# Brief for the Petitioners — Steele v. Bulova Watch Co. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386407_0186%3A3 ## Record - **Collection:** Supreme Court brief - **Document type:** Brief for the Petitioners - **Published:** January 1, 1952 - **Citation:** 344 U.S. 280 ## Text LIBRARY _ “SUPREME COURT, U.S. SUPREME COURT OF THE UNI OCTOBER TERM 1952 . e “NO. 38 - os SIDNEY STEELE, et al, PeTiTIONERS: versus. . BULOVA. WATCH COMPANY, INC. . 2 7 * ON WRIT OF CERTIORARI TO - | ‘THE UNITED STATES COURT OF APPEALS : 7 FOR THE FIFTH CIRCUIT ‘BRIEF FOR THE ith a ri g ~~ an Se . ' GRADY Bassert, ri 1501 Alamo, National Building, - Ce Set San Antonio 5, ‘Téxas.- / HERBERT ~ DAvIs, eS ies 904 Alamo National; ‘Building, San Antonio 5, Texas. eae ” W. L MATTHEWS, . 1501 Alamo National Building, Ee - San Antonio 5,. Texas. > oa Attorneys for Petitioners. rs aicieaashaetseniicceilitiiatisi tote Dee re) INDE X see . ‘Page ‘Opinions 0). hein PBN Ne etaie Nae 2 eater ane Woe Jurisdiction ......0........ pe tseteveniaeeee Ss oahitis Lape blots Rakes occ os Statutes Involved 0.02.0): Pea ee eee Speciwucaion of Error... ee na ig Ahlack Die rl Abin sae ae Bed a eghel EADN D nd 2 3-8 Summary of Argument : SAN TEND AERIAL? MH TEAS he De AA 9 Argument... pie Eire Fi tets Snare Meant Saeed. Se 10-23 Fa RMR RPRER CEG SORES aM ed Fl Caw Se Adelie STS Fas 24 3 CITATIONS CASES: » ape ee ® ; | American Banana Co. v. United Fruit Co., | 213 U. S. 347, 53 L. Ed. 826... Ae Oe ens | 1 Blackmer v. United States , 284 U, s. 421, 7 be SE ER 7 | Recta eb At, Aare edad SNR ciation ee _ Brown vy. Duchesne, 19 ie. 183, fs L.Ed, 696" 46 Cuba Railread Company vy, Cc rosby,, 222.U. S. 473, OW ta BG. SIG Be ees Ea el eta bso he INS | r ~ Dowagiac Manufacturing Company v. Minnesota Moline Plow Co., 235 U. S. 641, 59 L. Ed. 398 in ‘Hanover Star Milling Co. vy. Metcalf, 240 U.S. 403, 60:L. Ed. 713. a et Ker Ae Ingenohl v. Olsen & Co., 273 U. 'S. 541, 1 a Ed. 762... 3 Marshall v..Turnbull, 34 Fed. 827... ae - Sandberg v. McDonald, 248 U. S. 185, 63 L. ‘Ed. 200. 18 Slater v. Mexican National Railway Company, 194 U. 8. 120, 48 L. Ed..900......... 24 The People v. McLeod, 1 Hill 377, N. ¥. C ‘am. L. Rep. 164 3 dd The Schooner Exe hange v. M’Faddon, 7 C r. 114, : 3 L. Ed. 287 ae 15 United States v. Bowman, 269 b. S. 94, 67 L. Fd. 1492.19 STATUTES: 11 Corn Juris. Vol 63. Section 11 , ae Lanhgm Trade-Mark- Act. 15 a, S;G., | Sees, 1951-1127 | : Nf o Ld 3 Ce SUPREME COURT. OF THE UNITED STATES . OCTOBER TERM 1952 NO. 38 ‘SIDNEY STEELE, et al, PETITIONERS versus -BULOVA WATCH COMPANY, INC. << _2 Ogee > ON WRIT OF CERTIORARI TO. THE UNITED STATES COURT OF APPEALS | : FOR THE FIFTH aaupicaet BRIEF FOR THE PETITIONERS OPINIONS The majority opinion of the Court of Appeals (R. 389) and the. dissenting opinion of Judge Russell (R. 399) are- reported in 194 F. 2d.567-573. The findings of fact and conclusions of law of the District Court are peinted in the . record at pages 238-240. aman ipinen JURISDICTION The judartent of the Court of Appeals was entered on - February 21, 1952. Petition for rehearing was filed | March 7, 1952 and order denying the same was entered | March 18, 1952. Petition for -Certiorari was filed April Zi. 1952 and was granted June 2, 1952, Jurisdiction of this ésurt rests on 28 U.S.C. 1254 (1). STATUTES INVOLVED The Lariham Trade-Mark. Act, the Act of July 5, 1946, 60 Stat. 427, incorporated in 15 U.S.C. Sees. 1051- 1127. The interpretation of no specific provisions of this Act is in- volved but its applicability to marks registered and used only within the Republic of Mexico is the question at issue. "SPECIFICATION OF ERRORS The question presented and ‘urged arise upon the following errors of the Court of Appeals: 1. The Court erred in holding that the Lanham Trade- 4 ) Mark Act (15 U.S.C. Sec. 1051 et seq.) prescribes standards “at fair competition to be observed by all ‘nationals of the United States in the Republic of Mexico and throughout the world and hence forms He basis for a court of the “United States to enjoin the use of a trade-name held ‘unde~ a grant from the Republic of Mexico and used solely within the’ Republic of Mexico in the internal commerce of that Nation. 2. The Court erred in holding -that a United States. District Court°has pgwet to apply the laws of the United- States and enjoin the use of and thus nullify and cancel Mexican National Trade- Mark No, 33602, adjudicated by the Courts of Mexico to validly grant to Petitioner, Sidney i a oni hnnee Steele, the right to use the name “Bulova” in the Republic of Mexico as a trade-name for watches, the evidence show- ing that watches bearing the name are assembled and stamped with the name in Mexico and sold only in the internal commerce of Mexico. 3. The Court erred in holding that the mere fact that Sidney Steele is an American citizen and the Trial Court ‘acquired jurisdiction by service of process on him, gave the Trial €ourt power to apply the laws of the United States to his alleged acts of competition in Mexico in the face of the fact that his use of the name “Bulova” solely in the interffal commerce of the Republic of Mexico was. in accordance with a trade-mark granted under Mexican law and adjudicated to be valid by the Mexican Courts. 4, The Court: erred in holding that the panchass by Sidney Steele of unbranded watch cases and watch dials from manufacturers and jobbers in the United States furnished a basis for the granting of an injunction against Petitioners, because the purchase of such unbranded cases and dials does not violate any right of Bulova Watch Com- pany protected by law and does not justify nor tend to justify an injunction by a United States Court against the use in the Republic of Mexico of the trade-mark granted : under the laws of ‘Mexico. STATEMENT Bulova Watch Company, Inc,, filed this suit on June 13, 1949 in the United States District Court at San Antonio, ‘Texas, seeking a permanent injunction against the use by Sidney Steele of the name “Bulova” and a decree requir- - ing cancellation of his duly granted Mexican National Trade-Mark No. 33602 covering the name “Bulova” for ~ use in Mexico on Swiss watches. (R. 1-8) Do “Steele answered, stating that on December 5, 1933; he was granted Mexican National Trade-Mark No. 3360: cov- ering the name “Bulova” for use in connection with the sale of Swiss watches of all classes (R. 260) and that he had’ been engaged in selling Swiss watches imported from Switzerland in Mexico. under said trade name sincé 1933; ‘that his right te use the same in connection with the. sale of Swiss watches in Mexico had been twice adjudicated by the Mexican courts in actions brought by- Bulova Watch Company and its agent; and that all of the transactions in watches bearing the name “Bulova” occurred within the Republic of Mexico and were in accordance with and sanc-— tioned by the law of the Republic of Mexico and that the laws of the United States were, wholly. inapplicable there- — to. (R. 8-15). | . The District Court, based. on undisputed evidence, made the following findings of fact,’ none of which were set aside or altered by the Circuit Court: “1. The Defendant Sidney Steele is now and has been since 1933 engaged in the business of selling watches sole- ly in the Republic of Mexico from his sole and only place of business located in Mexico City. The Defendant Sid- ney Steele has no place of business in the United States and does not engage in the sale of watches or other goods within the United States or any of its territories. The Defendant Sidney Steele does not compete in the sale of watches in the United States or in any territory subject to its jurisdiction. (R.: 238): ane Note of the acts of the Defendant Sidney Steele in placing the name ‘Bulova’ on the face or works of watches or in the sale of watches bearing said name were done or - performed within the United States or any of its territories, but were/ /done and performed solely within the Republic of Me wie o Where the Defer dant, Steele assembles, marks on fe x oY | ‘ —— and sells all of the w vatches bearing the name ‘Bulova’ w hich are assembled, marked and sold by him. .(R. 238). “3. The Defendant Sidney Steele. procures all of the works of the watches sold by him solely from manufac- turers of watches in Switzerland. None of the works of watches imported by him into. Mexico from Switzerland. have the ‘Bulova,’ name stamped or engraved on them, said name being placed thereon by said Defendant at his place of business in Mexico City and not elsewhere. The Defendant Steele procures all’watch cases and watch dials used by him in his business in Mexico City from Switzer- ‘land except for some watch cases and watch dials which ‘are procured from manufacturers or jobbers in the United States. None of the watch cases or watch dials purchased in the United States or in Switzerband have the ‘Bulova’ name stamped or engraved thereon, such name being placed on watch dials by the Defendant Sidney Steele-at his place of business in Mexico City and not elsewhere. . (R. 238). “4. .On December 5; 1933, there was granted to S. Steele, Y. Cia., Ss. A., the predecessor in title of Sidney Steele, Mexican National Trade-Mark No. 33602, purporting to grant the right to use the name ‘Bulova’ in the Republic of Mexico as a trade name for w atches, and the Defendant Sidney Steele’s asserted right to use said name. is based on said Mexican trade-mark, which has been the subject of litigation between the Plaintiff Bulova Watch Com- pany, Ine., and the Department of: National Economy and the Director of National Property of the Republic of Mexico in eases before the Mexican courts in which De- fendant Sidney Steele was a party, and the Plaintifz. has . hot up te this time been successful in such litigation. At the present time there 48 a Suit or proceeding bending in| Mexico with reference to ihe right as between Plaintiff and the Defendant Sidney Steele to use the ‘Bulova’ name male on watches: assembled and sold’ by said Defendant in a Ne ico.” (R. 239). ' Based upon the above: findings, the Trial Court made the following conclusions of Taw: “1. The Court concludes that as a matter of law the alleged acts of unfair competition complain- ed of by Plaintiff were and are done and performed wholly outside of the jurisdiction and control of the Government and laws, both State -and Federal, of. the United States and outside of the territorial juris- ‘diction and powers of this Court. “2. The Court concludes ‘that as a matter of law the acts and conduct complained of relate to the internal commerce of the Reptblic of Mexito, solely within the jurisdiction and control of the Courts andthe laws of the Republic of Mexico. . “3. “The Court concludes as a matter of law - that it is without .autherity or jurisdiction to set aside or otherwise annul the Mexican trade-mark under which Defendant asserts the right to use the ‘Bulova’ name.’ Ch. 239-40). ! The following i is a brief history of the litigation: j in Mex- ico Which preceded the filing of this suit: On February iF 1946, thirteen years after the granting : of the Mexican trade- -mark to Sidney. Steele, Bulova Watch Company commenced an administrative proceeding before the Director of ‘Industrial Property “for a declaration of falsification, imitation and illegal use of the trade-mark ‘Bulova’.” The: petition in this 1946 case raised . sub- stantially the same issues as the petition filed in the Dis- trict Court at San Antonio, Texas in the instant case. (R. 262-266). : ; The Director General ‘of Industrial Property of the Re- public of Mexico denied the petition on the ground that it was barred by a 3-year limitation provision of Mexican & a ‘ ae law (R 286 and 383) ‘and that “the proofs rendered do not carry the conclusion that the trade-mark ‘Bulova’ was), fotoriously. known in this country on a date of the regis- e try of such trade-mark. ” (R. 286).° The “declaration of nullity” sought by Bulova Watch Company was in all things denied. (R. 293). eS Pa ee This action was-reviewed bY the District Court for the - Federal District, Mexico City, and a decree was entered # reversing the above-mentioned decree of the Director Gen- eral of Industrial Property (R. 321-327). The judgment of the District Court was appealed by Sidney Steele and the Director of Industrial Property to the Supreme Court of Mexico, (R. 327-333) and on June 24, 1948 the Supreme Court of Mexico reversed the. judgment of the District Court and affirmed the decree of the Director cf Industrial Property, the Supreme Court. declaring that the “judg- ment entered in the injunction suit to which this catise refers is revoked. ””. .(R. 346-358) . Thus, the administrative decree of, the Director | of industriat Property sustaining the validity of the ES ed trade-nafie “Bulova” and Sidney Steele’s right to the use-of the name was. finally adjudicated against Bulova Watch ‘Company by: the Supreme Court of Mexico. The issues in the instant case: were involved fn ‘that case and were. adjudicated against _ Bulova Watch Company and in favor of Stedle. : | ae On September 8, 1948, Bulova Watch Cabaae com- ‘menced a proceeding in the Federal’ District Court in Mex- ico City against the Director General of Industrial Prop- erty, alleging that the Director General had. granted and: / subsequently revoked an authorization in favor of Bulova’s agent to deal in imported watches under the name “Bul- ova.” Sidney Stoble was named’ “the third prejiidiced party in the suit.’ (R_! 360) ’ *The Plaintiff prayed for an — sna .- “ae @ injunction against the action of the Director General o€ - Industyial Property in revoking an official communication - of December 30, 1946, recognizing the agent’s right to the use of the name “Bulova” in Mexico an Watches which he _ desired to import and sell. (R. 363). -This injunction was ~ denied on. the authority: of “the final judgment of the Su- preme Court of Justice of the Nation,” again affirming the right of Sidney Steele to use the trade-name under the ° grant from the: Director General of Industrial Property. (R, 367-9). — me, eaceas On September ii, 1948, Sidney Steele commenced an action before the Director of Industrial Property seeking a declaration of illegal use of his Trademark No. 33602 named “Bulova” by Bulova Watch Company, Ine. (R. 379), and answer. was filed in such administrative’ action on Oc- . tober 20; 1948. AR, 381- =)... Bulova Wateh. Company, having been unsuccessful in attacking the trade-mark grant to Steelé in the courts of Mexico, decided to attempt to re- commence the litigation - in the American courts and claim that the validity of the Mexican trade- mark and the right to use the same in Mex- | ico is gov erned by the laws of the United States and par- ticularly the Lanham Trademark Act. penny of the fact situation involved and furnished a The instant suit based on the above theory, was filed in the District Court at San Antonio on June 13, 1949. (R. 1)..-The decision of the trial court dismissing * the - _ case antl the basis: thereof has been set out above. The Court of Appeals reversed the ataasin ‘of the basis for the granting of the relief sought by Bulova Watch C ompany. : suMMARY OF ARGUMENT Yl. Steele’s right . use the “Bulova” name is baad upon Mexican National \Trade-Mark No. 33602 granted to - him in 1933 under Mexican law. He ‘sed the. name ‘in Mexico continuously until 1946, a period of 13 years, be- fore any challenge of his right. to use the name was made - by Buleva Watch Company. This challenge culminated in a decision of the Supreme ( Court of Mexico’ affirming ~ Steele’s right to the reg istered trade- mark “Bulova” in: Mexico: which right was again affirmed by the ‘District | Court for the Federal District in g@948. Under these facts the courts of the United States should not enter a decree canceling or issue an injunction nullifying the Mexican trade-mark used only in the internal. commerce of Mexi- ¢o. | | | : The legal basis for’ the relief” sought by Bulova ’ Watch Company is the laws of the United States, and par-/ ticularly the Lanham Trade-mark Act, This “Act forbids unfair competition only in interstate and foreign commerce » and is’ inapplicable to the trade-mark granted. to Steele” under Mexican law which is used solely in the internal commeree of Mexico. ; 3. The fact that Steele: is a naturalized citizen of the United States does not require him while engaged in the - business of selling ‘watches in the internal ecommerce of ‘Mexico to conform to the Lanham Trade- mark Act or any: of the other laws of ‘the United, States regulating inter- state and foreign commerce. _ There is nothing in the Lan- "ham Trade-mark Act to indicate an intent on the part of Congress that it should apply to American citizens engaged in local commerce in foreign countries. In the absence of an express legislative provision making the Act applicable to citizens engaged in local trade in foreign countries the . Act shicaia not be construed to apply to sueh foreign local “activities. : 4. -The a by Steele of unmarked and-unbranded - watch cases and watch, ‘dials from manufacturers. and job- bers in the United States infringes no right of Bulova Watch Company and violates no duty owed by ‘Steele to. stid Company or anyone else. The: ‘purchase of unbranded and unmatked watch dials ‘in the U nited States is irrelevant to the right’ of Bulova Watch- ‘Company to annul and cancel the Mexican trade-mark granted. to Steele under which he uses the “Bulova” name on watches branded and sold sole-_ . - ly within the Republic of Mexico in- the internal commerce of said country, : Since Bulova Watch Company desires to enter into ponte eh in the internal commerce of- the Republic “A Mexico with Steele and others in the sale of watches, should 1 so’ in accordance with the laws of Mexico, a the adn inistrative’ and judicial acts. thereunder. Its reme- .dy -in. the instant case is under Mexican law before the. ad- ministrative agencies ‘and courts. of Mexico and not under the laws of the United States or in its courts. ‘ ARGUMENT a The majority opinion in the Court ef Appeals does not discuss, and apparently the majority of the Court did not _ consider, the true basis on which the Trial Court acted in this case. The Trial Court found that Steele’s claim of right to ise the “Bulova” name was fourided on a grant of such right by competent Mexican authority under the laws of Mexico and that Bulova: ‘Watch Company was seeking the decree of a court of the United States setting aside this of ficial’ Mexican grant. The title of es Mexican Ds ' a) wae onal ay ~ ton ae, ae Trade-Mark No-33602 shows that it is a “grant” of the “exclusivé ownership” of the “use of the word ‘Bulova’ ” to cover watches. (R. 260), Bulova Watch Company contends thrat it should be pro- . tected in.the use of the “Bulova” name in the Republic of Mexico ‘by the courts of the United States in accordance with the common law principles and the trade-mark stat- utes of the United States.) The Company does not allege _ or contend that Mexico ee “common law” country. It is; of course, a “civil law” jurisdiction where exclusive rights to the use of trade- marks are obtained only by regis- tration and grant in accordance with statutors“or * ‘code” law. Mexican National Trade Mark No. 53602" ‘ranted to Steele under Mexican code lay fs not subject to can- - Cellation or to nullification exceptSander and in accardance with the provisions of the Law of Industrial Prop the Republic of Mexico. * The courts of the United States shquid no mote cancel and nullify the right to use a trade- -name or trade-mark granted in Mexico under Mexican law than should the Mexican courts cancel rights grantetd or acquired under - the laws of the United States to use a trade-mark or trade- name in the United States. This was the view of the Trial Court in the instant case.’ It -held that, as a court ef the United States, it “is without authority or jurisdiction to set aside or otherwise annul the Mexican ‘trade- mark.” (R. 240). Marshall v. Turnbull, 34 Fed. 827, is a decision illustrat. ing this principle. In that case the Circuit Court. for the Eastern District of New' York dismissed a suit seeking. an injunction against the assertion of rights in ah asphalt _ Jake on an island in the mouth of the. Orinoco River _in—— * Venezuela. The Court first held (32 Fed* 124) that in- ° junctive relief might properly be granted since the Court arty of p= o we a ee had jurisdiction over the Defendant as a person and was in a position to enforce its decree against him. However, on reconsideration the Court held that the relief sought was in. derogation of aggant and official acts ‘of the government of Venezuela, and that the Coyrt was without authority to grant such relief. ‘In deciding the case the Court said: - “A naked injunction is asked for against him -° on the ground that his title is void because Venez- uglan officials acted improperly in creating it. In other words, he, it is claimed, holds nothing, not because what he took passéd (equita ably) through - him to the Manoa Company, but because the Venez- -uelan Government could give nothing. Turnbull's position under this bill is no different from that-of some stranger to whom the Venezuelan government . might have conveyed the rights originally conceded to Fitzgerald; and the court is asked to enjoin waste upon, or interference with, property in a foresgn country, because, as it is alleged, certain official acts of the government of that. country (annulling one concession and making a new one) are void. Such relief cannot be administered on such ground.” The trade-mark “Bulova” granted.to Steele under Mex- ican law is a Mexican property right drawng its existence and force from the laws of Mexico.. The use by Steele of ‘the name on watches assembled and sold by him in Mexico constitutes the very essence of the right granted to him by Mexican’ National Trademark No. 33602. To enjoin him: ‘from.the use of it is the same, thing as entering a decree of cancellation of the registration and grant itself. This point is stated with clarity and force by Judge Russell in his dissent in the Court of Appeals as follows: _ “That which the sovereign has authorized and judicially confirmed can not, when the acts arc per- formed wholly within the territorial limits of such “sovereign, be properly aici illegal and subject to injunction by our Courts merely because the perpetrator of such acts is an American citizen and in persor subject to the jurisdiction, of American Courts. *Cnsequently, when, on December 5, 1933, the Mexican Director General of Industrial Property granted to Steele the right to use the name “Bulova” _in the Republic of Mexico as a tradename -for watches (as found by the trial Judge upon undis- puted evidence) the acts of Steele in Mexico in ac- cordance with the grant were deren Especially is this so when-it appears, as if does here, that his right to the trade-mark was upheld in the Mexican Court in the proceedings in behalf of appellant seeking to set aside syich registered trade- mark in which Steele was named asa party. . mest 100) 'The general rules with reference to the recognition of trade-marks or trade-narnes are stated in Section 11 of the Article on “Trade-marks, Trade Names and Unfair Com-. petition,” in Volume 63, Corpus Juris, as folbws: “One ‘person may own a particular trade-mark in one country or jurisdiction and the‘same trade- mark may belong to anot her person in another coun- . _ try or jurisdiction, or the same trade-mark may » belong to one person in one part-of a state and to another person in another part of ‘the same state, or ‘ the trade-mark may be valid in one country and in- valid in another.” * * = @ > / e “Our courts, do’ not decide what trade-marks ‘exist or do not exist in foreign countries, and the . decision of a court of a foreign country as to the existence or nonexistence of a irade-mark therein will be given full force and credit in this country; but such foreign decision will not, settle who is en- titled to the trade- mark here. fe , The above rule was stated and applied ia Ingenoh! v. Olsen & Co., 273 U.S. 541, 71 L. Ed. 762, in an opinion * i - ; cen y ra written by Justice Holmes involving the recognition of a- trade-rmark in the British colony of Hong Kong. Justice Holmes put the matter tersely as follows: i “A trade-mark started elsewhere would depend for its protection in Honk Kong upon the law pre- vailing in Hong Kong, and would confer no rights “Ss except by’ the consent of that law.” _ In the case of Hanover Star Milling Co. . Metcalf, 240 U. S. 403, 61 L. Ed. 713, Justice Holmes in a concurring Opinion stated the power ef different states over the use of trade- marks in their territory as follows: Pa “But it never should he forgotten, ary in this. * - ¢ase it is important to remember, that when a trade- mark started in one state is recognized in another it is Dy the authority of a new sovereignty that gives its sanction to the right. The new sovereignty is not a passive figurehead. ° It creates the right with- in its jurisdiction, and what it creates it may condi- tion, as by requiring the mark to be recorded, or it may deny.” _The Lanham Trade- mark Act does not contain any pro- visions which attempt to extend the application of the Act beyond the boundariés of the United ‘States. It forbids, unfair competition and the'use of a trade-mark: in “com- merce,” and defines the term ‘‘commerce” as all commerce “which. may lawfully be regulated by Congress.” This, Court has specifically held that Congress has no jurisdic- tion beyond the boundaries. of the United States and its possessions. Its power does not extend into the territorial limits of a foreign nation and control acts pertaining to its internak commerce or affairs. ‘ It is a fundamental concept of “international law, as” : well as a matter of logic, that the government powers of ~ one sovereign nation de not extend inte and govern rights within the territorial domain of another sovereign nation. ee a \ cies —1l5— In The Schooner Exchange v. M’ Faddon, 7 Cr. 44 at. page 136, Chief Justice Marshall stated this fundamental . principle as to the jurisdiction of courts and national au- thority as follows: . Berea jurisdiction of courts is a branch of that which is possessed by the ,nation as an independent “sovereign power, ; - : “The jurisdiction of the nation within its own territory is necessarily exclusive and absolute. It is susceptible of no limitation not imposed by itself. Any restriction upon it, deriving validity from an external source, would imply. a diminution of its sovereignty to the extent of the restriction, and ¢ an-investment of that sovereignty to the same ex- tent in that power which could impose such re- striction. “All exceptions, therefore, to the full and com- - ' plete power ¥f a nation within its own territories, niust. be traced up to the consent of the nation itself. They cam flow from ho other legitimate source.” } In The Beople v. McLeod, 1-Hill 377,.15 N. Y. Com. L. . Rep. 164, the Supreme Court of: New York quoted the above language of Chief Justice Marshall and said: “these are “not. = rules of yesterday ; but have formed a part of the acknowl- edged law of nations for nearly two thousand years.” In American Banana Co..v: United Fruit Co., 213 U. 8. 347, 53 L. Ed. 826, the Court held that it was the universal | rule “that the character of an_act as lawful or unlawful must be determined wholly by the law, of the country where the act is done,’’ and refused to apply the antitrust laws of the United States in a suit etween two American. corpora- tions based upon: activities in Panama and Costa Rica. In its opinion the Court said: a “For another-jurisdiction,. if it should happen to lay hold of the actor, to treat “him according to ? — {, its own 1 notions rather than those of the place where he did the axts, not only would be unjust but would be an interference with the authority of another sovereign, contrary to the comity of nations, which _ the other state concerned. justly might resent. : ee ee Fi “The foregoing considerations would lead, in . case of doubt, to a construction of any statute as intended-tg be confined in its operation and effect to the territorial limits over which the lawmaker has general and legitimate power. ‘All legislation is prima facie tergitorial, ; - Words having uni- versal scope, such as ‘every ‘contract in restraint of : ' trade,’ “every sta we who shall monopolize,’ ete., will be taken, as ajmatter of course, to mean only everyone subject ‘a such legislation, not all that the _ legislator subsequently may be able to catch.” In Brown v. Duchesne, 19 How. 183, 15 L. Ed. 595, it was held that a United States patent could be infringed only by acts done within the territorial boundaries of the _ United States. The opinieén was written by Chief Justice Taney, and stated the basic principle with reference to the territorial reach of acts of Congress as follows: “But these Acts of Congress do not, and were . - net intended. to, operate beyond the limits of the’ _ United States; and as the patentee’s right of prop- erty and exclusive use is derived from them, they cannot extend beyond the limits to which the law itself is ‘confined. And the use of it ‘butside of the. jurisdiction of the United States is not an infringe- ment of his rights, and he has no claim to any compensation for the profit or advantage the party may derive from it.” Cuba, Ratroat- Company v..Crosby, 222 U.S. 473, 56 L. Ed. 274, involved the liability for personal injuries sdffered by an employ ee while working for the defendant Railroad / —17-- in Cub&.. The court held that since the Lability, if amy. arose under the law of Cuba and since the plaintiff pro- _ duced no evidence as to what that law was, no presumption’ could be indulged in that it was the same as the law of the | United States. On this point this Court said: “But when an action is brought upon, a cause arising outside of the jurisdiction, it always should. be borne in mind that the duty of the court is not to administer its notion of justice, but to enforce an obligation ‘that has been. created by a different WO ass The law of the forum is material only- as setting a-limit of policy beyond which such | obligations will not be enforced there. With very. rare exceptions the liabilities of the parties to each other are fixed by the law of the territorial juris- diction within which the wrong is done and the parties are at the time of doing it ..... That, and that alone, is the foundation of their rights.” The majority opinion of the Circuit Court, in holding _that the Lanham Trade-mark Act covered the use by Steele of the Mexican trade-mark within the Republic of Mexico stated: “It would seem that in the Lanham’ Trade-mark Act of 1946 the Congress intended to regulate interstate and foreign commerce to the full extent of its constitutional powers.” The majority opinion, based on this premise, then proceeds to apply the Act as _though it related not to the regulation of “interstate and foreign commerce” but to be internal or domestic commerce of the Republic is Mexico. igre AT € Chis illogical-application of the Act dealing with “‘inter- state and foreign” commerce to local commerce in a foreign country by the ‘majority of the Circuit Court is sought to be justified by the fact that Sidney Steele is a naturalized citizen of the United States, >» a Laying aside for the moment the question as to whether or not the Congress of the United States has power to legislate with reference to the internal commerce of Mexico .- (which power is denied in the decisions quoted above) let us examine the question as to whether or not the Congress in enacting the Lanham Trade-Mark Act evidenced any intent to legislate with respect to such commerce or with respect to citizens doing business in the internal commerce of another country. In Sandberg v. McDonald, 248 U. S. 185, 63 L. Ea. 200, this Court held that employment contracts of foreign seamen on foreign vessels in a foreign port were not in- validated on account of conflicting with the acts of Congréss relating to payment of seamen’s wages, and discussed the territorial nature of legislative acts.as follows: “Legislation is presumptively territorial and confined to limits over which the lawmaking power — has jurisdiction. American Banana Co. v. United Fruit Co,, 213 U. S. 347, 357, 53 L. Ed. 826, 832 29 Sup. Ct. ten. 511, 16 Ann. Cas. 1047. In Patterson v. The Eudora, supra, this court declared such. legislation es to foreign vessels in United States ports to be constitutional. We think that there is nothing in this section to show that Congress in- tended to take over the control of such contracts and payments as to foreign vessels except while they were in our ports. Congress could not prevent the making of meh contracts in other jurisdictions.” We submit that the Lanham Aet is Srcncisioersais ~ territorial as to the persons and transactions covered by it. There is nothing in the Lanham Trade-Mark Act to. indi- cate any intention of Congress to make it: effective as to . ‘citizens of the United States engaged in the internal commerce of Mexico or any other foreign country. The provision of the Act stating tHat it supplies to “all commerce Aan | & which may lawfully be vebilaied by Congress” | does not deal with what “persons” the Act applies to, but to what “commerce” the same applies. The commerce intended ta be covered is clearly “interstate and foreign” commerce and this provision of the law is. not susceptible to any other construction. There is nothing in the testes Act to indicate that Congress intended to depart from the common sense - principle generally applied to civil statues regulating com- merce and trade and to adopt a new and unprecedented principle that the same is to be applied to citizens of the _ United States in their local businesses established in and operated under the-!aws and customs of foreign countries. There have been a few acts of Congress dealing with matters relating to citizenship itself which Congress has made specifically: applicable to. American citizens residing abroad. In Bhickes uv: United States, 284 U.S. 421, 76 L. Ed. 375, this Court sustained an act of Congress providing for _the service of subpoenas upon Americah citizens residing in foreign. countries; holding that this related to a duty appertaining to citizenship. But in that case the Court . stated that “the legislation of Congress, unless the contrary . intent appears, is construed to apply only within the terri- torial jurisdiction of the United States.” ‘ The Lanham Trade-Mark Act may be searched-in vain for any expression of intent that it shall be applied on the basis of American citizenship or that the Congress had any intention that it would apply to rights arising under | registered Mexican trade-names placed on articles sold only in the Republic of Mexico. | —- te’ mitell States v. Bowman, 260 U.S. 94, 67 L. Ed. 149, th s Court discussed the extraterritorial! application of the ' ldws of the United Sates as follows: a —20— “Crimes against private individuals or their preperty, like’ assaults, murder, burglary, larceny, robbery, arson, embezzlement, and frauds of al _ kinds which affect the peace and good order of the _ community, must, of course, be committed within . - the territorial jurisdiction of the government where’ - it may properly exercise it. If punishment: of them — _is to be extended to_include those committed outside of the strict territorial jurisdiction, it is natural for Congress to say so in the statute, and faihrre to do so will negative the purpose of Congress in, this regard.” S : ees As stated in the above ease, if, Congress intends an act i cals to be applicable outside of the territorial jurisdiction~-of the United States “it is natural for Congress to say so jn the. statute, and failure ‘to “do so will negative the purpose - of Congress in this. régard.” ‘Therefore; the faiture—of- Congress to specifically provide in.the Lanham Trade-Mark ’ Act that it’ would apply to American nationals engaged in _. the internal commerée of. foreign countries. negatives any eee, inference that Congress intended it to so apply. _ The last article of the Lanham Trade-Mark Act (Article 1127 U.S. Code) contains ‘a statement of the intent and . purpose of the Act but, significantly, does not state that it-is intended to apply to American nationals abroad or to the internal commerce of other nations. Certainly if Con- gress had any such novel ideg, in mind it would have been noted in this or some other section of the Act and would . have been the subject of debate or comment in Congress, ° | _ As stated by Judge Russell of the Court of Appeals in- his dissenting opinion: Oe : ‘ “Under: even the broadest ‘interpretation of the Lanham Aet, supra, it evidences no attempt to pre- scribe a standard of fair competition for the Na- ‘tions of the world. | Its provisicns. are, and must be, ZI applicable to ‘territory within the reach of Con-> gressional power. Neither do its provisions so compellingly; permeate the being, or saturate the conscience, of an American Resident, doing business in a foreign country, as to impose .a guilty stain upon his acts there done in accordance with author- ity erented by such puma? Be laws.” cR. 399). The Sicisectiy opinion of the Court of Appéals comments upon. the: facts that watches bearing the “Bulova” name ;. _Which were purchased in Mexico were brought into the United States by the owners thereof and came to the atten- tion of various watch dealers in the United States who sold watches supplied by Bulova Watch Company. No conten- tion is made that those watches were imported into the _ United “States to be sold in competition with watches offered for sale by Bulova Watch Company. ; The. undisputed ‘evidence in this case shows, and the uncontested findings of -the “Trial Court are, that the . . Defendant Steele has engaged in the business of: selling - watches bearing the “Bulova” name “solely in the Republic ° of Mexico from his sole and only place of business located in Mexico City”, and that Steele “does not compete in the sale of watches in- the: United States or in any..territory - subject . to its jurisdiction.” (R, 238). The fac? that certain .owners of watches who. have purchased them in. _ Mexico bring them into the United States does not create a cause of action against Sidney Steele, nor does it con- ' stitute a wrong of which Bulova Watch Company can com- plain. . Such collateral facts do not bear upon the question -in this Case as to the right of an American court to cancel. the registered Mexican trade-mark belonging to Steele and ._ his right to use the name on watches sold solely in the __ internal commerce of Mexico, —22—. ’ The majority opinion of the Court of Appeals also _. comments upon the purchase by Steele of unbranded and > unmarked watch cases and dials in the United States and: the importation of the same ‘into Mexico. The opinion - infers that’ these purchases constitute a wrong which may ‘be complained of by Bulova Watch Company and for some - unexplained reason violate the Lanham Trade-Mark Act and confer power on the courts of the United States to enjoin Steeie’s use of the registered trade-mark in Mexico. . Bulova Watch Company did not complain in its com- plaint:in the Trial Court and cannot complain of the pur- chase by Steele or anyone else of unbranded watch dials . and watch ‘cases from’ American manufacturers and jcb- “bers. Such ‘action infringes no right of Bulova Watch Company and violates no duty owed by Steele to the Watch _ Company, or anyone else. The relief which Bulova Watch . Company seeks in this case is the cancellation and nullifica- tion’by injunction of the Mexican Trade-mark under which Steele places the “Bulova” name on watches at his place of business in Mexico City. \ | eat: | oh - . In Dowagiac . Manufacturing Company ~v. ‘Minnesota Moline Plow Co., 235 U. S. 641, 59 L. Ed. 398, this Court held that’a sale ixi Canada of grain “drills” or plahters covered by a United States patent did not constitute an infringement of the: patent, holding that the place of sale and not the place of origin of the product was determinative — of the question as to the application of the foreign law. In its opinion this Court said: aes, + Lan “Some of the drills, about 261, sold by the defen- dants, were sold in Canada, no part of the trans- _ action occurring within the United States, and as_ to them there could be no recovery of either profits or damages. The right conferred by a patent under _ our law is confined tothe United States and its. - territories (Rev. Stat. See. 4888, Comp. Stat. 1913, - 7 BB Sec. 9428), and infrigement of this right cannot be’ _. predicated of acts wholly done in a foreign country. _ See United Dictionary Co. y. G. & C. Merriam Co. 208 U. S. 260, 265, 52 L. Ed. A78, 480, 28 Sup. Ct. — Rep. 290. The case of Gould’s Mfg. Co. v. Cowing, 105 U. S. 253, L. Ed. 987, is cited as holding other- wise, but is not in point. . There the defendant made the infringing articles in the United States. Here, while they were made by. the defendants. The latter’s infringement consisted only in*selling the driils after they passed out of the makers’ hands. The place of sale is therefore of controlling im- - pertance here.” ° 3 What alien Watch Company seeks to enjoin Steele from.doing is the. placing of the word “Bulova” on the ~ watches. in the - Republic of Mexico. No injunction is’ ‘sought in this case against his purchasing unbranded watch cases and watch dials in the United States. The purchase of unmarked watch dials and watch cases in the- United . ' States does not violate any of Bulova Watch Company’s — legal rights and it therefore forms no basis for granting it any relief against Steele, The’ record in this case shows that Salove Watch ne _* pany took no action with reference to Mexican National Trade-Mark No. 33602 for approximately 13 yeurs after it was granted ‘to Sidney Steele. and during such period acquiesced in the usé of the name-by him in Mexico. The record shows that ‘Bulova Watch Company commenced its first action to set aside the trade-mark in February 1946 and was subsequently defeated in an attempt to nullify _ the trade-mark in an action affirmed by the Supreme Court. of Mexico. Under these facts, the Watch Company’s ~~ remedy, if any, is in the-courts of Mexico and under Mexi- ean law -— not under the. Lanham Trade-Mark. Aet and in, the courts, of the ‘United States. Cease | As stated by this sianes in, Slater v. Mexican National Railway Company, 194 U. S. 120,48 L.ed. 900: Sacre “The case is not one demanding extreme meas- ures, like those where a tort is committed in an un, civilized country. The defendant always can .be found in Mexico, on the other side of the river, and < it is to be presumed that the ceurts there are open to the plaintiffs.” 2 The Bulova Watch Company apparently desires to aie into competition with Steele and others in Mexico. We submit that it should do so under Mexican law as applied by the Mexican. courts and administrative agencies. “CONCLUSION , For the reasons stated, it is respectfully submitted that the judgment of the Court of Appeals should be reversed and the judgment ‘of the Trial Court affirmed. ‘Respectfully submitted, ‘GRADY BARRETT, . 1501 Alamo National Building, - San Antonio 5, Texas. HERBERT DAVIS, © 904 Alamo National Building, San Antonio 5, Texas. W. L:; MATTHEWs, | 1501 Alamo National Building, e Vo, ae Antonio .5, Texas. . . Attorneys for Petitioners. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386407_0186%3A3. Public record. Not legal advice.