TITLE: Relating to the use by third-party delivery services of merchants' marks or other intellectual property; authorizing a civil penalty.

SUMMARY: Relating to the use by third-party delivery services of merchants' marks or other intellectual property; authorizing a civil penalty.

FULL TEXT:
AN ACT relating to the use by third-party delivery services of merchants' marks or other intellectual property; authorizing a civil penalty. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Subtitle C, Title 5, Business & Commerce Code, is amended by adding Chapter 114 to read as follows: CHAPTER 114. THIRD-PARTY DELIVERY SERVICES Sec. 114.0001. DEFINITIONS. In this chapter: (1) "Mark" has the meaning assigned by Section 16.001. (2) "Merchant" means a restaurant or other business entity that sells food or other goods directly to consumers. (3) "Third-party delivery service" means a business entity that: (A) allows a consumer to purchase food or other goods from a merchant through the entity's proprietary Internet website, mobile application, or other Internet-based platform; (B) delivers, including through use of an independent contractor or agent of the entity, the purchased goods to the consumer for a fee that is in addition to the fee charged by the merchant for the goods; and (C) operates outside of the merchant's business. Sec. 114.0002. CONSENT REQUIRED FOR USE OF MERCHANT'S MARKS OR INTELLECTUAL PROPERTY. (a) A third-party delivery service may not use a merchant's mark or other intellectual property on the service's Internet website or application without the prior written consent of the merchant. (b) To receive valid consent from a merchant under Subsection (a), a third-party delivery service must be authorized to conduct business in this state. Sec. 114.0003. CIVIL PENALTY; INJUNCTIVE RELIEF. (a) A third-party delivery service that violates Section 114.0002 is liable to this state for a civil penalty in an amount not to exceed $1,000 for each violation. Each day of a continuing violation is a separate violation. (b) The attorney general may bring an action in the name of the state against the third-party delivery service for: (1) injunctive relief; (2) recovery of a civil penalty imposed under this section; or (3) both injunctive relief and a civil penalty. (c) An action under this section may be brought in a district court in: (1) Travis County; or (2) a county in which any part of the violation or threatened violation occurs. (d) A civil penalty collected under this section shall be deposited in the state treasury to the credit of the general revenue fund. Sec. 114.0004. PRIVATE CAUSE OF ACTION. (a) If a third-party delivery service violates Section 114.0002, a merchant aggrieved of the violation may bring an action for: (1) injunctive relief; (2) damages in an amount equal to the greater of: (A) the merchant's actual damages arising from the violation; or (B) $5,000, as exemplary damages, irrespective of whether the merchant has actual damages; or (3) both injunctive relief and damages. (b) A merchant that is awarded actual damages under Subsection (a)(2)(A) may also be awarded exemplary damages. SECTION 2. This Act takes effect September 1, 2021.