I don't normally blog about trademark issues, but this one has some connection to matters that I do blog about. On Friday, the U.S. Supreme Court agreed to hear Abitron Austria GmbH v. Hetronic Int'l, Inc.,No. 21-1043. The question presented is "Whether the U.S. Court of Appeals for the 10th Circuit erred in applying
the Lanham Act, which provides civil remedies for infringement of U.S.
trademarks, extraterritorially to Abitron Austria GmbH's foreign
sales, including purely foreign sales that never reached
the United States or confused U.S. consumers." The district court awarded a worldwide injunction, which the Tenth Circuit remanded for modification to reach only those countries in which Hetronic markets or sells products, and $90 million in damages, even though the defendants are all non-U.S. companies and only a comparatively small number of products infringing the U.S. trademarks and trade dress entered the U.S. The lower court's rationale was that the Lanham Act, as interpreted by the U.S. Supreme Court in its 1952 decision Steele v. Bulova Watch Co., 344 U.S. 280, allows for the extraterritorial application of U.S. trademark law when either the defendants are U.S. citizens, or their "foreign infringing conduct had a substantial effect on U.S. commerce" and application of the Lanham Act extraterritorially "would not conflict with trademark rights under another country's laws." Here, as noted, the defendants are not U.S. companies, and only a small portion of their sales were to U.S. consumers or incorporated into equipment that entered the U.S., but the Tenth Circuit concluded that the entire damages judgment could stand because of the "substantial effects" in the U.S.--that is, the sales that did reach the U.S., and also the fact that the U.S. plaintiff's profits were affected by the loss of sales it would have made abroad, but for the defendants' conduct there.
I need to give the matter some more thought, but I'm inclined to think that on the facts of this case the only potentially cognizable harm under the Lanham Act would have been the harm attributable to the products that entered the U.S., and that it is an error to characterize the purely foreign conduct by the foreign defendants as "foreign infringing conduct" just because it impacted the U.S. plaintiff's bottom line. (I believe this is, more or less, both the petitioner's and the United States' argument as well.) Anyway, I'm interested in the outcome, in part because I have written on extraterritorial damages in U.S. patent and in copyright law (see here and here), and concluded that such damages are permissible only when they are the foreseeable consequence of an act of domestic infringement. U.S. trademark law arguably is somewhat different, however, in that the statute forbids any "use in commerce" of a registered mark and any "use[ ] in commerce" of a word or other signifier that "is likely to cause confusion," and it defines "commerce" as "all commerce which may lawfully be regulated by Congress." The Lanham Act therefore may cover some extraterritorial conduct where, under analogous circumstances, patent or copyright law wouldn't. But maybe those circumstances are limited to those in which a defendant makes or sells products outside the U.S. and those products eventually wind up (and confuse consumers) in the U.S. Perhaps one could read the statute as holding the defendant liable under these circumstances, even if the defendant itself is not the entity directly exporting the goods into the U.S., at least where the defendant knows or should know of their ultimate destination. To hold foreign defendants liable for damages resulting from purely foreign sales that never enter the U.S., however, just because the plaintiff is a U.S. company and incurs some loss of profits resulting from fewer sales abroad, would seem to make U.S. trademark law govern the world, and that doesn't seem correct to me.
The Court also agreed to hear a patent case, Amgen, Inc. v. Sanofi, on the question whether "enablement is governed by the statutory requirement that the specification teach those skilled in the art to 'make and use' the claimed invention, 35 U.S.C. § 112, or whether it must instead enable those skilled in the art 'to reach the full scope of claimed embodiments' without undue experimentation—i.e., to cumulatively identify and make all or nearly all embodiments
of the invention without substantial "‘time and effort"'".