03/04/1996 01:04 PM House JUD

 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.