conditions and formalities required by a country for obtaining a registration. This conclusion was reached by an examination of the original Convention proceedings which revealed that the delegates intended Article 6 to eliminate possible objections to trademarks because of the inherent nature or form of the mark itself. Moreover, this interpretation is supported by an amendment to Article 6 which became effective in 1962 and reads:

"(1) The conditions for the filing and registration of trademarks shall be determined in each country of the Union by its domestic law."

In "Merry Cow" the Patent Office expressed concern with imposing upon foreign nationals "the burden of conforming to a requirement of our internal law." Indeed, this interpretation is now clearly erroneous. The decision of the Board in the instant case which reverts to the "Merry Cow" doctrine by overruling In re Certain Incomplete Trademark Applications, supra, is therefore in error. (at p. 966.)

With respect to Article 4 of the Convention, the Court said that it "relates only to the right of priority for applications based on a previously filed foreign application. There is nothing in Article 4 concerned with the requirements necessary for registration." (at p. 966.)

The Court said further that the intention of Congress in enacting the Lanham Act was not to grant rights in a trademark, but rather to "provide a mechanism to protect rights which had been obtained by an applicant prior to registration." (at p. 967.) The Court said that the fact that an application had been filed conferred no substantive rights on the applicant. "The application date is important procedurally in the case of an inter partes proceeding since the party with the latest filing date becomes the junior party and bears the burden of proving that its right to the mark arose prior to the time claimed by the first applicant." (Ibid.) The Court then said:

The question then is how one obtains rights in a trademark in the United States. The essence of a trademark has always been its use to uniquely identify particular goods and services. Exclusive use of such a mark is a valuable commercial right which is protected both by the common law and by the Lanham Act. In the United States, in contrast with some countries, the exclusive right to use a particular mark may arise only from its use in connection with the goods which the manufacturer wishes to distinguish. United States v. Steffans (The Trademark Cases), 100 U.S. 82, 25 L. Ed. 550 (1879) contains the definitive statement that rights in a trademark arise from its use. The Trade Mark Act of 1946 did not change the basic concept of the derivation of trademark rights as developed by the common law. Section 44 upon which defendant bases its claim for priority was

drafted for the narrow purpose of conforming to international agreements such as the Paris Union Treaty only "to the extent necessary to give effect to any provision of such convention . . ." As shown above, the Convention is not a repository of substantive rights. Further, Section 1 of the Act, to which § 44 refers, sets forth the provisions under which "the owner of a trademark used in commerce may register his trade-mark . . ." The dominant principle which emerges from §1 is that the mark must be in use, for the applicant must state

“... the date of applicant's first use of the mark in commerce, the goods in connection with which the mark is used and the mode or manner in which the mark is used in connection with such goods..

It is important to note that the Act was designed to protect marks used "in commerce," which is defined in § 45 to mean "all commerce which may lawfully be regulated by Congress." This makes it clear that the Act has no extraterritorial application since the benefits allowed to either United States citizens or foreign nationals are completely internal to the United States. The Congress did not confer benefits for trademark rights existing outside the United States. See Sterling Drug Inc. v. Kroll A.-G. Chemische Fabriken, 159 U.S.P.Q. 628 (1968). Use of a trademark outside the United States does not establish or create rights which can be asserted in an inter partes proceeding. Cooper's Inc. v. Jockey Shoe Polish Inc., 149 U.S.P.Q. 704 (1966).

Therefore in the instant case prior right in a trademark in the United States depends on priority of use in the United States and is not affected by priority of use in a foreign country. Sterling Drug Inc. v. Kroll A.-G. Chemische Fabriken, supra. The priority which was contemplated by § 44(d) and by the Convention was a procedural priority only. It established a method by which a foreign applicant could obtain a priority filing date without having used his mark in commerce. To hold that such priority grants a substantive right in the trademark itself when such mark has never been used in the United States is error. To allow a substantive priority to a foreign applicant would be to grant to him greater rights than those available to United States citizens. This is contrary to the Paris Union Treaty and to the Lanham Act.

(at p. 967-968.)

See also the 1973 Digest, Ch. 10, § 7, pp. 391–392.

§ 8

Fuels and Energy

International Cooperation

Washington Energy Conference

The Washington Energy Conference, called by the United States and convened February 11-13, 1974, issued a Communiqué at the con

clusion of the Conference outlining an action program of international cooperation to deal with the world energy situation. The Communiqué summarized the energy situation, called generally for cooperation and for consultation with producer countries and other consumers, and established a coordinating group to coordinate the development of an action program. The participants at the Conference affirmed the essentiality of "a substantial increase of international cooperation in all fields" and "concurred in the need for a comprehensive action program to deal with all facets of the world energy situation by cooperative measures." The participants stated that in taking such measures, "they will build on the work of the OECD" and they "recognized that they may wish to invite, as appropriate, other countries to join with them in these efforts." The following are further excerpts from the Communiqué:

9. ... Such an action program of international cooperation would include, as appropriate, the sharing of means and efforts, while concerting national policies, in such areas as:

-The conservation of energy and restraint of demand.

-A system of allocating oil supplies in times of emergency and severe shortages.

-The acceleration of development of additional energy sources so as to diversify energy supplies.

-The acceleration of energy research and development programs through international cooperative efforts.

France does not accept point 9. [Footnote in original.]

11. Further, they have agreed to accelerate wherever practicable their own national programs of new energy sources and technology which will help the overall worldwide supply and demand situation. 12. They agreed to examine in detail the role of international oil companies.

13. They stressed the continued importance of maintaining and improving the natural environment as part of developing energy sources and agreed to make this an important goal of their activity.

14. They further agreed that there was need to develop a cooperative multilateral relationship with producing countries, and other consuming countries that takes into account the long term interests of all. They are ready to exchange technical information with these countries on the problem of stabilizing energy supplies with regard to quantity and prices.

15. They welcomed the initiatives in the United Nations to deal with the larger issues of energy and primary products at a worldwide level and in particular for a special session of the U.N. General Assembly.

Establishment of Follow-on Machinery

16. They agreed to establish a coordinating group headed by senior officials to direct and to coordinate the development of the actions referred to above. The coordinating group shall decide how best to organize its work. It should:

-Monitor and give focus to the tasks that might be addressed in existing organizations;

-Establish such ad hoc working groups as may be necessary to undertake tasks for which there are presently no suitable bodies;

-Direct preparations of a conference of consumer and producer countries which will be held at the earliest possible opportunity and which, if necessary, will be preceded by a further meeting of consumer countries.

17. They agreed that the preparations for such meetings should involve consultations with developing countries and other consumer and producer countries.

France does not accept points 16 and 17. [Footnote in original.] For the full text of the Communiqué, see Dept. of State Bulletin, Vol. LXX, No. 1810, Mar. 4, 1974, pp. 220–222. The Conference was attended by the Foreign Ministers of Belgium, Canada, Denmark, France, the Federal Republic of Germany, Ireland, Italy, Japan, Luxembourg, The Netherlands, Norway, the United Kingdom, and the United States. The European Community was represented as such by the President of the Council and the President of the Commission.

At the opening session of the Conference, Secretary Kissinger proposed a sevenpoint approach to cooperation and presented an offer by the United States to share technology, resources, and supplies. Mr. Kissinger said that the United States "did not dispute the right of sovereign nations to make individual arrangements." But he stated the U.S. belief that "it is essential that these arrangements follow agreed rules of conduct. In their absence, unrestrained bilateralism is certain to produce disastrous political and economic consequences.”

For the texts of statements to the Conference by Secretary of State Henry A. Kissinger and by Federal Energy Administrator William Simon, as well as an outline of a statement by Secretary of the Treasury George P. Shultz, see the Dept. of State Bulletin, Id., pp. 201-220. For the section of the Communiqué dealing with monetary and economic questions, see this Chapter, § 1, supra, pp. 440– 441.

International Energy Program

On November 18, 1974, the International Energy Program (IEP) was formally adopted by 16 countries, including the United States and Austria, Belgium, Canada, Denmark, Germany, Ireland, Italy, Japan, Luxembourg, the Netherlands, Spain, Sweden, Switzerland, Turkey, and the United Kingdom. The Program, which originated in the February 1974 Washington Energy Conference, is to be implemented through the International Energy Agency (IEA), established by the agreement as an autonomous institution within the Organization for Economic Cooperation and Development (OECD).

The Program has four major elements: (1) an integrated emergency arrangement to limit immediately vulnerability to actual or threatened embargoes by producers; (2) a long term cooperative program to reduce dependency on imported oil; (3) an oil market information system; (4) a program for coordination of relations with producing countries and the less developed consuming countries.

Under the emergency arrangement, the participating countries agreed to three interrelated common commitments: (a) to build common levels of emergency reserves; (b) to develop pre-positioned demand restraint programs; (c) to allocate available oil to spread the shortfall evenly among the members.

Emergency reserves under the program are defined in terms of emergency self-sufficiency or a country's ability to live without imports for a given period of time. The initial self-sufficiency target has been set at 60 days, but the intent is to raise this to 90 days within three to four years. The targets may be met by stocks, standby production facilities, or by switching in an emergency from petroleum to other sources of energy. Each participating country is to maintain emergency reserves sufficient to sustain consumption for at least 60 days with no net oil imports.

Each country agrees to reduce its consumption during an emergency by a common percentage. These reductions would be triggered as supply shortfalls reached certain levels. If there were a seven percent shortfall in supplies to participating countries as a group, all countries would undertake a seven percent cut in oil consumption. Should supplies fall by as much as twelve percent, consumption would be cut by ten percent throughout the group. There is a further general provision that in a very severe or protracted crisis the goup can decide upon further emergency measures, including additional demand restraint.

As for allocation of oil, the program is designed to come into operation in either a general supply emergency or in response to a selective embargo aimed at one or more individual countries. The basic principle is that when the shortfall reaches a pre-agreed threshold all countries will restrain demand by a common rate, draw down emergency supplies, and share available oil so that they can all live for the same period of time at the common agreed level of consumption. The program would operate in the following manner:

When at least one member loses more than seven percent of its oil consumption, but the group loses less than seven percent of its total consumption, the embargoed country absorbs its embargo loss up to seven percent of its consumption, and the other members share the remaining shortfall among themselves on the basis of their consump