PROTECTION OF TRADE-MARKS. WEDNESDAY, JULY 3, 1918. UNITED STATES SENATE, The committee met, pursuant to call, at 10.30 o'clock a. m., in the committee room, Capitol, Senator Duncan U. Fletcher presiding. Present: Senators Fletcher (chairman), Ransdell, Nelson, Jones, Lenroot, Sheppard, and Vardaman. The CHAIRMAN. The bill we have before us this morning, S. 4783, will be inserted in the record at the hearing at this point. (The bill referred to is here printed in full, as follows:) A BILL To give effect to certain provisions of the convention for the protection of trademarks and commercial names, made and signed in the city of Buenos Aires in the Argentine Republic, August twentieth, nineteen hundred and ten, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the second section of the Act, approved February twentieth, nineteen hundred and five, entitled "An Act to authorize the registration of trade-marks used in commerce with foreign nations or among the several States or with Indian tribes, and to protect the same," as amended to date, be, and is hereby, further amended by adding at the end thereof the following paragraph: "Any trade-mark duly registered in any international bureau or office created or recognized by virtue of a treaty or convention duly ratified by the Government of the United States of America, by and with the advice and consent of the Senate thereof, and proclaimed by the President to be in full force and effect, shall be considered as a trade-mark for which application for registration under this Act has been properly filed and shall be acted upon by the Patent Office accordingly." SEC. 2. That section four of said act be, and is hereby, amended to read as follows: 66 'SEC. 4. That an application for registration of a trade-mark filed in the Patent Office of the United States of America or in an international bureau or office, such as described in section two, by any person who has previously regularly filed in any foreign country which by treaty, convention, or law affords similar privileges to citizens of the United States, an application for registration of the same trade-mark shall be accorded the same force and effect as would be accorded to the same application if filed in this country on the date on which application for registration of the same trade-mark was first filed in such foreign country: Provided, That such application is filed in the Patent Office of the United States of America or in the international bureau or office within a period not to exceed six months from the date on which the application was first filed in such foreign country: Provided further, That certificate of regsitration shall not be issued for any mark for registration of which application has been filed by an applicant located in a foreign country until such mark has been actually registered by the applicant in the country in which he is located." 3 SEC. 3. That section thirteen of said act be, and is hereby, amended to read as follows: 66 SEC. 13. That whenever any person shall deem himself injured by the registration of a trade-mark in the Patent Office he may at any time apply to the Commissioner of Patents to cancel the registration thereof. The commissioner shall refer such application to the examiner in charge of interferences, who is empowered to hear and determine this question, and who shall give notice thereof to the registrant. If it appear after a hearing before the examiner that the registrant was not entitled to the exclusive use of the mark at or since the date of his application for registration thereof, or that the mark is not used by the registrant or has been abandoned, and the examiner shall so decide, the commissioner shall cancel the registration. Appeal may be taken to the commissioner in person from the decision of examiner of interferences." SEC. 4. That said act is hereby amended by adding after section sixteen a new section as follows: "SEC. 16a. That any person who shall willfully and with intent to deceive affix, apply, or annex or use in connection with an article or articles of merchandise, or any container or containers of the same, a false designation of origin, including words or other symbols tending to falsely identify the origin of the merchandise, and shall then cause such merchandise to enter into interstate or foreign commerce, and any person who shall knowingly transport such merchandise, or cause or procure the same to be transported in interstate or foreign commerce, or commerce with Indian tribes, or shall knowingly deliver the same to any carrier to be so transported, shall be liable to an action for damages therefor at the suit of anyone doing business in the locality falsely indicated as that of origin or in the region in which said locality is situated." SEC. 5. That this act shall take effect immediately. The CHAIRMAN. I will read into the record at this point a letter from Dr. L. S. Rowe, Acting Secretary of the Treasury, and secretary general of the International High Commission. [Reading:] TREASURY DEPARTMENT, OFFICE OF THE SECRETARY, MY DEAR SENATOR FLETCHER: I learn with much pleasure of the introduction of a bill seeking to execute the convention concerning trade-marks signed at Buenos Aires on August 20, 1910, and ratified by the United States in the following session of Congress. The fundamental principle of the protection of prior use rather than of mere formal priority of registration is assured to the merchants and manufacturers of those Republics of America that have ratified this convention. It is to be hoped that in a relatively short time all the Republics will have so acted; to date the convention has been ratified by the United States, Cuba, Dominican Republic, Guatemala, Honduras, Nicaragua, Panama, Costa Rica, Brazil, Ecuador, Paraguay, and Bolivia. After a number of attempts, the American Republics arrived at a simple but effective statement of this principle in the convention adopted in 1910. The convention provides for two international trade-mark registration bureaus—one at Habana, which will receive applications for registration from the countries of North and Central America and the West Indies, and one at Rio de Janeiro, which will receive applications for registration from the countries of South America. The two bureaus are intended to exchange each week statements of the applications received and the registrations granted. The regulations concerning the procedure of application and registration will be prepared by two international bureaus with due care and after consultation with the trademark registration authorities of the participating countries. After waiting several years, and in part I think we may fairly say, as a result of the deep interest in the protection of industrial and literary property taken by the International High Commission at its meeting in Buenos Aires in April, 1916, enough ratifications were secured in the northern group of countries to make possible the inauguration of the bureau destined to serve that group. His Excellency the President of Cuba, upon receiving official notice of this fact, was able in December last to establish the International Trade-mark Registration Bureau at Habana, appointing a well-known and competent trade-mark authority of Cuba as the first director general. In the time that has elapsed since his appointment, Dr. Mario Díaz Irízar, Director General of the Bureau, has vigorously taken steps to be in a position at a very early date to receive applications for registration. The bureau may now count upon a generous appropriation toward its initial expenses made by the Cuban Congress, and, what is more noteworthy, an ample appropriation for the erection of a permanent building upon a site donated by the Cuban Government. The respective quotas of the other countries of the northern group which have ratified the convention for the first year of the operation of the bureau can be readily settled as soon as Dr. Mario Díaz Irizar comes to Washington to consult the Department of State and the Patent Office. The legislation, the enactment of which is now thought necessary, will enable the Commissioner of Patents fully to carry out the convention in the spirit in which it wsa formulated at the Fourth International Conference of American States, in Buenos Aires, in 1910. The power of preliminary examination is essential if the Patent Office is to have the right to refuse to grant registration (so far as the United States is concerned) of trade-marks registered in the International Bureau; while provision is necessary for civil suits to prevent the use of false designations of origin, as well as for broader powers of cancellation of registration. The enactment of legislation of the character suggested-the result of long and careful study on the part of technical authorities in this special field-will enable the United States quickly to put into effect so far as depends upon the Government the provisions of the convention of 1910 and thus directly to promote the successful operation of the Habana bureau, in turn stimulating the further ratification of the convention by enough countries of South America to make possible the opening of the bureau at Rio de Janeiro. With that final step the protection of trade-marks and commercial names throughout this hemisphere will be put upon an enduring and effective basis. I trust, my dear Senator Fletcher, that your committee will consider this matter favorably, and I beg to remain, Very sincerely, yours, L. S. ROWE, Acting Secretary of the Treasury, and Secretary General of the International High Commission. Hon. DUNCAN U. FLETCHER, United States Senate, Washington. The CHAIRMAN. Mr. Carter, the committee will hear you. Will you explain the reasons underlying the drafting of the bill? STATEMENT OF MR. C. P. CARTER, OF THE BUREAU OF FOREIGN AND DOMESTIC COMMERCE, DEPARTMENT OF COMMERCE. Mr. CARTER. The discussion relative to the effect of registration has been a rather nice preface to what I had in mind to say. There are three systems of registration in vogue throughout the world-one known as the system in vogue in France. There a man takes his trade-mark up to the trade-mark office and deposits it, and, provided his application conforms with their regulations-that is, the form of the papers and the wording, etc.-his trade-mark is accepted, and he receives a receipt for it, and that constitutes registration over there. The effect of that registration is not very great, as you can well imagine, because you could go to the trade-mark office to-day with the mark "Ajax," and I could come in to-morrow with the trade-mark "Ajax," and both of us would secure registration of that same mark for the same goods. The whole matter of ownership is left to the courts, and the only real effect of registration there is that a French merchant in going to a foreign country to register his mark, if that foreign country requires proof of home registration, finds it a very simple matter for him to obtain such proof. He merely needs to present his mark to get that certificate. The next system is the system in vogue in Great Britain and herethe systems are largely the same. A man may register a trade-mark here provided the application is in proper form and provided it does not conflict with a mark that is already registered. In other words, our Patent Office makes examination to see whether marks conflict with known or registered marks. The French office does not do that. If the mark does conflict, they refuse you registration. On the other hand, their search is not a conclusive search, because, as you know, a lot of marks are not registered, and we look upon use as the deciding factor, and the man who used first is entitled to the ownership of the mark. Therefore, even though they may register a mark, that constitutes only prima facie evidence of your ownership of that mark, and there is a specific section in the act which states that registration shall be prima facie evidence in the courts. But, as I say, another man may come into the court and prove that he used the trade-mark before you did, and even though he has not registered it he can upset your registration. Senator NELSON. And he has the best right? Mr. CARTER. Yes. The third system is the system that is in vogue in Japan and in most Latin-American countries that are parties to this convention, and to some extent in Germany. There a man makes application for registration of his trade-mark, and the Patent Office examines to see whether it conflicts with marks already on the register. If they find it does not, they register the trade-mark, and that registration, instead of being prima facie evidence, is conclusive evidence that you are the owner of that mark. In other words, it matters not who may have used that mark before, or what the history of the mark has been, if you were the first to register it, you thereby became the owner. It is more in the nature of a grant of a patent; they grant you the ownership of the mark provided you are the first to register it with them. There are certain benefits and advantages and disadvantages to that system. In the Argentine, for instance, it is an advantage, I take it, to know that when a man has a mark registered he owns that mark, and that no matter what happens in the future his ownership of that mark can never be upset and he can go ahead and expend all the money he likes in creating a market, knowing it is his absolute property. Senator JONES. That is the Argentine system? Mr. CARTER. That is the Argentine system. There is also another benefit. In adopting a mark here a man goes to the Patent Office and searches, and if he finds the mark not registered he thinks he is fairly safe and he adopts it. It may turn out, however, that some fellow out West has been using that mark for years, and after he has spent money and created good will this other fellow will come up and say, "I have a prior right and you have got to stop using the mark." In Argentina that could not be the case. There, if the mark were not already registered, he could register and know that he was safe in spending money to create good will. The disadvantage of that system, however, is very great, particularly to foreigners. For instance, a United States merchant adopts a trade-mark and he uses it and gets it registered in our Patent Office, and he has not a great amount of capital and he only uses it here; he does not consider the export market. But to sell his goods here he advertises-let us say he takes a full-page advertisement in the Saturday Evening Post featuring his trade-mark. That Saturday Evening Post goes down to the Argentine, but his goods do not go there as 66 yet. But some Argentine pirate sees it and he takes it and says, "Well, now, some day those goods are coming down here. I think I will register that mark." So he registers it; he does not use it, but registers and gets title. Perhaps in a year the United States merchant finds that his goods sell pretty well and he enters the export trade and he sends some goods down there with his trademark on, and when they get there the other fellow says to the local patent-office authorities. Here are some goods coming in with my trade-mark on them. I want you to confiscate them," and they do confiscate those goods. The result is that the American merchant has no remedy. He can not upset that registration and he can not after that sell any of his goods in Argentina with that trade-mark on. The Argentine, in reply to that, will say, "You had a perfect right to come down and register before you started to use that trademark here." That is perfectly true, but if that merchant should do that and register his trade-mark in every country in the world in that way at the outset it would cost him somewhere between $7,000 and $10,000 to do it, and the average merchant starting in business can not afford that expense for a business that may never develop. That has always been a very great hardship, and is the reason why we have tried to get together with these Latin-American countries and get them into a convention which recognizes ownership in trademarks based to some extent upon prior use and not on registration. Unfortunately, we have not been able to get Argentina to adopt this particular convention as yet. They may do it. A number of other countries whose law is just the same have adhered to it. As a result, under this convention we will recover marks which have been lost to us down there where we could not recover them without this convention. Under this convention a man desiring to register his mark in each of those countries may register first here and then in this international office in Cuba for $50, and he will thereby secure protection in every one of those countries, thus saving himself several hundreds, if not thousands, of dollars. Senator NELSON. Is that register in Cuba for all those countries? Mr. CARTER. Every one who ratifies this. Senator NELSON. Every one of these countries? Mr. CARTER. Yes. Senator NELSON. It is as though he had filed in each of those countries? Mr. CARTER. Exactly. And there are certain other phases of this convention which enable an American manufacturer to cancel a registration of a trade-mark effected in one of those foreign countries by a pirate, providing he can bring certain proof of ownership and use, which is usually easily available. That can not be done under the laws of those countries at the present time. So it behooves us to do everything we can to carry out our obligation under the convention just as promptly as possible. The marks coming from South American countries into our Patent Office will be practically nil, whereas the marks we send down there will run into the thousands. For this reason, if for no other, we ought to do everything we can to carry out our obligation under this convention and thus set an example to the South Americans to carry it out in their countries. |