must, therefore, have been the court's view that the use of the licensee's name alone with the mark does not automatically spell deception. Whether such use ever could constitute deception was not before the court on the pleadings.

In the ordinary case, it is difficult to see how deception could be caused by failure to identify the licensor. The public pays little enough attention to the name of the owner of the mark when as an optional matter it appears on the package. The license of the mark would not seem to change this. The interest of the public is somewhat greater in the identity of the licensee who actually sells the product. Full disclosure will of course do no harm, although the case law does not indicate such a legal requirement.

98

Another matter that troubled the dissenting judge in the Celanese case was that the licensor had a right to cancel the agreement only on six months' notice. This bothered the dissenter because he felt it indicated there was no exclusive right to use the mark by any one party. A more trying question is whether the licensor has effective control over the quality of the goods if for a six-month period no right to cancel exists, even when there is material departure from the specifications. On the face of it that might seem to be the case in the license agreement in suit. However, the contract might be subject to the interpretation that the grace period is dependent upon fulfillment of the obligations of the contract, and that the licensor could obtain an injunction at any time to prevent use of its mark in a deceptive fashion. In fact, license arrangements subject to cancellation on ninety days' notice, two weeks' notice, one day's notice, and not cancellable at all have been indiscriminately sustained.99 This must be premised on the assumption that the licensor would have the right to, and would in fact, exhaust every legal remedy to prevent departure from quality. A prior breach of contract would excuse the licensor from continuing to supply a raw material ingredient, and that might be the practical answer to a prompt termination of a trade-mark abuse by the licensee. Many risks in the future can be avoided by an explicit contract provision that the licensor has the right to reclaim its mark upon any departure from specifications, even though other contract provisions continue in effect for some longer period.

A nice question in practical control over quality arises when the licensor authorizes use of his mark on a different product. We know the attractiveness of "Seventeen," the title of a magazine, to manufacturers of 'teen-age clothing." 100 The nice problem is the degree of control that must be exercised where, instead of appropriation, a license is granted. In ordinary circumstances the products would be some

** The name of the licensee alone on goods was held sufficient in Stratton & Terstegge Co. v. Stiglitz Furnace Co., 258 Ky. 678, 81 S. W. 2d 1 (1935).

99

Crown Fabrics Corp. v. American Viscose Corp., 145 F. 2d 246 (C. C. P. A. 1944) (one day's notice); Smith v. Dental Products Co., 140 F. 2d 140 (C. C. A. 7th 1944), cert. denied, 322 U. S. 743 (1944) (ninety days' notice); The Coca-Cola Bottling Co. v. The Coca-Cola Co., 269 Fed. 796 (D. Dela. 1920) (perpetual contract); Associated Perfumers, Inc. v. Andelman, 316 Mass. 176, 55 N. E. 2d 209 (1944) (two weeks' notice).

100

Triangle Publications, Inc. v. Rohrlich, 167 F. 2d 969 (C. C. A. 2d 1948); Hanson v. Triangle Publications, Inc., 163 F. 2d 74 (C. C. A. 8th 1947), cert. denied, 332 U. S. 885 (1948).

what related-men's hats and suits, for example. Here the problem is to assure that the licensor is really in the driver's seat in controlling quality. If the item is noncompetitive, and if stock ownership is not involved, there may be a tendency for the licensor, though nominally in control, simply to approve whatever changes in the product the licensee desires to adopt. It is doubtful whether this will suffice. Certainly the licensor in cases of trade-mark use on related products should scrupulously follow the accepted pattern of regular factory inspection, sampling, and other checks to assure uniformity of quality and to maintain the dominant position in the licensing arrangement.

What is needed, above all, is an end to the fantasy that trade symbols cannot be licensed, and a willingness to recognize that protection of the public interest requires the courts carefully to scrutinize the kind of control actually exercised to assure that the public gets what it expects, whether that be its money's worth or a sop to its vanity.

A realistic appraisal of questions of control over production or sale by another company which is nominally independent must recognize the lurking dangers of antitrust violations. 101 It is, for example, but one step from control of ingredients to control of price. As has been stressed, whether that step is taken is not dependent on the trade-mark license but on the will of the parties. It is anomalous, but true, that the more effective the quality control, the more likely it becomes that a transgression of the Sherman Act will result. The size of the companies, the competitive condition of the industry, and the extent of the licensing will all play a role in the final outcome.

Standardization of product by competitors is a common tool to remove the stringency of competition. It is frequently necessary to achieve standardization in order to make a price-fixing conspiracy effective. A licensing plan for binding competitors together and regulating quality may, therefore, be immediately suspect. The standardization problem can prove to be the greatest stumbling block to valid licensing in some fields.

The presence of very practical antitrust problems does not point to permitting looser standards of control over quality. It simply indicates the desirability of not allowing additional controls for collateral reasons under the guise of regulation of quality. It may even point to the advisability of more confined licensing in certain fields in circumstances where a freer rein would lead to monopoly.

101 When the mark is thought to be a material factor in the Sherman Act offense, the court may decree forfeiture. See United States v. A. B. Dick Co. (N. D. Ohio 1948), CCH TRADE REG. SERV. ¶62,233.

THE LANHAM ACT AND INTERNATIONAL TRADE

STEPHEN P. LADAS*
I

International trade is inconceivable today without trade-marks and their adequate protection. Merchandise is sold by brands in foreign markets even more than in the domestic market. In the domestic market, the purchasing public has additional ways of identifying products: knowledge of the manufacturer or merchant by reputation, by newspaper, magazine or radio advertising, by personal visit to the factory or store, by community experience, and the like. In foreign markets, trade-marks are the only means of creating and maintaining good will with a foreign public.

More than one hundred years ago, nations began stipulating for reciprocal protection of trade-marks as an adjunct to treaties of commerce. Later special agreements were concluded. Lastly, it was recognized that bipartite treaties were not sufficient since the problem was not that of protection of trade-marks as between two nations only, but rather a problem of legislation on an international level which would establish as far as possible a uniform system for the protection of trade-marks everywhere.

At one time at the Congress on Industrial Property at Paris in 1878-it was proposed that a uniform law be adopted by all nations. This proposal was promptly abandoned when it was observed by the French jurist, Lyon Caen, that:

We cannot hope, in the present state of things, that we could have in all the countries laws on industrial property which would be common on all points. It is an utopia ... What makes impossible the adoption of uniform laws in all the countries on this subject is that these laws are closely related to the civil law, civil procedure, commercial law, penal law and penal procedure of each country. It would have to be necessary to make uniform all these branches of legislation in order to have uniform laws on industrial property and this is not possible.

What the Congress did then was to seek an agreement on certain problems of international protection of industrial property, and to recommend an international convention the stipulations of which would require the domestic legislation of the contracting countries to yield or to be revised. We know that this recommendation was followed and that an International Convention for the Protection of Industrial Property was entered into in 1883. This convention by successive revisions

LL.D. 1919, Athens, Greece; A.M. 1923, School of Political Science, Paris; LL.B. 1926, S.J.D. 1927, Harvard University. Member of firm of Langner, Parry, Card & Langner, New York. Author: THE INTERNATIONAL PROTECTION OF TRADE-MARKS BY THE AMErican RepubliCS (1929); THE INTERNATIONAL PROTECTION OF INDUSTRIAL PROPERTY (1930); THE EXCHANGE OF MINORITIES: BULGARIA, GREECE AND TURKEY (1932); THE INTERNATIONAL PROTECTION OF LITERARY AND ARTISTIC PROPERTY (1939).

has extended the scope of its stipulations so as to cover a broader field of international legislation on the subject of industrial property, so that at this time it may be truly said that industrial property, and trade-marks in particular, are governed by a twofold legal régime: national legisaltion of each country and the international legislation embodied in this convention.

The International Convention as last revised at London in 1934 extends today to forty-seven countries, including practically all of Europe (with the exception of Soviet Russia), the British Dominions, the French, Dutch, Portuguese, and Spanish colonies, and five American republics: Brazil, Cuba, the Dominican Republic, Mexico, and the United States.

On the other hand, there has been a distinct effort at inter-American legislation on trade-marks among the American Republics. Here the system followed was not the adoption of a convention with successive revisions but rather the adoption of a series of successive conventions: in 1902, 1906, 1910, 1923, and 1929. The latest and most satisfactory convention is the one adopted at Washington on February 20, 1929, which has detailed provisions on the inter-American protection of trade-marks, trade names, and indications of origin, and on the suppression of unfair competition. However, this convention has been ratified by only ten of the twenty-one republics: Colombia, Cuba, Guatemala, Haiti, Honduras, Nicaragua, Panama, Paraguay, Peru, and the United States.

II

Prior to the adoption of the Lanham Act, our federal trade-mark legislation did not accord, in several respects, with the stipulations of the international or Pan American conventions. The Patent Office, following an old opinion of the AttorneyGeneral, applied the Act of 19051 rather than the convention wherever there was a conflict between the two. The decisions of the courts on the same issue were at least inconclusive, and the dominant opinion was that the convention was not selfexecuting and that enabling legislation was required to make its stipulations mandatory. The decision of the Supreme Court in Bacardi v. Domenech2 in 1940 was the first clear judicial pronouncement that the conventions were self-executing and should be given effect regardless of domestic legislation.

One of the most interesting features of the Lanham Act is that it contains a special title Title 9-captioned International Conventions. The inclusion of such a title in the Act is due to Edward S. Rogers, whose passing is so deeply regretted by all of us. At his suggestion, these provisions were prepared with a view to carrying out as fully as possible the commitments of our country under international conventions for the protection of trade-marks and trade names and for the suppression of unfair competition.

The Act itself specifies as one of its purposes "to carry out the provisions of cer

1 33 STAT. 724 (1905), 15 U. S. C. §§ 81-109 (1946).

tain international conventions," and the last words of Section 45 state that the intention of the Act is "to provide rights and remedies stipulated by treaties and conventions respecting trade-marks, trade names and unfair competition entered into between the United States and foreign nations."

The Lanham Act may be considered from two points of view: how far its provisions actually carry out the stipulations of international conventions, and by what means they do so; and secondly, how far it operates in facilitating the international trade of United States trade-mark owners.

The first inquiry calls for an exposition of the provisions of Title 9 in their relation to the stipulations of International Conventions. Title 9 consists of Section 44, divided into nine paragraphs.

1. Special Register for International Marks

We may dismiss subsection (a) with a brief remark. This provides for a special register, which apparently is neither the principal nor the supplemental register, of all marks communicated to the Patent Office by international bureaus. In as much as the United States is not a party to the Madrid Arrangement for the International Registration of Trade-Marks, and we denounced the Protocol for Inter-American Registration of Trade-Marks on September 29, 1945, this provision of the Lanham Act seems to look to possible future developments, and has no present application. 2. General Principles of Protection of Foreigners

a. Persons entitled to benefits. Section 44 (b) provides that certain persons defined therein shall be entitled to certain rights. These persons are nationals of, domiciled in, or having a bona fide or effective business or commercial establishment in any foreign country which is a party to the International Convention, the Pan American Convention, or "any other Convention or Treaty relating to trade-marks, etc." to which the United States is a party. The only question raising any problem of interpretation herein is, What does the word "relate” mean with respect to conventions or treaties other than the International Convention and the Pan American Convention? Does this include treaties which contain provisions for the protection of trade-marks and trade names, and for the suppression of unfair competition, while they relate generally to other subjects? Take, for instance, the Treaty of Friendship, Commerce and Navigation with China, signed November 4, 1946. This includes Article IX on the Protection of Industrial Property. It stipulates that both countries shall grant effective protection to trade-marks and trade names and against acts of unfair competition. It would seem that this treaty is one "relating" to trademarks, trade names and unfair competition within the meaning of subsection (b). It should be noted that subsection (b) extends the benefits of the section only to the persons defined therein. How about other foreigners? Suppose a national of Chile (which is not a party to any convention relating to trade-marks with the United States) applies for registration of a mark. He cannot obtain registration based only 60 STAT. 443, 15 U. S. C. §1127 (1946).