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February 03, 2023

ABA asks U.S. Supreme Court to adopt three-part test in extraterritorial trademark disputes

CHICAGO, Feb. 3, 2023 — The American Bar Association filed an amicus brief today with the U.S. Supreme Court, asking the court to clarify the standards lower courts use in applying the federal Lanham Act to trademark disputes that cross international borders.

Federal circuits have employed several different legal standards in deciding extraterritorial cases under the Lanham Act, which provides civil remedies for the infringement of U.S. trademarks. The ABA brief cited the need for Supreme Court guidance, noting the rapid development of technology and the growth of the internet, which “has dramatically improved the ability to conduct business internationally and in many cases has led to brand awareness in territories outside a trademark’s geographic scope.”

“This breakdown of functional boundaries between distant territories has heightened the potential impact of foreign infringement on United States commerce and, relatedly, valuable trademark rights cultivated within this country,” the ABA brief said. “It therefore is imperative to trademark professionals — including members of the ABA — and their clients to understand clearly the circumstances in which the Act applies extraterritorially.”

The case at issue involves a U.S. company based in Oklahoma, which manufactures radio remote control systems for heavy industrial uses. It sued two of its former European distributors for selling copycat products, claiming that they had breached agreements, infringed on trademarks and misappropriated trade secrets, both during the partnership and after forming a competing company.

The U.S.-based company prevailed in both U.S. District Court and before the U.S. Court of Appeals for the 10th Circuit. But the latter’s reasoning differed from the test for extraterritoriality articulated by at least three other federal circuits, including the 2nd Circuit in Vanity Fair Mills, Inc. v. T. Eaton Co. In that decision, the 2nd Circuit held that courts should consider three factors in determining whether to apply the Lanham Act extraterritorially: the effect of the defendants’ conduct on U.S. commerce, the citizenship of the defendants and any conflict with the laws of foreign jurisdictions.

The ABA brief urges the Supreme Court to adopt that test while upholding the 10th Circuit’s judgment in support of the U.S. company.

“A more restrictive standard for extraterritorial application of the act would risk subjecting U.S. trademark owners, including those with globally recognized brands, to abuses of their rights outside the United States without adequate and efficient legal recourse in the foreign jurisdiction,” the brief said. “At the same time, a more permissive test that does not adequately respect principles of comity and foreign sovereignty would create its own set of issues.”

The ABA amicus brief in Abitron Austria GMBH v. Hetronic International, Inc., which was requested by the ABA Section of Intellectual Property Law, is here. Oral argument in the case is scheduled for March 21. The law firms of Kirkland & Ellis LLP, Pirkey Barber PLLC, and Debevoise & Plimpton LLP filed the brief pro bono on the ABA’s behalf.

The ABA is the largest voluntary association of lawyers in the world. As the national voice of the legal profession, the ABA works to improve the administration of justice, promotes programs that assist lawyers and judges in their work, accredits law schools, provides continuing legal education, and works to build public understanding around the world of the importance of the rule of law.