The marks in the same manner as is provided for patents and copyrights. ›resent trademark law is based on the commerce clause of the Constitution, article 1, section 8. There is no Federal common law of trademarks (Wheaten v. Peters, 38 U.S. 591) and according to the U.S. Supreme Court, the rights of use and ownership of trademarks arise under the common law and statutes of the individual States (248 U.S. 90). What is needed is an amendment to the U.S. Constitution providing that Congress shall have power to regulate the "use and ownership" of trademarks and this is set forth in my remarks in the hearing H.R. 9041 in 1938 and H.R. 4744 in 1939. I respectfully refer you to Congressman Eugene Keogh, who has introduced such a constitutional amendment "Congress shall have the power to regulate the use and ownership of trademarks." (The word trademark shall include brands, labels, designs, and all symbols of identity as applied to products, commodities, and services.) Under the present statutes, "registration" has been regulated and the use of the trademark is limited to the power of Congress to regulate "commerce." The trademark is not an article of commerce and the U.S. Supreme Court has never ruled that trademark per se is an article of commerce, to be bought, sold, consumed, or title regulated directly or indirectly. In other words, the present law regulates the "trade" but not the "mark." If you will delete the word "trademark" from your bill, or else defer further action on your bill until such constitutional amendment can be enacted, I will be glad to give my wholehearted approval to the measure. If it is enacted the way it is, it will suffer the same fate as the Fair Trade Acts, and will not accomplish the purpose you seek; namely, the indirect control of prices and other factors of unfair competition through trademark control. Respectfully submitted. PAUL STRUVEN, President. Mr. W. E. WILLIAMSON, TESKEY'S TV CENTER, Indianapolis, Ind., April 22, 1963. Clerk, House Interstate and Foreign Commerce Committee, House Office Building, Washington, D.C. DEAR MR. WILLIAMSON: I understand that the House Interstate and Foreign Commerce Committee is holding hearings this week on the quality stabilization bill. The State of Indiana Electronic Service Association, Inc., which represents over 350 individual TV men in Indiana, has taken a stand favoring this type of legislation. Our statement is enclosed. We respectively request this statement be included in the record of the hearings. All officers of this association serve without any form of pay. We feel this is our duty to the industry from which we make our living. The IESA chairman employs two men and an office girl. The vice chairman runs a one-man shop. In my business, it is my wife, myself, and one man. The other officers and directors are comparable, with the largest employing six men. We are not a professional pressure group, nor do we go in for lobbying and that sort of thing. We sincerely believe that quality stabilization is the answer to the trend of making things cheaper and poorer in quality, and selling them "by the ton" by the mass merchandisers that will spell the ruin of this Nation, if it goes unchecked. Thank you. Yours truly, FRANK J. TESKEY, Secretary. STATEMENT OF THE STATE OF INDIANA ELECTRONIC SERVICE ASSOCIATION, INC., ON POSITION ON QUALITY STABILIZATION LEGISLATION, APRIL 20, 1963 Small business today is represented by various government agencies, but what about the very small, or "tiny businessman"? Here the spirit of independence is strong, exercise of the freedom to start one's own business. The State of Indiana Electronic Service Association, Inc., represents over 350 of these tiny businessmen. For the most part, they are one-, two-, and three man shops. IESA members engage in the sale and service of radio, stereo, hi-fi, and television sets in the State of Indiana. As a group, these tiny independents have learned to successfully compete with the mass-merchandising giants. They avoid the high overheads of the giants, and maintain a close personal contact with their customers. However, when mass merchandisers offer our parts, tubes, accessories, and even the sets themselves as loss leaders, and then jack up their prices on something else to cover these losses, the tiny independent is doomed. He has neither the capital nor reserves to last out this unfair type of competition. Many manufacturers recognize the vital role played by independent electronic servicers in upholding the quality of the original product, and maintaining excellent radio-TV reception for the American public, all at the lowest possible cost. This has been proved time and again by various manufacturer's surveys. On behalf of the over 350 tiny independent TV businessmen who make up IESA this association urges passage into law of the quality stabilization bill. This position was reached by unanimous vote in open meeting. We feel that quality stabilization in no way interferes with anybody's freedom of choice. Manufacturers may elect to use it, or not. Dealers and servicers are free to handle products under the law, or outside of it. The ultimate consumer is free to choose quality products and services offered by the tiny independent, or other merchandise and questionable service offered by mass merchandisers. The TV men of Indiana urge enactment of quality stabilization legislation as a means to guarantee the American consumer availability of top quality goods and services at fair prices. Thank you. STATEMENT OF NATIONAL SHOE RETAILERS ASSOCIATION BY EDWARD J. MCDONALD, EXECUTIVE VICE PRESIDENT, APRIL 15, 1963 The National Shoe Retailers Association is the largest and most important retail trade group in the shoe industry. Its members number some 4,000 retail outlets. While the membership consists of department, specialty stores, chainstores and independents, 80 percent of the retailers are small businessmen-the independent type of operator who depend on brand name resources for merchandise and the sale of brand name products for their volume. For some time, the independent retailers have been seriously concerned about their future. The lack of capital and the increasing competition of new forms of distribution have been threatening their security. The Board of Directors of the National Shoe Retailers Association, speaking for the entire brand name segment of the Association, unanimously approved the provisions of the quality stabilization bill-eliminating bait advertising, unscrupulous price cutting and merchandising practices as a powerful means to help guarantee the future security of brand name retailers and, therefore, the future security of the national economy. The NSRA believes that quality stabilization is a must and should be enacted without delay. The directors and brand name retailers earnestly ask the House Commerce Committee for its all-out support for this much needed legislation. Thank you. THE GREEN SHOE MANUFACTURING CO., HOUSE INTERSTATE AND FOREIGN COMMERCE COMMITTEE, GENTLEMEN: This refers to the quality stabilization bill which is now before your committee for consideration. We want to express our endorsement and strong support of the objectives of this bill. For over 40 years we have been investing in and have attained a brand name for children's shoes with prestige and great value, not only to ourselves but to our department store and retail customers throughout the United States. Our 1,600 employees with a payroll of over $7 million annually depend on the value of the Stride Rite brand under which our shoes are sold. Yet, at the present time, we do not have any effective way of protecting ourselves against the harmful and damaging effects of price cutting and the use of our name for bait purposes, which are indulged in by stores around the country, and which are hurtful to the value of our brand in the eyes of the consumer, as well as our customers. We believe that in fairness and simple justice we should be put in a position of being able to supply an article of top value to consumers, on which they can depend as to quality and steadiness of value and price. More important in children's shoes is that they should be fitted on children's feet with conscientious skill and integrity. This is not so in the case of the unethical store which cuts the price and uses our brand name as a bait only. We therefore urge favorable consideration by your committee of this bill. S. L. SLOSBERG, President. STATEMENT IN REFERENCE TO THE QUALITY STABILIZATION BILL To Whom It May Concern: ANSON, INC., Providence, R.I., April 23, 1963. I wish to make it known that I feel the quality stabilization bill is most necessary for the distribution of quality merchandise. It is becoming more apparent and a necessity more urgent as the growth of all types of discount operations are established throughout the United States. Most all of these discount operators must have quality-known brand merchandise in order to draw the general public to their store counters. This is unfair to legitimate retailers of all sizes throughout the United States. Some method such as the quality stabilization bill must be enacted into law to give the manufacturer putting his best efforts into quality merchandise some protection as to where and how this merchandise is to be sold. This is also necessary for the protection of the smaller retailer as we all know the backbone of good distribution throughout the country. Sincerely yours, Re quality stabilization bill. OLOF V. ANDERSON, President. CHESEBROUGH-PONDS, INC., New York, N.Y., April 19, 1963. INTERSTATE AND FOREIGN COMMERCE COMMITTEE, DEAR SIRS: This has reference to your expected consideration of the quality stabilization bill. Chesebrough-Pond's, Inc., is a company which has been engaged for over 75 years in the manufacture and sale of proprietary drug, cosmetic, and toiletry products to the people of this country through virtually every recognized means of distribution. Such experience as we have obtained in these years has led us to firmly support the principles in the quality stabilization bill. We believe that in today's markets the manufacturer, especially the national advertiser, has a major responsibility for the good name and quality of his product. This duty on the part of manufacturers has been gradually recognized by many courts in this country in their consideration of the manufacturer's direct responsibility to consumers. Wholesale and retail distributors are recognized as vehicles, however important, to connect the consumer with the product manufacturer. The obligations and duties which are imposed upon the manufacturer of trademarked products imply, however, certain rights on his part. He has the right to determine the inherent and relative value of his products and should be permitted to set this value uniformly, if he chooses, on a countrywide basis. He should have the right to defend his products' name against attacks by other parties even where such parties have legally come into possession of his product. Such attacks today on the retail level can involve bait and switch tactics of retailers who feature nationally advertised brands in their advertising in order to draw traffic into their stores, and then switch customers to their own private labels; it includes deviation from the inherent value given he product by the manufacturer, a practice which implicitly creates a question in the consumer's mind as to the quality and value of the product. To a company like ourselves, our trademarks are our most important property. Present trademark laws give protection against copying or other infringement of such trademarks, but what is needed is additional protection against the attack leveled on nationally advertised products centering on the 99-685-63- -29 product's value. We wish to emphasize to the committee that this is truthfully every bit as important to a reputable manufacturer. While the so-called fair trade laws provide a measure of protection in this area in some States, such laws are essentially price maintenance laws which do not attack the heart of the problem so far as the manufacturer is concerned, i.e., an all-inclusive law protecting his most important property, his trademark. We urgently request your favorable consideration of this bill. Very truly yours, R. F. MITCHELL, Jr., Counsel. PENNSYLVANIA ASSOCIATION OF INDEPENDENT BUSINESS, Hon. HARLEY O. STAGGERS, Chairman, House Subcommittee on Commerce and Finance, DEAR CONGRESSMAN STAGGERS: We are writing to you regard the quality stabilization bill now being considered by your committee. Our membership is composed of some 3,000 small business firms throughout Pennsylvania. These members are engaged in all lines of business, including manufacturing, wholesaling, retailing, and service trades. Some months ago, we submitted an outline of the proposed legislation contained in the quality stabilization bill. We asked our members to express their opinion regarding this bill as it applied to their particular field. We are pleased to nform you that 90 percent of our members were in favor; 5 percent were against; and an additional 5 percent failed to vote. In view of the above, the small businessmen of Pennsylvania urge your support of this measure. Yours very truly, E. LYNN CARTER, Executive Secretary. Mr. W. E. WILLIAMSON, RUBBERMAID, INC., Wooster, Ohio, April 22, 1963. Clerk of the House Interstate and Foreign Commerce Committee, DEAR MR. WILL.IAMSON: It would be very much appreciated if you would include the following statement in the House Commerce Committee record hearings on the quality stabilization bill. "We believe that a manufacturer spends a great deal of money to build a brand or trade name so that people gain confidence in the name and know that they can rely on quality and value when they look for and buy products carrying that name. "When a retailer misuses that brand preference to draw people to his store and away from other stores by price cutting, he is stealing from the manufacturer and other retailers handling the product. He is cutting into a property right owned by the manufacturer and shared by all retailers who use it fairly. The merchant who cuts price is trying to get more than his fair share of brand-name value by drawing more people into his store to sell them greater volume of a product at a lower profit, hoping they will purchase a greater amount of other merchandise at normal profit. In doing so, he is misusing a property right loaned to him by the manufacturer, and he is misusing it to the detriment of the manufacturer and other retailers. "We believe that the passage of the quality stabilization bill will help to prevent the misues of honored trademarked products by unethical retailers and thus protect the manufacturer who had built it up and protect the tens of thousands of legitimate retailers who want to use the trademark properly." Thank you, Mr. Williamson, for including this statement in the record of the hearings. Sincerely, DONALD E. NOBLE, President. KAYSER-ROTH HOSIERY CO., INC., Mr. W. E. WILLIAMSON, New York, N.Y., April 17, 1963. Clerk, House Interstate and Foreign Commerce Committee, House Office Building, Washington, D.C. DEAR MR. WILLIAMSON: The following statement concerning the quality stabilization bill is being sent to you for the purpose of inclusion in the record of the hearings to be held next week by the House Interstate and Foreign Commerce Committee: "I feel that the passage of H.R. 3669 is important to the distribution economy of our country and is primarily essential in the protection of retailers and consumers against the reduction of quality, misrepresentation of products, and fraudulent advertising, which are inherent in a system that permits unethical exploitation of valued manufacturer's trademarks. "The passage of this legislation is extremely important also in maintaining the existence and the growth of small retailers who today are beset with competition on all sides from giant retailers. "The competition that they face from larger retailers who do not violate the proprietary rights of a manufacturer when selling his trademarked products, can be met with reasonable success by small retailers. "However, when other retailers use manufacturer's trademarked products to bait the consumer, or misrepresent trademarked merchandise, or deviate from the established price of trademarked merchandise, then the small retailer is faced with competition which eventually will afford him little, if any, opportunity for growth and which must lead to his elimination as a factor in the American economy. "It is for these reasons that I urgently request that the House committee vote for the passage of H.R. 3669-the quality stabilization bill." Very truly yours, Re quality stabilization bill-opposed. U.S. Congressman From West Virginia, Washington, D.C. ARNOLD M. RAPHAEL, Vice President and General Manager. TRADEMARK SERVICE CORP., DEAR CONGRESSMAN: Supplementing my letter of April 19 and thanking you and acknowledging your letter of April 22, as well as Mr. Williamson's telegram, I am herewith submitting my further objections to the above bill. In my original comments to the Honorable Senator Vance Hartke, I expressed my objections to the use of the trademark in almost any form in these bills. Most labels are construed as trademarks, the same as brands and other symbols of identity. In your bill, if enacted as it, the word "label" could be construed as a trademark. Since the will of the people is supposed to be expressed through Congress, I am afraid that the courts would misinterpret this bill unless it was clearly indicated that the intention of Congress was to indicate that the word "label" could in any way be considered for identification purposes. If you would remove the words "packages and labels" from the entire bill, that would eliminate any possible conflict. But since this does not appear to be very practical and would take out most of the sense of the bill, may I suggest that you seriously consider one of the following suggestions: (1) That the word "descriptive" be placed before the word "packages" and before the word "labels" in each case that it appears in the bill. (2) Or, if the foregoing is not suitable, a new sentence can be added at the end of section 1, paragraph 3, page 11, on line 16, after the word "and". The term "label" is intended only for descriptive purposes and not in any manner to indicate identification or ownership. With either of these changes, I would be very happy to support your bill in its entirety. Respectfully submitted. PAUL STRUVEN, President. |