It would authorize the use of a mark which has become secondary or which has acquired secondary significance. It would permit the use of such a mark, as a trade-mark by a newcomer in the field. I want to give one example of that, because there has been litigation pending for the last 8 or 10 years regarding the trade-mark Stetson. As everybody here knows, Stetson on hats means a hat made by John B. Stetson Co., and means nothing else, and has meant that for upward of 70 years. About 10 years ago, another company known as Stephen L. Stetson Co., started putting out hats, and calling them Stetson hats, I believe they called them Stephen L. Stetson hats. That use was enjoined by the court. In fact,, the court went so far as to say that Stephen L. Stetson Co. could make hats, but they had to put a notice in them in large type, "Not in any way associated with John B. Stetson Co." If this section 34 were amended as proposed, a newcomer in the hat field, if his name were Stetson, could use the name Stetson as a trade-mark and he would have a good defense, because that is his name. That should not be allowed. Mr. LANHAM. You think it opens the door to commercial piracy? Mr. SAVAGE. It certainly does, because it permits the newcomer in the field to use the name as a trade-mark while the section as it now stands says that he cannot use it as a trade-mark, that his use must be other than as a trade-mark, so it is a very dangerous amendment to me. As to section 7, renumbered 6, that situation could not arise if the one who first uses the mark and registers it under the present act is on his toes, and either opposes the latter registration, or cancels it within 5 years, or if he fails to do either, he still is protected in the use of his prior adopted mark under section 14 and also section 49 of the bill would protect such a person, because section 49 on page 51 reads. Nothing herein shall adversely affect the rights or the enforcement of rights in marks acquired in good faith prior to the effective date of this act. So that there is no necessity whatsoever for section 6. That is all I have to say except that on behalf of the Manufacturers Association, I would like to urge the passage of this bill in its present form as expeditiously as possible. Mr. LANHAM. Thank you very much, Mr. Savage. (Discussion off the record.) STATEMENT OF SYLVESTER J. LIDDY Mr. LIDDY. I am a member of the firm of Munn, Liddy & Glaccum, of New York, chairman of the committee on trade-marks of the association of the bar of the city of New York and counsel for the United States Trade-Mark Association. I am speaking, however, in my individual capacity. I want to say that I am opposed to the proposed amendments. The grounds of opposition have been adequately stated here, and I am not going to repeat them. I wish to make but one point. From my own experience, a trade-mark pirate is quick to adopt the defense that the mark he is using is purely descriptive, but experience has taught us that he does not confine his use of that term to a truly descriptive use. Take the example of Nu-Skin that was mentioned here, and take the example of Sure-Cleaner. The pirate would not be content to use that in a purely descriptive manner but he would always insist on using it as a brand or trade-mark in order to capitalize on the genuine mark he seeks to infringe. That is why I think the omission proposed by Mr. Vanderbilt of that particular phraseology as it now exists is really fatal. I am referring to lines 8 and 9 of section 33 (b) (4), page 31, of H. R. 82. That is all I want to say. Mr. LANHAM. Thank you very much. We are grateful to all of you. We will resume tomorrow in the Rivers and Harbors Committee room 1304. (Whereupon at 12:15 p. m. the hearing was adjourned to 10 a. m. Thursday, April 8, 1943.) TRADE-MARKS THURSDAY, APRIL 8, 1943 HOUSE OF REPRESENTATIVES, The committee met, pursuant to adjournment, at 10 a. m. in the Rivers and Harbors Committee room, 1304, New House Office Building, Hon. Fritz G. Lanham (acting chairman) presiding. Present: Representatives Lanham, Miller, Scott, Arends, Hale, Busbey, and Stanley. Also present: Mr. Leslie Frazer, First Assistant Commissioner of Patents. Mr. LANHAM. Inasmuch as the House meets today at 11 o'clock, we will have until then to give further consideration to this matter. We would like to conclude the hearing this morning. Without objection, permission will be granted to anyone who wishes to file an additional statement. Is there anyone, in addition to rebuttal testimony that Mr. Vanderbilt will wish to give, who would like to testify? (No response.) Mr. LANHAM. I want to thank Mr. Frazer, Assistant Commissioner of Patents, for being with us through these hearings, because he has always been very helpful in the consideration he has given to bills pending before this committee. We will now hear from Mr. Vanderbilt, who previously testified. First, however, I would like to call attention to the fact that the amendments do not exactly come before us de novo, because, in looking over the hearings we have held on trade-marks I find that in our November sessions of 1941 we had exactly the same amendments proposed for consideration of the committee, found on pages 225 and 226 of this pamphlet of hearings dated November 4, 12, 13, and 14 of 1941. I believe it was after Mr. Vanderbilt testified on yesterday that various witnesses had stated whom they represented and what their capacity was, so I suppose we should make the same inquiry of Mr. Vanderbilt in that regard. Mr. VANDERBILT. As a matter of fact, I stated it yesterday for the record, Congressman, and may I say with respect to that issue that while the question of Pepsi-Cola and Coca-Cola was mentioned at the last hearing and at that time there was considerable litigation on between those two companies, that litigation has been disposed of, not only in the United States but throughout the world, so, so far as I know, the matters that we are urging here cannot be in any sense attributed to either any existing or, so far as I know, any prospective litigation. 41 I merely say that so that there may not be in the minds of the committee any thought that these matters which are urged, could be of any advantage to anyone or disadvantage to another with respect to litigation, because there is none. Mr. LANHAM. Did not the litigation determine all the issues between the parties to it? Mr. VANDERBILT. I think it is fair to say that it did. The litigation involved the respective trade-marks in Canada and went up, to the Privy Council, the highest court in the British Empire, and was disposed of there and subsequently the American litigation was disposed of by agreements worked out between the two companies, so that I think I am justified in saying that the Pepsi-Cola and Coca-Cola trade-mark situation is at rest throughout the world. Mr. Martin is here and he is in a position to correct me if my statement is in any degree inaccurate. Mr. MARTIN. May I say that I do not believe that I am in a position to make any statement with reference to Mr. Vanderbilt's statement. I would not care to make any statement. Mr. VANDERBILT. I can say this to the committee without the slightest hesitancy, that there is no litigation pending anywhere, either in this country or in the British Empire or any other country, so far as I know, and I think I might go further and say that the matter is at rest throughout the world. Mr. LANHAM. How would that situation be complicated by the provisions of the pending bill, Mr. Vanderbilt? Mr. VANDERBILT. That situation is not complicated and our suggestions of amendments are not directed to that alone. We are interested in it solely-and I take it everyone else is-as being the owner of a trade-mark on which millions of dollars have been spent and which we are anxious to see is protected not as against one person, but as against the entire world. Mr. MARTIN. Mr. Vanderbilt and Mr. Chairman, may I say that I don't want to leave any wrong impression from what I said. I merely wanted not to approve or disapprove what Mr. Vanderbilt said, and if it is of any interest to the committee, I shall be very glad to endeavor to get a statement from the Coca-Cola Co. as to whether or not Mr. Vanderbilt's statements are in accord with their understanding and to submit it to the committee, but I am not in a position to represent the company with respect to this statement. I just merely want to make myself clear on the record. (Discussion off the record.) STATEMENT OF ARTHUR T. VANDERBILT-Resumed Mr. VANDERBILT. In view of the chairman's suggestions yesterday that the third point that I raised with respect to the bill was one on which the various Federal agencies interested, the Federal Trade Commission, the Pure Food and Drug Administration and the Department of Justice, would be given a time later and perhaps elsewhere to be heard, and in view, further, of the fact that that third issue does involve complicated questions of law which have been threshed out, I think, rather fully, I can see no good in my attempting to reply further on them. I would like to address myself primarily, if I might, to the second question which I believe is a rather simple one, and on which I really, sincerely believe that it should be possible for us to reach a point of agreement. I am dealing now with the question of incontestability, and what I referred to as the race for registration. The only objection, so far as I recall, came yesterday from Mr. Martin and Mr. Martin objects to my suggestion, my second suggestion on amendments, on the ground that our proposal as he views it, goes to supporting marks, presently on the register, regardless of whether they are being used. He takes the position that "user" should be the test of sustaining one of these ancient marks, rather than the fact of its being on the register. If "user" is to be the test, there is no difficulty at all in disposing of a mark that is on the old register and which is sought to be put upon the new register, because under section 14, dealing with cancelation, proceedings may be taken at any time within a period of 5 years to get rid of a mark which is not in actual use. In other words, it may be disposed of because it has been abandoned. That, it seems to me, is a complete and perfect answer to his contention. Mr. Martin stresses the importance of promoting and stimulating registration. He says that every conceivable sanction has been employed to force unregistered marks all over the country on the register. He is concerned where marks are not registered and in his concern-and I an speaking of him now as one of the draftsman of the act-to get marks registered, to force them on the register, he has applied against ancient marks which have long been registered the same sanction which he seeks to employ against marks that have never been registered. In fact, he is putting them in precisely the same position as i" they never had been registered, with this result, that the owner of a mark who has taken all the pains and precautions to comply with every provision of the existing law with respect to registration, who has done what Mr. Martin says is the great objective, registered his mark, is subjected to the same sort of penalty as the man who has never bothered to register his mark at all. The plain fact in connection with this objection which is raised to our amendment is that when this particular section, to which my objection goes, was drafted, the draftsman did not have in mind the case of two registered marks at all but had in mind the case of an unregistered mark in use as against a mark which was registered. I can demonstrate that by quoting just about six lines from the record of November 1941 at page 70. Referring to the earlier discussion of this suggestion, which was made at that time by Professor Handler, who is a much more competent person to speak than I but who, unfortunately cannot speak now because he is in the Federal service, Mr. Martin had this to say: It was not suggested to meet the situation where there are two registered marks |