Understanding the reach of Lanham Act decisions is now more critical than ever. By now, many in-house legal departments and eCommerce and sales professionals are well aware that the Lanham Act, which prohibits trademark infringement, is a powerful federal law that brands can use in their battle against unauthorized sales of their products, particularly on online marketplaces such as Amazon. With a well-designed and properly implemented eControl Program, a brand can wield the protections of the Lanham Act against unauthorized sellers using the brand’s trademarks.
For decades, federal courts have also generally allowed the Lanham Act to apply extraterritorially – outside of the United States – under various legal tests if there was arguably some evidence of U.S. consumer confusion, some material connection by the alleged infringer to the U.S., or some other meaningful harm sustained by the U.S. trademark owner as a result of the international infringements.
However, in a recent opinion, the United States Supreme Court has limited a brand’s ability to use the Lanham Act against infringers of their trademarks outside of the United States. The Court’s decision in Abitron Austria GmbH v. Hetronic International Inc. (“Abitron”) clarified that the triggering conduct for Lanham Act liability must be domestic (i.e. occurring within the United States) and that the relevant triggering conduct is “infringing use in commerce.” So what does this mean for eControl brands desiring to leverage their eControl programs beyond the U.S. borders? Read below for the case’s background and practical implications.
Having first determined that Congress did not draft the Lanham Act in a way to expressly provide that it applies to foreign conduct, the U.S. Supreme Court proceeded to the question of whether Hetronic sought (1) a permissible domestic application of the Lanham Act or (2) an impermissible foreign application.
To make this determination, a court must identify the “focus” of the Lanham Act and then determine whether the conduct relevant (or central) to that focus occurred within the United States. In the case of the Lanham Act, the U.S. Supreme Court held that the relevant conduct is the infringing use of the trademark in commerce in the United States. Because the verdict in the trial court, as well as the scope of the lower court’s injunctions, focused on sales by Abitron of infringing products outside of the United States, the Court remanded the case back to the Tenth Circuit for further proceedings.
In determining whether the Lanham Act should apply to conduct outside of the U.S., the courts should examine whether the infringing use of the trademark occurred in commerce in the U.S. The Act defines “use in commerce” as “the bona fide use of a mark in the ordinary course of trade,” when, among other things, “the goods are sold or transported in commerce, . . .” 15 USC § 1127. If the use in commerce occurs outside of the United States, the Lanham Act will not apply.
But, what exactly is “using [the trademark] in commerce” in the United States? The Court’s decision intentionally left unaddressed the “precise contours” of the meaning of “use in commerce.”
The U.S. Supreme Court appears to be grappling with how to address the reach of the Lanham Act in this online world. We can hope that the Tenth Circuit on remand will provide some additional guidance on what “use in commerce” means.
In the meantime, there are several things that eControl brands should take away from the Abitron decision:
For more information on how the Abitron decision specifically impacts your eControl enforcement, please reach out to your eControl enforcement attorney. For additional questions, please reach out to partners Jessica Cunning and Nina Webb-Lawton or contact the Vorys eControl team below.
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