring alteration of federally registered name, marks, and colors where included within the registration. The decisions in two recent federal cases concerning the Lanham Act have split on whether the Act preempts a local government's ability to foreclose the display of a trademark unless it conformed to a community's uniform aesthetic zoning standards.

In Blockbuster Video Inc. & Video Update v. City of Tempe (AZ), 141 F.3d 1295 (9th Cir. 1998), the 9th Circuit Court held that a city may not enforce zoning regulations if those regulations require the alteration of a registered mark. However, the Court also determined that a zoning ordinance may preclude the display of a mark, because the Court reasoned, "entirely precluding display of a mark for zoning purposes is permissible, [while] requiring alteration of a mark [as a precondition of obtaining a permit] is not." (@ p.1300)

In Lisa's Party City, Inc. v. Town of Henrietta (NY), 185 F.3d 12 (2nd Cir. 1999), the 2nd Circuit Court determined that Congress never intended that the Act should interfere with a community's police power to promote "aesthetics", if the only effect was to limit sign color typefaces and decorative elements on exterior signage. The Court in this case reasoned that the regulation had no effect on the trademark, but simply proscribed its display in carefully delimited instances-e.g., outside the premises.

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