Abitron Austria GmbH v. Hetronic International, Inc., 600 U.S. ___ (2023)
Hetronic (a U.S. company) manufactures remote controls for construction equipment. Abitron Austria, once a licensed Hetronic distributor, claimed ownership of the rights to much of Hetronic’s intellectual property and began employing Hetronic’s marks on products it sold. Hetronic sued Abitron in the Western District of Oklahoma under the Lanham Act, 15 U.S.C. 1114(1)(a), 1125(a)(1). A jury awarded Hetronic approximately $96 million. The Tenth Circuit affirmed, concluding that the Lanham Act extended to “all of [Abitron’s] foreign infringing conduct.”
The Supreme Court vacated. Applying the presumption against extraterritoriality, the relevant sections of the Lanham Act are not extraterritorial and extend only to claims where the infringing use in commerce is domestic. Neither provision provides an express statement of extraterritorial application or any other clear indication that it is one of the “rare” provisions that nonetheless applies abroad. Both simply prohibit the use “in commerce” of protected trademarks when that use “is likely to cause confusion.” Because sections 1114(1)(a) and 1125(a)(1) are not extraterritorial, the Court considered the location of the conduct relevant to the focus of the statutory provisions: the unauthorized “use in commerce” of a protected trademark under certain conditions. “Use in commerce” provides the dividing line between foreign and domestic applications of these provisions.
Supreme Court holds that Lanham Act provisions prohibiting the use “in commerce” of protected trademarks when that use “is likely to cause confusion” are not extraterritorial and extend only to claims where the infringing use in commerce is domestic.
SUPREME COURT OF THE UNITED STATES
Syllabus
ABITRON AUSTRIA GmbH et al. v. HETRONIC INTERNATIONAL, INC.
certiorari to the united states court of appeals for the tenth circuit
No. 21–1043. Argued March 21, 2023—Decided June 29, 2023
This case requires the Court to decide the foreign reach of 15 U. S. C. §1114(1)(a) and §1125(a)(1), two provisions of the Lanham Act that prohibit trademark infringement. The case concerns a trademark dispute between Hetronic (a U. S. company) and six foreign parties (collectively Abitron). Hetronic manufactures remote controls for construction equipment. Abitron, once a licensed distributor for Hetronic, claimed ownership of the rights to much of Hetronic’s intellectual property and began employing Hetronic’s marks on products it sold.
Hetronic sued Abitron in the Western District of Oklahoma for trademark violations under two related provisions of the Lanham Act, both of which prohibit the unauthorized use in commerce of protected marks when, inter alia, that use is likely to cause confusion. See §§1114(1)(a), 1125(a)(1). Hetronic sought damages for Abitron’s infringing acts worldwide. Abitron argued that Hetronic sought an impermissible extraterritorial application of the Lanham Act. The District Court rejected Abitron’s argument, and a jury later awarded Hetronic approximately $96 million in damages related to Abitron’s global employment of Hetronic’s marks. The District Court also entered a permanent injunction preventing Abitron from using Hetronic’s marks anywhere in the world. On appeal, the Tenth Circuit narrowed the injunction, but otherwise affirmed the judgment, concluding that the Lanham Act extended to “all of [Abitron’s] foreign infringing conduct.”
Held: Applying the presumption against extraterritoriality, §1114(1)(a) and §1125(a)(1) of the Lanham Act are not extraterritorial and extend only to claims where the infringing use in commerce is domestic. Pp. 3–15.
(a) The presumption against extraterritoriality reflects the longstanding principle “that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States.” Morrison v. National Australia Bank Ltd., 561 U.S. 247, 255. The presumption “serves to avoid the international discord that can result when U. S. law is applied to conduct in foreign countries” and reflects the “commonsense notion that Congress generally legislates with domestic concerns in mind.” RJR Nabisco, Inc. v. European Community, 579 U.S. 325, 335–336.
Applying the presumption involves a two-step framework, which asks at step one whether the statute is extraterritorial. This step turns on whether “Congress has affirmatively and unmistakably instructed that” the provision at issue should “apply to foreign conduct.” Id., at 335. If Congress has provided such an instruction, then the provision is extraterritorial. If not, then the provision is not extraterritorial and step two applies. That step resolves whether a suit seeks a (permissible) domestic or (impermissible) foreign application of the provision. That determination requires courts to identify the “focus” of congressional concern underlying the provision at issue, id., at 336, and then “as[k] whether the conduct relevant to that focus occurred in United States territory,” WesternGeco LLC v. ION Geophysical Corp., 585 U. S. ___, ___. Thus, to prove that a claim involves a domestic application of a statute, “plaintiffs must establish that ‘the conduct relevant to the statute’s focus occurred in the United States.’ ” Nestlé USA, Inc. v. Doe, 593 U. S. ___, ___ (emphasis added). Step two is designed to apply the presumption to claims that involve both domestic and foreign conduct, separating the activity that matters from the activity that does not. After all, the Court has long recognized that the presumption would be meaningless if any domestic conduct could defeat it. See Morrison, 561 U. S., at 266. Pp. 3–5.
(b) Neither provision at issue provides an express statement of extraterritorial application or any other clear indication that it is one of the “rare” provisions that nonetheless applies abroad. Both simply prohibit the use “in commerce” of protected trademarks when that use “is likely to cause confusion.” §§1114(1)(a), 1125(a)(1). Hetronic maintains that the Lanham Act’s definition of “commerce”—“all commerce which may lawfully be regulated by Congress,” §1127—rebuts the presumption against extraterritoriality. But this Court’s repeated holding that “ ‘even statutes . . . that expressly refer to “foreign commerce’ ” when defining “commerce” are not extraterritorial, Morrison, 561 U. S., at 262–263, dooms Hetronic’s arguments. Pp. 5–7.
(c) Because §1114(1)(a) and §1125(a)(1) are not extraterritorial, the Court must consider at step two when claims involve “domestic” applications of these provisions. Under the proper test, the ultimate question regarding permissible domestic application turns on the location of the conduct relevant to the focus of the statutory provisions. But much of the parties’ dispute in this case misses this critical point and centers on the “focus” of the relevant provisions without regard to the “conduct relevant to that focus.” WesternGeco, 585 U. S., at ___. Abitron contends that §1114(1)(a) and §1125(a)(1) focus on preventing infringing use of trademarks, while Hetronic argues that they focus both on protecting the goodwill of mark owners and on preventing consumer confusion. The United States as amicus curiae argues that the provisions focus only on likely consumer confusion. The parties all seek support for their positions in Steele v. Bulova Watch Co., 344 U.S. 280, but because Steele implicated both domestic conduct and a likelihood of domestic confusion, Steele does not answer which one determines the domestic applications of the provisions here.
The ultimate question regarding permissible domestic application turns on the location of the conduct relevant to the focus. See, e.g., RJR Nabisco, 579 U. S., at 337. And the conduct relevant to any focus the parties have proffered is infringing use in commerce, as defined by the Act. This conclusion follows from the text and context of both provisions. Both provisions prohibit the unauthorized “use in commerce” of a protected trademark when that use “is likely to cause confusion.” In other words, Congress proscribed the use of a mark in commerce under certain conditions. This conduct, to be sure, must create a sufficient risk of confusion, but confusion is not a separate requirement; rather, it is simply a necessary characteristic of an offending use. Because Congress has premised liability on a specific action (a particular sort of use in commerce), that specific action would be the conduct relevant to any focus on offer today. WesternGeco, 585 U. S., at ___–___.
In sum, §1114(1)(a) and §1125(a)(1) are not extraterritorial, and “use in commerce” provides the dividing line between foreign and domestic applications of these provisions. The proceedings below were not in accord with this understanding of extraterritoriality. Pp. 7–10, 14–15.
10 F. 4th 1016, vacated and remanded.
Alito, J., delivered the opinion of the Court, in which Thomas, Gorsuch, Kavanaugh, and Jackson, JJ., joined. Jackson, J., filed a concurring opinion. Sotomayor, J., filed an opinion concurring in the judgment, in which Roberts, C. J., and Kagan and Barrett, JJ., joined.
Judgment issued. |
Judgment VACATED and case REMANDED. Alito, J., delivered the opinion of the Court, in which Thomas, Gorsuch, Kavanaugh, and Jackson, JJ., joined. Jackson, J., filed a concurring opinion. Sotomayor, J., filed an opinion concurring in the judgment, in which Roberts, C. J., and Kagan and Barrett, JJ., joined. |
Argued. For petitioners: Lucas M. Walker, Washington, D. C. For United States, as amicus curiae: Masha G. Hansford, Assistant to the Solicitor General, Department of Justice, Washington, D. C. For respondent: Matthew S. Hellman, Washington, D. C. |
Reply of Abitron Austria GmbH, et al. submitted. |
Motion of the Solicitor General for leave to participate in oral argument as amicus curiae, for divided argument, and for enlargement of time for oral argument GRANTED. |
Reply of petitioners Abitron Austria GmbH, et al. filed. (Distributed) |
Joint appendix filed. (Distributed) (Statement of costs filed)(Feb. 10, 2023) |
Amicus brief of American Bar Association submitted. |
Joint appendix filed. (Statement of costs filed). (Distributed) |
Brief amicus curiae of American Bar Association filed. (Distributed) |
Joint Appendix submitted. |
Amicus brief of Stussy, Inc. submitted. |
Brief amicus curiae of Stussy, Inc. filed. (Distributed) |
SET FOR ARGUMENT on Tuesday, March 21, 2023. |
Motion of the Solicitor General for leave to participate in oral argument as amicus curiae, divided argument, and for enlargement of time for oral argument filed. |
Motion of the Solicitor General for leave to participate in oral argument as amicus curiae, for divided argument, and for enlargement of time for oral argument filed. |
Brief of respondent Hetronic International, Inc. filed. (Distributed) |
The deferred joint appendix is to be filed on or before February 3, 2023. |
CIRCULATED |
Motion of respondent for an extension of time to file respondent's brief on the merits granted and the time is extended to and including January 27, 2023. |
Motion of respondent for an extension of time filed. |
Motion of Hetronic International, Inc. for an extension of time submitted. |
REMOVED from the argument calendar for Wednesday, March 1, 2023. |
Record received from the U.S.D.C. Western District of Oklahoma. Sealed records transmitted electronically. The remaining record is available on PACER. |
Amicus brief of German Law Professors submitted. |
Amicus brief of United States submitted. |
Brief amici curiae of German Law Professors, et al. filed. |
Amicus brief of American Intellectual Property Law Association submitted. |
Amicus brief of European Commission on Behalf of the European Union submitted. |
Amicus brief of Professor William S. Dodge submitted. |
Brief amicus curiae of Professor Guido Westkamp filed. |
Amicus brief of Intellectual Property Owners Association submitted. |
Amicus brief of Three Intellectual Property Law Professors submitted. |
Amicus brief of International Trademark Association submitted. |
Amicus brief of Professor Guido Westkamp submitted. |
Amicus brief of Professor Dr Louis Pahlow submitted. |
Brief amicus curiae of United States supporting neither party filed. |
Brief amicus curiae of International Trademark Association in support of neither party filed. |
Brief amicus curiae of Intellectual Property Owners Association in support of neither party filed. |
Brief amicus curiae of American Intellectual Property Law Association in support of neither party filed. |
Brief amicus curiae of European Commission on Behalf of the European Union in support of neither party filed. |
Brief amici curiae of Three Intellectual Property Law Professors in support of neither party filed. |
Brief amicus curiae of United States supporting neither party filed. |
Brief amicus curiae of Professor William S. Dodge in support of neither party filed. |
Brief amicus curiae of Professor William S. Dodge filed. |
Brief amicus curiae of Professor Dr. Louis Pahlow filed. |
Brief amicus curiae of Professor Dr Louis Pahlow filed. |
Record received from the U.S.C.A. Tenth Circuit. Sealed portions of Appendix transmitted electronically. The remaining record is available on PACER. |
Amicus brief of Federal Circuit Bar Association submitted. |
Brief amicus curiae of Federal Circuit Bar Association in support of neither party filed. |
Record requested from the U.S.C.A. for the Tenth Circuit. |
SET FOR ARGUMENT on Wednesday, March 1, 2023. |
Brief of Abitron Austria GmbH, et al. submitted. |
Brief of petitioners Abitron Austria GmbH, et al. filed. |
The Clerk has approved the deferred method for filing of the joint appendix per Rule 26.4. |
Letter requesting permission to file the joint appendix under the deferred method filed. |
Letter requesting permission to file the joint appendix under the deferred method of Abitron Austria GmbH, et al. submitted. |
Letter requesting permission to file the joint appendix using the deferred method pursuant to Rule 26.4 filed. |
Consent to the filing of amicus briefs received from counsel for Abitron Austria GmbH, et al. submitted. |
Blanket Consent filed by Petitioner, Abitron Austria GmbH, et al. |
Petition GRANTED. |
DISTRIBUTED for Conference of 11/4/2022. |
Supplemental brief of petitioners Abitron Austria GmbH, et al. filed. (Distributed) |
DISTRIBUTED for Conference of 10/28/2022. |
Supplemental brief of respondent Hetronic International, Inc. filed. (Distributed) |
Brief amicus curiae of United States filed. |
The Solicitor General is invited to file a brief in this case expressing the views of the United States. |
DISTRIBUTED for Conference of 4/29/2022. |
Reply of petitioners Abitron Austria GmbH, et al. filed. (Distributed) |
Rule 29.6 Corporate Disclosure Statement filed with respect to Brief in Opposition of Respondent Hetronic International. |
Brief of respondent Hetronic International, Inc. in opposition filed. |
Motion to extend the time to file a response is granted and the time is extended to and including March 28, 2022. |
Motion to extend the time to file a response from February 25, 2022 to March 28, 2022, submitted to The Clerk. |
Petition for a writ of certiorari filed. (Response due February 25, 2022) |
Application (21A153) granted by Justice Gorsuch extending the time to file until January 21, 2022. |
Application (21A153) to extend further the time from December 22, 2021 to January 21, 2022, submitted to Justice Gorsuch. |
Application (21A153) granted by Justice Gorsuch extending the time to file until December 22, 2021. |
Application (21A153) to extend the time to file a petition for a writ of certiorari from November 22, 2021 to January 21, 2022, submitted to Justice Gorsuch. |