The International Trademark Association strongly supports enactment of H.R. 1295, the "Federal Trademark Dilution Act of 1995, 11 and H.R. 1270, the "Madrid Protocol Implementation Act."
H.R. 1295 would add a new Section 43 (c) to the Lanham Act to create a federal cause of action to protect federally registered marks that are famous against dilution. Dilution differs from the protection of marks from infringement in that the focus is not on protecting against consumer confusion but, instead, on protecting against "the gradual whittling away or dispersion of the identity and hold upon the public mind of the mark or name by its use upon non-competing goods." The concept of dilution recognizes the substantial investment the owner of the mark has made and the commercial value and aura of the mark itself. Approximately one-half of the states recognize a dilution cause of action.
H.R. 1295 is carefully crafted and delicately balanced. It would promote nationwide uniformity and predictability in the application of the dilution doctrine but would not preempt state dilution laws. it would recognize a new, federal right, but in a manner consistent with the First Amendment.
The bill requires that a mark be federally registered in order to be eligible for dilution protection and sets forth criteria that courts would consider in determining whether a mark is "famous." In most cases, injunctive relief would be the sole remedy.
The bill would only prohibit another's commercial use in commerce of a mark or trade name. It would not apply to uses of famous marks in "non-commercial" settings, such as parodies, news reports, and consumer product reviews. It also would not apply to the use of a mark for purposes of comparative advertising.
The enactment of H.R. 1295 would harmonize U.S. law with that of other nations and provide additional leverage to our trade negotiators when seeking greater protection in other countries for famous marks owned by U.S. companies.
H.R. 1270 would implement the changes to U.S. trademark law required when and if the U.S. joins the Madrid Protocol. The implementation of the Protocol in the U.S. would facilitate the obtaining and maintaining of trademark rights abroad by U.S. businesses. In May 1994, the administration indicated that the U.S. will not adhere to the treaty because it accords the European Union a separate vote within the treaty's governing body. INTA believes that U.S. adherence to the Protocol is of critical importance to U.S. business and global competitiveness and urges the administration and the EU to meet in order to resolve the "voting rights" issue.
Mr. Chairman, The International Trademark Association (INTA) (formerly known as The United States Trademark Association) (USTA)) , appreciates and welcomes the opportunity to testify in support of H.R. 1295, the "Federal Trademark Dilution Act of 1995,11 and H.R. 1270, the "Madrid Protocol Implementation Act." It also expresses its appreciation to you and to other members of the subcommittee for introducing these important legislative initiatives and for scheduling this hearing on them.
My name is Mary Ann Alford, and I presently serve as the Executive Vice President of INTA. I am employed by INTA member Reebok International Ltd. as vice president and assistant general counsel for intellectual property. Like all the officers, board members, committee chair persons, and committee members of the association, I serve on a voluntary basis.
INTA is a 117-year-old not-for-profit membership organization. Since its founding in 1878, its membership has grown from twelve New York-based manufacturers to approximately 2,950 members that are drawn from across the United States, and from approximately 110 countries.
Membership in INTA is open to trademark owners and to those who serve trademark owners. Its members are corporations, advertising agencies, professional and trade associations, and law firms. A large percentage of INTA's member companies are based in the U.S. INTA's membership crosses all industry lines, spanning a broad range of manufacturing, retail and service operations. Members include both small and large businesses and all sizes of general practice and intellectual property law firms. INTA's members are both plaintiffs and defendants in disputes involving trademark rights. What this diverse group has in common is a shared interest in trademarks, and a recognition of the importance of trademarks to their owners and consumers.
INTA has five principal goals:
þ To support and advance trademarks as an essential element of effective commerce throughout the world;
þ To protect the interests of the public in the use of trademarks;
þ To educate business, the press, and the public to the importance of trademarks;
þ To play an active leadership role in matters of public policy concerning trademarks; and
þ To provide a comprehensive range of services to its members, including keeping them well informed of current trademark developments and in touch with professional colleagues.
H.R. 1295 would add a new Section 43(c) to the Lanham Act, U.S.C.1051 et seq. to create a federal cause of action to protect federally registered marks that truly are famous from unauthorized users that attempt to trade upon the goodwill and exceptional renown of such marks and, thereby, dilute their distinctive quality. The bill is carefully crafted and delicately balanced. It would promote nationwide uniformity and predictability in the application of the dilution doctrine, but would not prevent continued application of the current regime of state dilution statutes. It would recognize a new, federal right, but in a manner consistent with the constitutional guarantees of the First Amendment. It would provide for an award of damages, but only upon a finding of willful misconduct.
1. Dilution vs. Infringement.
The protection of marks from dilution differs from the protection accorded marks from trademark infringement. Dilution does not rely upon the standard test of infringement, that is, likelihood of confusion, deception, or mistake. Rather, it applies when the unauthorized use of a famous mark reduces the public's perception that the mark signifies something unique, singular, or particular. As succinctly summarized in one decision:
Dilution is an injury that differs materially from that arising out of the orthodox confusion. Even in the absence of confusion, the potency of a mark may be debilitated by another's use. This is the essence of dilution. Confusion leads to immediate injury, while dilution is an infection, which, if allowed to spread, will inevitably destroy the advertising value of the mark.
Mortellito v. Nina of California, Inc., 335 F.Supp. 1288,
1296, 173 U.S.P.Q. 346, 351 (S.D.N.Y. 1972).
The concept of dilution recognizes the substantial investment the owner has made in the mark and the commercial value and aura of the mark itself, protecting both from those who would appropriate the mark for their own benefit. It is designed to protect against "the gradual whittling away or dispersion of the identity and hold upon the public mind of the mark or name by its use upon noncompeting goods. 11 Frank I. Schechter, "The Rational Basis of Trademark Protection," 40 Harvard Law Review 813, 825 (1927).
Dilution can occur "as either the blurring of a mark's product identification or the tarnishment of the affirmative associations a mark has come to convey." See Mead Data Central, Inc. v. Toyota Motor Sales, U.S.A., Inc., 875 F.2d 1026, 1031 (2d Cir. 1989). "Blurring" typically has involved "the whittling away of an established trademark's selling power and value through its unauthorized use by others upon dissimilar products." id. (describing such ""hypothetical anomalies as DuPont shoes, Buick aspirin tablets, Schlitz varnish, Kodak pianos, Bulova gowns, and so forth ") . Thus, dilution by "blurring" may occur when defendant uses, either exactly or in modified form, the plaintiff's trademark to identify the defendant's goods and services, raising the possibility that the mark will lose its ability to serve as a unique identifier of the plaintiff's product.
"Tarnishment" arises when a famous trademark is linked to products of shoddy quality, or is portrayed in an unwholesome or unsavory context likely to evoke unflattering beliefs about the owner or its products. See, g._q., Coca-Cola Co. v. Gemini Rising, Inc., 346 F.Supp. 1183 (E.D.N.Y. 1972) ("Enjoy Cocaine" poster, making fun of Coca-Cola trademark); (Academy of Motion Picture Arts and Sciences v. Creative House Promotions, Inc., 944 F.2d 1446, 1457 (9th Cir. 1991) (finding dilution because 11(i]f the Star Award looks cheap or shoddy . . . the Oscar's distinctive quality as a coveted symbol of excellence..... is threatened.") ; (Chemical Corp. of America v. Anheuser- Busch, Inc., 306 F.2d 433 (5th Cir. 1962) (defendant adopted plaintiff's slogan, "Where there is life . there's Bud" for its insecticide slogan, "Where there's life . there's Bugs."), cert. denied, 372 U.S. 965 (1963). In such situations, the trademark's reputation and commercial value might be diminished because the public will associate the lack of quality or lack of prestige in the defendant's goods with the plaintiff or with plaintiff's unrelated goods, or because the defendant's use reduces the trademark's reputation and standing in the eyes of consumers as a wholesome identifier of the owner's products or services. A recent decision of the U.S. Court of Appeals for the Second Circuit identified still a third context in which dilution may arise, i.e., alterations of a famous mark that have the potential to lessen its selling power. Deere & Co. v. MTD Products, Inc., 41 F.3d 39 (2nd Cir. 1994).
2. State Dilution Laws.
The concept of dilution, although not yet part of the federal trademark law, is not new to U.S. jurisprudence. Massachusetts adopted a dilution statute in 1947 and, since that time, twenty four other states have followed suit. For the most part, these state laws are patterned after language in the Model State Trademark Bill:
Likelihood of injury to business reputation or of dilution of the distinctive quality of a mark registered under this Act, or a mark valid at common law, shall be a ground for injunctive relief notwithstanding the absence of competition between the parties or the absence of confusion as to the source of goods or services.
Model State Trademark Bill, S12 (USTA 1964). of the remaining twenty-five states that have not enacted dilution statutes, our research reveals that three more states have judicially-created dilution doctrines: Michigan, New Jersey, and Ohio.
This patchwork quilt of state dilution protection is cumbersome and inadequate for a number of practical and legal reasons.
First, virtually all famous marks are sold on a nationwide basis. Because many courts are reluctant to issue nationwide injunctions in cases brought under a particular state's dilution law, trademark owners are effectively foreclosed, in many cases, from obtaining meaningful nationwide relief against dilution. ' See Blue Ribbon Feed Co., Inc. v. Farmers Union Central Exchange, Inc., 731 F.2d 415, 422 (7th Cir. 1984) (recognizing that "considerations of comity among the states favor limited out-of-state application of exclusive rights acquired under domestic law, and a district court does not err when it takes a restrained approach to the extraterritorial application of such rights"); Deere & Co. v. MTD Products Inc., 34 U.S.P.Q.2d 1706 (S.D.N.Y. 1995) (noting that "[i]nterests of comity, however, strongly favor a limited injunction" since only approximately half the states have dilution laws and even those states with such laws might not restrict commercial use of marks that do not confuse consumers or blur or tarnish the trademark.)
Second, there is no statutory definition of "dilution" in the Model Bill, which leads to inconsistent interpretations of the statute.
Third, some courts have required a showing of likelihood of confusion despite the clear language of the Model Bill, which mandates injunctive relief "notwithstanding..... absence of confusion(.]" See, e.g., Astra Pharmaceutical Products, Inc. v. Beckman Instruments Inc., 718 F.2d 1201, 1209 (1st Cir. 1983).
Fourth, some courts have insisted that only non- competitive, non-confusing uses are prohibited by a dilution statute, see, e.q., AHP Subsidiary Holding Co. v. Stuart Hale Co., 1 F.3d 611, 619 (7th Cir. 1993), whereas other courts have interpreted the statutes to extend protection to trademarks used on similar or competitive products as well as on dissimilar products. Thus, enactment of a federal dilution statute would serve to promote uniformity and consistency in the application of the dilution doctrine.
3.3. Congressional Authority Exists to Enact A Federal Dilution Law.
Congress clearly has the authority to pass this legislation. First, such a provision would be consistent with Congressional intent, as articulated by the Supreme Court in Park 'N Fly, Inc. v. Dollar Park IN Fly, Inc., 469 U.S. 189, 193, 224 U.S.P.Q. 327, 329 (1985):
Because trademarks desirably promote competition and the maintenance of product quality, Congress determined that "a sound public policy requires that trademarks should receive nationally the greatest protection that can be given them".
Second, the Supreme Court already has recognized that, when it comes to trademarks, Congress "could determine that unauthorized uses, even if not confusing, nevertheless may harm the [U.S. Olympic Committee] by lessening the distinctiveness and thus the commercial value of the marks." San Francisco Arts and Athletics, Inc. v. The United States Olympic committee, 107 S.Ct. 2971, 3 U.S.P.Q.2d 1145, 1153. It is important to emphasize that the dilution statute proposed in H.R. 1295 is in some ways even more limited in scope than the special status Congress conferred on the word "Olympic" under the Amateur Sports Act of 1978. Under H.R. 1295, a mark would be protected from dilution only after a court considered factors such as the degree of inherent or acquired distinctiveness of the mark and the nature and extent of use of the same or similar mark by other parties.
4. Definition of Dilution.
H.R. 1295 defines dilution as:
the lessening of the capacity of a registrant's mark to identify and distinguish goods or services, regardless of the presence or absence of - (1) competition between the registrant and other parties, or (2) likelihood of confusion, mistake, or deception.
This uniform definition would provide clear guidance to the courts in determining whether a cause of action for dilution exists. This definition encompasses both dilution by "blurring" and dilution by tarnishment. It is also elastic enough to encompass future, currently unforeseen, factual situations that may give rise to liability.
5. Criteria for Determining Fame of Mark.
H.R. 1295 is, by its terms, only applicable to those registered marks which are both distinctive and famous. To achieve this, it identifies a number of key factors the courts should consider in determining whether a mark meets these standards. These factors include, but are not limited to:
(a) the degree of inherent or acquired distinctiveness of the mark;
(b) the duration and extent of use of the mark in connection with the goods or services with which the mark is used;
(c) the duration and extent of advertising and publicity of the mark;
(d) the geographical extent of the trading area in which the mark is used;
(e) the channels of trade for the goods or services with which the mark is used;
(f) the degree of recognition of the registrant's mark in the trading areas and channels of trade of the registrant and the person against whom the injunction is sought; and
(g) the nature and extent of use of the same or similar marks by third parties.
The first factor, inherent or acquired distinctiveness, makes it clear that distinctiveness and fame can be acquired regardless of the original nature of the mark. A mark cannot be inherently famous but it can be inherently distinctive. Both factors have a bearing on the scope of protection from dilution.
The duration and extent of use in advertising of the mark are also relevant to both distinctiveness and fame. Generally, a famous mark will have been in use for some time. But there is nothing to prevent a mark from becoming famous overnight through widespread publicity and advertising, such as exposure during the televising of the Super Bowl.
The geographical fame of the mark must extend throughout a substantial portion of the United States. The exact scope of such geographical use should be left to a case-by-case analysis, depending on the type of goods or services and their channels of distribution.
By considering the degree to which the registered mark is famous to purchasers in both the registrant's and later users' channels of trade, a court may be more likely to grant protection where there is a reasonable probability that the later user adopted its mark with knowledge of the fame of the registered mark. Where the products of both parties are sold to the general public, the factor may be actualized even though the respective products are so unrelated that confusion is unlikely. Thus, dilution could occur if the same mark were used on running shoes and chewing gum. It may not occur, however, if the mark were used on microbiological chemicals sold to research laboratories, on the one hand, and fish oil sold only to the food processing trade, on the other.
Dilution is possible with respect to one purchaser universe but not another. For example, if a mark is famous at the industrial level but not at the consumer level, protection may be appropriate in the former case but not the latter.
6. Registration Requirement.
The bill, as drafted, provides that only famous registered marks may qualify for protection. Except for the situation noted above where a mark becomes famous overnight, it is hard to imagine that a mark deemed "famous" under subparagraphs (a) through (g) of proposed Section 43(c) would not be federally registered. The requirement for federal registration on the Principal Register would provide a data base that third parties could consult regarding possible dilution when "clearing" marks for adoption.
on a finding of dilution, the remedy provided by H.R. 1295 is limited to injunctive relief unless willful intent to trade on the registrant's reputation or to cause dilution can be shown. if willfulness can be established, the remedies set forth in Sections 35(a) (damages, profits, and attorney fees in "exceptional" cases) and Section 36 (destruction of infringing labels, plates, etc.) can be applied, subject to the discretion of the court and the principles of equity.
7. Preemption.
H.R. 1295 would not pre-empt existing state dilution statutes. State laws could continue to be applied in cases involving locally famous or distinctive marks. See, eg., Wedgewood Homes, Inc. v. Lund, 659 P.2d 377, 222 U.S.P.Q. 446 (or. 1983). Unlike patent and copyright laws, federal trademark law presently coexists with state trademark law, and it is to be expected that a federal dilution statute should similarly coexist with state dilution statutes. The Supreme Court's recent decision in U.S. v. Lopez, 115 S.Ct. 1624 (1995), also suggests that the commerce clause of the U.S. Constitution, which forms the basis of federal trademark protection, may not reach purely intrastate uses of marks.
The presence of a federal statute will, however, have an indirect salutary effect on state dilution law. As the body of jurisprudence interpreting the federal dilution develops, it can be expected that state courts, in interpreting their own dilution statutes, will look to federal court decisions for guidance, just as has occurred in the coexistent federal and state decisional law in trademark infringement cases. Thus, it can be expected that state dilution jurisprudence will become more consistent and unified, in accordance with federal dilution law.
8. ownership of Registration Is Defense.
Although H.R. 1295 would not preempt state dilution laws, it does specifically provide that ownership of a valid federal registration is a complete defense to a claim of dilution under state or common law. There are three reasons why a federal registration should be a bar to a state or common-law claim of dilution.
First, a federal registration affords rights that are in conflict with state dilution laws and, in this instance, a federal registration should be preemptive. Second, permitting a state to regulate the use of a federally registered mark is inconsistent with the intent of the Lanham Act "to protect registered marks used in such commerce from interference by state, or territorial legislation." Finally, making a federal registration a defense to a state dilution action encourages federal registration of marks and gives greater certainty to a federal registrant of its right to use its mark in commerce, without the possibility of attack based on a state dilution claim. In any case, one claiming a right under a state dilution statute is not prevented, in appropriate circumstances, from petitioning to cancel a federal registration in order to eliminate the defense.
9. International Norms.
The enactment of a proposed federal dilution statute would also harmonize U.S. trademark law with that of other nations and assist our country's negotiators in persuading other countries to protect famous trademarks owned by U.S. companies. In testimony prepared in connection with the Trademark Law Revision Act of 1988, it was noted that
"other countries can resist agreeing to higher international standards for intellectual property by pointing to the fact that the United States itself provides little protection against dilution in many states. The dilution provision would show that we are not asking other countries to give better protection than we are willing to give...."
See Statement of Donald J. Quigg on S.1883 submitted to the Subcommittee on Patents, Copyrights and Trademarks, Committee on the Judiciary, United States Senate, March 15, 1988.
Other countries, including some of our major trading partners, recognize the wisdom of dilution statutes. Canada has protected famous marks from dilution since 1953. More recently, Japan, Spain, Greece, and Venezuela have adopted dilution laws. Great Britain, in its first complete trademark revision since 1938, included a strong dilution provision in its Trade Marks Act 1994.
The European Community has also recognized the dilution concept. Article 9 (1) of the recently promulgated Community Trademark Regulation provides that the owner of a Community Trademark "shall be entitled to prevent all third parties not having his consent from using in the course of trade...
(c) any sign which is identical with or similar to the Community Trademark in relation to goods or services which are not similar to those for which the Community Trademark is registered, where the latter has a reputation in the Community and where the use of that sign without due course takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the Community Trademark."
And just this winter, after protracted negotiations, the U.S. and China agreed to an "Action Plan for Effective Protection and Enforcement of Intellectual Property Rights" in China. As part of this plan, China agreed that "protection of a well-known mark will extend to products and services other than those on which the mark is registered or used to the extent such use would . . . adversely affect the commercial reputation of the trademark owner." The irony of the current situation is plain. In China, famous marks owned by U.S. entities are provided more protection than in one-half of the U.S.
10. Earlier Dilution Proposal.
This is not the first time that a proposal for a federal dilution statute has been presented to Congress. Such a proposal was incorporated as part of the "Trademark Law Revision Act of 1988," as introduced in November 1987. Indeed, a federal dilution proposal was adopted by the Senate. As a result of concerns voiced by representatives of the broadcasting, publishing, and advertising industries, however, the proposal was deleted from the bill by the House Judiciary Committee. These industries wanted to be certain that any dilution statute be carefully considered in light of its First Amendment implications.
11. First Amendment.
Since 1988, INTA and others have given a great deal of thought to the First Amendment issues. For example, the Senate Judiciary Committee sought the views of the Congressional Research Service (CRS) as to whether "an anti-dilution amendment to the Lanham Act . . . can be drafted to alleviate First Amendment concerns." After a thorough review of the relevant case law and commentaries, and an analysis of the test set forth by the Supreme Court in Central Hudson Gas & Electric Corn. v. Public Service Commission of New York, 447 U.S. 557 (1980), for determining the constitutionality of governmental restrictions on commercial speech, CRS concluded that "an anti-dilution statute that applied solely to commercial speech..... would almost certainly be constitutional." Memorandum from The American Law Division, Congressional Research Service to the Senate Committee on the Judiciary, "First Amendment Concerns with Respect to Adding an Anti-Dilution Amendment to the Lanham (Trademark) Act," (October 16, 1990) at CRS-17.
H.R. 1295 is consistent with the recommendation of the CRS. It would only prohibit another's commercial use in commerce of a mark or trade name. The "use in commerce" language reflects that this legislation, like the Lanham Act itself, 15 U.S.C. 1051, et seq., requires some aspect of interstate commerce to be present before the dilution provision can be triggered.
Emphasizing that the "use" must be a "commercial use" has two purposes. First, it makes clear that courts are authorized to enjoin unauthorized commercial uses of famous marks that fall short of technical trademark use. Technically speaking, advertising for goods (as opposed to services) does not fall within the Lanham Act's definition of "use in commerce," which is limited to display of a mark on labels, packaging, and point-of-purchase signage. 15 U.S.C. S. 1127. Such speech, however, would be considered "commercial" for purposes of the commercial speech doctrine, because advertising for goods plainly proposes a commercial transaction. Virginia State Board of Pharmacy v. Virginia Citizens' Consumer Council, Inc., 425 U.S. 748, 758-59 (1976).
Second, H.R. 1295 deliberately is intended to preclude the courts from enjoining speech that courts have recognized to be constitutionally protected. To ensure that such speech remains protected, proposed Section 43(c) expressly incorporates the concept of "commercial" speech from the commercial speech doctrine, and proscribes dilution actions that seek to enjoin use of famous marks in "non-commercial" uses (such as parodies, consumer product reviews, and news and investigative reports) . The proposed statute also incorporates the doctrine that fair, truthful use may be made of another's trademark in a manner consistent with such cases as Prestonettes. Inc. v. Cody, 264 U.S. 359 (1924), and New Kids on the Block v. News America Publishing, Inc., 971 F.2d 302 (9th Cir. 1992). Section (4) (A) of the bill provides that the "fair use" of a famous mark for purposes of comparative advertising, for example, is not actionable.
The focus in the dilution statute on the commercial/noncommercial dichotomy expressly builds on a proven way of identifying speech that government simply should not regulate. Experience has demonstrated that courts are quite cautious when dilution and other trademark-related cases raise First Amendment concerns, and generally erred on the side of protecting informational uses against dilution claims. see. e.g., L.L. Bean. Inc. v. Drake Publishers, Inc., 811 F.2d 26 (1st Cir.) , cert. denied, 483 U.S. 1013 (1987). In these other cases, dilution or other trademark-related claims have been rejected when an injunction might impermissively have restricted protected expression.
At the same time, courts have been able to prevent diluting uses of another's mark in various commercial settings by balancing, in a manner consistent with Central Hudson, the need to use speech to convey a message against the advertiser's underlying profit motive and the real risk of harm to a famous mark. As the Second Circuit recently explained in a case finding dilution, where a competitor altered and animated the plaintiff's trademark in a comparative advertisement:
Sellers of commercial products who wish to attract attention to their commercials or products and thereby increase sales by poking fun at widely-recognized marks of non-competing products, (citation omitted) risk diluting the selling power of the mark that is made fun of. When this occurs, not for worthy purposes of expression but simply to sell their own products, that purpose can easily be achieved in other ways. The potentially diluting effect is even less deserving of protection when the object of the joke is the mark of a directly competing product. (citation omitted) The line drawing in this area becomes especially difficult when a mark is parodied for the dual purposes of making a satiric comment and selling a somewhat competing product.
Deere & Co., 41 F.3d at 44.
INTA recognizes that the commercial/non-commercial distinction is not a bright line. For example, speech that is packaged and sold for profit often has been deemed "non- commercial" for purposes of First Amendment protection; examples of such non-commercial speech range from for- profit parodies to art work to mainstream journalistic endeavors. In these cases, courts limit the term "commercial speech" to include only speech that proposes a commercial transaction, as opposed to speech that, itself, may be sold for profit.
12. Criticisms of Trademark Dilution.
INTA is aware that, in the past, some have criticized the concept of creating a federal cause of action for trademark dilution. Many of these criticisms point to the lack of clarity with which courts have treated the rationale for dilution. others suggest that the harm caused by dilution can be adequately addressed under traditional infringement theories. Still others point to the lack of any empirical way in which to measure whether a mark in fact has been diluted.
The short answer to all of these criticisms is twofold. First, as noted, enacting H.R. 1295 will help bring sorely needed clarity to this area of the law by creating a federal definition of dilution and by promoting the uniform application of a national dilution standard. Second, although questioning the rationale for dilution has made for some interesting law review articles, the American Law Institute's recently issued Restatement of the Law Unfair Competition should put to rest the notion that the doctrinal basis for a dilution statute somehow is flawed. Section 25 of the Restatement, which was prepared under the review and supervision of an advisory board of esteemed federal judges, law professors and experienced trademark practitioners, clearly summarizes the dilution rationale and recognizes it as a valid theory of unfair competition law.
In sum, enactment of a federal dilution statute, and of H.R. 1295 in particular, would provide famous marks protection consistent with international norms and with the First Amendment and would promote greater uniformity and certainty in the application of the dilution doctrine throughout the country. We urge the subcommittee to "report out" the bill as promptly as possible and look forward to working with the members of the panel and its staff in assuring passage of the measure.
B. MADRID PROTOCOL IMPLEMENTATION ACT
INTA also enthusiastically supports enactment of H.R. 1270, the "Madrid Protocol Implementation Act," as well as adherence by the U.S. to the treaty itself. INTA views the bill as noncontroversial. Indeed, an earlier version of the measure passed the House of Representatives last October by the lopsided vote of 387 to 3.
1. Advantages of Protocol.
The Madrid Protocol would greatly facilitate the obtaining and maintaining of trademark protection abroad by U.S. trademark owners. The treaty provides for a central trademark filing system so that a U.S. trademark owner may apply for protection in as many Protocol countries as desired through the filing of a single application at a single place the U.S. Patent and Trademark office -- in a single language English --upon the payment of a single set of fees. This new procedure would save U.S. trademark owners considerable time and expense in protecting their marks overseas and would be of particular benefit to small and medium size companies who cannot afford to retain counsel around the world in order to file and prosecute trademark applications. By facilitating trademark protection abroad, the Protocol enhances trade and expands opportunities for U.S. exporters, especially small businesses, and ensures a level playing field in international marketing. With business becoming more global and with all companies being concerned about costs and competitiveness, the Madrid Protocol is viewed by INTA as a significant and positive development in international trademark law.
2. The Bill.
The Madrid Protocol Implementation Act largely tracks the provisions of the Protocol and/or its implementing regulations. Further, and most significantly, the bill, as drafted, would not result in wholesale change to current U.S. trademark law or practice and would not disadvantage owners of U.S. registrations vis-a-vis non-U.S. trademark owners. It is also consistent with the strong public policy of reducing the amount of "deadwood," i.e., marks that no longer are being used, on the U.S. Principal Register.
Thus, for example, the bill provides, in proposed Section 66(a), that any request for extension of protection of an international registration to the U.S., in order to be considered properly filed, must contain a declaration of a "bona fide" intention to use the mark in commerce. And proposed Section 71 requires the owner of an extension of protection to the U.S. to file an affidavit of use in commerce between the fifth and sixth year following the grant of extension of protection and by the end of ten years following the grant of extension of protection and every ten years thereafter. This requirement parallels the requirements now set forth in Sections 8 and 9, 15 U.S.C. 1058 and 15 U.S.C. 1059, of the Lanham Act in order to maintain a U.S. registration. These requirements are separate and apart f rom those set forth in the Protocol for maintenance of the international registration issued under the Protocol.
In May 1993, INTA testified before this panel on predecessor legislation to H.R. 1270. At that point in time, we indicated our general support for the then-pending legislation and suggested one change, which we are pleased to note has been incorporated in the bill now before the subcommittee. That change, incorporated in proposed Section 74 of the bill, authorizes the USPTO to replace an existing U.S. registration with an international registration where both are owned by the same entity and the mark and goods are the same.
3. Administration's Position.
At the May 1993 hearing, the administration announced
that it "strongly" supported U.S. adherence to the
Protocol. One year later, however, the administration
reversed its position. The administration explained that
the U.S. would not adhere to the Madrid Protocol because
the treaty provides intergovernmental organizations, such
as the European Union, a separate vote within the Madrid
Assembly, the Protocol's governing body. This change in