The committee print was a complete surprise to the members of the subcommittee of the committee on patents and research of the National Association of Manufacturers who attended the hearing, and the matter therefore had not been given any consideration whatsoever. My fiat ran only to support of H. R. 5461, with permission to permit such changes as would clarify the language without changing the fundamental meaning, and with the exception that we had agreed to changes of section 32, title 6, "Remedies," subsection (1), to avoid undue hardship on innocent contributory infringers; and this change of section 32 was only agreed to after extensive deliberation. Some of my personal reasons for the objection to the insertion of section 29 of the committee print are enumerated below: 1. It opens the door to controversy regarding incontestability of a registered mark. 2. It permits an originator of a trade-mark to deposit same, although it may have been used in an exceedingly small intrastate district very sparsely, and without any intention of extending the territory in which the mark might be used. 3. It lends prestige of the Patent Office to the depositor. 4. There is no obligation on the depositor as to declaration of continuous use similar to that imposed on the registrant of a trade-mark registered in the United States Patent Office. 5. The use of the deposited mark may only be spasmodic and of no particular consequence. 6. It would require investigation as to whether the mark deposited was still in use or had been abandoned before it could be adopted by another. 7. It is inequitable to owners of registered trade-marks on whom duties and obligations are imposed. 8. It would emasculate many of the conditions of H. R. 5461. 9. It would eventually clutter up the records of the patent office with a lot of marks not in use or abandoned. I would seize this opportunity of calling attention to the trade-mark acts 1938 of Great Britain, section 2: "No person shall be entitled to institute any proceeding to prevent or to recover damages for the infringement of an unregistered trade-mark, but nothing in this act shall be deemed to affect the rights of action against any person for passing off goods as the goods of another person or the remedies in respect thereof." True, we cannot ignore State laws, but business today is integrated to such an extent that there should be some advantage accruing to a registrant which does not extend to one who does not register. On your call for a showing of hands of those supporting insertion in H. R. 5461 of section 29 of the committee print, I believe there were only two in favor. The subject matter of section 29 of the committee print should be, in my opinion, the object of very thorough and exhaustive investigation before being permitted to go on the statute books; and I therefore think that H. R. 5461 should not now be further delayed by insertion of section 29 of the committee print. Respectfully yours, W. H. STANLEY, Vice President. TRADE-MARK SERVICE CORPORATION, Re proposed trade-mark bill. Hon. FRITZ G. LANHAM, Chairman of Committee on Patents, House of Representatives, Washington, D. C. DEAR MR. LANHAM: May I submit the following fundamental objections to your bill on trade-marks. First, I wish to compliment the authors and sponsors of this bill on their efforts to improve trade-mark matters, but not the results. Every other year, time after time, we who represent those interested in trade-marks, keep coming down here to help solve the trade-mark problem and find again that all over the country the subject is "marking time vigorously." It is conceivable that your committee and Members of Congress are bewildered when you recall at the previous hearings 50 percent were for and 50 percent against the bill. How can laymen or trade-mark owners know their status when the New York bar was consistently for the bill and the Boston bar was utterly opposed and others (including various experts) "on the fence"? Why not have a number of open forums and private meetings until a satisfactory bill is condensed into such shape as to be acceptable to most of those vitally concerned rather than burden your committee year after year. This present bill is but a continuation of a trail of costly litigation, ambiguities, and confusion attendant to the existing trade-mark laws of today. I will not object to the bill section by section, but my general objections can be set forth briefly, as follows: 1. The bill does not give title to the registrant of trade-marks; it does not even determine title ownership. 2. The bill does not prevent unfair competition, trade-mark infringement, or unfair trade practices. 3. The bill does not provide distinction in all classes of goods regardless of present rules of practice. 4. The trade-mark is not covered all over the United States by Federal protection and does not extend in the United States territories-except through alleged interstate commerce. 5. The bill does not in any way provide the basis for eventually clearing up present trade-mark confusion and the establishment of trade-mark rights. 6. The bill does not provide the basis of coordination between trade-marks, trade names, corporate titles, or other instruments of good will used in business. 7. The bill does not clarify the difference between "common law" trade-mark rights and "statutory" trade-mark rights. 8. The bill does not provide Government protection to the owners of trademarks. I shall hereinafter analyze these objections, but first I would point out generally that businessmen and trade-mark owners want a good Federal trade-mark law that will give them the following: A. A deed of trade-mark title ownership in fee simple. B. Complete coverage all over the United States and its territories and possessions. In order to enact such legislation, I believe it is necessary to effect a trade-mark amendment to the United States Constitution giving Congress the power to legislate on the substantive law of trade-marks. I pointed out in the hearings of the last bill, H. R. 4744, page 204, March 28, 1939, that such an amendment to the United States Constitution was urgently needed; and before that I brought up the subject in the hearing H. R. 9041, page 176, on March 15, 1938. In fact, my suggestion was made as early as September 27, 1934, in my article in Printers Ink, entitled "Real trade-mark ownership," and repeated in the American Banker on November 7, 1934, in my article entitled "What bankers should know about trade-marks, etc."; and before the two previous hearings in January 1938 in the World Trade Review, in my article entitled "Why trade-mark registration should be mandatory." Hereinafter, I shall expand the subject of a constitutional amendment, but at this point, I wish to state into the record that Congress is deliberately overlooking the importance of a substantive law on trade-marks as against amending the present law or enacting a new law based on the same conditions and the same trade-mark laws that exist today with the same probable results. Congress has the jurisdiction, through the United States Constitution, to regulate commerce and trade. This bill now attempts to regulate trade-marks or "trade-marks used in commerce," or perhaps it is the use of trade-marks that this bill is attempting to regulate-in either event, a firm foundation is not provided for the owners of trade-marks. Without a substantive trade-mark law, registration in the United States Patent Office is and will be meaningless and ownership undetermined. As long as this ownership is not determined and regulated, trade-mark infringements and confusion is going to exist and the element of unfair competition is going to attend the use of such trade-marks. It must be stated here that there really never existed a definite statute on unfair competition, but just a series of precedents forming a quasi basis for decisions handed down by our courts. Without quoting citations or elaborating by hypothetical cases, it is sufficient to say that most of our eminent authorities agree that trade-marks and unfair competition are "in a mess" and that there are not any established rules to guide either judges or businessmen on these subjects. There is a trend of the great moral law (the Golden Rule) being completely ignored in business. Unless and until businessmen recognize this principle, there will be a tendency toward a regulatory statute for both trade-marks and unfair competition. This is true not only in business, but in other phases of human conduct. This bill, of course, can be passed without a constitutional amendment on the same basis as the existing Federal trade-mark laws, but it will not provide business with the instrumentality nor the Government with the control necessary to clarify the objections set forth hereinbefore. The necessity of an amendment to the United States Constitution goes back to the Original Thirteen Colonies. At that time, coordination was needed between the commerce of the States as well as other matters. When the founders of the United States Constitution were drawing up that great document, they were concerned a great deal about the State trade barriers of those early days and commerce per se, and so provided (art. I, sec. 8) "That Congress shall have the power to regulate commerce.” Since then, "mark" has been added to "trade" to create "trade-mark" to distinguish high-grade products and to generally establish good will so that today, the trademark has grown to be the key to advertised brands in commerce. Therefore, since Congress has the power to regulate commerce or trade, it should also have the power now to regulate the mark. This power can only be vested in the Federal Government by the States through the constitutional method of an amendment. The great difficulty in modern trade-marks starts even with their definition— not two authorities seem to agree as to what they are. Some say "Oh trademarks are those little pieces of paper" on things you buy. And yet another calls them "vanishing points." The courts however interpret trade-marks as a property right and sometimes as a contract (neither of which are articles of commerce). In either case, trade-marks are highly important to their owners (or users including consumers). As a more serious definition, let us realize that trade-marks are the intangible indentification signs of economic tranquility. They are the components of good will interlocked with the spirit of exchange. I believe that the highest economic instrumentality of commerce is good will and such good will can best be created by orginating unity in trade through a fundamentally fair trade-mark law. In the meantime, the most basic requirement for establishing unity in trade is an amendment to the United States Constitution giving Congress the right to regulate the use and ownership of trade-marks and therefore the enactment of one National or Federal trade-mark law providing for the registration of all trade-marks and other instruments of commerce in use. Such a law if enacted, would 1. Provide a basis of modification for many State trade barriers. 2. Provide a basis for the control of price indirectly without fixed prices. 3. Eliminate the necessity for 48 different unfair-sales acts. 4. Eliminate the necessity for antidiscrimination measures. 5. Eliminate the necessity for State fair-trade acts. 6. Provide a basis for the uniform distribution of trade-marked commodities. 7. Eliminate the necessity for 48 State trade-mark laws and provide trademark protection by one central Federal Government. 8. And, generally provide rules and regulations of general business conduct by the cooperation and coordination of the individual States with the Federal Government. 9. Provide a working vehicle for better enforcement of the new Federal Food and Drug Act, the Robinson-Patman Act, antitrust laws and Federal Trade Commission orders. A trade-mark amendment is needed to the United States Constitution now so that a good Federal trade-mark law may be enacted. All of the nine foregoing factors should be achieved through the simple trade-mark amendment to the United States Constitution, as suggested. The present Federal trade-mark law has already been declared unconstitutional in the lower courts as well as questioned by all the leading authorities. Why enact a law similar to the one on record when its constitutionality may be questioned or even some of its sections declared uncertain? I refer you to the Commissioner of Patents' remarks at the hearings of H. R. 9041, page 140, "that uncertainty in the law is no better than a bad law." A trade-mark amendment to the United States Constitution is not only needed for the benefit of trade-mark owners but for the manufacturers, distributors, dealers, and general consumer by providing general business rules of fair trade. A further reason for such constitutional amendment is that Congress will have the authority to grant trade-mark titles and deeds of ownership. As long as Congress does not have such authority, there is going to be confusion in trademarks, unfair competition, fair trade, and an even price and distribution of commodities. I have repeatedly written, indicated, and stated the various phases and benefits of such an amendment and quote just a few of such articles, as follows: (1) Journal of Commerce, August 1938, "Compulsory trade-mark registering urged by Struven." (2) New York Times, August 10, 1938, "Trade-mark rule argued at Albany." (3) New York Times, August 21, 1937, "Movement for fair trade." (4) National Consumer News, November 1937, "Price fascism forces cost rise (5) Journal of Commerce, April 18, 1938, "Trade-mark legislation." (6) Printers Ink, October 31, 1935, "Case for State registration of trademarks." (7) Nassau Press, November 1934, "A treatise on registration of trade-marks." All of the foregoing articles, not only suggest a trade-mark amendment to the United States Constitution, but suggest that Congress immediately thereafter enact a Federal law granting trade-mark ownership and protection to trade-mark registrants. With 48 States of the Union, each having trade-mark laws or provisions for the registration and protection of trade-marks, together with a myriad of other miscellaneous laws regulating or affecting business, a correct Federal law on this subject is needed whereby all of these previous laws and precedents can be at least coordinated, if not superseded. The present bill only mentions trade-marks as its subject, and as hereinbefore stated, does not include labels, prints, designs, terms, form of advertisement, trade names, corporate titles, and many other instruments of good will. The various laws enacted today in the several of the individual States resulting in the so-called trade barriers have been brought about by a basic weakness in the original United States Constitution and can be traced directly to this cause. This weakness was the lack of direct clearly defined control of commerce and distribution by Congress. The original lawmakers never dreamed of the complexities of modern commerce and its attendant ramifications such as mass production, price control, interstate and intrastate distribution through enormous advertising appropriations. They were entirely unfamiliar with nationally advertised trade-marks, unfair competition, etc. When the original Constitution was evoked, as a means of control and cooperation between the Original Thirteen States, Congress was given the power to regulate simple commerce of the everyday necessary commodities (article 1, sec. 8, see United States Constitution), but no provision was made at that time for the coordination or uniform regulation between the individual States with regard to trade-marks-now the key to commerce. The trade-mark can both directly and indirectly regulate fair trade, commerce, competition, as well as price and distribution, but this can only be accomplished nationally by one. Federal all-inclusive trade-mark law and such law can only be enacted after a constitutional amendment delegating this power to Congress instead of the 48 individual States. Such cons.itutional amendment is obvious in view of the fact that this Nation was created as a confederation of individual sovereign States. These States being sovereign, are the separate supreme units of government. They are coordinated and regulated only by powers sanctioned in the Constitution and any powers not expressly delegated therein are State rights. "ART. X. RIGHTS OF STATES UNDER CONSTITUTION.—The powers not delegated to the United States by the Constitution, nor prohibited by it to the States ?re reserved to the States, respectively, or to the people.” Congress should have the means of regulating "trade-marks" instead of "just trade." Since trade-marks are the key to modern commerce, they provide the underlying basis for fair trade and regulation without regimentation. The individual States of the United States under the United States Constitution are sovereign governments and have enacted laws which sometimes appear to be at variance and in conflict with each other. Many of these laws have already been sustained by the State courts and the United States Supreme Court and it seems a little negative to complain about them now. Certainly the commerce clause of the United States Constitution cannot garner and then condense State laws enacted in the various States, in a wild endeavor to regulate business. I would like to repeat at this point my remarks at all previous hearings (both Federal and State) and in all of my writings that a trade-mark per se is not an article of commerce-it is not consumed-it is not eaten and it is not parted with when attached to an article of merchandise, commodity or service-nor is it bought or sold. Even higher trade-marks on intangibles remain the property of the original owners. Thus, Congress should confine itself to regulating commerce and not trade-marks. You will hear such trick phrases as "affecting commerce" and such catchwords as "interference from State legislation" interposed in a diabolically ingenious attempt to circumvent a trade-mark amendment to the United States Constitution. There has been an abundance of writing and discussion regarding the recent proposals about stretching the United States Constitution and its appending commerce clause to include trade-marks. The founders of this country, no doubt, intended that the Constitution of the future could be bent to meet future needs. There is a great deal of difference between "flexibility" and "elasticity." The present trend seems to be to stretch it as far as possible without its snapping back. However, there is no need to stretch the commerce clause at all, especially with uncertainty when it can be properly amended as it itself provides with assurance of constitutionality. Of course, it would mean that 36 of the individual States would have to approve of such an amendment and that these States would have to surrender their power as well as their revenue, but this constitutional amendment could be accomplished for the benefit of the majority of national trade-mark owners-and business, the bar, and buyers should get busy and do their part by making a demand for it. The first step in this direction would be the introduction of an amendment to the United States Constitution to read: "Congress shall have the power to regulate the use and ownership of trade-marks and other symbols of good will." The State is the people; the supreme unit of government is the State, and to achieve coordination between the States it is necessary for Federal cooperation in this direction. Under the vested rights of the United States Constitution the individual proposition of State rights will always be omnipresent and will probably remain so unless the United States Constitution is destroyed. I will offer each and every principal objection to this bill that I submitted to H. R. 4744 and H. R. 9041 and repeat my plea that you do not burden business with a new trade-mark law substantially like the one is existence today. If this bill is passed, there will be some plain and fancy litigation that would dwarf the expenditure of moneys (to clarify and enforce trade-marks registered under this proposed bill) as compared to the costs of establishing trade-mark rights under the present laws. Referring to the original objections, as follows: 1. If ownership of trade-marks is not established under the new law, then this burden is left upon the trade-mark user to establish ownership and if that is predicated upon common law, it is going to be mighty difficult to ever give a deed of title. On referring to the section of the bill "Registration is notice", I repeat the same objection here as in the prior bill, namely, to the word "notice." My clients, who are trade-mark owners do not want a "notice of their claim of ownership" but rather a "deed of trade-mark title." I ask my worthy opponents to produce even one case for the record, where a trade-mark user is satisfied with a "notice of claim to ownership" as against a solid "deed of title." Either the trade-mark owner is going to own his mark or not, which is it? I would prefer that the section read "registration of a trade-mark under this act creates a property right." However, I would be satisfied if the section was merely modified to read "The registration of a trade-mark under this act is registrant's ownership thereof" and it is my opinion that either change would require a trademark amendment to the United States Constitution. If the word "ownership" is changed to "use" it would be more appropriate in this bill. 2. Approximately 18 percent of all trade-marks submitted to the Commissioner of Patents alone, result in costly interference, opposition, and cancelation, and 20 percent of the balance that are registered are involved in trade-mark infringement or unfair competition cases. The price that trade-mark users will pay to even attempt to establish their ownership will be far more costly than before. A simple sample of such fancy costs will be found in Printers Ink of |