[House Report 106-250]
[From the U.S. Government Publishing Office]



106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    106-250

======================================================================



 
                    TRADEMARK AMENDMENTS ACT OF 1999

                                _______


 July 22, 1999.--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. 1565]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 1565) to amend the Trademark Act of 1946 relating to 
dilution of famous marks, and for other purposes, having 
considered the same, reports favorably thereon with an 
amendment and recommends that the bill as amended do pass.

                           TABLE OF CONTENTS

                                                                  

                                                                 Page
The Amendment..............................................           1
Purpose and Summary........................................           4
Background and Need for the Legislation....................           4
Hearings...................................................           7
Committee Consideration....................................           8
Committee on Government Reform Findings....................           8
New Budget Authority and Tax Expenditures..................           8
Congressional Budget Office Cost Estimate..................           8
Constitutional Authority Statement.........................           9
Section-by-Section Analysis and Discussion.................           9
Changes in Existing Law Made by the Bill, as Reported......          12

    The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Trademark Amendments Act of 1999''.

SEC. 2. DILUTION AS A GROUNDS FOR OPPOSITION AND CANCELATION.

    (a) Registrable Marks.--Section 2 of 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'' (in this Act referred to as the 
``Trademark Act of 1946'') (15 U.S.C. 1052) is amended by adding at the 
end the following flush sentences: ``A mark which when used would cause 
dilution under section 43(c) may be refused registration only pursuant 
to a proceeding brought under section 13. A registration for a mark 
which when used would cause dilution under section 43(c) may be 
canceled pursuant to a proceeding brought under either section 14 or 
section 24.''.
    (b) Opposition.--Section 13(a) of the Trademark Act of 1946 (15 
U.S.C. 1063(a)) is amended in the first sentence by inserting ``, 
including as a result of dilution under section 43(c),'' after 
``principal register''.
    (c) Petitions To Cancel Registrations.--Section 14 of the Trademark 
Act of 1946 (15 U.S.C. 1064) is amended in the matter preceding 
paragraph (1) by inserting ``, including as a result of dilution under 
section 43(c),'' after ``damaged''.
    (d) Cancelation.--Section 24 of the Trademark Act of 1946 (15 
U.S.C. 1092) is amended in the second sentence by inserting ``, 
including as a result of dilution under section 43(c),'' after 
``register''.

SEC. 3. REMEDIES IN CASES OF DILUTION OF FAMOUS MARKS.

    (a) Injunctions.--(1) Section 34(a) of the Trademark Act of 1946 
(15 U.S.C. 1116(a)) is amended in the first sentence by striking 
``section 43(a)'' and inserting ``subsection (a) or (c) of section 
43''.
    (2) Section 43(c)(2) of the Trademark Act of 1946 (15 U.S.C. 
1125(c)(2)) is amended in the first sentence by inserting ``as set 
forth in section 34'' after ``relief''.
    (b) Damages.--Section 35(a) of the Trademark Act of 1946 (15 U.S.C. 
1117(a)) is amended in the first sentence by striking ``or a violation 
under section 43(a),'' and inserting ``a violation under section 43(a), 
or a willful violation under section 43(c),''.
    (c) Destruction of Articles.--Section 36 of the Trademark Act of 
1946 (15 U.S.C. 1118) is amended in the first sentence--
            (1) by striking ``or a violation under section 43(a),'' and 
        inserting ``a violation under section 43(a), or a willful 
        violation under section 43(c),''; and
            (2) by inserting after ``in the case of a violation of 
        section 43(a)'' the following: ``or a willful violation under 
        section 43(c)''.

SEC. 4. LIABILITY OF GOVERNMENTS FOR TRADEMARK INFRINGEMENT AND 
                    DILUTION.

    (a) Civil Actions.--Section 32 of the Trademark Act of 1946 (15 
U.S.C. 1114) is amended--
            (1) by amending the last undesignated paragraph in 
        paragraph (1) to read as follows:
    ``As used in this subsection, the term `any person' also includes 
the United States, all agencies and instrumentalities thereof, and all 
individuals, firms, corporations, or other persons acting for the 
United States and with the authorization and consent of the United 
States, and any State, any instrumentality of a State, and any officer 
or employee of a State or instrumentality of a State acting in his or 
her official capacity. The United States, all agencies and 
instrumentalities thereof, and all individuals, firms, corporations, 
other persons acting for the United States and with the authorization 
and consent of the United States, and any State, any instrumentality of 
a State, and any officer or employee of a State or instrumentality of a 
State, shall be subject to the provisions of this Act in the same 
manner and to the same extent as any nongovernmental entity.''.
    (b) Waiver of Sovereign Immunity.--Section 40 of the Trademark Act 
of 1946 (15 U.S.C. 1122) is amended--
            (1) in subsection (b), by striking ``(b) In a suit'' and 
        inserting ``(c) Availibility of Remedies.--In a suit'';
            (2) by striking ``Sec. 40. (a) Any State'' and inserting 
        the following:
    ``Sec. 40. (a) Waiver of Sovereign Immunity by the United States.--
The United States, all agencies and instrumentalities thereof, and all 
individuals, firms, corporations, other persons acting for the United 
States and with the authorization and consent of the United States, 
shall not be immune from suit in Federal or State court by any person, 
including any governmental or nongovernmental entity, for any violation 
under this Act.
    ``(b) Waiver of Sovereign Immunity by States.--Any State''; and
            (3) in the first sentence of subsection (c), as so 
        redesignated--
                    (A) by striking ``subsection (a) for a violation 
                described in that subsection'' and inserting 
                ``subsection (a) or (b) for a violation described 
                therein''; and
                    (B) by inserting after ``other than'' the 
                following: ``the United States or any agency or 
                instrumentality thereof, or any individual, firm, 
                corporation, or other person acting for the United 
                States and with authorization and consent of the United 
                States, or''.
    (c) Definition.--Section 45 of the Trademark Act of 1946 (15 U.S.C. 
1127) is amended by inserting between the 2 paragraphs relating to the 
definition of ``person'' the following:
    ``The term `person' also includes the United States, any agency or 
instrumentality thereof, or any individual, firm, or corporation acting 
for the United States and with the authorization and consent of the 
United States. The United States, any agency or instrumentality 
thereof, and any individual, firm, or corporation acting for the United 
States and with the authorization and consent of the United States, 
shall be subject to the provisions of this Act in the same manner and 
to the same extent as any nongovernmental entity.''.

SEC. 5. CIVIL ACTIONS FOR TRADE DRESS INFRINGEMENT.

    Section 43(a) of the Trademark Act of 1946 (15 U.S.C. 1125(a)) is 
amended by adding at the end the following:
    ``(3) In a civil action for trade dress infringement under this Act 
for trade dress not registered on the principal register, the person 
who asserts trade dress protection has the burden of proving that the 
matter sought to be protected is not functional.''.

SEC. 6. TECHNICAL AMENDMENTS.

    (a) Assignment of Marks.--Section 10 of the Trademark Act of 1946 
(15 U.S.C. 1060) is amended--
            (1) by striking ``subsequent purchaser'' in the second to 
        last sentence and inserting ``assignment'';
            (2) in the first sentence by striking ``mark,'' and 
        inserting ``mark''; and
            (3) in the third sentence by striking the second period at 
        the end.
    (b) Additional Clerical Amendments.--The text and title of the 
Trademark Act of 1946 are amended by striking ``trade-marks'' each 
place it appears and inserting ``trademarks''.

SEC. 7. RIGHTS OF PERFORMERS OF MUSICAL GROUPS.

    (a) In General.--Part A of subtitle II title 36, United States 
Code, is amended by inserting after chapter 2401 the following new 
chapter:

 ``CHAPTER 2501--ASSOCIATION TO PRESERVE AUTHENTICITY OF MUSICAL GROUPS

``Sec.
``250101. Association established.
``250102. Objects and purposes.
``250103. Powers.
``250104. Standards for use of certification mark.
``250105. Rights of performers.

``Sec. 250101. Association established

    ``There shall be established a body corporate which shall be known 
as the `Association to Preserve the Authenticity of Musical Groups'. 
The Association shall have perpetual succession and the powers and 
limitations contained in this chapter. The Association shall appoint 
its chairperson.

``Sec. 250102. Objects and purposes

    The objects and purposes of the Association shall be--
            (1) to benefit entertainers and performers who have 
        performed with original entertainment groups;
            (2) to promote, develop, and assist in preserving and 
        protecting the rights of entertainers and performers; and
            (3) to educate the public concerning the history of 
        performing groups and the names of the actual performers in 
        those groups.
To aid in its purposes, the Association shall promote and use the 
certification mark it establishes under this chapter and allow 
performers to use the certification mark of the Association in 
accordance with the chapter.

``Sec. 250103. Powers

    (a) In General.--The Association may--
            (1) sue and be sued, collect dues, claim and defend in any 
        court its rights and its members rights in its certification 
        mark;
            (2) make and adopt a constitution, bylaws, rules, and 
        regulations for the use of its certification mark;
            (3) from time to time repeal or amend its constitution, 
        bylaws, rules, and regulations not inconsistent with the laws 
        of the United States or any of the States thereof; and
            (4) provide for the safe-keeping and management of its 
        property and funds.
    (b) Certification Mark.--The Association shall establish and have 
the sole and exclusive rights to its certification mark for use in 
carrying out its purposes. No powers or privileges granted by this 
chapter shall interfere or conflict with established or vested rights.

``Sec. 250104. Standards for use of certification mark

    The Association shall establish the standards for those 
entertainers who may use its certification mark. Such standards shall 
include, but are not limited to, the following criteria:
            ``(1) At least one performer in any group displaying or 
        using in its advertising the certification mark must have been 
        a member of the original group that performed under the same or 
        similar name.
            ``(2) Any advertising for such group shall not be false or 
        misleading with respect to the membership or history of the 
        group.
Any additional standards must be consistent with paragraphs (1) and 
(2).

``Sec. 250105. Rights of Performers

    It shall not be a violation of the Trademark Act of 1946 or the 
statutes or common law of any State for an individual who has been a 
member of a performing group to be able to use the certification mark 
of the Association and represent that such individual had been a member 
of such a group in any promotions, advertisements, or performing of the 
same services as those performed by such group, if such representation 
meets the standards in section 250104 and does not deceive or confuse 
as to the nature, characteristics, qualities, or sponsorship of such 
services.''.
    (b) Conforming Amendment.--The item relating to chapter 2501 in the 
table of chapters for subtitle II of title 36, United States Code, is 
amended to read as follows:

``2501. ASSOCIATION TO PROVIDE AUTHENTICITY OF MUSICAL        250101''.
GROUPS.

                          Purpose and Summary

    H.R. 1565 makes significant improvements in trademark law. 
Section two provides holders of famous marks with a right to 
oppose or seek cancellation of a mark that would cause dilution 
as provided in the ``Federal Trademark Dilution Act of 1995.'' 
Pub. L. No. 104-98, 109 Stat. 985 (1996), Lanham Act 
Sec. 43(c), 15 U.S.C. Section three seeks to clarify that in 
passing the Dilution Act, Congress did intend to allow for 
injunctive relief and/or damages against a defendant found to 
have wilfully intended to engage in commercial activity that 
would cause dilution of a famous mark. Section four provides 
private citizens and corporate entities the right to sue the 
Federal Government for trademark infringement. Section five 
amends section 43(a) of the Trademark (Lanham) Act of 1946 to 
provide that in an action for trade dress infringement, where 
the matter sought to be protected is not registered with the 
U.S. Patent and Trademark Office, the plaintiff has the burden 
of proving that the trade dress is not functional. Section six 
makes technical amendments. Section seven seeks to resolve the 
problem of ``imposter'' celebrity musical groups by creating an 
authenticity certification mark that can only be used by 
qualifying members of a musical group.

                Background and Need for the Legislation

    Section two provides holders of famous marks with a right 
to oppose or seek cancellation of a mark that would cause 
dilution as provided in the Dilution Act. In 1996, the 
``Federal Trademark Dilution Act of 1995'' became effective.\1\ 
This Act (``Dilution Act'') gave a federal cause of action to 
holders of famous trademarks for dilution. The Dilution Act 
states:
---------------------------------------------------------------------------
    \1\ Pub. L. No. 104-98, 109 Stat. 985 (1996), Lanham Act 
Sec. 43(c), 15 U.S.C. Sec. 1125(c).

          The owner of a famous mark shall be entitled, subject 
        to the principles of equity and upon such terms as the 
        court deems reasonable, to any injunction against 
        another person's commercial use in commerce of a mark 
        or trade name, if such use begins after the mark has 
        become famous and causes dilution of the distinctive 
        quality of the famous mark, and to obtain such other 
        relief as is provided in this subsection.\2\
---------------------------------------------------------------------------
    \2\ Lanham Act Sec. 43(c)(1), 15 U.S.C. Sec. 1125 (c)(1).
---------------------------------------------------------------------------
    The Dilution Act only applies to the holders of famous 
trademarks. It provides a list of eight factors that courts may 
consider in determining if a mark is famous and distinctive. 
These factors focus on the degree of distinctiveness, both 
inherent and acquired, of the mark and the scope of the use of 
the mark by the holder. If a mark is found to be famous, then 
the holder is entitled to bring a federal cause of action 
against the holder of a identical or similar mark on a 
dissimilar product.
    Since the enactment of the Dilution Act, federal courts 
have grappled with how to apply the statute. Tarnishment and 
blurring have emerged as the two main ways by which federal 
courts have found dilution. Tarnishment occurs when the 
identical or similar mark is used on products that are of poor 
quality or are portrayed in an unwholesome manner so that the 
use evokes negative thoughts about the products bearing the 
famous mark. Blurring occurs when one or more identical or 
similar marks are used on dissimilar products without 
authorization so that the distinctiveness of the famous mark is 
eroded.
    While the Dilution Act was welcomed by the intellectual 
property community, a recent decision by the Trademark Trial 
and Appeal Board of the U.S. Patent and Trademark Office 
illuminated the need for further legislation. The Dilution Act 
provides for injunctive relief after the identical or similar 
mark has been in use and has caused actual dilution of a famous 
mark but provides no means to oppose an application for a mark 
or to cancel a registered mark that will result in dilution of 
the holder's famous mark. In Babson Bros. Co. v. Surge Power 
Corp., 39 USPQ2d 1953 (TTAB 1996), the Board held, ``Based on 
the provisions of the Federal Dilution Act itself, the lack of 
legislative history on the point, and a published report 
relating to a previously proposed federal dilution law . . ., 
we hold that the framers of the law did not intend to provide a 
new statutory ground for opposition or cancellation.''
    Section two is necessary for several reasons. Resolution of 
the dilution issue before the Board, as opposed to Federal 
District Court, would result in more timely, economical, and 
expeditious decisions. Resolving the issue at the Board would 
provide certainty to competing trademark interests, before the 
applicant has invested significant resources in its proposed 
mark, and before dilution-type damage has been suffered in the 
marketplace by the owner of the famous mark. Also, the Board 
would give guidance to litigants and the Trademark Bar, through 
precedent, with respect to such issues as what qualifies as a 
``famous'' mark, and what constitutes dilution, whether by 
blurring or tarnishment.
    Enactment of Section two meets the important policy 
objectives of a more timely and inexpensive resolution of the 
dilution issue, and will result in greater certainty in the 
application of this body of trademark law.
    Section three seeks to clarify that in passing the Dilution 
Act, Congress did intend to allow for injunctive relief and/or 
damages against a defendant found to have wilfully intended to 
engage in commercial activity that would cause dilution of a 
famous trademark. The Dilution Act provided:

          In an action brought under the subsection, the owner 
        of a famous mark shall be entitled only to injunctive 
        relief unless the person against whom the injunction is 
        sought wilfully intended to trade on the owner's 
        reputation or to cause dilution of the famous mark. If 
        such willful intent is proven, the owner of a famous 
        mark shall also be entitled to the remedies set forth 
        in sections 35(a) and 36, subject to the discretion of 
        the court and the principles of equity.\3\
---------------------------------------------------------------------------
    \3\ Lanham Act Sec. 43(c)(2), 15 U.S.C. Sec. 1125 (c)(2).
---------------------------------------------------------------------------
    The language of the Dilution Act presented to the President 
for signing did not include the necessary changes to sections 
35(a) and 36 of the Trademark (Lanham) Act of 1946 as referred 
to in the Dilution Act. Therefore, in an attempt to clarify 
Congress' intent and to avoid any confusion by courts trying to 
interpret the statute, section three makes the appropriate 
changes to sections 35(a) and 36 to allow for injunctive relief 
and damages.
    Section four seeks to level the playing field by amending 
the Lanham Act to allow for private citizens and corporate 
entities to sue the Federal Government for trademark 
infringement. Currently, the Federal Government can not be sued 
for trademark infringement by a private citizen or corporate 
entity. The Federal Government can, and does, enter into the 
market place, competing with the private sector. It enters into 
contracts, promotes the sale of goods and services, and 
registers trademarks. In fact, the Federal Government owns a 
large amount of trademarks. And, it is in a position to sue 
private citizens and corporate entities for infringement of its 
trademarks. However, the same recourse is not available to 
those whose trademarks have been infringed by the Federal 
Government.
    Section five amends section 43(a) of the Lanham Act to 
provide that in an action for trade dress infringement, where 
the matter sought to be protected is not registered with the 
U.S. Patent and Trademark Office, the plaintiff has the burden 
of proving that the trade dress is not functional. A functional 
feature of trade dress is one that is commonly used by similar 
businesses, protection of which would hinder competition. If a 
mark is registered, there is a presumption that it is not 
functional. However, for plaintiffs of unregistered marks to be 
given the same presumption would not promote fair competition 
or registration. For example, the owner of a patent that is 
about to expire may try to register it as a trademark, which 
receives protection as long as the owner uses it in commerce. 
This amendment seeks to ensure that marks that are functional 
are not registered. Functional marks should be dealt with under 
patent law. Therefore, it should be incumbent on the plaintiff 
suing for infringement of an unregistered mark to prove that 
the mark is not functional.
    Section six makes a technical correction to section 10(a) 
of the Lanham Act. It amends section 10(a) of the Lanham Act by 
striking out the words ``subsequent purchase'' as they appear 
in the second to last sentence and replacing them with the word 
``assignment.'' This sentence deals with assignments and so the 
use of the words ``subsequent purchase'' are incorrect. It was 
a technical oversight that this was not part of the legislation 
as it was presented to the President for signing.
    Section 10(a) was part of the ``Trademark Law Treaty 
Implementation Act'' which passed in the 105th Congress and was 
signed into law on October 30, 1998.\4\ Because the ``Trademark 
Law Treaty Implementation Act'' will not go into effect until 
October 30, 1999, it is important that this technical 
correction be made to go into effect when the law does or on 
the date that this bill is signed into law.
---------------------------------------------------------------------------
    \4\  Pub. L. No. 105-330 (1998).
---------------------------------------------------------------------------
    Section seven addresses the issue of ``imposter'' celebrity 
performers of musical groups. During the Subcommittee hearing 
on H.R. 1565, the Subcommittee received testimony from original 
performers of musical groups about how ``imposter'' 
performances have impacted their ability to perform and make a 
living. As a result of that testimony an amendment was adopted 
at the Subcommittee markup which attempted to resolve the 
issue.
    Section seven establishes a new ``certification'' mark, 
much like the ones for ``Idaho Potatoes'' or ``Florida 
Oranges.'' This approach allows the ``rock and roll'' groups to 
establish their own organization and criteria for whom may use 
this seal of authenticity. Also, it gives an affirmative 
defense to those who are using the new certification mark when 
sued by the owner of the trademark for the musical group. 
Section seven significantly resolves the problem for those 
performers that do not own the trademark for the musical group 
and are currently unable to perform as a member of the musical 
group to which they once belonged.

                                Hearings

    The Committee's Subcommittee on Courts and Intellectual 
Property held a hearing on H.R. 1565 on May 5, 1999. Testimony 
was received from The Honorable Todd Dickinson, Acting 
Assistant Secretary of Commerce and Acting Commissioner of 
Patents and Trademarks, U.S. Patent & Trademark Office; Michael 
K. Kirk, Executive Director, American Intellectual Property Law 
Association (AIPLA); Kimbley L. Muller, Vice President, 
International Trademark Association (INTA); Garo Partoyan, 
Chairman, Trademark Committee, Intellectual Property Owners 
(IPO); Jon Bauman,(a/k/a Bowzer, formerly of Sha Na Na); and 
Chuck Blasko, original member of the Vogues.

                        Committee Consideration

    On May 20, 1999, the Subcommittee on Courts and 
Intellectual Property met in open session and ordered favorably 
reported the bill H.R. 1565, as amended, by voice vote, a 
quorum being present. On May 26, 1999, the Committee met in 
open session and ordered favorably reported the bill H.R. 1565 
without amendment, by voice vote, a quorum being present.

                Committee on Government Reform Findings

    No findings or recommendations of the Committee on 
Government Reform and Oversight were received as referred to in 
clause 3(c)(4) of Rule XIII of the Rules of the House of 
Representatives.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of House Rule XIII is inapplicable because 
this legislation does not provide new budget authority or 
increased tax expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of Rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
respect to the bill, H.R. 1565, 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, June 25, 1999.
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. 1565, the 
Trademark Amendments Act of 1999.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mark Hadley, 
who can be reached at 226-2860.
            Sincerely,

                                            Dan L. Crippen, Director.  
H.R. 1565--Trademark Amendments Act of 1999
    H.R. 1565 would waive the sovereign immunity of the federal 
government and its contractors from liability for trademark 
infringement and dilution and would allow courts to issue 
injunctions against the federal government to cease activities 
that dilute or infringe on trademarks. (Dilution refers to 
activities using alternative symbols or logos that could be 
mistaken for an original trademark, thus lessening the market 
value of the original.) The bill also would permit trademark 
owners who believe the registration of another trademark would 
dilute the distinctive quality of their mark to petition the 
Patent and Trademark Office (PTO) to cancel the application 
before the trademark has been registered. Under current law, 
trademark owners must wait until another mark is registered and 
show that the other mark actually diluted the distinctive 
quality of their trademark. Finally, H.R. 1565 would make 
technical changes to trademark law and establish an association 
to preserve the authenticity of musical groups.
    Based on information from the Department of Justice (DOJ) 
and the PTO, CBO estimates that defending the federal 
government in lawsuits involving trademark infringement or 
dilution and handling petitions to cancel registrations would 
cost less than $500,000 a year. CBO cannot estimate the 
magnitude or timing of additional administrative costs that 
would result from waiving sovereign immunity; however, such 
costs would probably be insignificant. In most cases, such 
spending would be subject to appropriation of the necessary 
amounts. Waiving sovereign immunity also would increase 
payments of claims in lawsuits against the U.S. government. 
Because such payments are recorded as direct spending, pay-as-
you-go procedures would apply. Based on information from DOJ 
and the American Intellectual Property Law Association, CBO 
expects that these costs probably would not be significant.
    H.R. 1565 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not impose costs on state, local, or tribal governments.
    The CBO staff contact is Mark Hadley, who can be reached at 
226-2860. This estimate was approved by Paul N. Van de Water, 
Assistant Director for Budget Analysis.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of the Rule XIII 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

    Sec. 1. Short Title.--This section states that this Act may 
be cited at the ``Trademark Amendments Act of 1999.''
    Sec. 2. Dilution As A Grounds for Opposition and 
Cancellation.--Section two provides holders of famous marks 
with a right to oppose or seek cancellation of a mark that 
would cause dilution as provided in the Dilution Act.
    Section two amends section 2 of the Trademark (Lanham) Act 
of 1946 by adding at the end the following sentence: ``A mark 
which when used would cause dilution under section 43(c) may be 
refused registration only pursuant to a proceeding brought 
under section 13. A registration for a mark which when used 
would cause dilution under section 43(c) may be canceled 
pursuant to a proceeding brought under wither section 14 or 
section 24.''.
    Section two also makes the necessary conforming amendments. 
It amends section 13(a) of the Lanham Act to include dilution 
under section 43(c) as grounds for opposing the registration of 
a mark on the principal register. Section 14 of the Lanham Act 
is amended to include dilution under section 43(c) as grounds 
to petition for cancellation of a registration of a mark on the 
principal register. Section 24 of the Lanham Act is amended to 
include dilution under section 43(c) as grounds to petition for 
cancellation of a registration of a mark on the supplemental 
register.
    Sec. 3. Remedies in Cases of Dilution of Famous Marks.--
Section three seeks to clarify that in passing the Dilution 
Act, Congress did intend to allow for injunctive relief and/or 
damages against a defendant found to have wilfully intended to 
engage in commercial activity that would cause dilution of a 
famous trademark.
    Section three amends section 34(a) of the Lanham Act, which 
gives courts the power to grant injunctions for violations of 
the Act, by clarifying that an injunction is an available 
remedy for a violation of section 43(c), which provides a right 
to injunctive relief to famous mark holders for dilution. It 
also amends section 43(c)(2) to clarify that in an action 
brought under section 43(c), the injunctive relief shall be as 
set forth in section 34.
    Section three amends section 35(a) of the Lanham Act, which 
provides for recovery of profits, damages and costs, and 
attorneys fees for violations of rights, by clarifying that 
recovery of profits, damages and costs, and attorneys fees are 
also available for a willful violation under section 43(c), 
which provides holders of a famous mark the right to obtain 
relief for dilution.
    Section three amends section 36 of the Lanham Act, which 
gives the court power to order the delivery and destruction of 
articles in the possession of the defendant that have been 
established to violate the rights of the registrant of a mark, 
by clarifying that a court may order the delivery and 
destruction of articles which constitute a willful violation 
under section 43(c), which provides holders of a famous mark 
the right to obtain relief for dilution.
    Sec. 4. Liability of Governments for Trademark Infringement 
and Dilution.--Section four seeks to level the playing field by 
amending the Lanham Act to allow for private citizens and 
corporate entities to sue the Federal Government for trademark 
infringement.
    Section four amends section 32 of the Lanham Act by 
amending the last paragraph to include in the term ``any 
person'' the United States, its agencies and any entities or 
persons acting for the United States. It also subjects the 
United States, its agencies and any entities or persons acting 
for the United States to the provisions of the Lanham Act in 
the same manner and to the same extent as any nongovernmental 
entity.
    Section four amends section 40 of the Lanham Act by 
redesignating subsection (b) as subsection (c) and creating new 
subsections (a) and (b). Subsection (a) waives the sovereign 
immunity of the United States, its agencies, and any entities 
or persons acting for the United States from suit in Federal or 
State court by any person, including any governenmental entity, 
for any violation under the Lanham Act. Subsection (b), former 
subsection (a), waives the sovereign immunity of States. The 
language of the subsection is the same. The redesignated 
subsection (c) is amended to properly refer to and include the 
new subsections (a) and (b), in order to allow the same 
remedies to be available for a violation of the Lanham Act in a 
suit brought under the new subsections (a) or (b) as are 
available in a suit against any other person.
    Section four also amends section 45 of the Lanham Act by 
inserting between the two paragraphs relating to the definition 
of ``person'' that the term ``person'' includes the United 
States, its agencies and any entities or persons acting for the 
United States. It also subjects the United States, its agencies 
and any entities or persons acting for the United States to the 
provisions of the Lanham Act in the same manner and to the same 
extent as any nongovernmental entity.
    Sec. 5. Civil Actions for Trade Dress Infringement.--
Section five amends section 43(a) of the Lanham Act to provide 
that in an action for trade dress infringement, where the 
matter sought to be protected is not registered with the U.S. 
Patent and Trademark Office, the plaintiff has the burden of 
proving that the trade dress is not functional.
    Section 43(a) of the Lanham Act is amended by adding at the 
end the following: ``(3) In a civil action for trade dress 
infringement under this Act for trade dress not registered on 
the principal register, the person who asserts trade dress 
protection has the burden of proving that the matter sought to 
be protected is not functional.''.
    Sec. 6. Technical Amendments.--Section six makes a 
technical correction to section 10(a) of the Lanham Act. It 
amends section 10(a) of the Lanham Act by striking out the 
words ``subsequent purchase'' as they appear in the second to 
last sentence and replacing them with the word ``assignment.'' 
This sentence deals with assignments and so the use of the 
words ``subsequent purchase'' are incorrect. It was a technical 
oversight that this was not part of the legislation as it was 
presented to the President for signing.
    Section 10(a) was part of the ``Trademark Law Treaty 
Implementation Act'' which passed in the 105th Congress and was 
signed into law on October 30, 1998.\5\ Because the ``Trademark 
Law Treaty Implementation Act'' will not go into effect until 
October 30, 1999, it is important that this technical 
correction be made to go into effect when the law does or on 
the date that this bill is signed into law.
---------------------------------------------------------------------------
    \5\ Pub. L. No. 105-330 (1998).
---------------------------------------------------------------------------
    Sec. 7. Rights of Performers of Musical Groups.--Section 
seven establishes a new certification mark to signify 
authenticity for use by qualifying members of musical groups in 
response to the problem of ``imposter'' celebrity musical 
groups.
    Section seven amends Part A of subtitle II title 36, United 
States Code, by inserting after chapter 2401 a new chapter. It 
creates ``Chapter 2501- Association to Preserve Authenticity of 
Musical Groups.'' The chapter contains five sections.
    Section 250101 deals with the establishment of an 
association. It establishes a body corporate which shall be 
known as the ``Association to Preserve Authenticity of Musical 
Groups'' (``Association'').
    Section 250102 describes the objects and purposes of the 
Association. The objects and purposes shall be: (1) to benefit 
entertainers and performers who have performed with original 
entertainment groups; (2) to promote, develop, and assist in 
preserving and protecting the rights of entertainers and 
performers; and (3) to educate the public concerning the 
history of performing groups and the names of the actual 
performers.
    Section 250103 describes the powers of the Association. The 
Association has the power to do the following: (1) sue and be 
sued, collect dues, claim and defend in any court its rights 
and its members rights in its certification mark; (2) make and 
adopt a constitution, by laws, rules and regulations for the 
use of its certification mark; (3) from time to time repeal or 
amend its constitution, bylaws, rules, and regulations not 
inconsistent with the laws of the United States or any of the 
states thereof; and (4) provide for the safe-keeping and 
management of its property and funds. This section also states 
that the Association shall establish and have the sole and 
exclusive rights to its certification mark for use in carrying 
out its purposes, though no powers and privileges granted by 
this Chapter shall interfere or conflict with established or 
vested rights.
    Section 250104 addresses the standards for use of the 
certification mark. It states that the Association shall 
establish standards and that those standards will include, 
though are not limited to, the following criteria: (1) At least 
one performer in any group displaying or using in its 
advertising the certification mark must have been a member of 
the original group that performed under the same or similar 
name; and (2) Any advertising for such group shall not be false 
or misleading with respect to the membership or history of the 
group.
    Section 250105 addresses the rights of performers. It 
provides that an individual who is authorized to use the 
certification mark shall not be in violation of the Lanham Act 
of the statutes or common law of any State for use of the mark.

H.L.C.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) 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 (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, existing law in which no change 
is proposed is shown in roman):

                         TRADEMARK ACT OF 1946

           *       *       *       *       *       *       *


                    TITLE I--THE PRINCIPAL REGISTER

           *       *       *       *       *       *       *


              marks registrable on the principal register

    Sec. 2. No trademark by which the goods of the applicant 
may be distinguished from the goods of others shall be refused 
registration on the principal register on account of its nature 
unless it--
    (a)  * * *

           *       *       *       *       *       *       *

A mark which when used would cause dilution under section 43(c) 
may be refused registration only pursuant to a proceeding 
brought under section 13. A registration for a mark which when 
used would cause dilution under section 43(c) may be canceled 
pursuant to a proceeding brought under either section 14 or 
section 24.

           *       *       *       *       *       *       *


                               assignment

    Sec. 10. A registered mark or a mark for which application 
to register has been filed shall be assignable with the 
goodwill of the business in which the mark is used, or with 
that part of the goodwill of the business connected with the 
use of and symbolized by the mark[,]. However, no application 
to register a mark under section 1(b) shall be assignable prior 
to the filing of the verified statement of use under section 
1(d), except 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 
goodwill 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 recorded in the Patent and Trademark 
Office the record shall be prima facie evidence of execution. 
An assignment shall be void as against any [subsequent 
purchaser] assignment for a valuable consideration without 
notice, unless it is recorded in the Patent and Trademark 
Office within three months after the date thereof or prior to 
such subsequent purchase. A separate record of assignments 
submitted for recording hereunder shall be maintained in the 
Patent and Trademark Office.
    An assignee not domiciled in the United States shall be 
subject to and comply with the provisions of section 1(e) of 
this Act.

           *       *       *       *       *       *       *


                               opposition

    Sec. 13. (a) Any person who believes that he would be 
damaged by the registration of a mark upon the principal 
register, including as a result of dilution under section 
43(c), may, upon payment of the prescribed fee, file an 
opposition in the Patent and Trademark Office, stating the 
grounds therefor, within thirty days after the publication 
under subsection (a) of section 12 of this Act of the mark 
sought to be registered. Upon written request prior to the 
expiration of the thirty-day period, the time for filing 
opposition shall be extended for an additional thirty days, and 
further extensions of time for filing opposition may be granted 
by the Commissioner for good cause when requested prior to the 
expiration of an extension. The Commissioner shall notify the 
applicant of each extension of the time for filing opposition. 
An opposition may be amended under such conditions as may be 
prescribed by the Commissioner.

           *       *       *       *       *       *       *

    Sec. 14. A petition to cancel a registration of a mark, 
stating the grounds relied upon, may, upon payment of the 
prescribed fee, be filed as follows by any person who believes 
that he is or will be damaged, including as a result of 
dilution under section 43(c), by the registration of a mark on 
the principal register established by this Act, or under the 
Act of March 3, 1881, or the Act of February 20, 1905:
            (1)  * * *

           *       *       *       *       *       *       *


                 TITLE II--THE SUPPLEMENTAL REGISTER

           *       *       *       *       *       *       *


                              cancelation

    Sec. 24. Marks for the supplemental register shall not be 
published for or be subject to opposition, but shall be 
published on registration in the Official Gazette of the Patent 
and Trademark Office. Whenever any person believes that he is 
or will be damaged by the registration of a mark on this 
register, including as a result of dilution under section 
43(c), he may at any time, upon payment of the prescribed fee 
and the filing of a petition stating the ground therefor, apply 
to the Commissioner to cancel such registration. The 
Commissioner shall refer such application to the Trademark 
Trial and Appeal Board, which shall give notice thereof to the 
registrant. If it is found after a hearing before the Board 
which that the registrant is not entitled to registration, or 
that the mark has been abandoned, the registration shall be 
canceled by the Commissioner. However, no final judgment shall 
be entered in favor of an applicant under section (1)(b) before 
the mark is registered, if such applicant cannot prevail 
without establishing constructive use pursuant to section 7(c).

           *       *       *       *       *       *       *


                           TITLE VI--REMEDIES

    Sec. 32. (1) Any person who shall, without the consent of 
the registrant--
            (a)  * * *

           *       *       *       *       *       *       *

    [As used in this paragraph, the term ``any person'' 
includes any State, any instrumentality of a State, and any 
officer or employee of a State or instrumentality of a State 
acting in his or her official capacity. Any State, and any such 
instrumentality, officer, or employee, shall be subject to the 
provisions of this Act in the same manner and to the same 
extent as any nongovernmental entity.]
    As used in this subsection, the term ``any person'' also 
includes the United States, all agencies and instrumentalities 
thereof, and all individuals, firms, corporations, or other 
persons acting for the United States and with the authorization 
and consent of the United States, and any State, any 
instrumentality of a State, and any officer or employee of a 
State or instrumentality of a State acting in his or her 
official capacity. The United States, all agencies and 
instrumentalities thereof, and all individuals, firms, 
corporations, other persons acting for the United States and 
with the authorization and consent of the United States, and 
any State, any instrumentality of a State, and any officer or 
employee of a State or instrumentality of a State, shall be 
subject to the provisions of this Act in the same manner and to 
the same extent as any nongovernmental entity.

           *       *       *       *       *       *       *

    Sec. 34. (a) The several courts vested with jurisdiction of 
civil actions arising under this Act shall have power to grant 
injunctions, according to the principles of equity and upon 
such terms as the court may deem reasonable, to prevent the 
violation of any right of the registrant of a mark registered 
in the Patent and Trademark Office or to prevent a violation 
under [section 43(a)] subsection (a) or (c) of section 43. Any 
such injunction may include a provision directing the defendant 
to file with the court and serve on the plaintiff within thirty 
days after the service on the defendant of such injunction, or 
such extended period as the court may direct, a report in 
writing under oath setting forth in detail the manner and form 
in which the defendant has complied with the injunction. Any 
such injunction granted upon hearing, after notice to the 
defendant, by any district court of the United States, may be 
served on the parties against whom such injunction is granted 
anywhere in the United States where they may be found, and 
shall be operative and may be enforced by proceedings to punish 
for contempt, or otherwise, by the court by which such 
injunction was granted, or by any other United States district 
court in whose jurisdiction the defendant may be found.

           *       *       *       *       *       *       *

  Sec. 35. (a) When a violation of any right of the registrant 
of a mark registered in the Patent and Trademark Office, [or a 
violation under section 43(a),] a violation under section 
43(a), or a willful violation under section 43(c), shall have 
been established in any civil action arising under this Act, 
the plaintiff shall be entitled, subject to the provisions of 
sections 29 and 32, and subject to the principles of equity, to 
recover (1) defendant's profits, (2) any damages sustained by 
the plaintiff, and (3) the costs of the action. The court shall 
assess such profits and damages or cause the same to be 
assessed under its direction. In assessing profits the 
plaintiff shall be required to prove defendant's sales only, 
defendant must prove all elements of cost or deduction claimed. 
In assessing damages the court may enter judgment, according to 
the circumstances of the case, for any sum above the amount 
found as actual damages, not exceeding three times such amount. 
If the court shall find that the amount of the recovery based 
on profits is either inadequate or excessive the court may in 
its discretion enter judgment for such sum as the court shall 
find to be just, according to the circumstances of the case. 
Such sum in either of the above circumstances shall constitute 
compensation and not a penalty. The court in exceptional cases 
may award reasonable attorney fees to the prevailing party.

           *       *       *       *       *       *       *

    Sec. 36. In any action arising under this Act, in which a 
violation of any right of the registrant of a mark registered 
in the Patent and Trademark Office, [or a violation under 
section 43(a),] a violation under section 43(a), or a willful 
violation under section 43(c), shall have been established, the 
court may order that all labels, signs, prints, packages, 
wrappers, receptacles, and advertisements in the possession of 
the defendant, bearing the registered mark or, in the case of a 
violation of section 43(a) or a willful violation under section 
43(c), the word, term, name, symbol, device, combination 
thereof, designation, description, or representation that is 
the subject of the violation, or any reproduction, counterfeit, 
copy, or colorable imitation thereof, and all plates, molds, 
matrices, and other means of making the same, shall be 
delivered up and destroyed. The party seeking an order under 
this section for destruction of articles seized under section 
34(d) (15 U.S.C. 1116(d)) shall give ten days' notice to the 
United States attorney for the judicial district in which such 
order is sought (unless good cause is shown for lesser notice) 
and such United States attorney may, if such destruction may 
affect evidence of an offense against the United States, seek a 
hearing on such destruction or participate in any hearing 
otherwise to be held with respect to such destruction.

           *       *       *       *       *       *       *

    Sec. 40. (a) [Any State] Waiver of Sovereign Immunity by 
the United States.--The United States, all agencies and 
instrumentalities thereof, and all individuals, firms, 
corporations, other persons acting for the United States and 
with the authorization and consent of the United States, shall 
not be immune from suit in Federal or State court by any 
person, including any governmental or nongovernmental entity, 
for any violation under this Act.
    (b) Waiver of Sovereign Immunity by States.--Any State, 
instrumentality of a State or any officer or employee of a 
State or instrumentality of a State acting in his or her 
official capacity, shall not be immune, under the eleventh 
amendment of the Constitution of the United States or under any 
other doctrine of sovereign immunity, from suit in Federal 
court by any person, including any governmental or 
nongovernmental entity for any violation under this Act.
    [(b) In a suit] (c) Availibility of Remedies.--In a suit 
described in [subsection (a) for a violation described in that 
subsection] subsection (a) or (b) for a violation described 
therein, remedies (including remedies both at law and in 
equity) are available for the violation to the same extent as 
such remedies are available for such a violation in a suit 
against any person other than the United States or any agency 
or instrumentality thereof, or any individual, firm, 
corporation, or other person acting for the United States and 
with authorization and consent of the United States, or a 
State, instrumentality of a State, or officer or employee of a 
State or instrumentality of a State acting in his or her 
official capacity. Such remedies include injunctive relief 
under section 34, actual damages, profits, costs and attorney's 
fees under section 35, destruction of infringing articles under 
section 36, the remedies provided for under sections 32, 37, 
38, 42 and 43, and for any other remedies provided under this 
Act.

           *       *       *       *       *       *       *


   TITLE VIII--FALSE DESIGNATIONS OF ORIGIN, FALSE DESCRIPTIONS, AND 
                           DILUTION FORBIDDEN

    Sec. 43. (a)(1)  * * *

           *       *       *       *       *       *       *

    (3) In a civil action for trade dress infringement under 
this Act for trade dress not registered on the principal 
register, the person who asserts trade dress protection has the 
burden of proving that the matter sought to be protected is not 
functional.

           *       *       *       *       *       *       *

    (c)(1)  * * *
    (2) In an action brought under this subsection, the owner 
of the famous mark shall be entitled only to injunctive relief 
as set forth in section 34 unless the person against whom the 
injunction is sought willfully intended to trade on the owner's 
reputation or to cause dilution of the famous mark. If such 
willful intent is proven, the owner of the famous mark shall 
also be entitled to the remedies set forth in sections 35(a) 
and 36, subject to the discretion of the court and the 
principles of equity.

           *       *       *       *       *       *       *


                 TITLE X--CONSTRUCTION AND DEFINITIONS

    Sec. 45. In the construction of this Act, unless the 
contrary is plainly apparent from the context--
    The United States includes and embraces all territory which 
is under its jurisdiction and control.

           *       *       *       *       *       *       *

    The term ``person'' and any other word or term used to 
designate the applicant or other entitled to a benefit or 
privilege or rendered liable under the provisions of this Act 
includes a juristic person as well as a natural person. The 
term ``juristic person'' includes a firm, corporation, union, 
association, or other organization capable of suing and being 
sued in a court of law.
    The term ``person'' also includes the United States, any 
agency or instrumentality thereof, or any individual, firm, or 
corporation acting for the United States and with the 
authorization and consent of the United States. The United 
States, any agency or instrumentality thereof, and any 
individual, firm, or corporation acting for the United States 
and with the authorization and consent of the United States, 
shall be subject to the provisions of this Act in the same 
manner and to the same extent as any nongovernmental entity.
    The term ``person'' also includes any State, any 
instrumentality of a State, and any officer or employee of a 
State or instrumentality of a State acting in his or her 
official capacity. Any State, and any such instrumentality, 
officer, or employee, shall be subject to the provisions of 
this Act in the same manner and to the same extent as any 
nongovernmental entity.

           *       *       *       *       *       *       *

                              ----------                              


     TITLE 36--PATRIOTIC AND NATIONAL OBSERVANCES, CEREMONIES, AND 
                             ORGANIZATIONS

           *       *       *       *       *       *       *


           SUBTITLE II--PATRIOTIC AND NATIONAL ORGANIZATIONS

           *       *       *       *       *       *       *


                         PART B--ORGANIZATIONS

201. AGRICULTURAL HALL OF FAME................................... 20101

           *       *       *       *       *       *       *


                         PART B--ORGANIZATIONS

           *       *       *       *       *       *       *


                [2501. [RESERVED]
                                                            250101]
2501. ASSOCIATION TO PROVIDE AUTHENTICITY OF MUSICAL GROUPS... 250101

           *       *       *       *       *       *       *


  CHAPTER 2501--ASSOCIATION TO PRESERVE AUTHENTICITY OF MUSICAL GROUPS

Sec.
250101. Association established.
250102. Objects and purposes.
250103. Powers.
250104. Standards for use of certification mark.
250105. Rights of performers.

Sec. 250101. Association established

    There shall be established a body corporate which shall be 
known as the ``Association to Preserve the Authenticity of 
Musical Groups''. The Association shall have perpetual 
succession and the powers and limitations contained in this 
chapter. The Association shall appoint its chairperson.

Sec. 250102. Objects and purposes

    The objects and purposes of the Association shall be--
            (1) to benefit entertainers and performers who have 
        performed with original entertainment groups;
            (2) to promote, develop, and assist in preserving 
        and protecting the rights of entertainers and 
        performers; and
            (3) to educate the public concerning the history of 
        performing groups and the names of the actual 
        performers in those groups.
To aid in its purposes, the Association shall promote and use 
the certification mark it establishes under this chapter and 
allow performers to use the certification mark of the 
Association in accordance with the chapter.

Sec. 250103. Powers

    (a) In General.--The Association may--
            (1) sue and be sued, collect dues, claim and defend 
        in any court its rights and its members rights in its 
        certification mark;
            (2) make and adopt a constitution, bylaws, rules, 
        and regulations for the use of its certification mark;
            (3) from time to time repeal or amend its 
        constitution, bylaws, rules, and regulations not 
        inconsistent with the laws of the United States or any 
        of the States thereof; and
            (4) provide for the safe-keeping and management of 
        its property and funds.
    (b) Certification Mark.--The Association shall establish 
and have the sole and exclusive rights to its certification 
mark for use in carrying out its purposes. No powers or 
privileges granted by this chapter shall interfere or conflict 
with established or vested rights.

Sec. 250104. Standards for use of certification mark

    The Association shall establish the standards for those 
entertainers who may use its certification mark. Such standards 
shall include, but are not limited to, the following criteria:
            (1) At least one performer in any group displaying 
        or using in its advertising the certification mark must 
        have been a member of the original group that performed 
        under the same or similar name.
            (2) Any advertising for such group shall not be 
        false or misleading with respect to the membership or 
        history of the group.
Any additional standards must be consistent with paragraphs (1) 
and (2).

Sec. 250105. Rights of Performers

    It shall not be a violation of the Trademark Act of 1946 or 
the statutes or common law of any State for an individual who 
has been a member of a performing group to be able to use the 
certification mark of the Association and represent that such 
individual had been a member of such a group in any promotions, 
advertisements, or performing of the same services as those 
performed by such group, if such representation meets the 
standards in section 250104 and does not deceive or confuse as 
to the nature, characteristics, qualities, or sponsorship of 
such services.

                                  
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