Legislature(1995 - 1996)
03/04/1996 01:04 PM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 450 - ALASKA TRADEMARK ACT WILDA WHITAKER, Legislative Administrative Assistant to Representative Gene Therriault read the sponsor statement regarding HB 450 into the record. "This legislation is intended to update the State Trademark Act. Alaska's current law is modeled upon the 1964 Lanham Act. The proposed revision is to bring Alaska's trademark law current with the changes to the Lanham Act over the past 30 years, and is modeled closely to the Model State Trademark Bill written by the International Trademark Association. This revision will allow the registration of marks that currently cannot be registered under state law, such as service marks, certification marks and collective marks. The legislation was introduced at the request of the Division of Banking, Securities and Corporations. Passage of the legislation is needed to strengthen the intellectual property rights for Alaska's business community." MS. WHITAKER expanded this explanation by stating that current state law only allows the registration of a trademark which is a mark that's placed on a product to identify who made it. This legislation would expand this to the registration of service marks which identifies who provides a service versus a product. The certification mark identify approval or certification of a quality such as, "Made in Alaska" or "Good Housekeeping." She also stated that collective marks identify who made a product, such as a union. MS. WHITAKER noted a letter of support from Don and Rose Harris, owners of the Red Dog Saloon, who said they've fought numerous battles over the past several years when their trademark had been infringed upon and diluted. They said that working within the existing system, they found protection as vague at best and almost impossible to defend. Ms. Whitaker also noted a letter from the Department of Commerce and Economic Development. This department said the major improvements allowed by this legislation include broadening of trademark protection to service providers adding additional remedies to trademark owners for infringement and providing anti-delusion provisions for intellectual property owners who's trade marks have become famous in this state. MS. WHITAKER said that a few technical amendments were made to this legislation in the Labor and Commerce Committee, both of which are relatively minor. They are both on page 16, line 14 which changed "section 5" to "section 6" because of a drafting error and line 21 which gives the department authorization to formulate their regulations so that they can begin implementing them once this bill goes into effect. Ms. Whitaker also pointed out the Mike Monagle from the Department of Commerce and Economic Development was available to answer technical questions. Number 308 REPRESENTATIVE CON BUNDE voiced his concern that maybe this legislation was getting into federal jurisdiction of trademarks, etc. MS. WHITAKER believed that this legislation parallels the federal law, but deferred to Mr. Monagle. She stated that this legislation takes into account revisions to the federal law as well. Number 354 MIKE MONAGLE, Records & Licensing Superintendent, Division of Banking, Securities & Corporations, Department of Commerce & Economic Development testified on HB 450. He initially responded to Representative Bunde's question about federal jurisdiction for licensing and noted that the federal Landum Act solely applies to marks and interstate commerce. This Alaskan legislation would apply soley to those marks used in this state. Number 527 REPRESENTATIVE CYNTHIA TOOHEY asked about trademarks for the Red Dog Saloon as an example and wondered if the protection would reach as far as Chicago. MR. MONAGLE responded that this protection would only apply to those businesses within the state. What typically happens is that attorneys will advise their clients to get both a federal registration as well as, a state registration, primarily because state's will not check against the federal registers. Someone could be federally registered and find out that someone else has registered in the state either prior to this federal registration or after the federal registration. Most states will not recognize registration at the federal level, as a state registration supersedes the federal registration. In cases where there is a state registration that precedes a federal registration, they will generally limit a market area to particular states for the various parties. MR. MONAGLE noted that there is a cost to this state registration process, currently set at $10 a class code. The current fee is written into statute prior to the 1964 Model Act. This legislation would remove the registration process from statute and put it into regulation. The fee proposed is $50 and the fiscal note is based on this amount. Mr. Monagle referred to a survey which he would make available to the committee if desired which the U.S. Trademark Association conducted in 1990. Some states charge $100 - $150. Number 600 REPRESENTATIVE AL VEZEY asked if they took this fee out of statute would it prevent the state from increasing this fee. MR. MONAGLE noted that in order to change a regulation it needs to be published and allow for a time period to receive commentary from people this legislation affects. He stated that there was no plan to raise this fee and if it's set in regulation, the department can set a fee however they deem appropriate. Mr. Monagle said that they would be sensitive to any commentary they received from affected individuals and could be obligated to follow through with actions reflecting this commentary. Number 709 REPRESENTATIVE BUNDE asked if the $50 fee built into this legislation covered the actual cost of processing the paperwork. MR. MONAGLE responded that they have one full time person who works approximately 15 to 20 percent of their time processing registration applications and probably their cost to the division is between $12,000 to $15,000 per year. The department bases the fee on what is reasonable and customary for applications, as well as, what other states are charging. He noted that there is a contribution to the general fund from processing these applications, so they do make some profit. Mr. Monagle stated that this process of registering was not mandatory, but voluntary. The act also considers the validity of a common law usage and recognizes the rights of a person to use a mark. Typically in litigation the burden of proof is on the person who fails to register. Although it is not mandatory, it is advisable that someone go through the registration process. Number 830 MS. WHITAKER stated that Representative Therriault had indicated that he would consider amendments regarding the fee depending on the sentiment of the committee. MR. MONAGLE responded to a question posed by Chairman Porter regarding duplicate filings. In the event that filings are brought forward, the first filing that the department is made aware of prevails and he noted that this language is incorporated in the pending legislation. The first applicant who comes through the door prevails, but if there is a dispute to the rights or ownership of the mark as part of the remedy procedure the statute defers to the superior court ruling. He said that if someone can show that they have been using a mark for years superseding filing of the same mark then they could probably prevail in court. Number 973 REPRESENTATIVE BUNDE made a motion to move CSHB 450(L&C) from the Judiciary Committee with individual recommendations and attached fiscal note. Representative Vezey objected, then he withdrew this objection. The objection was noted and hearing no additional objection it was so moved.