Davenport, Evans, Hurwitz & Smith, L.L.P.* Sioux Falls, SD

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1 Last Updated: July 2018 South Dakota Davenport, Evans, Hurwitz & Smith, L.L.P.* Sioux Falls, SD A. State Trademark Registration Statute 1. Code Section The registration of a trademark in South Dakota is governed by SDCL ch SDCL preserves common law rights in marks acquired at any time, so long as the marks were acquired in good faith. 2. Model Act Provisions The principal parts of SDCL ch were adopted in 1955 and closely follow the Model State Trademark Bill. The primary deviations are: (1) the provisions of Section 4 dealing with the Secretary s review and possible rejection of the application are excluded; (2) the second paragraph of Section 5 dealing with the admission of a mark as evidence in any South Dakota Court is deleted; (3) the duration of a registered trademark in South Dakota is four years rather than the five year duration set out in the Model State Trademark Bill; (4) there is no statutory requirement of continued usage in an application for renewal; (5) the Section 7 subparts addressing changes of name and other instruments were omitted; (6) the Secretary may cancel a registration within 180 days of the registration if the Secretary determines the registration was granted improperly or in error, or was obtained fraudulently; (7) a court determination that a registered mark has become a generic name for the goods or services for which the mark has been registered or is likely to cause confusion with a mark registered by another in the U.S. Patent and Trademark Office is not listed as a ground for cancellation; (8) Section 13 concerning injury *Davenport, Evans, Hurwitz & Smith, L.L.P. of Sioux Falls, South Dakota, is one of the state s largest law firms. The firm practices in all major areas of law, including general corporate and business practice, banking, creditors rights and related bankruptcy work, estate and probate matters, real property, tax, insurance, and litigation in state and federal courts, in addition to the firm s work in the areas of trademarks, copyrights, and intellectual property matters. SD-1

2 A.3. STATE TRADEMARK LAW to business reputation-dilution is omitted; Section 15 concerning proper forum for certain actions is omitted; (9) the Model Bill s allowance for a court to enter judgment for up to three times the profits, damages, and/or attorney s fees for knowing or bad faith violations, prescribed in Section 14, is omitted; (10) and numerous additional provisions enacted by the state in 1877 and 1881, primarily dealing with remedies for trademark violations, are still in force. 3. Administrator Shantel Krebs Secretary of State Capitol Building 500 East Capitol Avenue Ste 204 Pierre, SD (605) web site: trademark@state.sd.us 4. Procedure for Applying for Registration a. Forms The trademark applicant must file an application for registration with the Office of the Secretary of State on a form furnished by the Secretary of State. SDCL Applications may be filed on photocopies of the form. Trademark applications are available in PDF format and can be downloaded at no cost from the Secretary of State s website. b. Number of Copies One copy of the application is sufficient. c. Fee The registration fee of $125, payable to the Secretary of State, is prescribed by statute and must accompany the application. SDCL d. Specimens One sample or facsimile of the mark is required. It is sufficient to submit a photocopy of one specimen, which can be no larger than eight and one-half inches by eleven inches. e. Drawing A special drawing is not required. SD-2

3 SOUTH DAKOTA A Intent to Use Provision South Dakota does not have a provision for the reservation of a mark with an intent to use it in the future. 6. Classification The statute adopts the international schedule of classes of goods and services used for federal trademark law. SDCL Search Prior to Application The Secretary of State is required to keep for public examination a record of all marks registered or renewed. See SDCL Search Prior to Registration The statute prescribes no type of pre-registration search. In practice, the Secretary of State does conduct a search prior to issuance of registration. Only mark registration records are searched, and solely for identical marks. However, a mark is not registrable if it so resembles a mark registered in the state as to be likely to cause confusion, mistake, or deceit. SDCL Doing Business Requirement There is no doing business requirement. The applicant is merely required to have used the mark in the state. See (7), (9). 10. Types of Marks Registrable Trademarks and service marks are registrable. No separate provisions exist for registration of collective and certification marks. 11. Restrictions South Dakota has adopted the provisions of the Model State Trademark Bill on this issue. See SDCL through Use in State Use of the mark in South Dakota is required to be able to apply for registration. SDCL Term of Registration A registration is effective for a term of four years from the date of registration. SDCL Renewal A registration may be renewed for successive periods of four years. An application for renewal may be filed with the Secretary of State six months prior to the date of expiration. SDCL Forms are SD-3

4 A.15. STATE TRADEMARK LAW furnished by the Secretary of State and require one sample or facsimile of the mark. Notification of renewal is not sent to the registrant. 15. Renewal Forms A renewal form furnished by the Secretary of State is required to renew an application. SDCL Other Forms An application for Mark Registration Assignment is available and does not require specimens. SDCL Post-Registration Forms Not applicable. 18. Fees After Registration A renewal fee of $125 payable to the Secretary of State is prescribed by statute. SDCL A fee of $125 payable to the Secretary of State is prescribed by statute upon assignment of a mark. SDCL There is no fee for cancellation. See SDCL Use Requirement for Renewal The statute does not require usage for renewal. SDCL ; but see Dakota Industries, Inc. v. Cabela s.com, Inc., 766 N.W.2d 510 (S.D. 2009) (holding that a lack of trademark use for several years constituted abandonment). The mark registration renewal form, however, requires a statement of the mode or manner in which the mark is used. 20. Presumptions a. In Favor of Registrant Registration under SDCL ch is prima facie evidence of the registrant s exclusive right to use the mark. Registration is not conclusive, however, as to the validity of the registration, and either the Secretary of State or a court is authorized to cancel a mark s registration. See SDCL , -20; Time Out, Inc. v. Karras, 392 N.W.2d 434, 437 (S.D. 1986). b. Presumption of Doing Business None. 21. Remedies for Infringement Injunction: (SDCL ); profits derived from wrongful use, lost profits and damages suffered by wrongful use, if acts committed with SD-4

5 SOUTH DAKOTA C.3. knowledge that the mark is intended to cause confusion or mistake or to deceive (SDCL ); civil liability against anyone who procures the registration of a mark knowingly making any false or fraudulent representation or means (SDCL ); delivery of counterfeits or imitations for destruction (SDCL ). The statute also provides a special remedy for those engaged in the manufacturing, bottling, or selling of soda, mineral water, cider, or other nonintoxicating beverages who file an application with the register of deeds of the county or counties where they have their place of business describing the names, brands, or trademarks used for marking any container in which any such beverages are sold or kept for sale. Any person who refills the containers with the intent to sell them without the written consent of the manufacturer is liable to a penalty of $.50 for each bottle sold, for the first offense, and $5 on each bottle for every subsequent offense. SDCL Persons Entitled to Sue Any owner of a South Dakota registered mark may sue for infringement. SDCL Additionally, any party may be sued for damages from fraudulent mark registration. SDCL See also Hot Stuff Foods, LLC v. Mean Gene s Enters., Inc., 468 F. Supp.2d 1078 (D.S.D. 2006) (holding that a television announcer whose nickname was used as part of a registered trademark had standing to seek cancellation of the trademark). B. Dilution There is no statutory provision in South Dakota on dilution nor is there a recognized common law dilution doctrine Not applicable. C. Unfair Business Practices Acts (Little FTC Acts) 1. Code Section SDCL Scope SDCL prohibits any person from using any deceptive act or practice in the conduct of the person s business activities in South Dakota. 3. Prohibited Activities SDCL generally prohibits the use of a deceptive act or SD-5

6 C.4. STATE TRADEMARK LAW practice in the conduct of one s business in South Dakota. The statute also sets forth a non-exhaustive listing of approximately thirteen acts and practices which are specifically identified as deceptive. These acts and practices cover many facets of false representation regarding the quality and origin of merchandise and the affiliations and connections of the person marketing the merchandise. The statute specifically addresses business practices commonly known as bait and switch advertising, the referral sale and the endless chain. A 2001 amendment prohibits the practice of promoting cards or purchasing mechanisms that are not insurance but purport to offer discounts for prescription drug purchases. SDCL (12). A 2015 Amendment prohibits any lottery from continuing for longer that eighteen months after the date one which the first ticket is sold. SDCL (14). A 2018 Amendment prohibits hotels, motels, campgrounds, or other lodging providers, from knowingly concealing any mandatory fee, such as a resort fee or parking fee, when reservations are made, whether or not the guest utilizes the amenities for which the fee is assessed. 4. Remedies a. State Administrative Enforcement SDCL allows the court to restore to any person in interest any moneys or property, real or personal, which the court finds to have been acquired by means of any act or practice declared to be unlawful by SDCL b. Criminal Enforcement SDCL states that [e]ach act in violation of this section under one thousand dollars is a Class 1 misdemeanor. Each act in violation of this statute over one thousand dollars but under one hundred thousand dollars is a Class 6 felony. Each act in violation of this section over one hundred thousand dollars is a Class 5 felony. Although it is likely that the dollar amounts refer to actual damages suffered, as of this writing there is no case law directly on point. In addition, as punishment for either a misdemeaner or felony conviction the court may order restitution to any victim as part of the sentence of the defendant. SDCL , to -2. c. Civil Penalties The Attorney General may, with the assistance of the state s attorney, bring an action for injunction to restrain and prevent violations of SDCL SDCL through -25. The violation of an injunction issued under SDCL subjects the violator to a civil penalty of not more than $5,000 per violation. SDCL In SD-6

7 SOUTH DAKOTA C.4.f. addition, the court may allow the Attorney General to recover a civil penalty of not more than $2,000 for each intentional violation of SDCL SDCL SDCL allows restitution (see C.4.a, above) and also allows the court to appoint a receiver to take control of the property of any defendant who is about to remove, conceal, or dispose of his property to the damage of persons to whom restoration would be made under [SDCL ]. See also SDCL (powers of receiver). d. Private Actions and Remedies SDCL allows any person adversely affected by a violation of SDCL to bring a private action for actual damages suffered. Nygaard v. Sioux Valley Hosps. & Health Sys., 731 N.W.2d 184, 197 (S.D. 2007) (noting that a private civil action under SDCL specifically requires a causal connection between the alleged violation and the damages suffered ). Moss v. Guttormson, 551 N.W.2d 14 (S.D. 1996) (finding that employee had standing to sue employer for damages when deceptive practices were used and concealed from employee during his employment but affected his future job prospects and reputation). See also Sisney v. Best Inc., 754 N.W.2d 804, 811 (S.D. 2008) (holding that a plaintiff must be adversely affected as a result of a deceptive practice used by the Defendants in connection with their sale or advertising of their merchandise) (emphasis added). Punitive damages are not recoverable under this Section. Wyman v. Terry Schulte Chevrolet, Inc., 584 N.W.2d 103 (S.D. 1998). e. Class Actions SDCL ch does not contain any specific provisions regarding class actions, nor are there any reported South Dakota court decisions on this issue. But see Nygaard v. Sioux Valley Hosps. & Health Sys., 83, 731 N.W.2d 184, 188 (S.D. 2007) (class action dismissed for failure to show causation between alleged violation and damages). However, SDCL includes a collateral reference to an A.L.R. annotation regarding class actions based on fraud or misrepresentations. Presumably, a class action to recover damages for a violation of SDCL would be available if the requirements of South Dakota s statutes on class actions were met. See SDCL f. Notice There are no prerequisites to a suit by a private person alleging a violation of SDCL At least three days prior to any hearing in an action brought by the Attorney General, notice must be given, which states generally the relief sought and be served according to SDCL SDCL Although not a specific prerequi- SD-7

8 C.4.g. STATE TRADEMARK LAW site to a suit by the Attorney General on behalf of the state under SDCL , SDCL to -22 does allow for an investigative report and hearings conducted by the Attorney General in an attempt to secure voluntary compliance with SDCL The Department s investigative authority and other powers are contained at SDCL through-22. g. Standing Competitors are persons within the provisions of SDCL and may thus pursue civil actions on their own behalf for violations of SDCL See SDCL (8). Person includes an employee. See Moss v. Guttormson, 551 N.W.2d 14, 17 (S.D. 1996). h. Consumer Products Formerly, SDCL limited the provisions of SDCL ch to merchandise of a personal, family household or agricultural nature. However, SDCL was repealed by SL 1983, ch. 277, 2. i. Jurisdiction of Courts No special jurisdictional statutes exist within SDCL ch Suits by the Attorney General or the state s attorney for an injunction under SDCL are properly venued in the county in which the alleged violator resides or has his place of business or in the circuit court for Hughes County. SDCL j. Rules Although SDCL empowers the South Dakota Attorney General to promulgate rules governing the conduct of investigations, the release of information, and the acceptance of assurances of voluntary compliance, all in connection with the furtherance of the objectives of SDCL ch , no such rules have been promulgated. k. Administrative Investigative Authority Pursuant to SDCL , the Attorney General is authorized to conduct an investigation if he has reason to believe that a person has engaged in, is engaging in, or is about to engage in any act or practice declared to be unlawful by [SDCL] SDCL authorizes the issuance of an investigative demand requiring the receiving party to furnish written reports, testimony, documentation, and/or physical evidence. Moreover, the Attorney General is empowered to issue subpoenas to any person, and to conduct such hearings as are necessary to aid in an investigation or inquiry, all in furtherance of SDCL ch See SDCL The Attorney General may bring an action for a temporary or permanent injunction against any person believed to be in violation of SDCL See SDCL through -25. SD-8

9 SOUTH DAKOTA E. 5. Administrator The Attorney General is authorized to issue rules and regulations, conduct hearings and investigations, and issue subpoenas to accomplish the objectives of SDCL ch The Attorney General may also issue investigative demands and seek injunctive relief if he has reason to believe that there has been a violation of SDCL ch See SDCL , Leading Cases State v. Western Capital Corp., 290 N.W.2d 467 (S.D. 1980) (loan broker committed deceptive trade practices by failing to place cancellation provisions in bold type and by failing to provide separate notice of cancellation form; not necessary that state show actual damage suffered in order to recover civil penalties under SDCL ). Nygaard v. Sioux Valley Hosps. & Health Sys., 731 N.W.2d 184, 197 (S.D. 2007) (noting that a private civil action under SDCL specifically requires a causal connection between the alleged violation and the damages suffered ). Sisney v. Best Inc., 754 N.W.2d 804, 811 (S.D. 2008) (holding that a plaintiff must be adversely affected as a result of a deceptive practice used by the Defendants in connection with their sale or advertising of defendants merchandise). Sancom, Inc. v. Qwest Commc n Corp., 643 F. Supp. 2d 1117 (D.S.D. 2009), reconsideration granted in part and denied in part by Sancom, Inc. v. Qwest Commc n Corp., No. Civ KES, 2010 WL (D.S.D. Mar. 12, 2010) (dismissing Sancom s deceptive trade practices claim, finding that although Sancom s... claim would not require the court to engage in rate-setting per se, the court would be required to engage in action which undermines agency rate-making authority, which is precluded by the filed rate doctrine. ). D. Uniform Deceptive Trade Practices Act South Dakota has not adopted the Uniform Deceptive Trade Practices Act. South Dakota has, however, adopted statutes prohibiting deceptive acts or practices in general and further prohibiting certain itemized practices in particular. The statutes and remedies are contained in SDCL ch and are described in response to C, above Not applicable. E. Trademark Counterfeiting Except for SDCL which prohibits counterfeiting controlled SD-9

10 F. STATE TRADEMARK LAW substances and/or the labels of controlled substances, there are no statutes separate from state trademark, uniform deceptive trade practices or unfair business practices acts specifically directed to preventing counterfeiting of trademarked goods (see I, below) Not applicable. F. False Advertising 1. Statute Several South Dakota statutes address false advertising, however, none are of general applicability except to the extent that false advertising is a deceptive act under South Dakota s Deceptive Trade Practices and Consumer Protection Act (SDCL Ch ) ( Trade Practices Act or the Act ). The Act is applicable to a broad spectrum of false advertising claims. Deceptive advertising and practices using are covered in SDCL to -48, but see Gage E. Services, LLC v. Angelvision Technologies, Inc., 2013 WL (D.S.D. 2013), finding that these statutes are preempted by federal law, specifically the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM). False advertising has also been addressed with the following SDCL Statutory Chapters: Liability for Disparagement of Agricultural Food Products (SDCL 20-10A-2); Real Estate Licensing (SDCL 36 21A-71(4)); Hearing Aid Dispensers (SDCL ); Franchise Investment (SDCL 37 5B-23); Business Opportunities (SDCL 37 25A-46); Seed Standards and Labeling (SDCL 38 12A- 16); Soil Amendments (SDCL 38 19A-8); Animal Remedies (SDCL ); 43 15A Condominiums (SDCL 43 15A-25); Division of Banking (SDCL 51A 2-17); Money Lending Licenses (SDCL ); Unfair Trade Practices (SDCL to -6, -47, -50, -58). South Dakota s former false advertising statutes of general applicability were SDCL to -11; however, these statutes were officially repealed July 1, Prohibited Practices See C.3, above. SDCL declares that it is a deceptive act or practice for any person to: (1) Knowingly and intentionally act, use, or employ any deceptive act or practice, fraud, false pretense, false promises, or misrepresentation or to conceal, suppress, or omit any material fact in connection with the sale or advertisement of any SD-10

11 SOUTH DAKOTA F.2. merchandise, regardless of whether any person has in fact been mislead, deceived, or damaged thereby. SDCL The broad applicability of the Act is apparent, as merchandise is defined as any object, wares, goods, commodity, intangible, instruction, or service. SDCL (7). The Trade Practices Act identifies several acts and practices as deceptive. SDCL (2-15); see C.3, above. Pertinent here, the Act sets guidelines for advertising price reductions or reduced rates (SDCL (2-3)), prohibits advertising a rate for any lodging accommodation which is not available to the public under the terms advertised (SDCL (7)), prohibits bait and switch advertising in lodging accommodations (SDCL (8)), prohibits advertising a false business address (SDCL (11)), prohibits certain types of fraudulent insurance for prescription drugs (SDCL (12)), and prohibits unsolicited commercial s that do not include ADV: or ADV:ADLT: (for messages containing explicit sexual material ) in the first part of the subject line of such an electronic message (SDCL (13)), prohibits violations of SDCL (maximum duration of lottery) (SDCL (14)), and prohibits concealment of mandatory fees, such as resort or parking fees, upon making reservations for lodging accommodations. (SDCL (15)). Other prohibitions of specific practices of false advertising are as follows: SDCL ch A, Liability for Disparagement of Agricultural Food Products, creates a cause of action against anyone who disseminates information misrepresenting facts concerning the consumption safety of agricultural products. SDCL 20-10A-2. SDCL ch A, Real Estate Licensing, lists making any false promise or advertisement of a character such as to influence, persuade or induce a party to a transaction to the party s injury or damage as constituting unprofessional conduct. SDCL 36-21A-71(4). Unprofessional conduct is grounds for revocation of one s real estate license. SDCL 36 21A-68. SDCL ch , Hearing Aid Dispensers, prohibits persons who dispense hearing aids, including audiologists but not physicians, from [i]mitating or simulating the trademarks, trade names, brands, or labels of competitors, with the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers; or [u]sing any trade name, corporate name, trademark, or other designation, which has the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers. SDCL (18-19). SD-11

12 F.2. STATE TRADEMARK LAW SDCL ch. 37 5B, Franchise Investment, states that no person may publish a franchise advertisement after the director has found that the advertisement contains a false or misleading statement or omits to make any statement necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading and has so notified the person by written order. SDCL 37-5B-23. SDCL ch A, Business Opportunities, prohibits false advertising in connection with the offer or sale of any business opportunity. SDCL 37 25A-46. SDCL ch A, Seed Standards and Labeling, prohibits a false or misleading advertisement from being used in the sale of any seed within South Dakota. SDCL 38 12A-16. SDCL ch A, Soil Amendments. No information or statement shall appear on any package, label, delivery slip, or advertising matter nor shall any oral claim be made which is false or misleading to the purchaser as to the use, value, quality, analysis, type, or composition of the soil amendment. SDCL 38-19A-8. SDCL ch , Animal Remedies, states that No person shall disseminate any advertisement which is false or misleading in any respect, but no person or medium for the dissemination of any advertisement, except the manufacturer, packer, distributor, or seller of the article to which a false advertisement relates, is subject to the penalties for violations of this chapter. SDCL This chapter is limited to animal remedies, which are drugs, proprietary medicines, biological products, combinations of drugs and other ingredients, other than for food or cosmetic purposes which are prepared or compounded for animal use, except those exempted by the secretary of agriculture. SDCL (3). SDCL ch A, Condominiums, prohibits any person from knowingly authorizing, directing, or aiding in the false advertisement of a project offered for sale or lease. SDCL 43 15A-25. SDCL ch. 51A 2, Division of Banking, states that no bank may engage in any form of advertising which is false, misleading or deceptive. SDCL 51A SDCL ch. 54 4, Money Lending Licenses, states that no licensee may advertise any statement or representation, including rates, terms, or conditions for making or negotiating loans that is false, misleading, or deceptive, or that refers to the supervision of business by the state. SDCL SDCL to -57, comprise the Unauthorized Insurers False Advertising Process Act, which prohibits any false advertising designed to induce residents of this state to purchase insurance from SD-12

13 SOUTH DAKOTA G.1. insurers not authorized to transact business in this state. SDCL SDCL to -6 also address false advertising as it relates to insurance. 3. Limitations Nothing in The Trade Practices Act applies to any acts or practices that are lawful and permitted in South Dakota or in the United States. SDCL Also, all advertising media such as publishers, broadcasters, and printers are exempt from penalties under the Trade Practices Act, as long as they are without knowledge that the information disseminated or reproduced on the behalf of another is an unlawful act or practice as defined in SDCL SDCL Further, no action under the Act may be brought more than four years after the occurrence or discovery of the conduct which is the subject of the action. SDCL However, the Act is not retroactive and does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before July 1, SDCL Who Can Sue Under the Trade Practices Act, [a]ny person who claims to have been adversely affected by any act or a practice declared to be unlawful by SDCL shall be permitted to bring a civil action for the recovery of actual damages suffered as a result of such act or practice. SDCL Punitive damages are not recoverable under the Act. See C.4(d). 5. Remedies For available remedies under the Trade Practices Act, see C.4 (a-k). 6. Leading Cases Nygaard v. Sioux Valley Hosps. & Health Sys., 731 N.W.2d 184, 197 (S.D. 2007) (noting that private civil actions under SDCL specifically requires a causal connection between the alleged violation and the damages suffered ). G. Corporate Name Reservation Prior to Incorporation 1. Statute Corporation names may be reserved pursuant to SDCL 47-1A-402. In addition, a foreign corporation may register its name in South Dakota on an annual basis pursuant to SDCL 47-1A-403 through SDCL 47-1A Limited liability company names may be reserved pursuant SD-13

14 G.2. STATE TRADEMARK LAW to SDCL 47-34A-106, and foreign limited liability companies may register names in South Dakota pursuant to SDCL 47-34A-107. Note: South Dakota adopted the Uniform Limited Liability Company Act in 1998 (SDCL ch A) but did not repeal previously existing limited liability company statutes found at SDCL ch until Reservation A person may reserve the exclusive use of a corporate name, including a fictitious name for a foreign corporation whose corporate name is not available, by delivering an application to the Office of the Secretary of State for filing. The reservation may be transferred to another person. SDCL 47-1A-402. a. Time Period A corporate name may be reserved for up to one hundred twenty days. SDCL 47-1A-402. b. Renewal The reservation may not be extended. SDCL 47-1A-402. c. Fee The fee for filing an application for a corporate name reservation is $25. SDCL 47-1A-122(3). d. Prerequisite to Incorporation There is no requirement that a corporate name be reserved in advance of incorporation. Foreign Corporations. A corporation organized under the laws of any other state in the United States may renew its name in South Dakota on an annual basis. SDCL 47-1A The initial application by a foreign corporation to register its name in South Dakota must state: the name of the corporation; the state or country under whose laws the corporation is incorporated; the date of its incorporation and a brief statement of the business in which it is engaged. SDCL 47-1A The application must be accompanied by a certificate of existence, or a document of similar import, under the laws of the state in which the applicant is organized, issued by the official of that state having custody of records pertaining to corporations. SDCL 47-1A The fee for the registration is $25. SDCL 47-1A-122(5). The initial registration may be renewed from year to year by filing an application containing the information required in the initial application. The application for renewal may be filed between October 1 and December 31 of the previous year. SDCL 47-1A The filing fee for an application for renewal is $15. SDCL 47-1A-122(6). SD-14

15 SOUTH DAKOTA G.3. Before engaging in business in South Dakota, a foreign corporation must obtain a certificate of authority. SDCL 47-1A The fee for filing an application for a certificate of authority to transact business in South Dakota and the issuance of the certificate is $750. SDCL 47-1A-122(23). Foreign Limited Liability Companies. The initial application requirements for name registration are the same for limited liability companies as they are for corporations. SDCL 47-34A-107. Before conducting business in South Dakota, a foreign limited liability company must obtain a certificate of authority pursuant to SDCL 47-34A The application for certificate of authority must be accompanied by an annual report; the fee for filing the first annual report is $750. SDCL 47-34A Conflicting Names A foreign corporation s name must be distinguishable upon the records of the Secretary of State from the name of another corporation authorized to do business in the state. SDCL 47-1A However, the foreign corporation may seek to take advantage of SDCL 47-1A , which permits a corporation to use the same or a distinguishable corporate name already authorized for use, reservation, or registration in South Dakota, if the corporation seeking to use the same or distinguishable name obtains a written consent from the original holder of the name. The original holder of the name must change its name to one that is then distinguishable from the name of the applying corporation. SDCL 47 1A If an applicant delivers a certified copy of a final judgment that establishes the applicant s authority to use the name, SDCL 47 1A-401.2(2) allows for the use of the name. If a foreign corporation already authorized to do business in South Dakota seeks to change its name, it may not choose a name which would not be available to it on an original application for a certificate of authority in South Dakota. SDCL 47-1A If the name of a foreign corporation is not available for use in South Dakota, the directors of the foreign corporation may adopt an assumed name for use in transacting business in South Dakota, provided that the assumed name is distinguishable from the name of domestic corporations, foreign corporations authorized to do business in South Dakota, any corporate name registered or reserved for use in South Dakota, the name of any limited liability company, limited partnership, limited liability limited partnership, or limited partnership registered with the Secretary of State, or the assumed name of any other foreign corporation. SDCL 47-1A-1506 and SD-15

16 G.4. STATE TRADEMARK LAW SDCL 47-34A-1005 provides that a foreign limited liability company may apply for a certificate of authority under any name that would be available to a domestic limited liability company. A foreign limited liability company must use its real name for the certificate of authority unless its real name is unavailable, in which case the limited liability company must adopt a fictitious name pursuant to SDCL 47-34A Limited liability companies are also subject to SDCL 47-34A-1005 (addressing the use of a name that is otherwise unavailable) and may seek to take advantage of the statute. 4. Restrictions on Use of Corp. and Similar Terms There is no South Dakota law prohibiting a person from using words such as Corporation, Incorporated, or Company, or abbreviations of such words, when in fact the person using such a name is not incorporated. 5. Required or Authorized Use of Corp. or Similar Term SDCL 47-1A-401 provides that the name of any corporation shall contain the word Corporation, Company, Incorporated or Limited, or an abbreviation of one of those words. SDCL 47-1A makes the requirement applicable to foreign corporations seeking a certificate of authority to do business in South Dakota. The name for a limited liability company must contain the words limited liability company, or limited company, or the abbreviation L.L.C., LLC, L.C., or LC. Limited may be abbreviated Ltd. and company may be abbreviated Co. SDCL 47-34A-105. SDCL 47-34A-1005 makes the requirements of SDCL 47-34A-105 applicable to foreign limited liability companies as well. Corporations and limited liability companies formed to engage in certain specified professions or trades are required to use slightly different words in their names. Corporations formed for the practice of the following professions or trades must use the name Professional Company, or Professional Corporation, or some abbreviation thereof, and limited liability companies must use professional limited liability company or the abbreviation Prof. L.L.C. in their names: chiropractic corporations (SDCL 47-11A-4); optometric corporations (SDCL 47-11B-2); podiatry corporations (SDCL 47-11C-2); Physician s assistants corporations (SDCL 47-11D-2); nursing corporations (SDCL 47-11E-4); health care corporations (SDCL 47-11F-11); corporations for the practice of law (SDCL 47-13A-2(1)); and public accounting corporations (SDCL 47-13B-4). Corporations formed for the practice of medicine, dentistry, or the veterinary sciences must end SD-16

17 SOUTH DAKOTA G.8. their name with the words Incorporated (in the case of a dental corporation only), Chartered, Limited, or Professional Association, or some designated abbreviation thereof (only corporations using P.A. on July 1, 1974 may continue using abbreviation, all other corporations must use P.C. ). See SDCL , SDCL , and SDCL , respectively. In addition, if a dental corporation has two or fewer shareholders, the name of the corporation must include the surnames of all shareholders. SDCL Limited liability companies formed for the practice of medicine, dentistry, or the veterinary sciences must use the words professional limited liability company or the abbreviation Prof. L.L.C. See SDCL , SDCL , and SDCL , respectively. However, SDCL was repealed by SL 2017, SB 47, 3, effective July 1, Search Provision There is no South Dakota statute specifically providing that the Secretary of State shall conduct a search of corporate names already lawfully in use or registration for possible conflicts. Such a requirement appears to be implicit, however, in SDCL 47-1A-401.1, which states that a corporation will only be permitted to use a name which is distinguishable upon the records of the Secretary of State from any corporation, limited partnership, or limited liability company organized, authorized, or registered under South Dakota law. As a matter of policy, the Secretary of State s Office in South Dakota does in fact conduct a search of corporate names already properly in use or properly registered or reserved before permitting a new corporation or a foreign corporation seeking a certificate of authority to do business in South Dakota to use a particular name. 7. Policy Regarding Identical Words The South Dakota Secretary of State s Office states that it does not have a specific policy for determining whether a proposed corporate name is not distinguishable from a name already in use or reserved and which would therefore be prohibited under SDCL 47-1A According to officials of the Secretary of State s Office, a case-by-case judgment is made in light of the language in SDCL 47-1A A proposed corporate name must be distinguishable upon the records of the Secretary of State from an existing name of a corporation, limited partnership, or limited liability company, organized, authorized, or registered under South Dakota law. SDCL 47-1A Substantive Rights South Dakota statutes do not create any substantive rights pertaining SD-17

18 G.9. STATE TRADEMARK LAW to trademark or service mark protection as a result of merely incorporating under a specific name. Use of the name, however, may give rise to common law trademark or service mark rights. Since South Dakota s enactment of the Revised Model Business Code Act (RMBCA) in 2005, there have been no reported cases pertaining to substantive or common law rights regarding trademark protection. 9. Prohibited Terms SDCL 47-1A-401 provides that the name of a corporation may not be composed of language that gives the impression that the corporation is organized for a purpose other than that authorized by statute and the corporation s articles of incorporation. SDCL 47-1A requires that the name must be distinguishable upon the records of the Secretary of State from: the name of any domestic corporation; any foreign corporation authorized to do business in South Dakota; any corporate name reserved or registered as permitted under the laws of South Dakota, the name of any limited partnership limited liability partnership, limited liability limited partnership, certified or registered in South Dakota; or the name of any limited liability company. As indicated above, however, this prohibition may be waived if the person desiring to use such a name obtains a written consent from the original holder of the name consenting to the similar use. SDCL 47-1A Finally, SDCL 47-1A-120(4) provides that corporate names do not have to be in English if written in English letters in combination with Arabic or Roman numerals. 10. Administrative Agency Shantel Krebs, Secretary of State Att.: Corporation Division Capitol Building 500 East Capitol Avenue, Ste 204 Pierre, SD (605) Fax: (605) Fictitious Business Name Registration: (605) sdsos@state.sd.us for business filings, or BNRS@state.sd.us for ficticious business name registrations 11. Forms Forms for reserving a proposed corporate name and registering the name of a foreign corporation are available from the Secretary of State s Office at the address and website listed above. SD-18

19 SOUTH DAKOTA H Fees The fee for reserving a corporate name is $25. SDCL 47-1A-122(3). The fees for registering a foreign corporate name and renewing that registration are set forth at G.2(d), above. H. Trade Name Registration (Fictitious Name Statutes) 1. Purpose South Dakota s statutes concerning registration of fictitious or business names are contained in SDCL ch The primary purpose of these statutes is to protect the public against fraud and deceit by giving the public information as to the persons with whom they are dealing. Mellgren Plumbing Shop, Inc. v. Lewis & Tinsley, Inc., 90 N.W.2d 78 (S.D. 1958). 2. Entities Required to File SDCL states that [a]ny person regularly engaging in or conducting a business in this state shall file a fictitious name statement unless one of the following apply: (1) The name of the business plainly shows the true surname of each person interested in the business; or (2) The name of the business is on file with the secretary of state in a required business filing. The statute clearly applies to any natural person. The statute does not expressly state whether it applies to a partnership, joint venture, trust, corporation, limited liability company, or limited partnership operating under a name different from its proper legal name. There are no reported South Dakota court decisions which clarify the meaning of the statute on this issue. It would appear, in light of the ambiguity, to be good practice to file a registration under this chapter on behalf of such other types of legal entities. If a corporation, for example, conducts business under some name other than its proper corporate name, it should file a registration under this chapter that lists the proper name of the corporation as the true identity of the person conducting business under the fictitious name. The same reasoning would apply to a limited partnership conducting business under a fictitious name. Whenever there is a change of twenty-five percent or more of the ownership interest in the business operated under a fictitious name, a new filing must be made. SDCL Limited Partnerships See H.2, above. 4. Where to File The registration of a fictitious business name must be electronically SD-19

20 H.5. STATE TRADEMARK LAW filed with the secretary of state, or filed in paper form with any register of deeds in the state. SDCL As of July 1, 2004, all fictitious names registered are done so electronically with the Secretary of State. If the name is registered at the County Register of Deeds, the information received will be entered into the centralized system by county personnel. 5. Fees The filing fee is $10, which must be paid with each new filing and renewal. SDCL If a new filing is made because of a twentyfive percent or more change in ownership of the business operated under the fictitious name, as required by SDCL , a $10 fee will be charged for each filing. If filing is done online via the Secretary of State website, only credit card payment using Visa, Mastercard or Discover is accepted. 6. Publication There are no publication requirements for a fictitious name registration. 7. Foreign Corporations The requirements regarding the registration of business names apply to both South Dakota and foreign corporations. See H.2, above; SDCL (requiring that any person doing business in South Dakota shall be subject to these requirements); see also SDCL 47-1A-1506 (relating to requirements of foreign corporation names). 8. Civil Penalties A person or firm which has failed to file the fictitious registration required by SDCL to -2 may not maintain any legal action in the name under which the business is conducted... [or] recover anything or enforce any right claimed to be due or arising out of the operation of the business. SDCL The disability is cured by making the proper filing prior to bringing an action. See SDCL Criminal Penalties Failure to file a ficticious name registration is a Class 2 misdemeanor. SDCL A Class 2 misdemeanor is punishable by a maximum of thirty days imprisonment in a county jail or a fine of $500, or both. SDCL Certificate All records, whether filed electronically with the Secretary of State or SD-20

21 SOUTH DAKOTA H.15. by paper forms with a county register of deeds, are maintained by the Secretary of State in an electronic filing system. See SDCL No certificate of a fictitious name or similar document is issued. 11. Renewal or Deletion The filing of a fictitious name is effective for five years and may be renewed every fifth year after the initial filing. SDCL The statutes do not explicitly state that a filing should be deleted when the fictitious name is discontinued. However, SDCL requires a new filing when the same name is used after any change of twentyfive percent or more of the ownership interest in the business. It would be good practice to file a statement of cancellation of fictitious name in light of SDCL , which states that all persons interested in a business included within the scope of these statutes shall at all times remain liable for any obligations of that business prior to the filing of a verified statement showing that they are no longer interested. 12. Substantive Rights South Dakota statutes do not explicitly provide that filing of a fictitious business name creates any substantive right in the use of that name. Use of the name after filing may create common law rights to the name, an outcome suggested by Bidwell v. Collins, 164 N.W. 969 (S.D. 1917), which held that as between a corporation and a partnership which was organized prior to the corporation but which did not file a statement under these statutes until after incorporation of the corporation, the corporation obtained the right to use the name in question. 13. Search It is generally the practice of registers of deeds to conduct searches of names already filed if requested, and a request for a search may be made orally, in person, or in writing. If no request to search prior registrations is made, the register of deeds does not search prior registrations to see if there is a conflict with a new registration. The Secretary of State website also provides a search link, available to the public, for determining if the name is already in use. See Agent Not required. 15. Mail Registration Although it is not explicitly authorized by statute, it is the common SD-21

22 I. STATE TRADEMARK LAW practice of register of deeds offices in South Dakota to permit registration or filing under these statutes by mail. I. State Statutory and/or Common Law Unfair Competition or Passing Off Provisions 1. Statutory Section SDCL provides that it is a Class 1 misdemeanor to: (1) intentionally forge or counterfeit any trademark with intent to pass off any goods to which such a forged or counterfeited trademark is affixed; (2) with intent to defraud keep any dies, plate, or brand or imitation of the trademark for the purpose of counterfeiting the trademark, selling such a trademark when counterfeited, or affixing the trademark to any goods and selling them as the genuine goods; (3) fraudulently use the genuine trademark of another with intent to sell or offer for sale or disposal any goods as genuine which are not the original and genuine goods of the person to whom the trademark properly belongs; (4) sell or keep for sale any goods upon which any counterfeit trademark has been affixed, intended to represent such goods as the genuine goods of another, knowing the trademark to be counterfeited. SDCL provides that it shall be a Class 1 misdemeanor for every person who with intent to defraud affixes to any goods any label, stamp, brand, imprint, printed wrapper, ticket, or mark which designates the goods by any word or token used by any other person as his trademark, and for every person who knowingly sells or keeps or offers for sale any such goods or containers with any such label, stamp, brand, imprint, printed wrapper, ticket or mark affixed to or upon it, in case the person affixing such mark or so selling, exposing or offering for sale such goods or containers was not the first to employ or use such words as his trademark. As an additional punishment, any such person is liable to the party aggrieved in the penal sum of $100 for each and every offense, to be recovered by him in a civil action. SDCL Derivation The SDCL and -3 date back to 1919 and probably derive from Pennsylvania law. SD Rev. Code , 30, 31 & Intent Both SDCL and -3 require intent to defraud as an element of the cause of action contained therein. SD-22

23 SOUTH DAKOTA I Defenses SDCL ch does not specifically address nor recognize any partial or complete defenses. However, in Strom v. Canyon Amusement Corp., 79 N.W.2d 698 (S.D. 1956), the court recognized the defense of invalidity of the mark and held that the mere registration of a mark under state law did not automatically establish the validity of the mark. Further, in SweeTarts v. Sunline, Inc., 380 F.2d 923 (8th Cir. 1967), the court recognized the defense of good faith insofar as it applied to independently developed market areas. Additionally, the court in Zweck v. Aberdeen Laundry & Dry Cleaning Co., 183 N.W. 118 (S.D. 1921) found that laches in commencement of an act did not preclude injunction restraining use of the mark. 5. Remedies SDCL allows any injured party to recover damages caused by the fraudulent procurement of a mark. An owner of a properly registered trademark may sue to enjoin counterfeits or imitations. SDCL Additional civil penalties are provided under SDCL and -26, including the right to sue for lost profits and damages. Special rules apply to marked and registered containers. SDCL through Common Law Action for Unfair Competition SDCL specifically recognizes common law rights in marks and the enforcement of those rights at common law. In SweeTarts v. Sunline, Inc., 380 F.2d 923 (8th Cir. 1967), the court recognized a technical trademark, i.e., a mark which is arbitrary, unique, distinct, and non-descriptive, as a common law property right, entitled to protection as against a subsequent user when a likelihood of confusion among consumers is created. The court in Phipps Bros. v. Nelson s Oil and Gas, 508 N.W.2d 885 (S.D. 1993) held that proof of likelihood of confusion does not require actual confusion, but there must be substantial likelihood of confusion. 7. Elements of a Common Law Cause of Action Under a common law cause of action based upon the infringement of a technical trademark, it must be established: (1) that a mark exists; (2) that the mark is arbitrary, unique, distinct, and non-descriptive; and (3) that the user is entitled to protection as against a subsequent user, i.e., that the user first appropriated the mark for use in connection with a particular business and that the use by the subsequent user will create a likelihood of confusion. The user need not establish actual confusion or actual monetary injury. See SweeTarts v. Sunline, Inc., 380 SD-23