Amicus Curiae Brief — Abitron Austria GmbH, et al., Petitioners v. Hetronic International, Inc.

No. 21-1043

IN THE

Supreme Court of the United States

____________________

ABITRON AUSTRIA GMBH, et al.,

Petitioners,

v.

HETRONIC INTERNATIONAL, INC.,

Respondent.

____________________

On Writ Of Certiorari

to the United States Court of Appeals

for the Tenth Circuit

____________________

BRIEF FOR THE AMERICAN INTELLECTUAL

PROPERTY LAW ASSOCIATION AS

AMICUS CURIAE IN SUPPORT

OF NONE OF THE PARTIES

____________________

BRIAN H. BATZLI

President

AMERICAN INTELLECTUAL

PROPERTY LAW ASSOCIATION

1400 Crystal Drive

Suite 600

Arlington, VA 22202

(703) 415-0780

DECEMBER 27, 2022

RICHARD S. STOCKTON

Counsel of Record

BANNER & WITCOFF, LTD.

71 S. Wacker Dr.

Suite 3600

Chicago, IL 60606

(312) 463-5000

rstockton@bannerwitcoff.com

Counsel for Amicus Curiae

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ..................................... iii

INTEREST OF AMICUS CURIAE ............................1

SUMMARY OF ARGUMENT.....................................2

ARGUMENT ...............................................................4

I.

THE LANHAM ACT APPLIES EXTRATERRITORIALLY................................................5

A. The Lanham Act Rebuts the Presumption Against Extraterritoriality ............6

B. This Court Already Concluded that the

Lanham Act Has Extraterritorial Effect

................................................................9

C. The Lanham Act Should Not Be Truncated at the U.S. Border ......................11

II.

THE LANHAM ACT DOES NOT APPLY TO

ALL FOREIGN COMMERCE ....................13

A. The Lanham Act Applies Only to Foreign Commerce Having a Substantial

Effect on U.S. Commerce .....................13

B. The Lanham Act’s Extraterritoriality

Does Not Depend on a Defendant’s U.S.

Citizenship ...........................................16

C. Most Circuits Already Limit the Lanham Act’s Reach to Foreign Commerce

ii

That Has a Substantial Effect on U.S.

Commerce ............................................18

III. INFRINGEMENT REMEDIES SHOULD

BE SEPARATELY ADDRESSED ..............22

IV. THE COURT SHOULD REMAND TO DETERMINE WHETHER THERE WAS A

SUBSTANTIAL EFFECT ON U.S. COMMERCE AND TO REASSESS ANY REMEDY .............................................................25

CONCLUSION ..........................................................27

iii

TABLE OF AUTHORITIES

Page(s)

Constitutional Provisions

U.S. Const., Art. I, § 8, cl. 3 .......................... 3, 4, 7, 17

U.S. Const., Art. I, § 8, cl. 18 ....................................17

Cases

Aerogroup Int’l, Inc. v. Marlboro Footworks,

Ltd., 152 F.3d 948 (Fed. Cir. 1998) ...................... 23

Am. Rice, Inc. v. Ark. Rice Growers Coop.

Ass’n, 701 F.2d 408 (5th Cir. 1983) ...................... 24

American Banana Co. v. United Fruit Co.,

213 U.S. 347 (1909) ............................................... 22

Bacardi Corp. of Am. v. Domenech, 311 U.S.

150 (1940) .............................................................. 10

Belmora LLC v. Bayer Consumer Care AG,

819 F.3d 697 (4th Cir. 2016) ................................. 13

Bluetooth SIG Inc. v. FCA US LLC, 30

F.4th 870 (9th Cir. Apr. 6, 2022) .......................... 30

Bourjois & Co. v. Katzel, 260 U.S. 689

(1923). .................................................................... 14

E.E.O.C. v. Arabian Am. Oil Co., 499 U.S.

244 (1991) ........................................................ 12, 13

iv

Grupo Gigante S.A. de C.V. v. Dallo & Co.,

Inc. et al., 391 F.3d 1088 (9th Cir. 2000) ....... 10, 13

Havana Club Holding, S.A. v. Galleon S.A.,

203 F.3d 116 (2d Cir. 2000) .................................... 9

Int'l Cafe, S.A.L. v. Hard Rock Cafe Int’l,

(U.S.A.), Inc., 252 F.3d 1274 (11th Cir.

2001) ...................................................................... 23

ITC Ltd. v. Punchgini, Inc., 482 F.3d 135

(2d Cir. 2007)......................................................... 10

Kiobel v. Royal Dutch Petroleum Co., 569

U.S. 108 (2013) ........................................................ 5

Love v. Assoc. Newspapers, Ltd., 611 F.3d

601 (9th Cir. 2010) ................................................ 27

Matal v. Tam, 137 S. Ct. 1744 (2017)........................ 4

Morris v. Altstedter, 156 N.Y.S. 1103 (Sup.

Ct.) ......................................................................... 22

Morrison v. Nat’l Australia Bank Ltd., 561

U.S. 247 (2010) ............................................... passim

N.Y. Cent. R. Co. v. Chisholm, 268 U.S. 29

(1925) ....................................................................... 8

Nintendo of Am., Inc. v. Aeropower Co., 34

F.3d 246 (4th Cir. 1994) ........................................ 24

Pfizer Inc. v. Government of India, 434 U.S.

308 (1978) ................................................................ 8

v

RJR Nabisco, Inc. v. European Community,

579 U.S. 325 (2016) ........................................ passim

Romag Fasteners, Inc. v. Fossil, Inc., 140 S.

Ct. 1492 (2020) .................................................. 4, 28

Skiriotes v. State of Florida, 313 U.S. 69, 73

(1941) ..................................................................... 21

Steele v. Bulova Watch Co., 344 U.S. 280,

287 (1952) ....................................................... passim

Timberlane Lumber Co. v. Bank of Am.

Nat’l Trust & Savings Ass’n, 549 F.2d 597

(9th Cir. 1976) ....................................................... 24

Tire Eng’g & Distrib., LLC v. Shandong

Linglong Rubber Co., 682 F.3d 292 (4th

Cir. 2012) ............................................................... 27

Trade-Mark Cases, 100 U.S. 82 (1879).................... 15

Trader Joe’s Co. v. Hallatt, 835 F.3d 960

(9th Cir. 2016 ........................................................ 24

United States v. Baston, 818 F.3d 651 (11th

Cir. 2016) ............................................................... 18

United States v. Bollinger, 798 F.3d 201

(4th Cir. 2015) ....................................................... 18

United States v. Durham, 902 F.3d 1180

(10th Cir. 2018) ..................................................... 17

United States v. Lopez, 514 U.S. 549 (1995) ........... 17

vi

United States v. Park, 938 F.3d 354 (D.C.

Cir. 2019) ............................................................... 17

United States v. Pendleton, 658 F.3d 299

(3rd Cir. 2011) ....................................................... 18

Vacuum Oil Co. v. Eagle Oil Co., 154 F. 867

(C.C.D.N.J. 1907) .................................................. 21

WesternGeco LLC v. ION Geophysical

Corp., 138 S. Ct. 2129 (2018) .............................. 5, 6

Statutes

1125(a)(1)(A) ........................................................... 4, 7

15 U.S.C. § 1116(a)................................................... 31

15 U.S.C. § 1126(b)..................................................... 9

15 U.S.C. § 1126(e) ................................................... 11

15 U.S.C. § 1127 ............................................. 7, 16, 33

15 U.S.C. § 78b(2)....................................................... 8

15 U.S.C. §§ 1051 et seq. ............................................ 2

15 U.S.C. §§ 1114(1)(a) .......................................... 4, 7

18 U.S.C. § 1962 ......................................................... 9

vii

Other Authorities

A. Colangelo, The Foreign Commerce

Clause, 96 VA. L. REV. 949 (2010)

(evaluating “substantial effect” and

Foreign Commerce Clause) .................................. 18

Agreement on Trade-Related Aspects of

Intellectual Property Rights, Apr. 15,

1994 ....................................................................... 17

General Inter-American Convention for

Trade Mark and Commercial Protection,

Feb. 20, 1929, 46 Stat. 2907 ................................. 17

J. McCarthy, Trademarks and Unfair

Competition § 29:2, at 29-6 (5th ed. 2022)

(McCarthy) ............................................................ 10

Lockridge, Honoring International

Obligations in U.S. Trademark Law: How

the Lanham Act Protects Well-Known

Foreign Marks, 84 St. John’s L. Rev. 1347 .......... 10

McBee v. Delica Co., 417 F.3d 107, 117 (1st

Cir. 2005) ............................................................... 20

Paris Convention for the Protection of

Industrial Property, Mar. 20, 1883, as

revised July 14, 1967, 21 U.S.T. 1583 .................. 17

S. Rep. No. 79-1333 (1946)......................................... 9

Trade-Mark Act of Feb. 20, 1905, ch. 592, §

1 ............................................................................. 15

viii

Trade-Mark Act of Mar. 3, 1881, ch. 138, 21

Stat. 502 ................................................................ 15

INTEREST OF THE AMICUS CURIAE

Amicus curiae, the American Intellectual Property

Law Association (“AIPLA”), is a national bar association representing the interests of approximately 7,000

members in private and corporate practice, governmental service, and academia worldwide. 1 AIPLA’s

members represent a diverse spectrum of individuals,

companies, and institutions involved directly or indirectly in the practice of trademark, patent, and copyright law, as well as other fields of law affecting intellectual property. Our members represent both owners

and users of intellectual property. AIPLA’s mission

includes providing courts with objective analyses to

promote an intellectual property system that stimulates and rewards invention, creativity, and investment while accommodating the public’s interest in

healthy competition, reasonable costs, and basic fairness. AIPLA has no stake in any of the parties to this

litigation or in the result of the case. AIPLA’s only interest is to promote a correct and consistent interpretation of intellectual property law.

1 This brief was not authored, in whole or in part, by counsel for

a party. No party, and no counsel for a party, made a monetary

contribution intended to fund the preparation or submission of

this brief. Moreover, after reasonable investigation, AIPLA believes that (i) AIPLA, its Board and Amicus Committee members

who voted to file this brief or authored this brief, and AIPLA’s

counsel (and their law firms or employers) do not represent any

party to this litigation and (ii) no person other than AIPLA, those

members and AIPLA’s counsel (and their law firms or employers) made a monetary contribution intended to fund the preparation or submission of this brief. All parties provided written

consent to AIPLA to file this brief.

2

SUMMARY OF ARGUMENT

The fundamental issue before this Court is

whether causes of action for trademark infringement

in the Lanham Act, 15 U.S.C. §§ 1051 et seq., apply

extraterritorially, i.e., whether they can reach conduct outside of the United States.

Under this Court’s recent two-step framework for

analyzing the extraterritoriality of a statute, see Morrison v. Nat’l Australia Bank Ltd., 561 U.S. 247

(2010), the text of the Lanham Act rebuts the presumption against extraterritoriality. Accordingly, the

Lanham Act applies extraterritorially. This Court already reached the same conclusion many years before

Morrison. See Steele v. Bulova Watch Co., 344 U.S.

280, 287 (1952).

But the Lanham Act’s extraterritorial scope is not

limitless. Under the second step of the Morrison

framework, it “turns on the limits Congress has (or

has not) imposed on the statute’s foreign application

… .” RJR Nabisco, Inc. v. European Community, 579

U.S. 325, 337 (2016). These limits are the limits of

Congressional power, e.g., “to regulate commerce with

foreign Nations … .” U.S. Const., Art. I, § 8, cl. 3.

Various tests for Lanham Act extraterritoriality

proliferated in the circuits since Steele, see, e.g., Vanity Fair Mills, Inc. v. T. Eaton Co., 234 F.2d 633, 642

(2d Cir. 1956), but they have much in common. Recast

within the Morrison framework, they support the conclusion that foreign commerce must have a substantial effect on U.S. commerce in order to be actionable

under the Lanham Act.

3

Finally, just because the Lanham Act applies extraterritorially and the challenged conduct may have

a substantial effect on U.S. commerce does not mean

that monetary and injunctive relief for the full scope

of any infringements should always be awarded. Rather, remedies should be tailored to the situation, taking into account, e.g., international comity.

In view of the above, this Court should remand to

determine whether Petitioners’ conduct had a “substantial effect” on U.S. commerce within the Morrison

framework, and also to review the rationale for the

award below.

4

ARGUMENT

The Commerce Clause authorizes Congress “to

regulate commerce with foreign Nations, and among

the several states, and with the Indian tribes.” U.S.

Const., Art. I, § 8, cl. 3.

For more than 150 years, Congress has enacted

laws to make the use of spurious trademarks actionable. The Lanham Act culminates these laws. It is the

“foundation of current federal trademark law.” Matal

v. Tam, 137 S. Ct. 1744, 1752 (2017).

The Lanham Act created causes of action for

trademark infringement and unfair competition. See

15 U.S.C. §§ 1114(1)(a) (registered trademark infringement), 1125(a)(1)(A) (trademark infringement

and unfair competition). 2 A defendant infringes if its

“use in commerce” of a trademark or other device “is

likely to cause confusion, or to cause mistake, or to

deceive” with regard to a plaintiff’s trademark. Id. “A

district court may award a winning plaintiff injunctive relief, damages or the defendant’s ill-gotten profits.” Romag Fasteners, Inc. v. Fossil, Inc., 140 S. Ct.

1492, 1494 (2020).

The fundamental issue in this case is whether

these Lanham Act causes of action apply extraterritorially, i.e., whether they can reach conduct outside of

the United States. The Act’s text and this Court’s

2 For purposes of extraterritoriality in this case, there is no rele-

vant distinction between these sections.

5

precedent establish that they can. Yet, the Lanham

Act’s reach and its remedies are not limitless.

THE LANHAM ACT APPLIES EXTRATERRITORIALLY

This Court’s two-step Morrison framework evaluates the extraterritoriality of statutes. See, e.g., Morrison, 561 U.S. 247 (Exchange Act § 10(b) cause of action did not apply extraterritorially); Kiobel v. Royal

Dutch Petroleum Co., 569 U.S. 108 (2013) (jurisdictional Alien Tort Statute did not apply extraterritorially); RJR, 579 U.S. 325 (RICO public causes of action

applies extraterritorially); WesternGeco LLC v. ION

Geophysical Corp., 138 S. Ct. 2129, 2142 (2018) (applying Morrison framework to patent remedy and “domestic supply” cause of action).

The first step is “whether the presumption

against extraterritoriality has been rebutted—that is,

whether the statute gives a clear, affirmative indication that it applies extraterritorially.” RJR, 579 U.S.

at 337.

If the presumption is rebutted, the second step is

to determine the statute’s scope, which “turns on the

limits Congress has (or has not) imposed on the statute’s foreign application, and not on the statute’s ‘focus.’” Id. at 337-38. However, if the presumption is not

rebutted, the second step is to determine whether

there is a “domestic application” of the statute by

identifying its “focus” and asking whether “the conduct relevant to the statute’s focus occurred in the

United States … .” Id. (quoting Morrison, 561 U.S. at

267, n. 9); see also WesternGeco, 138 S. Ct. at 2136,

2138 (the “focus” of patent § 284 remedy and §

6

271(f)(2) cause of action is “the act of exporting [otherwise infringing] components from the United

States”).

A. THE LANHAM ACT REBUTS THE PRESUMPTION AGAINST EXTRATERRITORIALITY

Under the first step of the Morrison framework,

the Lanham Act “gives a clear, affirmative indication”

that it applies extraterritorially. Morrison, 561 U.S.

at 267.

The Lanham Act created causes of action against

defendants who “use in commerce” either “any reproduction, counterfeit, copy, or colorable imitation of a

registered mark” or else, e.g., any “word, term, name,

symbol, or device” that is “likely to cause confusion, or

to cause mistake, or to deceive … .” 15 U.S.C. §§

1114(1)(a), 1125(a)(1)(A).

According to the Lanham Act, “commerce” is “all

commerce which may lawfully be regulated by Congress.” 15 U.S.C. § 1127. Like a jurisdictional longarm statute, the “sweeping reach” of the Lanham Act

extends its possible effect to the limits of congressional power. Steele, 344 U.S. 280, 287 (1952) (applying Lanham Act extraterritorially). And congressional power includes, e.g., the power “to regulate

commerce with foreign Nations … .” U.S. Const., Art.

I, § 8, cl. 3. Like RICO in RJR, “it is hard to imagine

how Congress could have more clearly indicated that

it intended [the Lanham Act] to have (some) extraterritorial effect.” RJR, 579 U.S. at 339.

7

Congress codified this intent in the Lanham Act:

“[t]he intent of this chapter [i.e., the Lanham Act] is

to regulate commerce within the control of Congress

by making actionable the deceptive and misleading

use of marks in such commerce.” 15 U.S.C. § 1127 (emphasis added). Unlike Morrison, where an ambiguous

statutory intent mitigated extraterritoriality, this extraterritorial intent is unequivocal and expressly targeted at the Lanham Act’s causes of action. See Morrison, 561 U.S. at 263 (“national public interest”); 15

U.S.C. § 78b(2).

The Lanham Act’s infusion of extraterritoriality

into “use in commerce” surpasses mere references to

foreign or interstate commerce that this Court has

held to be insufficient to trigger extraterritorial effect.

See, e.g., Morrison, 561 U.S. at 262-63 (“foreign commerce” reference in definition of “interstate commerce” insufficient); RJR, 579 U.S. at 353 (reference

to trade with “foreign nations” in Pfizer Inc. v. Government of India, 434 U.S. 308, 314-15 (1978) insufficient in itself); N.Y. Cent. R. Co. v. Chisholm, 268 U.S.

29 (1925) (“interstate commerce” reference insufficient).

Moreover, Sections 32(1)(a) and 43(a)(1)(A) of the

Lanham Act need not expressly rebut the presumption. “While the presumption can be overcome only by

a clear indication of extraterritorial effect, an express

statement of extraterritoriality is not essential. ‘Assuredly context can be consulted as well.’” RJR, 579

U.S. at 340 (citing Morrison, 561 U.S. at 265). In RJR,

for example, this Court held that the RICO public

cause of action applied extraterritorially based on extended definitions of “racketeering activity” found

8

elsewhere. See RJR, 579 U.S. at 340 (finding parts of

RICO cause of action under 18 U.S.C. § 1962 extraterritorial based on context from, e.g., §§ 1956, 1957 and

2339B).

The remainder of the Lanham Act also supports

extraterritoriality. For example, Section 44(b) recognizes the bedrock trademark treaty principle of “national treatment” and confirms that the benefits of the

Lanham Act—including suing under its causes of action—extend to foreign as well as domestic entities.

See 15 U.S.C. § 1126(b). The lack of similar language

in RICO was “critical” in distinguishing the extraterritoriality of the Clayton Act’s private cause of action

with RICO’s private cause of action. RJR, 579 U.S. at

352-53.

Moreover, Section 44(b) extends the benefits of

the Lanham Act to foreign entities “to the extent necessary to give effect” to provisions of trademark treaties and conventions “in addition to the rights to

which any owner of a mark is otherwise entitled” under the Lanham Act. 15 U.S.C. § 1126(b); see also Havana Club Holding, S.A. v. Galleon S.A., 203 F.3d

116, 128 (2d Cir. 2000) (“Congress intended the Lanham Act ‘[t]o carry out by statute our international

commitments … .’”) (quoting S. Rep. No. 79-1333

(1946)).

These benefits have included recognizing a foreign entity’s Lanham Act cause of action based on Article 6bis of the Paris Convention, which prohibits infringement of a well-known foreign mark, despite no

“domestic use of the mark” being alleged. Grupo Gigante S.A. de C.V. v. Dallo & Co., Inc. et al., 391 F.3d

1088, 1094, 1098-99 (9th Cir. 2000); cf. ITC Ltd. v.

9

Punchgini, Inc., 482 F.3d 135, 142 (2d Cir. 2007); see

also J. McCarthy, Trademarks and Unfair Competition § 29:2, at 29-6 (5th ed. 2022) (McCarthy); L.

Lockridge, Honoring International Obligations in

U.S. Trademark Law: How the Lanham Act Protects

Well-Known Foreign Marks, 84 St. John’s L. Rev.

1347; Bacardi Corp. of Am. v. Domenech, 311 U.S. 150

(1940) (prior to the Lanham Act, General Inter-American Convention for Trade Mark and Commercial Protection held to be self-executing and applied “to protect the foreign trade marks which fall within the

treaty’s purview”).

Some benefits of the Lanham Act are actually better for foreign entities. For example, Section 44(e) allows a foreign entity to obtain a U.S. trademark registration with just a “bona fide intention to use the

mark in commerce” rather than the actual “use in

commerce” that is otherwise required. 15 U.S.C. §

1126(e).

All these provisions support the Lanham Act’s extraterritorial applicability.

B. THIS COURT ALREADY CONCLUDED THAT

THE LANHAM ACT HAS EXTRATERRITORIAL

EFFECT

In Steele v. Bulova, this Court already concluded

that the Lanham Act has extraterritorial effect based

on the “sweeping reach” of “commerce” in the Lanham

Act. Steele, 344 U.S. at 286-87. The plaintiff, Bulova

Watch Co. (“Bulova”), sold “BULOVA” watches worldwide and registered “BULOVA” trademarks in many

jurisdictions—including the United States but not

10

Mexico. The lead defendant, Sidney Steele, “conducted a watch business in Mexico City where, without Bulova's authorization and with the purpose of deceiving the buying public, he stamped the name

‘Bulova’ on watches there assembled and sold.” Id. at

281. Steele also registered “BULOVA” as a trademark

for watches in Mexico. Ibid. However, the Supreme

Court of Mexico nullified Steele’s Mexican trademark

registration prior to this Court’s decision. See Steele,

344 U.S. at 285; see also Part III, infra.

Recognizing “that the legislation of Congress will

not extend beyond the boundaries of the United

States unless a contrary legislative intent appears,”

i.e., the presumption against extraterritoriality, this

Court concluded that Steele’s “activities, when viewed

as a whole, fall within the jurisdictional scope of the

Lanham Act.” Steele, 344 U.S. at 285 (citations omitted).

Following Steele, this Court reasserted that the

Lanham Act’s “’broad jurisdictional grant’ 3 and its

‘sweeping reach into all commerce which may be lawfully be regulated by Congress’” makes it an exemplar

of extraterritorial applicability. E.E.O.C. v. Arabian

Am. Oil Co., 499 U.S. 244, 252 (1991) (“Aramco”) (concluding that Title VII cause of action did not rebut the

3 Morrison concluded that extraterritoriality is a merits ques-

tion, not a jurisdictional, question. Morrison, 561 U.S. at 253-54.

But the difference was inconsequential in Morrison. Ibid. It is

also inconsequential here.

11

presumption against extraterritoriality)

Steele, 344 U.S. at 286). 4

(citing

Steele remains good law. Morrison and its progeny

have not overruled or otherwise limited it. In fact,

Morrison acknowledged Steele as “interpreting [the

Lanham Act] to have extraterritorial effect.” Morrison, 561 U.S. at 271, n. 11 (citing Aramco, 499 U.S. at

252).

Other precedent also supports the Lanham Act’s

extraterritoriality. For example, a lack of U.S. commerce by the plaintiff is not always fatal (i.e., foreign

commerce may be sufficient) to a Lanham Act cause

of action. See, e.g., Grupo Gigante, 391 F.3d at 1088;

Belmora LLC v. Bayer Consumer Care AG, 819 F.3d

697 (4th Cir. 2016). It would be anomalous if a plaintiff’s foreign commerce sufficed for a Lanham Act

cause of action, but a defendant’s foreign commerce

could never lead to liability.

C. THE LANHAM ACT SHOULD NOT BE TRUNCATED AT THE US BORDER

Writing for the Court in Bourjois v. Katzel, Justice Holmes stated that a trademark “deals with a delicate matter that may be of great value but that is

easily destroyed, and therefore should be protected

4 In Aramco, the United States attempted to equate the “broad

jurisdictional grant in the Lanham Act” and its extraterritorial

applicability with provisions in Title VII, but the Court disagreed. See Aramco, 499 U.S. at 252 (rejecting comparison); see

also id., Brief for United States at 12 (citing Steele, 344 U.S. at

286).

12

with corresponding care.” Bourjois & Co. v. Katzel,

260 U.S. 689, 692 (1923).

Especially in an era of increasing global commerce, the Lanham Act should not be truncated at the

U.S. border. Because trademarks are delicate and valuable, the Lanham Act must have the flexibility to

protect trademark owners not only domestically, but

also abroad when necessary and consistent with Constitutional authority.

Some “first to file” jurisdictions, as is China, require obtaining a local trademark registration before

any rights will accrue, regardless of actual use in that

jurisdiction. Such trademark regimes can give rise to

“trademark squatting,” where a third party beats a

trademark owner to the local trademark office and

then obtains the exclusive right to use that trademark. The third party would then have the exclusive

right to export to, e.g., the U.S. In this situation, a

U.S. trademark owner would be relegated to either

seeking to stop products as they enter the U.S. or recapturing its rights in a Chinese court proceeding.

Both options are fraught with difficulty, especially if

intermediaries are involved.

Other jurisdictions may have less developed

trademark regimes that do not yet recognize, e.g.,

trade dress or other nontraditional marks. And still

other jurisdictions may be unwilling to protect trademarks.

Since the first federal trademark laws were enacted more than 150 years ago, they have always applied to foreign commerce. In fact, after the TradeMark Cases invalidated the first federal trademark

law based on an alleged overreach into intrastate

13

commerce, the subsequent Trademark Act of 1881

only applied to foreign commerce and commerce with

the Indian tribes. See Trade-Mark Cases, 100 U.S. 82,

96 (1879); see also Trade-Mark Act of Mar. 3, 1881, ch.

138, 21 Stat. 502 (creating action in equity “to enjoin

the wrongful use of [a trademark] used in foreign commerce or commerce with Indian tribes” but not interstate commerce). During this time, international intellectual property treaties such as the Paris Convention were drafted, and “national treatment” provisions put the onus on the U.S. to enact better trademark laws lest American traders be disadvantaged in

international commerce. And by 1905, when the next

trademark act was enacted, Congress had recognized

the interplay of foreign and domestic commerce and

expanded the law to also include “interstate” commerce. Trade-Mark Act of Feb. 20, 1905, ch. 592, § 1.

Based on the need to protect the public from spurious knockoffs, the private interest in protecting

trademark rights, and the longstanding relationship

between trademarks and foreign commerce, the Lanham Act should be given some extraterritorial effect.

THE LANHAM ACT DOES NOT APPLY TO ALL

FOREIGN COMMERCE

Although Sections 32(1)(a) and 43(a)(1)(A) of the

Lanham Act apply extraterritorially, they do not apply to “literally all commerce occurring abroad.” RJR,

579 U.S. at 344; see also Pet. App. 23a (“In other

words, just because a statute can apply extraterritorially doesn’t mean that it always will.”).

14

A. THE LANHAM ACT APPLIES ONLY TO FOREIGN COMMERCE HAVING A SUBSTANTIAL

EFFECT ON U.S. COMMERCE

The second step of the Morrison framework for extraterritorial statutes is to determine the statute’s

scope. See RJR, 579 U.S. at 337. This “turns on the

limits Congress has (or has not) imposed on the statute’s foreign application … .” Ibid.

As stated previously, the outer limits of Sections

32(1)(a) and 43(a)(1)(A) of the Lanham Act are the

limits of congressional power, i.e., “all commerce

which may lawfully be regulated by Congress.” 15

U.S.C. § 1127. Through the Commerce Clause, for example, Congress may lawfully “regulate commerce

with foreign Nations, and among the several states,

and with the Indian tribes.” U.S. Const., Art. I, § 8, cl.

3. 5 This includes regulating economic “activity that

substantially affects interstate commerce.” United

States v. Lopez, 514 U.S. 549, 559 (1995). This also

includes regulating foreign commerce having a “substantial effect” on U.S. commerce. See, e.g., United

States v. Park, 938 F.3d 354, 371 (D.C. Cir. 2019);

5 The United States has acceded to many treaties relating to

trademarks. See, e.g., the Paris Convention for the Protection of

Industrial Property, Mar. 20, 1883, as revised July 14, 1967, 21

U.S.T. 1583; General Inter-American Convention for Trade

Mark and Commercial Protection, Feb. 20, 1929, 46 Stat. 2907;

Agreement on Trade-Related Aspects of Intellectual Property

Rights, Apr. 15, 1994. Accordingly, another Constitutional

ground for Congress to regulate under the Lanham Act is the

treaty power effectuated via the Necessary and Proper Clause.

See U.S. Const., Art. I, § 8, cl. 18.

15

United States v. Durham, 902 F.3d 1180, 1192-93

(10th Cir. 2018) (“substantial effect”); United States v.

Pendleton, 658 F.3d 299, 311 (3rd Cir. 2011); United

States v. Bollinger, 798 F.3d 201, 208 (4th Cir. 2015)

(“demonstrabl[e] [e]ffect[]”); United States v. Baston,

818 F.3d 651, 668 (11th Cir. 2016) (“substantial effect”); see also A. Colangelo, The Foreign Commerce

Clause, 96 VA. L. REV. 949 (2010) (evaluating “substantial effect” and Foreign Commerce Clause).

RJR identified limits on congressional power to

regulate foreign commerce. RJR, 579 U.S. at 344. Despite being extraterritorial, RICO causes of action in

RJR did not reach “literally all commerce occurring

abroad.” Ibid. Instead, one of the subjects of RICO, the

RICO enterprise, was required to “engage in, or affect

in some significant way, commerce directly involving

the United States—e.g., commerce between the

United States and a foreign country. Enterprises

whose activities lack that anchor to U.S. commerce

cannot sustain a RICO violation.” Ibid.

Like RICO, the Lanham Act does not reach all foreign commerce. In 70 years since Steele, the circuits

applied various tests to determine what foreign commerce the Lanham Act does reach. 6

For example, the Second Circuit considers three

factors: “(1) whether the defendant's conduct had a

substantial effect on U.S. commerce; (2) whether the

6 Despite this proliferation, the tests have much in common. In-

deed, no one alleges a true circuit split. See, e.g., Brief for Petitioners at 17 (the circuits are “fractured” but not split); Brief for

United States at 21 (the circuits have an “array of related” tests).

16

defendant was a United States citizen; and (3)

whether there was a conflict with trademark rights

established under the relevant foreign law.” Vanity

Fair Mills, 234 F.2d at 642.

Recast in view of Morrison, two of these factors

should fall out of the merits analysis: (a) as discussed

in Part II-B infra, extraterritoriality should not depend on U.S. citizenship, and (b) as discussed in Part

III infra, international comity is better addressed

during consideration of the remedy. What remains is

the “effect” factor, and as discussed in Part II-C infra,

most circuits focus on foreign commerce that has a

“substantial effect” on U.S. commerce.

B. THE LANHAM ACT’S EXTRATERRITORIALITY

DOES NOT DEPEND ON A DEFENDANT’S U.S.

CITIZENSHIP

Some circuit tests for Lanham Act extraterritoriality have assigned varying weight to a defendant’s

U.S. citizenship. Compare Vanity Fair, 234 F.2d at

642 (absence of U.S. citizenship “might well be determinative” of extraterritoriality) with McBee v. Delica

Co., 417 F.3d 107, 117 (1st Cir. 2005) (U.S. citizenship

only lowers the requisite showing of effects on “commerce”). But any dissonance is insignificant under the

Morrison framework.

In RJR, the petitioner argued that the RICO enterprise (one of the subjects of the RICO cause of action) could not be a foreign enterprise because the “focus” of RICO was domestic enterprises. RJR, 579 U.S.

at 342 (quoting Morrison, 561 U.S., at 267, n. 9). But

RICO, like the Lanham Act, applies extraterritorially

and, therefore, the “focus” was not relevant under the

17

Morrison framework. Ibid. Like the RICO cause of action in RJR, under the Lanham Act “we do not need

to determine which transnational (or wholly foreign)

patterns of [infringement] it applies to; it applies to

all of them, regardless of whether they are connected

to a ‘foreign’ or ‘domestic’ [infringer].” Id.

Steele also did not depend on the defendant’s U.S.

citizenship. It was relevant in Steele because defendant’s U.S. citizenship assuaged international comity

concerns (discussed in Part III, infra). It was not critical to the merits. See, e.g., Steele, 344 U.S. at 286

(“With respect to [an extraterritorial] exercise of authority [on a citizen] there is no question of international law, but solely of the purport of the municipal

law which establishes the duty of the citizen in relation to his own government.”) (citing Skiriotes v. State

of Florida, 313 U.S. 69, 73 (1941)).

Moreover, the Court focused on how Steele’s conduct affected U.S. commerce, not just Steele’s U.S. citizenship:

In the light of the broad jurisdictional grant

in the Lanham Act, we deem its scope to encompass petitioner's activities here. His operations and their effects were not confined

within the territorial limits of a foreign nation. He bought component parts of his wares

in the United States, and spurious ‘Bulovas'

filtered through the Mexican border into this

country; his competing goods could well reflect adversely on Bulova Watch Company's

trade reputation in markets cultivated by advertising here as well as abroad.

18

Steele, 344 U.S. at 256. The Court also cited prior

cases involving defendants without U.S. citizenship.

See, e.g., Vacuum Oil Co. v. Eagle Oil Co., 154 F. 867

(C.C.D.N.J. 1907), aff’d, , 162 F. 671 (3d Cir. 1908);

Morris v. Altstedter, 156 N.Y.S. 1103 (Sup. Ct.), aff’d,

158 N.Y.S. 1123 (App. Div. 2016).

Moreover, in distinguishing American Banana

Co. v. United Fruit Co., 213 U.S. 347 (1909), where a

U.S. defendant was found not liable under the Sherman Act based on acts committed abroad, Steele reinforced its focus on conduct not citizenship: “[u]nlawful

effects in this country, absent in the posture of [American Banana], are often decisive.” Steele, 344 U.S.

256-57. 7

Accordingly, RJR and Steele control, regardless of

the defendant’s citizenship.

C. MOST CIRCUITS ALREADY LIMIT THE LANHAM ACT’S REACH TO FOREIGN COMMERCE

THAT HAS A SUBSTANTIAL EFFECT ON U.S.

COMMERCE

As mentioned previously, many circuits are already aligned on the effect on U.S. commerce needed

7 U.S. citizenship may still be relevant when a U.S. court

asserts jurisdiction over a defendant based on U.S. nationality.

See, e.g., Blackmer v. United States, 284 U.S. 421, 438-41 (1932);

see also McBee, 417 F.3d at 110 (“a separate constitutional basis

for jurisdiction exists for control of activities, even foreign activities, of an American citizen.”). But here, none of the defendants

are U.S. nationals.

19

to trigger Lanham Act liability. The Eleventh and

Federal Circuits have adopted the Second Circuit’s

Vanity Fair test verbatim, and therefore the Second,

Eleventh, and Federal Circuits all require a “substantial” effect on U.S. commerce. See Int'l Cafe, S.A.L. v.

Hard Rock Cafe Int’l, (U.S.A.), Inc., 252 F.3d 1274,

1278 (11th Cir. 2001) (describing the three-factor

analysis as the “Bulova test” but citing Vanity Fair);

Aerogroup Int’l, Inc. v. Marlboro Footworks, Ltd., 152

F.3d 948, 1998 WL 169251, at *2 (Fed. Cir. 1998) (per

curiam) (unpublished). The First Circuit also looks for

a “substantial effect” when reviewing “foreign activities of foreign defendants.” McBee, 417 F.3d at 111.

And the Tenth Circuit applied the McBee test below.

See Pet. App. at 42a.

The Fourth and Fifth Circuits have also adopted

the Vanity Fair test, but the Fourth Circuit asks

whether the conduct had a “significant effect.” Nintendo of Am., Inc. v. Aeropower Co., 34 F.3d 246, 250

(4th Cir. 1994). And the Fifth Circuit only requires

“some effect” on U.S. commerce. Am. Rice, Inc. v. Ark.

Rice Growers Coop. Ass’n, 701 F.2d 408, 414 n.8 (5th

Cir. 1983). In the context of the Morrison framework,

“some” effect is likely insufficient; while a “substantial” or “significant” effect should be sufficient.

Finally, while the Ninth Circuit only requires

“some effect” on U.S. commerce, additional factors

amplify that effect:

(1) the alleged violations ... create some effect

on American foreign commerce; (2) the effect

[is] sufficiently great to present a cognizable

injury to the plaintiffs under the Lanham Act;

and (3) the interests of and links to American

20

foreign commerce [are] sufficiently strong in

relation to those of other nations to justify an

assertion of extraterritorial authority.

Trader Joe’s Co. v. Hallatt, 835 F.3d 960, 966 (9th Cir.

2016) (quoting Timberlane Lumber Co. v. Bank of Am.

Nat’l Trust & Savings Ass’n, 549 F.2d 597 (9th Cir.

1976)). Combined, these factors point toward a “substantial” effect just like many other circuits.

Steele provides an example of “significant” or

“substantial” effect. In Steele, this Court’s opinion did

not identify any instances of Steele selling his

watches directly into the United States (i.e., direct foreign to U.S. commerce). However, Steele “bought component parts of his wares in the United States, and

spurious ‘Bulovas’ filtered through the Mexican border” into the United States. Steele, 344 U.S. at 286. 8

In addition, “Bulova’s Texas sales representative received numerous complaints from retail jewelers in

the Mexican border area whose customers brought in

for repair defective ‘Bulovas’ which upon inspection

often turned out not to be products of that company.”

Id. at 285. This situation was enough to find extraterritorial liability.

To trigger Lanham Act liability for infringement,

two events must occur, with both potentially occurring outside the United States: (1) a “use in commerce” (e.g., a foreign defendant places a trademark

The dissent states that “the only alleged acts of infringement

occurred in Mexico. The acts complained of were the stamping of

the name ‘Bulova’ on watches and the subsequent sale of the

watches. Steele, 344 U.S. at 290 (Reed., J., dissenting).

8

21

on goods abroad and “the goods are sold or transported in commerce” abroad), and (2) a “likelihood of

confusion” between the trademark and the trademark

of another occurs abroad (e.g., in the minds of foreign

consumers). 9 In order to pass Constitutional muster

and be actionable under the Lanham Act, these

events must have a substantial effect on U.S. commerce. Thus, a categorical restriction of either event

to the territorial confines of the United States would

be an improper “domestic application” of an extraterritorial statute under Morrison. 10 See Brief for United

States at 9-19 (urging “domestic application” of the

Lanham Act based on domestic “use in commerce” and

domestic “likelihood of confusion”).

In some cases, foreign “use in commerce” and/or

foreign “likelihood of confusion” may lack a “substantial effect” on U.S. commerce. For example, a purely

foreign sale by one foreign company to another that

has no effect on U.S. commerce would not be within

the Lanham Act’s scope. Yet, foreign situs of one or

both of two events should not categorically preclude

extraterritorial application of the Lanham Act.

It follows that trademark infringement liability

under, e.g., a diversion of sales theory (i.e., foreign-toforeign commerce with a substantial effect on U.S.

commerce), as was raised below, should not be cate-

9 Also, unlike tangible “actual confusion,” “likelihood of confu-

sion” is an intangible hypothetical that more easily transcends

geographic borders.

10 Of course, a trademark owner may seek relief based both on a

“domestic application” and extraterritorial applicability.

22

gorically excluded simply because the “use in commerce” was abroad, and/or the “likelihood of confusion” occurred abroad. Diverted sales can have a substantial effect on U.S. commerce. 11 See, e.g., Love v.

Assoc. Newspapers, Ltd., 611 F.3d 601, 613 (9th Cir.

2010) (“The [effect-on-U.S.-commerce] criteria may be

met even where all of the challenged transactions occurred abroad, and where ‘injury would seem to be

limited to the deception of consumers’ abroad, as long

as ‘there is monetary injury in the United States’ to

an American plaintiff.”). Here, the court below concluded that there was a substantial effect on U.S.

commerce, and applied the diversion of sales theory.

The Solicitor General argues that Tire Eng’g &

Distrib., LLC v. Shandong Linglong Rubber Co., 682

F.3d 292 (4th Cir. 2012) (per curiam), conflicts with

the decision below to apply the diversion of sales theory. See Brief for United States at 20. But Tire Engineering found “compelling the reasons underpinning

use” of the diversion of sales theory. Tire Eng’g, 682

F.3d at 311. It just declined to apply the diversion of

sales theory because the plaintiffs lacked “a pervasive

system of domestic operations,” i.e., there was no substantial effect on U.S. commerce. Id.

INFRINGEMENT REMEDIES SHOULD BE SEPARATELY ASSESSED

While the Lanham Act may give rise to liability

for foreign commerce having a substantial effect on

11 This is especially true, e.g., in a two-supplier market and/or

where one infringing supplier’s goods are of poor quality.

23

U.S. commerce, not all of the corresponding injury

necessarily warrants monetary relief.

Under the Lanham Act, if liability is established,

the plaintiff “shall be entitled” to recover “defendant’s

profits” and “any damages sustained by the plaintiff.”

15 U.S.C. § 1117(a) (emphasis added). “[A]ny” is an

express disavowal of limitations on damages, and neither remedy has a territoriality limitation in the statute. See Romag, 140 S. Ct. at 1495 (refusing to incorporate a willfulness limitation into Section 35(a) of

the Lanham Act, noting that the Court does not “usually read into statutes words that aren’t there.”).

Accordingly, monetary relief is far-reaching under the Lanham Act. Yet, it is not unlimited. For example, it is “subject to principles of equity.” 15 U.S.C.

§ 1117(a). “In the context of this statute, [principles of

equity] more naturally suggests fundamental rules

that apply more systematically across claims and

practices areas.” Romag, 140 S. Ct. at 1496.

International comity is one such fundamental

rule. In Steele, international comity concerns were

mitigated because the lead defendant’s registration of

“BULOVA” in Mexico was cancelled in an official proceeding brought by Bulova. See Steele, 344 U.S. at

285. Here, the European Union Intellectual Property

Office rejected Petitioners’ request to cancel Respondent’s

European

trademark

registration

for

“HETRONIC” on the ground that Petitioner owned

the mark. Petitioners appealed to the European General Court but the denial was affirmed. Petitioners

then appealed to the European Court of Justice,

which declined to hear another appeal. International

comity concerns have been mitigated here as they

24

were in Steele. It may not be in other situations, and

in those situations a court may entirely deny relief

even if there is liability.

Any monetary relief must also be “compensation

not a penalty,” and judges are expressly given wide

discretion to tailor monetary relief to the facts at

hand. See 15 U.S.C. § 1117. That being said, while the

remedy is not limited to what occurs in the United

States, in cases like this involving products made

solely outside the United States, any such monetary

relief should ordinarily be based on infringing products sold in the United States or otherwise tied or rationally related to use of the infringing mark “in commerce” as defined by the Act. Such an approach would

balance the wide discretion given to judges under the

Lanham Act, the extraterritorial reach of the Act, and

interests of international comity and equity. Additionally, such an approach would encompass other

considerations such as a “diversion of sales” theory

like the one also adopted by the Tenth Circuit in finding liability. Diversion of sales is complicated and

fact-intensive. A one-size-fits-all rule does not work

well, and this is where a court’s broad discretion under the Lanham Act is best applied.

Remedies are also subject to other guardrails. For

example, Section 29 limits monetary relief for registered trademark infringement unless the defendant

had actual or constructive notice of the registration.

See 15 U.S.C. § 1111. And Section 32 limits monetary

relief under Section 43(a)((1)(A) against “innocent”

printers and others. 15 U.S.C. § 1114. Also, the trademark first sale doctrine may apply. See, e.g., Bluetooth

SIG Inc. v. FCA US LLC, 30 F.4th 870 (9th Cir. Apr.

25

6, 2022) (trademark first sale doctrine applies when

product is incorporated into a new product). In addition, standing, personal jurisdiction, forum non conveniens and other general doctrines limit the ability

of courts to hear extraterritorial disputes in the first

place. 12

THE COURT SHOULD REMAND TO DETERMINE

WHETHER THERE WAS A SUBSTANTIAL EFFECT

ON U.S. COMMERCE AND TO REASSESS ANY REM-

EDY

This Court should remand to reapply the Morrison framework, including to determine whether Petitioners’ conduct had a “substantial effect” on U.S.

commerce.

This Court should also remand because the rationale for the award below is unclear. While the court

below appears to have applied the diversion of sales

theory, it also stated that “it’s irrelevant what proportion of Defendants’ global sales entered the United

States” and awarded $90M corresponding to all foreign sales. To the extent the court below simply con-

12 In this case, two petitioners never contested personal jurisdic-

tion. See Pet. App. at 9a. The remaining petitioners do not seem

to seek review of personal jurisdiction with this Court. Id. at 9a19a; see also Supplemental Brief for Petitioners at 2-3 (in response to the Solicitor General’s suggestion to reformulate the

question presented to “focus the presentations of the parties and

amici,” petitioners responded that issues beyond extraterritoriality are “consequences” and “not identified as separate issues

for this Court’s review.”).

26

flated extraterritoriality, liability, and remedy without concluding that defendants’ conduct substantially

affected U.S. commerce, it went too far.

Given this ambiguity, the equitable nature of the

relief awarded, the fact-intensive nature of the overall

inquiry and in view of this Court’s anticipated clarification of the Morrison framework as applied to the

Lanham Act, this Court should remand this case for

further proceedings consistent with the requirement

that the challenged conduct must have a substantial

effect on U.S. commerce. 13

13 A trademark owner may obtain an injunction “to prevent” a

“violation” of certain Lanham Act provisions. 15 U.S.C. §

1116(a). Hetronic obtained an injunction here that the Tenth

Circuit later adjusted to only apply to jurisdictions in which the

Hetronic mark was “in commerce.” Steele offered a similar injunction. Generally speaking, the equitable principles of monetary relief in the form of an accounting for lost profits also should

apply to injunctions.

27

CONCLUSION

Sections 32(1)(a) and 43(a)(1)(A) of the Lanham

Act apply to “all commerce which may lawfully be regulated by Congress.” 15 U.S.C. § 1127. This Court already recognized this “sweeping reach” in Steele and

applied the Lanham Act extraterritorially. Steele, 344

U.S. at 287.

But the Lanham Act’s reach is not limitless. Its

scope only extends to the limits of congressional

power. While congressional power includes the power

“to regulate commerce with foreign Nations,” U.S.

Const., Art. I, § 8, cl. 3, Congress cannot regulate all

foreign commerce. Rather, Congress can regulate only

foreign commerce that has a substantial effect on U.S.

commerce.

While various tests for Lanham Act extraterritoriality have proliferated in the circuits since Steele,

they have much in common. And after they are recast

within the Morrison framework, their analyses comport with each other, the Lanham Act and this Court’s

precedents. To find liability, the court must find that

the challenged conduct had a substantial effect on

U.S. commerce.

Further, just because the Lanham Act applies extraterritorially to conduct that substantially affects

U.S. commerce does not mean that relief should be

awarded for the full scope of activity for which defendant is liable. Rather, the remedies should be tailored

to the situation.

Given the ambiguity in the opinion below regarding the scope of extraterritoriality, liability, and rem-

28

edy, and in view of this Court’s anticipated clarification of the Morrison framework as applied to the Lanham Act, this Court should remand this case for further proceedings, limiting the scope of liability to

those infringing acts that had a substantial effect on

U.S. commerce and assessing remedies based on applicable principles of equity.

Respectfully submitted,

BRIAN H. BATZLI

President

AMERICAN INTELLECTUAL

PROPERTY LAW ASSOCIATION

1400 Crystal Drive

Suite 600

Arlington, VA 22202

(703) 415-0780

December 27, 2022

RICHARD S. STOCKTON

Counsel of Record

BANNER & WITCOFF, LTD.

71 S. Wacker Dr.

Suite 3600

Chicago, IL 60606

(312) 463-5000

rstockton@bannerwitcoff.com

Counsel for Amicus Curiae