“A more restrictive standard for extraterritorial application of this law would risk exposing U.S. trademark owners, including those with globally recognized brands, to abuse of their rights outside the United States. – ABA Brief
On February 3, the American Bar Association (ABA) filed a summary of court hearings asking the Supreme Court to clarify issues related to the application of the Lanham Act to cross-border trademark disputes. ABA submitted brief Abitron Austria GmbH v. Hetronic International, Inc. In this trademark lawsuit, the United States Court of Appeals for the Tenth Circuit confirmed a $90 million damages award for trademark infringement based almost entirely on infringement that occurred outside the United States.
In its gist, ABA argued that rapid developments in technology and the Internet are breaking down boundaries and enabling the development of cross-border brands and businesses.
“This disintegration of functional boundaries between distant territories has heightened the potential impact of foreign encroachment on U.S. commerce and, relatedly, the valuable trademark rights cultivated in this country.” ABA said in its brief.
According to the Bar Association, this requires clarification from the court on the Lanham Act.
“It is therefore imperative that trademark professionals, including members of the ABA, and their clients have a clear understanding of the circumstances in which the law applies extraterritorially,” the ABA continued.
3 part test
The ABA asks the Supreme Court to affirm the 10th Circuit’s decision in this case and adopt a three-part test applied by the 2nd, 11th and Federal Circuits. .
The three-part test considers three factors in determining whether the Federal Lanham Act applies to extraterritorial trademark disputes. The three factors are the impact of the defendant’s conduct on U.S. commerce, the defendant’s citizenship, and its conflict with the laws of a foreign jurisdiction. Importantly, the ABA test does not require infringement to cause disruption to US consumers. This is a topic of much debate among the parties that submitted the Abitron, Hetronic, and Amicus briefs.
The Tenth Circuit did not apply this three-part test, Abitron vs Hetronic In this case, ABA argues that the results would have been the same. Hetronic International wins $90 million judgment after 10th Circuit finds German manufacturer Abitron reverse engineered his Hetronic products and sold infringing products abroad and in the U.S. .
The Tenth Circuit cited precedent that Abitron’s infringement damaged U.S. commerce, despite the fact that 97 percent of sales occurred outside the U.S. between foreign sellers and buyers. , applying the criteria, rendered this judgment.
Overall, the ABA argued that this three-part test protects US interests and innovators.
“The more restrictive standard for extraterritorial application of this law would prevent US trademark owners, including those with globally recognized brands, from applying to the United States without proper and efficient legal recourse in a foreign jurisdiction. It puts you at risk of violating your rights outside,” the Bar Association wrote. .
case development
In addition to the ABA overview, the case has seen other developments in recent weeks.
On January 31, the Attorney General filed an application for permission to participate in oral arguments as a barrister. The motion also asked the Supreme Court to extend the time allotted for oral argument, he said, to 70 minutes. Of which, 25 minutes for Complainant Abitron, 15 minutes for the United States, and 30 minutes for Defendant Hetronic.
The attorney general said the government’s previous court opinion did not endorse either party, [the U.S. government] It seems to align more closely with that of petitioners, both legally and practically. “
In addition, Hetronic submitted a response summary on 27 January. The Oklahoma-based company argued that lower courts have applied the Lanham Act to cases involving similar extraterritorial infringements for the past 70 years.
“This is a simple case if the Lanham Act is properly construed,” the company wrote in its brief.
objection
Arguing that the Lanham Act does not apply in this case, Abitron asked the Supreme Court: Confused US consumers. “
Since the U.S. Attorney General’s filing of a letter of intent on September 23, 2022, various parties, including 12 entities, individuals and organizations, have filed a letter of intent in the case in addition to the ABA’s letter of intent. increase.10th Circuit Judgment On Grounds That Judgment Is Inconsistent With Foley Brothers. v.Filaldo (1949). Using this precedent, the Attorney General argued that the Lanham Act requires courts to consider whether foreign sales could cause consumer confusion in the United States.
Several groups recently filed papers asking the Supreme Court to overturn the 10th Circuit’s ruling.
On December 27, 2022, the European Commission, the executive body of the European Union, submitted an Amicus brief to the Supreme Court asking it to rule that the Lanham Act does not apply extraterritorially. The European Commission called on the US to commit to uphold the Paris Convention for the Protection of Industrial Property and her TRIPS Agreement.
“The Tenth Circuit’s decision in this case threatens to upend the carefully balanced international trademark system,” the European Commission wrote in its brief.
On the same day as the European Commission, three US intellectual property law professors filed a court hearing requesting the Supreme Court to overturn the 10th Circuit’s ruling.
“The pendulum is now back to a strong presumption against extraterritorial application of US law,” the professor wrote.
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Author: Vadim Vasenin
