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

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Supreme Court of the Anited States

ITC LIMITED,

Petitioner,

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PUNCHGINI, INC., RAJA JHANJEE,

PARAGNESH DESAI, VICKY VIJ, DHANDU RAM,

MAHENDRA SINGH, BACHAN RAWAT,

BUKHARA GRILL II, INC.,

Respondents.

On Petition for a Writ of Certiorari to the United

States Court of Appeals for the Second Circuit

PETITIONER'S REPLY BRIEF

Ethan Horwitz

Counsel of Record

Jill Wasserman

Charles A. Panncll, Ill

Sarah QO. Jorgensen

KING & SPALDING LLP

1185 Avenue of the Americas

New York, NY 10036-4003

(212) 556-2100

Counsel for Petitioner

August 21, 2007

Becker Gallagher - Cincinnati, OH - Washington, D.C. - 800.890.5001

RULE 29.6 STATEMENT

Pursuant to Supreme Court Rule 29.6, Petitioner states

that ITC Limited (“ITC”)! has no parent corporation and no

publicly-held company owns 10% or more of its stock.

' This case was originally brought by ITC Limited and ITC Hotels

Limited. In 2005, ITC Hotels Limited was dissolved and made a

part of ITC Limited. Accordingly, ITC Limited is the only

petitioner

RULE 29.6 STATEMENT

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TABLE OF CONTENTS

REPLY TO RESPONDENTS' REASONS FOR

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THE NINTH CIRCUIT DECISION WAS

GROUNDED IN THE LANHAM ACT ........

. A DECISION BY THIS COURT WOULD BE CASE

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. RESPONDENTS MISCONTRUE- THE

WELL-KNOWN MARKS DOCTRINE ........

1. The Well-Known Marks Doctrine Has Long Been

A Feature of United States Trademark Law .. .

2. The Lanham Act has Incorporated Treaty

Provisions Adopting the Well-Known Marks

RA ipsink rit anihink AAPA SEAL ce ee

. RESPONDENTS’ PREDICTIONS OF DIRE

CONSEQUENCES HIGHLIGHT THE NEED TO

RESOLVE THIS CONPLICT NOW ..........

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TABLE OF CITATIONS

FEDERAL CASES

Brennan’s, Inc. v. Brennan’s Restaurant, L.L.C.,

ae ee ee at ED a b's. eo a A ace we eee 6

De Beers LV Trademark Ltd. v. DeBeers Diamond Syndicate

Inc., No. 04-4099,

2005 U.S. Dist. LEXIS 9307

Caer .2hce SU AD. ke ee ee eee

Empresa Cubana del Tabaco v. Culbro Corp.,

aoe ae Oe Cee SS Se oe ae

Grupo Gigante v. Dallo & Co.,

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

Hanover Star Milling Co. v. Metcalf,

tyes IE PEO 66-8 nk bie ka ee ee

Maruti.Com v. Maruti Udyog Lid.,

447 F.Supp.2d 494 (D. Md. 2006) ............

Mattel, Inc. v. MCA Records,

296 F.3d G94 (th Car. 2002) 2 ww ww ee

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

er Ba PU kw ew ee ee te ee

United Drug Co. v. Theodore Rectanus Co..,

PA PUOD ss oe NS ew ees

FEDERAL STATUTES AND LEGISLATIVE MATERIALS

15 U.S.C. §§ 1125, 1126 (Lanham Act, §§ 43, 44) . passim

S. Rep. No. 79-1333 (1946) reprinted in 1946 U.S.C.C.A.N.

eR RPS S Fy AS Kako G Be ee ee 2

OTHER AUTHORITIES

The Paris Convention for the Protection of Industrial

Property, as revised at Stockholm, July 14, 1967 21 U.S.T.

Seats eet EE kos oe Ooo be ee Ae ees 7

Joint Recommendation Concerning Provisions on_ the

Protection of Well-Known Marks, World Intellectual Property

Organization (2000), Art. 2(3)(1) ..........-... 8 n.5

REPLY TO RESPONDENTS’ REASONS

FOR DENYING THE PETITION

Respondents admit there is a circuit split on whether a

foreign mark not used in the United States is nevertheless

entitled to protection against unfair competition if the mark is

well-known in the United States. See e.g., Brief in

Opposition (“Opp.”) at 4. And they agree that resolution of

this tssue has significant impact on United States business and

both domestic and international trademark law. See e.g., id.

at 24-25. These facts support a grant of certiorari.

Respondents’ primary objections to a grant of certiorari

are that the Second Circuit is right, and that ultimately they

will win on the facts at trial. But neither of these arguments

-- even if they are correct -- is a persuasive reason to deny

certiorari. Moreover, Respondents misconstrue the well-

known marks doctrine and its impact on domestic and

international trademark policies and protection.

A. THE NINTH CIRCUIT DECISION WAS

GROUNDED IN THE LANHAM ACT

The Ninth Circuit recognized a foreign well-known marks

doctrine. The Second Circuit did not. While Respondents

admit there is a Circuit split, they try to minimize its

significance by claiming that the Ninth Circuit did not base its

decision on the Lanham Act, but purely on public policy,

whereas the Second Circuit based its rejection of the well-

known marks doctrine on a “restricted” interpretation of § 44

of the Lanham Act. Opp. at 22-23. Yet, the fact that the

Ninth Circuit’s reasoning differed from that of the Second

Circuit highlights, rather than lessens, the split between

circuits.

Furthermore, Respondents’ description of the Ninth

Circuit’s decision is not a fair reading of that decision. In

recognizing the well-known marks doctrine, the Ninth Circuit

looked to key principles embodicd in the Lanham Act: the

territoriality principle and protection against consumer

confusion. See Grupo Gigante v. Dallo & Co., 391 F.3d

1088, 1094 (9th Cir. 2004); Petition for Writ of Certiorari

(“Pet.”) at 17-18 (discussing Grupo Gigante).

As Respondents admit, these principles -- like the well-

known marks doctrine itself -- are implicit in the Lanham Act,

and are derived from common law. See Opp. at 8; Pet. at 8-

9. The Lanham Act codified these common law principles.

See S. Rep. No. 79-1333 (1946) reprinted in 1946

U.S.C.C.A.N. 1274, 1274 (“The purpose of this bill is to

place all matters relating to trade-marks in one statute and to

eliminate judicial obscurity...”). Thus, the Ninth Circuit’s

reasoning did not reference express language in the Lanham

Act, but instead looked to case law to conclude that

territoriality is not absolute. It then applied these principles

to the claim of a foreign mark holder, who, like ITC, sought

relief under the Lanham Act.’

B. A DECISION BY THIS COURT WOULD BE CASE

DISPOSITIVE

Respondents argue this Court should not grant certiorari

because any decision would not be dispositive. Opp. at 6-7.

They imply that the Second Circuit held that ITC had

> The Ninth Circuit did not find it necessary to refer to international

treaties to determine the existence of a well-known marks doctrine,

since it concluded that the doctrine was already encompassed in the

Lanham Act. Grupo Gigante, 391 F.3d at 1099.

insufficient evidence to create a genuine issue of fact on

whether its mark is well-known. See Opp. at 2-3, 6 (citing

the District Court holding). To be sure, the District Court

found ITC had insufficient evidence of secondary meaning.

Pet. App. at 88a. But, the District Court took a novel

approach to secondary meaning,’ and the Second Circuit did

not affirm on this basis. Instead, after reviewing the record

de novo and noting the evidence supporting ITC’s claim, see

Pet. App. A at 6a-7a, it reached the issue of the well-known

marks doctrine -- presumably because it concluded ITC’s

evidence was sufficient to survive summary judgment,

requiring it to reach the issue. Cf. Empresa Cubana del

Tabaco v. Culbro Corp., 399 F.3d 462, 471 (2d Cir. 2005)

(“We do not reach the question of whether to recognize the

famous marks doctrine because... [Plaintiff's] acquisition

rights ... is barred by the embargo”). Thus, a decision by this

Court in ITC’s favor will result in a reversal of the decisions

below. Whether Respondents ultimately prevail at trial is

irrelevant to whether certiorari is appropriate, and improperly

asks this Court to engage in fact finding.

On the same grounds, Respondents suggest this Court wait

for another case. Opp. at 7. But two of the circuits most

concerned with international trade -- the Second and the Ninth

-- have now ruled directly on this issue. And Respondents in

fact note that a number of other circuits have indicated

positions either on the well-known marks doctrine directly or

indirectly on the principle of territoriality. See Opp. at 7-8,

23; Pet. at 20-21 (citing cases that recognize but do not apply

the doctrine).

> The District Court considered only use of the mark outside the

United States. Pet. App. at 91-95. ITC disagrees with the District

Court’s reasoning and decision regarding secondary meaning.

Moreover, that the Second Circuit has, in Respondents’

eyes, gotten it right is not a sound reason to deny certiorari,

particularly given the enormity of the issues at stake.

Respondents’ concern for the significant impact of this

decision only highlights the need to resolve this issue

promptly. There may not be many more opportunities to

resolve these conflicting decisions before other countries set

policies causing domestic trademark holders doing business

abroad to be harmed. Thus, the Court should act now to

resolve this circuit split.

C. RESPONDENTS MISCONTRUE THE WELL-

KNOWN MARKS DOCTRINE

Respondents would have this Court believe that ITC seeks

to create “ex nihilo a new paradigm,” one that would

represent a drastic departure from current trademark law.

Opp. at 5. This is simply not the case. United States

trademark law has long contained a form of the well-known

marks doctrine. And that doctrine, to the extent not codified

in the Lanham Act ab initio, was incorporated into the Act

through later amendments intended to implement the United

States’ treaty obligations, most notably through § 44. Formal

recognition of the doctrine by this Court is not a drastic

departure -- if a departure at all -- from existing law.

More important, these points go to the merits of the claim

and are essentially irrelevant to whether certiorari should be

granted. The admitted circuit split and the undeniable

significance of the issue support certiorari.

Respondents assert that the lack of express statutory

language denoting a well-known marks exception bars its

recognition. But, the well-known marks doctrine is

incorporated in the Lanham Act in two ways. First, it flows

from the notion, first established at common law, that a

trademark may be protected where it is known as well as

where it is used. Second, it is a critical provision in both the

Paris Convention and TRIPs, each of which is effectuated by

the Lanham Act.

1. The Well-Known Marks Doctrine Has Long Been A

Feature of United States Trademark Law

Respondents rely on the Second Circuit’s rigid and

absolutist view of territoriality. But, as they are forced to

admit, Opp. at 8, the territoriality principle itself is not in the

Lanham Act’s express language. Respondents nevertheless

claim that territoriality can be presumed because of its long

standing in the common law, whereas they claim the well-

known marks doctrine cannot be so presumed, because,

according to Respondents, there is no pre-Lanham Act

common law support. /d.

But this assertion misreads both the common law and

ITC’s argument.* Before the adoption of the Lanham Act,

this Court discussed the exception to the territoriality principle

for well-known marks. See Hanover Star Milling Co. vy.

Metcalf, 240 U.S. 403, 415-16 (1916) (holding that protection

of a trademark follows where it has been used “or its meaning

has become known,” with the goal of protecting against

palming off and unfair competition); United Drug Co. v.

Theodore Rectanus Co., 248 U.S. 90, 97-100 (1918)(same).

* Respondents claim that, according to ITC, the common law “did

not require marks be used at all.” Opp. at 11-12. This is

incorrect, as a careful reading of ITC’s Petition shows.

Thus, as ITC explained in its Petition, this long-standing

case law allows a mark used in one area to be protected in a

distant area where the mark is known but not used. See Pet.

at 8-9; Grupo Gigante, 319 F.3d at 1097; Brennan's, Inc. v.

Brennan’s Restaurant, L.L.C., 360 F.3d 125, 134 (2d Cir.

2004) (a “geographically remote mark” may be protected in

a distant market where there is evidence of reputation).

Where a mark is already known, even if it is not used, there

is the potential for consumer confusion and unfair competition

from similar marks. See Pet. at 8-9; De Beers LV Trademark

Ltd. v. DeBeers Diamond Syndicate Inc. , No. 04-4099, 2005

U.S. Dist. LEXIS 9307, at *25 (S.D.N.Y. May 18, 2005)

(noting that the well-known marks doctrine is a warranted

application of the Lanham Act because “avoidance of

consumer confusion is the ultimate end of all trademark law”)

(citation omitted).

Realizing that they cannot entirely avoid the impact of the

case law, Respondents assert that it is “a long leap” to apply

the same principle internationally. Opp. at 9. But that is

exactly what sections 44(b) and (h) require, even under

Respondents’ reading: national treatment for foreign mark

holders. See Opp. at 19-20. Thus, the international corollary

to Hanover is that a trademark that is used outside the United

States and is well-known in the United States, is entitled to

protection. A foreign mark holder, like a domestic mark

holder, may show either use or fame to establish a protectible

right. See DeBeers, No. 04-4099, 2005 U.S. Dist. LEXIS

9307, at *25-*26; cf. Maruti.Com v. Maruti Udyog Lid. , 447

F.Supp.2d 494, 500 (D. Md. 2006) (no trademark rights in

United States where mark was well-known in India, but

neither used nor well-known in the United States). To deny

such protection to foreign mark holders would be to deny

them protection provided to domestic trademark holders, in

violation of the Act.

Respondents also assert that, under the territoriality

principle, use in the United States is an “absolute

prerequisite” to United States trademark rights. Opp. at 7,

12. ITC does not contest that, as a general matter, use is

required to obtain trademark rights in the United States. But

the territoriality principle is not mandated by statutory

language and is not “absolute.” The cases on which

Respondents rely do not stand for this proposition. See e.g.,

Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992).

Two Pesos did not involve a foreign mark, nor the well-

known marks doctrine. In fact, in its holding, the Court

relied on the Lanham Act’s purpose to protect against

consumer confusion and unfair competition. /d. at 767-68.

2. The Lanham Act has Incorporated Treaty Provisions

Adopting the Well-Known Marks Doctrine

While Respondents acknowledge that sections 44(b) and

(h) “certainly aim to give cffect to the provisions of

international treaties,” they maintain that the Lanham Act

does not expressly incorporate the relevant treaty provisions.

Opp. at 21. And, Respondents argue that (a) the Paris

Convention and TRIPs do not require signatory nations to

adopt well-known foreign marks protection; (b) the treaties

are not self-executing, and (c) Congress has not implemented

ihe Weaties. Opp. at 15-16. Whether the treaties require

adoption of well-known marks protection (which they do)?

> There is no indication in the language of the treaties that their

protections are optional. See Paris Convention, Art. 6bis (“The

countries of the Union undertake, ex officio if their legislation so

permits, or at the request of an interested party, .... These

provisions shall also apply... .”). And Respondents’ references

to debate on this topic (Opp. at 15) have been superseded by the

2000 WIPO Guidelines, which make clear that states must protect

and whether they are self-executing are beside the point. The

United States has chosen to adopt and implement the

protections of the Paris Convention and TRIPs through the

Lanham Act. See Pet. at 9-16.

Respondents argue that there was no legislation “aimed

directly” at TRIPs Article 16(2), and therefore it was not

implemented. Opp. at 18. But, as ITC explained, Congress

adopted legislation to implement the treaty protections in full.

See Pet. at 11-16.° To the extent Article 16(2) was not

addressed directly in such legislation, it was because Congress

concluded that the protection at issue was already covered by

the Act, and in this case by the Act’s enactment of the Paris

Convention through § 44. See id. at 12-15. Respondents fail

to address this extensive evidence of Congressional intent and

argue instead that the well-known marks doctrine will give

foreigners an unfair advantage over United States trademark

owners. But in making this argument, Respondents ignore

§ 44(i), which grants United States citizens the same rights as

foreign owners of marks under § 44. See id. at 20.

well-known marks without use. See Joint Recommendation

Concerning Provisions on the Protection of Well-Known Marks,

World Intellectual Property Organization (2000), Art. 2(3)()

(members “shall not require . . . that the mark has been used in

. . . the Member state”).

* As they do elsewhere, Respondents again mistakenly accuse ITC

of inaccuracy. In discussing the phrase “in addition to the rights to

which any owner of a mark is otherwise entitled” in § 44(b), they

allege that ITC “incorrectly suggests that the phrase was added

alone in the 1962 amendment,” rather than the entire section being

amended. Opp. at 19, n. 13. But ITC in fact stated: “This section

[44] of the Lanham Act was amended in 1962 . . . One such

amendment was to change the last sentence . . .” Pet. at 15, n.5.

Lastly, Respondents suggest that certiorari should not be

granted because Petitioner waived any claim for unfair

competition brought pursuant to section 44(h). Opp. at 20.

This is a red herring. Petitioner’s cause of action is pursuant

to section 43(a), which protects against anyone who causes

consumer confusion. Sections 44(b) and (h) confirm that

foreigners may bring a cause of action pursuant to section

43(a) -- as Respondents admit. Opp. at 10. There is no

requirement that a separate claim be filed under section 44.

See Mattel, Inc. v. MCA Records, 296 F.3d 894, 907 (9th

Cir. 2002).

D. RESPONDENTS’ PREDICTIONS OF DIRE

CONSEQUENCES HIGHLIGHT THE NEED TO

RESOLVE THIS CONFLICT NOW

Respondents claim a well-known foreign marks exception

will have dire consequences. Specifically, it would leave

United States businesses without constructive notice of a

foreign entity’s claim to United States rights in a mark, force

United States businesses to conduct global trademark

clearances, and allow foreign mark holders to “warehouse”

marks with no incentive to register in the United States. Opp.

at 24-25. Respondents’ predictions, to the extent they hold

water, only serve to show that this Court should grant

certiorari and resolve the circuit conflict.

But these asserted objections all ignore that the mark must

be well known in the United States before the being entitled

to trademark protection. Thus, a United States business

would have notice of a well-known mark in its industry --

€.2., a jewelry store owner has probably heard of DeBeers,

a cigar manufacturer has probably heard of Cohiba, and a

grocery store 50 miles from the Mexican border has probably

heard of Grupo Gigante. By the same token, unwieldy

“global” clearances are not necessary where the issue is

marks that are well-known. And foreign mark holders still

have an incentive to file United States trademark applications:

clear priority of trademark rights, without the need to prove

renown in a particular market.

On the other hand, no United States business should be

entitled to appropriate a well-known mark to confuse

consumers and gain an unfair competitive edge. See Grupo

Gigante, 391 F.3d at 1094. Even the Second Circuit in fact

acknowledged that a “persuasive policy argument” supports

the well-known marks doctrine. Pet. App. at 49a.

CONCLUSION

For the reasons stated, Petitioner respectfully requests that

the petition for writ of certiorari be granted.

This 21“ day of August, 2007.

Respectfully Submitted,