| 1 | 1 | | 87R1289 JES-D |
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| 2 | 2 | | By: Sherman, Sr. H.B. No. 597 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to the use by third-party delivery services of merchants' |
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| 8 | 8 | | marks or other intellectual property; authorizing a civil penalty. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Subtitle C, Title 5, Business & Commerce Code, is |
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| 11 | 11 | | amended by adding Chapter 114 to read as follows: |
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| 12 | 12 | | CHAPTER 114. THIRD-PARTY DELIVERY SERVICES |
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| 13 | 13 | | Sec. 114.0001. DEFINITIONS. In this chapter: |
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| 14 | 14 | | (1) "Mark" has the meaning assigned by Section 16.001. |
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| 15 | 15 | | (2) "Merchant" means a restaurant or other business |
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| 16 | 16 | | entity that sells food or other goods directly to consumers. |
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| 17 | 17 | | (3) "Third-party delivery service" means a business |
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| 18 | 18 | | entity that: |
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| 19 | 19 | | (A) allows a consumer to purchase food or other |
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| 20 | 20 | | goods from a merchant through the entity's proprietary Internet |
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| 21 | 21 | | website, mobile application, or other Internet-based platform; |
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| 22 | 22 | | (B) delivers, including through use of an |
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| 23 | 23 | | independent contractor or agent of the entity, the purchased goods |
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| 24 | 24 | | to the consumer for a fee that is in addition to the fee charged by |
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| 25 | 25 | | the merchant for the goods; and |
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| 26 | 26 | | (C) operates outside of the merchant's business. |
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| 27 | 27 | | Sec. 114.0002. CONSENT REQUIRED FOR USE OF MERCHANT'S MARKS |
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| 28 | 28 | | OR INTELLECTUAL PROPERTY. (a) A third-party delivery service may |
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| 29 | 29 | | not use a merchant's mark or other intellectual property on the |
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| 30 | 30 | | service's Internet website or application without the prior written |
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| 31 | 31 | | consent of the merchant. |
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| 32 | 32 | | (b) To receive valid consent from a merchant under |
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| 33 | 33 | | Subsection (a), a third-party delivery service must be authorized |
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| 34 | 34 | | to conduct business in this state. |
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| 35 | 35 | | Sec. 114.0003. CIVIL PENALTY; INJUNCTIVE RELIEF. (a) A |
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| 36 | 36 | | third-party delivery service that violates Section 114.0002 is |
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| 37 | 37 | | liable to this state for a civil penalty in an amount not to exceed |
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| 38 | 38 | | $1,000 for each violation. Each day of a continuing violation is a |
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| 39 | 39 | | separate violation. |
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| 40 | 40 | | (b) The attorney general may bring an action in the name of |
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| 41 | 41 | | the state against the third-party delivery service for: |
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| 42 | 42 | | (1) injunctive relief; |
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| 43 | 43 | | (2) recovery of a civil penalty imposed under this |
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| 44 | 44 | | section; or |
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| 45 | 45 | | (3) both injunctive relief and a civil penalty. |
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| 46 | 46 | | (c) An action under this section may be brought in a |
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| 47 | 47 | | district court in: |
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| 48 | 48 | | (1) Travis County; or |
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| 49 | 49 | | (2) a county in which any part of the violation or |
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| 50 | 50 | | threatened violation occurs. |
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| 51 | 51 | | (d) A civil penalty collected under this section shall be |
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| 52 | 52 | | deposited in the state treasury to the credit of the general revenue |
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| 53 | 53 | | fund. |
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| 54 | 54 | | Sec. 114.0004. PRIVATE CAUSE OF ACTION. (a) If a |
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| 55 | 55 | | third-party delivery service violates Section 114.0002, a merchant |
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| 56 | 56 | | aggrieved of the violation may bring an action for: |
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| 57 | 57 | | (1) injunctive relief; |
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| 58 | 58 | | (2) damages in an amount equal to the greater of: |
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| 59 | 59 | | (A) the merchant's actual damages arising from |
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| 60 | 60 | | the violation; or |
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| 61 | 61 | | (B) $5,000, as exemplary damages, irrespective |
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| 62 | 62 | | of whether the merchant has actual damages; or |
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| 63 | 63 | | (3) both injunctive relief and damages. |
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| 64 | 64 | | (b) A merchant that is awarded actual damages under |
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| 65 | 65 | | Subsection (a)(2)(A) may also be awarded exemplary damages. |
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| 66 | 66 | | SECTION 2. This Act takes effect September 1, 2021. |
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