By Aaron Fellmeth
Faculty Editor
& Kelsey McGillis
Law Student Editor
In the Supreme Court’s June 2023 decision in Abitron Austria GmbH v. Hetronic International, Inc., an American remote-control manufacturer, sued a collection of 6 foreign parties for unauthorized use of their trademarks, primarily outside of U.S. territory. Abitron alleged trademark infringement under the Lanham Trademarks Act, 15 U.S.C. §§ 1051 et seq., which prohibits unauthorized trademark “use in commerce,” particularly when that use leads to consumer confusion and brand dilution. Section 1127 of the Lanham Act defines “commerce” as “all commerce which may lawfully be regulated by Congress.” The defendants countered that these claims rely on an impermissible extraterritorial application of the Lanham Act.
The key legal principle underlying this case is a presumption against extraterritoriality, announced by the Supreme Court in EEOC v. Aramco, 499 U.S. 244 (1991). Under this presumption, U.S. laws are meant to apply within the territorial United States only, unless Congress clearly intended a contrary result. This principle is intended better to effectuate congressional intent and to avoid international conflict for the other branches of government.
With this presumption in mind, the Supreme Court applied a two-step framework to determine a statute’s applicability beyond the United States borders. First, the court looked for a “clear, affirmative indication” that Congress intended the statute to apply extraterritorially. The Court found that the relevant sections of the Lanham act, §§ 1114(1)(a) and 1125(a)(1), merely provided for an infringement action for uses “in commerce,” which does not overcome the presumption. Step two requires the Court to determine whether the relevant conduct occurred within the United States.
In Steele v. Bulova, 344 U.S. 280 (1952), the Supreme Court had held that a U.S. citizen who manufactures watches in Mexico that bear a U.S. trademark not registered in Mexico infringed the Lanham Act when a few purchasers brought the watches into the United States. This was a clearly extraterritorial application of the Lanham Act. The Abitron majority struggled to distinguish Steele based on the claim that, in that case, “essential steps” to the infringement occurred in the United States (in fact, they did not) and on the dubious assertion that Steele’s conduct “was likely to and did cause consumer confusion in the United States.” At the same time, the Court reiterated the holding in Morrison v. National Australia Bank, 561 U.S. 247 (2010) that not just any domestic conduct would qualify as use in domestic commerce; the conduct must be “relevant to the statute’s focus” (in this case, preventing consumer confusion).
The Court’s opinion references the Paris Convention for the Protection of Industrial Property by explaining that trademark law is typically a national matter, valuable in preserving sovereignty. The court further concluded that the complex issues associated with consumer confusion and brand dilution are likely better handled by the individual political branches of government, given their experience in foreign policy.