The issue that the court will decide here is whether or not that selectivity can extend to preventing political advocacy based solely on the issue that the group is advocating for. Iowa State has essentially said "We don't agree with NORML's position on a particular political issue, and because of this, we are going to deny their use of our trademark - after first allowing it until political pressure caused us to change our mind." As a public university, a strong case could be made that this is improper.
Also, your point about "Allowing anyone to use it" in this context is 100% irrelevant as NORML requested permission from ISU and went through proper channels, so there isn't any issue there.
No...ISU has said that they do not let groups not use the trademarked materials, they never said they disagree with NORML's political or other viewpoints. Doesn't matter if NORML requested permission by going through proper channels. ISU said "no" and has every right to do that. They've done the same thing to dorm floors who wanted to use trademarked material in their floor signs or to others that wanted to use the material on shirts/banners. Their decision might also be based on answers NORML provided in the application process.
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