500 E. Capitol Ave.

Pierre, SD 57501

(605) 773-3212

 

FOR IMMEDIATE RELEASE: Wednesday, March 3, 2010

Contact:  Joe Kafka or Roxy Everson at 605-773-3212

 

 

 

 

 

 

March 3, 2010

 

The Honorable Timothy Rave  

Speaker of the House

500 East Capitol Avenue

Pierre, SD 57501-5070

 

Dear Speaker Rave and Members of the House:

 

I herewith return House Bill 1137 and VETO the same.

 

House Bill 1137 is entitled, “An Act to permit the secretary of state to cancel a trademark or service mark registration under certain conditions.”

House Bill 1137 extends to the Secretary of State the ability to cancel a trademark or service mark registration. Currently, the power to cancel a trademark or service mark registration is limited to our circuit courts under the provisions of SDCL 37-6-19, 37-6-20 or 37-6-21. According to the sponsors, the bill is intended to allow the Secretary of State to cancel a trademark or service mark registration, which was erroneously granted by that office, without the necessity of incurring court litigation.   While the legislation is well intentioned, it needs improvement to accomplish that goal.

 

First, the bill does not specify or require any type of due process prior to the cancellation of the trademark or service mark. While the Secretary of State testified that he would conduct a hearing prior to such a cancellation, none is required under the bill nor guaranteed under a future Secretary of State. Thus, while the bill is intended to eliminate the need for court litigation, the only remedy for a registrant who has had their trademark or service mark cancelled is to file an action in circuit court. In addition, because the bill does not specify an appeal process under the Administrative Procedures Act, Chapter 1-26, any litigation would necessarily be conducted de novo as opposed to an abuse of discretion standard. This would require a full evidentiary hearing in order to resolve the litigation. 

 

Finally, I believe the 1-year window in which the Secretary of State may cancel a service mark or trademark to be too lengthy. It would be unfair to allow any person or business to incur substantial expense and effort promoting a service or trademark only to have it revoked almost a year later. 

 

Again, while I believe the bill is well intended, the bill needs improvement to accomplish the goals of the sponsors.

 

Therefore, I respectfully request that you concur with my action. If the legislature sustains my veto, I will work with the sponsors to accomplish its goals.  

 

Respectfully submitted,

 

M. Michael Rounds  

Governor

 

cc: The Honorable Dennis Daugaard