Opposition Brief — ITC Limited v. Punchgini, Inc., 128 S. Ct. 288 (2007) (No. 06-1722)

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No. 06-1722

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IN THE

Supreme Court of the United States

ITC LIMITED,

Petitioner,

—-V,—

PUNCHGINI, INC., RAJA JHANJEE, PARAGNESH DESAI. VICKY VU,

DHANDU RAM, MAHENDRA SINGH, BACHAN RAWAT,

BUKHARA GRILL II, INC.,

Respondents.

ON PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE SECOND CIRCUIT

BRIEF IN OPPOSITION

MICHELLE MANCINO MARSH

Counsel of Record

KENYON & KENYON LLP

Of Counsel: One Broadway

New York, New York 10004-1007

MICHAEL J. FRENO (212) 425-7200

KENYON & KENYON LLP

One Broadway

New York, New York 10004-1007

(212) 425-7200

Counsel for Respondents

July 30, 2007

RULE 29.6 STATEMENT

Pursuant to Supreme Court Rule 29.6, Respondent

Punchgini, Inc. states that it has no parent corporation

and no publicly-held company owns 10% or more of its

stock.

Pursuant to Supreme Court Rule 29.6, Respondent

Bukhara Grill II, Inc. states that it has no parent corpo-

ration and no publicly-held company owns 10% or more

of its stock.

TABLE OF CONTENTS

REASONS FOR DENYING THE PETITION.... 4

A. ANY RULING BY THE

SUPREME COURT ON THE

QUESTION PRESENTED

WILL NOT BE DISPOSITIVE

| ee a re eee b

B. THE TERRITORIALITY

PRINCIPLE IS WELL-

See lin eS Serre reer 7

C. THERE IS NO BASIS IN

FEDERAL LAW FOR A

FAMOUS FOREIGN MARKS

EXCEPTION TO THE

TERRITORIALITY PRINCIPLE ....... 10

1. The Lanham Act Does Not

Explicitly Recognize A

Famous Foreign Marks

TNO. cx sinicdne Su uncstseaweeus 10

i)

International Treaties Do Not

Require A Famous Foreign Marks

IIIS ov acc bccn cewanecceae as LZ

ill

PAGE

(a) Neither the Paris Convention

nor the TRIPS Agreement

Requires U.S. Congress to

Adopt a Famous Foreign

oe eee 13

(b) Neither the Paris Convention

nor the TRIPS Agreement is

| 16

(c) Neither Section 44(b) nor

44(h) of the Lanham Act

Implement A Famous

Foreign Marks Doctrine

Through Article 6bis........... 18

D. PUBLIC POLICY CONSIDERATIONS

DO NOT WARRANT GRANTING THE

og bt Fe rhe ren er epee ore 22

LRT 453 bs is enk Wha nx eAacakennnedaetasnnen 26

\

iV

TABLE OF AUTHORITIES

Cases: PAGE

A. Bourjois & Co., Inc. v. Katzel,

SE AA EEE haw as sadcadacdsenkaasecus 8

A.B. Kirschbaum Co. v. Walling,

PR A PE CREE ns head h cda due vecnobacet 22

Addison vy. Holly Hill Fruits Prods. Co.,

Pa Ris EE COs < ch awdieneanssunetasrnans 22

Almacenes Exito S.A. v. El Gallo Meat

Mkt., Inc., 381 F. Supp. 2d 324

a IS Sc ain a cho vuR ENA Swksenewban 8, 18, 24

Am. Circuit Breaker Corp. v.

Or. Breakers, Inc., 406 F.3d 577

PE SE oc tins oreuatarenknsanewdenrense 8

American Auto. Ass'n v. Spiegel,

ye we ee BO. he a | <7 ne 20

Armstrong Paint & Varnish Works vy.

Nu-Enamel Corp., 305 U.S. 315

ERE 14 0Gs cakes cath tw ennaw daiwa tesxehas 22

Badaracco v. Commissioner of Internal

Revenue, 464 U.S. 386 (1984) ............... se

Barcelona.com, Inc. v. Excelentismo

Ayuntamiento de Barcelona,

Se Pe Okt CBR EAE, BOO? a vidvwcccaccincs 4, 223

Brennan's, Inc. v. Brennan's

Restaurant, L.L.C., 360 F.3d 125

Sa te SER ig eV cs wa koe &NK Gan ake EA 9.10

PAGE

Burkybile v. Bd. Of Educ. Of Hastings-

on-Hudson Union, 411 F.3d 306

A oi Ss ek Rend ase VA KERN Rae eae ew 20

Buti v. lmpressa Perosa, S.R.L.,

Ree er Oe 6G Gril. COPED sean vvcenssewnsas #

Chan vy. Korean Air Lines, Ltd.,

re ee FE oo ison kooks x 5ie vad bnew selon 17

Consumer Prod. Safety Comm'n v.

GTE Sylvania, Inc., 447 U.S. 102

A aris ii Es cde en Rb e demk ibe ak be 21

Empresa Cubana Del Tabaco v.

Culbro Corp., 213 F. Supp. 2d 247

Ee ED 4555 Guise chk y eka wwnraes ax kasaws 8

Empresa Cubana Del Tabaco v.

Culbro Corp., 399 F. Supp. 2d 462

Ee ies cnt awn be bdiw ee ac tnwee ke 8, 18

Empresa Cubana Del Tabaco v.

Culbro Corp., 126 S.Ct. 2887 (2006)........ 8

Fuji Photo Film Co., Inc. v. Shinohara Shoji

Kabushiki Kaisha, 754 F.2d 591

SO CSc cexcnn ee dune dex spwswns 8

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

391 F.3d 1088 (9th Cir. 2004)................ passim

Hanover Star Milling Co. v. Metcalf,

Bn A I EA OID i epg oink anand eh unease i2

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

Oe Te CEO C20 Rit. SOD kc cssavvssacecscs Oita

vi

Huber Baking Co. v. Stroehmann Bros. Co.,

cae ©. te PSS C20 Cit. PSIG) oo cc cvinsees

In re Rath, 402 F.3d 1207 (Fed. Cir. 2005)...

In re Societe D'Exploitation de la Marque

Le Fouguet’s, 67 U.S.P.Q.2d 1784

EE RE Kine TARa CATR RATAN oes

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

Int'l, Inc., 252 F.3d 1274

RR ee PEE 5 8624 cdc pscsaekieseidensa

Kemart Corp. v. Printing Arts Research

PAGE

eens passim

Labs., Inc., 269 F.2d 375 (9th Cir. 1959).... 13, 18

Kos. Pharms., Inc. v. Andrx Corp..,

369 F.3d 700 (3d Cir. 2004) .............

Mannington Mills, Inc. v. Congoleum

Corp., 595 F.2d 1287 (3d Cir. 1979)....

Maison Prunier v. Prunier’s Rest. & Café,

288 N.Y.S. 529 (N.Y. Sup. Ct. 1936)...

Mattel, Inc. v. MCA Records, Inc.,

296 F.3d 894 (9th Cir. 2002) ............

Park ’N Fly, Inc. v. Dollar Park & Fly, Inc.,

oh ee | Be erry

Person's Co. v. Christman, 900 F.2d 1565

SI: SO UE ovine ack Soe cada a wk

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

Two Pesos, Inc. v. Taco Cabana, Inc..,

eS OFS. Pe Cae i ica sk nk cae a ede kkes

Vil

PAGE

United Drug Co. v. Theodore Rectanus Co.,

oo ok pica Schack eka a kenen 12

Vaudable v. Montmartre, Inc.,

93s NU.S.24 332 (N.Y. Sup. Ct. 1959) ..... 23

Statutes & Legislative Materials:

Section 43 of the Lanham Act, 15 U.S.C.

ay pra auade espa aks TAAS ANS SASS ee ans 86d passim

Section 44 of the Lanham Act, 15 U.S.C

RE as ents ee sedas AGNL a kuru Wnenkas hewn samen passim

Federal Trademark Dilution Act of 1995,

Pub. L. No. 104-98, 109 Stat. 985

i aS ain 11,18

Trademark Amendment Act of 1999,

Publ L. No. 106-43, 113 Stat. 218

CT SESNSREARSRIL ROM eer OPE AE WP PARES ECOL OR aa 11

Trademark Dilution Revision Act of 2006,

Publ. L. 109-213, 120 Stat. 1730

RE SRO eg ee Serie Pe A nee geek a ee }

ee ee

Trademark Law Revision Act of 1988,

Pub. L. No. 100-667, 102 Stat. 3935

ie ae ir ee ag Ot 1]

Uruguay Round Agreements Act,

Pub. L. No. 103-465, 108 Stat. 4809

S.A Por ne err eee he ree eee Me ee

H. REP. No. 104-374 (1995), as reprinted

Se Se Bie Ps PUPA ose flint ee stbinens 18

Viil

S. REP. No. 79-1019 (1946), as reprinted

re 19GG Utes FI nos neces

S. REP. NO. 87-2107 (1962), as reprinted

in 1962 U.S.C.C.A.N. 2844(1962) .......

S. Rep. No. 100-515 (1988), as reprinted

eb BPS oe oe A). sy

S. REP. PEO. Tite a caw c ek ve ccesccceess

Other Authorities:

Agreement on Trade-Related Aspects

of Intellectual Property Rights,

Apr. 15, 1994, Marrakesh Agreement

Establishing the World Trade

Organization, Annex IC,

Po ee. ey Ok. )

Alexis Weissberger, Note: Is Fame Alone

Sufficient To Create Priority Rights:

An International Perspective On The

Viability Of The Famous/Well-Known

Marks Doctrine, 24 Cardozo Arts &

See ek ek ere ee

G.H.C. Bodenhausen, Guide to the Application

of the Paris Convention for the Protection

of Industrial Property as Revised at

Stockholm in 1967 89 (1968).............

J. Thomas McCarthy, McCarthy on

Trademarks and Unfair Competition

CAG OR ei ivy va acc ceeee.

PAGE

passim

1X

PAGE

Paris Convention for the Protection of

Industrial Property, Mar. 20, 1883,

as rev. at Stockholm, July 14, 1967,

21 U.S.T. 1583, $28 U.N.T.S. 305

PRT hic c ancnsutdapdwrncedent seenceus meNeeeanased passim

Bureau de L’ Union Internationale Pour La

Protection de La Propriété Industrielle,

Actes de La Conférence Réunie A Lisbonne,

Du 6 Au 31 Octobre 1958 [Acts of the

Lisbonne Conference, 6-31 October 1958]

state Ct tO EET rr eee: 15

STATEMENT OF THE CASE

Buknara is an ancient city in Uzbekistan, known

for its rugs and spice trade. (See C.A. Appendix 719;

A 744; A 800-01). ITC Limited (“ITC”) is a massive,

billion dollar Indian conglomerate dealing primarily in

cigarettes, packaging, and hotels—including the Maurya

Sheraton Hotel & Towers in New Delhi, India. (A 58).

The Maurya Sheraton contains at least six restaurants,

one of which is called “Bukhara.” (A 144 at 121:4-9).

The décor of ITC’s restaurant features rustic elements of

the Northwest frontier region, inspired by its namesake

town.

ITC opened a New York restaurant under the

“Bukhara” name in 1986—and obtained a federal U-S.

trademark registration for the mark “Bukhara,” Reg. No.

1,461,445, (the “°445 Registration” )—but the restaurant

closed in 1991. (A 260 at 147:7-18). ITC also tried to

license the “Bukhara” name for a restaurant in Chicago,

but that restaurant also closed. (A 199 at 214:13-19,

215:13-19; A 441-442). Both the District Court (85a)

and the Second Circuit Court of Appeals (26a) con-

cluded, after an exhaustive review of the record, that

ITC affirmatively abandoned its mark as a matter of law,

and canceled the °445 Registrat'on. ITC does not appeal

that part of the decision.

In 1999, Punchgini, Inc. (“Punchgini’) opened a

restaurant in New York City under the name “Bukhara

Grill.” (A 611-29). Focusing on good food and person-

alized service (CA 1446 at 150:16-18), Bukhara Grill

was a success, and in November 2001, Bukhara Grill II.

Inc. (sharing some common owners as Punchgini) opened

a second “Bukhara Grill” in New York City. (A 611-29).

In March 2000, ITC sent the first of several letters to

Punchgini demanding that it stop using the name

ta

“Bukhara Grill.” (7a). Over the following two years,

Punchgini told ITC several times that it could find no

evidence of ITC's use of the mark in the United States.

(7a-8a). Each time, ITC retreated, and each time,

Punchgini believed the matter to be closed. /d. Nonethe-

less, three years later, ITC sued Punchgini, Bukhara

Grill Il, Inc., and the individual owners, alleging trade-

mark infringement, unfair competition and deceptive

acts and practices under federal, New York state and

common law. 7d.

At the District Court, in opposition to summary judg-

ment after full discovery, ITC raised the argument that

even if it had abandoned its mark, it could maintain its

complaint under the so-called “famous marks” excep-

tion. The famous marks exception to the well-founded

principle of territoriality for trademarks, purports to

allow a foreign entity with a famous trademark outside

the United States to prevent use of a confusingly similar

mark in the United States, without demonstrating any

use of the mark within the United States.

In addressing ITC's argument for a famous marks

exception, the District Court faced two issues: whether

the doctrine was good law, and if so, what type of recog-

nition did ITC’s New Delhi restaurant need in New York

to create protectable rights in the United States. (88a,

91a). The District Court gave every benefit of the doubt

to ITC, assuming that U.S. federal law protected famous

foreign marks—although expressing serious doubts

whether it did—and assuming that ITC had to, at least,

show the minimum standard for proving a trademark’s

distinctiveness, namely “secondary meaning” of its mark

in New York. ITC failed to proffer evidence of adver-

tising expenditures in the United States or a consumer

study linking the “Bukhara” mark to its New Delhi

restaurant,’ and ITC admitted that it had not directly tar-

geted advertising for its Indian restaurant to the United

States. (92a). As Respondents argued below, while ITC

insisted that its mark is known in the United States, its

own expert, a New York based food critic and marketing

professor at the Culinary Institute of America, had never

heard of ITC’s New Delhi restaurant until hired by ITC

for the litigation.

Thus, the District Court held “ITC has failed even to

establish a triable issue as to the existence of ‘secondary

meaning’ in the New York market in which defendants

operate” and “dismiss[ed] ITC's complaint in its entirety.

.” (91a, 100a).

ITC appealed the District Court’s decision to the Sec-

ond Circuit, which affirmed the decision on all federal

claims. (3a n.3). On the issue of the recognition of the

federal famous marks doctrine, the Second Circuit con-

cluded that ITC could not

assert a successful federal claim for unfair compe-

tition because Congress has not incorporated the

substantive protections of the famous marks doc-

trine set forth in Paris Convention Article 6bis and

TRIPs Article 16(2) into the relevant federal law,

and this court cannot recognize the doctrine simply

as a matter of sound policy.

' In its Petitton. ITC cites to “[1]nformal market research con-

ducted to assess the market for prepared foods indicated that the

Bukhara brand was well-known among the relevant consumer group”

(Petition at 3 (citing Contidential Appendix 1189-91)). However, the

so-called “informal market research” refers to the tesumony ot Bha-

vani Parameswar, a Director, Vice President, and CFO, of an ITC sub-

sidiary who said that several people - naming four individuals—

through her informal association had knowledge of the Bukhara

restaurant in New Delhi. (CA 1188-89 at 34-39).

4

Id. at 64a - 65a. In arriving at its decision, the Second

Circuit considered long-standing jurisprudence on the

territoriality principle, which holds that foreign trade-

mark use alone does not confer U.S. trademark rights.

(28a - 30a). The court did not follow the Ninth Circuit's

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

Inc., 391 F.3d 1088 (9th Cir. 2004), the sole federal

appellate court to recognize a federal famous marks

exception, stating that the court did not ground its deci-

sion in the Lanham Act, but recognized the exception as

a matter of public policy. The Second Circuit observed

that “any policy arguments in favor of the famous marks

doctrine must be submitted to Congress for it to deter-

mine whether and under what circumstances to accord

federal recognition to such an exception to the basic

principle of territoriality.” (50a).*

REASONS FOR DENYING THE PETITION

The question presented by ITC is whether the Lanham

Act, our country’s trademark law, codified at 15 U.S.C.

§§ 1051-1141, protects marks which are famous in the

United States despite having no use in the United States.

The petition should be denied because an affirmative

answer to this question is not case dispositive as ITC's

foreign mark is not recognized in the United States.

> With respect to ITC's state law claim of unfair competition.

the Second Circuit found New York law unsettled. and deferred its

ruling on that claim pending the New York Court of Appeals’

response to two certified questions: (a) whether the famous marks

doctrine is recognized under the state's common law of unfair com-

petition and, if so. (bh) how famous a mark must be to qualify for such

common law protection. The parties have not briefed the Court of

Appeals on these open questions. (65a). lt should be noted that the

Ninth Circuit's decision in Grupo, the cause for ITC's claim of a

direct circuit conflict, relied. in part. on the New York common law

presently at issue before the New York Court of Appeals.

Furthermore, it is indisputable that the plain language

of the Lanham Act makes no explicit mention of a “for-

eign famous marks exception” to the bedrock principle

of territoriality.“ Territoriality draws boundaries for U.S.

trademark law, and it follows naturally that one cannot

acquire U.S. trademark rights without use of the mark in

the United States. Thus, ITC asks this Court to create ex

nihilo a new paradigm wherein foreign trademark own-

ers can stop domestic uses of a mark, otherwise avail-

able in the United States, based on foreign use alone. As

the Second Circuit correctly held, such a drastic depar-

ture from fundamental tenets of U.S. trademark law, if

adopted, should be made by Congress.

ITC further argues that this exception is mandated by

international treaties. However, neither the Paris Con-

vention (Article 6bis) nor the TRIPS Agreement (Article

16) require its signatories to adopt a famous foreign

marks exception.* Moreover, neither treaty is self-exe-

cuting and neither has been implemented by Congress to

create this exception under U.S. law.

The Supreme Court’s recognition of a foreign famous

marks exception would dramatically alter the landscape

of U.S. trademark law. It would, inzer alia, (i) provide

’ The only mention of famous or well-known marks in the Lan-

ham Act is in Section 43(c), codified at 1S U.S.C. § 1125(c). in con-

necuion with the protection of famous marks under dilution law which

has no connection with the similarly named famous foreign marks

exception. ITC has made no claim under Section 43(c).

. Paris Convention for the Protection of Industrial Property.

Mar. 20. 1883. as rev. at Stockholm, July 14. 1967. 21 U.S.T. 1583.

828 U.N.T.S. 305 (1967) (Paris Convention”). Agreement on Trade-

Related Aspects of Intellectual Property Rights. Apr. 15. 1994. Mar-

rakesh Agreement Establishing the World Trade Organization, Annex

IC, 1869 ULN.T.S. 299 (1994) (°TRIPS Agreement”). see also

Uruguay Round Agreements Act, Pub. L. No. 103-465, 108 Stat. 4809

(1994).

6

for preferential treatment to foreign rights owners over

U.S. rights owners, who must demonstrate use of their

trademarks to enforce their rights against others; (11) cre-

ate a disincentive for foreign rights owners to file trade-

mark applications in the United States; (1i1) provide no

notice to U.S. businesses about foreign rights-holders;

(iv) allow foreign companies to hold U.S. rights owners

hostage through threats of lawsuits when the U.S. owner

may not be able to obtain jurisdiction over the foreign

owner without its intentional surrender to U.S. juris-

diction; and (v) as in this instance, would abrogate well-

settled abandonment law, whereby if an owner abandons

a mark, another is free to adopt it.

As the Second Circuit suggested, Congress is in the

best position to weigh all these considerations and the

competing foreign interests before introducing new law.

(50a). Therefore, the Court should deny the Petition, and

allow this matter to be resolved by the legislative

branch.

A. ANY RULING BY THE SUPREME COURT ON

THE QUESTION PRESENTED WILL NOT BE

DISPOSITIVE OF THE CASE

The Court should deny the Petition because any ruling

on the existence of a foreign famous marks doctrine will

ultimately have no impact on the merits of this case. The

District Court held that ITC had virtually no evidence of

any recognition of its New Dethi restaurant in the United

States, and could not even meet the most basic “sec-

ondary meaning” standard.* (92a, 96a). Thus, even if the

Supreme Court found a famous foreign marks exception,

In the event the Court grants the Petition, Respondents

respectfully reserve the right to argue that the level of fame required

for any departure from the “territoriality principle” must be sub-

stantially more than secondary meaning.

and even if it adopted the lowest possible standard for a

foreign entity to demonstrate recognition in the United

States, on the record below, ITC has failed to produce

sufficient evidence to create a genuine issue of material

fact requiring trial. As such, ITC’s petition for review is,

at most, an academic exercise which the Court should

not entertain. To resolve any perceived conflict, it would

be more appropriate to wait for a case where the exis-

tence of the famous marks doctrine is likely to be dis-

positive.

B. THE TERRITORIALITY PRINCIPLE IS WELL-

SETTLED U.S. LAW

The Petition should be denied because the Second Cir-

cuit correctly held that territoriality is a time-tested prin-

ciple in U.S. jurisprudence that should not be disturbed

absent Congressional mandate. It is axiomatic that a

trademark has a separate legal existence under cach

country’s laws; ownership of a mark in one country does

not automatically confer upon the owner the exclusive

right to use that mark in another country. Rather, the

owner of a trademark must take the proper steps to

ensure that its rights to that mark are recognized in any

country in which it seeks to assert them. Barcelona.com,

Inc. v. Excelentismo Ayuntamiento de Barcelona, 330

F.3d 617, 628 (4th Cir. 2003) (“United States courts do

not entertain actions seeking to enforce trademark rights

that exist only under foreign law.”’).

Under U.S. law, trademark rights are acquired by, and

dependent upon, priority of use. The territoriality prin-

ciple dictates that priority of rights in the United States

depends solely upon priority of use in the United States.

not on priority of use anywhere in the world. See Buti v.

Impressa Perosa, S.R.L., 139 F.3d 98, 103 (2d Cir. 1998)

(noting that “Impressa’s registration and use of the Fash-

8

ion Café name in Italy has not, given the territorial

nature of trademark rights, secured it any rights in the

name under the Lanham Act”); Empresa Cubana Del

Tabaco v. Culbro Corp., 213 F. Supp. 2d 247, 286

(S.D.N.Y. 2002), rev'd. in part, 399 F.3d 462 (2d Cir.

2005), cert. denied, 126 S. Ct. 2887 (2006); Kos.

Pharms., Inc. v. Andrx Corp., 369 F.3d 700, 714 (3d Cir.

2004); Fuji Photo Film Co. v. Shinohara Shoji Kabushiki

Kaisha, 754 F.2d 591, 599 (Sth Cir. 1985); Am. Circuit

Breaker Corp. v. Or. Breakers, Inc., 406 F.3d 577, 581-

82 (9th Cir. 2005); Grupo Gigante 391 F.3d at 1093

(“priority of trademark rights in the United States

depends solely upon priority of use in the United States.

not on priority of use anywhere in the world”); Person’s

Co. v. Christman, 900 F.2d 1565, 1568-69 (Fed. Cir.

1990).

Before the territoriality principle, U.S. trademark law

recognized a so-called “universality principle,” which

held that certain trademark rights followed the goods on

which they were attached, even across national borders.

For example, if a trademark was lawfully affixed to mer-

chandise in India and then imported into the United

States, it would not infringe the rights of an exclusive

owner of the mark in the United States. That principle is

now extinct. Am. Circuit Breaker, 406 F.3d at 581 (cit-

ing A. Bourjois & Co., Inc. v. Katzel, 260 U.S. 689, 692

(1923)). The universality principle was supplanted by

the territoriality principle, which itself has been traced

to Justice Holmes’ 1923 opinion in A. Bourjois & Co.

See J. Thomas McCarthy, McCarthy on Trademarks and

Unfair Competition § 29: 1 at 29-4 (4th ed. 2002). Even

though the Lanham Act does not define the territoriality

principle in haec verba, the principle is so basic to trade-

mark law that it is presumed in the Lanham Act. See

Almacenes Exito S.A. v. El Gallo Meat Mkt., Inc., 381 F.

9

Supp. 2d 324, 327 n.3 (S.D.N.Y. 2005) (quoting McCarthy

§ 29.2).

ITC relies on several cases in which U.S. courts

allowed a domestic trademark owner to enforce rights

against another, despite the fact that the two parties’ uses

did not overlap geographically. (Petition at 7). ITC con-

cludes that the protection of famous foreign marks is,

thus, “consistent” with the concept that U.S. marks can,

in certain circumstances, acquire recognition in a geo-

graphic U.S. location without actual use in that U.S.

location. (Petition at 7). However, in each case relied

upon by ITC, the complainant owned U.S. trademark

rights through use of its trademark in the United States.

Finding that a remote owner's mark may have protection

in a “greatly extended area” due to notoriety within the

United States is a far cry from finding an owner’s mark

to have protection two oceans away. /d. (citing Huber

Baking Co. v. Stroehmann Bros. Co., 252 F.2d 945, 955

(2d Cir. 1958)). ITC’s conclusion that the concepts are

parallel is a very long leap.

Even when a person establishes ownership in a U.S.

trademark through use, the geographic scope of the use

of the mark can seveiely limit one’s ability to enforce

one’s mark. See, e.g., Brennan's, Inc. v. Brennan’s

Restaurant, L.L.C., 360 F.3d 125, 134 (2d Cir. 2004).

The Brennan’s case, relied upon by ITC, makes this

point clearly. In Brennan's the court held that a well-

known New Orleans restaurant, which had obtained a

federal registration of its name, “Brennan's,” could not

obtain a preliminary injunction against a New York

restaurant named “Terrance Brennan's Seafood & Chop

House.” The court held that “geographic remoteness ts

critical in this case,” and found that due to the distance

between the two restaurants, the plaintiff “face[d] a high

hurdle to demonstrate that a single restaurant in New

10

Orleans and a single restaurant in New York City com-

pete for the same customers.” /d. This case demonstrates

that even a registered mark conferring national rights

does not always grant the owner the power to exclude

others from using the mark in a distant market where the

owner has no reputation.

C. THERE IS NO BASIS IN FEDERAL LAW FOR

A FAMOUS FOREIGN MARKS EXCEPTION

TO THE TERRITORIALITY PRINCIPLE

The plain language of the Lanham Act makes no men-

tion of a famous foreign marks exception. However, ITC

takes the position that such a doctrine should be read

into the existing Lanham Act by virtue of the Paris Con-

vention and the TRIPS Agreement. The plain language

of the Paris Convention (Article 6bis) and TRIPS Agree-

ment (Article 16) do not mandate that its signatories

enact a famous foreign marks exception as suggested by

ITC. Further, even if such a requirement existed, these

treaties are not self-executing and have not been imple-

mented by Congress through corresponding legislation.

1. The Lanham Act Does Not Explicitly Recog-

nize A Famous Foreign Marks Exception

A cause of action for unfair competition, delineated by

Section 43(a) of the Lanham Act, codified at 15 U.S.C.

§1125(a), is available to anyone with protectable trade-

mark rights in the United States, including a foreign

entity with trademark rights in the United States. This

“national treatment” requirement (/.e., providing for the

same treatment to foreign nationals as to U.S. nationals)

was mandated by the Paris Convention (Article 2(1)) and

the TRIPS Agreement (Article 3(1)), and was imple-

mented by Congress through Section 44 of the Lanham

Act, 15 U.S.C. § 1126. See, e.g.. In re Rath, 402 F.3d

11

1207, 1220 (Fed. Cir. 2005); Int'l Café S.A.L. v. Hard

Rock Cafe Int'l, Inc., 252 F.3d 1274, 1282 (11th Cir.

2001). But, “national treatment” does not require the

U.S. to enforce rights acquired only in a foreign country

against individuals in the United States.

While the Lanham Act has been revised numerous

times since its enactment, it remains devoid of any pro-

vision for infringement or unfair competition of famous

unused foreign marks.® Indeed, no federal court has ever

held that the Lanham Act expressly protects foreign

famous marks in cases where the mark is not actually

used in the United States. See, e.g., Grupo Gigante, 391

F.3d 1088 (finding an exception to the territoriality prin-

ciple, but not grounding it in a specific provision of the

Lanham Act).

ITC argues that pre-Lanham Act common law did not

require marks be used at all in commerce in order to

acquire trademark rights—being known was sufficient.

(Petition at 7). ITC states:

In essence, the common law recognized a well-

known marks principle as a form of unfair compe-

tition for domestic marks; if the mark is known. use

by another will cause confusion.

Id. at 8. Building from this false premise, ITC claims

that the Lanham Act, enacted in 1946, is a mere codifi-

cation of that federal unfair competition law, thus

silently incorporating it. ITC’s recitation of pre-Lanham

Act common law Is wrong.

: See, e.g., Trademark Law Revision Act of 1988. Pub. L. No.

100-667, 102 Stat. 3935 (1988). Federal Trademark Dilution Act of

1995, Pub. L. No. 104-98. 109 Stat. 985 (1995), Trademark Amend-

ment Act of 1999, Pub. L.. No. 106-43. 113 Stat. 218 (1999), Trade-

mark Dilution Revision Act of 2006, Pub. L. No. 109-213. 120 Stat

1730 (2006).

12

ae

Use of a mark in the United States is an absolute pre-

requisite to U.S. federal trademark rights. See generally

Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768

(1992); United Drug Co. v. Theodore Rectanus Co., 248

U.S. 90 (1918). Although one may bring an action under

the Lanham Act without a federal registration, one must

first demonstrate use in the United States. See, e.g.,

Hanover Star Milling Co. v. Metcalf, 240 U.S. 403

(1916), superseded by statute, Lanham Act, 15 U.S.C.

§§ 1051-1141, as recognized in Park '’N Fly, Inc. v. Dol-

lar Park & Fly, Inc., 469 U.S. 189 (1985); Trade-Mark

Cases, 100 U.S. 82 (1879). Thus, a plain reading of the

Lanham Act and the federal unfair competition jurispru-

dence that has evolved from it, provides no basis for a

foreign famous marks exception to the bedrock territo-

riality principle.

2. International Treaties Do Not Require A

Famous Foreign Marks Exception

ITC further argues in support of its Petition that Arti-

cles 6bis of the Parts Convention and 16(2) of the TRIPS

Agreement mandate that the United States adopt a

famous foreign marks exception. To the contrary, neither

provides a basis for this Court to establish a famous for-

eign marks exception in that: (a) the plain language of

Article 6bis does not require a member country to pro-

tect famous foreign trademarks without use in the coun-

try: (b) neither treaty is self-executing: and (c) Congress

has not implemented a famous foreign marks exception

in the Lanham Act.

13

(a) Neither the Paris Convention nor the

TRIPS Agreement Requires U.S. Congress

to Adopt a Famous Foreign Marks

Exception

By way of background, the Paris Convention, of

which the United States is a signatory, lays out minimum

requirements for its members to implement through their

national trademark laws.’ Kemart Corp. v. Printing Arts

Research Labs., Inc., 269 F.2d 375, 389 (9th Cir. 1959)

(““We can only conclude that the Paris Convention was

not intended to define the substantive law in the area of

‘unfair competition’ of the signatory countries, but

rather to set out the broad basic principles under which

the laws of the said countries would operate.”’).

Article 6 of the Paris Convention defines basic con-

ditions each member should adopt for the registration of

- trademarks, but recognizes that “[t]he conditions for the

filing and registration of trademarks shall be determined

in each country of the Union by its domestic legisla-

tion.” Although the Paris Convention affirmatively states

that members should create laws allowing entities to

obtain trademark registrations, it leaves the specific con-

ditions open for each nation to determine independently.

The Paris Convention expressly acknowledges a form of

the “territoriality principle,” holding that each nation’s

laws are independent of all other member states. /d. at

art. 6(3) (“A mark duly registered in a country of the

Union shall be regarded as independent of marks regis-

tered in the other countries of the Union, including the

country of origin.”). Under this regime, if one wishes to

protect its marks in various countries, one must take the

Since its introduction in 1883. the treaty has been revised

seven times: 1900 (Brussels). 1911 (Washington. D.C). 1925 (the

Hague). 1934 (London). 1958 (Lisbon), 1967 (Stockholm), and most

recently, 1979,

14

requisite steps under each countries’ national trademark

laws to ensure protection.

The original Paris Convention treaty did not contain

Article 6bis. Article 6bis was first introduced at The

Hague in 1925, later modified by the Revision Confer-

ence in London, 1934, and again modified by the Revi-

sion Conference of Lisbon, 1958 (“Lisbon Conference’).

See G.H.C. Bodenhausen, Guide to the Application of

the Paris Convention for the Protection of Industrial

Property as Revised at Stockholm in 1967 89 (1968).

Article 6bis of the Convention currently states:

The countries of the Union undertake, ex officio if

their legislation so permits, or at the request of an

interested party, to refuse or to cancel the registra-

tion, and to prohibit the use, of a trademark which

constitutes a reproduction, an imitation, or a trans-

lation, liable to create confusion, of a mark con-

sidered by the competent authority of the country of

registration or use to be well Known in that country

as being already the mark of a person entitled to the

benefits of this Convention and used for identical or

similar goods. These provisions shall also apply

when the essential part of the mark constitutes a

reproduction of any such well-known mark or an

imitation liable to create confusion therewith.

Id. at art. 6bis(1).§

Although commentators, international organizations,

and even some recent U.S. courts (including the Second

Circuit in this case), have, of late, interpreted Article

6bis as containing a form of the famous foreign marks

exception (3la - 33a), that interpretation is a relatively

s

Article 1Obis of the Paris Convention defines the types of acts

which should be prohibited in view of trademark rights recognized

under Article 6

15

new one and one not born from the plain meaning of the

article.

In 1958, the signatories of the Paris Convention unan-

imously agreed that Article 6bis did not require members

to protect famous foreign marks unless the foreign mark

was also used in the member state. At the Lisbon Con-

ference, a proposal for an amendment to Article 6bis was

considered which would have expressly required a

famous foreign marks exception, but that proposal was

rejected:

The Revision Conference of Lisbon in 1958 rejected

a proposal according to which use of a well-known

mark in the country in which its protection is

claimed would not be necessary for such protection.

This means that a member State is not obliged to

protect well-known trademarks which have not been

used on its territory, but it will be free to do so. In

view of the vote taken at the Lisbon Conference, the

great majority of the member States will probably

adopt this attitude.

Bodenhausen at 91 (emphasis added).

According to the Association Internationale pour ta

Protection de la Propriété Intellectuelle (“AIPPI”), a

non-government organization attending the Lisbon Con-

ference, the rejected proposal would have added the

proposition that: “It is not necessary for the well-known

mark to be used in the country where its protection is

requested.” Bureau de L’Union Internationale Pour La

Protection de La Propriété Industrielle. Actes de La Con-

férence Réunie A Lisbonne, Du 6 Au 31 Octobre 1958

[Acts of the Lisbonne Conference, 6-31 October 1958]

649 (1963)..The Union Internationale pour La Protection

de la Propiété Industrielle. which hosted the conference,

explained that the decision to omit the amendment was

16

on the grounds that a mark is not well-known if it is not

used. fa’. (“Le Bureau international justifie cette omis-

sion par le motif que la marque nest pas notoire

lorsqu'el’ n'est pas utilisée.”).

Although signatories of the Paris Convention may

enact legislation for a famous marks exception, Article

6bis plainly does not require it.” As the national adoption

of famous foreign marks protection is optional, under the

Paris Convention or TRIPS Agreement, only a few coun-

tries have enacted national laws protecting foreign

famous marks unused in their countries.'® See Alexis

Weissberger, Note: 1s Fame Alone Sufficient To Create

Priority Rights: An International Perspective On The

Viability Of The Famous/Well-Known Marks Doctrine,

24 Cardozo Arts & Ent LJ 739, 768-76 (2006) (men-

tioning Brazil, China, and South Africa). It should be

noted that only a minority of the Paris Convention sig-

natories have adopted a form of the famous foreign

marks doctrine. Furthermore, even among these coun-

tries, there is no uniformity to their forms of famous

marks protection.

(b) Neither the Paris Convention nor the

TRIPS Agreement is Self-Executing

Even assuming Article 6bis can be interpreted as

requiring a famous foreign marks exception, the ratifi-

Since the 1958 Lisbon modification, the Paris Convention has

only been modified twice, in 1967 at the Stockholm Conference and

in 1979. In neither instance was Article 6bis substantively modified.

” The TRIPS Agreement, ratified by Congress on December 8.

1994 as part of the Uruguay Round Agreements Act, simply incor-

porates mutatis mutandis Article 6bis of the Pans Convention

although extending the article to service marks. (116a at art. 16(2)).

Theretore, unless Article 61s requires a famous toreign marks excep-

tion, the TRIPS Agreement does not require a famous foreign marks

exception,

17

cation of the Paris Convention does not turn Article 6bis

into substantive U.S. trademark law. Courts have con-

sistently held that the Paris Convention is not self-exe-

cuting. See, e.g., Mannington Mills, Inc. v. Congoleum

Corp., 595 F.2d 1287, 1298-99 (3d Cir. 1979); Int'l

Café, 252 F.3d at 1277 n.5 (“The Paris Convention is not

self-executing because, on its face, the Convention pro-

vides that it wiil become effective only through domes-

tic legislation.”); Mattel, Inc. vy. MCA Records, Inc., 296

F.3d 894, 907-08 (9th Cir. 2002) (holding that the Paris

Convention does not create a separate cause of action

from those available under the Lanham Act); see also S.

Rep. No. 79-1019 (1946), as reprinted in 1946

U.S.C.C.A.N. 3044, 3045 (“The provisions of the Con-

vention of Paris are not self-executing, and legislation is

therefore needed to carry into effect any provision not

already in our present law.”). Indeed, the Paris Con-

vention itself states that it is not self-executing. Article

25 of the Paris Convention, entitled “Implementation of

the Convention on the Domestic Level,” requires that

“[a]ny country party to this Convention undertakes to

adopt, in accordance with its constitution, the measures

necessary to ensure the application of this Convention.”

Id. at art. 25(1); see also art. 25(2), Mannington Mills,

595 F.2d at 1298-99."

Similarly, the TRIPS Agreement is not self-executing.

See In re Rath, 402 F.3d at 1210 n.2; see also S. Rep.

No. 103-412, at 13 (1994) (accompanying the Uruguay

Round Agreements Act, Pub. L. No. 103-465, 108 Stat.

" There ts no precedent tor a ULS. federal court to create com-

mon law to implement the Parts Convention: only Congress can

implement a treaty. See Chan v. Korean Air Lines, Ltd., 490 U.S. 122,

127(1989) (quoting Justice Story: “| T]o alter, amend. or add to any

treaty. by inserting any clause, whether small or great. tmportant or

trivial, would be on our part an usurpation of power, and not an exer-

erse of pudicial functions.” ).

18

4809 (1994)) (stating that TRIPS and other GATT agree-

ments “are not self-executing and thus their legal effect

in the United States is governed by implementing leg-

islation”). While Congress has amended numerous fed-

eral statutes to implement specific provisions of the

TRIPS Agreement, it has not enacted legislation aimed

directly at Article 16(2).'°

In summary, the United States’ ratification of the Paris

Convention and the TRIPS Agreement did not create

new substantive trademark law which is separate and

distinct from the Lanham Act. Empresa Cubana, 399

F.3d at 485; Grupo Gigante, 391 F.3d at 1100 (stating

that Paris Convention creates no “additional substantive

rights” to those provided by Lanham Act); see also

Almacenes Exito, 381 F. Supp. 2d at 327-28; Kemart,

269 F.2d at 389. Thus, ITC’s Petition, requesting this

Court to, in essence, implement international treaties to

create additional rights, should be denied.

(c) Neither Section 44(b) nor 44(h) of the Lan-

ham Act Implement A Famous Foreign Marks

Doctrine Through Article 6dis

ITC claims that Lanham Act Sections 44(b) and 44(h)

of the Lanham Act effectively incorporate the protec-

- For example, Congress has enacted legislation to implement

TRIPS Article 16(3). which contemplates the extension of anu-dilu-

tion protection to certain famous marks. See Federal Trademark Dilu-

tion Act of 1995, Pub. L. No. 104-98, 109 Stat. 985 (1995) (codified

at 15 U.S.C. § 1125(c)): see H. Rep. 104-374. as reprinted in 1995

U.S.C.C.A.N. 1029 (indicating that anti-dilution act was intended to

make United States law consistent with terms of TRIPS and Paris

Convention). No comparable legislation exists with respect to Arti-

cle 16(2). See also Uruguay Round Agreements Act, Pub. L. No. 103-

465 at 514. 108 Stat. at 4976) (amending 17 U.S.C. § LO4A, governing

copyrights in restored works. to comport with the TRIPS Agreement):

Id. at 532. 108 Stat. at 4983 (amending 35 U.S.C. § 154. governing

United States patents. to comport with the TRIPS Agreement).

19

tions afforded famous marks allegedly found in the Paris

Convention and the TRIPS Agreement. (Petition at 15-

16). But neither Sections 44(b) and 44(h) speak to ITC's

version of the famous foreign marks doctrine.

Section 44(b) states:

Any person whose country of origin is a party to

any convention or treaty relating to trademarks,

trade or commercial names, or the repression of

unfair competition, to which the United States is

also a party, or extends reciprocal rights to nation-

als of the United States by law, shall be entitled to

the benefits of this section under the conditions

expressed herein to the extent necessary to give

effect to any provision of such convention, treaty or

reciprocal law, in addition to the rights to which

any owner of a mark is otherwise entitled by this

chapter.

15 U.S.C. § 1126(b). As noted above in Section C.1, the

great weight of authority suggests that this provision

simply expresses a general proposition of national treat-

ment. See, e.g., In re Rath, 402 F.3d at 1220; Int'l Cafe,

95? F.3d at 1282."

99 : = .

I. ITC points to the last phrase as “strongly” suggesting that

eB!) eb =

Congress wanted to implement wholesale everything in the Paris Con-

vention. However, ITC incorrectly suggests that the phrase was added

alone in the 1962 amendment to Section 44(b) of the Lanham Act.

which actually rewrote the entire subsection. The Senate Report on

the amendment explains a single reason for the change: “Section 20

of the bill proposes to amend section 44(b) of the act by adding a

reference to a country which extends reciprocal rights to nationals of

the United States by law and by revising the language to a more

understandable form.” S. Rep. No. 87-2107. ays reprinted in 1962

U.S.C.C.A.N, 2844. 2851 (1962). Congress’ express purpose did not

include granting foreign trademark owners additional substantive

rights.

Section 44(h) states:

Any person designated in subsection (b) of this sec-

tion as entitled to the benefits and subject to the

provisions of this chapter shall be entitled to effec-

tive protection against unfair competition, and the

remedies provided in this chapter for infringement

of marks shall be available so far as they may be

appropriate in repressing acts of unfair competition.

Id. § 1126(h). ITC can not take refuge under Section

44(h), even if it were to provide the “additional relevant

protection” they propose (Petition at 5), as ITC waived

any claim of unfair competition under Section 44(h).

The Second Circuit held that “[t]he district court did not

explicitly pass on this claim in dismissing the entirety of

ITC’s complaint, and ITC does not press it on this

appeal. Accordingly, we deem any such claim waived,

. . and we treat ITC’s unfair competition claim as hav-

ing been brought solely under section 43(a).” (26a n.13,

citing Burkybile v. Bd. of Educ. of Hastings-on-Hudson

Union, 411 F.3d 306, 308 n.1 (2d Cir. 2005)). In its peti-

tion, ITC does not challenge its waiver, but simply

ignores it.

Apart from ITC’s waiver, Section 44(h) provides no

substantive rights apart from the national treatment pro-

vision set out in Section 44(b). See Havana Club Hold-

ing, S.A. v. Galleon S.A., 203 F.3d 116, 134 (2d Cir.

2000) (characterizing the “[rJights under section 44(h)”

as “co-extensive with treaty rights under section 44(b),

including treaty rights relating to. . . the repression of

unfair competition”): see also American Auto. Ass'n vy.

Spiegel, 205 F.2d 771, 774 (2d Cir. 1953) (“Since [sec-

tion 44(h)] is limited to *person[s] designated in sub-

section (b),” we look to that subsection to learn its

scope.”’).

21

Both Sections 44(b) and 44(h) are devoid of any

express or implied reference to the protection of foreign

famous marks without use in the United States. Based on

a novel interpretation of otherwise unambiguous provi-

sions of the Lanham Act, ITC suggests that when the

Lanham Act was enacted in 1946, it incorporated whole-

sale all provisions of the Paris Convention, thereby

effectuating Article 6bis."

Although the language of Sections 44(b) and (h) of the

Lanham Act certainly aim to give effect to the provisions

of international treaties, based on the plain meaning of

Sections 44(b) and (h), there is no express incorporation

by reference of all provisions of the Paris Convention or

TRIPS Agreement: each member must enact its own

national laws.'* And this is not a case where the statute

is ambiguous and requires judicial interpretation. See,

e.g., Consumer Prod. Safety Comm'n v. GTE Sylvania,

Inc., 447 U.S. 102, 108 (1980) (unless there is alterna-

tively expressed legislative intent or ambiguity, courts

will consider the ordinary meaning of the statutory lan-

guage to be a complete and final articulation of the

statute).

3 ITC misquotes a Senate Report in order to suggest that all

“U.S. treaty obligations [are] reflected in Section 44 of the Lanham

Act.” (Petition at 14. citing S. Rep. No. 100-515, 5 (1988). ays

reprinted in i988 U.S.C.C.A.N. 5577. 5581). The Report simply

refers to particular “U.S. treaty obligations, reflected in Section 44 of

the Lanham Act... .~

2 Various courts have held that the provisions of Section 44

should be construed narrowly. See. e.g.. Int'l Café. 252 F.3d at 1277-

78: In re Soctete D’Exploitation de la Marque Le Fouqguet’s. 67

U.S.P.Q.2d 1784 (T.T.A.B. 2003). Indeed. the Second Circuit has gone

so far as to say that Section 44 imphicitly abrogates all preexisting

trademark treaty rights that it does not affirmatively incorporate.

Havana Club Holding. 203 F.3d at 128

ITC asks this Court to look beyond the express lan-

guage of Sections 44(b) and 44(h) in the name of inter-

national trademark harmonization. The Court has

previously indicated on numerous occasions that it is

loath to create new legislation through the interpretation

of an existing statute. See Addison v. Holly Hill Fruits

Prods. Co., 322 U.S. 607, 618 (1944) (“Construction

. . Must avoid ‘that retrospective expansion of mean-

ing which properly deserves the stigma of judicial leg-

islation.” To blur the distinctive functions of the

legislative and judicial processes is not conducive to

responsible legislation.) (quoting A.B. Kirschbaum Co.

v. Walling, 316 U.S. 517, 522 (1942)); Armstrong Paint

& Varnish Works v. Nu-Enamel Corp., 305 U.S. 315, 333

(1938) (noting that judicial legislation should be con-

demned); Badaracco v. Commissioner of Internal Rev-

enue, 464 U.S. 386 (1984) (“Courts are not authorized to

rewrite a statute because they might deem its effects sus-

ceptible of improvement.”). Again, ITC’s Petition to

invoke this Court's jurisdiction as a means of harmo-

nizing international law is misplaced and should be

denied.

D. PUBLIC POLICY CONSIDERATIONS DO NOT

WARRANT GRANTING THE PETITION

While the Second Circuit held that there is no federal

famous foreign marks exception, the Ninth Circuit Court

of Appeals, in the Grupo Gigante case, held that “there

is a famous mark exception to the territoriality princi-

ple” as a matter of public policy. 391 F.3d at 1094. How-

ever, and unlike ITC, the Ninth Circuit did not find that

the famous foreign marks exception was supported by

the Lanham Act, and the Ninth Circuit expressly held

that the Paris Convention created no distinct cause of

action. Instead, the Ninth Circuit. relying, in part, on

decades old and unsettled New York common law, cre-

23

ated new, substantive federal rights with far-reaching

implications.'®

Although ITC suggests that the question presented to

this Court represents a wide split in the circuits, until

Grupo Gigante, there was agreement among the circuits.

In addition to the Second Circuit, the Fourth and

Eleventh Circuits have restricted Section 44 of the Lan-

ham Act to requiring national treatment only. See /nt’l

Café, 252 F.3d at 1277-78 (holding that the rights artic-

ulated in the Paris Convention do not exceed the rights

conferred by the Lanham Act); Barcelona.com, 330 F.3d

at 628 (“United States courts do not entertain actions

seeking to enforce trademark rights that exist only under

foreign law.”). Even the Ninth Circuit in Grupo Gigante

did not rely on the Lanham Act to create its exception to

the territoriality principle.'’

If the Ninth Circuit’s creation of an exception to the

territoriality principle was upheld by this Court, or if

this Court were to find justification for a famous foreign

marks exception under the Lanham Act, the landscape of

” See Maison Prunter v. Prunier’s Rest. & Cafe, 288 N.Y.S.

529, 535-36 (N.Y. Sup. Ct. 1936) (opinion issued before the Lanham

Act enactment in 1946), Vaudable v. Montmartre, Inc., 193 N.Y.S.2d

332 (N.Y. Sup. Ct. 1959).

" In Grupo Gigante, the Dallos—who were the first U.S. users

of the mark and the declaratory-judgment plaintiff—did not challenge

Grupo Gigante’s assertion that the famous foreign marks doctrine was

an exception to the territoriality principle under federal law. 391 F.3d

at 1093-94 (“The Dallos concede that there is such an exception. but

dispute what it takes for a mark to qualify for 1t."). Thus. the issue in

that case turned on the scope and mechanics of the exception. Another

distinguishing factor in the Grupo case in that’ the Mexican company.

Grupo Gigante. had opened grocery stores in Los Angeles under the

GIGANTE name. and thus. was using the mark tn the United States

when the action was filed. In that sense. Grupo Gigante and the Dul-

los were competitors, unlike ITC and Punchgini in the present case.

24

U.S. trademark law would change dramatically. U.S.

courts and commentators have said as much: “[S]uch a

radical change in basic federal trademark law may, in

this Court's view, only be made by Congress, not the

courts.” Almacenes Exito, 381 F. Supp. 2d at 327. See

generally Alexis Weissberger, 24 Cardozo Arts & Ent LJ

739 (2006).

The famous foreign marks exception creates a disin-

centive for foreign trademark holders to file U.S. trade-

mark applications. In addition, without a_ U.S.

registration, U.S. citizens and businesses would be with-

out constructive notice of a foreign entity’s claim to U.S.

rights in a mark.

Moreover, if every foreign business potentially owns

U.S. trademark rights, U.S. businesses would have to

conduct unwieldy global trademark clearances before

domestic use. Adding further complication, U.S. busi-

nesses would be placed in the awkward position of

having to determine potential problems on a market-by-

market basis. For example, a famous mark from Kaza-

khstan may have no recognition in Seville, Ohio and

therefore no rights, but it may have rights in Washing-

ton. D.C.

Under a trademark regime whereby foreign entities

own U.S. rights without use in the United States, foreign

companies could hold U.S. companies hostage with

threats of an infringement action. For example, a foreign

entity in India with no business connections in the

United States could threaten to sue a U.S. company for

infringement in the United States, and the U.S. company

would not be able to resolve the controversy through a

declaratory judgment action because the U.S. courts

would not have personal jurisdiction over the entity until

it unilaterally surrendered itself to U.S. jurisdiction or

sued first. As ITC’s case demonstrates, a foreign cor-

25

poration could indefinitely warehouse a mark, without

ever intending to exploit it in the United States, and

thus, could never abandon U:S. rights in its mark. Fur-

thermore, a U.S. entity could not even rely on a court

decision holding a mark abandoned in the United States

by the foreign entity.

Although ITC argues that U.S. intellectual property

“will be significantly undermined” unless the Court

carves out an exception to the territoriality principle

(Petition at 6), by providing foreign entities with rights

not enjoyed by U.S. companies in those nations, the

United States may stand at a disadvantage. Contrary to

ITC’s assertions, the United States has one of the most

robust trademark regimes in the world, and many foreign

companies already enjoy U.S. protection of their marks

under current U.S. law.

26

CONCLUSION

For the reasons stated, Respondents respectfully

requests that the petition for writ of certiorari be denied.

This 30th day of July, 2007.

Respectfully submitted,

MICHELLE MANCINO MARSH

Counsel of Record

KENYON & KENYON LLP

One Broadway

New York, New York 10004

(212) 425-7200

Counsel for Respondents

Of Counsel:

MICHAEL J. FRENO

KENYON & KENYON LLP

One Broadway

New York, New York 10004

(212) 425-7200