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[House Report 107-19]
[From the U.S. Government Publishing Office]

                                                                       
107th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     107-19

======================================================================

 
                   MADRID PROTOCOL IMPLEMENTATION ACT
                                _______
                                

 March 13, 2001.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Sensenbrenner, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 741]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 741) to amend the Trademark Act of 1946 to provide 
for the registration and protection of trademarks used in 
commerce, in order to carry out provisions of certain 
international conventions, and for other purposes, having 
considered the same, report favorably thereon without amendment 
and recommend that the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     1
Background and Need for the Legislation..........................     2
Hearings.........................................................     3
Committee Consideration..........................................     3
Vote of the Committee............................................     3
Committee Oversight Findings.....................................     3
Performance Goals and Objectives.................................     4
New Budget Authority and Tax Expenditures........................     4
Congressional Budget Cost Estimate...............................     4
Constitutional Authority Statement...............................     5
Section-by-Section Analysis and Discussion.......................     5
Changes in Existing Law Made by the Bill, as Reported............     6
Markup Transcript................................................    13

                          Purpose and Summary

    The purpose of H.R. 741 is to implement the Madrid Protocol 
Agreement (``Protocol'') which provides for an international 
registration system for trademarks.

                Background and Need for the Legislation

    Trademark protection under Federal law provides for the 
legal protection of particular words or symbols that have been 
used on particular goods or services. Trademark protection 
generally entitles the owner of a trademark to protection 
against similar or confusing trademarks.
    Trademarks constitute a significant part of the value of a 
product and figure largely in the advertising of the product. A 
very recognizable mark reflects the popularity of a product and 
often is prominently featured in a company's advertising. The 
protection of the mark is therefore of paramount importance to 
the affected company. Understandably, an individual or company 
using another company's mark could significantly diminish the 
market share of a particular product or compromise the goodwill 
derived from ownership of the mark.
    Since products are marketed and sold on an international 
scale, protection in countries other than the United States 
improves the competitiveness of American businesses. Each 
country has its own laws determining the level of protection 
for trademarks and the type of marks that can be registered for 
particular products. American citizens seeking protection for 
their trademarks outside the United States are currently 
required to register individually in each country in which 
protection is sought.
    As with many intellectual property rights, there are 
international agreements relating to the registration and 
protection of trademarks. Since 1891, the Madrid Agreement 
Concerning the International Registration of Marks (``Madrid 
Agreement'') has provided an international registration system 
operated under the auspices of the International Bureau of the 
World Intellectual Property Organizaiton (WIPO). The United 
States has never been a signatory to the Madrid Agreement.
    On June 27, 1989, at a Diplomatic Conference in Madrid, 
Spain, the parties to the Madrid Agreement signed the Madrid 
Protocol. The United States was an observer and advisor to 
these talks but not a participant in the negotiations since 
only signatories could amend the Madrid Agreement through the 
Protocol. Subsequent talks, at which the United States has 
participated as an observer, have been devoted to developing 
regulations for the implementation of the Protocol for those 
countries and entities which have and will become signatories 
to it. Practically speaking, the resulting Protocol amendments 
``updated'' the Madrid Agreement, in many respects by 
conforming its contents to existing provisions in U.S. law.
    H.R. 741 represents implementing legislation for the 
Protocol. It is identical to measures introduced in the 
previous four Congresses. While the Senate has yet to ratify 
the Protocol, House passage of H.R. 741 will send a signal to 
the international community, U.S. businesses, and trademark 
owners that Congress is serious about our nation becoming part 
of a low-cost, efficient system to promote the international 
registration of marks. U.S. membership in the Protocol would 
assist American businesses in protecting their proprietary 
names and brand-name goods while saving money, time, and 
effort. This is especially critical to small businesses which 
may otherwise lack the resources to acquire world-wide 
protection for their trademarks.
    The Protocol took effect in April 1996, and currently binds 
49 countries, but not the United States. Without U.S. 
participation, however, the Protocol may never achieve its 
purpose of providing a one-stop, inexpensive ``shop'' for 
trademark applicants who, by filing one application in their 
country and in their language, can receive protection from each 
member country of the Protocol.
    There is no opposition to H.R. 741, nor to the substantive 
portions of the treaty; but one extant issue must be addressed 
before the Protocol is ratified and H.R. 741 is enacted. During 
the 106th Congress, the House passed H.R. 769 under suspension 
of the rules without opposition. Unfortunately, Senate 
ratification of the Protocol and passage of the implementing 
language were derailed as result of a private dispute over a 
mark (``Havana Club'') between a rum distiller (Bacardi) and a 
French concern (Pernod) which formed a joint venture with the 
Cuban government. Efforts to insert language in the 
implementing bill (or a report accompanying the Protocol) 
clarifying that the treaty could not be interpreted to honor 
the expropriation of a mark registered to a third party were 
unsuccessful. As a result, the Senate neither ratified the 
Protocol nor acted on the implementing language of H.R. 769. 
The interested parties, with the assistance of the trademark 
community, continue to negotiate this point in the 107th 
Congress. It is expected that, once a compromise on the matter 
is reached, the Senate will shortly ratify the Protocol and 
pass the implementing language.

                                Hearings

    H.R. 741 was referred to the Committee on the Judiciary on 
February 27, 2001. In light of thorough consideration of the 
bill in previous Congresses, and given the noncontroversial 
contents of H.R. 741, the Committee elected not to conduct any 
hearings on the matter.

                        Committee Consideration

    The Committee on the Judiciary, a reporting quorum being 
present, ordered H.R. 741 reported on March 8, 2001, by voice 
vote, with no objection heard.

                         Vote of the Committee

    There were no recorded votes during Committee consideration 
of H.R. 741.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of the rule XIII of the 
Rules of the House of Representatives, the Committee reports 
that the findings and recommendations of the Committee, based 
on oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

                    Performance Goals and Objectives

    H.R. 741 does not authorize funding; therefore, clause 3(c) 
of rule XIII of the Rules of the House of Representatives is 
inapplicable.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of House Rule XIII is inapplicable because 
this legislation does not provide new budgetary authority or 
increased tax expenditures.

                   Congressional Budget Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
regard to the bill H.R. 741, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974.

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, March 13, 2001.
Hon. F. James Sensenbrenner, Jr.,
Chairman, Committee on the Judiciary, House of Representatives, 
        Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 741, the Madrid 
Protocol Implementation Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Ken Johnson.
            Sincerely,
                                          Dan L. Crippen, Director.

    Enclosure.
H.R. 741--Madrid Protocol Implementation Act
    H.R. 741 would amend the Trademark Act of 1946 in order to 
facilitate the implementation of the Madrid Protocol, an 
international agreement that provides for the possibility of 
obtaining trademark protection in several jurisdictions through 
a single registration. The bill outlines the administrative 
procedures that would be followed by companies applying for 
international protection of trademarks.
    CBO estimates that enacting this bill would have no 
significant effect on the Federal budget. Because the bill 
would not affect direct spending or receipts, pay-as-you-go 
procedures would not apply. Section 4 of the Unfunded Mandates 
Reform Act excludes from the application of that act any 
legislative provisions that are necessary for the ratification 
or implementation of international treaty obligations. CBO has 
determined that H.R. 741 would fit within that exclusion 
because it would implement the Madrid Protocol, an 
international agreement requiring ratification by the Senate.
    H.R. 741 would become effective at the same time as the 
Madrid Protocol, which the Senate has not yet ratified. 
Assuming the Madrid Protocol enters into force in 2001, CBO 
estimates that, subject to the availability of appropriated 
funds, the United States Patent and Trademark Office (PTO) 
would incur net costs of less than $500,000 during the 2001-
2002 period to establish a computer database.
    United States participation in the Madrid Protocol also 
could cause an increase in the number of trademark applications 
received by the PTO. The PTO's costs for processing such 
applications are fully funded by filing fees paid by the 
applicants. Those fees are collected and spent under authority 
provided in annual appropriation acts. Because the income from 
fees offsets the costs of processing applications, CBO 
estimates that an increase in the number of trademark 
applications would have no net budgetary impact.
    The CBO staff contact for this estimate is Ken Johnson, who 
can be reached at 226-2860. The estimate was approved by Robert 
A. Sunshine, Assistant Director for Budget Analysis.

                   Constitutional Authority Statement

    Pursuant to rule XIII, clause 3(d)(1) of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in Article I, section 8, clause 8, of the 
Constitution.

               Section-by-Section Analysis and Discussion

    Section 1. Short Title. This section provides a short 
title: the ``Madrid Protocol Implementation Act.''
    Section 2. Amendments to the Trademark Act of 1946. This 
section amends the ``Trademark Act of 1946'' by adding a new 
title XII which contains the following provisions:
    The owner of a registration granted by the Patent and 
Trademark Office (PTO) or the owner of a pending application 
before the PTO may file an international application for 
trademark protection at the PTO.
    After receipt of the appropriate fee and inspection of the 
application, the PTO Commissioner is charged with the duty of 
transmitting the application to the WIPO International Bureau.
    The Commissioner is also obliged to notify the 
International Bureau whenever the international application has 
been ``. . . restricted, abandoned, canceled, or has expired . 
. .'' within a specified time period.
    The holder of an international registration may request an 
extension of its registration by filing with the PTO or the 
International Bureau.
    The holder of an international registration is entitled to 
the benefits of extension in the United States to the extent 
necessary to give effect to any provision of the Protocol; 
however, an extension of an international registration shall 
not apply to the United States if the PTO is the office of 
origin with respect to that mark.
    The holder of an international registration with an 
extension of protection in the United States may claim a date 
of priority based on certain conditions.
    If the PTO Commissioner believes that an applicant is 
entitled to an extension of protection, he or she publishes the 
mark in the ``Official Gazette of the Patent and Trademark 
Office.'' This serves notice to third parties who oppose the 
extension. Unless an official protest conducted pursuant to 
existing law is successful, the request for extension may not 
be refused. If the request for extension is denied, however, 
the Commissioner notifies the International Bureau of such 
action and sets forth the reason(s) why. The Commissioner must 
also apprise the International Bureau of other relevant 
information pertaining to requests for extension within 
designated time periods.
    If an extension for protection is granted, the Commissioner 
issues a certificate attesting to such action, and publishes 
notice of the certificate in the ``Gazette.'' Holders of 
extension certificates thereafter enjoy protection equal to 
that of other owners of registration listed on the Principal 
Register of the PTO.
    If the International Bureau notifies the PTO of a 
cancellation of some or all of the goods and services listed in 
the international registration, the Commissioner must cancel an 
extension of protection with respect to the same goods and 
services as of the date on which the international registration 
was cancelled. Similarly, if the International Bureau does not 
renew an international registration, the corresponding 
extension of protection in the United States shall cease to be 
valid. Finally, the holder of an international registration 
canceled in whole or in part by the International Bureau may 
file an application for the registration of the same mark for 
any of the goods and services to which the cancellation applies 
that were covered by an extension of protection to the United 
States based on that international registration.
    The holder of an extension of protection must, within 
designated time periods and under certain conditions, file an 
affidavit setting forth the relevant goods or services covered 
and any explanation as to why their nonuse in commerce is 
related to ``special circumstances,'' along with a filing fee.
    The right to an extension of protection may be assigned to 
a third party so long as that individual is a national of, or 
is domiciled in, or has a ``bonafide'' business located in a 
country that is a member of the Protocol; or has such a 
business in a country that is a member of an intergovernmental 
organization (like the EC) belonging to the Protocol.
    An extension of protection conveys the same rights as an 
existing registration for the same mark if the extension and 
existing registration are owned by the same person, and 
extension of protection and the existing registration cover the 
same goods or services, and the certificate of extension is 
issued after the date of the existing registration.
    Section 3. Effective Date. This section states that the 
effective date of the act shall commence on the date on which 
the Madrid Protocol takes effect in the United States.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic, existing law in which no change is proposed 
is shown in roman):

TRADEMARK ACT OF 1946

           *       *       *       *       *       *       *

                     TITLE XII--THE MADRID PROTOCOL

SEC. 60. DEFINITIONS.

    For purposes of this title:
            (1) Madrid protocol.--The term ``Madrid Protocol'' 
        means the Protocol Relating to the Madrid Agreement 
        Concerning the International Registration of Marks, 
        adopted at Madrid, Spain, on June 27, 1989.
            (2) Basic application.--The term ``basic 
        application'' means the application for the 
        registration of a mark that has been filed with an 
        Office of a Contracting Party and that constitutes the 
        basis for an application for the international 
        registration of that mark.
            (3) Basic registration.--The term ``basic 
        registration'' means the registration of a mark that 
        has been granted by an Office of a Contracting Party 
        and that constitutes the basis for an application for 
        the international registration of that mark.
            (4) Contracting party.--The term ``Contracting 
        Party'' means any country or inter-governmental 
        organization that is a party to the Madrid Protocol.
            (5) Date of recordal.--The term ``date of 
        recordal'' means the date on which a request for 
        extension of protection that is filed after an 
        international registration is granted is recorded on 
        the International Register.
            (6) Declaration of bona fide intention to use the 
        mark in commerce.--The term ``declaration of bona fide 
        intention to use the mark in commerce'' means a 
        declaration that is signed by the applicant for, or 
        holder of, an international registration who is seeking 
        extension of protection of a mark to the United States 
        and that contains a statement that--
                    (A) the applicant or holder has a bona fide 
                intention to use the mark in commerce;
                    (B) the person making the declaration 
                believes himself or herself, or the firm, 
                corporation, or association in whose behalf he 
                or she makes the declaration, to be entitled to 
                use the mark in commerce; and
                    (C) no other person, firm, corporation, or 
                association, to the best of his or her 
                knowledge and belief, has the right to use such 
                mark in commerce either in the identical form 
                of the mark or in such near resemblance to the 
                mark as to be likely, when used on or in 
                connection with the goods of such other person, 
                firm, corporation, or association, to cause 
                confusion, or to cause mistake, or to deceive.
            (7) Extension of protection.--The term ``extension 
        of protection'' means the protection resulting from an 
        international registration that extends to a 
        Contracting Party at the request of the holder of the 
        international registration, in accordance with the 
        Madrid Protocol.
            (8) Holder of an international registration.--A 
        ``holder'' of an international registration is the 
        natural or juristic person in whose name the 
        international registration is recorded on the 
        International Register.
            (9) International application.--The term 
        ``international application'' means an application for 
        international registration that is filed under the 
        Madrid Protocol.
            (10) International bureau.--The term 
        ``International Bureau'' means the International Bureau 
        of the World Intellectual Property Organization.
            (11) International register.--The term 
        ``International Register'' means the official 
        collection of such data concerning international 
        registrations maintained by the International Bureau 
        that the Madrid Protocol or its implementing 
        regulations require or permit to be recorded, 
        regardless of the medium which contains such data.
            (12) International registration.--The term 
        ``international registration'' means the registration 
        of a mark granted under the Madrid Protocol.
            (13) International registration date.--The term 
        ``international registration date'' means the date 
        assigned to the international registration by the 
        International Bureau.
            (14) Notification of refusal.--The term 
        ``notification of refusal'' means the notice sent by an 
        Office of a Contracting Party to the International 
        Bureau declaring that an extension of protection cannot 
        be granted.
            (15) Office of a contracting party.--The term 
        ``Office of a Contracting Party'' means--
                    (A) the office, or governmental entity, of 
                a Contracting Party that is responsible for the 
                registration of marks; or
                    (B) the common office, or governmental 
                entity, of more than 1 Contracting Party that 
                is responsible for the registration of marks 
                and is so recognized by the International 
                Bureau.
            (16) Office of origin.--The term ``office of 
        origin'' means the Office of a Contracting Party with 
        which a basic application was filed or by which a basic 
        registration was granted.
            (17) Opposition period.--The term ``opposition 
        period'' means the time allowed for filing an 
        opposition in the Patent and Trademark Office, 
        including any extension of time granted under section 
        13.

SEC. 61. INTERNATIONAL APPLICATIONS BASED ON UNITED STATES APPLICATIONS 
                    OR REGISTRATIONS.

    The owner of a basic application pending before the Patent 
and Trademark Office, or the owner of a basic registration 
granted by the Patent and Trademark Office, who--
            (1) is a national of the United States;
            (2) is domiciled in the United States; or
            (3) has a real and effective industrial or 
        commercial establishment in the United States,
may file an international application by submitting to the 
Patent and Trademark Office a written application in such form, 
together with such fees, as may be prescribed by the Director.

SEC. 62. CERTIFICATION OF THE INTERNATIONAL APPLICATION.

    Upon the filing of an application for international 
registration and payment of the prescribed fees, the Director 
shall examine the international application for the purpose of 
certifying that the information contained in the international 
application corresponds to the information contained in the 
basic application or basic registration at the time of the 
certification. Upon examination and certification of the 
international application, the Director shall transmit the 
international application to the International Bureau.

SEC. 63. RESTRICTION, ABANDONMENT, CANCELLATION, OR EXPIRATION OF A 
                    BASIC APPLICATION OR BASIC REGISTRATION.

    With respect to an international application transmitted to 
the International Bureau under section 62, the Director shall 
notify the International Bureau whenever the basic application 
or basic registration which is the basis for the international 
application has been restricted, abandoned, or canceled, or has 
expired, with respect to some or all of the goods and services 
listed in the international registration--
            (1) within 5 years after the international 
        registration date; or
            (2) more than 5 years after the international 
        registration date if the restriction, abandonment, or 
        cancellation of the basic application or basic 
        registration resulted from an action that began before 
        the end of that 5-year period.

SEC. 64. REQUEST FOR EXTENSION OF PROTECTION SUBSEQUENT TO 
                    INTERNATIONAL REGISTRATION.

    The holder of an international registration that is based 
upon a basic application filed with the Patent and Trademark 
Office or a basic registration granted by the Patent and 
Trademark Office may request an extension of protection of its 
international registration by filing such a request--
            (1) directly with the International Bureau; or
            (2) with the Patent and Trademark Office for 
        transmittal to the International Bureau, if the request 
        is in such form, and contains such transmittal fee, as 
        may be prescribed by the Director.

SEC. 65. EXTENSION OF PROTECTION OF AN INTERNATIONAL REGISTRATION TO 
                    THE UNITED STATES UNDER THE MADRID PROTOCOL.

    (a) In General.--Subject to the provisions of section 68, 
the holder of an international registration shall be entitled 
to the benefits of extension of protection of that 
international registration to the United States to the extent 
necessary to give effect to any provision of the Madrid 
Protocol.
    (b) If United States Is Office of Origin.--An extension of 
protection resulting from an international registration of a 
mark shall not apply to the United States if the Patent and 
Trademark Office is the office of origin with respect to that 
mark.

SEC. 66. EFFECT OF FILING A REQUEST FOR EXTENSION OF PROTECTION OF AN 
                    INTERNATIONAL REGISTRATION TO THE UNITED STATES.

    (a) Requirement for Request for Extension of Protection.--A 
request for extension of protection of an international 
registration to the United States that the International Bureau 
transmits to the Patent and Trademark Office shall be deemed to 
be properly filed in the United States if such request, when 
received by the International Bureau, has attached to it a 
declaration of bona fide intention to use the mark in commerce 
that is verified by the applicant for, or holder of, the 
international registration.
    (b) Effect of Proper Filing.--Unless extension of 
protection is refused under section 68, the proper filing of 
the request for extension of protection under subsection (a) 
shall constitute constructive use of the mark, conferring the 
same rights as those specified in section 7(c), as of the 
earliest of the following:
            (1) The international registration date, if the 
        request for extension of protection was filed in the 
        international application.
            (2) The date of recordal of the request for 
        extension of protection, if the request for extension 
        of protection was made after the international 
        registration date.
            (3) The date of priority claimed pursuant to 
        section 67.

SEC. 67. RIGHT OF PRIORITY FOR REQUEST FOR EXTENSION OF PROTECTION TO 
                    THE UNITED STATES.

    The holder of an international registration with an 
extension of protection to the United States shall be entitled 
to claim a date of priority based on the right of priority 
within the meaning of Article 4 of the Paris Convention for the 
Protection of Industrial Property if--
            (1) the international registration contained a 
        claim of such priority; and
            (2)(A) the international application contained a 
        request for extension of protection to the United 
        States; or
            (B) the date of recordal of the request for 
        extension of protection to the United States is not 
        later than 6 months after the date of the first regular 
        national filing (within the meaning of Article 4(A)(3) 
        of the Paris Convention for the Protection of 
        Industrial Property) or a subsequent application 
        (within the meaning of Article 4(C)(4) of the Paris 
        Convention).

SEC. 68. EXAMINATION OF AND OPPOSITION TO REQUEST FOR EXTENSION OF 
                    PROTECTION; NOTIFICATION OF REFUSAL.

    (a) Examination and Opposition.--(1) A request for 
extension of protection described in section 66(a) shall be 
examined as an application for registration on the Principal 
Register under this Act, and if on such examination it appears 
that the applicant is entitled to extension of protection under 
this title, the Director shall cause the mark to be published 
in the Official Gazette of the Patent and Trademark Office.
    (2) Subject to the provisions of subsection (c), a request 
for extension of protection under this title shall be subject 
to opposition under section 13. Unless successfully opposed, 
the request for extension of protection shall not be refused.
    (3) Extension of protection shall not be refused under this 
section on the ground that the mark has not been used in 
commerce.
    (4) Extension of protection shall be refused under this 
section to any mark not registrable on the Principal Register.
    (b) Notification of Refusal.--If, a request for extension 
of protection is refused under subsection (a), the Director 
shall declare in a notification of refusal (as provided in 
subsection (c)) that the extension of protection cannot be 
granted, together with a statement of all grounds on which the 
refusal was based.
    (c) Notice to International Bureau.--(1) Within 18 months 
after the date on which the International Bureau transmits to 
the Patent and Trademark Office a notification of a request for 
extension of protection, the Director shall transmit to the 
International Bureau any of the following that applies to such 
request:
            (A) A notification of refusal based on an 
        examination of the request for extension of protection.
            (B) A notification of refusal based on the filing 
        of an opposition to the request.
            (C) A notification of the possibility that an 
        opposition to the request may be filed after the end of 
        that 18-month period.
    (2) If the Director has sent a notification of the 
possibility of opposition under paragraph (1)(C), the Director 
shall, if applicable, transmit to the International Bureau a 
notification of refusal on the basis of the opposition, 
together with a statement of all the grounds for the 
opposition, within 7 months after the beginning of the 
opposition period or within 1 month after the end of the 
opposition period, whichever is earlier.
    (3) If a notification of refusal of a request for extension 
of protection is transmitted under paragraph (1) or (2), no 
grounds for refusal of such request other than those set forth 
in such notification may be transmitted to the International 
Bureau by the Director after the expiration of the time periods 
set forth in paragraph (1) or (2), as the case may be.
    (4) If a notification specified in paragraph (1) or (2) is 
not sent to the International Bureau within the time period set 
forth in such paragraph, with respect to a request for 
extension of protection, the request for extension of 
protection shall not be refused and the Director shall issue a 
certificate of extension of protection pursuant to the request.
    (d) Designation of Agent for Service of Process.--In 
responding to a notification of refusal with respect to a mark, 
the holder of the international registration of the mark shall 
designate, by a written document filed in the Patent and 
Trademark Office, the name and address of a person resident in 
the United States on whom may be served notices or process in 
proceedings affecting the mark. Such notices or process may be 
served upon the person so designated by leaving with that 
person, or mailing to that person, a copy thereof at the 
address specified in the last designation so filed. If the 
person so designated cannot be found at the address given in 
the last designation, such notice or process may be served upon 
the Director.

SEC. 69. EFFECT OF EXTENSION OF PROTECTION.

    (a) Issuance of Extension of Protection.--Unless a request 
for extension of protection is refused under section 68, the 
Director shall issue a certificate of extension of protection 
pursuant to the request and shall cause notice of such 
certificate of extension of protection to be published in the 
Official Gazette of the Patent and Trademark Office.
    (b) Effect of Extension of Protection.--From the date on 
which a certificate of extension of protection is issued under 
subsection (a)--
            (1) such extension of protection shall have the 
        same effect and validity as a registration on the 
        Principal Register; and
            (2) the holder of the international registration 
        shall have the same rights and remedies as the owner of 
        a registration on the Principal Register.

SEC. 70. DEPENDENCE OF EXTENSION OF PROTECTION TO THE UNITED STATES ON 
                    THE UNDERLYING INTERNATIONAL REGISTRATION.

    (a) Effect of Cancellation of International Registration.--
If the International Bureau notifies the Patent and Trademark 
Office of the cancellation of an international registration 
with respect to some or all of the goods and services listed in 
the international registration, the Director shall cancel any 
extension of protection to the United States with respect to 
such goods and services as of the date on which the 
international registration was canceled.
    (b) Effect of Failure To Renew International 
Registration.--If the International Bureau does not renew an 
international registration, the corresponding extension of 
protection to the United States shall cease to be valid as of 
the date of the expiration of the international registration.
    (c) Transformation of an Extension of Protection Into a 
United States Application.--The holder of an international 
registration canceled in whole or in part by the International 
Bureau at the request of the office of origin, under Article 
6(4) of the Madrid Protocol, may file an application, under 
section 1 or 44 of this Act, for the registration of the same 
mark for any of the goods and services to which the 
cancellation applies that were covered by an extension of 
protection to the United States based on that international 
registration. Such an application shall be treated as if it had 
been filed on the international registration date or the date 
of recordal of the request for extension of protection with the 
International Bureau, whichever date applies, and, if the 
extension of protection enjoyed priority under section 67 of 
this title, shall enjoy the same priority. Such an application 
shall be entitled to the benefits conferred by this subsection 
only if the application is filed not later than 3 months after 
the date on which the international registration was canceled, 
in whole or in part, and only if the application complies with 
all the requirements of this Act which apply to any application 
filed pursuant to section 1 or 44.

SEC. 71. AFFIDAVITS AND FEES.

    (a) Required Affidavits and Fees.--An extension of 
protection for which a certificate of extension of protection 
has been issued under section 69 shall remain in force for the 
term of the international registration upon which it is based, 
except that the extension of protection of any mark shall be 
canceled by the Director--
            (1) at the end of the 6-year period beginning on 
        the date on which the certificate of extension of 
        protection was issued by the Director, unless within 
        the 1-year period preceding the expiration of that 6-
        year period the holder of the international 
        registration files in the Patent and Trademark Office 
        an affidavit under subsection (b) together with a fee 
        prescribed by the Director; and
            (2) at the end of the 10-year period beginning on 
        the date on which the certificate of extension of 
        protection was issued by the Director, and at the end 
        of each 10-year period thereafter, unless--
                    (A) within the 6-month period preceding the 
                expiration of such 10-year period the holder of 
                the international registration files in the 
                Patent and Trademark Office an affidavit under 
                subsection (b) together with a fee prescribed 
                by the Director; or
                    (B) within 3 months after the expiration of 
                such 10-year period, the holder of the 
                international registration files in the Patent 
                and Trademark Office an affidavit under 
                subsection (b) together with the fee described 
                in subparagraph (A) and an additional fee 
                prescribed by the Director.
    (b) Contents of Affidavit.--The affidavit referred to in 
subsection (a) shall set forth those goods or services recited 
in the extension of protection on or in connection with which 
the mark is in use in commerce and the holder of the 
international registration shall attach to the affidavit a 
specimen or facsimile showing the current use of the mark in 
commerce, or shall set forth that any nonuse is due to special 
circumstances which excuse such nonuse and is not due to any 
intention to abandon the mark. Special notice of the 
requirement for such affidavit shall be attached to each 
certificate of extension of protection.

SEC. 72. ASSIGNMENT OF AN EXTENSION OF PROTECTION.

    An extension of protection may be assigned, together with 
the goodwill associated with the mark, only to a person who is 
a national of, is domiciled in, or has a bona fide and 
effective industrial or commercial establishment either in a 
country that is a Contracting Party or in a country that is a 
member of an intergovernmental organization that is a 
Contracting Party.

SEC. 73. INCONTESTABILITY.

    The period of continuous use prescribed under section 15 
for a mark covered by an extension of protection issued under 
this title may begin no earlier than the date on which the 
Director issues the certificate of the extension of protection 
under section 69, except as provided in section 74.

SEC. 74. RIGHTS OF EXTENSION OF PROTECTION.

    An extension of protection shall convey the same rights as 
an existing registration for the same mark, if--
            (1) the extension of protection and the existing 
        registration are owned by the same person;
            (2) the goods and services listed in the existing 
        registration are also listed in the extension of 
        protection; and
            (3) the certificate of extension of protection is 
        issued after the date of the existing registration.

                           Markup Transcript

                            BUSINESS MEETING

                        THURSDAY, MARCH 8, 2001

                  House of Representatives,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10 a.m., in Room 
2141, Rayburn House Office Building, Hon. F. James 
Sensenbrenner (chairman of the committee) presiding.
    Pursuant to notice, I call up the bill H.R. 741, amending 
the Trademark Act of 1946 to provide for the registration and 
protection of trademarks used in commerce in order to carry out 
the provisions of certain international conventions, for 
purposes of markup and move its favorable recommendation to the 
House.
    [H.R. 741 follows:]
    

    
    Chairman Sensenbrenner. Without objection, the bill will be 
considered as read and open for amendment at any time. I yield 
myself 5 minutes.
    This legislation has been introduced in each of the past 
four Congresses. The last term our committee reported this 
measure favorably by voice vote, and it passed the full House 
under suspension of the rules. Later in the term, the other 
body began its deliberations over the merits of the Madrid 
Protocol, which is an international trademark treaty that will 
enable American trademark holders to register their marks to 
the U.S. PTO and those countries which are already signatories 
to the treaty. The process will be expeditious and far less 
expensive than the current practice, which involves the 
appointment of translators and attorneys in each individual 
country in which an American trademark holder seeks protection.
    This legislation before us simply implements our public law 
to conform with the terms of the protocol. I note that two 
companies, Bacardi and Pernod, are in the process of attempting 
to settle a dispute over the rights to a mark which each wishes 
to market. At least one of these companies believe that the 
implementing language should be amended to reflect its position 
on the matter. It is my understanding that talks between the 
two companies are fluid and ongoing and that a resolution to 
this problem may be forthcoming in the future.
    I, therefore, wish to move the bill unamended to the floor 
and allow the talks to continue. Once a compromise is reached, 
I am confident that the Senate will shortly ratify the protocol 
and pass the implementing language. I would point out that 
yesterday and the day before I met with representatives of both 
Bacardi and Pernod. I think it is fair to say that both of them 
are in agreement with this process of passing the bill before 
us unamended and that when they reach an agreement, should an 
amendment to this legislation be necessary, it will be added in 
the Senate after the Senate ratifies the Madrid Protocol.
    I now recognize the gentleman from North Carolina for his 
explanation of the contents.
    Mr. Coble. I move to strike the last word.
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Coble. Mr. Chairman, you have very accurately portrayed 
this issue. I will not consume my full 5 minutes.
    The implementing legislation for the Madrid Protocol has 
been introduced in the past four Congresses, as you pointed 
out. Passage of the bill is important because it will send a 
signal to the international community that United States' 
businesses and trademark owners, that the Congress is serious 
about our nation becoming part of a low-cost, efficient system 
for the international registration of trademarks.
    The World Intellectual Property Organization, WIPO, 
administers the protocol which, in turn, operates the 
international system for the registration of trademarks. This 
system would assist our businesses in protecting their 
proprietary names and brand-name goods, while at the same time 
saving cost, time and effort. This is especially important to 
our small businesses, which may only be able to afford--which 
may not be able to afford worldwide protection for their marks 
through a low-cost international registration system.
    Unfortunately, and as you alluded in your opening remarks, 
Mr. Chairman, Senate ratification of the protocol and passage 
of the implementing language was derailed last term as a result 
of a private dispute over a mark between Bacardi, the rum 
distiller, and Pernod, a French concern, which formed a joint 
venture with the Cuban Government. Although negotiations to 
develop an acceptable compromise failed, as you just pointed 
out, this is ongoing, and I think we will redouble our efforts 
to resolve the problem during this present term.
    Mr. Chairman and colleagues, it is important to move this 
legislation forward as a way of encouraging all parties 
involved in the Bacardi dispute to intensify their 
negotiations. House consideration of the protocol will also 
assure American trademark holders that the United States stands 
ready to benefit imminently from its ratification.
    This concludes my remarks, Mr. Chairman, and I yield back 
the balance of my time.
    Chairman Sensenbrenner. Anybody else wish to speak?
    The gentlewoman from California?
    Ms. Waters. Mr. Chairman, I move to strike the last word.
    Chairman Sensenbrenner. The gentlewoman is recognized for 5 
minutes.
    Ms. Waters. I raise a question, while I must admit I'm not 
familiar with this protocol, and it appears to be just as Mr. 
Coble and you have described it, in making sure that we have a 
process by which we can register and protect our trademarks.
    I'd like to know if this is the protocol that establishes 
the trademarks that are considered in World Trade Organization 
decisions, and I would raise that question and yield to Mr. 
Coble.
    Mr. Coble. Would the gentlelady repeat her question. I was 
not listening to you, Ms. Waters.
    Ms. Waters. Yes. What I'm trying to find out is, is this, 
the Madrid Protocol, the protocol that registers the trademarks 
that are recognized in WTO disputes? Is this what they depend 
on to determine whether or not an intellectual property has 
been registered properly, is it on file?
    Mr. Coble. It is my belief that the answer to that question 
is no.
    Ms. Waters. Well, on my own time, let me just say I raise 
that because, as you know, some of us try and watch what is 
going on with the WTO, and I have been very concerned about 
intellectual property protections of certain companies. And at 
this time, I'm very concerned about what is happening with the 
pharmaceutical companies, 39 of them in our country, relative 
to a court case that just opened in South Africa. And the basis 
of my concern----
    Chairman Sensenbrenner. Will the gentlewoman yield?
    Ms. Waters. Yes.
    Chairman Sensenbrenner. I think I can answer at least a 
part of her question, so let me try.
    I am aware that there are some very serious public health 
tragedies, which are heart-wrenching, and legal disputes with 
several of our overseas trading partners. However, as you know, 
changing our law here will not affect the legal system of those 
nations, and specifically Brazil, India and South Africa. 
However, I am pleased by news reports, including one I read 
this morning, about companies rising to the occasion and 
providing humanitarian relief at great expense of their own and 
providing life-saving drugs in the Third World at a fraction of 
their cost.
    Currently, there is a legal process underway in the other 
nations, and there is about to be a trial in South Africa which 
has been delayed until next month. May I suggest we wait and 
watch the outcome of that trial before we take any action which 
may be premature.
    Furthermore, my staff is willing, able and ready to meet 
your staff regarding any possible options, if any, that the 
subcommittee has in this area of international law. I would 
point out to the gentlewoman from California that I've been 
concerned about this issue and have been following it as well. 
And I have noticed that the American drug companies have been 
rising to the occasion, generally. However, it is the European 
pharmaceutical companies that are adopting what, in my opinion, 
is a very shortsighted stonewalling of to issue.
    So I think that we can proceed with this piece of 
legislation. If more needs to be done following the outcome of 
the trial in South Africa, I would certainly be willing to sit 
down with you and figure out what we can do, if anything, in 
response to whatever decision comes out.
    Mr. Berman. Would the gentlelady yield further?
    Ms. Waters. Yes.
    Mr. Berman. Your initial question was the relationship of 
this to WTO. This is a separate international protocol. It's 
simply a way to have an international system for simplifying 
and streamlining procedures just for the registration of 
trademarks. It has no impact at all on patent law and does not, 
as I understand it, from my great expertise in trademark law, 
it has no relationship to--in other words, there's nothing 
about this that is directly related to WTO.
    Ms. Waters. I think it is.
    Mr. Berman. You think it is?
    Ms. Waters. Uh-huh.
    Mr. Berman. Well, notwithstanding my expertise, I'll look 
into this more.
    Ms. Waters. Mr. Chairman, if I may, I appreciate your 
concern and your obvious interest in this issue. I do believe 
that, while it does not have anything directly to do with the 
WTO, if the WTO is to recognize trademarks, they have to 
perhaps make a determination about whether or not it is 
legitimate, legally filed or correctly done, all of that. I 
suspect that this registration establishes that criteria.
    Mr. Scott. Will the gentlelady yield?
    Ms. Waters. Yes.
    Chairman Sensenbrenner. The gentlewoman's time has expired, 
and I think we better go vote and come right back.
    Mr. Conyers. Mr. Chairman, may I speak out of order for 1 
minute?
    Chairman Sensenbrenner. The gentleman from Michigan?
    Mr. Conyers. Thank you. I wanted to report to the full 
committee that the chairman and myself went before the House 
Administration Committee yesterday and supported a number of 
changes that I think were helpful and beneficial. Particularly, 
we were able to get an additional staff allocation and new 
space for the minority as a result of our negotiations. And I 
didn't think it was secret, and I thought I'd make it public 
that the comity that began the Judiciary Committee with the 
Sensenbrenner chairmanship still continues, and I wanted to 
thank you publicly.
    Chairman Sensenbrenner. Well, I thank the gentleman from 
Michigan. He was asked what it took to do this, and he said a 
new chairman. So now that my usefulness has ended, we'll 
adjourn the committee, and please come back.
    [Laughter.]
    [Recess.]
    Chairman Sensenbrenner. The committee will be in order.
    When the committee recessed, we were considering the bill 
H.R. 741. Are there any amendments or motions to strike the 
last word?
    The gentleman from Virginia was seeking recognition.
    Mr. Scott. No, Mr. Chairman.
    Chairman Sensenbrenner. If there are no amendments----
    Mr. Watt. Mr. Chairman?
    Chairman Sensenbrenner. The gentleman from North Carolina?
    Mr. Watt. Thank you, Mr. Chairman.
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Watt. I'll be brief. I don't think it will take 5 
minutes, but I do think this is the appropriate time to express 
a generalized concern, although I certainly have no objections 
to this bill moving forward. I worked with the prior chairman 
of the full committee and with the chairman of the subcommittee 
and traveled with them, in fact, to some jurisdictions to try 
to--some other nations to try to get our patent and copyright 
protections expanded and try to get a uniform system that 
protects the proprietary and origination interests of companies 
and individuals in this country.
    The generalized concern, however, that I want to express 
has to do with this kind of general kicking things up to some 
higher level that basically is convenient for this committee, 
but makes it possible for us--and makes it impossible for us to 
really have any involvement in the issues that we are supposed 
to be involved in trying to resolve. And that's bad enough when 
we're kicking it up to--we're just rushing legislation through 
and hoping that the Senate and some Conference Committee 
consisting of our peers will resolve the issue, but as I 
understand it in this one, we're waiting on a resolution to 
come from the Bacardi people and----
    Chairman Sensenbrenner. Will the gentleman yield?
    Mr. Watt. Yes, sir, I'd be happy to yield.
    Chairman Sensenbrenner. Ordinarily, I would agree with the 
gentleman from North Carolina. However, what we're dealing with 
here is the process of ratification of a treaty, which the 
House is not involved under the Constitution. This is either 
the fourth or the fifth Congress, where the Madrid Protocol 
Implementation bill has been introduced, and because some 
Senators have placed holds on the treaty, they've also placed 
holds on the implementation bill, and I think that the two of 
them go together.
    If the House were involved in whether the treaty is amended 
or there would be understandings or reservations imposed during 
the ratification process, I'd hold this bill here. But since 
we're not involved, that's why, in consultation with the 
gentleman from Michigan, we put this bill on the list of 
noncontroversial bills because, frankly, in the ratification 
process, which is where this issue will be resolved 
constitutionally, we don't have a dog in that fight.
    I thank the gentleman for yielding.
    Mr. Watt. I thank the gentleman for his comments. And it's 
for that very reason that I really have no strong objections, 
and I'm raising a generalized concern here because I think, in 
the interests of moving things along in the process, we don't 
want to overlook the jurisdiction and prerogatives of this 
committee. And I think we're going to get to a bill this 
morning, where I think really should have gone to the--through 
the subcommittee process, rather than being jumped to the full 
committee. So I'm kind of laying the groundwork for a more 
generalized concern because expediency is one thing, but there 
are some prerogatives of the committee and responsibilities of 
the committee that I think are important too.
    Having said that, I agree with the gentleman. I don't have 
any objection to this particular bill moving forward in the 
process, but I hope we're not going to make this a practice of 
just punting things that we really ought to be analyzing more 
thoroughly, just in the interests of expediency.
    I will yield back the balance of my time.
    Chairman Sensenbrenner. The question occurs on the motion 
to report the bill H.R. 741 favorably.
    Those in favor will signify by saying aye.
    Opposed, no.
    The ayes have it. The motion to report favorably is 
adopted.
    Without objection, the chairman is authorized to move to go 
to conference, pursuant to House rules. Without objection, the 
staff is directed to make any technical and conforming changes, 
and all members will be given 2 days, as provided by House 
rules, in which to submit additional dissenting supplemental or 
minority views.

                                
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