[Congressional Record Volume 144, Number 80 (Thursday, June 18, 1998)]
[Senate]
[Pages S6564-S6580]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. NICKLES:
  S. 2187. A bill to amend the Federal Power Act to ensure that no 
State may establish, maintain, or enforce on behalf of any electric 
utility an exclusive right to sell electric energy or otherwise unduly 
discriminate against any consumer who seeks to purchase electric energy 
in interstate commerce from any supplier; to the Committee on Energy 
and Natural Resources.


                    the electric consumer choice act

  Mr. NICKLES. Mr. President, I rise today to introduce the Electric 
Consumer Choice Act. For the last two years hearings and workshops have 
been held in both the House and Senate examining the issue of 
restructuring the electric industry. Many bills have been introduced on 
this issue by both Congressmen and Senators, some comprehensive and 
some dealing with more discreet issues such as repeal of the Public 
Utility Holding Company (PUHCA) or repeal of the Public Utility 
Regulatory Policies Act of 1978 (PURPA). The bill that I am introducing 
today cuts to the heart of the issue: do we or don't we support 
allowing consumers to choose their electric supplier? Do we or don't we 
support a national competitive market in electricity? I believe the 
answer to these questions is a resounding ``yes''! This Congress 
believes competition is good, that free markets work and that every 
American will benefit from a competitive electric industry.

[[Page S6565]]

  The Electric Consumer Choice Act is intended to begin the process of 
achieving a national, competitive electricity market. It will establish 
consumer choice of electric suppliers as a goal this Congress firmly 
supports. It achieves this in a simple, straight-forward method. First, 
it eliminates electric monopolies by prohibiting the granting of 
exclusive rights to sell to electric utilities. Second, it prohibits 
undue discrimination against consumers purchasing electricity in 
interstate commerce. Third, it provides for access to local 
distribution facilities and finally, it allows a state to impose 
reciprocity requirements on out-of-state utilities. The bill also makes 
it clear that nothing in this act expands the authority of the Federal 
Energy Regulatory Commission (FERC) or limits the authority of a state 
to continue to regulate retail sales and distribution of electric 
energy in a manner consistent with the Commerce Clause of the United 
States Constitution.
  The premise of this bill is that all attributes of today's electric 
energy market--generation, transmission, distribution and both 
wholesale and retail sales--are either in or affect interstate 
commerce. Therefore, any State regulation of these attributes that 
unduly discriminates against the interstate market for electric power 
violates the Commerce Clause unless such State action is protected by 
an act of Congress.
  The Supreme Court has interpreted Part II of the Federal Power Act 
(FPA) as protecting State regulation of generation, local distribution, 
intrastate transmission and retail sales that unduly discriminates 
against the interstate market for electric power. The Court has 
reasoned that Congress, in the FPA, determined that the federal 
government needed only to regulate wholesale sales and interstate 
transmission in order to adequately protect interstate commerce in 
electric energy. Thus, all other aspects of the electric energy market 
were reserved to the States and protected from challenges under the 
Commerce Clause. The Electric Consumer Choice Act amends the FPA to 
eliminate the protection provided for State regulation that 
establishes, maintains, or enforces an exclusive right to sell electric 
energy or that unduly discriminates against any consumer who seeks to 
purchase electric energy in interstate commerce.
  This bill provides consumers and electric energy suppliers with the 
means to achieve retail choice in all States by January 1, 2002. It 
does not impose a federal statutory mandate on the States. It does not 
preempt the States' traditional jurisdiction to regulate the aspects of 
the electric power market in the reserved realm--generation, local 
distribution, intrastate transmission, or retail sales--it merely 
limits the scope of what the States can do in that realm. It does not 
expand or extend FERC jurisdiction into the aspects of traditional 
State authority.
  As I stated earlier, this bill is intended to provide every consumer 
a choice when it comes to electricity suppliers. It is intended to 
establish that this Congress supports national competition when it 
comes to the generation of electricity. It is intended to be the 
beginning, not the end of the process. There are many other issues that 
need to be addressed at the federal level to facilitate a national 
market for electricity. Some of these issues include repeal of PURPA 
and PUHCA, taxation differences between various electric providers, 
clarification of jurisdiction over transmission, ensuring reliability, 
providing for inclusion of Power Marketing Administrations and the 
Tennessee Valley Authority in a national market, and other issues that 
can only be addressed at the Federal level. These issues need to be 
addressed and should be addressed. But while these issues are being 
debated we should ensure that progress towards customer choice 
proceeds.
  I am proud to say that my state of Oklahoma has been in the forefront 
of opening up it's electricity markets to competition. Seventeen other 
states have also moved to open their markets. It is my hope that the 
Electric Consumer Choice Act will facilitate this process nationally. 
To that end, I am introducing this bill today.
  Mr. President, I ask unanimous consent that the Electric Consumer 
Choice Act be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2187

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SEC. 1. SHORT TITLE.

       This Act may be cited as the ``Electric Consumer Choice 
     Act''.

     SEC. 2. FINDINGS.

       The Congress finds that--
       (a) the opportunity for all consumers to purchase electric 
     energy in interstate commerce from any supplier is essential 
     to a dynamic, fully integrated and competitive national 
     market for electric energy.
       (b) the establishment, maintenance or enforcement of 
     exclusive rights to sell electric energy and other State 
     action which unduly discriminates against any consumer who 
     seeks to purchase electric energy in interstate commerce from 
     any supplier constitute an unwarranted and unacceptable 
     discrimination against and burden on interstate commerce;
       (c) in today's technologically driven marketplace there is 
     no justification for the discrimination against and burden 
     imposed on interstate commerce by exclusive rights to sell 
     electric energy or other State action which unduly 
     discriminates against any consumer who seeks to purchase 
     electric energy in interstate commerce from any supplier; 
     and,
       (d) the electric energy transmission and local distribution 
     facilities of the nation's federally-owned, investor-owned 
     and self-regulated utilities are essential facilities for the 
     conduct of a competitive interstate retail market in electric 
     energy in which all consumers have the opportunity to 
     purchase electric energy in interstate commerce from any 
     supplier.

     SEC. 3. DECLARATION OF PURPOSE.

       The purpose of this Act is to ensure that nothing in the 
     Federal Power Act or any other federal law exempts or 
     protects from Article I, Section 8, Clause 3 of the 
     Constitution of the United States exclusive rights to sell 
     electric energy or any other State actions which unduly 
     discriminate against any consumer who seeks to purchase 
     electric energy in interstate commerce from any supplier.

     SEC. 4. SCOPE OF STATE AUTHORITY UNDER THE FEDERAL POWER ACT.

       Section 201 of the Federal Power Act (16 U.S.C. Sec. 824) 
     is amended by adding at the end the following:
       ``(h) Notwithstanding any other provision of this section, 
     nothing in this Part or any other federal law shall be 
     construed to authorize a State to--
       ``(1) establish, maintain, or enforce on behalf of any 
     electric utility an exclusive right to sell electric energy; 
     or,
       ``(2) otherwise unduly discriminate against any consumer 
     who seeks to purchase electric energy in interstate commerce 
     from any supplier.''.

     SEC. 5. ACCESS TO TRANSMISSION AND LOCAL DISTRIBUTION 
                   FACILITIES.

       No supplier of electric energy, who would otherwise have a 
     right of access to a transmission or local distribution 
     facility because such facility is an essential facility for 
     the conduct of interstate commerce in electric energy, shall 
     be denied access to such facility or precluded from engaging 
     in the retail sale of electric energy on the grounds that 
     such denial or preclusion is authorized or required by State 
     action establishing, maintaining, or enforcing an exclusive 
     right to sell, transmit, or locally distribute electric 
     energy.

     SEC. 6. STATE AUTHORITY TO IMPOSE RECIPROCITY REQUIREMENTS.

       Part II of the Federal Power Act (16 U.S.C. Sec. 824) is 
     amended by adding at the end the following:

     ``SEC. 215. STATE AUTHORITY TO IMPOSE RECIPROCITY 
                   REQUIREMENTS.

       ``A State or state commission may prohibit an electric 
     utility from selling electric energy to an ultimate consumer 
     in such State if such electric utility or any of its 
     affiliates owns or controls transmission or local 
     distribution facilities and is not itself providing unbundled 
     local distribution service in a State in which such electric 
     utility owns or operates a facility used for the generation 
     of electric energy.''.

     SEC. 7. SAVINGS CLAUSE.

       Nothing in this Act shall be construed to--
       (a) authorize the Federal Energy Regulatory Commission to 
     regulate retail sales or local distribution of electric 
     energy or otherwise expand the jurisdiction of the 
     Commission, or,
       (b) limit the authority of a State to regulate retail sales 
     and local distribution of electric energy in a manner 
     consistent with Article I, Section 8, Clause 3 of the 
     Constitution of the United States.

     SEC. 8. EFFECTIVE DATES.

       Section 5 and the amendment made by section 4 of this Act 
     take effect on January 1, 2002. The amendment made by section 
     6 of this Act takes effect on the date of enactment of this 
     Act.
                                 ______
                                 
      By Mr. MURKOWSKI (for himself, Mr. Inouye, Mr. Akaka, and Mr. 
        Stevens):
  S. 2188. A bill to amend section 203(b) of the National Housing Act 
relating to the calculation of downpayments; to the Committee on 
Banking, Housing, and Urban Affairs.

[[Page S6566]]

                 family home owners mortgage equity act

  Mr. MURKOWSKI. Mr. President, today I, and my fellow Senator from the 
State of Alaska, Senator Stevens, and my good friends and colleagues 
from the State of Hawaii, Senator Inouye and Senator Akaka, are 
introducing a very important measure--one that would unlock and open 
the door to many first-time home buyers.
  As we are all aware, it is often the downpayment that is the largest 
impediment to home ownership for first-time home buyers. The Federal 
Housing Administration (FHA) began a pilot program two years ago to 
help families overcome that impediment by lowering the downpayment 
necessary for an FHA home mortgage.
  Mr. President, I am pleased to say that the pilot program, which is 
located in Alaska and Hawaii, has reported great success.
  This pilot program is effective because it accomplishes two feats: 
(1) it lowers the FHA downpayment, making it more affordable; and (2) 
it makes the FHA downpayment calculation easier and more understandable 
for all parties to the transaction. The pilot program, commonly called 
the ``97 percent Loan-to-Value Program,'' requires--on average--only a 
minimum cash investment of three percent for home buyers.
  Our bill amends section 203(b) of the National Housing Act by 
changing the current multi-part formula to a single calculation 
formula. The simplified formula creates a lower, more affordable 
downpayment while simultaneously simplifying the current, cumbersome 
loan calculation formula. Our bill would extend this lower and 
simplified downpayment rate to perspective home buyers across the 
country.
  Mr. President, the pilot program is a win-win situation: affordable 
homes are made available to responsible buyers without any increase in 
mortgage default rates. Here's what mortgage lenders have reported:

       There is no indication of increase in risk. The loans we 
     have made to date have been to borrowers with excellent 
     credit records and stable employment, but not enough 
     disposable income to accumulate the cash necessary for a high 
     downpayment.--Richard E. Dolman, Manager, Seattle Mortgage, 
     Anchorage Branch.
       Is the 97% program working? The answer is a resounding YES! 
     . . . In this current day, it takes two incomes to meet basic 
     needs. To come up with a large downpayment is increasingly 
     difficult, especially for those just starting out. The 3% 
     program is a good start . . . I do no believe that lowering 
     the downpayment increased our risk. . .-- Nancy A. 
     Karriowski, Alaska Home Mortgage, Inc., Anchorage, Alaska.
       We have experienced nothing but positive benefits from the 
     FHA Pilot Program Loan Calculation in Alaska and Hawaii.--
     Roger Aldrich, President, City Mortgage, Corporation, 
     Anchorage, Alaska.
       We support the new loan calculation, as this has provided a 
     step toward the goal of homeownership for everyone . . . We 
     do not feel that there is a greater risk with the borrower 
     putting 3 percent down rather than using the calculation 
     under the standard program . . .--Lorna Gleason, Vice 
     President, National Bank of Alaska.

  Home buyers under the pilot program agree. Vicki Case of Palmer, 
Alaska is a single parent and a mortgage lender who earned too much to 
qualify for any of the low-income mortgage programs. She would have 
been unable to purchase her home had it not been for an FHA loan with 
the reduced down payment.
  In fact, but for the pilot program, approximately 70 percent of the 
FHA loan applications processed in Vicki Case's office would be 
rejected. simply because the buyer could not afford the downpayment. 
Mr. President, thanks to this pilot program, more and more deserving 
Alaskans are becoming home owners.
  Mr. President, our legislation has the support of the Mortgage 
Bankers Association of America, the National Association of Realtors, 
the National Association of Home Builders and the U.S. Department of 
Housing and Urban Development. They believe, as I do, that borrowers in 
all states should benefit from the simplification of the FHA 
downpayment calculation.
  I firmly believe that helping American families realize their dream 
of home ownership is vital to the Nation as a whole. Our bill, by 
creating a lower FHA downpayment, does much to assist families in 
owning their first home--thereby making the American dream of home 
ownership a reality.
  Mr. President, for details on how the new calculation works in 
comparison to the current calculation, I ask unanimous consent to 
submit into the Record a downpayment calculation comparison sheet. And 
I ask that my colleagues join Senator Stevens, Senator Inouye, Senator 
Akaka, and me in supporting this important legislation.
  There being no objection, the item was ordered to be printed in the 
Record, as follows:

  FHA Downpayment Comparison Sheet--the Current Mortgage Calculation 
                 Versus the Alaska/Hawaii Pilot Program

       A. The current FHA mortgage calculation requires numerous 
     steps. They are as follows:
       Step 1: Determine the acquisition cost by adding closing 
     costs to sales price [many times the closing costs must be 
     estimated; if they are and the estimate changes during 
     processing, then the calculations must be redone.]
       Step 2: Apply the loan formulation to acquisition cost: (a) 
     97% of the $25,000, (b) 95% of the amount between $25,001 and 
     $125,000, and (c) 90% of the amount in excess of $125,000.
       Step 3: Determine the maximum LTV by multiplying the 
     appraised value [minus closing costs] by 97.75%. If the 
     property is valued at $50,000 or less, then multiply by 
     98.75%.
       Step 4: To determine the maximum FHA mortgage amount, take 
     the lower amount from steps 2 and 3. The difference between 
     the mortgage amount and the acquisition cost is the 
     downpayment.
       The simplified calculation currently utilized for FHA 
     projects in Alaska and Hawaii is basic, common sense:
       The downpayment is based on a percent of home's sale price. 
     If a home is valued at $50,000 or less, the downpayment will 
     equal 98.75 percent of the value of the home, subtracted from 
     the total costs of the sale of the home (the value of the 
     home plus closing costs). For homes that are valued at 
     $50,000 to $125,000 the downpayment will equal 97.65 percent 
     of the value of the home subtracted from the total cost of 
     the sale of home. And for homes that are valued over 
     $125,000, the downpayment will be 97.15 percent of the home 
     subtracted from the total cost of the sale of the home.
       For example: If a home sells for $98,000 and its closing 
     costs are $2,000, the total acquisition cost of the home is 
     100,000. To calculate a downpayment, 97.65 percent of the 
     cost of the 98,000 home (which equals $85.697) is subtracted 
     from the total cost of the home--the sales price plus its 
     closing costs. Therefore, the downpayment would be $4,303 
     ($100,000 - 95,697).
                                 ______
                                 
      By Mr. WYDEN (for himself and Mr. Burns):
  S. 2189. A bill to amend the Federal Water Pollution Control Act to 
authorize the use of State revolving loan funds for construction of 
water conservation and quality improvements; to the Committee on 
Environment and Public Works.


             Water Conservation and Quality Incentives Act

 Mr. WYDEN. Mr. President, twenty-five years after enactment of 
the Clean Water Act, we still have not achieved the law's original goal 
that all our nation's lakes, rivers and streams would be safe for 
fishing and swimming.
  After 25 years, it's time for the next generation of strategies to 
solve our remaining water quality problems. We need to give States new 
tools to overcome the new water quality challenges they are now facing.
  The money that has been invested in controlling water pollution from 
factories and upgrading sewage treatment plants has gone a long way to 
controlling these urban pollution sources. In most cases, the remaining 
water quality problems are no longer caused by pollution spewing out of 
factory pipes. Instead, they are caused by runoff from a myriad of 
sources ranging from farm fields to city streets and parking lots.
  In my home State of Oregon, more than half of our streams don't fully 
meet water quality standards. And the largest problems are 
contamination from runoff and meeting the standards for water 
temperature.
  In many cases, conventional approaches will not solve these problems. 
But we can achieve water temperature standards and obtain other water 
quality benefits by enhancing stream flows and improving runoff 
controls.
  A major problem for many streams in Oregon and in many other areas of 
the Western United States is that water supplies are fully appropriated 
or over-appropriated. There is currently no extra water to spare for 
increased stream flows.
  We can't create a new water to fill the gap. But we can make more 
water available for this use through increased water conservation and 
more efficient use of existing water supplies.
  The key to achieving this would be to create incentives to reduce 
wasteful water use.

[[Page S6567]]

  In the Western United States, irrigated agriculture is the single 
largest user of water. Studies indicate that substantial quantities of 
water diverted for irrigation do not make it to the fields, with a 
significant portion lost to evaporation or leakage from irrigation 
canals.
  In Oregon and other States that recognize rights to conserved water 
for those who conserve it, irrigators and other water users could gain 
rights to use conserved water while also increasing the amount of water 
available for other uses by implementing conservation and efficiency 
measures to reduce water loss.
  The Federal government can play a role in helping meet our nation's 
changing water needs. In many Western States, water supply problems can 
be addressed by providing financial incentives to help water users 
implement cost effective water conservation and efficiency measures 
consistent with State water law.
  And, we can improve water quality throughout the nation by giving 
greater flexibility to States to use Clean Water Act funds to control 
polluted runoff, if that's where the money is needed most.
  Today, I am pleased to be joined by my colleague, Senator Burns, in 
introducing legislation to authorize the Clean Water State Revolving 
Fund program to provide loans to water users to fund conservation 
measures or runoff controls. States would be authorized, but not 
required, to use their SRF funds for these purposes. Participation by 
water users, farmers, ranchers and other eligible loan recipients would 
also be entirely voluntary.
  The conservation program would be structured to allow participating 
users to receive a share of the water saved through conservation or 
more efficient use, which they could use in accordance with State law. 
This type of approach would create a win/win situation with more water 
available for both the conservers and for instream flows. And, by using 
the SRF program, the Federal seed money would be repaid over time and 
gradually become available to fund conservation or other measures to 
solve water quality problems in other areas.
  My proposal has the support of the Farm Bureau, Oregon water users, 
the Environmental Defense Fund and the Oregon Water Trust.
  I urge my colleagues to support giving States greater flexibility to 
use their Clean Water funds for water conservation or runoff control 
when the State decides that is the best way to solve water quality 
problems and the water users voluntarily agree to participate.
 Mr. BURNS. Mr. President, I am pleased today to join with my 
colleague from Oregon, Senator Wyden, to introduce the Water 
Conservation and Quality Incentives Act, a bill to revise the state 
revolving fund in the Clean Water Act. This is language that Senator 
Wyden and I have collaborated on to bring some sense of additional 
conservation of water resources to the many irrigation districts in the 
nation.
  In the west, irrigators are by far the largest water users. These are 
folks who need the water because of the various crops that they have on 
the ground in the states out west. Unfortunately a large portion of the 
water that is used in irrigation is by nature displaced due to seepage 
within the canals and ditches in which the water flows. Although the 
water is not lost, since it seeps into the soil and assists in the 
overall soil moisture, it is not immediately available to the 
irrigator. However, it is water which could be more effectively used to 
provide additional water to the producer.
  In most irrigation districts, irrigators pay for water that is 
released to them, and any displacement of this water does not help that 
producer on the bottom line. At a time when prices are low and markets 
are questionable, it is important that we give tools to the producer to 
make sure that they have every opportunity to stay in business.
  A key underlying feature of the legislation, is that the water saved 
under the proposal in this bill will not only assist the producer in 
water and cost savings, but also will assist the future of water in the 
many rivers and streams in the west. At a time when the federal 
government seems to be taking steps to reduce state involvement in 
water rights this is extremely important.
  The proposal put forth in this bill, will authorize the Clean Water 
State Revolving Fund to provide loans to irrigation districts to 
construct pipelines and develop additional conservation measures. The 
states would have an option in this measure, they would not have to 
involve their funds in this matter, but would allow them to do so if 
they so elected. In addition, those districts who did so elect to 
involve themselves would be able to add to their supply of water the 
difference between what they were using prior to the plan and what they 
were able to save.
  This bill creates a win/win situation both for water users and for 
the multiple users of water in our states, particularly Oregon and 
Montana. We have an opportunity here to do something useful and 
worthwhile for the irrigators and the fishing, boating and those who 
use instream water. I would like to thank Senator Wyden for his work on 
this measure and I am pleased to work with him today on this issue of 
great importance.
                                 ______
                                 
      By Mr. KENNEDY (for himself, Mr. Domenici, Mr. Kerry, and Mr. 
        Bingaman):
  S. 2190. A bill to authorize qualified organizations to provide 
technical assistance and capacity building services to microenterprise 
development organizations and programs and to disadvantaged 
entrepreneurs using funds from the Community Development Financial 
Institutions Fund, and for other purposes; to the Committee on Banking, 
Housing, and Urban Affairs.


 THE PROGRAM FOR INVESTMENT IN MICRO-ENTREPRENEURS (PRIME) ACT OF 1998

  Mr. KENNEDY. Mr. President, it is a privilege to join Senator 
Domenici, Senator Kerry, and Senator Bingaman in introducing the ``The 
Program for Investment in Micro-Entrepreneurs'' Act--the PRIME Act. 
This legislation will encourage investment in micro-entrepreneurs by 
supporting the kinds of education and training needed to help build new 
small businesses.
  Today, the nation's entrepreneurial spirit is thriving, fueled by the 
extraordinary economic growth and prosperity we currently enjoy. But 
new entrepreneurs still face challenges that limit their ability to 
turn innovative ideas into successful businesses and create new jobs. 
They deserve assistance in learning the basics to take their ideas to 
the next level--starting their own firms.
  The ``PRIME'' Act is designed to help small entrepreneurs bridge the 
gap between worthwhile ideas and successful businesses. It will offer 
$105 million over the next five years to build business skills in key 
areas such as record-keeping, planning, management, marketing and 
computer technology.
  The Clinton Administration strongly supports these initiatives. The 
Treasury Department's Community Development Financial Institutions Fund 
has become a lead agency for micro-enterprise activities across the 
country, and First Lady Hillary Rodham Clinton is one of their 
strongest advocates.
  The PRIME Act will enhance all of these efforts. It will provide 
grants for micro-enterprise organizations across the country to assist 
disadvantaged and low-income entrepreneurs and provide them with 
essential training and education.
  It will encourage the development of new micro-enterprise 
organizations, and expand existing ones to reach more micro-
entrepreneurs.
  It will sponsor research on the most innovative and successful ways 
of encouraging these new businesses and enabling them to succeed.
  Under the Act, grants will be available each year to organizations 
that work with entrepreneurs. Local groups will leverage these funds 
with private and local resources to increase the impact of the federal 
seed money.
  Massachusetts and New Mexico are leaders in this effort. The business 
community and local banks have made a significant investment in 
creating loan capital for micro-entrepreneurs to start their 
businesses.
  By investing in micro-entrepreneurs, we will be harnessing the spirit 
and ideas of large numbers of Americans and creating new opportunities 
for self-sufficiency. We will be encouraging new small businesses that 
will strengthen the local economy in communities across the country. 
And that

[[Page S6568]]

result in turn will help to keep our national economy strong as well. I 
look forward to working closely with our colleagues in the Senate and 
the House to enact this important measure.
  I ask unanimous consent that the text of the legislation be printed 
in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2190

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. PROVISION OF TECHNICAL ASSISTANCE TO 
                   MICROENTERPRISES.

       Title I of the Riegle Community Development and Regulatory 
     Improvement Act of 1994 (12 U.S.C. 4701 et seq.) is amended 
     by adding at the end the following new subtitle:

    ``Subtitle C--Microenterprise Technical Assistance and Capacity 
                            Building Program

     ``SEC. 171. SHORT TITLE.

       ``This subtitle may be cited as the `Program for Investment 
     in Microentrepreneurs Act of 1998', also referred to as the 
     `PRIME Act'.

     ``SEC. 172. DEFINITIONS.

       ``For purposes of this subtitle--
       ``(1) the term `Administrator' has the same meaning as in 
     section 103;
       ``(2) the term `capacity building services' means services 
     provided to an organization that is, or is in the process of 
     becoming a microenterprise development organization or 
     program, for the purpose of enhancing its ability to provide 
     training and services to disadvantaged entrepreneurs;
       ``(3) the term `collaborative' means 2 or more nonprofit 
     entities that agree to act jointly as a qualified 
     organization under this subtitle;
       ``(4) the term `disadvantaged entrepreneur' means a 
     microentrepreneur that is--
       ``(A) a low-income person;
       ``(B) a very low-income person; or
       ``(C) an entrepreneur that lacks adequate access to capital 
     or other resources essential for business success, or is 
     economically disadvantaged, as determined by the 
     Administrator;
       ``(5) the term `Fund' has the same meaning as in section 
     103;
       ``(6) the term `Indian tribe' has the same meaning as in 
     section 103;
       ``(7) the term `intermediary' means a private, nonprofit 
     entity that seeks to serve microenterprise development 
     organizations and programs as authorized under section 175;
       ``(8) the term `low-income person' has the same meaning as 
     in section 103;
       ``(9) the term `microentrepreneur' means the owner or 
     developer of a microenterprise;
       ``(10) the term `microenterprise' means a sole 
     proprietorship, partnership, or corporation that--
       ``(A) has fewer than 5 employees; and
       ``(B) generally lacks access to conventional loans, equity, 
     or other banking services;
       ``(11) the term `microenterprise development organization 
     or program' means a nonprofit entity, or a program 
     administered by such an entity, including community 
     development corporations or other nonprofit development 
     organizations and social service organizations, that provides 
     services to disadvantaged entrepreneurs or prospective 
     entrepreneurs;
       ``(12) the term `training and technical assistance' means 
     services and support provided to disadvantaged entrepreneurs 
     or prospective entrepreneurs, such as assistance for the 
     purpose of enhancing business planning, marketing, 
     management, financial management skills, and assistance for 
     the purpose of accessing financial services; and
       ``(13) the term `very low-income person' means having an 
     income, adjusted for family size, of not more than 150 
     percent of the poverty line (as defined in section 673(2) of 
     the Community Services Block Grant Act (42 U.S.C. 9902(2), 
     including any revision required by that section).

     ``SEC. 173. ESTABLISHMENT OF PROGRAM.

       ``The Administrator shall establish a microenterprise 
     technical assistance and capacity building grant program to 
     provide assistance from the Fund in the form of grants to 
     qualified organizations in accordance with this subtitle.

     ``SEC. 174. USES OF ASSISTANCE.

       ``A qualified organization shall use grants made under this 
     subtitle--
       ``(1) to provide training and technical assistance to 
     disadvantaged entrepreneurs;
       ``(2) to provide training and capacity building services to 
     microenterprise development organizations and programs and 
     groups of such organizations to assist such organizations and 
     programs in developing microenterprise training and services;
       ``(3) to aid in researching and developing the best 
     practices in the field of microenterprise and technical 
     assistance programs for disadvantaged entrepreneurs; and
       ``(4) for such other activities as the Administrator 
     determines are consistent with the purposes of this subtitle.

     ``SEC. 175. QUALIFIED ORGANIZATIONS.

       ``For purposes of eligibility for assistance under this 
     subtitle, a qualified organization shall be--
       ``(1) a nonprofit microenterprise development organization 
     or program (or a group or collaborative thereof) that has a 
     demonstrated record of delivering microenterprise services to 
     disadvantaged entrepreneurs;
       ``(2) an intermediary;
       ``(3) a microenterprise development organization or program 
     that is accountable to a local community, working in 
     conjunction with a State or local government or Indian tribe; 
     or
       ``(4) an Indian tribe acting on its own, if the Indian 
     tribe can certify that no private organization or program 
     referred to in this paragraph exists within its jurisdiction.

     ``SEC. 176. ALLOCATION OF ASSISTANCE; SUBGRANTS.

       ``(a) Allocation of Assistance.--
       ``(1) In general.--The Administrator shall allocate 
     assistance from the Fund under this subtitle to ensure that--
       ``(A) activities described in section 174(1) are funded 
     using not less than 75 percent of amounts made available for 
     such assistance; and
       ``(B) activities described in section 174(2) are funded 
     using not less than 15 percent of amounts made available for 
     such assistance.
       ``(2) Limit on individual assistance.--No single 
     organization or entity may receive more than 10 percent of 
     the total funds appropriated under this subtitle in a single 
     fiscal year.
       ``(b) Targeted Assistance.--The Administrator shall ensure 
     that not less than 50 percent of the grants made under this 
     subtitle are used to benefit very low-income persons, 
     including those residing on Indian reservations.
       ``(c) Subgrants Authorized.--
       ``(1) In general.--A qualified organization receiving 
     assistance under this subtitle may provide grants using that 
     assistance to qualified small and emerging microenterprise 
     organizations and programs, subject to such rules and 
     regulations as the Administrator determines to be 
     appropriate.
       ``(2) Limit on administrative expenses.--Not more than 7.5 
     percent of assistance received by a qualified organization 
     under this subtitle may be used for administrative expenses 
     in connection with the making of subgrants under paragraph 
     (1).
       ``(d) Diversity.--In making grants under this subtitle, the 
     Administrator shall ensure that grant recipients include both 
     large and small microenterprise organizations, serving urban, 
     rural, and Indian tribal communities and racially and 
     ethnically diverse populations.

     ``SEC. 177. MATCHING REQUIREMENTS.

       ``(a) In General.--Financial assistance under this subtitle 
     shall be matched with funds from sources other than the 
     Federal Government on the basis of not less than 50 percent 
     of each dollar provided by the Fund.
       ``(b) Sources of Matching Funds.--Fees, grants, gifts, 
     funds from loan sources, and in-kind resources of a grant 
     recipient from public or private sources may be used to 
     comply with the matching requirement in subsection (a).
       ``(c) Exception.--
       ``(1) In general.--In the case of an applicant for 
     assistance under this subtitle with severe constraints on 
     available sources of matching funds, the Administrator may 
     reduce or eliminate the matching requirements of subsection 
     (a).
       ``(2) Limitation.--Not more than 10 percent of the total 
     funds made available from the Fund in any fiscal year to 
     carry out this subtitle may be excepted from the matching 
     requirements of subsection (a), as authorized by paragraph 
     (1) of this subsection.

     ``SEC. 178. APPLICATIONS FOR ASSISTANCE.

       ``An application for assistance under this subtitle shall 
     be submitted in such form and in accordance with such 
     procedures as the Fund shall establish.

     ``SEC. 179. RECORDKEEPING.

       ``The requirements of section 115 shall apply to a 
     qualified organization receiving assistance from the Fund 
     under this subtitle as if it were a community development 
     financial institution receiving assistance from the Fund 
     under subtitle A.

     ``SEC. 180. AUTHORIZATION.

       ``In addition to funds otherwise authorized to be 
     appropriated to the Fund to carry out this title, there are 
     authorized to be appropriated to the Fund to carry out this 
     subtitle--
       ``(1) $15,000,000 for fiscal year 1999;
       ``(2) $25,000,000 for fiscal year 2000;
       ``(3) $30,000,000 for fiscal year 2001; and
       ``(4) $35,000,000 for fiscal year 2002.

     ``SEC. 181. IMPLEMENTATION.

       ``The Administrator shall, by regulation, establish such 
     requirements as may be necessary to carry out this 
     subtitle.''.

     SEC. 2. ADMINISTRATIVE EXPENSES.

       Section 121(a)(2)(A) of the Riegle Community Development 
     and Regulatory Improvement Act of 1994 (12 U.S.C. 
     4718(a)(2)(A)) is amended--
       (1) by striking ``$5,550,000'' and inserting 
     ``$6,100,000''; and
       (2) in the first sentence, by inserting before the period 
     ``, including costs and expenses associated with carrying out 
     subtitle C''.

     SEC. 3. CONFORMING AMENDMENTS.

       Section 104(d) of the Riegle Community Development and 
     Regulatory Improvement Act of 1994 (12 U.S.C. 4703(d)) is 
     amended--
       (1) in paragraph (2)--
       (A) by striking ``15'' and inserting ``17'';
       (B) in subparagraph (G)--
       (i) by striking ``9'' and inserting ``11'';
       (ii) by redesignating clauses (iv) and (v) as clauses (v) 
     and (vi), respectively; and
       (iii) by inserting after clause (iii) the following:

[[Page S6569]]

       ``(iv) 2 individuals who have expertise in microenterprises 
     and microenterprise development;''; and
       (2) in paragraph (4), in the first sentence, by inserting 
     before the period ``and subtitle C''.
  Mr. DOMENICI. Mr. President, it is a pleasure to join with Senator 
Kennedy in support of the PRIME Act, ``Program for Investment in Micro-
Entrepreneurs Act of 1998.''
  Starting one's own business is a part of the American dream. There 
are thousands of creative and hardworking men and women who believe 
they have a solid idea for building a new business. The realities of 
beginning a business are that it takes more than luck, hard labor, and 
dedication to make it work. There are often overwhelming obstacles for 
would-be small and micro entrepreneurs, due in part of the complexity 
of local, state and federal laws, the necessity of understanding the 
intricacies of marketing, feasibility studies, and bookkeeping 
practices, as well as finding a source for capital. Entrepreneurs 
usually need basic assistance to bring their idea to a viable business 
enterprise. They need training, technical assistance, and mentoring.
  Under this bill grants will be available through the Community 
Development Financial Institutions Fund, matched at least 50 percent in 
non-federal funds, to help experienced non-profit organizations provide 
the assistance these new businesses so urgently require. Fifty percent 
of these grants will be awarded to applicants serving low-income 
clients, and those serving equally both urban and rural areas. From so 
many case studies and histories of successful businesses, we know that 
enthusiastic entrepreneurs can sustain and build their businesses when 
these organizations are available to provide critical training and 
professional, technical assistance.
  I have had the pleasure of visiting countless new micro-level 
businesses in my State of New Mexico, a great majority of whom received 
assistance from the very competent WEEST Corp organization, now located 
in five different sites throughout our State. This organization not 
only provides key technical assistance and training and access to low 
interest revolving loans, but it also provides mentoring and 
information about sound business practices to ensure their creative 
ideas become viable business entities.
  Micro and small businesses are an absolutely critical component of 
our national economic growth. The Small Business Administration, for 
example, lends excellent support to entrepreneurs. At the small time, 
the PRIME Act will establish a complimentary program by enabling 
intermediary organizations to serve a more micro-level entrepreneurs 
who need specialized and hands-on assistance. This is a good investment 
for the future, and will be returned many fold by the creation of 
businesses that can contribute to the growth of the family, local, and 
national economies.
  There are many success stories we can all point to about the business 
that began with an idea and eventually grew into a major global 
corporation. It all began with the basic tenacity of a businessman, 
woman, or family. We have no way of knowing how many more such success 
stories will be told in the future. It is guaranteed, however, that 
there are thousands of such extraordinary entrepreneurs willing to 
provide the ideas and hard labor to make it happen, and with a little 
help, they will be successful.
  Again, I am pleased to join Senator Kennedy in cosponsoring the PRIME 
Act. Whatever we can do to assist who want to be self-reliant, 
successful entrepreneurs, with a piece of the American dream, is an 
investment well worth taking.
  Mr. BINGAMAN. Mr. President, I rise today to offer my very 
enthusiastic support for the micro-enterprise bill being introduced by 
Senator Kennedy. Programs of this type provide technical support and 
funding to thousands of potentially productive Americans who are 
struggling to make ends meet and are looking for a way out of their 
current precarious economic situation.
  I have visited microenterprise businesses in my state and know they 
work. These individuals possess energy, ingenuity, desire, and vision 
but currently lack access to three important ingredients that will 
allow them to be successful in their entrepreneurial efforts: business 
management training, knowledge of the market, and affordable capital. 
This bill will provide all three ingredients, and will do so in areas 
of the country that need economic assistance.
  Microenterprise is not charity and it does not foster dependence. 
Instead, it encourages individuals to use their specific strengths and 
creativity to support themselves and their community. It is a market-
based approach to economic empowerment and self-reliance that has 
proven to be successful both here and overseas, and it deserves to be 
expanded. It offers an alternative to poverty and provides the means 
by which individuals and communities can be saved from cycles of 
isolation, violence, and despair.

  In New Mexico, I have seen the tangible results of microenterprise 
programs. One organization we have interacted with, ACCION, provided 
funds for Michael and Jamie Ford to begin a very successful business 
selling flies for fly-fishing in their community and over the Internet. 
They were recently named the Small Business Administration's Welfare-
to-Work Entrepreneur of the Year in New Mexico. Another organization, 
the New Mexico Business Resource Center, recommended that funds be 
provided through New Mexico Community Development Loan Fund to Kevin 
Bellinger, who created a unique art and dance program for disadvantaged 
youths called Harambe. Here, low-income individuals are taught to 
interact in non-violent and constructive ways and give back to the 
community in which they live. Mr. Bellinger was recently selected by 
New Mexico Newspaper as one of the top ten people in Santa Fe making a 
real difference in their community.
  In Taos, the Taos County Economic Development Corporation providing 
funding for the Taos Food Center, a commercial kitchen that acts as an 
incubator for small-scale food producers and farmers in the region.
  Previously, these individuals could not afford to rent space, buy 
commercial and office equipment, or market their products. With the 
assistance of microenterprise funds, the Taos Food Center provides the 
space and the equipment and provides on-site technical and business 
assistance. This allows individuals to rent the facility by the hour, 
and convert their crops into marketable products.
  Other microenterprise organizations in New Mexico--the Rio Grande 
Community Development Corporation, La Jicarita Enterprise Community, 
WESST Corp., and so on--have had similarly stellar results. They play 
essential roles in their communities, and they should be commended for 
their efforts.
  In April, I organized a roundtable discussion of all the 
microenterprise organizations operating in New Mexico. This was the 
first time representatives from these organizations met in the same 
location to discuss their respective philosophies, objectives, and 
strategies concerning microenterprise, and it was very beneficial to 
all of us. The dialogue with the organizations that began that day has 
continued to the present, and has only reinforced by commitment to 
these programs. The simple fact is: the work, and they work well.
  The bill we are introducing today would accomplish several important 
tasks:
  First, it will provide training, technical assistance, and start-up 
funds to potential entrepreneurs who are currently disadvantaged but 
eager to change their economic condition;
  Second, it will provide training and capacity building services to 
microenterprise development organizations, an activity that will lead 
directly to the expansion of microenterprise funding and an increased 
number of clients being served;
  Third, it will identify best practices in microenterprise technical 
and lending services, an activity that will further enhance efforts to 
provide funds to individuals in an efficient and effective manner;
  Finally, it will ensure that microenterprise lending occurs in all 
areas that require assistance--meaning both rural and urban 
communities.
  Let me conclude by thanking my colleague from Massachusetts and his 
staff for their work on this bill. I have been pleased to work with 
Senator Kennedy on the development of the

[[Page S6570]]

components contained within the bill, in particular those related to 
rural communities and Indian reservations. I believe that this bill 
will have a profound effect on the ability of low-income individuals to 
establish businesses, develop new products and services, and create new 
jobs. All of these activities can only help individuals and communities 
in the United States in a positive way.
                                 ______
                                 
      By Mr. LEAHY:
  S. 2191. A bill to amend the Trademark Act of 1946 to provide for the 
registration and protection of trademarks used in commerce, in order to 
carry out provisions of certain international conventions, and for 
other purposes; to the Committee on the Judiciary.


                   madrid protocol implementation act

  Mr. LEAHY. Mr. President, I am pleased to introduce legislation that 
will implement the Protocol Relating to the Madrid Agreement Concerning 
the International Registration of Marks (Protocol). This bill is part 
of my ongoing effort to refine American intellectual property law to 
ensure that it serves to advance and protect American interests and 
does not serve to encumber small companies seeking to expand into 
international markets. Specifically, this legislation will conform 
American trademark application procedures to the terms of the Protocol 
in anticipation of the U.S.'s eventual ratification of the treaty, 
thereby helping American businesses to create a ``one stop'' 
international trademark registration process. This bill is one of many 
measures I have introduced and supported over the past few years to 
ensure that American trademark holders receive strong protection in 
today's world of changing technology and complex international markets.

  In addition to this legislation, I have introduced the Trademark Law 
Treaty Implementing and Registration Simplification Act, which will 
bring U.S. trademark law into conformance with the Trademark Law 
Treaty. The Trademark Law Treaty will simplify trademark registration 
requirements around the world by establishing a list of maximum 
requirements which Treaty member countries can impose on trademark 
applicants. All American businesses, and particularly small American 
businesses, will benefit as a result.
  Earlier this year, I introduced legislation authorizing the National 
Research Council of the National Academy of Sciences to conduct a 
comprehensive study of the effects of adding new generic Top Level 
Domains on trademark and other intellectual property rights.
  Moreover, I supported the Federal Trademark Dilution Act of 1995, 
which was passed last Congress, to provide intellectual property rights 
holders with the power to enjoin another person's commercial use of 
famous marks that would cause dilution of the mark's distinctive 
quality.
  Together, these measures represent major steps in our efforts to 
refine American trademark law to ensure that it serves to promote 
American interests.
  Currently, in order for American companies to protect their 
trademarks abroad, they must register their trademarks in each and 
every country in which protection is sought. Registering in multiple 
countries is a time-consuming, complicated and expensive process--a 
process which places a disproportionate burden on smaller American 
companies seeking international trademark protection. This legislation 
will ease the registration burden by enabling American businesses to 
obtain trademark protection in all signatory countries with a single 
trademark application filed with the Patent and Trademark Office.
  Since 1891, the Madrid Agreement Concerning the International 
Registration of Marks (Agreement) has provided an international 
trademark registration system. However, prior to adoption of the 
Protocol, the U.S. declined to join the Agreement because it contained 
terms deemed inimical to American intellectual property interests. In 
1989, the terms of the Agreement were modified by the Protocol, which 
corrected the objectionable terms of the Agreement and made American 
participation a possibility. For example, under the Protocol, 
applications for international trademark extension can be completed in 
English; formerly, applications were required to be completed in 
French. It should be noted that the Protocol will not require 
substantive changes to American trademark law, hence the implementing 
legislation I introduce today is identical to the legislation that 
passed the House on May 5, 1998 and only would make those technical 
changes to American law necessary to bring the U.S. into conformity 
with the Protocol.
  To date, the Administration has resisted accession to the treaty 
because of voting rights disputes with the European Union, which has 
sought to retain an additional vote for itself as an intergovernmental 
entity, in addition to the votes of its member states. I support the 
Administration's efforts to negotiate a treaty based upon the equitable 
and democratic principle of one-state, one-vote. However, in 
anticipation of the eventual resolution of this dispute, the Senate has 
the opportunity to act now to make the technical changes to American 
trademark law so that once this voting dispute is satisfactorily 
resolved and the U.S. accedes to the Protocol, ``one-stop'' 
international trademark registration can become an immediate reality 
for all American trademark applicants.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2191

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Madrid Protocol 
     Implementation Act''.

     SEC. 2. PROVISIONS TO IMPLEMENT THE PROTOCOL RELATING TO THE 
                   MADRID AGREEMENT CONCERNING THE INTERNATIONAL 
                   REGISTRATION OF MARKS.

       The Act entitled ``An Act to provide for the registration 
     and protection of trade-marks used in commerce, to carry out 
     the provisions of certain international conventions, and for 
     other purposes'', approved July 5, 1946, as amended (15 
     U.S.C. 1051 and following) (commonly referred to as the 
     ``Trademark Act of 1946'') is amended by adding after section 
     51 the following new title:

                    ``TITLE XII--THE MADRID PROTOCOL

     ``SEC. 60. DEFINITIONS.

       ``For purposes of this title:
       ``(1) Madrid protocol.--The term `Madrid Protocol' means 
     the Protocol Relating to the Madrid Agreement Concerning the 
     International Registration of Marks, adopted at Madrid, 
     Spain, on June 27, 1989.
       ``(2) Basic application.--The term `basic application' 
     means the application for the registration of a mark that has 
     been filed with an Office of a Contracting Party and that 
     constitutes the basis for an application for the 
     international registration of that mark.
       ``(3) Basic registration.--The term `basic registration' 
     means the registration of a mark that has been granted by an 
     Office of a Contracting Party and that constitutes the basis 
     for an application for the international registration of that 
     mark.
       ``(4) Contracting party.--The term `Contracting Party' 
     means any country or inter-governmental organization that is 
     a party to the Madrid Protocol.
       ``(5) Date of recordal.--The term `date of recordal' means 
     the date on which a request for extension of protection that 
     is filed after an international registration is granted is 
     recorded on the International Register.
       ``(6) Declaration of bona fide intention to use the mark in 
     commerce.--The term `declaration of bona fide intention to 
     use the mark in commerce' means a declaration that is signed 
     by the applicant for, or holder of, an international 
     registration who is seeking extension of protection of a mark 
     to the United States and that contains a statement that--
       ``(A) the applicant or holder has a bona fide intention to 
     use the mark in commerce,
       ``(B) the person making the declaration believes himself or 
     herself, or the firm, corporation, or association in whose 
     behalf he or she makes the declaration, to be entitled to use 
     the mark in commerce, and
       ``(C) no other person, firm, corporation, or association, 
     to the best of his or her knowledge and belief, has the right 
     to use such mark in commerce either in the identical form of 
     the mark or in such near resemblance to the mark as to be 
     likely, when used on or in connection with the goods of such 
     other person, firm, corporation, or association, to cause 
     confusion, or to cause mistake, or to deceive.
       ``(7) Extension of protection.--The term `extension of 
     protection' means the protection resulting from an 
     international registration that extends to a Contracting 
     Party at the request of the holder of the international 
     registration, in accordance with the Madrid Protocol.
       ``(8) Holder of an international registration.--A `holder' 
     of an international registration is the natural or juristic 
     person

[[Page S6571]]

     in whose name the international registration is recorded on 
     the International Register.
       ``(9) International application.--The term `international 
     application' means an application for international 
     registration that is filed under the Madrid Protocol.
       ``(10) International bureau.--The term `International 
     Bureau' means the International Bureau of the World 
     Intellectual Property Organization.
       ``(11) International register.--The term `International 
     Register' means the official collection of such data 
     concerning international registrations maintained by the 
     International Bureau that the Madrid Protocol or its 
     implementing regulations require or permit to be recorded, 
     regardless of the medium which contains such data.
       ``(12) International registration.--The term `international 
     registration' means the registration of a mark granted under 
     the Madrid Protocol.
       ``(13) International registration date.--The term 
     `international registration date' means the date assigned to 
     the international registration by the International Bureau.
       ``(14) Notification of refusal.--The term `notification of 
     refusal' means the notice sent by an Office of a Contracting 
     Party to the International Bureau declaring that an extension 
     of protection cannot be granted.
       ``(15) Office of a contracting party.--The term `Office of 
     a Contracting Party' means--
       ``(A) the office, or governmental entity, of a Contracting 
     Party that is responsible for the registration of marks, or
       ``(B) the common office, or governmental entity, of more 
     than 1 Contracting Party that is responsible for the 
     registration of marks and is so recognized by the 
     International Bureau.
       ``(16) Office of origin.--The term `office of origin' means 
     the Office of a Contracting Party with which a basic 
     application was filed or by which a basic registration was 
     granted.
       ``(17) Opposition period.--The term `opposition period' 
     means the time allowed for filing an opposition in the Patent 
     and Trademark Office, including any extension of time granted 
     under section 13.

     ``SEC. 61. INTERNATIONAL APPLICATIONS BASED ON UNITED STATES 
                   APPLICATIONS OR REGISTRATIONS.

       ``The owner of a basic application pending before the 
     Patent and Trademark Office, or the owner of a basic 
     registration granted by the Patent and Trademark Office, 
     who--
       ``(1) is a national of the United States,
       ``(2) is domiciled in the United States, or
       ``(3) has a real and effective industrial or commercial 
     establishment in the United States,

     may file an international application by submitting to the 
     Patent and Trademark Office a written application in such 
     form, together with such fees, as may be prescribed by the 
     Commissioner.

     ``SEC. 62. CERTIFICATION OF THE INTERNATIONAL APPLICATION.

       ``Upon the filing of an application for international 
     registration and payment of the prescribed fees, the 
     Commissioner shall examine the international application for 
     the purpose of certifying that the information contained in 
     the international application corresponds to the information 
     contained in the basic application or basic registration at 
     the time of the certification. Upon examination and 
     certification of the international application, the 
     Commissioner shall transmit the international application to 
     the International Bureau.

     ``SEC. 63. RESTRICTION, ABANDONMENT, CANCELLATION, OR 
                   EXPIRATION OF A BASIC APPLICATION OR BASIC 
                   REGISTRATION.

       ``With respect to an international application transmitted 
     to the International Bureau under section 62, the 
     Commissioner shall notify the International Bureau whenever 
     the basic application or basic registration which is the 
     basis for the international application has been restricted, 
     abandoned, or canceled, or has expired, with respect to some 
     or all of the goods and services listed in the international 
     registration--
       ``(1) within 5 years after the international registration 
     date; or
       ``(2) more than 5 years after the international 
     registration date if the restriction, abandonment, or 
     cancellation of the basic application or basic registration 
     resulted from an action that began before the end of that 5-
     year period.

     ``SEC. 64. REQUEST FOR EXTENSION OF PROTECTION SUBSEQUENT TO 
                   INTERNATIONAL REGISTRATION.

       ``The holder of an international registration that is based 
     upon a basic application filed with the Patent and Trademark 
     Office or a basic registration granted by the Patent and 
     Trademark Office may request an extension of protection of 
     its international registration by filing such a request--
       ``(1) directly with the International Bureau, or
       ``(2) with the Patent and Trademark Office for transmittal 
     to the International Bureau, if the request is in such form, 
     and contains such transmittal fee, as may be prescribed by 
     the Commissioner.

     ``SEC. 65. EXTENSION OF PROTECTION OF AN INTERNATIONAL 
                   REGISTRATION TO THE UNITED STATES UNDER THE 
                   MADRID PROTOCOL.

       ``(a) In General.--Subject to the provisions of section 68, 
     the holder of an international registration shall be entitled 
     to the benefits of extension of protection of that 
     international registration to the United States to the extent 
     necessary to give effect to any provision of the Madrid 
     Protocol.
       ``(b) If United States is Office of Origin.--An extension 
     of protection resulting from an international registration of 
     a mark shall not apply to the United States if the Patent and 
     Trademark Office is the office of origin with respect to that 
     mark.

     ``SEC. 66. EFFECT OF FILING A REQUEST FOR EXTENSION OF 
                   PROTECTION OF AN INTERNATIONAL REGISTRATION TO 
                   THE UNITED STATES.

       ``(a) Requirement for Request for Extension of 
     Protection.--A request for extension of protection of an 
     international registration to the United States that the 
     International Bureau transmits to the Patent and Trademark 
     Office shall be deemed to be properly filed in the United 
     States if such request, when received by the International 
     Bureau, has attached to it a declaration of bona fide 
     intention to use the mark in commerce that is verified by the 
     applicant for, or holder of, the international registration.
       ``(b) Effect of Proper Filing.--Unless extension of 
     protection is refused under section 68, the proper filing of 
     the request for extension of protection under subsection (a) 
     shall constitute constructive use of the mark, conferring the 
     same rights as those specified in section 7(c), as of the 
     earliest of the following:
       ``(1) The international registration date, if the request 
     for extension of protection was filed in the international 
     application.
       ``(2) The date of recordal of the request for extension of 
     protection, if the request for extension of protection was 
     made after the international registration date.
       ``(3) The date of priority claimed pursuant to section 67.

     ``SEC. 67. RIGHT OF PRIORITY FOR REQUEST FOR EXTENSION OF 
                   PROTECTION TO THE UNITED STATES.

       ``The holder of an international registration with an 
     extension of protection to the United States shall be 
     entitled to claim a date of priority based on the right of 
     priority within the meaning of Article 4 of the Paris 
     Convention for the Protection of Industrial Property if--
       ``(1) the international registration contained a claim of 
     such priority; and
       ``(2)(A) the international application contained a request 
     for extension of protection to the United States, or
       ``(B) the date of recordal of the request for extension of 
     protection to the United States is not later than 6 months 
     after the date of the first regular national filing (within 
     the meaning of Article 4(A)(3) of the Paris Convention for 
     the Protection of Industrial Property) or a subsequent 
     application (within the meaning of Article 4(C)(4) of the 
     Paris Convention).

     ``SEC. 68. EXAMINATION OF AND OPPOSITION TO REQUEST FOR 
                   EXTENSION OF PROTECTION; NOTIFICATION OF 
                   REFUSAL.

       ``(a) Examination and Opposition.--(1) A request for 
     extension of protection described in section 66(a) shall be 
     examined as an application for registration on the Principal 
     Register under this Act, and if on such examination it 
     appears that the applicant is entitled to extension of 
     protection under this title, the Commissioner shall cause the 
     mark to be published in the Official Gazette of the Patent 
     and Trademark Office.
       ``(2) Subject to the provisions of subsection (c), a 
     request for extension of protection under this title shall be 
     subject to opposition under section 13. Unless successfully 
     opposed, the request for extension of protection shall not be 
     refused.
       ``(3) Extension of protection shall not be refused under 
     this section on the ground that the mark has not been used in 
     commerce.
       ``(4) Extension of protection shall be refused under this 
     section to any mark not registrable on the Principal 
     Register.
       ``(b) Notification of Refusal.--If, a request for extension 
     of protection is refused under subsection (a), the 
     Commissioner shall declare in a notification of refusal (as 
     provided in subsection (c)) that the extension of protection 
     cannot be granted, together with a statement of all grounds 
     on which the refusal was based.
       ``(c) Notice to International Bureau.--(1) Within 18 months 
     after the date on which the International Bureau transmits to 
     the Patent and Trademark Office a notification of a request 
     for extension of protection, the Commissioner shall transmit 
     to the International Bureau any of the following that applies 
     to such request:
       ``(A) A notification of refusal based on an examination of 
     the request for extension of protection.
       ``(B) A notification of refusal based on the filing of an 
     opposition to the request.
       ``(C) A notification of the possibility that an opposition 
     to the request may be filed after the end of that 18-month 
     period.
       ``(2) If the Commissioner has sent a notification of the 
     possibility of opposition under paragraph (1)(C), the 
     Commissioner shall, if applicable, transmit to the 
     International Bureau a notification of refusal on the basis 
     of the opposition, together with a statement of all the 
     grounds for the opposition, within 7 months after the 
     beginning of the opposition period or within 1 month after 
     the end of the opposition period, whichever is earlier.
       ``(3) If a notification of refusal of a request for 
     extension of protection is transmitted under paragraph (1) or 
     (2), no grounds for refusal of such request other than those 
     set

[[Page S6572]]

     forth in such notification may be transmitted to the 
     International Bureau by the Commissioner after the expiration 
     of the time periods set forth in paragraph (1) or (2), as the 
     case may be.
       ``(4) If a notification specified in paragraph (1) or (2) 
     is not sent to the International Bureau within the time 
     period set forth in such paragraph, with respect to a request 
     for extension of protection, the request for extension of 
     protection shall not be refused and the Commissioner shall 
     issue a certificate of extension of protection pursuant to 
     the request.
       ``(d) Designation of Agent for Service of Process.--In 
     responding to a notification of refusal with respect to a 
     mark, the holder of the international registration of the 
     mark shall designate, by a written document filed in the 
     Patent and Trademark Office, the name and address of a person 
     resident in the United States on whom may be served notices 
     or process in proceedings affecting the mark. Such notices or 
     process may be served upon the person so designated by 
     leaving with that person, or mailing to that person, a copy 
     thereof at the address specified in the last designation so 
     filed. If the person so designated cannot be found at the 
     address given in the last designation, such notice or process 
     may be served upon the Commissioner.

     ``SEC. 69. EFFECT OF EXTENSION OF PROTECTION.

       ``(a) Issuance of Extension of Protection.--Unless a 
     request for extension of protection is refused under section 
     68, the Commissioner shall issue a certificate of extension 
     of protection pursuant to the request and shall cause notice 
     of such certificate of extension of protection to be 
     published in the Official Gazette of the Patent and Trademark 
     Office.
       ``(b) Effect of Extension of Protection.--From the date on 
     which a certificate of extension of protection is issued 
     under subsection (a)--
       ``(1) such extension of protection shall have the same 
     effect and validity as a registration on the Principal 
     Register, and
       ``(2) the holder of the international registration shall 
     have the same rights and remedies as the owner of a 
     registration on the Principal Register.

     ``SEC. 70. DEPENDENCE OF EXTENSION OF PROTECTION TO THE 
                   UNITED STATES ON THE UNDERLYING INTERNATIONAL 
                   REGISTRATION.

       ``(a) Effect of Cancellation of International 
     Registration.--If the International Bureau notifies the 
     Patent and Trademark Office of the cancellation of an 
     international registration with respect to some or all of the 
     goods and services listed in the international registration, 
     the Commissioner shall cancel any extension of protection to 
     the United States with respect to such goods and services as 
     of the date on which the international registration was 
     canceled.
       ``(b) Effect of Failure To Renew International 
     Registration.--If the International Bureau does not renew an 
     international registration, the corresponding extension of 
     protection to the United States shall cease to be valid as of 
     the date of the expiration of the international registration.
       ``(c) Transformation of an Extension of Protection Into a 
     United States Application.--The holder of an international 
     registration canceled in whole or in part by the 
     International Bureau at the request of the office of origin, 
     under Article 6(4) of the Madrid Protocol, may file an 
     application, under section 1 or 44 of this Act, for the 
     registration of the same mark for any of the goods and 
     services to which the cancellation applies that were covered 
     by an extension of protection to the United States based on 
     that international registration. Such an application shall be 
     treated as if it had been filed on the international 
     registration date or the date of recordal of the request for 
     extension of protection with the International Bureau, 
     whichever date applies, and, if the extension of protection 
     enjoyed priority under section 67 of this title, shall enjoy 
     the same priority. Such an application shall be entitled to 
     the benefits conferred by this subsection only if the 
     application is filed not later than 3 months after the date 
     on which the international registration was canceled, in 
     whole or in part, and only if the application complies with 
     all the requirements of this Act which apply to any 
     application filed pursuant to section 1 or 44.

     ``SEC. 71. AFFIDAVITS AND FEES.

       ``(a) Required Affidavits and Fees.--An extension of 
     protection for which a certificate of extension of protection 
     has been issued under section 69 shall remain in force for 
     the term of the international registration upon which it is 
     based, except that the extension of protection of any mark 
     shall be canceled by the Commissioner--
       ``(1) at the end of the 6-year period beginning on the date 
     on which the certificate of extension of protection was 
     issued by the Commissioner, unless within the 1-year period 
     preceding the expiration of that 6-year period the holder of 
     the international registration files in the Patent and 
     Trademark Office an affidavit under subsection (b) together 
     with a fee prescribed by the Commissioner; and
       ``(2) at the end of the 10-year period beginning on the 
     date on which the certificate of extension of protection was 
     issued by the Commissioner, and at the end of each 10-year 
     period thereafter, unless--
       ``(A) within the 6-month period preceding the expiration of 
     such 10-year period the holder of the international 
     registration files in the Patent and Trademark Office an 
     affidavit under subsection (b) together with a fee prescribed 
     by the Commissioner; or
       ``(B) within 3 months after the expiration of such 10-year 
     period, the holder of the international registration files in 
     the Patent and Trademark Office an affidavit under subsection 
     (b) together with the fee described in subparagraph (A) and 
     an additional fee prescribed by the Commissioner.
       ``(b) Contents of Affidavit.--The affidavit referred to in 
     subsection (a) shall set forth those goods or services 
     recited in the extension of protection on or in connection 
     with which the mark is in use in commerce and the holder of 
     the international registration shall attach to the affidavit 
     a specimen or facsimile showing the current use of the mark 
     in commerce, or shall set forth that any nonuse is due to 
     special circumstances which excuse such nonuse and is not due 
     to any intention to abandon the mark. Special notice of the 
     requirement for such affidavit shall be attached to each 
     certificate of extension of protection.

     ``SEC. 72. ASSIGNMENT OF AN EXTENSION OF PROTECTION.

       ``An extension of protection may be assigned, together with 
     the goodwill associated with the mark, only to a person who 
     is a national of, is domiciled in, or has a bona fide and 
     effective industrial or commercial establishment either in a 
     country that is a Contracting Party or in a country that is a 
     member of an intergovernmental organization that is a 
     Contracting Party.

     ``SEC. 73. INCONTESTABILITY.

       ``The period of continuous use prescribed under section 15 
     for a mark covered by an extension of protection issued under 
     this title may begin no earlier than the date on which the 
     Commissioner issues the certificate of the extension of 
     protection under section 69, except as provided in section 
     74.

     ``SEC. 74. RIGHTS OF EXTENSION OF PROTECTION.

       ``An extension of protection shall convey the same rights 
     as an existing registration for the same mark, if--
       ``(1) the extension of protection and the existing 
     registration are owned by the same person;
       ``(2) the goods and services listed in the existing 
     registration are also listed in the extension of protection; 
     and
       ``(3) the certificate of extension of protection is issued 
     after the date of the existing registration.''.

     SEC. 3. EFFECTIVE DATE.

       This Act and the amendments made by this Act shall take 
     effect on the date on which the Madrid Protocol (as defined 
     in section 60(1) of the Trademark Act of 1946) enters into 
     force with respect to the United States.
                                 ______
                                 
      By Mr. HATCH:
  S. 2192. A bill to make certain technical corrections to the 
Trademark Act of 1946; to the Committee on the Judiciary.


           Technical corrections to the trademark act of 1946

  Mr. HATCH. Mr. President, I rise today to introduce some housekeeping 
amendments to the Trademark Act. This bill makes a number of technical 
corrections to the Trademark Act which will clean up the code and make 
explicit some of the current practices of the Patent and Trademark 
Office with respect to the trademark protection of matter that is 
wholly functional.
  I take it as my duty as Chairman of the Committee on the Judiciary to 
try to ensure that the U.S. Code is clear, useful, and up-to-date. 
These housekeeping amendments will help clarify the law in useful ways, 
and I hope my colleagues will support this bill.
  For the reference of my colleagues, I ask unanimous consent that a 
copy of the bill and a section-by-section analysis be printed in the 
Record.
  There being no objection, the items were ordered to be printed in the 
Record, as follows:

                                S. 2192

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. TECHNICAL CORRECTIONS TO TRADEMARK ACT OF 1946.

       (a) In General.--The Act entitled ``An Act to provide for 
     the registration and protection of trademarks used in 
     commerce, to carry out the provisions of certain 
     international conventions, and for other purposes'', approved 
     July 5, 1946 (15 U.S.C. 1051 et seq.) (commonly referred to 
     as the Trademark Act of 1946), is amended as follows:
       (1) Section 1 (15 U.S.C. 1051) is amended--
       (A) in subsection (a)(1)(A), by striking ``goods in 
     connection'' each place it appears and inserting ``goods on 
     or in connection''; and
       (B) in subsection (d)(1)--
       (i) by inserting ``and,'' after ``specifying the date of 
     the applicant's first use of the mark in commerce''; and
       (ii) by striking ``and, the mode or manner in which the 
     mark is used on or in connection with such goods or 
     services''.
       (2) Section 2 (15 U.S.C. 1052) is amended--
       (A) in subsection (e)--
       (i) in paragraph (3) by striking ``or'' after ``them,''; 
     and

[[Page S6573]]

       (ii) by inserting before the period at the end the 
     following: ``, or (5) comprises any matter that, as a whole, 
     is functional''; and
       (B) in subsection (f), by striking ``paragraphs (a), (b), 
     (c), (d), and (e)(3)'' and inserting ``subsections (a), (b), 
     (c), (d), (e)(3), and (e)(5)''.
       (3) Section 7(a) (15 U.S.C. 1057(a)) is amended in the 
     first sentence by striking the second period at the end.
       (4) Section 10 (15 U.S.C. 1060) is amended--
       (A) at the end of the first sentence, by striking the comma 
     before the period; and
       (B) in the third sentence, by striking the second period at 
     the end.
       (5) Section 14(3) (15 U.S.C. 1064(3)) is amended by 
     inserting ``or is functional,'' before ``or has been 
     abandoned''.
       (6) Section 23(c) (15 U.S.C. 1091(c)) is amended by 
     striking ``or device'' and inserting ``, device, any matter 
     that as a whole is not functional,''.
       (7) Section 26 (15 U.S.C. 1094) is amended by striking 
     ``7(c),,'' and inserting ``, 7(c),''.
       (8) Section 31 (15 U.S.C. 1113) is amended--
       (A) by striking--

     ``Sec. 31. Fees'';

     and
       (B) by striking ``(a)'' and inserting ``Sec. 31. (a)''.
       (9) Section 32(1) (15 U.S.C. 1114(1)) is amended by 
     striking ``As used in this subsection'' and inserting ``As 
     used in this paragraph''.
       (10) Section 33(b) (15 U.S.C. 1115(b)) is amended--
       (A) by redesignating paragraph (8) as paragraph (9); and
       (B) by inserting after paragraph (7) the following:
       ``(8) That the mark is functional; or''.
       (11) Section 39(a) (15 U.S.C. 1121(a)) is amended by 
     striking ``circuit courts'' and inserting ``courts''.
       (12) Section 42 (15 U.S.C. 1124) is amended by striking 
     ``the any domestic'' and inserting ``any domestic''.
       (13) The Act is amended by striking ``trade-mark'' each 
     place it appears in the text and the title and inserting 
     ``trademark''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect on the date of enactment of this Act, and 
     shall apply only to any civil action filed or proceeding 
     before the United States Patent and Trademark Office 
     commenced on or after such date relating to the registration 
     of a mark.
                                  ____


                      Section-by-Section Analysis


     section 1. technical corrections to the trademark act of 1946

       Section 1(a) provides that the Act entitled ``An Act to 
     provide for the registration and protection of trademarks 
     used in commerce, to carry out the provision of certain 
     international conventions, and for other purposes'', approved 
     July 5, 1946, as amended (15 U.S.C. 1051 et seq.) shall be 
     referred to as the ``Trademark Act of 1946'' and will be 
     amended by the following provisions.
       Subparagraph 1(a)(1)(A) amends subparagraph 1(a)(1)(A) of 
     the Trademark Act to change the phrase ``goods in 
     connection'' to ``goods on or in connection''. This amendment 
     simply adds language to clarify that a trademark or service 
     mark may be used on or in connection with goods or services 
     rather than just directly on the goods. This language is 
     fully consistent with case law and Patent and Trademark 
     Office (``Office'') practice and is not a substantive change.
       Subparagraph 1(a)(1)(B)(i) amends subsection 1(d)(1) of the 
     Trademark Act by inserting ``and'' after the words 
     ``specifying the date of the applicant's first use of the 
     mark in commerce,''.
       Subparagraph 1(a)(1)(B)(ii) amends subsection 1(d)(1) of 
     the Trademark Act by deleting ``and the mode or manner in 
     which the mark is used on or in connection with such goods or 
     services''. Section 1(d)(1) sets out the requirements for a 
     complete ``statement of use'', the document that must be 
     filed to complete any published trademark application that 
     was originally filed based on intent-to-use the mark. The 
     statement of use is meant to bring the intent-to-use based 
     application into conformity with the requirements for a 
     trademark application based on use in commerce. The deletion 
     of this language makes this section parallel to section 
     1(a)(1)(A), as amended by the Trademark Law Treaty 
     Implementation Act. Section 1(a)(1)(A), as amended, sets out 
     the requirements for filing a complete trademark application 
     based on use in commerce. Thus the amendment conforms the 
     requirements of these two sections, requirements that should 
     logically be identical. In addition, the experience of the 
     Office has been that requiring the applicant to state the 
     mode or manner of using the mark adds no additional useful 
     information to the application inasmuch as an applicant is 
     already required to submit specimens, e.g., tags, labels, 
     advertising etc., to demonstrate how it is using the mark. 
     Therefore, an additional statement concerning the mode or 
     manner of use of the mark is unnecessary.
       Subparagraph 1(a)(2)(A) amends paragraph 2(e) of the 
     Trademark Act by adding a new subparagraph 5, ``any matter 
     that, as a whole, is functional'', to the list of statutory 
     refusals set out in that paragraph. The language clarifies 
     that matter which is wholly functional must be refused 
     registration, a position that is completely consistent with 
     the intent of the Trademark Act. This change codifies both 
     the case law in this matter and the long-standing practice of 
     the Office to refuse registration to matter that is wholly 
     functional based on a combined reading of sections 1, 2 and 
     45 of the Trademark Act. This new section will provide 
     examining attorneys with a simple reference for the 
     functionality refusal.
       Subparagraph 1(a)(2)(B) amends paragraph 2(f) of the 
     Trademark Act to add a reference to the new statutory refusal 
     set out in subparagraph 2(e)(5). This amendment to paragraph 
     2(f) of the Trademark Act provides that matter which is 
     wholly functional may not be registered upon a showing that 
     the matter has become distinctive. This change codifies 
     existing case law and the current practice of the Office and 
     is not a change in the substantive law.
       Paragraph 1(a)(3) amends section 7(a) of the Trademark Act 
     by deleting an extraneous period.
       Paragraph 1(a)(4) amends section 10 of the Trademark Act by 
     deleting extraneous punctuation.
       Paragraph 1(a)(5) amends paragraph 14(3) of the Trademark 
     Act by inserting the phrase ``or is functional,'' before ``or 
     has been abandoned''. This amendment adds an additional 
     ground for canceling a registration more than five years 
     after the date of registration. This amendment changes 
     existing case law in this matter but is fully consistent with 
     the purpose of the Trademark Act. To exempt the registration 
     of a wholly functional design from being subject to 
     cancellation five years after the registration has issued 
     permits the trademark owner with such a registration to 
     obtain patent-like protection for its wholly functional 
     design without the limited term that the patent law imposes. 
     This change is therefore wholly consistent with both the 
     purpose of the Trademark Act and the codifications of current 
     practice regarding functionality made in this Act.
       Paragraph 1(a)(6) amends section 23(c) of the Trademark Act 
     by adding ``any matter that as a whole is not functional'' to 
     the listing of the types of marks which can be registered on 
     the Supplemental register. This change codifies existing case 
     law and the current practice of the Office.
       Paragraph 1(a)(7) amends section 26 of the Trademark Act by 
     deleting an extraneous comma.
       Paragraph 1(a)(8) amends section 31 of the Trademark Act by 
     deleting ``Sec. 31 Fees'' from the title of the section and 
     inserting ``Sec. 31. (a)''.
       Paragraph 1(a)(9) amends section 32(1) of the Trademark Act 
     to clarify that the definition of ``any person'' as set out 
     in paragraph 1 of section 32 is limited to the matter within 
     the paragraph.
       Paragraph 1(a)(10) amends section 33(b) of the Trademark 
     Act by inserting as a new paragraph 8, ``That the mark is 
     functional; or''. This language adds a new defense against a 
     claim of infringement made by the owner of a mark which has 
     become ``incontestable'' under the provisions of section 32 
     of the Trademark Act. This language is fully consistent with 
     the amendment made to paragraph 14(3) of the Trademark Act by 
     paragraph 1(a)(5) of this Act.
       Paragraph 1(a)(11) amends section 39(a) of the Trademark 
     Act to strike a reference, that is no longer relevant, to 
     ``circuit courts'' and insert the word ``courts''.
       Paragraph 1(a)(12) amends Section 42 of the Trademark Act 
     by sdeleting an extraneous ``the''.
       Paragraph 1(a)(13) amends the Act to strike ``trade-mark'' 
     in each place it occurs and replace it with ``trademark''. 
     This is the more modern spelling.
       Section 1(b) establishes an effective date that is 
     prospective with respect to both civil actions and 
     proceedings at the U.S. Patent and Trademark Office.
                                 ______
                                 
      By Mr. HATCH (for himself and Mr. Leahy):
  S. 2193. A bill to implement the provisions of the Trademark Law 
Treaty; to the Committee on the Judiciary.


                Trademark Law Treaty Implementation Act

  Mr. HATCH. Mr. President, I rise to introduce the Trademark Law 
Treaty Implementation Act of 1998. This legislation makes necessary 
changes in our domestic trademark law and procedures to ensure that we 
are in compliance when we ratify the treaty, which appears more likely 
this year than previously. The Trademark Law Treaty was done and signed 
at Geneva in October of 1994, and entered into force in 1996.
  The obligations under the Trademark Law Treaty legislation will 
require some relatively minor changes to U.S. trademark practice, but 
will bring significant improvements in the trademark practices of a 
number of important countries around the world in which U.S. trademark 
owners seek protection. The required changes will eliminate 
complexities and simplify the process of obtaining, renewing, and 
managing trademark assets for American firms marketing their products 
and services around the world.
  Countries around the world have a number of varying requirements for 
filing trademark applications, effecting changes of ownership of 
trademark registrations, and other procedures associated with managing 
trademark assets. These differences cause considerable

[[Page S6574]]

aggravation and expense to trademark owners seeking to protect their 
marks around the world. Many of these procedures and requirements 
imposed by foreign countries are non-substantive and highly technical. 
In addition, many of these requirements in the various procedures of 
foreign trademark offices impose very significant cost burdens, both in 
official fees to be paid to local trademark offices, as well as agent's 
fees for fulfilling the various requirements. For example, many 
countries require that signatures on applications for powers of 
attorney be notarized, authenticated, and legalized. This very 
expensive and time consuming procedure is prohibited under the Treaty 
in all cases except where the registrant is surrendering a 
registration.
  The Treaty eliminates these conflicting and expensive practices by 
setting forth a list of maximum requirements which a member State can 
impose for various actions. Specifically, the Treaty sets forth maximum 
requirements for: the contents of a trademark application; the content 
of a power of attorney; the elements necessary for an application to 
receive a filing date; a request to record a change in the name or 
address of a trademark owner; and, a request to renew a trademark 
registration. These requirements are implemented through the adoption 
of model forms for trademark applicants and owners to use which must be 
accepted by every member State. While a member need not impose all of 
the requirements or elements listed, it cannot demand the inclusion of 
any additional requirements or elements in respect of a particular 
action.
  There are several other guarantees mandated by the Treaty that will 
benefit trademark applicants and owners. Under the Treaty, countries 
will have to register and protect service marks, as well as goods 
marks, an important consideration to the U.S. service economy, which 
has many valuable service marks, such as Marriott and American 
Airlines. Applicants will be able to file for protection under multiple 
classifications for goods and services, which will mature into multiple 
class registrations. No longer will trademark owners be forced to make 
a separate filing for each power of attorney; one general power will 
suffice. Member countries are precluded from considering goods or 
services as being similar to each other simply on the ground that they 
appear in the same class of the NICE classification. Moreover, a 
request to change the name or address of a trademark owner or a request 
to correct a mistake in a trademark registration may not be refused 
without giving the trademark owner an opportunity to comment.
  As I indicated, the Trademark Law Treaty Implementation Act of 1998 
makes only minor changes in our domestic trademark law. These changes 
include: the elimination of the requirement for a statement of the 
manner in which a mark is used or intended to be used in connection 
with the goods or services identified in the application; the 
elimination of the requirement that the applicant verify an 
application; the adoption of a grace period of at least six months for 
the filing of a renewal application; the elimination of a declaration 
or evidence concerning the use of a mark in connection with the filing 
of a renewal application; and, the elimination of a requirement to file 
a copy of the actual assignment document as a condition for recording 
the assignment of a trademark registration.
  This bill will also harmonize and simplify the procedural 
requirements under the Trademark Act of 1946. Sections 8 and 9 will be 
amended to establish a similar period of one year prior to the end of 
the applicable time period, along with a grace period of six months 
after that period, for filing both affidavits of use and renewal 
applications. While it separates the ten-year affidavit of use from the 
renewal application, as required by the Treaty, the bill permits them 
both to be filed during the same time period which will benefit 
trademark applicants.
  The Trademark Law Treaty Implementation Act of 1998 will help 
American companies protect their trademark assets in markets around the 
world thereby facilitating their ability to compete. At the same time, 
the changes it makes in U.S. trademark law are made in a manner that 
will assist American trademark owners protect their marks in this 
country.
  Mr. President, I hope my colleagues will support this legislation 
which is so important to American trademark owners.
  I ask unanimous consent that the text of the bill and an explanatory 
section by section analysis be printed in the Record.
  There being no objection, the items were ordered to be printed in the 
Record, as follows:

                                S. 2193

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Trademark Law Treaty 
     Implementation Act''.

     SEC. 2. REFERENCE TO THE TRADEMARK ACT OF 1946.

       For purposes of this Act, the Act entitled ``An Act to 
     provide for the registration and protection of trademarks 
     used in commerce, to carry out the provisions of certain 
     international conventions, and for other purposes'', approved 
     July 5, 1946 (15 U.S.C. 1051 et seq.), shall be referred to 
     as the ``Trademark Act of 1946''.

     SEC. 3. APPLICATION FOR REGISTRATION; VERIFICATION.

       (a) Application for Use of Trademark.--Section 1(a) of the 
     Trademark Act of 1946 (15 U.S.C. 1051(a)) is amended to read 
     as follows:
       ``Section 1. (a)(1) The owner of a trademark used in 
     commerce may request registration of its trademark on the 
     principal register hereby established by paying the 
     prescribed fee and filing in the Patent and Trademark Office 
     an application and a verified statement, in such form as may 
     be prescribed by the Commissioner, and such number of 
     specimens or facsimiles of the mark as used as may be 
     required by the Commissioner.
       ``(2) The application shall include specification of the 
     applicant's domicile and citizenship, the date of the 
     applicant's first use of the mark, the date of the 
     applicant's first use of the mark in commerce, the goods in 
     connection with which the mark is used, and a drawing of the 
     mark.
       ``(3) The statement shall be verified by the applicant and 
     specify that--
       ``(A) the person making the verification believes that he 
     or she, or the juristic person in whose behalf he or she 
     makes the verification, to be the owner of the mark sought to 
     be registered;
       ``(B) to the best of the verifier's knowledge and belief, 
     the facts recited in the application are accurate;
       ``(C) the mark is in use in commerce; and
       ``(D) to the best of the verifier's knowledge and belief, 
     no other person has the right to use such mark in commerce 
     either in the identical form thereof or in such near 
     resemblance thereto as to be likely, when used on or in 
     connection with the goods of such other person, to cause 
     confusion, or to cause mistake, or to deceive, except that, 
     in the case of every application claiming concurrent use, the 
     applicant shall--
       ``(i) state exceptions to the claim of exclusive use; and
       ``(ii) shall specify, to the extent of the verifier's 
     knowledge--
       ``(I) any concurrent use by others;
       ``(II) the goods on or in connection with which and the 
     areas in which each concurrent use exists;
       ``(III) the periods of each use; and
       ``(IV) the goods and area for which the applicant desires 
     registration.
       ``(4) The applicant shall comply with such rules or 
     regulations as may be prescribed by the Commissioner. The 
     Commissioner shall promulgate rules prescribing the 
     requirements for the application and for obtaining a filing 
     date herein.''.
       (b) Application for Bona Fide Intention To Use Trademark.--
     Subsection (b) of section 1 of the Trademark Act of 1946 (15 
     U.S.C. 1051(b)) is amended to read as follows:
       ``(b)(1) A person who has a bona fide intention, under 
     circumstances showing the good faith of such person, to use a 
     trademark in commerce may request registration of its 
     trademark on the principal register hereby established by 
     paying the prescribed fee and filing in the Patent and 
     Trademark Office an application and a verified statement, in 
     such form as may be prescribed by the Commissioner.
       ``(2) The application shall include specification of the 
     applicant's domicile and citizenship, the goods in connection 
     with which the applicant has a bona fide intention to use the 
     mark, and a drawing of the mark.
       ``(3) The statement shall be verified by the applicant and 
     specify--
       ``(A) that the person making the verification believes that 
     he or she, or the juristic person in whose behalf he or she 
     makes the verification, to be entitled to use the mark in 
     commerce;
       ``(B) the applicant's bona fide intention to use the mark 
     in commerce;
       ``(C) that, to the best of the verifier's knowledge and 
     belief, the facts recited in the application are accurate; 
     and
       ``(D) that, to the best of the verifier's knowledge and 
     belief, no other person has the right to use such mark in 
     commerce either in the identical form thereof or in such near 
     resemblance thereto as to be likely, when used on or in 
     connection with the goods of such other person, to cause 
     confusion, or to cause mistake, or to deceive.


[[Page S6575]]


     Except for applications filed pursuant to section 44, no mark 
     shall be registered until the applicant has met the 
     requirements of subsections (c) and (d) of this section.
       ``(4) The applicant shall comply with such rules or 
     regulations as may be prescribed by the Commissioner. The 
     Commissioner shall promulgate rules prescribing the 
     requirements for the application and for obtaining a filing 
     date herein.''.
       (c) Consequence of Delays.--Paragraph (4) of section 1(d) 
     of the Trademark Act of 1946 (15 U.S.C. 1051(d)(4)) is 
     amended to read as follows:
       ``(4) The failure to timely file a verified statement of 
     use under paragraph (1) or an extension request under 
     paragraph (2) shall result in abandonment of the application, 
     unless it can be shown to the satisfaction of the 
     Commissioner that the delay in responding was unintentional, 
     in which case the time for filing may be extended, but for a 
     period not to exceed the period specified in paragraphs (1) 
     and (2) for filing a statement of use.''.

     SEC. 4. REVIVAL OF ABANDONED APPLICATION.

       Section 12(b) of the Trademark Act of 1946 (15 U.S.C. 
     1062(b)) is amended in the last sentence by striking 
     ``unavoidable'' and by inserting ``unintentional''.

     SEC. 5. DURATION OF REGISTRATION; CANCELLATION; AFFIDAVIT OF 
                   CONTINUED USE; NOTICE OF COMMISSIONER'S ACTION.

       Section 8 of the Trademark Act of 1946 (15 U.S.C. 1058) is 
     amended to read as follows:


                               ``duration

       ``Sec. 8. (a) Each registration shall remain in force for 
     10 years, except that the registration of any mark shall be 
     canceled by the Commissioner for failure to comply with the 
     provisions of subsection (b) of this section, upon the 
     expiration of the following time periods, as applicable:
       ``(1) For registrations issued pursuant to the provisions 
     of this Act, at the end of 6 years following the date of 
     registration.
       ``(2) For registrations published under the provisions of 
     section 12(c), at the end of 6 years following the date of 
     publication under such section.
       ``(3) For all registrations, at the end of each successive 
     10-year period following the date of registration.
       ``(b) During the 1-year period immediately preceding the 
     end of the applicable time period set forth in subsection 
     (a), the owner of the registration shall pay the prescribed 
     fee and file in the Patent and Trademark Office--
       ``(1) an affidavit setting forth those goods or services 
     recited in the registration on or in connection with which 
     the mark is in use in commerce and such number of specimens 
     or facsimiles showing current use of the mark as may be 
     required by the Commissioner; or
       ``(2) an affidavit setting forth those goods or services 
     recited in the registration on or in connection with which 
     the mark is not in use in commerce and showing that any such 
     nonuse is due to special circumstances which excuse such 
     nonuse and is not due to any intention to abandon the mark.
       ``(c)(1) The owner of the registration may make the 
     submissions required under this section within a grace period 
     of 6 months after the end of the applicable time period set 
     forth in subsection (a). Such submission is required to be 
     accompanied by a surcharge prescribed by the Commissioner.
       ``(2) If any submission filed under this section is 
     deficient, the deficiency may be corrected after the 
     statutory time period and within the time prescribed after 
     notification of the deficiency. Such submission is required 
     to be accompanied by a surcharge prescribed by the 
     Commissioner.
       ``(d) Special notice of the requirement for affidavits 
     under this section shall be attached to each certificate of 
     registration and notice of publication under section 12(c).
       ``(e) The Commissioner shall notify any owner who files 1 
     of the affidavits required by this section of the 
     Commissioner's acceptance or refusal thereof and, in the case 
     of a refusal, the reasons therefor.
       ``(f) If the registrant is not domiciled in the United 
     States, the registrant shall designate by a written document 
     filed in the Patent and Trademark Office the name and address 
     of some person resident in the United States on whom may be 
     served notices or process in proceedings affecting the mark. 
     Such notices or process may be served upon the person so 
     designated by leaving with that person or mailing to that 
     person a copy thereof at the address specified in the last 
     designation so filed. If the person so designated cannot be 
     found at the address given in the last designation, such 
     notice or process may be served upon the Commissioner.''.

     SEC. 6. RENEWAL OF REGISTRATION.

       Section 9 of the Trademark Act of 1946 (15 U.S.C. 1059) is 
     amended to read as follows:


                       ``renewal of registration

       ``Sec. 9. (a) Subject to the provisions of section 8, each 
     registration may be renewed for periods of 10 years at the 
     end of each successive 10-year period following the date of 
     registration upon payment of the prescribed fee and the 
     filing of a written application, in such form as may be 
     prescribed by the Commissioner. Such application may be made 
     at any time within 1 year before the end of each successive 
     10-year period for which the registration was issued or 
     renewed, or it may be made within a grace period of 6 months 
     after the end of each successive 10-year period, upon payment 
     of a fee and surcharge prescribed therefor. If any 
     application filed under this section is deficient, the 
     deficiency may be corrected within the time prescribed after 
     notification of the deficiency, upon payment of a surcharge 
     prescribed therefor.
       ``(b) If the Commissioner refuses to renew the 
     registration, the Commissioner shall notify the registrant of 
     the Commissioner's refusal and the reasons therefor.
       ``(c) If the registrant is not domiciled in the United 
     States, the registrant shall designate by a written document 
     filed in the Patent and Trademark Office the name and address 
     of some person resident in the United States on whom may be 
     served notices or process in proceedings affecting the mark. 
     Such notices or process may be served upon the person so 
     designated by leaving with that person or mailing to that 
     person a copy thereof at the address specified in the last 
     designation so filed. If the person so designated cannot be 
     found at the address given in the last designation, such 
     notice or process may be served upon the Commissioner.''.

     SEC. 7. RECORDING ASSIGNMENT OF MARK.

       Section 10 of the Trademark Act of 1946 (15 U.S.C. 1060) is 
     amended to read as follows:


                              ``assignment

       ``Sec. 10. (a) A registered mark or a mark for which an 
     application to register has been filed shall be assignable 
     with the good will of the business in which the mark is used, 
     or with that part of the good will of the business connected 
     with the use of and symbolized by the mark. Notwithstanding 
     the preceding sentence, no application to register a mark 
     under section 1(b) shall be assignable prior to the filing of 
     an amendment under section 1(c) to bring the application into 
     conformity with section 1(a) or the filing of the verified 
     statement of use under section 1(d), except for an assignment 
     to a successor to the business of the applicant, or portion 
     thereof, to which the mark pertains, if that business is 
     ongoing and existing. In any assignment authorized by this 
     section, it shall not be necessary to include the good will 
     of the business connected with the use of and symbolized by 
     any other mark used in the business or by the name or style 
     under which the business is conducted. Assignments shall be 
     by instruments in writing duly executed. Acknowledgment shall 
     be prima facie evidence of the execution of an assignment, 
     and when the prescribed information reporting the assignment 
     is recorded in the Patent and Trademark Office, the record 
     shall be prima facie evidence of execution. An assignment 
     shall be void against any subsequent purchaser for valuable 
     consideration without notice, unless the prescribed 
     information reporting the assignment is recorded in the 
     Patent and Trademark Office within 3 months after the date of 
     the subsequent purchase or prior to the subsequent purchase. 
     The Patent and Trademark Office shall maintain a record of 
     information on assignments, in such form as may be prescribed 
     by the Commissioner.
       ``(b) An assignee not domiciled in the United States shall 
     designate by a written document filed in the Patent and 
     Trademark Office the name and address of some person resident 
     in the United States on whom may be served notices or process 
     in proceedings affecting the mark. Such notices or process 
     may be served upon the person so designated by leaving with 
     that person or mailing to that person a copy thereof at the 
     address specified in the last designation so filed. If the 
     person so designated cannot be found at the address given in 
     the last designation, such notice or process may be served 
     upon the Commissioner.''.

     SEC. 8. INTERNATIONAL CONVENTIONS; COPY OF FOREIGN 
                   REGISTRATION.

       Section 44 of the Trademark Act of 1946 (15 U.S.C. 1126) is 
     amended--
       (1) in subsection (d)--
       (A) by striking ``23, or 44(e) of this Act'' and inserting 
     ``or 23 of this Act or under subsection (e) of this 
     section''; and
       (B) in paragraphs (3) and (4) by striking ``this subsection 
     (d)'' and inserting ``this subsection''; and
       (2) in subsection (e), by striking the second sentence and 
     inserting the following: ``Such applicant shall submit, 
     within such time period as may be prescribed by the 
     Commissioner, a certification or a certified copy of the 
     registration in the country of origin of the applicant.''.

     SEC. 9. TRANSITION PROVISIONS.

       (a) Registrations in 20-Year Term.--The provisions of 
     section 8 of the Trademark Act of 1946, as amended by section 
     5 of this Act, shall apply to a registration for trademark 
     issued or renewed for a 20-year term, if the expiration date 
     of the registration is on or after the effective date of this 
     Act.
       (b) Applications for Registration.--This Act and the 
     amendments made by this Act shall apply to any application 
     for registration of a trademark pending on, or filed on or 
     after, the effective date of this Act.
       (c) Affidavits.--The provisions of section 8 of the 
     Trademark Act of 1946, as amended by section 5 of this Act, 
     shall apply to the filing of an affidavit if the sixth or 
     tenth anniversary of the registration, or the sixth 
     anniversary of publication of the registration under section 
     12(c) of the Trademark Act of 1946, for which the affidavit 
     is filed is on or after the effective date of this Act.
       (d) Renewal Applications.--The amendment made by section 6 
     shall apply to the filing of an application for renewal of a 
     registration if the expiration date of the registration for 
     which the renewal application is filed is on or after the 
     effective date of this Act.

[[Page S6576]]

     SEC. 10. EFFECTIVE DATE.

       This Act and the amendments made by this Act shall take 
     effect--
       (1) on the date that is 1 year after the date of the 
     enactment of this Act, or
       (2) upon the entry into force of the Trademark Law Treaty 
     with respect to the United States,

     whichever occurs first.
                                  ____


                      Section-by-Section Analysis


                         Section 1. SHORT TITLE

       This section provides a short title: ``Trademark Law Treaty 
     Implementation Act.''


           Section 2. REFERENCE TO THE TRADEMARK ACT OF 1946

       This section provides that the Act entitle ``An Act to 
     provide for the registration and protection of trademarks 
     used in commerce, to carry out the provision of certain 
     international conventions, and for other purposes'', approved 
     July 5, 1946, as amended (15 U.S.C 1051 et. seq.) shall be 
     referred to as the ``Trademark Act of 1946''.


         Section 3. APPLICATION FOR REGISTRATION; VERIFICATION

     Summary of Section 3
       This section amends subsections 1(a) (Application for Use) 
     and 1(b) (Application for Intent to Use) of the Trademark Act 
     of 1946 (15 U.S.C. 1051(a) and 1051(b)) to create a clear 
     distinction between the written application, the form of 
     which may be prescribed by the Commissioner, and the 
     declaration pertaining to applicant's use or intention to use 
     the mark, the substance of which is detailed in the 
     respective subsections; to require that the declaration 
     pertaining to use or intention to use be verified by the 
     applicant; to authorize the Commissioner to promulgate rules 
     prescribing both the elements of the application, in addition 
     to those specified in the proposed provision, and those 
     elements necessary for a filing date; to omit the requirement 
     in the written application for a statement of the ``mode or 
     manner'' in which the mark is used or intended to be used in 
     connection with the specified goods or services; and to 
     clarify and modernize the language of the subsections, as 
     appropriate. In addition, an amendment is made to subsection 
     1(d) (15 U.S.C. 1051(d)) to clarify that an application may 
     be revived after a notice of allowance is issued.
     Applications under the Trademark Law Treaty and Existing U.S. 
         Law
       With the goal of simplifying and harmonizing the 
     registration process worldwide, Article 3(1) of the Trademark 
     Law Treaty (``Treaty'' or ``TLT'') establishes a 
     comprehensive list of indications or elements that may be 
     required in an application to register a trademark or service 
     mark (``mark''). This list permits a Contracting Party to the 
     Treaty (``Party'') to require, inter alia, a signature and 
     declarations of use and intention to use a mark. The list 
     does not permit a Party to require, inter alia, a statement 
     of the mode or manner in which the mark is used, or intended 
     to be used, in connection with the goods or services 
     specified in the application. Article 3(4) of the Treaty 
     obligates a Party that requires a signature to permit either 
     the applicant or his representative to sign the application, 
     except that a Party may require declarations of use and 
     intention to use a mark to be signed by the applicant.
       The existing subsections 1(a) and 1(b) of the Trademark Act 
     of 1946 (15 U.S.C. 1051(a)) and 1051(b)) require, 
     respectively, declarations pertaining to use and intention to 
     use a mark and require verification by the applicant of the 
     written application, which includes the aforementioned 
     declarations. Under the terms of the Treaty, the United 
     States may continue to require the aforementioned 
     declarations and may require verification by the applicant of 
     such declarations, but may not require verification by the 
     applicant of the written application. Thus, it becomes 
     necessary to distinguish the declarations of use and 
     intention to use from the other elements of the application.
       Additionally, the existing subsections 1(a) and 1(b) of the 
     Trademark Act of 1946 (15 U.S.C. 1051(a)) and 1051(b)) 
     require, respectively, a statement of the mode or manner in 
     which the mark is used or intended to be used, in connection 
     with the goods specified in the application. Thus, it becomes 
     necessary to delete the requirement for this statement from 
     the list of required elements in the written application.
     Distinction Between Written Application and Verified 
         Declarations
       Consistent with the Treaty obligations, the proposed 
     revision will distinguish between the written application and 
     the declarations of use and intention to use for purposes of 
     the signature requirement. The proposed revision will 
     continue to require a written application, in such form as 
     may be prescribed by the Commissioner, and a declaration 
     verified by the applicant, as set forth in the two 
     subsections.
       By separating the written application from the verified 
     declarations, there will no longer be a requirement in the 
     law for verification by the applicant of the written 
     application. In the proposed revision, as in the existing 
     subsections, the Commissioner will retain authority to 
     prescribe the form of the application. Thus, the Commissioner 
     will have discretion to permit the written application to be 
     filed with no signature or with the signature of applicant's 
     representative. Also, the Commissioner may permit the filing 
     of a single document, which combines the elements of the 
     written application and the declaration, and which is signed 
     by the applicant, as under the existing subsections.
     Elements of the Written Application
       The proposed revision specifies a non-exclusive list of 
     elements and grants authority to the Commissioner to 
     prescribe, by regulation and consistent with law and 
     international obligations, additional elements which the 
     Commissioner considers to be necessary for an application and 
     those elements necessary for receipt of a filing date. This 
     proposal improves the ability of the law pertaining to 
     application requirements to accommodate advancing technology 
     and further international procedural harmonization. The 
     proposed revision specifically requires the application to 
     include applicant's domicile and citizenship, the dates of 
     applicant's first use of the mark and first use of the mark 
     in commerce in an application under subsection 1(a), the 
     goods in connection with which the mark is used or intended 
     to be used, and a drawing of the mark. Consistent with the 
     Treaty, the proposed revision omits a requirement for 
     specification of the mode or manner in which the mark is 
     used, or intended to be used, in connection with the goods 
     specified in the application.
       Additionally, the proposed revision reorganizes subsections 
     1(a) and (b) 1946 (15 U.S.C. 1051(a)) and 1051(b)) to clarify 
     the provisions and to modernize the language. To parallel the 
     language of the Treaty, the phrase ``may apply to 
     register'' is replaced by ``may request registration''. 
     Reference to ``firm, corporation or association'' is 
     replaced by a reference to ``juristic person'' or 
     ``person.'' Section 45 defines ``person'' as including 
     ``juristic persons.'' These terms are considered 
     preferable in view of the numerous types of juristic 
     persons in existence today.
     The Verified Statement
       Rather than requiring in the verified statement a 
     repetition of statements in the written application 
     identifying goods and, in a section 1(a) application, dates 
     of use, the proposed revision requires a statement that, to 
     the best of the applicant's knowledge and belief, the facts 
     recited in the application are accurate. In addition, the 
     proposed revision specifies the averments that the applicant 
     must make in the verified statement concerning applicant's 
     use, or bona fide intention to use, the mark in commerce, 
     ownership of the mark and lack of knowledge of conflicting 
     third party rights. These averments do not differ from those 
     in the existing provisions.
       The proposed revision requires verification of the 
     statement by the applicant and omits the specification of the 
     appropriate person to verify the declaration for a juristic 
     applicant, i.e., the proposed revision omits the phrase 
     requiring verification by ``a member of the firm or an 
     officer of the corporation or association applying.'' While 
     this revision is not required by the Treaty, it will greatly 
     simplify the filing of an application without compromising 
     the integrity of the information contained therein. This 
     proposed revision will give the Patent and Trademark Office 
     (``PTO'') the discretion to determine the appropriate person 
     with authority to sign the declaration for a juristic 
     applicant.
       Under the existing provision, the PTO has been limited to 
     accepting, for example, only the signature of an officer of a 
     corporation on an application when another corporate 
     manager's signature would be appropriate because the 
     corporate manager has authority to bind the corporation 
     legally or because the corporate manager has specific 
     knowledge of the facts asserted in the application. The 
     unnecessary rigidity of the existing provision has worked a 
     hardship on applicants who have been denied filing dates 
     because the person verifying their application has not met 
     the strict requirement of being an officer of the corporate 
     applicant. Additionally, the Patent and Trademark Office has 
     had difficulty applying the officer requirement to foreign 
     juristic entities whose managers are not clearly officers 
     under the United States' corporate standards.
     Revival of Applications After the Notice of Allowance Has 
         Issued
       Existing subsection 1(d) (15 U.S.C. 1051(d)) is amended to 
     clarify that applications which are awaiting the filing of a 
     statement of use or a request for extension of time to file a 
     statement of use may be revived if it can be shown to the 
     satisfaction of the Commissioner that the failure to file was 
     unintentional. Although this change is not necessary for the 
     implementation of the TLT, the change clarifies that the 
     Commissioner has the authority to revive such an application 
     so long as reviving the application does not extend the 
     statutory period for filing the statement of use. The 
     standard for revival is that the applicant's failure to file 
     was unintentional. This is the same standard that is being 
     proposed in subsection 12(b) of the Trademark Act of 1946 (15 
     U.S.C. 1062(b)) for reviving applications during the 
     examination process.


             SECTION 4. REVIVAL OF AN ABANDONED APPLICATION

     Summary of Section 4
       This section amends subsection 12(b) of the Trademark Act 
     of 1946 (15 U.S.C. 1062(b)) by changing the present standard 
     for reviving an abandoned application upon a showing of 
     ``unavoidable'' delay to the standard of ``unintentional'' 
     delay.

[[Page S6577]]

     Revival of Applications Under the Historical ``Unavoidable 
         Delay'' Standard
       Section 12(b) of the Trademark Act of 1946 (15 U.S.C. 
     1062(b)) provides that an application is abandoned if the 
     applicant does not timely respond to an Office Action, 
     ``unless it can be shown to the satisfaction of the 
     Commissioner that the delay in responding was unavoidable, 
     whereupon such time may be extended.''
       Prior to the implementation of the Trademark Act of 1946, 
     there was no statutory provision for abandonment and revival 
     of abandoned trademark applications. There was a regulatory 
     provision that an abandoned application could be revived if 
     it were ``shown to the satisfaction of the Commissioner that 
     the delay in the prosecution of the same was unavoidable,'' 
     However, the legislative history of the Lanham Act is silent 
     as to the meaning or intention behind the ``unavoidable 
     delay'' standard for revival of abandoned applications.
       The language of section 12(b) of the Trademark Act of 1946 
     is virtually identical to the analogous provision of the 
     patent law, 35 U.S.C. 133, which provides for abandonment of 
     patent applications and revival upon a showing of unavoidable 
     delay. The requirements for reviving an ``unavoidably'' 
     abandoned patent applications, set forth in 37 C.F.R. 
     Sec. 1.137(a), are identical to the requirements for reviving 
     an abandoned trademark application under 37 C.F.R. Sec. 2.66.
       Courts have held that the Commissioner has broad discretion 
     in determining whether a delay is unavoidable. Under current 
     law, the Commissioner's decision is subject to judicial 
     review, but will be reversed only if it is arbitrary, 
     capricious, or an abuse of discretion. Morganroth v. Quigg, 
     885 F.2d 843, 21 USPQ2d 1125 (Fed. Cir. 1989); Smith v. 
     Mossinghoff, 671 F.2d 533, 213 USPQ 977 (D.C. Cir. 1982); 
     Douglas v. Manbeck, 21 USPQ2d 1697 (E.D. Pa. 1991).
     Revival of Applications Under the New ``Unintentional Delay'' 
         Standard
       Prior to 1982, patent applications, like trademark 
     applications, could be revived only upon a showing of 
     unavoidable delay. Under Public Law 97-247, Sec. 3, 96 Stat. 
     317 (1982) codified at 35 U.S.C. 41(a)(7), it became possible 
     to revive an unintentionally abandoned patent application. 
     Section 41(a)(7) establishes two different fees for filing 
     petitions with two different standards to revive abandoned 
     applications. There is one for a petition to revive an 
     unavoidably abandoned application and another fee for a 
     petition to revive an unintentionally abandoned application. 
     The procedure for petitioning to revive an unintentionally 
     abandoned application is set forth in 37 C.F.R. 
     Sec. 1.137(b), effective October 1, 1982. 58 Fed. Reg. 44277 
     (Aug. 20, 1993); 48 Fed. Reg. 2696 (Jan. 20, 1983). The 
     rule requires, among other things, that the applicant 
     submit a verified statement that the delay was 
     unintentional, and provides that the ``Commissioner may 
     require additional information where there is a question 
     that the delay was unintentional.''
       The legislative history of Public Law 97-247 states: 
     Section 41(a)7 establishes two different fees for filing 
     petitions with different standards to revive abandoned 
     applications. . . Since the section provides for two 
     alternative fees with different standards, the section would 
     permit the applicant seeking revival . . . to choose one or 
     the other of the fees and standards under such regulations as 
     the Commissioner may establish. . . This section would permit 
     the Commissioner to have more discretion than present law to 
     revive abandoned applications . . . in appropriate 
     circumstances (emphasis added). H.R. Rep. No. 542, 97th Cong. 
     2d Sess. 6-7 (1982), quoted in In re Rutan, 231 USPQ 864, 865 
     (Comm'r Pats. 1986).
       The legislative history of Public Law 97-247 pertains 
     primarily to fees. However, the intent of Congress appears to 
     be to give the Commissioner the power to revive abandoned 
     applications using a much less strict standard than had been 
     previously applied. In re Rutan, supra. Neither the 
     legislative history of the Lanham Act nor the relevant case 
     law limit the Commissioner's authority to establish 
     procedures for revival of unintentionally abandoned trademark 
     applications.
       With the goal of the Trademark Law Treaty to simplify the 
     registration process worldwide, this proposed amendment 
     parallels the unintentional standard for revival available to 
     patent applicants and relaxes the standard for reviving 
     trademark applications. This will enable the majority of 
     applicants, who file a timely petition to revive an 
     application that was abandoned due to an unintentional delay, 
     to proceed to registration from the point that the 
     application became abandoned, rather than requiring these 
     applicants to refile their applications.


    section 5. duration of registration; cancellation; affidavit of 
             continued use; notice of commissioner's action

     Note on Sections 5 and 6: Registration Maintenance under the 
         Trademark Law Treaty and Existing U.S. Law
       Sections 5 and 6 of this legislation amend existing 
     sections 8 and 9 of the Trademark Act of 1946, which are the 
     two provisions of the Act containing requirements for 
     registration maintenance. These two sections are analogous in 
     their requirements for the filing of a verified document 
     attesting to the use of the mark in commerce and specimens or 
     facsimiles, or a showing of excusable non-use. Section 8 of 
     the Trademark Act of 1946 requires the aforementioned filing 
     during the year preceding the sixth year following 
     registration to avoid cancellation of the registration. 
     Section 9 of the Trademark Act of 1946 requires the 
     aforementioned filing as part of the registration renewal 
     application.
       With the goal of simplifying and harmonizing the process 
     for renewal of a trademark or service mark registration 
     worldwide, Article 13(1) of the Treaty establishes a 
     comprehensive list of indications that may be required in a 
     request to renewal a trademark or service mark registration. 
     This list does not include a declaration and/or evidence 
     concerning use of the mark. Article 13(4)(iii) expressly 
     prohibits a requirement for the furnishing of a 
     declaration and/or evidence concerning use of the mark as 
     part of a request for renewal. However, the Treaty 
     contains no prohibition against a requirement for the 
     periodic filing of a declaration and/or evidence of use in 
     connection with a registration, as long as such 
     requirement is not part of the requirements for renewal. 
     In fact, Article 13(1)(b) of the Treaty, concerning 
     renewal fees, recognizes that fees may be required in 
     connection with the filing of a declaration and/or 
     evidence of use of a registered mark.
       Under the terms of the Treaty, the United States may 
     continue to require the periodic filing of a verified 
     document attesting to the use of the mark in commerce and 
     specimens or facsimiles, or a showing of excusable non-use. 
     However, the United States may not make such a requirement in 
     connection with registration renewal.
     Harmonization of Trademark Act Sections 8 and 9 Requirements
       The proposed revision harmonizes certain procedural 
     requirements for the affidavits required under this section 
     with the requirements for a registration renewal application 
     contained in section 9 of the Trademark Act of 1946. While 
     both sections contain requirements for registration 
     maintenance, the specific requirements pertaining to the 
     filing required by each existing section differ 
     unnecessarily. These differing requirements have caused 
     confusion to some registrants, particularly those proceeding 
     pro se, resulting in the cancellation of registrations of 
     marks still in use in commerce due to non-compliance with the 
     technical requirements of one or the other of these 
     maintenance sections. Furthermore, since the proposed 
     revision to section 8 adds an affidavit requirement at ten-
     year internals, harmonizing the filing procedures with those 
     for renewal enables the registrant to make both filings at 
     the same time, thus, simplifying registration maintenance.
     Summary of Section 5
       This section amends section 8 of the Trademark Act of 1946 
     (15 U.S.C. 1058). The main purpose of the revision of this 
     section is to set out, in one section, all of the 
     requirements for filing any of the affidavits of use needed 
     to maintain a registration and to ensure that the 
     requirements of each use affidavit are identical. This 
     section includes the affidavit of use filed between the fifth 
     and the sixth year after registration, between the fifth and 
     the sixth year after publication under subsection 12(c), and 
     in the year preceding every ten year anniversary of the 
     registration.
       This purpose is accomplished by adding an obligation to 
     file an affidavit of use or non-use, consistent with the 
     requirements set forth in the subsections, in the year 
     preceding every tenth anniversary of the registration, to 
     provide for correction of deficiencies in submissions under 
     these subsections; to provide for a grace period for making 
     submissions required by these subsections; to modernize the 
     language and to simplify and clarify the existing procedural 
     requirements for filing affidavits under these subsections; 
     and to harmonize certain procedural requirements for such 
     affidavits with the requirements for a registration renewal 
     application contained in section 9 of the Trademark Act of 
     1946.
       Subsection 8(a) states the duration of each registration 
     and provides that the registration shall be canceled by the 
     Commissioner if timely affidavits of use are not 
     filed. Paragraph (1) of subsection 8(a) states that an 
     affidavit of use must be filed by the end of six years 
     following registration. Paragraph (2) of subsection 8(a) 
     states that an affidavit of use must be filed by the end 
     of six years following the date of publication under 
     subsection 12(c) of the Trademark Act of 1946 (15 U.S.C. 
     1062(c)). Paragraph (3) of subsection 8(a) states that an 
     affidavit of use must be filed by the end of each 
     successive ten-year period following the date of 
     registration.
       Subsection 8(b) sets out the length of the time period 
     during which the statutory filing can be made and the 
     contents needed in each filing. In every case, there is a one 
     year statutory period for filing the affidavit.
       Subsection 8(c) permits the filing of the use affidavit, 
     after the statutory period for filing has ended upon payment 
     of an additional ``grace period'' surcharge. The section also 
     provides that a correction of a deficiency, after the 
     statutory period, may be made upon payment of an additional 
     ``deficiency'' surcharge.
       Subsection 8(c)(1) sets out the time period for filing the 
     use affidavit where the statutory period has expired, the so-
     called ``grace'' period, and gives the Commissioner authority 
     to prescribe a surcharge for affidavits filed during the 
     grace period.
       Subsection 8(c)(2) allows for correction of deficiencies in 
     the filings submitted under this section upon payment of the 
     deficiency surcharge.

[[Page S6578]]

       Subsection 8(d) sets out the requirement that the 
     Commissioner attach to each certificate of registration, and 
     notice of publication under section 12(c), a special notice 
     of the requirement for the affidavits required by this 
     section. This section preserves an obligation of the 
     Commissioner that is set out in the last sentence of existing 
     section 8(a) and in section 12(c).
       Subsection 8(e) preserves the obligation of the 
     Commissioner, in existing subsection 8(c), to notify any 
     owner who files an affidavit under section 8 of his 
     acceptance or refusal of the affidavit. The subsection has 
     been revised to reflect the revisions in subsections 8 (a) 
     and (b) by stating that it applies to any of the above 
     prescribed affidavits.
       Subsection 8(f) has been added to require the appointment 
     by owners, not domiciled in the United States, of a domestic 
     representative for service of notices or process in 
     proceedings affecting the mark.
     Periodic Filing of the Affidavit
       The PTO continues to believe in the value of requiring a 
     periodic filing verifying the continued use of the mark as a 
     way to maintain the integrity of the trademark register by 
     periodically removing from the register marks no longer in 
     use in commerce. Therefore, consistent with the Treaty 
     obligations, the proposed revision adds to section 8 of the 
     Trademark Act of 1946 an obligation to file an affidavit of 
     use or excusable non-use, consistent with the requirements 
     set forth in the subsection, in the year preceding the tenth 
     anniversary of the registration and every ten years 
     thereafter. This revision is proposed in view of the proposed 
     deletion of the requirement in connection with registration 
     renewal, in section 9 of the Trademark Act of 1946, for a 
     verified statement attesting to the use of the mark in 
     commerce, accompanied by specimens or facsimiles, or a 
     showing of excusable non-use.
     Grace Period and Correction of Deficiencies
       Rules 8 of the Regulations under the Trademark Law Treaty 
     provides that renewal request must be accepted for at least a 
     six-month period, upon payment of a surcharge, after the date 
     the renewal is due. The existing provisions of section 9 of 
     the Trademark Act of 1946 permit the renewal application to 
     be filed within a three-month period, upon payment of a 
     surcharge, after the date the renewal is due. The existing 
     provisions of section 8 of the Trademark Act of 1946 contain 
     no grace period for the filing of the required affidavit 
     after its due date. As described below, the proposed revision 
     incorporates the six-month grace period required by the 
     treaty for filing renewal requests and harmonizes the 
     requirements for filings under sections 8 and 9 of the 
     Trademark Act of 1946. Harmonization of the filing 
     requirements of sections 8 and 9 will require the amendment 
     of both sections to provide this six-month grace period for 
     making the required filing. This amendment is a 
     liberalization of sections 8 and 9 of the Trademark Act of 
     1946, which is desirable to avoid, to the extent possible, 
     the removal from the register for mere technical reasons of 
     marks that are still in use in commerce.
       The proposed revision to section 8 of the Trademark Act of 
     1946 will amend the existing law by providing a six-month 
     grace period for filing the required affidavit, conditioned 
     upon payment of a ``grace period'' surcharge. Additionally, 
     the proposed revision permits the correction of a deficiency 
     after the sixth anniversary of registration. Such correction 
     must be accompanied by a ``deficiency surcharge'' and be 
     filed no later than the end of a prescribed period after 
     notification of the deficiency. This proposed revision is 
     consistent with the practice proposed in the revision to 
     section 9(a) of the Trademark Act of 1946, concerning 
     renewal.
       Only an owner who did not make any filing prior to the end 
     of the statutory period may make the required filing under 
     the grace period provisions. The owner filing an affidavit 
     prior to the end of the statutory period, but correcting a 
     deficiency either during or after the grace period, will be 
     subject to the ``deficiency surcharge'' only. On the other 
     hand, the owner filing an affidavit during the six-month 
     grace period, will be subject to the ``grace period 
     surcharge'' (for the ability to file the affidavit during the 
     grace period) and, if notified of deficiencies, the 
     ``deficiency surcharge'' (for the ability to correct a 
     deficiency after the end of the statutory period.) The 
     proposed revision does not define deficiency or place any 
     limits on the type of deficiency or omission that can be 
     cured after expiration of the statutory filing period. The 
     Commissioner has broad discretion to provide procedures and 
     fees for curing deficiencies or omissions.
     Simplification and Clarification of Section 8 of the 
         Trademark Act
       The proposed revision conforms the requirements of 
     subsections 8(a) and (b) of the Trademark Act of 1946 to 
     current practice. First, the language in the existing 
     subsections ``attaching to the affidavit a specimen or 
     facsimile showing current use of the mark'' is revised to 
     clarify that the specimens or fascimiles are to be filed 
     along with the affidavit but are not considered part of the 
     affidavit for purposes of complying with the requirement to 
     set forth in the affidavit the goods or services on or in 
     connection with which the mark is in use in commerce. The 
     sentence comprising subsection 8(a) of the Trademark Act of 
     1946 has been revised to clarify and distinguish the 
     requirements for the fee, the affidavit, the specimens and  a 
     showing of non-use. The proposed revision further permits 
     the Commissioner to specify the number of specimens or 
     facsimiles required so that he may require a specimen or 
     facsimile for each class of goods or services identified 
     in the registration. The language ``setting forth those 
     goods or services recited in the registration on or in 
     connection with which the mark is not in use in commerce'' 
     is proposed to be added to parallel the affidavit 
     requirements pertaining to use of the mark and to clarify 
     that the owner must specify the goods or services to which 
     a showing of non-use pertains.
     Existing Subsection 8(b)
       The requirements set out in former subsection 8(b) of the 
     Trademark Act of 1946, pertaining to marks published pursuant 
     to section 12(c) of the Trademark Act of 1946, have been set 
     out in subsections 8(a)(2), 8(b) and (8)(c) and conform to 
     the proposed revisions as to the time of filing the 
     affidavit, the grace period and the correction of 
     deficiencies.
     Existing Subsection 8(c)
       Subsection 8(c) of the Trademark Act of 1946 is now set out 
     in subsection 8(e) and has been amended to reflect the 
     revisions in subsections 8 (a) and (b) to add requirements 
     for the periodic filing of additional affidavits by changing 
     reference from ``. . . any owner who files either of the 
     above-prescribed affidavits . . .'' to ``. . . any owner who 
     files one of the above-prescribed affidavits . . .''.
     Subsection 8(f)--Appointment of Domestic Representative
       Section 5 of this Act proposes to add a section 8(f) to the 
     Trademark Act of 1946 to provide for the appointment of a 
     domestic representative for service of notices or process in 
     proceedings affecting the mark by owners not domiciled in the 
     United States. This new subsection is consistent with similar 
     requirements imposed on applicants by subsection 1(e) of the 
     Trademark Act of 1946. This is necessary because the 
     appointment required in subsection 1(e) of the Trademark Act 
     of 1946 pertains only during the pendency of the application.
     Registrant or Owner: Who must file?
       Throughout the revised section 8, the term ``registrant'' 
     has been replaced by the term ``owner.'' The practice at the 
     Patent and Trademark Office has been to require that the 
     current owner of the registration file all the post-
     registration affidavits needed to maintain a registration. 
     The current owner of the registration must aver to actual 
     knowledge of the use of the mark in the subject registration. 
     However, the definition of ``registrant'' in section 45 of 
     the Act states that the ``terms `applicant' and `registrant' 
     embrace the legal representatives, predecessors, successors 
     and assigns of each applicant and registrant.'' Therefore, 
     use of the term ``registrant'' in section 8 of the Act would 
     imply that any legal representative, predecessor, successor 
     or assign of the registrant could successfully file the 
     affidavits required by sections 8 and 9. To correct this 
     situation, and to keep with the general principle, as set out 
     in section 1, that the owner is the proper person to 
     prosecute an application, section 8 has been amended to state 
     that the owner must file the affidavits required by the 
     section.


                   section 6. renewal of registration

     Summary of Section 6
       This section amends subsection 9(a) of the Trademark Act of 
     1946 to cross-reference the obligatory registration 
     maintenance requirements of section 8 of the Trademark Act of 
     1946; to delete the obligation to submit as part of a renewal 
     application verified statements regarding the use of the mark 
     in commerce and attaching to the application a specimen or 
     facsimile showing current use of the mark; to extend the time 
     for filing a renewal application to up to one year before the 
     expiration of the period for which the registration was 
     issued or renewed and, for an additional fee, up to six 
     months after the end of the expiring period of the 
     registration; to grant authority to the Commissioner to 
     prescribe the form of the written application for renewal of 
     the registration; and, to permit the correction of 
     deficiencies after the statutory filing period.
       This section amends subsection 9(c) to specify the 
     requirements for the appointment by registrants not domiciled 
     in the United States of a domestic representative for service 
     of notices or process in proceedings affecting the mark.
     Use Requirement for Registration Renewal
       Separate from the obligation to renew a trademark 
     registration at ten-year intervals, the U.S. Patent and 
     Trademark Office continues to believe in the value of 
     requiring a periodic filing verifying the continued use of 
     the mark as a way to maintain the integrity of the trademark 
     register by periodically removing from the register marks no 
     longer in use in commerce. Therefore, consistent with the 
     Treaty obligations, the proposed revision deletes from 
     subsection 9(a) of the Trademark Act of 1946 the requirement 
     that the renewal application include a verified statement 
     attesting to the use of the mark in commerce, accompanied by 
     a specimen or facsimile evidencing current use of the mark, 
     or a showing of excusable non-use. These requirements are 
     proposed to be added to subsection 8(a) of the Trademark Act 
     of 1946 in the form of an obligation to file an affidavit of 
     use or excusable non-use, consistent with the requirements 
     set forth in the subsection, on the tenth anniversary of the 
     registration and every ten years thereafter.

[[Page S6579]]

       Also, consistent with the treaty obligations, the 
     requirement that the renewal application be verified is 
     proposed to be deleted and the Commissioner is granted 
     authority to prescribe the form of the written renewal 
     application, consistent with law and international treaties 
     or agreements to which the United States is a party.
     Grace Period and Harmonization
       Rule 8 of the Regulations under the Trademark Law Treaty 
     provides that a renewal request must be accepted for at least 
     a six-month period, upon payment of a surcharge, after the 
     date the renewal is due. The existing provisions of section 9 
     of the Trademark Act of 1946 permit the renewal application 
     to be filed within a three-month period, upon payment of a 
     surcharge, after the date the renewal is due. The revision 
     proposes to change the three-month grace period for 
     requesting registration renewal to the six-month grace period 
     required by the treaty and harmonizes the requirements for 
     filings under sections 8 and 9 of the Trademark Act of 1946. 
     Harmonization of the filing requirements of sections 8 and 9 
     will require the amendment of both sections to provide this 
     six-month grace period for making the required filing. 
     This amendment is a liberalization of sections 8 and 9 of 
     the Trademark Act of 1946, which is desirable to avoid, to 
     the extent possible, the removal from the register for 
     mere technical reasons of marks that are still in use in 
     commerce. In particular, consistent with the filing 
     requirements in section 8 of the Trademark Act of 1946, 
     the period for filing a renewal request is expressly 
     defined as the period one year prior to expiration of the 
     period for which the registration was issued or renewed, 
     or within a grace period of six months after the end of 
     the expiring period.
     Subsection 9(c)--Appointment of Domestic Representatives
       Subsection 6(b) of this Act amends subsection 9(c) to the 
     Trademark Act of 1946 to provide for the appointment of a 
     domestic representative for service of notices or process in 
     proceedings affecting the mark by owners not domiciled in the 
     United States, rather than referencing the requirements in 
     subsection 1(e) of the Trademark Act of 1946. This is 
     preferable because the appointment required in subsection 
     1(e) of the Trademark Act of 1946 pertains only during the 
     pendency of the application.


                section 7. recording assignment of mark

       This section amends section 10 of the Trademark Act of 1946 
     (15 U.S.C. 1060) to clarify that the PTO will record a change 
     in ownership without requiring a copy of the underlying 
     document; and to remove the proscription against the 
     assignment of a mark in an application filed under section 
     1(b) of the Trademark Act of 1946 (15 U.S.C. 1051(b)) 
     (intent-to-use) upon the filing of an amendment to allege use 
     pursuant to section 1(c) of the Trademark Act of 1946 (15 
     U.S.C. 1051(c)).
       The PTO has interpreted the present reference to a ``record 
     of assignments'' in section 10 to require the PTO to record a 
     copy of the actual assignment document. Article 11(4) of 
     Trademark Law Treaty prohibits the requirement of a statement 
     or proof of such transfer in order to record an assignment of 
     a trademark registration. The proposed amendment clarifies 
     that, rather than maintaining a ``record of assignments,'' 
     the PTO ``shall maintain a record of the prescribed 
     information on assignments, in such form as may be prescribed 
     by the Commissioner.'' The proposed amendment authorizes the 
     PTO to determine what information regarding assignments it 
     will record and maintain. The proposed amendment will ensure 
     that a transfer of goodwill remains a necessary element of a 
     valid assignment of a trademark; however, the PTO will not 
     require a statement or proof of the transfer of goodwill in 
     order to record an assignment of a trademark registration.
       Additionally, pertaining to the proscription against the 
     assignment of a mark in an application filed under section 
     1(b) of the Trademark Act of 1946 (intent-to-use), the 
     proposed amendment adds reference to section 1(c) of the 
     Trademark Act of 1946 so that the filing of an amendment to 
     allege use pursuant to section 1(c) removes the restriction 
     against assigning the mark except to the successor to the 
     business of the applicant, or portion thereof, to which the 
     mark pertains, if that business is ongoing and existing. 
     Presently, prior to registration of an application filed 
     pursuant to section 1(b) of the Trademark Act of 1946 
     (15 U.S.C. 1051(b)) based upon a bona fide intention to 
     use a mark in commerce on the identified goods or 
     services, an applicant must file either a verified 
     statement of use under section 1(d) of the Trademark Act 
     of 1946 (15 U.S.C. 1051(d)) or an amendment to allege use 
     under section 1(c) of the Trademark Act of 1946 (15 U.S.C. 
     1051(c)). The substance of the two filings is essentially 
     the same. The difference between the two filings is the 
     point at which the filing is made. Presently, section 10 
     of the Trademark Act of 1946 (15 U.S.C. 1060) limits the 
     assignability of an application to register a mark under 
     section 1(b) of the Trademark Act of 1946 (15 U.S.C. 
     1051(b)) until such time as applicant files a verified 
     statement of use under section 1(d) of the Trademark Act 
     of 1946 (15 U.S.C. 1051(d)). Since the effect of the 
     filing of an amendment to allege use under section 1(c) of 
     the Trademark Act of 1946 (15 U.S.C. 1051(c)) is 
     analogous, there is no reason in law or policy for 
     omitting to include reference to section 1(c) in section 
     10.


   section 8. international conventions; copy of foreign registration

       This section amends section 44(e) of the Trademark Act of 
     1946 (15 U.S.C. 1126(e)) to change the requirement that an 
     application ``be accompanied by a certificate or certified 
     copy'' of the foreign registration, which has been 
     interpreted to be a filing date requirement, so that such 
     copy may be submitted to the PTO prior to registration, 
     within such time limits as may be prescribed by the 
     Commissioner. Such a requirement as a prerequisite to 
     receiving a filing date is prohibited pursuant to Article 5 
     of the Trademark Law Treaty.


                    section 9. transition provisions

       This section clarifies when and how the new provisions set 
     out for the maintenance of registrations will apply to 
     existing and future applications and registrations.
       Section 9(a) provides that registrations issued or renewed 
     with a 20 year term, i.e. those registrations issued or 
     renewed prior to the effective date of the Trademark Law 
     Revision Act of 1988, will be subject to the post-
     registration provisions of this Act on or after a date that 
     is 1 year before the date on which the twenty year term 
     expires. This provision will allow those registrations to 
     have the benefit of the one year statutory filing period and 
     the six-month grace period provided by the Act.
       Section 9(b) provides that the Act shall apply to any 
     application for the registration of a trademark pending on, 
     or filed after, the effective date of the Act.
       Section 9(c) provides that the filing of an affidavit under 
     Section 5 of the Act, which amends Section 8(b) of the 
     Trademark Act of 1946, shall be required for any registration 
     if the sixth or tenth anniversary of the registration, or the 
     sixth anniversary of publication under section 12(c) of the 
     Trademark Act of 1946, occurs on or after the effective date 
     of this Act.
       Section 9(d) provides that the amendment made by section 6 
     of this Act shall apply to the filing of an application for 
     the renewal of a registration if the expiration date of the 
     registration for which the renewal application is filed is on 
     or after the effective date of this Act.


                       section 10. effective date

       This section provides that this Act shall take effect one 
     year after enactment of the Act or upon entry into force of 
     the Treaty in respect to the United States, whichever occurs 
     first. Since the provisions of the Act will modernize and 
     simplify procedures pertaining to trademark application 
     filing and registration maintenance, this section provides 
     that, if the U.S. has not acceded to the treaty and become 
     subject to the obligations thereunder within a year after 
     enactment, the Act will become effective so that its benefits 
     can be realized by trademark owners.
       Since the United States is not one of the first five States 
     to deposit its instrument of ratification or accession, 
     Article 20 of the Treaty provides that the Treaty shall enter 
     into force three months after the date on which the 
     instrument of ratification or accession is deposited.

  Mr. LEAHY. Mr. President, I am pleased today to introduce the 
Trademark Law Treaty Implementation and Registration Simplification Act 
(TLT Act). The TLT Act, which will implement the Trademark Law Treaty 
of 1994, is an important step in our continuing endeavor to harmonize 
trademark law around the world so that American businesses--
particularly small American businesses--seeking to expand 
internationally will face simplified and straightforward trademark 
registration procedures in foreign countries.
  This bill is one of a series I have supported which protect American 
trademark holders in a world of rapidly changing technology and 
international competition. Earlier this year I introduced S. 1727, 
legislation authorizing the National Research Council of the National 
Academy of Sciences to conduct a comprehensive study of the effects of 
adding new generic Top Level Domains on trademark and other 
intellectual property rights owners. Moreover, I supported the Federal 
Trademark Dilution Act of 1995, which was enacted into law last 
Congress. This legislation provides intellectual property rights 
holders with the power to enjoin another person's commercial use of 
famous marks that would cause dilution of the mark's distinctive 
quality. Together, these measures represent efforts to refine American 
trademark law to ensure that it promotes American interests.
  Today more than ever before, trademarks are among the most valuable 
assets of business. One of the major obstacles in securing 
international trademark protection is the difficulty and cost involved 
in obtaining and maintaining a registration in each and every country. 
Countries around the world have a number of varying requirements for 
filing trademark applications, many of which are non-substantive and 
very confusing. Because of these difficulties, many U.S. businesses, 
especially smaller businesses,

[[Page S6580]]

are forced to concentrate their efforts on registering their trademarks 
only in certain major countries while pirates freely register their 
marks in other countries.
  The Trademark Law Treaty will eliminate many of the arduous 
registration requirements of foreign countries by enacting a list of 
maximum requirements for trademark procedures. Eliminating needless 
formalities will be an enormous step in the direction of a rational 
trademark system which will benefit American business, especially 
smaller businesses, to expand into the international market more 
freely. Fortunately, the Trademark Law Treaty has already been signed 
by thirty-five countries, has already been ratified by ten countries 
including Japan and the United Kingdom, and has already been reported 
favorably to the full Senate by the Senate Foreign Affairs Committee.
  As the United States is already in accordance with most of the 
Trademark Law Treaty requirements, the TLT Act would impose only minor 
changes to U.S. trademark law. The Patent and Trademark Office, the 
International Trademark Association and the American Intellectual 
Property Law Association have indicated their support for the TLT Act.
  I hope the Senate will consider and pass this bill expeditiously.

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