Well, I am inclined to withdraw my objections to that section that I read, as I read this one here. When I made my statement, I had only glanced at part of it, and I find my objection is practically eliminated by the latter part of the section here. In other words, the section as it reads here provides that the registrant can only claim profit or damages where the printer is a moving party in the use of the mark, with knowledge that it is to be used to cause confusion or mistake, or to deceive purchasers.

There appears, however-I do not know how it is contained in the committee print and whether my objection is cured, but in H. R. 5461, the sections pertaining to incontestability, sections 33 and 15-it appears from section 15 that after the registration of a mark and its use for a consecutive period of 5 years in commerce, the mark becomes incontestable. However, under section 33, we find that an incontestable mark is contestable. And, as I understand it in this bill, when a mark becomes incontestable, it applies to all of the territories of this country whereas, under the common law, anyone who used a mark in a particular territory was not subject to claims of infringement by someone who had used the mark in another territory.

So what we have a similar situation with regard to printers. Where a printer has been printing a mark for, say, 5 years and no claim of infringement has been made to that mark, he suddenly finds he has received notice from someone who has used that mark in another territory and which may not be known to him.

Mr. KRAMER. And which may not be entirely the same trade-mark, but quite similar to it.

Mr. BROSTOFF. That is right-and that other mark has been registered for 5 years and is, therefore, incontestable and applies in the territory of the mark which he is going to print. Therefore, he is asked to cease and desist the printing.

Now, this incontestable mark is still contestable as shown by section 33, and the printer is again placed in the position of a judge and jury. Mr. KRAMER. Would not that only be if the parties had claimed, for instance, that some person, we will say in Kansas City, was using a certain trade-mark design which was somewhat similar to one being used in Chicago, Ill., perhaps, for a good long while, many years-5 or 6 years and there had not come any contact between them where they noticed the one was using the other's; but when the Chicago firm found this firm back there was using it, they brought it to their attention and said, "You are using our trade-mark design," and they said, "No; you are using ours." They would say, "Well, we will go back to who has the priority of registry, and the question would be confined to the question of who had prior registration. Would not that settle the whole basis of dispute?

Mr. BROSTOFF. Well, that would, under this bill.

Mr. KRAMER. That is the way it should be, should it not?

Mr. BROSTOFF. Well, as I understand it, the practice has been, and apparently satisfactory, and the law now is that if a mark has been used in a certain territory and a similar mark has been used in another territory, neither mark is an infringement on the other. Now, I am not a trade-mark lawyer, so I may be in error; but that is my understanding.

Mr. KRAMER. You are not talking to one, either; so we are on the same footing. I am only speaking as to the common sense of it, and the suggestion I made here was one which came up in the hearings in a court room in Chicago many years ago when I was sitting there waiting for a motion, and trade-mark patent attorneys were going to be through with theirs in 5 minutes and they argued all day and then were not through, and I sat listening to them.

Mr. BROSTOFF. As I gather the background, the rights in a mark may be based on unfair competition in that one who uses an infringing mark is palming off his goods as the goods of another; therefore, with these territorial limitations, where a mark is used in one territory and a similar mark is used in another territory, and the two territories do not conflict and the one is not going into the other's territory, there is no palming off or deception; therefore, there is no infringement between the marks.

That, I understand, is the present law. The gentlemen who follow me can probably state it much more authoritatively, either in support or denial; but that, I understand, is the present law. And the effect would be to place the printer on the spot again of having to decide whether an incontestable mark is contestable, and whether he should print or desist from printing; whether he shall subject himself to a breach of contract for not printing and lose the profits, or whether to subject himself to a suit for damages if he does print.

Therefore, we respectfully submit to the committee that the section should be changed, or modified, or amended, so as to eliminate that. Mr. KRAMER. You are speaking of which sections now?

Mr. BROSTOFF. I am speaking of sections 33 and 15, and section 32 (1), clause 6, as contained in H. R. 5461.

Mr. PLAUCHÉ. To sum up your argument and objection to the bill in both respects, as I see it, you do not believe that the printer should be held liable for infringement if he is just carrying out or following an order for some trade-mark or wrapper, or something of that sort? Mr. BROSTOFF. That is correct, sir.

Mr. PLAUCHÉ. In other words, you do not want the printers to be made the judges of whether or not they are infringers?

Mr. BROSTOFF. That is correct, and that is my entire statement.

Mr. PLAUCHÉ. However, you do agree, if they are parties to some collusion or agreement by which some patent or copyright or trademark is infringed, that they should be held liable?

Mr. BROSTOFF. Definitely.

Mr. KRAMER. Well, supposing the printer is only someone who does the printing on this and then it goes to a billboard poster and is used on the billboard, would you say the poster should be given notice of that, too; or should you stop the printer, or let it go on to the bill poster? The printer only does the printing; that is one operation. Someone else takes it from there on and delivers it to the bill poster, and he puts it on the billboard.

Mr. BROSTOFF. My theory of this whole picture is that the proper remedy for a trade-mark infringement, either against the printer or against the bill poster, or anyone in this chain of use who is not responsible for the adoption of the mark and has not entered into a collusive arrangement with the user of the mark for its adoption, should be one of injunction restraining the printer and the bill poster or anyone else from using it.

Mr. KRAMER. Restraining all persons?

Mr. BROSTOFF. Yes; from performing any action in connection with that mark.

Mr. PLAUCHÉ. And the action for damages would be against the prime mover?

Mr. BROSTOFF. That is correct.

Mr. PLAUCHÉ. For the use of that copyright or trade-mark?

Mr. BROSTOFF. That is correct. Now, in this injunction relief, we do one of several things. Principally, we protect the one who is estopped, who is entitled to protection. If he is estopped from printing or putting up signs, he is losing profits and, if the claimant is wrong, he should be entitled to recover, and if a restraining order is entered it should be accompanied by a bond, that is, require the putting up of a bond. The printer or whoever is restrained would then have an action on the bond if an improper restraining order be entered.

Mr. KRAMER. Yet when restrained and not being able to complete the job, he may have gone only so far as setting up the type or the running of the job on the press before he was served with the injunction or restraining order.

Mr. BROSTOFF. That is correct.

Mr. KRAMER. And it is going to be difficult to say how far he has advanced with the job at the time the action is actually taken and heard.

Mr. BROSTOFF. But, in any event, the injunctive relief solves the problem in that he is definitely compelled to stop by a court order which is supported by a bond, under which, if the claimant or the one in whose favor the restraining order is entered is wrong, any damages which may have been caused to the party restrained can be recovered. I think that is by far the best solution to this whole problem, insofar as these innocent people in the chain are concerned.

Mr. KRAMER. If that were the situation (and there were some recent infringement cases I was interested in that were tried in Chicago), why, the party who claimed an infringement merely for the purpose of preventing the other competitor from receiving those orders he knew they undoubtedly would receive because of superiority of the product, a better price on the bid, and many other things, and sought some way of doing it and did not ask for an injunction order, could simply send a letter to all of the concerns who might purchase the article and thereby, without securing an injunction order, obtain the same effect; because no one wants to subject himself to a lawsuit. And it might be in this section, if you make it mandatory, that the only damages that could be claimed would be by obtaining an injunction order and the court then would pass on it, and the parties would all have notice of it. But where they use the other medium, which I understand has been used in many instances, that is, where some of the lower-grade practicing attorneys have sent a letter out, of course that letter does the job. I am just using this as an illustration; it is the same thing I had in mind for possible introduction of a bill, to stop that kind of procedure, and by bringing an action delaying the other person who has a product which he has put on the market, if the person has a real, honest-to-god suit, why, let him put up a bond and let the court direct in this infringement action he should give a bond,

so that whatever damages inure by reason of the fact the injunction or restraining order was entered, would be protected.

Mr. FENNING. That is the law now.

Mr. KRAMER. It may be the law now, but you get around the law and do not get an injunction, and that is merely a correction in the Patent Act that would apply here, too.

Mr. BROSTOFF. That proceeding you have reference to, this letter writing, is the proceeding that apparently is approved by section 33 of H. R. 5461, and which is manifestly wrong.

Mr. KRAMER. It is, yes; I agree with you. In other words, it gives the party an opportunity to put a stop to something because he throws a fear into the other fellow that, if he persists and goes along with the printing of that, he is going to suffer damages; but whether he intends to prosecute later on or not no one knows.

Mr. PLAUCHÉ. In other words, it is in the nature of a racketeering practice?

Mr. KRAMER. Yes. Of course, the patent bar may suffer in some respects, in that way, from defending legitimate cases; but I think the patent bar-and I have the highest respect for it-while there are some in the patent bar who might use those tactics, I think the men such as we have here today are not using that procedure.

Mr. FRAZER. On the other hand, Mr. Chairman, if I may inject a remark, I think the general use of notice of claims of infringement avoids a great deal of unnecessary litigation.

Mr. FENNING. It is required by statute.

Mr. KRAMER. Yes; you would avoid a great deal of litigation.

STATEMENT OF OSCAR W. GIESE, MINNEAPOLIS, MINN.

The CHAIRMAN. You may proceed, Mr. Giese.

Mr. GIESE. Mr. Chairman, my name is Oscar W. Giese, Minneapolis, Minn. I am a member of the committee on legislation of the American Bar Association.

I speak as a lawyer in private practice in Minneapolis whose practice relates extensively to trade-marks and unfair-competition matters, and I also speak as a member of the committee on legislation of the patent-law section of the American Bar Association.

My brief remarks will be directed first generally in support of the provision for incontestability in the bill, and particularly the committee reprint, and more specifically I wish to mention briefly section 21 of the bill with reference to the provision for incontestability. The situation which really brought me to Washington at this time is merely one which will illustrate the desirability and necessity for certain legislation. I am here to attend a hearing in a trade-mark interference proceeding. My client adopted and registered its mark over 15 years ago. For more than 10 years my client's mark has been nationally advertised in such magazines as the Saturday Evening Post, Good Housekeeping, and moreover it has been advertised over the national radio network most extensively.

But despite this long continuous and extensive advertisement of its mark my client finds its registration involved in a trade-mark interference proceeding, and under the present law laches is probably no defense in an interference proceeding, but under the Lanham bill, this

new trade-mark bill, it would be impossible for the opposite party to have sat back for a matter of 15 years after the registration of a trademark and after its extensive use and then begun his attack. Now, in this situation this opposing party has made only a very nominal use of the mark, so far as we can determine, and if otherwise we were not aware of it.

That merely demonstrates one of the inequities which results under the present law. Therefore, I am certainly heartily in favor of the provision for incontestability, so far as it arises on a similarity situation as referred to here.

Now, with regard to section 21 of the committee reprint: That section differs from section 21 of H. R. 5461 only in respect to the concluding clause, which has been added. In that concluding clause it is separately provided that any party who is satisfied with the decision of the Commission-and that should be Commissioner.

The CHAIRMAN. Yes.

Mr. GIESE. Shall, upon the filing of an appeal to the Court of Customs and Patents Appeals, have the right to elect to have all future proceedings under revised Statutes 4915 as provided for in Statutes 4911.

Now in section 21 of H. R. 5461 it is merely provided that any party who is dissatisfied with the decision of the Commissioner may have further proceedings under Revised Statue 4915, and the effect of this additional clause at the end of section 21, in the committee reprint, is to also make it possible for the party who is satisfied with the decision of the Commissioner, to have further proceedings under Revised Statutes 4915. The fundamental purpose of this added provision is to provide a court for litigation to enable the parties to determine in a single proceeding both the question of registerability and also the question of the right to use.

It is common practice in actions under 4915 to bring in the question of infringeability by means of a counter claim, and therefore section 21 of the committee reprint would make it possible for any party in a Patent Office litigation to have further proceedings before the Federal district courts of the United States, which would settle the question of infringement at the same time the matter of registration is being determined.

I think that is all.

The CHAIRMAN. Do you believe, then, that this concluding paragraph should be left out of the bill, which appears in the committee print at the end of section 21?

Mr. GIESE. No; just the opposite. I am very strongly in favor of it for this reason: That, with that provision in the bill, it is possible for any satisfied party to elect to have further proceedings in the district court whereby he can bring up the matter of infringement at the same time the question of registration is being settled.

You see, in these Patent Office proceedings the issue is pretty much the same as would be in an infringement suit, the question of confusing similarity of the mind.

Perhaps I can illustrate what I am attempting to say here by referring to several litigations which I have had. In one case a proceeding was instituted in the Patent Office by way of opposition. In that proceeding, the sole question was whether the marks of the parties as applied to their respective goods were confusingly similar.