June 29, 2023
Decided June 29, 2023
Abitron Austria GmbH v. Hetronic Int’l, Inc., No. 21-1043
Today, the Supreme Court held that trademark infringement claims under the Lanham Act apply only where the claimed infringing “use in commerce” occurs in the United States.
Background: The Lanham Act imposes civil liability—potentially including actual, treble, and statutory damages—on anyone who “use[s] in commerce” a trademark in a manner “likely to cause confusion, or to cause mistake, or to deceive.” 15 U.S.C. §§ 1114(1)(a), 1117(a)-(c), 1125(a)(1). Hetronic, a U.S. company, sued Abitron, a group of foreign companies, under the Lanham Act, alleging that Abitron sold products that infringe Hetronic’s trademarks. Less than 0.3 percent of Abitron’s sales were made directly to U.S. buyers. Ninety-seven percent were made in foreign countries, to foreign buyers, for use in foreign countries; and the remainder were made in foreign countries but were designated to and ultimately did enter the United States.
A jury awarded more than $90 million in damages for all of Abitron’s sales, whether inside or outside the United States. The Tenth Circuit affirmed, holding that the Lanham Act applies extraterritorially to foreign sales that have a substantial effect on U.S. commerce. It reasoned that even Abitron’s foreign sales to foreign buyers for foreign use had a domestic effect by depriving a U.S. company of foreign sales that it otherwise would have made.
Issue: Whether the Lanham Act’s provisions that prohibit trademark infringement (15 U.S.C. § 1114(1)(a) and § 1125(a)(1)) apply extraterritorially.
The Court confirmed “that a permissible domestic application” of the Lanham Act “can occur even when some foreign ‘activity is involved in the case,’” but the question of liability reaches only an allegedly infringing “use in commerce” of a trademark that occurs in the United States.
“[W]e hold that § 1114(1)(a) and § 1125(a)(1) are not extraterritorial and that the infringing ‘use in commerce’ of a trademark provides the dividing line between foreign and domestic applications of these provisions.”
Justice Alito, writing for the Court
What It Means:
The Court’s opinion is available here.
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