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What is a “Domestic Application” of the Lanham Act? The Supreme Court Creates More Questions than It Answers

Rochelle C. Dreyfuss, Linda J. Silberman

In Abitron Austria Gmbh v. Hetronic International, Inc., the Supreme Court appears to have returned to its recent preference for bright-line rules in cases assessing the extraterritoriality of federal statutes. Abitron involved the extraterritorial reach of two provisions of the Lanham Act that prohibit trademark infringement. The Supreme Court had addressed the extraterritoriality of the Lanham Act in an earlier decision, Steele v. Bulova Watch Co. (1952), holding there that the Act could be applied to the unauthorized use by a U.S. citizen of the Bulova mark on goods that were manufactured and sold in Mexico, but where some of the infringing watches had “filtered” into the United States with adverse effects on the Bulova brand. The rationale for Steele was something of a hodge-podge. The Supreme Court relied on language in the statute referring to the jurisdictional provision of the statute, which provided for Congress’s intent “to regulate commerce within the control of Congress.” It also pointed to essential U.S. conduct that the defendant engaged in and to customer confusion in the United States.

Since Steele, however, the Court’s extraterritoriality jurisprudence has substantially changed as a result of cases such as Morrison v. National Australia Bank (2010) and RJR Nabisco, Inc. v. European Community (2016). The Court developed a two-step test that began with a presumption against extraterritorial application of federal statutes (in the absence of language or context that indicated a different result) and then looked further to see whether the case could be said to involve a “domestic application” based on the focus of the provisions. In addition, the Court has consistently rejected arguments that “in commerce” language in federal statutes carries a sufficient statement of extraterritorial application.