Texas House Bill HB597

Texas 2021 - 87th Regular

Caption

Relating to the use by third-party delivery services of merchants' marks or other intellectual property; authorizing a civil penalty.

Impact

The implications of this bill on state laws include the introduction of civil penalties for non-compliance, with fines up to $1,000 for each violation. Each day a violation continues is treated as a separate offense, underscoring the seriousness of the regulations set forth. This is expected to empower merchants, particularly small businesses, by giving them authoritative control over the usage of their trademarks and branding in delivery services, potentially curbing unauthorized use that has proliferated in the gig economy.

Summary

House Bill 597 aims to regulate the use of merchants' marks and other intellectual property by third-party delivery services, such as those facilitating food delivery. The bill establishes clear definitions for 'merchant' and 'third-party delivery service,' indicating the legal frameworks that govern their interactions. It specifically prohibits third-party services from using a merchant’s intellectual property without prior written consent from the merchant, thereby ensuring that businesses retain control over their branding and property.

Contention

While the bill is generally seen as a protective measure for merchants, it has garnered attention for the potential impacts on third-party delivery entities that rely on the use of merchant branding for advertising and business operations. Concerns have been raised about the operational challenges this bill may impose on third-party platforms that might need to seek consent from numerous merchants, thus complicating the speed and efficiency of food delivery services. Additionally, the requirement for merchants to actively manage their intellectual property could add a layer of complexity to their operations, especially for smaller entities with limited resources.