83 FR 3068 - Rules and Regulations Under the Textile Fiber Products Identification Act

FEDERAL TRADE COMMISSION

Federal Register Volume 83, Issue 15 (January 23, 2018)

The Commission amends the Rules and Regulations Under the Textile Fiber Products Identification Act (``Textile Rules'') to delete the requirement that an owner of a registered word trademark, used as a house mark, furnish the FTC with a copy of the mark's registration with the United States Patent and Trademark Office (``USPTO'') before using the mark on labels.

[Federal Register Volume 83, Number 15 (Tuesday, January 23, 2018)]
[Rules and Regulations]
[Pages 3068-3071]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-01202]


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FEDERAL TRADE COMMISSION

16 CFR Part 303

RIN 3084-AB47


Rules and Regulations Under the Textile Fiber Products 
Identification Act

AGENCY: Federal Trade Commission (``FTC'' or ``Commission'').

ACTION: Final rule.

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SUMMARY: The Commission amends the Rules and Regulations Under the 
Textile Fiber Products Identification Act (``Textile Rules'') to delete 
the

[[Page 3069]]

requirement that an owner of a registered word trademark, used as a 
house mark, furnish the FTC with a copy of the mark's registration with 
the United States Patent and Trademark Office (``USPTO'') before using 
the mark on labels.

DATES: Effective on February 22, 2018.

FOR FURTHER INFORMATION CONTACT: Jock Chung, (202) 326-2984, Attorney, 
Division of Enforcement, Bureau of Consumer Protection, Federal Trade 
Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580.

SUPPLEMENTARY INFORMATION: 

I. Background

    The Textile Fiber Products Identification Act (``Textile Act'') \1\ 
and implementing Textile Rules require marketers to, among other 
things, attach a label to each covered textile fiber product 
disclosing: (1) The generic names and percentages by weight of the 
constituent fibers in the product; (2) the name under which the 
manufacturer or other responsible company does business, i.e., the 
product's marketer's name,\2\ or other specified identifier in lieu of 
that name,\3\ and (3) the name of the country where the product was 
processed or manufactured.\4\ Section 303.19(a) allows the owners of 
registered word trademarks who use these trademarks as house marks to 
disclose such trademarks in lieu of their names. However, before doing 
so, the company must file a copy of their USPTO registration with the 
Commission. The Commission imposed this requirement in 1959, presumably 
to obviate the need for the Commission to obtain paper copies of 
registrations from the USPTO. However, registered house marks now can 
be found by searching online or at the USPTO's website (www.uspto.gov).
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    \1\ 15 U.S.C. 70 et seq.
    \2\ 15 U.S.C. 70b(b)(3).
    \3\ 16 CFR 303.19.
    \4\ See 15 U.S.C. 70b(b).
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II. Amendments to the Textile Rules

    In a Notice of Proposed Rulemaking published on June 28, 2017,\5\ 
the Commission proposed amending Section 303.19 to: (1) Delete the 
requirement that an owner of a registered word trademark used as a 
house mark furnish the FTC with a copy of the mark's registration with 
the USPTO before using the mark on labels, and (2) no longer restrict 
the use of such trademarks to only those employed as house marks. The 
Commission received three comments in response.\6\
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    \5\ 82 FR 29251 (June 28, 2017).
    \6\ American Apparel & Footwear Association (AAFA) (#00005); 
Jonathan Appelbaum (#00003); and De La Cruz (#00002). See https://www.ftc.gov/policy/public-comments/2017/07/initiative-708.
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    As discussed below, based on the record, the Commission has 
determined to amend the Textile Rules to delete the requirement 
trademark owners furnish the FTC with a copy of the mark's USPTO 
registration before using the mark on labels. Based on the comments 
received, however, the Commission declines to eliminate the provision 
allowing only trademarks used as house marks.

A. Deleting the Registration Submission Requirement

    Comments: The AAFA and Appelbaum comments supported the 
Commission's proposal to eliminate the requirement that businesses 
provide the Commission with a copy of a word trademark's USPTO 
registration prior to using these marks. AAFA asserted that simplifying 
the Textile Rules would ``eliminate confusion, both for the business 
community and for consumers.'' \7\ De La Cruz, however, opposed this 
proposed amendment, arguing that the current Section 303.19(a) ``keeps 
trade in order'' and ``discourages trademark infringement,'' \8\ but 
did not offer support for these contentions.
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    \7\ AAFA, https://www.ftc.gov/system/files/documents/public_comments/2017/07/00005-141123.pdf, p. 1; Appelbaum, https://www.ftc.gov/system/files/documents/public_comments/2017/07/00003-141029.pdf, p. 1.
    \8\ De La Cruz, https://www.ftc.gov/policy/public-comments/2017/07/06/comment-00002, p. 1.
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    Discussion: Based on the record, the Commission amends Section 
303.19(a) of the Textile Rules to delete the requirement that an owner 
of a registered word trademark furnish the FTC with a copy of the 
mark's registration with the USPTO prior to using the mark in lieu of a 
marketer's name. Commenters and the Commission's experience indicate 
that eliminating the submission requirement will reduce compliance 
costs for marketers without reducing protections for consumers. 
Specifically, the Commission and consumers can readily identify a 
registrant by searching for a marketer's house mark on the USPTO's 
online database or other online resources.\9\ Moreover, Commission 
staff has not consulted the files of house marks submitted to the 
Commission for many years, if ever, nor has it received requests from 
the public to do so. The Commission therefore concludes that the 
current submission requirement is neither necessary nor useful to 
enable the Commission or consumers to identify marketers of textile 
fiber products.
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    \9\ As discussed below, however, although simple searches can 
determine registrants for house marks, it is far more difficult to 
determine relevant registrations for some word trademarks.
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B. Word Trademarks Other Than House Marks as Marketer Identifiers

    Comments: Commenters Appelbaum and De La Cruz opposed the 
Commission's proposal to eliminate the provision allowing only 
trademarks used as house marks to be used in lieu of marketers' names. 
Appelbaum asserted that the proposed amendment was premised on an 
assumption a word trademark is ``unique,'' when, in fact, word 
trademarks may be ``very similar,'' preventing consumers from 
effectively searching online for business owners.\10\ Appelbaum further 
noted that, in contrast, house marks did not present this problem 
because ``a house mark is more uniquely associated with a business and 
less likely to be imitated.'' \11\ De La Cruz stated without further 
analysis that the current Section 303.19(a) ``keeps trade in order'' 
and ``discourages trademark infringement.'' \12\ The AAFA supported 
this proposed amendment without explanation.\13\
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    \10\ Appelbaum, p. 1.
    \11\ Id.
    \12\ De La Cruz, p. 1.
    \13\ AAFA, p. 1.
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    Discussion: The Commission declines to amend Section 303.19(a) of 
the Textile Rules to permit the use of word trademarks other than house 
marks in lieu of marketers' names. The comments and staff research 
indicate that such an amendment would impose new burdens and additional 
costs on consumers and others to identify marketers of textile fiber 
products.
    In particular, the record indicates that it can be difficult to 
find the identity of a specific registrant using a word trademark, 
rather than a house mark. Word trademarks that are not house marks can 
be registered for specific goods or services, and identical word 
trademarks can be registered numerous times for different goods or 
services.\14\ Consequently, simple searches on the USPTO's online 
database can produce

[[Page 3070]]

hundreds or thousands of responses.\15\ Although sophisticated searches 
produce far fewer responses, such searches may require more training 
and expertise than many consumers are likely to possess.\16\ In 
contrast, to register a house mark as a trademark, the USPTO requires 
that an applicant indicate that it will use that house mark ``for a 
full line of products'' so that consumers can identify a manufacturer 
or seller from that house mark.\17\ Therefore, it is significantly 
easier to identify a house mark owner from a USPTO search.\18\
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    \14\ For example, the USPTO has 148 registrations for the 
trademark ``Acme'' for different types of goods, including boat 
propellers (AMG Operations), beer (North Coast Brewing Co., Inc.), 
and firearm targets (Clifford J. Brown). Three of these 
registrations are for products covered by the Textile Rules: T-
shirts (Acme Anvils, LLC), T-shirts (Time Warner Entertainment 
Company, L.P.), and quilts (Pillowtex Corp.).
    \15\ For instance, a simple search for ``Acme'' on the USPTO's 
website currently produces 527 registrations; a simplesearch for 
``Cotton'' produces 2,761 registrations. Similarly, searches on 
standard search engines for common word trademarks can produce 
enormous numbers of responses. Searching for ``Acme'' on Google 
returns almost 57 million results, with the first results 
referencing supermarkets, cartoons, packaging-supplies, pies, and 
furniture.
    \16\ For example, to search on the USPTO website for only 
``Acme,'' and exclude the 379 registrations for terms that include 
Acme, such as ``Pro Acme,'' a user must conduct a ``structured' 
search on the USPTO database and specify that the search is on the 
``FULL MARK'' field.
    \17\ USPTO ``Trademark Manual of Examining Procedure April 
2017'' 1402.03(b) House Marks, available at https://tmep.uspto.gov/RDMS/TMEP/current#/current/TMEP-1400d1e2208.html.
    \18\ For example, a simple search on the USPTO for the house 
mark ``Kirkland Signature'' returns 138 registrations, all owned by 
Costco Wholesale Corporation. Therefore, consumers can review any of 
the registrations and determine the house mark owner, even though 
only one of the registrations is for clothing. Online searches for 
``Kirkland Signature'' also readily return references to Costco 
Wholesale Corporation.
    RN numbers also already provide a free, convenient alternative 
to names for marketers that do not own house marks. The Commission 
has recently revised the RN Database at https://rn.ftc.gov/Account/BasicSearch, so consumers can easily identify companies from RN 
numbers.
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    Accordingly, the Commission will continue to allow only owners of 
registered word trademarks who use these trademarks as house marks to 
disclose such trademarks in lieu of their names.

III. Paperwork Reduction Act

    The Textile Rules contain various ``collection of information'' 
(e.g., disclosure and recordkeeping) requirements for which the 
Commission has obtained clearance from the Office of Management and 
Budget (``OMB'') under the Paperwork Reduction Act (``PRA'').\19\ The 
amended Textile Rules do not impose any additional collection of 
information requirements.
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    \19\ 44 U.S.C. 3501 et seq. In 2015, the Commission published 
its PRA burden estimates for the current information collection 
requirements under the Rules. See 80 FR 1411, 1413 (Jan. 9, 2015) 
and 80 FR 14387, 14388 (Mar. 19, 2015). In April 2015, OMB granted 
clearance through April 30, 2018, for these requirements and the 
associated PRA burden estimates. The OMB control number is 3084-
0101.
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IV. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), 5 U.S.C. 601-612, requires 
that the Commission provide an Initial Regulatory Flexibility Analysis 
(IRFA) with a Proposed Rule, and a Final Regulatory Flexibility 
Analysis (FRFA) with the final Rule, unless the Commission certifies 
that the Rule will not have a significant economic impact on a 
substantial number of small entities.\20\
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    \20\ 5 U.S.C. 603-605.
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    The Commission anticipates that the final amendment will not have a 
significant economic impact on a substantial number of small entities. 
In the Commission's view, the amendment should not increase the costs 
of small entities that manufacture or import textile fiber products, 
but may reduce costs associated with furnishing a copy of a registered 
word trademark used as a house mark to the FTC. Therefore, based on 
available information, the Commission certifies that amending the 
Textile Rules will not have a significant economic impact on a 
substantial number of small businesses. Although the Commission 
certifies under the RFA that the amendment will not have a significant 
impact on a substantial number of small entities, the Commission has 
determined, nonetheless, that it is appropriate to publish a Final 
Regulatory Flexibility Analysis to inquire into the impact of the 
proposed amendment on small entities. Therefore, the Commission has 
prepared the following analysis:
    Although the Commission has certified under the RFA that the 
amendments would not have a significant impact on a substantial number 
of small entities, the Commission has determined, nonetheless, that it 
is appropriate to publish an FRFA in order to explain the impact of the 
amendments on small entities as follows:

A. Description of the Reasons That Action by the Agency Is Being Taken

    The Commission is amending the Rules to provide greater flexibility 
in complying with the Rules' disclosure requirements by permitting 
textile fiber product marketers to use registered house marks to 
identify themselves without sending registration copies to the 
Commission.

B. Issues Raised by Comments in Response to the IRFA

    The Commission did not receive any comments specifically related to 
the impact of the final amendment on small businesses. In addition, the 
Commission did not receive any comments filed by the Chief Counsel for 
Advocacy of the Small Business Administration.

C. Estimate of Number of Small Entities To Which the Amendments Will 
Apply

    Under the Small Business Size Standards issued by the Small 
Business Administration, textile apparel manufacturers qualify as small 
businesses if they have 500 or fewer employees. Clothing wholesalers 
qualify as small business if they have 100 or fewer employees. The 
Commission's staff has estimated that approximately 22,642 textile 
fiber product manufacturers and importers are covered by the Textile 
Rules' disclosure requirements.\21\ A substantial number of these 
entities likely qualify as small businesses. The Commission estimates 
that the amendment will not have a significant impact on small 
businesses because it does not impose any new obligations on them, but 
may reduce filing costs associated with the Textile Rules.
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    \21\ 80 FR 1411, 1413 (Jan. 9, 2015).
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D. Projected Reporting, Recordkeeping, and Other Compliance 
Requirements

    The amendment deletes a filing requirement, thus providing greater 
flexibility to companies covered by the Textile Rules. The amendment is 
not expected to increase any reporting, recordkeeping, or other 
requirements associated with the Textile Rules, and is expected to 
decrease reporting requirements.

E. Description of Steps Taken To Minimize Significant Economic Impact, 
If Any, on Small Entities, Including Alternatives

    The Commission did not propose any specific small entity exemption 
or other significant alternatives because the amendment is expected to 
decrease reporting requirements and will not impose any new 
requirements or compliance costs. No comments identified any new 
compliance costs, and several comments argued the amendment will reduce 
compliance costs.

List of Subjects in 16 CFR Part 303

    Advertising, Labeling, Recordkeeping, Textile fiber products.

    For the reasons discussed in the preamble, the Commission amends 
part

[[Page 3071]]

303 of title 16, Code of Federal Regulations, as follows:

PART 303--RULES AND REGULATIONS UNDER THE TEXTILE FIBER PRODUCTS 
IDENTIFICATION ACT

0
1. The authority citation for part 303 continues to read:

    Authority:  15 U.S.C. 70 et seq.


0
2. Amend Sec.  303.19 by revising paragraph (a) to read as follows:


Sec.  303.19   Name or other identification required to appear on 
labels.

    (a) The name required by the Act to be used on labels shall be the 
name under which the person is doing business. Where a person has a 
word trademark, used as a house mark, registered in the United States 
Patent Office, such word trademark may be used on labels in lieu of the 
name otherwise required. No trademark, trade names, or other names 
except those provided for above shall be used for required 
identification purposes.
* * * * *

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2018-01202 Filed 1-22-18; 8:45 am]
 BILLING CODE 6750-01-P