Mr. LANHAM. Mr. Byerly, of course, has modified his amendment considerably, and now says that the idea that you have suggested by way of amendment to it, he thinks you could work it out. So, suppose you see if during the noon recess you can do that.

Mr. ROGERS. Mr. Chairman, I have been trying my hand at compromise. May I read you this:

That the use by the defendant of the name, term, or device charged to be an infringement is a use other than as a trade-mark designation or service mark of the defendant's individual name in his own business, or of the individual name of anyone in privity with the defendant, who uses his own name in his own business, or of a term or device which is only descriptive of and used in good faith to describe to users the goods or services of the defendant or their geographical origin.

Mr. LANHAM. Does not that include your idea?

Mr. MARTIN. May I just inquire-Mr. Rogers has inserted the word "designation" in line 13 of the committee print. Is there a comma between the words "trade-mark" and "designation?" Or is it intended to use the term "trade-mark designation" without the comma? Mr. ROGERS. "Trade-mark, designation."

Mr. MARTIN. If you leave the comma out I would be inclined not to object.

Mr. ROGERS. I do not like punctuation in statutes if we can help it"trade-mark or designation or service mark." I intended it to be disjunctive.

Mr. POHL. Perhaps Mr. Rogers' amendment to the amendment to the amendment could be further amended to "other than as a brand name, merchandise designation, or service designation."

Mr. ROGERS. All right.

Mr. MARTIN. Now we have to define "designation." What does "designation" mean?

Mr. LANHAM. Gentlemen, as a compromiser I am convinced by this discussion that you gentlemen here who have been talking about this provision are not so far apart but that in the noon recess you can get together on it, and thereby conserve time.

Mr. LOUIS ROBERTSON, Chicago, Ill. Mr. Chairman, there is one point that I believe has not been made so far. It seems to me that the inclusion of this restriction that it has not been used as a trademark or of some such language is extremely dangerous from the standpoint of incontestability. Mr. Martin has stated that the American Bar Association desired that the defendant be able to have his day in court as to whether or not the plaintiff using a descriptive term has a trade-mark or not. The limitation that the defendant does not use the term in question as a trade-mark, which might be different from the registered trade-mark, is a very serious and dangerous limitation. If I use the term "new process", for example, as part of my trade-mark, the wording that is proposed would seem to prevent my arguing that some other term registered has not acquired a secondary meaning, and I think I should point out in that connection that a great many of the terms which are registered are not in extensive use. It is common practice among corporations owning trade-marks to have what may be called a "synthetic" use. Every month or so, maybe every week if they think it is necessary in order to maintain continuity for 5 years to get incontestable right in their descriptive terms, they will send out one product to somebody-one product, sent to

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some friendly dealer in the District of Columbia and paid for by him will be enough to, in 5 years, give him incontestablility, even if it is a descriptive term. To the public it may have absolutely no secondary significance whatever, and it seems to me that the person who uses the descriptive term should have a chance to show that he is using it even as part of his trade-mark in a way that is perfectly fair, will not confuse anybody, and is absolutely harmless. If anybody has any real rights, he is the one who has it. He may have used the term in Texas and in that vicinity for years and not know anything about anybody else using the term. He may have used his own name, "Louis Robertson" in Texas for years and then been confronted with somebody else who perhaps has registered the name "Robinson," a different name-no confusion. The name "Robinson" has not been used in his territory, and he has no defense that the other person has not exclusive rights in fact.

Mr. LANHAM. Well, I believe the suggestion is a good one, that you gentlemen can probably get together on that, and I know that is one of the controversial parts of this bill. Now, Mr. Byerly, if that suggestion is agreeable-did you have any further suggestions?

Mr. BYERLY. No; that is all I wanted to say. Thank you very much.

Mr. LANHAM. Then will you gentlemen in the noon recess get together on that?

Now, Mr. Mock, who has to leave today, said that he wanted to be heard for 10 minutes, and when we conclude with Mr. Mock's statement we will go right ahead to the amendments. However, gentlemen, it is not the purpose of the subcommittee in taking this up for amendment to go over it section by section as we did before. We have ironed out so many of those sections that we will just take the suggested amendments. First, those, for instance, that have been so generally agreed upon by the American Bar Association, and then take up incidental amendments later. For instance, in correspondence I have received a number of suggested amendments which may be included in the American Bar Association suggestions.

STATEMENT OF HUGO MOCK, REPRESENTING THE TOILET GOODS ASSOCIATION, INC., NEW YORK CITY

Mr. Mock. Mr. Chairman and gentlemen, I am here on behalf of the Toilet Goods Association, which is an association representing the majority of the toilet goods manufacturers.

I want to say that although I appear specifically for the toilet goods manufacturers, I think logically my few brief remarks will apply equally well to other lines of industry, especially the drug trade and similar trades.

Although I have been privileged to attend many of the meetings of the committees sitting on this bill, I do not propose to contribute anything to the majority of these amendments, and shall confine my remarks to a single point, the importance of which I would like to impress upon the members of the committee.

We have worked under the present trade-mark law of February 20, 1905, until the present time, and although it is in many respects

unsatisfactory, it is a great improvement over the previous legislation on the same subject.

The industry which I represent is in favor of the passage of the Lanham bill, H. R. 5461, as we believe it will be a great step forward in eliminating many of the trade-mark difficulties which are not resolved under the present law.

If I may very briefly summarize the differences between the present statute and the proposed bill I would say this: That under the new and proposed legislation the statutory rights of the trade-mark registrant are increased, and the common-law rights of the trade-mark owner are not canceled but are more restricted.

Many of you have an affection for the common law, but I think it will not be difficult to show that with our present complex method of the distribution of products needed for our economy, the common law basis on which we have so much relied in the past is insufficient. Under the present law the registration is merely a record and grants no substantive rights. There is no compulsion, and in fact no necessity for any trade-mark owner to register his mark under the present law, and many important marks have never been registered under that law. In some respects at the present time a man who registers his trade-mark is at a positive disadvantage compared to the man who does not do so.

One of the purposes of this bill is to encourage trade-mark owners to register their marks, to establish a central bureau of information where it can be found out whether a certain mark is or is not registered, and to penalize to a moderate extent those trade-mark owners who have not thought their trade-marks sufficiently valuable to register them in the Patent Office.

Broadly speaking, there are two classes of manufacturers in the United States, those who have a national distribution and those who have only a limited or local distribution, and the distance between these two classes tends to become greater rather than smaller. You have the local baker, who sells in his own neighborhood only, and then you have the giant baking company, such as Ward and National Baking and others, who have plants in various parts of the country. The same thing applies to such fundamentals as milk and milk products, ice cream, beer and a great many other commodities. The thing which has made possible the growth of the national advertiser and large distributor is, of course, quantity manufacture, but this in turn has brought its own problems to the manufacturer of a product widely distributed. If you buy labels and bottles by the million you can get a very low price. If you only buy a few thousand at a time the price is necessarily a very high one.

This brings us to the immediate point of these remarks. A manufacturer with national distribution starts putting a new product on the market. Let us say he calls it "Victory Soap. He files an application for registration of his trade-mark in the Patent Office. Under the present system he may even have his registration, but then when he starts distributing in Chicago, let us say, he finds that a wholesaler there has had Victory Soap for the past 2 years, and when he gets to San Francisco he may find a similar situation there. These uses may have been so small, confined perhaps to a single city or a single district, that they could not have been discovered by the

manufacturer with national distribution. When this happens-and it has happened very often in the past-I do not think there is a practicing lawyer here to whom it has not happened a great many times the manufacturer with national distribution either has to buy out the man who, so to speak, has kept his trade-mark in ambush, or he has to stop his own business with this particular mark altogether, and either way is very apt to be a costly procedure.

Now, under the provisions of this bill, the Lanham bill, your Chicago manufacturer and your San Francisco manufacturer can still continue to sell Victory soap in the area in which they have been selling it, but they can not stop the national distributor from selling his product. anywhere else in the United States, unless they will go to the trouble and expense of cancelling the national manufacturer's registration.

We do not want to interfere with the small manufacturer or the small dealer. If he has any rights in a trade-mark, he should be permitted to keep such rights with the customers he has developed, but he should not be permitted to destroy the fruits of the initiative of another man who wants to sell his product all over the country. Any small manufacturer can register his mark just the same as the large manufacturer, and can announce to the country that he claims an ownership in that mark.

In numerous instances manufacturers have made diligent search through the Patent Office, through private registration bureaus and through other sources available for both registered and unregistered marks, where they are attempting to name a new product, and very often it has happened in the case of the energetic progressive manufacturer that he finds that after all his care in choosing a new mark, some obscure dealer or manufacturer has priority in the same, and if he is located near a State border line he may even have priority in interstate commerce.

This law does not take anything away from a man who has not registered his trade-mark, except the right to harass the progressive manufacturer. The present law worked very well when business was mostly local, but instances are occurring all the time of marks which have developed slowly in their own territories, and then their sales territory has gradually extended, and you gentlemen know that even such prominent marks as Vicks and Coca-Cola and Maxwell House Coffee, they all started as local marks. The present bill provides that where there has been honest, concurrent, and noncompetitive use of the same trade-mark for the same merchandise in different parts of the country, registration may be provided to both parties having such

concurrent use.

We e are in favor of this bill as it is, because we think this is a progressive step forward. We would favor legislation which goes much further than this bill does, and which would limit the common-law right of the trade-mark owner much more than it does.

I notice the deposit provision here, where a man may deposit his mark in the Patent Office by paying a fee of $2. This is in the House print without a number, page 24, section 29, of the committee print. That is all right as far as it goes, but even with that deposit, the trademark owner is not required to spend $2 for that deposit, so he can still wait and sit in ambush, and the people who do that have another advantage over the national advertiser, because the man who sits in

ambush, expecting to make capital out of these little known marks is sometimes a little bit unscrupulous as to his date of usage. The big manufacturer has no means of lying, but the little manufacturer simply submits his own word, and very often he has to be believed.

The defect of section 29 is that the registration of that common-law mark is not compulsory. It would seem that anybody who claims right to a mark would be willing to spend one or two dollars to register the same. I have here a couple of books published by our association. This top one cost more than $10,000 to print. In there are listed all the registered and all the unregistered trade-marks for toilet preparations and soap that we could possibly gather from every source. There was no charge of any kind made for listing those marks. We sent to every name and every directory and asked people to list their marks, registered or unregistered, and yet there is not a week goes by in the United States that some manufacturer with national distribution does not find that there is somebody who claims to own a mark which he is starting to advertise, and claims to have had it before the national advertiser had it. Now, that is a condition that we think legislation ought to correct. It does not penalize the small trader, and it helps the large trader.

Mr. LANHAM. You think there should be some compulsory provision with reference to giving notice?

Mr. Mock. We think that a man who wants to adopt a new mark ought to be able to go to some place in the United States, some central bureau, where he can find out whether anybody claims to use the mark, and in most cases, even if he finds that the mark has been abandoned, he will leave it alone and go to something else. But there ought to be some bureau of information where a manufacturer who legitimately wants to adopt a new mark may find out if he is entitled to do so. That is the burden of my little talk.

Mr. LANHAM. Section 29, as I understand the statement made by Mr. Bailey, is one of those which is recommended by the American Bar Association?

Mr. BAILEY. Mr. Chairman, that section is intended to embody a recommendation adopted by the American Bar Association at its midwinter meeting last winter, not at the Indianapolis meeting, but it is intended to be an American Bar Association suggestion.

Mr. LANHAM. What is the general thought of you gentlemen with reference to the statement made by Mr. Mock that this should be compulsory?

Mr. FENNING. It should not be compulsory, for one reason at least. A man adopts a label. He may not know exactly what is his trademark. There may be several things in his label. The public may select one of those, and he may select another. An instance is Vick's salve. It is known throughout the country as Vick's salve. They have a red triangle on their label, which is a trade-mark. Vapo Rub was a term they used. That is a trade-mark. Initially I apprehend that if Vick's were required to register their trade-mark, they probably would have registered Vapo Rub and not Vick's, and possibly not the red triangle. How is a man going to tell what he should register?

Mr. E. H. SIMPSON, Milwaukee, Wis. Would you not put everything on the mark, then; the trade-mark there?