GEC H.B. 2569 75(R) BILL ANALYSIS BUSINESS & INDUSTRY H.B. 2569 By: Woolley 4-2-97 Committee Report (Unamended) BACKGROUND The Texas trademark act, enacted in 1962, and presently codified in Chapter 16, Business & Commerce Code, is patterned in part on the Model State Trademark Bill, which is modeled on the federal trademark act, more commonly referred to as the Lanham Act (15 U.S.C. 1051 et. seq.). The provisions of Chapter 16, have not been substantially revised since the codification of the Trademark Act by the 57th Legislature in 1967. A revision of the Chapter would update the act to reflect some of the provisions currently found in the Model State Trademark Bill, as revised in 1992, and harmonize the statute with present practice and procedure established by the secretary of state [1 TEX. ADMIN. CODE 93.51 - 93.171 (West 1996)], facilitating the prosecution of trademark applications by the general practitioner and the public. PURPOSE As proposed, HB 2569 makes various amendment to Chapter 16 of the Business & Commerce Code relating to examination, registration, and recordation of trademark applications and other related documents. The amendments make several revisions to Subchapter B which bring the statute in line with a few of the provisions of the revised Model State Trademark Bill promulgated by the International Trademark Association, which seeks to encourage uniformity among state trademark registration statutes and improve state application examination procedures. Many of the changes to Subchapter B reflect present examination and review procedures established by administrative rules adopted by the secretary of state as found in 1 TEX. ADMIN. CODE 93.51 - 93.171 (West 1996). The Act also deletes the requirement that an application for registration or renewal be verified by the applicant or registrant and clarifies the authority of the secretary of state to adopt administrative rules regarding procedures for the filing, examination, registration, and recordation of documents submitted pursuant to chapter 16, Business & Commerce Code. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS Section 1 This section amends the provisions setting forth the requirements of an application to register a trademark or service mark. The section is amended to take into account the various other forms of business organizations, other than corporate entities, which may seek to register a trademark. The amendments also specifically require that the applicant provide a narrative description and a drawing of the trademark which helps the trademark examiners identify with more clarity and precision exactly what the applicant seeks to register; this represents present application/examination requirements. The section also clarifies that the fee accompanying the trademark application is for the processing and examination of the application, regardless of whether or not the application is finally registered. This is in line with the wording of the Model State Trademark Bill which recognizes that the greater cost to the state lies in the extensive examination and processing of an application rather than in the issuance of a certificate of registration, if any. The section also amends the execution requirements for an application for trademark registration by deleting the requirement that the application be verified by the applicant. Elimination of the notarization requirement will facilitate the filing of such instruments and bring the execution requirements in line with similar documents filed by the secretary of state for corporations, limited partnerships, limited liability companies, and limited liability partnerships. Section 2 Amends Chapter 16, Business & Commerce Code, to add new sections 16.105-16.109 dealing with the examination of trademark applications by the secretary of state. The procedures set forth in the new sections reflect current practice codified in administrative rules promulgated by the secretary of state. The new sections specifically provide for a period of examination and provide the applicant a period within which to respond to objections raised to registration of the trademark; authorize the secretary of state to require a disclaimer of unregistrable elements of a composite mark for purposes of registration; allow amendments to the application; specify the consequences for failing to respond within the time provided to the applicant, and clarify the procedure when two or more applications concurrently being processed by the secretary of state seek registration of the same or confusingly similar marks for the same or related goods or services. Section 3 This section makes conforming changes to Section 16.11 as it relates to the payment of the application fee. Section 4 Amends the execution requirements for filing an application for renewal of trademark registration by deleting the requirement that the application be sworn to by the applicant and makes conforming changes as it relates to the application fee. Elimination of the notarization requirement will facilitate the filing of such instruments and bring the execution requirements in line with similar documents filed by the secretary of state for corporations, limited partnerships, limited liability companies, and limited liability partnerships. Section 5 Amends Section 16.15 to include other instruments which may be recorded under new Section 16.19. Section 6 Adds new Sections 16.19 - 16.21 . Section 16.19 provides for the recordation of instruments, other than assignments, which relate to the ownership of a trademark or service mark registered under Chapter 16. The addition of new Section 16.19 would allow for the recordation of instruments which effectively transferred ownership of a registered trademark or which effected a change of name of the registrant which previously could not be recorded by the secretary of state unless drafted as an assignment. These other instruments would include articles of merger, consolidation, or conversion, and documents effecting a name change to the registrant. License agreements and instruments recorded under the provisions of the Uniform Commercial Code are not subject to the provisions of the section. Section 16.20 sets forth the procedure for the issuance of a new certificate of registration in the new name of the registrant or under the name f the transferee. Section 16.21 clarifies and codifies the authority of the secretary of state as it specifically relates to the secretary's duties under Chapter 16, Business & Commerce Code. The secretary of state is authorized under the provisions of Section 2001.004, Government Code, to adopt rules of practice which state the nature and requirements of formal and informal procedures in the processing and examination of applications for registration of trademarks by the secretary of state. Section 7 In connection with easing the execution requirements for trademark applications and renewals, Subchapter C, Chapter 16, Business & Commerce Code is amended by adding Section 16.31 which provides a criminal penalty for the submission of a false or fraudulent document. Section 8 Repeals Sections 16.12(b) and 16.14(c), Business & Commerce Code, which were transitional provisions and are now obsolete. Section 9 Effective date: September 1, 1997. Section 10 Emergency clause.