[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.
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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,
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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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