Legislature(1999 - 2000)
04/09/1999 08:15 AM Senate FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL NO. 93
"An Act relating to the names of businesses and
organizations; and providing for an effective date."
CS FOR SENATE BILL NO. 93(L&C)
"An Act relating to the names of businesses and
organizations and to the registration under the Alaska
Trademark Act of marks that resemble the name of
another business or organization; and providing for an
effective date."
DAVID GRAY, staff to Senator Mackie was invited to join the
committee. He explained that the bill sought to
consolidate statutes regarding names of businesses and
corporate enterprises. The present legislation was drafted
to change the current name availability status under which
business entities are allowed to file in the State from
three conflicting guidelines to one. Current guidelines
under Title 10 and Title 32 were as followed:
1. Alaska Statutes 10.06, 10.20, 10.35 and 32.11 each
use the guideline ".name may not be the same as,
or deceptively similar to, the name of a
corporation or registered/reserved name filed
under this title."
2. Alaska Statute 10.25 uses the guideline ".name
shall be distinct from the name of other
cooperatives or corporations organized under the
laws of or authorized to do business in this
state."
3. Alaska Statutes 10.50 and 32.05 use the guideline
".name is distinguishable on the records of the
department (from all other entities filed)."
Due to the result of the difference in the current
guidelines and the margin of error encountered in
determining name availability, many conflicts arise each
year between different business entities within Alaska.
Some of the private name conflicts ultimately result in a
conflict with the State of Alaska if an entity believes a
name was filed inappropriately. The State expends scarce
resources when it must be party to a lawsuit resulting from
"conflicting" registered names.
He further stated that the old standards of "deceptively
similar" and "distinct" should be replaced by the newest
guideline "distinguishable on the record." The new
guideline would allow for more entities to file with the
State of Alaska, because it was not as stringent as the
"deceptively similar" standard.
the adoption of the newer standard would remove the State
from these conflicts and allow those entities that see a
problem in name similarity to resolve their disputes
privately. He asked that the department representative be
allowed to explain further or answer any technical
questions.
Senator Phillips said something must have triggered Senator
Mackie to introduce this piece of legislation and asked for
an example of some of the problems.
Co-chair Torgerson indicated that Ms. Williams was present
from the Department of Commerce and that she would be the
best to answer any questions.
DAWN WILLIAMS, Corporations Supervisor, Department of
Commerce was invited to join the committee. She said there
were several conflicts every year. For example, she
explained the case of "Wild Iris" and "Wild Iris Caf ".
She said the department felt they were different but "Wild
Iris" did not. Therefore, a lawsuit was filed and the
State was brought into the suit.
Senator Phillips asked where the "Wild Iris" was located
and Ms. Williams responded that she believed both were
located in Anchorage. Senator P. Kelly said the "Wild Iris
Caf " was in Fairbanks.
Senator Phillips commented on two businesses claiming the
same name. Ms. Williams explained that the statute reads
that no two names must be deceptive. It is not known
whether they are being deceptive or not. However, it is
not up to the State to determine who should use what name.
The entities themselves must decide this issue.
Senator Parnell said he understood the State not wanting to
be the one to determine "names". What standard will the
Court use regarding names? Will this bill change the
standards? Ms. Williams explained the procedure they used
in determining the name usage. The Court uses a variety of
factors. Who has used the name longer, where is the entity
located, who has the longer business license, etc. Senator
Parnell said his concern was that they were not changing
the statutory standard between parties, but rather as it
would affect the State's relationship to those parties in
registering the names. Ms. Williams said this was correct.
Senator Adams asked the department's comments on amendment
that they were attempting to correct this for the insurance
companies.
Senator Parnell asked what changed between the original
bill and the Labor and Commerce version of the bill. Ms.
Williams explained the difference; said it dealt mostly
with statutes and a few legal changes. Senator Parnell
asked about substantive changes. Ms. Williams explained
specifically section 1 and also said that the Labor and
Commerce version of the bill went up to thirty-eight
sections as compared to thirty-four in the original.
Mr. Gray said that the legal drafter noted in the original
draft there was no mention of any religious corporations
and that they should be included. The Labor and Commerce
Committee included those organizations. She further
thought there should be reference to banking laws. He said
he would provide the appropriate memorandum.
Senator Leman referred to page twelve, lines twenty-one and
twenty-three and asked for a description of "deceptively
misdescriptive". Ms. Williams explained that this was
different under registered trademarks and this was the
original section. Section 7 was added which would require
the department to check registered business names to
corporations so that they would not give a trademark would
not be given to anyone if there was already the same name
in use. They were not looking to change Federal Trademark
laws, but rather looking to make sure that when they file a
trademark they would look at the names on file with the
department.
Co-chair Torgerson asked if this particular piece of
legislation was going to affect any existing corporations
or problems that the department presently has? Ms.
Williams said she did not think any corporation was going
to be affected that was currently registered. It will
allow more corporations and more businesses to file. At
least twenty-five states have already adopted this same
bill.
Senator Parnell referred to page three, lines one through
thirteen and the use of a corporate name. He quoted
particularly at line seven. He voiced concern that it
looked like it was setting up a standard and wanted to make
sure the intent was not to preclude the use of the factors
or criteria that Courts already use. This was not going to
be the exclusive standard or was it? Ms. Williams
explained the original statute and how it would be
distinguishable. It would have no concern to the State
regarding any name conflict. Senator Parnell felt the
standard was being changed between private parties and
giving the right to stop someone from using a particular
name under different standards. He said they were
impacting the rights between private parties. Ms.
Williams explained that any corporation on file now,
another corporation filing a name that would be
indistinguishable, the first corporation would have
priority. Senator Parnell said this was not meant to
change the present criteria the Courts currently use
regarding distinguishable names between two private
parties.
Co-chair Torgerson asked if the section could be taken out
along with the section on page eight. Action could always
be brought; the authority does not have to be given. Ms.
Williams advised that the section was not included in the
original bill. Terri Bannister, the drafter, added the
section. As stated by Co-chair Torgerson, anyone has the
right to go to Court and stop someone else from using their
name or to prove that it is an infringement on their name.
They wanted to keep this portion in the bill because it was
in 10.06 originally.
Senator Parnell said this was really a matter of a policy
call and did not want there to be a misunderstanding as to
what was happening.
Senator Adams MOVED amendment #1. Co-chair Torgerson
explained the amendment and said perhaps there would be a
title change, but that would have to be left up to the
drafter. WITHOUT OBJECTION amendment #1 was ADOPTED
conceptually, giving leave to the drafter to make
appropriate changes.
He then said he would like someone to think about another
amendment. He said the department was given authority to
adopt their own regulations. He referred to page two, line
twelve, pages five, six, seven, eight, nine and ten. He
suggested taking out the words "interpret", "interpret
and", "interpret or". Senator Phillips MOVED amendment #2.
As Co-chair Torgerson explained, the amendment would delete
"interpret" wherever it showed up in the bill. Senator
Adams OJBECTED. He asked the department if they had any
objection to the removal of this language. Ms. Williams
said there was no objection. Senator Adams WITHDREW his
objection. WITHOUT OBJECTION amendment #2 was ADOPTED.
Senator Parnell voiced concern regarding a letter from the
Law Offices of Burr, Pease & Kurtz, dated 8 February 1999
and signed by RALPH E. DUERRE. In this letter he said
that the State should not be making determinations in the
guise of corporate regulations with regards to "deceptively
similar"; however such determinations would be more
properly made by private parties with the assistance of the
Courts if necessary, under the concepts of unfair trade
practices. He also referred briefly to a memo dated 26
February 1999 from Terri Bannister to Senator Mackie.
However, he felt that this memo was no longer valid because
the draft had been changed.
Co-chair Torgerson recessed the committee briefly at
approximately 8:55 a.m.
Co-chair Torgerson reconvened the committee and said that
he would HOLD the bill and give members time to work
through some unanswered matters.
He further advised that the Senate Finance meeting
scheduled for this evening at 6:00 p.m. was cancelled.
The schedule for tomorrow morning was briefly reviewed and
he said he anticipated the committee being in session
between 10:00 a.m. and 2:00 p.m.
ADJOURNMENT
Co-chair Torgerson adjourned the meeting at approximately
9:00 a.m.
SFC-99 (1) 04/09/99
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