BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Senator Ellen M. Corbett, Chair
2007-2008 Regular Session
AB 1484 A
Assemblymember Krekorian B
As Amended June 28, 2007
Hearing Date: July 10, 2007 1
Business and Professions Code 4
BCP:rm 8
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SUBJECT
Model State Trademark Law
DESCRIPTION
This bill would repeal California's Trademark Law and,
instead, replace it with the Model State Trademark Law,
making numerous changes, including:
(1) reducing the registration period from 10 to 5 years;
(2) requiring applicants to state whether a similar mark
has been registered either federally or in this state; (3)
conforming dilution provisions to recent federal changes by
adopting the "likely to dilute" standard; (4) stating that
federal case law is persuasive authority; and (5) removing
a the provision stating that a registration constitutes
prima facie evidence of the registrant's right to use the
mark in California.
BACKGROUND
Trademarks are distinctive marks that are used by
individuals or entities to identify the source of their
products or services to consumers, thus, distinguishing
those products or services from those of other entities.
Those marks also protect the consumer by preventing the
public from being mislead as to the origin or quality of a
product or service.
Both federal and state law cover the registration of
trademarks, providing an owner with the right to exclude
others from using a specific mark or using one confusingly
(more)
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similar to that mark. As federal registration is not
required, many companies who transact business solely
within California do not federally register their
trademarks. California law currently provides that
trademarks may be registered with the Secretary of State,
although registration is not required to protect them as
trademark rights also arise under common law as a result of
actual use.
California's first comprehensive trademark law was enacted
in 1941. In 1967, that law was repealed and replaced with
one based on the Model State Trademark Bill (MSTB), drafted
by the International Trademark Association (INTA) in 1949.
While the MSTB has undergone significant revision,
California's Trademark Law has been sparingly updated over
the years.
This bill would repeal California's Trademark Law and
replace it with a revised version of the most recent MSTB.
This bill would, among other things, reduce the
registration period from 10 to 5 years, require applicants
to state whether a similar mark has been registered either
federally or in this state, conform dilution provisions to
recent federal changes, limit the dilution provision to
famous marks, and state that federal case law is persuasive
authority.
CHANGES TO EXISTING LAW
Existing law , the California Trademark Law, allows any
person who adopts and uses a trademark or service mark in
California to register that mark with the Secretary of
State. That registration is constructive notice of the
registrant's claim of ownership of that mark. (Bus. &
Prof. Code 14230, 14242.) Existing law provides that a
certificate of registration issued by the Secretary of
State shall be considered prima facie evidence of ownership
of a mark, as specified. (Bus. & Prof. Code 14241.)
Existing law provides that certain marks are ineligible for
registration, such as those that would be likely to cause
confusion or mistake due to their resemblance to marks
registered or previously used in this state by another, as
specified. (Bus. & Prof. Code 14220.)
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Existing law provides that the registration of a mark shall
be effective for a 10-year term from the date of
registration, and renewable for 10-year periods upon
application filed within six months prior to the expiration
of the term. (Bus. & Prof. Code 14250.)
Existing law requires the Secretary of State to cancel
registration of marks upon: (1) voluntary request for
cancellation; (2) the failure to renew a mark; (3) failure
to pay the filing fee, as specified; (4) any registration
issued through ministerial error, as specified; or (5) upon
a finding by a court that the mark had been abandoned, the
registrant is not the owner of the mark, the registration
was granted improperly or obtained fraudulently. (Bus. &
Prof. Code 14280 - 81.)
Existing law provides for remedies for the fraudulent
filing or registration of a mark, counterfeit use,
reproduction, manufacturing, sale, or distribution of a
mark, as specified, and limits the remedies available to
the owner of a mark for innocent infringement of that mark,
as specified. (Bus. & Prof. Code 14300, 14320.) (See
Comment 3.)
Existing law provides that the likelihood of injury to a
business' reputation or of dilution of the distinctive
quality of a registered mark, or mark valid at common law,
or trade name valid at common law, shall be a ground for
injunctive relief notwithstanding the absence of
competition between the parties or the absence of confusion
as to the source of goods or services. (Bus. & Prof. Code
14330.)
Existing law provides that any person who uses or
unlawfully infringes upon a registered mark, other than in
an otherwise non-infringing manner, shall be subject to an
injunction against that use by the owner of the mark.
Existing law exempts comparative advertising from that
prohibition. (Bus. & Prof. Code 14335.)
Existing law allows an owner of a registered mark to enjoin
the manufacture, use, display, or sale of any counterfeit
marks, seek three times profits from, and three times
damages suffered as a result of the wrongful manufacture,
use, display, or sale. The court may also order the
destruction of all counterfeit marks, the means of making
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the marks, and goods or other matter bearing the marks that
are in the possession of the court or a party to the
action. (Bus. & Prof. Code 14340.)
Existing law allows a plaintiff to file an ex-parte
application to enjoin the manufacture, use, display, or
sale of counterfeits, including seizure of the goods, as
specified. (Bus. & Prof. Code 14340(b).) Existing law
provides that any person who causes the seizure of
non-counterfeit goods shall be liable for damages, costs
incurred, expenses, and punitive damages, as specified.
(Bus. & Prof. Code 14340(c).)
This bill would repeal the Trademark Law and enact the
Model State Trademark Law with revised requirements for the
registration, abandonment, and enforcement of trademarks
and service marks, as specified.
This bill would provide that any person who uses a mark may
file with the Secretary of State, on a form prescribed by
the secretary, an application for registration of that mark
that sets forth information about the applicant, the goods
or services on or in connection with which the mark is
used, and the date on which the mark was first used
anywhere, and the date when it was first used in this
state. This bill would additionally require a statement
that the applicant is the owner of the mark, that the mark
is in use, and that, to the knowledge of the person
verifying the application, no other person has registered,
either federally or in this state, or has the right to use
the mark either in the identical form or in such near
resemblance as to be likely, when applied to the goods or
services of the other person, to cause confusion, to cause
mistake, or to deceive.
This bill would require the application to include a civil
declaration of accuracy, signed by the applicant or other
individual, as specified. The declaration would state that
if the person signing the declaration willfully states as
true in the declaration any material fact that he or she
knows to be false, he or she shall be subject to a civil
penalty of not more than ten thousand dollars, as
specified.
This bill would also require three specimens of the mark,
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and require a certified translation to accompany the
application if any part of the mark is in a language other
than English.
This bill would provide that if the secretary finally
refuses registration of the mark, the applicant may seek a
writ of mandamus to compel registration. A writ may be
granted, but without costs to the secretary, of proof that
all statements in the application are true and that the
mark is otherwise entitled to registration.
This bill would provide that the registration of a mark
shall be effective for a term of five years from the date
of registration and may be renewed for successive periods
of five years. This bill would provide that any
registration in force on January 1, 2008 shall continue in
full force and effect for the unexpired term thereof, and
may then be renewed.
This bill would allow any mark and its registration to be
assignable, as specified.
This bill would require the secretary to keep for public
examination a record of all marks registered or renewed
under the Model State Trademark Law, as well as a record of
documents assigning marks, as specified.
This bill would require the secretary to cancel marks upon
voluntary request, or non-renewal. This bill would also
require the secretary to cancel marks upon a court finding
one of several circumstances, including: (1) that the mark
has become the generic name for the goods or services for
which it has been registered; or (2) the registered mark is
so similar to a un-abandoned mark registered by another
person in the United States Patent and Trademark Office
(USPTO) prior to the date of the filing of the application
for registration by the registrant as to be likely to cause
confusion or mistake, or to deceive, as specified.
This bill would allow the owner of a mark to bring a civil
action for the use, without consent, of any counterfeit
mark, the reproduction of any mark, and the knowing
assisting of the use of a counterfeit mark. This bill
would limit the remedies available to the owner of the mark
if there is an innocent infringer or violator, or the
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infringement is contained in paid advertising matter, as
specified.
This bill would, subject to the principles of equity, allow
the owner of a mark that is famous and distinctive to be
entitled to an injunction against another person's
commercial use of a mark or trade name, if such use begins
after the mark has become famous and is likely to cause
dilution of the famous mark, as specified. This bill would
also allow the owner of the famous mark, in the case of
willful dilution, to additionally seek three times the
defendant's profits, and three times the damages, subject
to the discretion of the court and principles of equity.
This bill would provide that a mark is famous if it is
widely recognized by the general consuming public of this
state, or by a geographic area of this state, as a
designation of the source of the goods or services of the
mark's owner. This bill would allow a court, in
determining whether a mark is famous, to consider various
factors, including, but not limited to the geographic reach
of advertising, amount, volume, and geographic extent of
sales in this state, actual recognition of the mark in this
state, and whether the mark is subject to federal or state
registration.
This bill would allow the owner of a famous mark to be
entitled to injunctive relief throughout the geographic
area in California in which the mark is found to have
become famous prior to the commencement of any junior use,
as specified. This bill would state that the following
uses are not actionable under the famous mark provisions:
(1) any fair use, as specified; (2) noncommercial use of
the mark; and (3) all forms of news reporting and news
commentary.
This bill would define "dilution" as "dilution by blurring"
or "dilution by tarnishment," regardless of the presence or
absence of competition between the famous mark and other
parties, actual or likely confusion, mistake or deception,
or actual economic injury. This bill would define
"dilution by blurring" as an association arising from the
similarity between a mark or a trade name and a famous mark
that impairs the distinctiveness of the famous mark. This
bill would define "dilution by tarnishment" as an
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association arising from the similarity between a mark or a
trade name and a famous mark that harms the reputation of
the famous mark.
This bill would additionally allow the owner of a
registered mark to enjoin the manufacture, use, display, or
sale of counterfeits, as specified, including allowing
damages of three times the profits from, and three times
all damages suffered by reason of the wrongful manufacture,
use, display, or sale, as specified. This bill would allow
a plaintiff to file an ex-parte application to enjoin the
manufacture, use, display, or sale of counterfeits, as
specified. This bill would provide that a person who
causes seizure of goods that are not counterfeit shall be
liable for the total of any damages proximately causes,
costs incurred, expenses, and punitive damages, as
specified.
This bill would state that the Model State Trademark Law
shall not affect any suit, proceeding, or appeal pending on
January 1, 2008.
This bill would state that the construction given the
federal Trademark Act of 1946 should be examined as
persuasive authority for interpreting and construing the
Model State Trademark Law.
This bill would state the intent of the chapter to provide
a system of state trademark registration and protection
substantially consistent with the federal system of
trademark registration and protection under the Trademark
Act of 1946.
COMMENT
1. Stated need for the bill
According to the author,
AB 1484 will amend the current California
Business and Professions Code Sections
14200-14232 to bring California's trademark law,
now based largely on the 1949 version of the
Model State Trademark Bill[], into conformance
with the most recent version of the MTSB. AB
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1484 retains important California provisions
regarding anti-counterfeiting, vicarious
infringement, and seizures, which are not found
in the MSTB . . . The passage of the bill would
help bring California into alignment with federal
trademark infringement and dilution law as well
as the law of 28 other states that have adopted
the most recent version of the MSTB.
2. Comments and concerns about the changes proposed by
this bill
During their 2006 annual meeting, the Conference of
Delegates approved Resolution 11-02-06, recommending that
the Model State Trademark Bill be adopted by California.
This bill, as introduced February 23, 2007, substantially
conformed to that recommended proposal. After that
introduction, numerous parties submitted comments and
worked with the author to amend the bill in various ways.
The most recent version, amended on June 28, 2007,
sought to conform the bill to federal trademark dilution
standards.
Due to the timing of those amendments, it is unknown
whether the prior concerns expressed by various parties
are now removed. While noting every change is not
feasible, the major changes, and the comments concerning
those changes are as follows.
a) Reduction of the registration period from 10 to 5
years
Under current law, registrations of marks with the
Secretary of State are effective for a 10-year term
from the date of registration, and renewable for
10-year periods. (Bus. & Prof. Code 14250.) This
bill would, instead, reduce the duration of
registration from 10 to 5 years, although current
registrations would be allowed to continue for the
duration of their term. The bill would provide that
any registration in force on January 1, 2008, shall
continue in full force and effect for the unexpired
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term thereof, and may be renewed by filing an
application for renewal, as specified. The sponsor
notes that the reduction in duration is intended to
"[r]educe[] the number of 'deadwood' registrations on
the books."
In response, individuals express concern that
"registrants will be caught unaware, registrations
will expire that were not intended to do so, and third
parties waiting in the wings can jump in to file."
The decreased duration would additionally require
further expense on the part of the registered owner by
requiring payment of the registration fee twice, not
once, in a ten year period. Committee staff has
received no information as to the extent of the
problem, if any, of "deadwood" registration in the
Secretary of State's office.
The author's office notes that the duration is roughly
equivalent to that for trademarks registered with the
USPTO. Although those registrations are valid for
10-year periods, an Affidavit of Use must be filed
between the fifth and sixth year following
registration, and during the year before the end of
the ten-year registration period. Thus, while an
individual must file an affidavit every 5 years, the
federal term is actually 10 years, not 5.
b) Applicants required to include a statement that no
person has registered a similar mark, either federally
or in this state
Under existing law, applications for registration must
include:
A statement that the applicant is the owner of the
mark and that no other person has the right to use
such mark in this state either in the identical
form thereof or in such near resemblance thereto
as might be calculated to deceive or to be
mistaken therefor. (Bus. & Prof. Code Section
14230(d).)
This bill would, instead, require the application to
include:
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A statement that the applicant is the owner of the
mark, that the mark is in use, and that, to the
knowledge of the person verifying the application,
no other person has registered, either federally
or in this state, or has the right to use the mark
either in the identical form or in such near
resemblance as to be likely, when applied to the
goods or services of the other person, to cause
confusion, to cause mistake, or to deceive.
Thus, AB 1484 would expand the scope of the statement
to cover federally registered marks, and modify the
standard to include marks that would be likely to
cause confusion in addition to mistake or to deceive.
The sponsor notes that by expanding the provision to
include confusingly similarly marks, either federally
or in this state, the intent was to "prevent
individuals from knowingly filing a state application
when they are aware that others have better rights in
the mark." While the confusingly similar standard may
be appropriate, searching federally registered marks
for a confusing similar mark would add a significant
legal cost for smaller businesses and individuals,
especially if that federally registered mark is not
used in this state. As a practical matter, those who
would counterfeit existing marks would be unlikely to
actually register those marks.
In response to that provision, numerous comments from
the members of the Intellectual Property Law Section
of the State Bar of California express various
concerns about requiring the absence of a federally
registered mark. Sample comments include:
Without more, this implies that a mark could not
be registered in California if the owner knew of
some other person who had the right to use the
mark locally in another states . . . Indeed, the
strongest justification for an applicant to seek a
California rather than a Federal trademark
registration is where the applicant has prior
"common law" rights in a similar mark for similar
goods or services in another state.
. . .
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The proposed requirement that an applicant must
have a trademark right federally as well as in
California evidently is intended to eliminate
California regional trademarks that lack [an]
interstate reach. Thus it is intended to render a
"California" trademark superfluous since a federal
trademark then will do essentially everything a
California trademark could do.
Due to the additional burden on California businesses
of searching all confusingly similar federally
registered trademarks, and to preserve the relevance
of California's trademark registration system, and in
the absence of any strong argument for this major
revision, committee staff recommends striking "either
federally or" from proposed Business and Professions
Code Section 14207(a)(4).
Suggested amendment
On page 6, lines 13 through 14, strike
"either federally or"
c) Fair use provision amended to arguably conform to
the Trademark Dilution Revision Act of 2006, H.R. 683
(109th Congress)
Generally speaking, a trademark is "diluted" when the
use of similar or identical trademarks diminish the
unique nature of that mark. In Mosely v. V Secret
Catalog, Inc. (2005) 123 S.Ct. 1115, the owners of
"Victoria's Secret" sought to stop the use of the name
"Victor's Secret" by a husband and wife in their
single retail Kentucky store. The court generally
noted:
Traditional trademark infringement law is a part
of the broader law of unfair competition [] that
has its sources in English common law, and was
largely codified in the Trademark Act of 1946
(Lanham Act). That law broadly prohibits uses of
trademarks, trade names, and trade dress that are
likely to cause confusion about the source of a
product or service. Infringement law protects
consumers from being misled by the use of
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infringing marks and also protects producers from
unfair practices by an 'imitating competitor.'
(Id. at 428.)(Citations omitted.)
Despite noting the similarity of the marks, the court
held that actual dilution of the mark must be
established in order to prevail under the Federal
Trademark Dilution Act (FTDA). (Id. at 433). The
court further noted that:
It may well be, however, that direct evidence of
dilution such as consumer surveys will not be
necessary if actual dilution can reliably be
proven through circumstantial evidence -- the
obvious case is one where the junior and senior
marks are identical. Whatever difficulties of
proof may be entailed, they are not an acceptable
reason for dispensing with proof of an essential
element of a statutory violation. (Id. at 434.)
In response, President Bush signed the Trademark
Dilution Revision Act of 2006 into law on October 6,
2006. That Act effectively reversed the Mosely
decision by "entitl[ing] the owner of a famous,
distinctive mark to an injunction against the user of
a mark that is 'likely to cause dilution' of the
famous mark." (Starbucks Corp. v. Wolfe's Borough
Coffee, Inc. (2007) 477 F.3d 765, 766)(citing 15
U.S.C. 1125(c)(1).) This bill would, in turn, seek to
introduce the "likely to cause dilution" standard into
California law.
Accordingly, this bill would provide that, subject to
the principles of equity, an owner of a mark that is
famous and distinctive shall be entitled to an
injunction against another person's commercial use of
a mark or trade name, if such use begins after the
mark has become famous and is likely to cause dilution
of the famous mark. This bill would also allow the
owner of the famous mark, in the case of willful
dilution, to additionally seek three times the
defendant's profits, and three times the damages,
subject to the discretion of the court and principles
of equity. For purposes of this bill, a mark is
considered to be famous if it is widely recognized by
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the general consuming public of this state, or by a
geographic area of this state, as a designation of the
source of the goods or services of the mark's owner.
By incorporating the "likely to cause dilution"
standard that was contained within the Trademark
Dilution Revision Act of 2006, this bill would allow
for injunctive relief absent a showing of an actual
dilution in the mark itself. Comments from the
Intellectual Property Section of the State Bar
regarding an inclusion of the "likely to dilute"
standard stated:
. . . while INTA may have finally been able to
push the 'likely to dilute' language through
Congress, there's no reason why California has to
follow such a vague and anti-competitive standard.
. . . the "likely to dilute" standard for dilution
is a significant weakening of the burden of proof
that also will have a powerful anti-competitive,
chilling effect in favor of national and
international businesses against regional and
smaller businesses. It reflects a narrow vision
that what is good for big, established business is
good for us all.
WOULD PEPSI-COLA OR RC COLA HAVE BEEN ABLE TO
ESTABLISH THEMSELVES AS A BUSINESS IF COCA-COLA COULD
HAVE USED THE LIKELY TO DILUTE STANDARD TO STOP
PEPSI'S OPERATIONS AT THE INCEPTION?
DOES THE STANDARD CHILL COMPETITION?
The bill would also specifically provide that fair
use, as defined, is not actionable under the dilution
provisions. The Electronic Frontier Foundation (EFF)
had initially expressed concern about the failure of
AB 1484 to track federal law on the issue of fair use;
it is unknown whether the June 28th amendments that
added that exemption remove their concerns. Those
amendments specifically exempted any fair use of a
famous mark by another person other than as a
designation of source for the person's own goods or
services, including use in connection with: (1)
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advertising or promotion that permits consumers to
compare goods or services; or (2) identifying and
parodying, criticizing, or commenting upon the famous
mark owner or the goods or services of the famous mark
owner.
d) Limitation of dilution provisions to only "famous"
marks
With respect to dilution, California's trademark law
provides:
Likelihood of injury to business reputation or of
dilution of the distinctive quality of a mark
registered under this chapter, or a mark valid at
common law, or a trade name valid at common law,
shall be a ground for injunctive relief
notwithstanding the absence of competition between
the parties or the absence of confusion as to the
source of goods or services. (Bus. & Prof. Code
Section 14330.)
While that provision allows injunctive relief for the
dilution of any mark, the standard proposed by this
bill would limit relief to famous marks, as defined
and discussed above. Although that limitation would,
again, mainly benefit larger businesses with products
in interstate commerce, it would provide protection
for California businesses with regionally famous
names.
e) Use of federal case law
This bill would state that the construction given the
federal Trademark Act of 1946 (15 U.S.C. 1051 et
seq.) should be examined as persuasive authority for
interpreting and construing this chapter. The sponsor
argues that this provision sanctions courts to draw
upon the extensive body of federal case law as "[a]
large percentage of federal courts because of strong
federal statutes as well [as] developed case law."
Although the federal courts may, in fact, have more
case law on the issue of trademarks, that alone does
not mean that the interpretation of the federal
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statute should be persuasive authority in California.
From a public policy standpoint, it is important for
California's laws to be interpreted against the unique
legislative and common law history present in this
state. By stating that federal case law is
persuasive, this bill would undermine the authority of
California's courts to interpret California law, and
set a precedent for future devaluation of our state
court system.
SHOULD NOT THIS PROVISION BE REMOVED FROM THE BILL?
f) "Abandonment" of a mark
This bill would refer to abandoned marks in several
provisions, including one of the elements that if
found by a court would require the Secretary of State
to cancel the registration for the abandoned mark.
This bill would define "abandoned" as meaning either
of the following has occurred: (1) the mark's use has
been discontinued with the intent not to resume that
use; or (2) when any course of conduct of the owner,
including acts of omission as well as commission,
causes the mark to lose its significance as a mark.
The author notes that abandonment is: "A common issue
between parties disputing their rights [and is a] well
settled concept in federal law."
The bill would also state that nonuse for two
consecutive years shall constitute prima facie
evidence of abandonment. Although the presumption of
nonuse can be rebutted, comments received from the
Intellectual Property Section of the State Bar of
California note that federal standard is three, not
two years. (15 U.S.C. 1127.) The federal standard
was raised from two to three years as of January 1,
1996. It is unclear why the three year standard was
not used in this bill.
g) Allowance to cancel a mark if it has become the
generic name for goods or services or so similar so as
to be likely to cause confusion
This bill would require the Secretary of State to
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cancel the registration for a mark if a court of
competent jurisdiction finds, among other things, that
the mark has become the generic name for the goods or
services, or a portion thereof, for which it has been
registered. While those marks would no longer
specifically refer to one single product from a single
source, that provision could invite litigation to
cancel registration of common products, such as
Band-Aid, or eventually, Google.
No objections to this provision were received by the
committee from any entity concerned about the loss of
their registered mark. The sponsor notes that "[t]he
definition is a well developed concept on the federal
level."
h) Deletion of provision stating that the registration
certificate is prima facie evidence of ownership
Under existing law, a certificate of registration
issued by the Secretary of State shall be considered
prima facie evidence of ownership of such a mark, as
specified. (Bus. & Prof. Code 14241.) This bill
would, instead, state that the certificate shall be
admissible in evidence as competent and sufficient
proof of the registration of the mark in any action or
judicial proceeding in any court of this state. Thus,
the prima facie presumption of ownership would be
removed.
Various comments from the Intellectual Property
Section of the State Bar note concern about removing
the presumption, including:
For enforcement of a state registration, even
informally, it is helpful to have the prima facie
presumption, and I don't think it should be
deleted.
. . .
This seems like another anti-trademark-owner
amendment and its not clear why it's necessary or
what state interest it promotes. In the absence
of evidence [on why] this change is needed to
correct some sort of abuse or aberrant court
ruling, we should consider leaving the presumption
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of ownership alone.
In response the sponsor states: "Because of the
somewhat cursory examination by the California
Secretary of State, the constructive notice and prima
facie evidence provisions confer too much advantage to
a state registration."
It is important to note that presumptions can be
rebutted. Absent evidence of hardship caused by the
current prima facie presumption of ownership, the
removal of that presumption may pose greater hardships
than it would relieve.
i) Ornamental use
Numerous parties have expressed concern about the lack
of an ornamental use exemption in this bill. In fact,
the current language appears to make the ornamental
use of a mark actionable. Ornamental use refers to
the use of a trademark as a design, rather than as an
identifier. Consumers may, in turn, purchase goods
containing that trademark based upon the aesthetic
nature of the mark, not any representation that the
mark is making about the quality of the goods. The
Electronic Frontier Foundation (EFF) notes:
[The bill] appears to authorize injunctive relief
against purely ornamental uses of a mark even
where such uses are not likely to cause confusion
or dilute a mark. Given that such uses are
arguably not even trademark uses, California's
trademark law should exclude them.
Proposed Section 14245(d), referenced by the EFF,
states:
Any person who uses or unlawfully infringes upon a
mark registered under this chapter or under Title
15 of the United States Code, other than in an
otherwise noninfringing manner, either on the
person's own goods or services or to describe the
person's own goods or services, irrespective of
whether the mark is used primarily as an ornament,
decoration, garnishment, or embellishment on or in
AB 1484 (Krekorian)
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products, merchandise, or goods, for the purpose
of enhancing the commercial value of, or selling
or soliciting purchases of, products, merchandise,
goods, or services, without prior consent of the
owner of the mark, shall be subject to an
injunction against that use by the owner of the
mark. Nothing in this section shall be construed
to prohibit comparative commercial advertising.
(Emphasis added.)
While that section is substantially similar to current
Business and Professions Code Section 14335, the
committee did receive numerous concerns about the
inclusion of that provision in this bill. One comment
specifically noted that proposed subdivision (d) could
"easily be abused to stretch trademark rights beyond
anything found in either federal law or that of any
other state."
SHOULD THE PROVISION RESTRICTING ORNAMENTAL USE BE
STRIKEN FROM THE BILL?
j) Allowing the Secretary of State to inquire as to
whether a registrant had applied for a federal
trademark, and the outcome of that application
This bill would additionally allow the Secretary of
State to require a statement as to whether an
application to register the mark, or portions or a
composite thereof, has been filed by the applicant or
a predecessor in interest with the United States
Patent and Trademark Office and, if so, the
applicant shall provide full particulars with respect
thereto, including the filing date and serial number
of each application, the status thereof, and, if any
application was finally refused registration or has
otherwise not resulted in a registration, the reasons
for the refusal or result.
The sponsor notes: "The federal office has more
resources and is better equipped to spot issues and
deny registration because a mark does not satisfy
registrability requirements. This allows the
California Secretary of State to obtain the benefit of
the federal examination process [and will] help
AB 1484 (Krekorian)
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prevent individuals from obtaining California
registrations to which they are not entitled." Thus,
the intent of the provision appears to be to use the
federal trademark screening process as a backup for
the California Secretary of State. Considering the
different standards, and numerous variables involved,
this does not seem to be a preferable method for
screening applications.
A comment from the Intellectual Property Section of
the State Bar further noted: "I see no valid reason
for this. The federal applicant may have believed the
examining [attorney] was wrong but decided not to
appeal and pursue only a California registration."
Another individual stated: "This could get into a very
complicated (and possibly irrelevant) discussion of
the prosecution of the applicant's federal
application(s), without the ability to discuss why
certain strategic positions where taken in connection
with those applications."
3. Existing remedies would continue in revised and recast
form in this bill
Under existing law, any person who files or registers a
mark by knowingly making any false or fraudulent
representation or declaration shall be liable to the
injured party for all damages sustained as a result of
that filing or registration. Existing law further
provides that a person shall be subject to a civil action
by the owner of the registered mark for doing any of the
following: (1) using, without consent, any reproduction,
counterfeit, or copy of colorable imitation of a
registered mark in connection with the sale or
advertising of goods that is likely to cause confusion or
mistake or deceive as to the origin of those goods or
services; (2) reproducing and applying a mark, as
specified; and (3) knowingly assisting a person to
manufacture, use, sell, or distribute good or services
bearing a counterfeit mark, as specified. Those sections
and the existing limitations on those remedies would be
revised and recast in proposed Business & Professions
Code Sections 14240 and 14245.
4. Promotion of interstate uniformity
AB 1484 (Krekorian)
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According to the sponsor, this bill would "help bring
California law into alignment with federal trademark
infringement and dilution law as well as the law of 28
other states that have adopted the most recent version of
the [Model State Trademark Bill]." While that uniformity
would benefit large businesses that distribute products
throughout many states, it is unclear how the provisions
of this bill would assist smaller California businesses
whose business does not cross state lines. On a whole,
this bill represents a policy decision about whether to
federalize California trademark law, or to retain the
independence of California's current trademark laws.
5. Potential need for further comment period
As stated above, the most recent amendments to this bill
were put into print on June 28, 2007, just within the
Senate Judiciary Committee's deadlines. On June 12,
2007, the Electronic Frontier Foundation sent a letter of
concern that concluded:
We understand that the International Trademark
Association ("INTA") is contemplating a package
of revisions to its model state trademark bill,
which served as a model for A.B. 1484 as well,
but may not have an opportunity to approve those
revisions and present them to the legislature
before this Committee has held hearings on A.B.
1484. We are hopeful that these revisions will
address our concerns, but are aware that INTA may
be unable to complete its review in time.
Therefore, the Committee may wish to defer
consideration of the bill until INTA can complete
its review and its proposed revisions can be
circulated for public comment . . .
As the recent amendments have only been in print for a
short amount of time, the committee has not received any
public comment on those amendments. It is unknown
whether the prior concerns are addressed by the present
amendments, although many portions that did receive
comments of concern have not been amended.
Support: Clorox Company; International Trademark
AB 1484 (Krekorian)
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Association (INTA); Motion Picture Association of
America; Universal Studios; 14 individuals
Opposition: None Known
HISTORY
Source: Conference of Delegates of California Bar
Associations (CDCBA)
Related Pending Legislation: None Known
Prior Legislation: None Known
Prior Vote: Asm. Jud. (Ayes 10, Noes 0)
Asm. Appr. (Ayes 16, Noes 0)
Asm. Floor (Ayes 74, Noes 0)
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