[House Report 105-199]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                    105-199
_______________________________________________________________________


 
                   MADRID PROTOCOL IMPLEMENTATION ACT

_______________________________________________________________________


 July 24, 1997.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Coble, from the Committee on the Judiciary, submitted the following

                              R E P O R T

                        [To accompany H.R. 567]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on the Judiciary, to whom was referred the bill 
(H.R. 567) 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, having considered the 
same, reports favorably thereon without amendment and 
recommends that the bill do pass.

                           TABLE OF CONTENTS

                                                                  

                                                                   Page
Purpose and Summary........................................           2
Background and Need for the Legislation....................           2
Hearings...................................................           4
Committee Consideration....................................           4
Vote of the Committee......................................           4
Committee Oversight Findings...............................           4
Committee on Government Reform and Oversight Findings......           4
New Budget Authority and Tax Expenditures..................           4
Congressional Budget Office Cost Estimate..................           5
Constitutional Authority Statement.........................           6
Section-by-Section Analysis and Discussion.................           6
Changes in Existing Law Made by the Bill, as Reported......           7

                          Purpose and Summary

    The purpose of H.R. 567 is to implement the Madrid Protocol 
Agreement (``Protocol'') which provides for an international 
registration system for trademarks.

                Background and Need for the Legislation

    Trademark protection under federal law provides for the 
legal protection of particular words or symbols that have been 
used on particular goods or services. Trademark protection 
generally entitles the owner of a trademark to protection 
against similar or confusing trademarks.
    Trademarks constitute a significant part of the value of a 
product and figure largely in the advertising of the product. A 
very recognizable mark reflects the popularity of a product and 
often is prominently featured in a company's advertising. The 
protection of the mark is therefore of paramount importance to 
the affected company. Understandably, an individual or company 
using another company's mark could significantly diminish the 
market share of a particular product or compromise the goodwill 
derived from ownership of the mark.
    Since products are marketed and sold on an international 
scale, protection in countries other than the United States 
improves the competitiveness of American businesses. Each 
country has its own laws determining the level of protection 
for trademarks and the type of marks that can be registered for 
particular products. American citizens seeking protection for 
their trademarks outside the United States are currently 
required to register individually in each country in which 
protection is sought.
    As with many intellectual property rights, there are 
international agreements relating to the registration and 
protection of trademarks. Since 1891, the Madrid Agreement 
Concerning the International Registration of Marks (``Madrid 
Agreement'') has provided an international registration system 
operated under the auspices of the International Bureau of the 
World Intellectual Property Organization (WIPO). The United 
States has never been a signatory to the Madrid Agreement.
    On June 27, 1989, at a Diplomatic Conference in Madrid, 
Spain, the parties to the Madrid Agreement signed the Madrid 
Protocol. The United States was an observer and advisor to 
these talks but not a participant in the negotiations since 
only signatories could amend the Madrid Agreement through the 
Protocol. Subsequent talks, at which the United States has 
participated as an observer, have been devoted to developing 
regulations for the implementation of the Protocol for those 
countries and entities which have and will become signatories 
to it. Practically speaking, the resulting Protocol amendments 
updated the Madrid Agreement, in many respects by conforming 
its contents to existing provisions in U.S. law.
    H.R. 567 represents implementing legislation for the 
Protocol. It is identical to measures introduced in both the 
103rd and 104th Congresses. While the Administration has still 
not forwarded the treaty to the Senate for ratification, 
thereby allowing the United States to become a member of the 
Protocol, the introduction of H.R. 567 sends a signal to the 
international community, U.S. businesses, and trademark owners 
that Congress is serious about our nation becoming part of a 
low-cost, efficient system to promote the international 
registration of marks. U.S. membership in the Protocol would 
assist American businesses in protecting their proprietary 
names and brand-name goods while saving money, time, and 
effort. This is especially critical to small businesses which 
may otherwise lack the resources to acquire world-wide 
protection for their trademarks.
    The Protocol took effect in April 1996, and currently binds 
16 countries, but not the United States. Without U.S. 
participation, however, the Protocol may never achieve its 
purpose of providing a one-stop, inexpensive ``shop'' for 
trademark applicants who, by filing one application in their 
country and in their language, can receive protection from each 
member country of the Protocol.
    There is no opposition to H.R. 567, nor to the substantive 
portions of the treaty. The State Department is trying to 
resolve differences between the Administration and the European 
Union (EU) regarding the voting rights of intergovernmental 
members of the Protocol in the Assembly established by the 
agreement. Pursuant to the Protocol, the EU receives a separate 
vote in addition to the votes of its member states. While it 
may be argued that the existence of a supranational European 
trademark issued by the Office for Harmonization in the 
Internal Market (``European Trademark Office'') justifies the 
additional vote, the State Department opposes this proviso as a 
contravention of the democratic concept of one vote per 
country. State Department officials also believe this voting 
structure may establish a precedent for deviation from the one 
vote-one state principle in future international agreements. 
These differences must be settled before the Secretary of State 
will recommend to the President that the Administration sign 
the Protocol and present a ratification package to the Senate.
    In furtherance of this end, the Secretary of State 
transmitted an April 1997 ``demarche,'' or diplomatic 
representation, to European Commission (EC) officials in 
Brussels, Belgium, requesting that the organization assent to a 
compromise position on the Protocol voting rights structure 
mentioned above. In effect, the Secretary wants the EC (the 
government bureaucracy of the EU) to endorse substitute 
language on the matter that is identical to that set forth in 
Article 15.3(b) of the WIPO Copyright Treaty negotiated last 
December in Geneva, Switzerland. Briefly, Article 15.3(b) would 
permit an ``intergovernmental organization,'' such as the EU, 
to participate in place of its member states with a number of 
votes equal to the number of states which are parties to the 
Protocol. Moreover, an intergovernmental organization could not 
vote if one of its member states chose to participate, and vice 
versa. In other words, the EU could function only as a proxy 
for its members.
    While the focal point of the demarche is the voting rights 
structure of the Protocol, the Secretary of State also 
mentioned the following topics in the document:
          The adoption of Article 18 WIPO Copyright language 
        governing ``competency'' among the EU and its member 
        states. This would ensure that every contracting party 
        to the Protocol (including intergovernmental 
        organizations like the EU) would assume all of the 
        obligations under the Protocol in addition to enjoying 
        all of its benefits.
          Affirmation of Article 14 of the Protocol governing 
        the admission of ``acceptable'' intergovernmental 
        organizations.
          ``Bloc,'' or en masse, voting. The State Department 
        in concerned that the EU could cast bloc votes on 
        behalf of its members, a practice that could 
        ``jeopardize'' the value of single votes and 
        potentially compromise U.S. interests. The demarche 
        cites the need to explore the matter informally.

                                Hearings

    The Subcommittee on Courts and Intellectual Property 
conducted a hearing on H.R. 567 on May 22, 1997. 
Representatives from the State Department, the Patent and 
Trademark Office, the International Trademark Association 
(INTA), and the American Intellectual Property Law Association 
(AIPLA) all testified in support of the bill.

                        Committee Consideration

    On June 10, 1997, the Subcommittee on Courts and 
Intellectual Property, a reporting quorum being present, 
ordered H.R. 567 reported by voice vote, with no objection 
heard, to the Committee on the Judiciary for further 
consideration.
    Subsequently, the Committee on the Judiciary, a reporting 
quorum being present, ordered H.R. 567 reported on June 18, 
1997, also by voice vote, with no objection heard.

                         Vote of the Committee

    There were no recorded votes during committee consideration 
of H.R. 567.

                      Committee Oversight Findings

    In compliance with clause 2(l)(3)(A) of rule XI of the 
Rules of the House of Representatives, the Committee reports 
that the findings and recommendations of the Committee, based 
on oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

         Committee on Government Reform and Oversight Findings

    No findings or recommendations of the Committee on 
Government Reform and Oversight were received as referred to in 
clause 2(l)(3)(D) of rule XI of the Rules of the House of 
Representatives.

               New Budget Authority and Tax Expenditures

    Clause 2(l)(3)(B) of House Rule XI is inapplicable because 
this legislation does not provide new budgetary authority or 
increased tax expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 2(l)(C)(3) of rule XI of the 
Rules of the House of Representatives, the Committee sets 
forth, with respect to the bill, H.R. 567, the following 
estimate and comparison prepared by the Director of the 
Congressional Budget Office under section 403 of the 
Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 18, 1997.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 567, the Madrid 
Protocol Implementation Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Kristen 
Layman, who can be reached at 226-2860.
            Sincerely,

                                           June E. O'Neill, Director.  
    Enclosure.

H.R. 567--Madrid Protocol Implementation Act

    H.R. 567 would amend the Trademark Act of 1946 in order to 
facilitate the implementation of the Madrid Protocol, an 
international agreement that provides for the possibility of 
obtaining trademark protection in several jurisdictions by a 
single registration. The bill specifies administrative 
procedures that would be followed by companies applying for 
international protection of trademarks.
    CBO estimates that enacting this bill would have no 
significant effect on the federal budget. Because the bill 
would not affect direct spending or receipts, pay-as-you-go 
procedures would not apply. Section 4 of the Unfunded Mandates 
Reform Act of 1995 excludes from application of that act 
legislative provisions that are necessary to implement 
international treaty obligations. CBO has determined that H.R. 
567 fits within that exclusion because it would implement the 
Madrid Protocol.
    Based on information from the United States Patent and 
Trademark Office (PTO), CBO estimates that the PTO would incur 
costs of less than $500,000 in fiscal year 1999 to establish a 
computer database, subject to the availability of appropriated 
funds.
    United States participation in the Madrid protocol is also 
likely to result in an increase in the number of trademark 
applications received by the PTO. The PTO's costs for 
processing trademark applications are fully funded by filing 
fees paid by the applicants. Such fees are collected and spent 
under authority provided in annual appropriations acts. Because 
fee income offsets the costs of processing applications, there 
would be no net budgetary impact from any change in the number 
of trademark applications.
    The CBO staff contact for this estimate is Kristen Layman, 
who can be reached at 226-2880. The estimate was approved by 
Robert A. Sunshine, Deputy Assistant Director for Budge 
Analysis.

                        Constitutional Authority

    Pursuant to Rule XI, clause 2(1)(4) of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in Article I, section 8, clause 8, of the 
Constitution.

                      Section-by-Section Analysis

Section 1.--Short Title
    This section provides a short title: the ``Madrid Protocol 
Implementation Act.''
Section 2.--Amendments to the Trademark Act of 1946
    This section amends the ``Trademark Act of 1946'' by adding 
a new Title XII which contains the following provisions:
          The owner of a registration granted by the Patent and 
        Trademark Office (PTO) or the owner of a pending 
        application before the PTO may file an international 
        application for trademark protection at the PTO.
          After receipt of the appropriate fee and inspection 
        of the application, the PTO Commissioner is charged 
        with the duty of transmitting the application to the 
        WIPO International Bureau.
          The Commissioner is also obliged to notify the 
        International Bureau whenever the international 
        application has been ``.  .  . restricted, abandoned, 
        canceled, or has expired .  .  .'' within a specified 
        time period.
          The holder of an international registration may 
        request an extension of its registration by filing with 
        the PTO or the International Bureau.
          The holder of an international registration is 
        entitled to the benefits of extension in the United 
        States to the extent necessary to give effect to any 
        provision of the Protocol; however, an extension of an 
        international registration shall not apply to the 
        United States if the PTO is the office of origin with 
        respect to that mark.
          The holder of an international registration with an 
        extension of protection in the United States may claim 
        a date of priority based on certain conditions.
          If the PTO Commissioner believes that an applicant is 
        entitled to an extension of protection, he or she 
        publishes the mark in the ``Official Gazette of the 
        Patent and Trademark Office.'' This serves notice to 
        third parties who oppose the extension. Unless an 
        official protest conducted pursuant to existing law is 
        successful, the request for extension may not be 
        refused. If the request for extension is denied, 
        however, the Commissioner notifies the International 
        Bureau of such action and sets forth the reason(s) why. 
        The Commissioner must also apprise the International 
        Bureau of other relevant information pertaining to 
        requests for extension within designated time periods.
          If an extension for protection is granted, the 
        Commissioner issues a certificate attesting to such 
        action, and publishes notice of the certificate in the 
        ``Gazette.'' Holders of extension certificates 
        thereafter enjoy protection equal to that of other 
        owners of registration listed on the Principal Register 
        of the PTO.
          If the International Bureau notifies the PTO of a 
        cancellation of some or all of the goods and services 
        listed in the international registration, the 
        Commissioner must cancel an extension of protection 
        with respect to the same goods and services as of the 
        date on which the international registration was 
        canceled. Similarly, if the International Bureau does 
        not renew an international registration, the 
        corresponding extension of protection in the United 
        States shall cease to be valid. Finally, the holder of 
        an international registration canceled in whole or in 
        part by the International Bureau may file an 
        application 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.
          The holder of an extension of protection must, within 
        designated time periods and under certain conditions, 
        file an affidavit setting forth the relevant goods or 
        services covered and any explanation as to why their 
        nonuse in commerce is related to ``special 
        circumstances,'' along with a filing fee.
          The right to an extension of protection may be 
        assigned to a third party so long as that individual is 
        a national of, or is domiciled in, or has a 
        ``bonafide'' business located in a country that is a 
        member of the Protocol; or has such a business in a 
        country that is a member of an intergovernmental 
        organization (like the EC) belonging to the Protocol.
          An extension of protection conveys the same rights as 
        an existing registration for the same mark if the 
        extension and existing registration are owned by the 
        same person, and extension of protection and the 
        existing registration cover the same goods or services, 
        and the certificate of extension is issued after the 
        date of the existing registration.
Section 3.--Effective Date
    This section states that the effective date of the act 
shall commence on the date on which the Madrid Protocol takes 
effect in the United States.

  

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3 of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italics and existing law in which no change is 
proposed is shown in roman):

                          ACT OF JULY 5, 1946

        (Commonly referred to as the ``Trademark Act of 1946'')

 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.

          * * * * * * *

                     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 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 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.