encountered by Century 21, a national franchisor, when several states required it to alter the display of its federally registered trademark.
Century 21's registered trademark designated 80% of the mark's surface area for the display of the Century 21 logo and the remaining 20% for the display of the local franchisee's name.
Nevada's Real Estate Advisory Commission enacted regulations that required all real estate brokers to display their national logo on 50% of the mark's surface area and display the local franchisee's name on the remaining 50%. This regulation, therefore, required Century 21 brokers to alter their federally registered trademark to display the franchisee's name as prominently as the Century 21 logo. This regulation applied across the board to all items on which the trademark was displayed in Nevada, including signs, letterheads, business cards, brochures, uniforms, name tags, folders, checks, forms, memo pads, desk plates, display materials, marketing materials, advertisements, etc.
Century 21 brought suit in federal court against the Nevada Real Estate Advisory Commission in an attempt to have the regulation declared invalid under the Lanham Act. The district court held, however, that the state regulation did not violate the provisions of the Lanham Act. Century 21 Real Estate Corp. v. Nevada Real Estate Advisory Comm'n, 448 F. Supp. 1237 (D. Nev. 1978), aff'd, 440 U.S. 941, 59 L. Ed. 2d 630, 99 S. Ct. 1415 (1979). According to the court, the "Lanham Act contains no manifestation of a Congressional intent comprehensively to control all aspects of the trademark field." Id. at 1241.
In the aftermath of the decision, other states adopted various rules requiring different percentages of the trademark to be devoted to the name of the local franchisee. These rules inhibited nationwide advertising campaigns, increased costs, and made the franchisor-franchisee relationship less appealing.
Section 1121(b) was intended to be the legislative remedy for this situation by providing that "no State . . . or any political subdivision . . . may require alteration of a registered mark." 15 U.S.C. § 1121(b). It is the meaning of this provision that is at the core of the dispute in this action.
B. Statutory Construction
The starting point for "determining the intended meaning of a statutory provision is, of course, the language of the statute." Berger v. Heckler, 771 F.2d 1556, 1570 (2d Cir. 1985). The plain language of § 1121(b) arguably supports plaintiff's position that the Town may not require any alteration of its mark. However, the precise meaning of the term "alteration" and whether aesthetic zoning constitutes such an alteration are not entirely clear from the language of the statute.
"Where the scope of a statutory provision is not made crystal clear by the language of the provision, it is appropriate to turn to the legislative history of the statute." Id. at 1571. Further, legislative history may be consulted to determine whether a literal application of the statute would contravene its overarching purpose. Id.
The legislative history of § 1121(b) is unequivocal that aesthetic zoning does not constitute an "alteration" of a registered mark within the meaning of the statute. The section simply was not intended "to interfere with local aesthetic or historic-type zoning," but was aimed only at prohibiting the actual alteration of the mark itself. Lanham Trademark Act Amendment: Hearings on H.R. 5154 Before the Subcomm. on Courts, Civil Liberties, and the Administration of Justice of the House Comm. on the Judiciary, 97th Cong., 2d Sess. 39-18 (1982) (Statement of Rep. Barney Frank).
In his opening remarks at the Congressional hearings, Gerald J. Mossinghoff, Commissioner of Patents and Trademarks, stated that the purpose of the amendment was to "prohibit any State from requiring that a registered trademark be altered for use within such State." Id. at 39-11. He added that the amendment "would not interfere with the power of States . . . to regulate the display of advertising of any kind or to limit the dimensions or location of signs." Id. at 39-13
Congressman Barney Frank, one of the co-sponsors of the bill, directed the following question to Mossinghoff:
Frank: I just have one question, I just want to double check on this. I have spoken to the people at Century 21 about this. I am very much in support of the bill, with one understanding that I would like to get clear and that is that nothing in this would be meant to interfere with local aesthetic or historic-type zoning, so that if there was a uniform requirement in a particular locality--we have many in Massachusetts--which required that any sign had to conform to a certain type, that nothing in this would be preemptive of that.
I am wondering whether you think we need any language to do that. That would be something I would feel very strongly about, and I would think it would be noncontroversial. I do not think we would say that any one trademark would have an override of an otherwise uniform aesthetic or historic zoning that had been established by valid local procedures.