Trademark Licensing Protection Act of 2019

II 116TH CONGRESS 1ST SESSION S. 2439 To amend the Trademark Act of 1946 to provide that the licensing of a mark for use by a related company may not be construed as estab- lishing an employment relationship between the owner of the mark, or an authorizing person, and either that related company or the employ- ees of that related company, and for other purposes. IN THE SENATE OF THE UNITED STATES AUGUST 1, 2019 Mr. KING (for himself, Mr. LANKFORD, Mr. CORNYN, Ms. SINEMA, Mr. BRAUN, Mr. MANCHIN, and Mr. CRAMER) introduced the following bill; which was read twice and referred to the Committee on the Judiciary A BILL To amend the Trademark Act of 1946 to provide that the licensing of a mark for use by a related company may not be construed as establishing an employment relation- ship between the owner of the mark, or an authorizing person, and either that related company or the employees of that related company, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Trademark Licensing 4 Protection Act of 2019’’. 5 VerDate Sep 11 2014 04:39 Aug 15, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2439.IS S2439 kjohnson on DSK79L0C42 with BILLS 2 •S 2439 IS SEC. 2. SAFE HARBOR. 1 Section 5 of the Act entitled ‘‘An Act to provide for 2 the registration and protection of trademarks used in com- 3 merce, to carry out the provisions of certain international 4 conventions, and for other purposes’’, approved July 5, 5 1946 (commonly known as the ‘‘Trademark Act of 1946’’) 6 (15 U.S.C. 1055), is amended— 7 (1) in the first sentence, by striking ‘‘Where a’’ 8 and inserting the following: 9 ‘‘(a) IN GENERAL.—Where a’’; and 10 (2) by adding at the end the following: 11 ‘‘(b) CONSISTENCY IN USE.— 12 ‘‘(1) DEFINITIONS.—In this subsection— 13 ‘‘(A) the term ‘authorizing person’ means 14 a person that is authorized by the owner of a 15 mark to license that mark for use by a related 16 company; 17 ‘‘(B) the term ‘communicate’, with respect 18 to subparagraph (D)(i)(II), does not include 19 any communication related to a personnel or 20 employment policy or procedure; 21 ‘‘(C) the term ‘employment relationship’ 22 means any type of joint employer relationship, 23 single employer relationship, or other employ- 24 ment-related status or relationship; 25 VerDate Sep 11 2014 04:39 Aug 15, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2439.IS S2439 kjohnson on DSK79L0C42 with BILLS 3 •S 2439 IS ‘‘(D) the term ‘exercise control over the 1 mark’— 2 ‘‘(i) includes, but is not limited to, re- 3 quiring a related company to— 4 ‘‘(I) complete training conducted 5 for the purpose of preserving or en- 6 hancing goodwill, a reputation, uni- 7 formity, or the expectation of the pub- 8 lic with respect to the nature and 9 quality of goods or services associated 10 with a mark; or 11 ‘‘(II) communicate with the 12 owner of a mark, or an authorizing 13 person, with respect to preserving or 14 enhancing goodwill, a reputation, uni- 15 formity, or the expectation of the pub- 16 lic with respect to the nature and 17 quality of goods or services associated 18 with a mark; and 19 ‘‘(ii) does not include any personnel or 20 employment policy or procedure that is 21 communicated— 22 ‘‘(I) by— 23 ‘‘(aa) the owner of a mark; 24 or 25 VerDate Sep 11 2014 04:39 Aug 15, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2439.IS S2439 kjohnson on DSK79L0C42 with BILLS 4 •S 2439 IS ‘‘(bb) an authorizing person; 1 and 2 ‘‘(II) to— 3 ‘‘(aa) a related company 4 with respect to the mark; or 5 ‘‘(bb) any employee of a re- 6 lated company described in item 7 (aa); 8 ‘‘(E) the term ‘franchise’ means a fran- 9 chise, as defined— 10 ‘‘(i) in section 436.1(h) of title 16, 11 Code of Federal Regulations, as in effect 12 on the date of enactment of this sub- 13 section; or 14 ‘‘(ii) under an applicable State fran- 15 chise law; 16 ‘‘(F) the term ‘franchisee’ means a 17 franchisee, as defined— 18 ‘‘(i) in section 436.1(i) of title 16, 19 Code of Federal Regulations, as in effect 20 on the date of enactment of this sub- 21 section; or 22 ‘‘(ii) under an applicable State fran- 23 chise law; 24 VerDate Sep 11 2014 04:39 Aug 15, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2439.IS S2439 kjohnson on DSK79L0C42 with BILLS 5 •S 2439 IS ‘‘(G) the term ‘franchisor’ means a 1 franchisor, as defined— 2 ‘‘(i) in section 436.1(k) of title 16, 3 Code of Federal Regulations, as in effect 4 on the date of enactment of this sub- 5 section; or 6 ‘‘(ii) under an applicable State fran- 7 chise law; and 8 ‘‘(H) the term ‘personnel or employment 9 policy or procedure’ means— 10 ‘‘(i) any contractually retained right 11 of the owner of a mark, or an authorizing 12 person, to directly control a related com- 13 pany’s hiring, promotion, firing, or dis- 14 cipline of the employees of such related 15 company; 16 ‘‘(ii) any contractually retained right 17 of the owner of a mark, or an authorizing 18 person, to directly control a related com- 19 pany’s rates of pay, including wages and 20 fringe benefits; 21 ‘‘(iii) any contractually retained right 22 of the owner of a mark, or an authorizing 23 person, to directly control a related com- 24 VerDate Sep 11 2014 04:39 Aug 15, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2439.IS S2439 kjohnson on DSK79L0C42 with BILLS 6 •S 2439 IS pany’s assignment of employee work sched- 1 ules; 2 ‘‘(iv) any contractually retained right 3 of the owner of a mark, or an authorizing 4 person, to directly control collective bar- 5 gaining procedures or labor relations; and 6 ‘‘(v) any contractually retained right 7 of the owner of a mark, or an authorizing 8 person, to directly supervise the employees 9 of a related company. 10 ‘‘(2) APPLICABILITY.—For the purposes of the 11 National Labor Relations Act (29 U.S.C. 151 et 12 seq.) and the Fair Labor Standards Act of 1938 (29 13 U.S.C. 201 et seq.), none of the following may be 14 construed, alone or in combination with any other 15 factor, as establishing an employment relationship 16 between the owner of a mark that is a franchisor, 17 or an authorizing person that is a franchisor, and a 18 related company with respect to that franchisor, or 19 the employees of that related company: 20 ‘‘(A) The licensing of the mark for use by 21 that related company or the employees of that 22 related company. 23 VerDate Sep 11 2014 04:39 Aug 15, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2439.IS S2439 kjohnson on DSK79L0C42 with BILLS 7 •S 2439 IS ‘‘(B) Any exercise of control over the mark 1 by that owner or authorizing person, as applica- 2 ble— 3 ‘‘(i) with respect to the use of the 4 mark by that related company or the em- 5 ployees of that related company; and 6 ‘‘(ii) for the purpose of preserving or 7 enhancing goodwill, a reputation, uni- 8 formity, or the expectation of the public 9 with respect to the nature and quality of 10 goods or services associated with the 11 mark.’’. 12 SEC. 3. APPLICABILITY. 13 This Act, and the amendments made by this Act, 14 shall not apply to any proceeding before the National 15 Labor Relations Board that is commenced before the date 16 of enactment of this Act. 17 Æ VerDate Sep 11 2014 04:39 Aug 15, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\S2439.IS S2439 kjohnson on DSK79L0C42 with BILLS