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How Far Can You Reach? The Territorial Limits of Lanham Act Infringement and False Designation of Origin Claims
On June 29, 2023, the U.S. Supreme Court set new geographic limits for infringement and false designation of origin claims raised under Sections 1114 and 1125(a) of the Lanham Act. In Abitron Austria GmbH v. Hetronic International, Inc., No. 21-1043, the Court held these Lanham Act claims do not extend extraterritorially, and only apply where the infringing use in commerce is domestic. 216 L. Ed. 2d 1013; 2023 U.S.P.Q.2d 760 (2023). The decision vacates a $95 million dollar damages award that was premised on infringing conduct that occurred primarily outside the United States.
Though the decision does not address and will not limit a trademark owner's ability to establish, for registration purposes, use in commerce through sales extending into foreign countries, it does limit a trademark owner's ability to enforce its rights in U.S. courts should a third party infringe its marks abroad. Given the global nature of business today, the decision highlights the need for trademark owners to continually reassess and, perhaps, expand their international trademark registration strategy as product lines and brands become more international in scope.
Background
Hetronic manufactures radio remote controls for construction equipment that incorporate a distinctive black and yellow color scheme, and which have been distributed in more than 45 countries around the world. Abitron (which includes five foreign entities — Abitron Germany GmbH, Abitron Austria GmbH, Hetronic Germany GmbH, Hydronic-Steuersysteme GmbH, and ABI Holding GmbH — and one foreign individual) had originally operated as Hetronic's licensed distributor. However, Abitron later claimed ownership of Hetronic's intellectual property rights, including the marks forming the basis of Hetronic's claims. Abitron reverse-engineered Hetronic's products and began selling Hetronic-branded products primarily in Europe (with some direct sales into the United States).
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