Grupo Gigante: Policy Contradictions of Territoriality

It is beyond contradiction that the economy has become one of global focus, and although many commentators may point to relatively-recent innovations involving the Internet and international jet travel, issues surrounding the integrity of trademarks across national borders have challenged business and the legal profession for much longer. Even within the United States, geographical distinctions have seemingly vanished as the interstate highway system, a host of low-fare regional airlines, and the prominence of cellular phones have connected California to Connecticut and all points between.

In a simpler time, an undefined period of yesteryear, it may have been easier to identify individual pockets of economic activity and, within such, trademarks limited to specific geographies. As travel and communication have become more enhanced over the years, however, these isolated pockets have merged with their neighbors until the present, when it is questionable as to if there remain any such islands where commerce hasn’t reached.

Within this expanding economy, companies naturally desire to introduce their products to new populations of consumers, and in doing so wish to bring forward the brand names, advertising, and goodwill created for and by those items introduced into other markets. The issue becomes complicated when another party has previously utilized or registered a similar mark in that locale, as the situation forces a confrontation between the national aspects of trademarks laws and the underlying purpose of those laws. In addition, questions will arise regarding the intent of the second user of the mark to trade upon the goodwill of the first user’s reputation; a double-edged sword that requires subjective judgment as to why the second user adopted the mark and how well-known the primary mark was at the time the second use started.

As a contemporary illustration of this concept, the 9^th Circuit Court of Appeals has recently opined on the case of two grocery store chains, both named “Gigante.” The senior user, Grupo Gigante, started using the mark in 1962, and had expanded to nearly 100 stores by 1991, the year in which the junior user, Dallo & Co., opened its first store in San Diego. Twenty miles separated the senior and junior users, likely an easy case if considered solely under U.S. law, but a situation made much more complex by the presence of the U.S.-Mexican border running between them.

In 1995, Grupo Gigante explored entry into the California market, and in so doing, learned of the use by Dallos. Grupo Gigante did not contact Dallos concerning the “GIGANTE” name until they decided to actually enter the California market in 1998. In the interim period, specifically October 1996, Dallos opened a second store in San Diego. No federal registrations were at issue, most likely because no interstate commerce was involved, but both parties registered the mark with the state of California: Grupo Gigante in June 1998, Dallos in July 1998.

Grupo Gigante opened two stores in the Los Angeles in 1999, and a third in 2000. After the first opening, Dallos forwarded a cease-and-desist letter demanding that Grupo Gigante cease using the “GIGANTE” name. The latter instead filed the instant suit seeking declaratory judgment as its superior right and an injunction against Dallos continued use.

The district court found for Grupo Gigante, finding that their mark had acquired secondary meaning, and that such satisfied the well-known mark exception to the territoriality principle. The court found, however, that laches barred Grupo Gigante barred enforcement of priority against the two Dallos stores already in operation, citing the delay after Grupo Gigante first learned of the Dallos use.

On review, the Ninth Circuit Court of Appeals remanded, allowing that a well-known mark exception to territoriality did exist, but stating that the district court had not applied the correct standard. Per the appellate court, secondary meaning as applied by the district court was a proper measure when adjudging a mark within the United States, but “where the mark has not before been used in the American market, the court must be satisfied, by a preponderance of the evidence, that a substantial percentage of consumers in the relevant American market is familiar with the foreign mark.”[2]

This case provides a contemporary backdrop for analyzing the disparate standards applied to conflicting marks within the United States versus the situation where a mark in the United States is being used in conflict with a foreign mark. Although Grupo Gigante embodies many of the elements pertinent to the broader discussion, its facts are limited in some respects,[3] and alternate case law and commentaries will be examined.

Before delving into the analysis of the Grupo Gigante decision, it is appropriate to review the evolution of two seemingly-contradictory geographical doctrines, and in doing so to analyze the policy components that have guided these doctrines to their present form.

Absent any application of law, a trademark embodies the goodwill garnered via the mark’s use in commerce, the reputation assigned to it amongst the grouping of consumers that have experienced the product or service. Under this simplistic method of evaluation, the only geographical boundaries imposed are those dictated by the mark itself and the extent to which its consumers carry the goodwill to others. Although a company may have a limited area of impact based upon a combination of internal and external constraints, the societal changes noted above may carry the mark’s reputation far outside this area.

It is certainly conceivable that two parties might innocently arrive to the same mark for similar goods, and it is equally conceivable that a second party might recognize the potential of a remote mark and opt to introduce it to the local market without any reference to the first user. Dependent upon the relative areas of trade, the two marks may co-exist in commerce without any impact on one another, and each may continue to build goodwill within their respective markets. Should one of the parties wish to expand geographically, however, a conflict will almost certainly arise regarding who has the greatest right in the mark.

The question of territoriality, in this circumstance, is answered with reference to the goodwill underlying each mark within both the current and prospective markets. By itself, this is a complex issue that requires a somewhat subjective determination of the marks’ present geographic impacts, as well as estimates regarding the future expansion of each. In the modern world, these determinations are made more difficult in light of a business’ ability to almost instantaneously employ a mark worldwide through the Internet and establish goodwill in areas that may have been unreachable just a decade prior. Again, absent any introduction of law, the decision regarding priority in a mark is one of equity, and a quest befitting Solomon himself.

In a utopian environment, territoriality would be defined solely by goodwill, but yet another complicating factor arises through the governance of rights via national laws. This distinct definition of territoriality limits the purely equitable approach by introducing separate legal rights as dictated by each country’s own laws, and although numerous international agreements have sought to align the procedures for securing trademark rights, it still remains necessary, with limited exception,[4] to gain and defend rights on a country-by-country basis.

Allowing that there is a disconnect between the natural expansion of goodwill and geographical boundaries, determination of a solution necessarily requires understanding as to how courts would resolve a conflict occurring solely within the United States, then further comprehension as to how the decision would differ if addressed against foreign marks seeking recognition and enforcement within the United States.

As established, goodwill is not necessarily constrained to geographic or political boundaries, as it seeks to expand to the reputation of the product itself. In a society that has progressively become more mobile, more connected, and more enabled to find items that may have previously been remote in nature, the mark owner may not be able to accurately gauge precise areas of impact.

Within the U.S., it became apparent that circumstances existed wherein two parties could arrive to the same or similar marks for the same goods, prompting a balancing of avoidance of confusion with the protection of each party’s goodwill in the respective marks. Compounding the issue was the allocation of geographies where neither party has built a reputation, prompting the judicial system to determine an equitable division. In the event that one of the involved parties had secured a federal registration, the solution was somewhat facilitated, but as shown below in the Dawn Doughnut circumstance, there were situations in which even the federal registration didn’t permit the rights holder to immediately demand the alternate user to cease use of the mark.

Again, although the conceptual premise of concurrent use makes a degree of sense in any territorial mark dispute, it is a domestic policy under the Lanham Act. As will be shown below, it has certainly influenced opinions regarding the international use of marks, but as the latter abuts a series of national laws, rights are generally determined on a country-by-country basis under those laws.

Within U.S. trademark history, two cases decided in the early twentieth century established the basis for concurrent use jurisprudence, now encapsulated within the Tea Rose-Rectanus doctrine, a name derived from the subject marks and parties to these cases.[5]

The “TEA ROSE” case involved the right to use that mark in connection with the sale of flour in Alabama. The Court, after introducing the basic function of trademark law,[6] stated one of the guiding principles regarding rights in a trademark itself: “[I]t is plain that in denying the right of property in a trademark it was intended only to deny such property right except as appurtenant to an established business or trade in connection with which the mark is used.”[7] More simply put, rights in a trademark vest through its use, a concept firmly embedded in the Lanham Act codified in 1946,[8] and act to protect the goodwill underlying the trademark, not the trademark itself.

Before addressing itself more specifically to the facts applicable to the joined parties within Hanover, the Court summarized its position on priority of use as follows:

“In the ordinary case of parties competing under the same mark in the same market, it is correct to say that prior appropriation settles the question. But where two parties independently are employing the same mark upon goods of the same class, but in separate markets wholly remote the one from the other, the question of prior appropriation is legally insignificant; unless, at least, it appear that the second adopter has selected the mark with some design inimical to the interests of the first user, such as to take the benefit of the reputation of his goods as to forestall the extension of his trade or the like.”[9]

In the first part of its ruling, the Court found that the Allen & Wheeler Company may have had previous sales into Alabama, but that a prolonged absence from that market had essentially stripped it of the right to maintain a trademark infringement action against Hanover, who had since established a substantial presence in that state using the “TEA ROSE” mark.

Metcalf had attempted to enter the Alabama market utilizing the same mark, albeit with change in the sourcing noted on the label. In ruling against Metcalf, and overturning the lower court, the Court found that even if Steeleville (Metcalf’s source) had prior rights to the “TEA ROSE” mark, the rights were not in the Alabama market, and further that Metcalf had intended to trade upon the reputation of Hanover by adopting a similar label.

Two years after the Hanover decision, the Court revisited the issue of concurrent use when it considered the rights to the “REX” trademark.[10] Therein, a predecessor to United Drug marketed a dyspepsia remedy under the mark in Massachusetts, later receiving a federal registration. In the interim, prior to the federal registration, a druggist nicknamed “Rex” (apparently short for Rectanus) in Louisville, Kentucky began selling a blood purifier under the same mark. United Drug objected to this use when it desired to enter the Louisville market nearly two decades after Mr. Rectanus initiated his use. In allowing the latter to continue his use in the Louisville market, the Court stated:

“Undoubtedly, the general rule is that, as between conflicting claimants to the right to use the same mark, priority of appropriation determines the question. But the reason is that purchasers have come to understand the mark as indicating the origin of the wares, so that its use by a second producer amounts to an attempt to sell his goods as those of his competitor. The reason for this rule does not extend to a case where the same trade-mark happens to be employed simultaneously by two manufacturers in different markets separate and remote from each other, so that the mark means one thing in one market, as entirely different thing in another. It would be a perversion of the rule of priority to give it such an application in our broadly extended country that an innocent party who had in good faith employed a trade-mark in one state , and by the use of it had built up a trade there, being the first appropriator in that jurisdiction, might afterwards be prevented from using it, with consequent injury to his trade and goodwill, at the insistence of one who theretofore had employed the same mark, but only in other and remote jurisdictions, upon the ground that its first employment happened to antedate that of the first-mentioned trader.”[11]

Through these two cases, the Supreme Court established a doctrine that recognized the locality of trademark use, even when subsequent federal registrations granted a nationwide right. The combined effect of these rulings is to protect those that innocently and independently develop goodwill in a mark prior to the assertions of superior right.[12]

The Tea Rose-Rectanus doctrine remains guiding law nearly a century after the events there under. §2(d) of the Lanham Act allows for the registration of concurrent marks where “confusion, mistake, or deception is not likely to result from the continued use by more than one person of the same or similar marks under conditions and limitations as to the mode or place of use of the marks or the goods on or in connection with which such marks are used.”[13] Further, the Director is charged with establishing the conditions, including geographical limitations, applicable to the concurrent rights.[14]

The Tea Rose-Rectanus doctrine and the codification of concurrent use are concerned with assuring that the innocent adopter of a mark prior to another’s federal registration is not foreclosed from utilizing the mark in the area where the innocent user had established goodwill. These are equitable concepts that attempt to balance the creation of an exclusive trademark right.[15]

One of the primary purposes for registering a trademark is to inform other users of the exclusive right, thereby precluding the “innocent adopter” protection noted above. Some courts, however, desired to extend equity even to those that failed to take notice of a prior registered trademark, and thereby created equity in a mark after constructive notice that the mark was exclusively owned by another.

In 1959, the Second Circuit considered the circumstance of the Dawn Doughnut Company, a marketer of doughnut mixes headquartered in Michigan, which owned a federal registration for “DAWN” dating to 1927.[16] The defendant in the case, Hart‘s Food Stores, innocently utilized the same mark in doughnut sales within a 45-mile radius of Rochester, New York, with such use beginning in 1951. A strict application of the Lanham Act in this circumstance would have required Hart to cease use of the mark.

The court determined, however, that such a result was not appropriate given that Dawn Doughnut had not expanded to the Rochester marketplace, and held that “no likelihood of public confusion arises from the concurrent use of the mark in connection with retail sales of doughnuts and other baked goods in separate trading areas.”[17] This ruling did not create a permanent right of concurrent use, however, as the court also stated that

“the fact that the defendant employed the mark ‘Dawn,’ without actual knowledge of plaintiff’s registration, at the retail level in a limited geographical area of New York state before the plaintiff used the mark in that market, does not entitle it to either exclude the plaintiff from using the mark in that area or to use the mark concurrently once the plaintiff licenses the mark or otherwise exploits it in connection with retail sales in that area.”[18]

In other words, Hart’s could continue to build goodwill under the “DAWN” mark in the Rochester, but it enjoyed no permanent right should Dawn Doughnut decide to move into that market. The goodwill would thereby be ceded to Dawn Doughnut at that time, and equity placed the risk of loss upon the party that could have avoided the conflicting use in light of a previously-registered superior right.

The Ninth Circuit, the same court ruling upon Grupo Gigante, had applied similar logic to a case decided previous to the better-known Dawn Doughnut ruling, and had determined that the junior use did not impact the trademark owner’s immediate rights.[19] Although this equitable stance has been adopted by other circuit courts, it is not absolute. The Sixth Circuit, for example, found in one case that the junior user of the mark “CARMAX” could not continue its use despite the fact that the trademark owner was not using and had no definite plans to expand within the relevant market.[20]

In the limited context of the Dawn Doughnut Rule, the increased cross-market reach of the Internet creates some speculation as to the availability of this equity result. Adapting the fifty-year-old facts of Dawn Doughnut to a modern business environment where the company may have chosen to utilize the Internet as an addition to its traveling sales staff, the court may have had a more difficult determination as to the mark’s ownership in the Rochester market.[21] Regardless, the rule survives as an illustration of the efforts of the courts to arrive at an equitable result even where it appears that superior exclusive rights have been established via a federal registration.

As noted above, the economics of the world have changed, and of course the same may be said of domestic commerce. Whereas Massachusetts and Kentucky may have been geographically-distant in 1915, it is questionable as to if they would be so deemed today. Still, the true test lies not solely with the geographical delineations, but rather those distinctions coupled with the marks in question. Economic realities dictate that many companies will focus first on developing a local reputation, and expand only when their capital structure permits them to further exploit the goodwill developed locally.

Arguably, the Internet has facilitated even a purely local concern to establish a national, and indeed worldwide, presence, but it remains a question of evidence as to if such use is “in commerce” and if that use has garnered the requisite goodwill. A mark may be represented on a webpage and accessible from anywhere, but may have no significant impact on consumer confusion.[22] A recent TTAB decision further questions the survival of concurrent use registrations in this light,[23] but as courts are acclimated to making evidentiary rulings, the issue does not appear to endanger concurrent use registrations to the degree highlighted therein.

Foremost, there is no true applicability of the concurrent use doctrine to the Grupo Gigante case, although it is easy to understand how the district court arrived at the same secondary meaning standard for the famous mark exception. The cases underlying the Tea Rose-Rectanus Doctrine involved markets from Ohio to Alabama and Massachusetts to Kentucky, respectively. Grupo Gigante involved two geographies that are twenty miles apart, close enough that they may otherwise be classified as a single market. Given the similarities in demographics, the court was justified in finding that the “GIGANTE” mark as employed by Dallos in San Diego, California would likely cause confusion with that originally utilized in Tijuana, Mexico by Grupo Gigante.

Although concurrent use is a trademark concept applied to solely domestic trademark law, the policy embodied therein addresses itself more to the definition of territoriality that is exclusive of political boundaries and instead concentrated on the expansion of goodwill attributable to the mark itself. As commerce seeks to expand without respect for national boundaries, secondary meaning illustrates an equitable basis for the granting of trademark rights.

The international community has recognized the potential for consumer confusion, as well as the adoption by another of a mark made “famous” in another jurisdiction. Its efforts to address such are addressed in the next section.

Internationally, issues of confusion arise between users of similar marks within different countries, an accelerating issue as the world becomes figuratively smaller in an economic context. Recognizing such, the international community has responded through various treaties and guidance designed to create uniform treatment of qualified well-known marks.

The Paris Convention was drafted in a manner that stressed the political aspects of territoriality, as it allowed for national treatment of the obligations that it established. Article 2(1) requires that a signatory of the Paris Convention may not demand higher standards for protection that those extended to its own citizens.[25] Strictly read, this Article implies that a member may discriminate against those countries that have not joined the Paris Union by refusing protection outright or demanding that other conditions by satisfied.[26]

National treatment is very apparent in Article 6, which makes two primary statements regarding the registration of a mark. Foremost, 6(1) allows that “[t]he conditions for the filing and registration of trademarks shall be determined in each country of the Union by its domestic legislation.”[27] This rule is conditioned by 6(2), by which a Union member may not deny an application or registration on the basis of the mark’s status in the country of origin.[28]

The second primary point can be found in Section 3, which establishes independence of the mark in plain language: “[a] mark duly registered in a country of the Union shall be regarded as independent of marks registered in the other countries of the Union, including the country of origin.”[29] There are two instances wherein this absolute independence is disregarded in favor of efficiency and facilitation of procurement.

Foremost, because trademark rights are based primarily upon national law, it is possible that a mark utilized in one country may not be eligible for protection in another. For example, whereas a mark in a certain form may be protectable in one member country, law in the country wherein expansion is sought may prohibit such a form. Article 6quinquies was structured to break down this inefficiency, which would essentially operate to restrict an owner from expanding the goodwill attached to a particular mark into a foreign jurisdiction. This article states, “[e]very trademark duly registered in the country of origin shall be accepted for filing and protected as is in the other countries of the Union, subject to the reservations indicated in this Article.”[30] The delineated exceptions include where the mark “as-is” would infringe third-party rights in the country where protection is desired, where they are “devoid of distinctive character” or have become generic, or where the mark is contrary to public order or morality.”[31]

The second exception allows for a temporal shift rather than an overruling of national law. Article 4 mandates a six-month period of priority from the first application in a member state wherein the owner of that application may elect to file within other member countries and maintain the original application date.[32] The effect of this provision creates a period wherein a national entity may be the first to utilize a mark domestically, yet may find that right to continued use obviated where the foreign application predates the domestic use or registration.[33]

Pertinent to the discussion on the well-known marks doctrine, Article 6bis acknowledges national treatment while requiring members to invalidate domestic marks constituting imitations of extraterritorial marks that have gathered the requisite fame. This provision states:

“The countries of the Union undertake ex officio if their legislation so permits, or at the request of an interested party, to refuse or to cancel the registration, and to prohibit the use, of a trademark which constitutes a reproduction, an imitation, or a translation, liable to create confusion, of a mark considered by the competent authority of the country of registration or use to be well known in that country as being already the mark of a person entitled to the benefits of this Convention and used for identical or similar goods. These provisions shall also apply when the essential part of the mark constitutes a reproduction of any such well-known mark or an imitation liable to create confusion therewith.”[34]

Perhaps the most important aspect of this provision regards the question of fame to be resolved as pertinent to the country wherein imitation is alleged, versus the fame in the country of origin or other nations where protection has been extended. This distinction subjects each member to the obligation of determining what constitutes a “well-known mark” and thus embraces national treatment even as it requires acknowledgement of foreign rights.

Hereinafter referred to as TRIPS, this agreement incorporates the nationality principle through its Articles 3 and 4, and requires that each subscribing country extend parallel treatment to the nationals of another.[36] TRIPS incorporates the principles articulated in the Paris Convention, and Article 15 addresses several aspects of what constitutes protectable subject matter.[37]

With respect to famous marks, Article 16 makes three key pronouncements. The first, through 16(1) allows that,

“The owner of a registered trademark shall have the exclusive right to prevent all third parties not having the owner’s consent from using in the course of trade identical or similar signs for goods or services which are identical or similar to those in respect of which the trademark is registered where such use would result in a likelihood of confusion”[38]

This same provision allows for the presumption of a likelihood of confusion where an identical mark is utilized for the same goods or services.[39]

As regards well-known marks, TRIPS makes two direct references modifying Article 6bis of the Paris Convention. Article 16(2) extends protection to service marks, and guides that “[i]n determining whether a trademark is well-known, Members shall take account of the knowledge of the trademark in the relevant sector of the public, including knowledge in the Member concerned which has been obtained as a result of the promotion of the trademark.”[40] Article 16(3) further extends protection where the goods or services underlying the mark are not the same “provided that use of that trademark in relation to those goods or services would indicate a connection between those goods or services and the owner of the registered trademark and provided that the interests of the owner of the registered trademark are likely to be damaged by such use.”[41]

TRIPS broadened the protections available for well-known marks while maintaining determination under the likelihood of confusion standard articulated therein. As with the Paris Convention, national treatment principles required the determination of well-known status to be made within each member.

The preamble to this document established it as an advisory element with permissive application when it states,

“The Assembly of the Paris Union for the Protection of Industrial Property and the General Assembly of the World Intellectual Property Organization (WIPO), Taking into account the provisions of the Paris Convention for the Protection of Industrial Property relative to the protection of well-known marks; Recommend that each Member State may consider the use of any of the provisions […] as guidelines for the protection for well-known marks.”[43]

The Joint Recommendation, through its Article 2, allows that “in determining whether a mark is a well-known mark, the competent authority shall take into account any circumstances from which it may be inferred that the mark is well known.”[44] It then proceeds to outline several specific elements, identified as being not an exhaustive list, that might be considered in the determining a mark as well-known.

Article 2(1)(b) allows for consideration of factors including the degree of knowledge of the mark with the relative public, duration and geographic extent of the mark and promotion of the same, applications and registrations regarding the mark, including successful enforcement of such, and the mark’s value.[45] Article 2(2)(a), without placing heightened importance on the element, suggests that the relevant public to be considered includes actual and potential users of the goods and services applicable to the mark and/or those persons involved in the distribution and business environments of those goods.[46] Article 2 continues to specify that if a mark is determined to be well known in one relevant sector, it should be considered as such overall, and if a mark is merely known, the member may regard it as well known permissibly.[47]

Respecting the Paris Convention and TRIPS, the Joint Recommendation does not permit consideration of use, registration, or application therefore in the member state, nor does it allow well known status to be derived from such in a foreign jurisdiction.[48] A member may not require that a mark be known by the public at large as a condition of being well-known.[49]

Article 4(1)(a) incorporates TRIPS Article 16(1) in gauging the conflict of competing marks in the circumstance where both the mark and goods and/or services underlying such are similar.[50] Whereas Article 16(3) of TRIPS extended protection to situations where the goods and/or services were dissimilar provided damage to the mark owner, the Joint Recommendation followed suit and specified that “damage” could be found in the following circumstances:

“(i) the use of that mark would indicate a connection between the goods and/or services for which the mark is used, is the subject of an application for registration, or is registered, and the owner of the well-known mark, and would be likely to damage his interests;

(ii) the use of that mark is likely to impair or dilute in an unfair manner the distinctive character of the well-known mark;

(iii) the use of that mark would take unfair advantage of the distinctive character of the well-known mark.”[51]

In conjunction with its mandate that member states protect well-known marks against competing marks, the Joint Recommendation allows that bad faith may be considered as an element.[52] As will be further examined in the historical case law within the U.S., this element has been the subject of some controversy.

Whereas the Joint Recommendation was exactly that, a recommendation, the recognition of well-known marks remains a question for consideration within the judiciary, and the following outlines the development of such within the United States.

Territoriality as applied to political boundaries within the trademark dimension encompasses several sources of law. As noted above, the U.S. is a signatory to several relevant treaties regarding the treatment to be afforded to both domestic and foreign trademarks, and the components thereof have been woven into the Lanham Act as the source of rights for trademark holders in the U.S. As with all statutory enactments, the next challenge regards how the courts will interpret the Lanham provisions, and ultimately influence the next developments, for example, by assigning equitable principles reminiscent of the Tea Rose-Rectanus cases.

There are, of course, variances of opinion as between the different circuit courts, but within these variances it is possible to view the evolution of several key concepts in territoriality. Beyond the basic factual inquiries as to degrees of similarity as between marks, two questions guide the territoriality discussion: where the use of both marks occurred and where the mark had previously gathered goodwill. The former speaks to extraterritoriality, as U.S. law typically applies to marks within the U.S., whereas the latter speaks to the well-known mark exception, requiring a degree of goodwill to be present to prompt judicial intervention.

The following cases represent the stepping stones leading, with some diversion, to the famous mark exception noted in 9^th Circuit’s opinion to Grupo Gigante.

This case tested the constructs of the Lanham Act by determining its effect on potentially infringing activity occurring outside of the United States. Herein Steele, a U.S. citizen, registered the “BULOVA” mark in 1933 within Mexico to capitalize on the advertising done by the Bulova Watch Company (“BWC”), based in New York and holder of a valid U.S. registration. Steele imported Swiss and U.S. parts, then assembling and distributing them in Mexico under the “BULOVA” mark. BWC sought on injunction of that activity, the affixation of an identical mark bearing a valid registration and occurring solely within a foreign jurisdiction.

In considering the reach of U.S. law in this circumstance, the Supreme Court stated, “[A]cts in themselves legal lose that character when they become part of an unlawful scheme. (…) In sum, we do not think that petitioner by so simple a device can evade the thrust of the laws of the United States in a privileged sanctuary beyond our borders.”[54] The Court considered three primary factors in its decision, the foremost being overall impact on U.S. commerce, which the Court deemed evident via the factual circumstances wherein inferior products impacted the U.S.-registered mark. As Steele was a U.S. citizen, the Court found the authority over his extraterritorial actions, and as the Mexican registration was cancelled by that government in a separate action, there was no conflict of laws. Steele was enjoined from subsequent use of the mark.

The Second Circuit employed these tests in a subsequent case involving women’s undergarments and the mark “VANITY FAIR.”[55] Different in that case was the lacking of the second and third factors, as although the effects on commerce were evident, the Court found that the defendant was a foreign person and that there was a conflict of laws where the foreign trademark authority had affirmed the mark. In its opinion, the Court summarized the tests’ applications by stating “that the remedies provided by the Lanham Act, other than in §44, should not be given an extraterritorial application against foreign citizens acting under presumably valid trade-marks in a foreign country.”[56]

Concerning the use of the mark “MAXIM’S” as relating to restaurant services, this case is frequently cited as authority for the well-known mark exception to the territoriality principle. Therein, the defendant was engaged in the restaurant business in New York and adopted the name and trade dress of the Maxim’s restaurant in Paris. Although the opinion states that “there is no doubt to its unique and eminent position as a restaurant of international fame and prestige,” the court only alludes to its rationale in finding such by concluding it “well known in this country, particularly to the class of people residing in the cosmopolitan city of New York who dine out.”[58]

At this early stage in utilization of the territoriality exception, it is notable that the court makes the following observation: “”Whatever the source of the name, it is the origination and development of its use in a particular field which may entitle the user thereof to protection by virtue of the secondary meaning acquired therein.”[59] Probative was the use of several distinctive elements associated to the Parisian version of the restaurant, which the court concluded was a deliberate attempt to appropriate the plaintiff’s goodwill.

The opinion rendered in this case was quite short in comparison to later cases dealing with the well-known marks exception, in large part because the court felt no need to establish notoriety outside of the simple statement of facts recited above. Implicit in the court’s opinion, however, was the finding that the mark had to be well-known in the country where the second use occurred, a requirement essential to the finding that Montmartre was attempting to trade upon the original restaurant’s goodwill.

In 1990, the Federal Circuit handed down its decision in the above case, which concerned a set of facts similar to those in the instant case, if not involving greater geographical distances. Therein, Takaya Iwasaki began the use of the mark “PERSON’S” on clothing within Japan in 1977, and established Person’s Co., LTD in 1979 to market this clothing. Christman visited a Person’s store in 1981, and returned to the United States with several items bearing the mark. Upon discovering that the mark was not claimed in the United States, Christman began sales of clothing bearing a similar mark in April 1982, and registered for a federal trademark in April 1983, which issued in September 1984 for use on clothing.

Thereafter, Person’s Co. sought to expand into the United States, having gained a significant level of recognition in the Japanese market. In August 1985, a federal trademark was issued for the “PERSON’S” mark for luggage, clothing, and accessories, classes similar to those granted within the Christman registration.

Both parties acknowledged subsequent confusion in the marketplace and both asserted a superior right to the mark in the following legal action. The Trademark Trial and Appeals Board (“TTAB”) upheld the validity of Christman’s registration and granted the cancellation of the Person’s Co. mark. The appellate court affirmed.

The primary question answered by the court was as follows: “Does knowledge of a mark’s use outside U.S. commerce preclude good faith adoption and use of the identical mark in the United States prior to the entry of the foreign user into the domestic market?”[61] Within this question lies one of the primary arguments made by Person’s Co., as it alludes to the good faith standard utilized for domestic concurrent use rulings.

In answering Person’s reliance on Woman’s World Shops, Inc. v. Lane Bryant, Inc.,[62] the court distinguished the circumstance where “the first use of the mark by both the junior and the senior user was in United States commerce” from the present case wherein “Person’s Co., while first to adopt the mark, was not the first user in the United States.”[63] Under the former concurrent use scenario, likelihood of confusion may be inferred in bad faith situations where the junior user is aware of the senior user’s mark, however under U.S. law, Person’s was not a senior user.[64]

Similarly, Person’s argued that knowledge of the foreign use itself should preclude Christman from obtaining trademark rights within the United States. The Court stated, “[w]hile adoption of a mark with knowledge of a prior actual user in U.S. commerce may give rise to cognizable equities as between the parties, no such equities may be based upon knowledge of a similar mark’s existence or on a problematical intent to use such a similar mark in the future.”[65] The opinion cites to prior cases that may recognize bad faith in the context of a well-known mark or where the U.S. registration is a nominal one simply meant to block expansion, but finds neither of those circumstances present.[66] As to the former, Person’s may have built a strong reputation in the Japanese market, but as the pertinent basis for the judgment is the market being expanded into, the lack of any U.S. sales precluded this exception. The TTAB found that Christman, at the time he began use and applied for registration, was not aware the Person’s intended to expand into the U.S. Although not expressly stated within the opinion, it is assumed that Christman’s use could hardly be nominal given his marketing and line expansions.

In this instance, the Court focused on the intent of the potentially infringing domestic party, an element that would maintain validity in future decisions to be discussed, but likewise an element that would be considered in conjunction with other elements determinative of secondary meaning.

Discussing its departure from the Person’s decision, the 4^th Circuit stated in this opinion that, “[t]he statutory provision we apply today is directed solely and specifically to services and to evaluating what constitutes use in commerce for servicemarks. We would not apply our interpretation of the statutory provision addressing services to a case involving goods.”[68] The servicemark distinction is critical to understanding the departure from past decisions wherein it was established that foreign use could not vest U.S. rights in a mark.[69]

In this case, the Societe des Bains de Mer et du Cercle des Etrangers a Monaco (“SBM”) had operated a casino in Monaco under the “CASINO DE MONTE CARLO” mark, registered in Monaco, but not within the United States. SBM promotes the casino from an office in New York with a budget of $1 million annually. International Bancorp had operated a series of gambling websites which contained elements of the above mark as well as pictures and renderings of the SBM casino in Monaco. It also alluded to the websites as an alternative to its physical location operating in Monaco, which did not exist.

The majority arrived at its expanded definition of use in commerce via that found in §45 of the Lanham Act as applicable to service marks, which reads that a mark is utilized in commerce:

“on services when it is used or displayed in the sale or advertising of services and the services are rendered in commerce, or the services are rendered in more than one State or in the United States and a foreign country and the person rendering the services is engaged in commerce in connection with the services.”[70]

Employing the Lanham Act’s definition that commerce “means all commerce which may lawfully regulated by Congress,”[71] the majority moved to the Commerce Clause of the Constitution and determined that foreign trade was an aspect that could be regulated by Congress.[72] Through this statutory analysis, the majority found that the advertising of services that led to services rendered in foreign commerce properly constituted “use in commerce,” essentially establishing a policy under which U.S. trademarks rights are created via delivery of services in a foreign jurisdiction.

The dissent in International Bancorp cites contrary precedent that would require both the advertising and use of the mark to be within the United States in order to meet the use requirement.[73] Specifically, Judge Moritz highlighted Rivard v. Linville, a 1998 case resolved in the federal circuit which determined that although a Canadian chain of hair salons promoted their business in the U.S. and indeed serviced U.S. consumers, “activity outside the United States does not create rights in marks within the United States.”[74] She also discussed a policy argument wherein a trademark clearance search would need to determine if foreign mark owners had sold to U.S. consumers.

Empresa Cubanadel Tabaco (“Empresa”) was prohibited from distributing its “COHIBA” cigars in the United States as a result of the Cuban trade embargo. Culbro Corporation, now operating as General Cigar, had sold cigars under the mark in the United States from 1978 through 1987. A registered mark was granted to General Cigar in early 1981 without having had any opposition. Prior to the opposition period, General Cigar has responded to PTO inquires regarding the mark by stating that it had no meaning in the industry, and that the mark was arbitrary. In late 1987, the company ceased branding any cigars with the “COHIBA” mark.

In 1992, General Cigar reintroduced the mark with the specific intent of imitating, as closely as possible, the overall appearance of the Cuban version of the cigar by replicating the label, box, and cigar band.[76] The court’s opinion is replete with instances illustrating General Cigar’s desire to capitalize on the “COHIBA” mark.

After a discussion on the guidance provided through the Tea Rose-Rectanus Doctrine within the McCarthy treatise, the court found that the secondary meaning factors would be “critical in determining whether COHIBA was famous within the meaning of the famous marks doctrine”[77] and after verbatim inclusion of the Well Known Marks Recommendations,[78] the court outlined the following six factors utilized in the Second Circuit: “(1) advertising expenditures, (2) consumer studies linking the mark to a source, (3) unsolicited media coverage of the product, (4) sales success, (5) attempts to plagiarize the mark, and (6) length and exclusivity of the mark’s use.”[79]

Because of the embargo, the court set aside factors one and four, and likewise found that length and exclusivity of use was irrelevant given the mark’s abandonment by General Cigar. Regarding survey evidence and previous case law in the Second Circuit, the court found that typically a 50% recognition was required. Inferences were drawn from contemporary surveys given the lack thereof from the period in question, finding that “COHIBA’s aided awareness in September 1994 is significantly higher than it’s 14.5% unaided awareness for that period.”[80] The media coverage aspect of the factors found that coverage within industry publications and wider-circulation general interest magazines were probative in establishing awareness of the COHIBA brand.

The fifth factor regarding attempts to plagiarize the mark provided the Court with perhaps the broadest factual inquiry, and it considered the “[b]ecause COHIBA is a distinctive mark, evidence of copying may be probative.[81] The Court strongly considered Second Circuit precedent finding that “imitative intent can help support a finding of secondary meaning.”[82]

Pertinent to a discussion of the famous marks exception is the ultimate ruling of the Empresa court, which concluded “that the COHIBA trademark achieved a level of fame consistent with secondary meaning as described in Vaudable and other cases. The COHIBA mark is therefore famous within the meaning of the famous marks doctrine, and it is concluded that Cubatabaco had a legally protectable right to the mark at that time.”[83]

The equation of secondary meaning with the standard for the famous marks exception expressed within Empresa above had previously found support in the District Court’s opinion in Grupo Gigante. Relying in large part on the McCarthy treatise and its commentaries on the Tea Rose-Rectanus doctrine, the Court found that, “in order to establish that a foreign mark is sufficiently famous to qualify for protection in the United States, the foreign user need only show that the mark is sufficiently known to potential customers in the are of the United States in which it seeks protection.”[84] Further, the Court stated,

“In the context of a foreign mark, the Court also considers where in the world the mark was originally used. For example, where the mark was first used in Paris or Tokyo, it would probably need to be quite famous in the lay meaning of the word in order to be known to consumers in the United States. Where a mark was first used in a country that borders the United States, however, it would need to be much less famous in order to be known to United States consumers who live near that border.”[85]

In this proclamation, the court acknowledges the symmetry of territoriality as both a geographical expansion of goodwill and a politically-inspired limitation.

In considering how well-known the mark was in the Southern California market at issue, the Court turned to factors utilized in the Ninth Circuit, which bear a strong resemblance to those noted above in Empresa. Relevant to the inquiry are “survey evidence; direct consumer testimony; exclusivity, manner and length of use of the mark; amount and manner of advertising; amount of sales and number of customers; established place in the market; and proof of intentional copying by the defendant.”[86] The court placed a large value on the survey evidence presented by Grupo Gigante, finding that “20-22% of Mexican-Americans in the San Diego area were aware of their “GIGANTE” mark when the defendant’s opened their first location in San Diego.”[87] Per the District Court, “GIGANTE” had achieved the requisite degree of fame in the market and ruled in favor of the Mexican corporation, excepting on a theory of laches the two Dallo stores already in operation.

As noted above, the appellate court agreed in the result, but not in the reasoning, and remanded the case. In addition to secondary meaning, the Court of Appeals prompted:

“[w]here the mark has not before been used in the American market, the court must be satisfied, by a preponderance of the evidence, that a substantial percentage of consumers in the relevant American market is familiar with the foreign mark. The relevant American market is the geographical area where the defendant uses the alleged infringing mark. In making this determination, the court should consider such factors as the intentional copying of the mark by the defendant, and whether customers of the American firm are likely to think they are patronizing the same firm that uses the mark in another country. While these factors are not necessarily determinative, they are particularly relevant because they bear heavily on the risks of consumer confusion and fraud, which are the reasons for having a famous-mark exception.”[88]

These instructions may not be entirely helpful to the District Court, which although not articulated specifically within its opinion, theoretically followed its own advice to consider such factors. Other courts have struggled with statistically differentiating a secondary meaning standard from the requisite degree necessary to be well-known for protection under the well-known mark exception.

At a minimum, however, the Circuit Court affirmed the propriety of an exception for well-known marks, an affirmation under question in the Second Circuit.

Commenting of the ‘well-known marks exception to territoriality, the dissent in International Bancorp stated, “[t]hat doctrine has been applied so seldom (never by a federal appellate court and only by a handful of district courts) that its viability is uncertain.[89] Soon thereafter, the Ninth Circuit Court of Appeals invalidated half of that parenthetical statement by determining that a well known marks exception did indeed exist. Within that period, a district court in the Second Circuit adopted a like sentiment in Empresa, although utilizing a different path and standard of degree for secondary meaning.

Despite a relative absence of the famous marks exception prior to the Grupo Gigante decision, 2005 has seen several developments within the Second Circuit. These applications are not dispositive of the future of the famous marks exception in the Second Circuit, however, as the Circuit Court explicitly left open the question for future consideration. The last case to be highlighted in this section may prompt the Court’s review.

On appeal, the Second Circuit reversed the District Court’s finding of infringement, but within the specific circumstance regarding the Cuban trade embargo,

“There is no contest that, as matters stand, General Cigar has the full panel of property rights in the COHIBA mark, including the right to exclude or limit others seeking to use the mark in the United States. […] There is no doubt that granting […] relief to Cubatabaco would entail a transfer from General Cigar to Cubatabaco of a ‘right, remedy, power, privilege, or interest with respect to [the COHIBA mark].’ […] As it is exactly this brand of property right transfer that the embargo prohibits, we cannot sanction a grant of injunctive remedy to Cubatabaco in the form of the right, privilege, and power to exclude General Cigar from using its duly registered mark.”[91]

The Court declined to directly reach the viability of the well known marks exception as unnecessary given the trade restrictions and stated that General Cigar owned the COHIBA mark in the U.S., even if it had abandoned it for an interim period wherein the embargo disallowed Cubatabaco from acquiring rights.[92]

Cubatabaco also brought an unfair competition claim under §43(a) of the Lanham Act, which had not been litigated at the District Court level. Paralleling an amicus brief filed by the United States, Cubatabaco argued that it could obtain the cancellation of the COHIBA mark in the U.S. as well as an injunction against General Cigar’s further use of the mark, despite being barred from direct ownership by virtue of the embargo. The unfair competition alleged was the consumer confusion made likely by the dual use of the mark, to which the Court answered, “Cubatabaco cannot obtain relief on a theory that General Cigar’s use of the mark causes confusion, because, pursuant to our holding today, General Cigar’s legal right to the COHIBA mark has been established as against Cubatabaco.”[93]

A second claim made under Article 6bis of the Paris Convention, in conjunction with §44(b) and §44(h) of the Lanham Act, was summarily set aside by the Court, as these elements essentially argued a well-known mark exception. As the Court had previously stated, Cubatabaco was unable to obtain ownership as a result of the embargo, and thus the Court found it unnecessary to further consider the argument.[94]

Although this opinion overruled the result reached by the District Court, it did not invalidate the well known marks exception that the lower court utilized in making its decision. Where it had previously appeared that the Second and Ninth Circuits may have been simultaneously exploring the use of this doctrine, albeit with differing approaches as regards standards of secondary meaning, this opinion did operate to place the Grupo Gigante result as an unparalleled application of the doctrine. Future decisions in the Second Circuit, noted below, would find some parallel to the Ninth Circuit result, then an abrupt shift in philosophy.

Two weeks prior to the Circuit Court decision in Empresa, the Southern District Court of New York again had the opportunity to consider the well known marks doctrine as applied to Indian restaurants. ITC operated several “BUKHARA” restaurants throughout the world, including New York, and licensed the mark elsewhere, including Chicago. ITC obtained a U.S. trademark registration for restaurant services in 1987, and had ceased operations in mid-1997. ITC made limited use of the BUKHARA name in conjunction with a packaged food item since the cessation of restaurant operations, and had separately applied for a trademark registration covering that use.

Punchgini opened two restaurants in New York bearing the “BUKHARA” name in 1999 and 2001. Named defendants presently employed by Punchini had previously been employees of ITC, and the latter accused that Punchgini had used significant features of its trade dress. The defendant maintained, and the Court agreed, that ITC had abandoned the “BUKHARA” mark as a result of nonuse for three years.[96]

Pertinent to a discussion on the well known marks doctrine, ITC asserted an unfair competition claim under §43(a) of the Lanham Act, claiming that “foreign marks and trade dress may be protected, even without use or registration within the United States, where the mark or dress is so ‘well known’ or ‘famous’ as to give rise to a risk of consumer confusion if the mark or dress in used subsequently by someone else in the domestic marketplace.”[97] Commenting on the lack of application of the well known marks doctrine, the Court highlighted the Ninth Circuit’s recent use of such in Grupo Gigante as well as the historical application within the Second Circuit through the Vaudable decision.[98]

The Court addressed the presence of a well known marks doctrine as between Vaudable and Grupo Gigante by stating the issue as follows:

“Assuming without deciding that these cases support the existence of an unfair competition claim, even in the absence of a viable U.S. trademark, on the basis of a foreign mark that is ‘well known’ or ‘famous,’ it remains unclear how to determine what foreign marks are sufficiently ‘famous’ to qualify”[99]

The Court, however, found the question somewhat academic, as although the District Court opinion in Grupo Gigante reached secondary meaning through extended application of the Tea Rose-Rectanus Doctrine, the result reached a similar standard as that articulated in the Second Circuit’s Vaudable decision.[100] As the appellate decision arising from the Ninth Circuit employed secondary meaning as a base requirement, seemingly placing a substantiality requirement atop this base, the Second Circuit first considered secondary meaning as a minimum threshold.

Applying the tests for secondary meaning employed in the Second Circuit, the Court found that ITC had failed to establish even that minimum, so it was unnecessary to validate the Ninth Circuit’s extended test. Finding that no consumer studies were submitted and that no advertising had been made for the restaurants since the cessation of U.S. operations, the Court considered the lack of sales arising from the U.S. and the fact that ITC did not have exclusivity of use by virtue of other, unaffiliated “BUKHARA” restaurants operating in the United States. Only one media report, a TIME article, was from a domestic source, with the others appearing in foreign publications.

As stated by the Court, “ITC is left with only its somewhat circular claim that defendant’s alleged appropriation of the ‘BUKHARA’ mark and dress itself establishes the existence of ‘secondary meaning.’”[101] The facts in this case certainly illustrate a vast number of similarities between the international restaurants owned by ITC and the domestic ones opened by Punchgini. The Court summarized its view as follows:

“Although there may be some circumstances in which intentional copying is sufficient to show ‘secondary meaning,’ it would be tautological to conclude that copying alone demonstrates ‘secondary’ meaning’ sufficient to permit an unfair competition claim as to a foreign mark here, where that copying is only prohibited by the ‘well known’ or ‘famous’ mark exception if the mark has ‘secondary meaning.’”[102]

Finding that ITC could not establish secondary meaning, the Court dismissed the complaint against Punchgini.

Whereas this case preceded the appellate decision in Empresa, it is evident that the District Court still considered the well known marks exception to be a viable means of establishing domestic rights. Empresa did not overrule the exception, but instead declined to address such in light of the trade embargo. Thus, at the conclusion of February 2005, it appears that a well known marks exception premised on secondary meaning was still alive in the Second Circuit.

Three months after the “BUKHARA” decision above, the Southern District of New York considered application of the well known marks doctrine against the “DE BEERS” mark. The plaintiff in this action, “De Beers LV,” was able to illustrate a historical right to the mark, although the Court recognized that the company apparently conceded that they had not used such in U.S. commerce.[104] The defendant, “Syndicate,” incorporated in 1981 using the mark as a part of the corporate name, ceased operations in 1986, and then reemerged in late 2001 with the registration of 34 Internet domains utilizing the mark. Shortly thereafter, Syndicate renewed its Certificate of Incorporation and registered “DEBEERS DIAMOND SYNDICATE” with the USPTO, disclaiming exclusive rights to the “DIAMOND SYNDICATE” element of the mark.

Amongst the various claims made was one by Syndicate seeking declaratory judgment that De Beers LV has no rights in the U.S. by virtue of not having used the mark in domestic commerce. De Beers LV countered with a motion to dismiss alleging that the well known marks doctrine should prompt recognition even in the absence of use within the United States.

After recapping the split in authorities regarding the level of fame in a discussion reminiscent of that in ITC above, the court ultimately denied the motion to dismiss. In doing so, however, it stated, “[i]n the absence of contravening authority from the Second Circuit, the doctrine will be applied in this case if appropriate. It is a narrow but justified exception to the territoriality principle and the general rule that trademark rights attach only where a mark is used in connection with goods or services.”[105]

A statement made by the Court paralleled logic applied by the Ninth Circuit: “Recognition of the famous marks doctrine is particularly desirable in a world where international travel is commonplace and where the Internet and other media facilitate the rapid creation of business goodwill that transcends borders.”[106] Again, Empresa and these two District Courts decisions in close temporal proximity seem to recognize the potential for applying the well known marks exception, even if circumstances had not yet provided the opportunity to fully consider its dynamics.

Citing the question left open from the District Court’s decision in Empresa as, “whether an entity that has not used a mark on products sold in the United States can nonetheless acquire a U.S. trademark through operation of the famous marks doctrine,” the court herein stated, “[i]n the instant case, the Court is obliged to answer the question, and concludes that the answer is ’No.’”[108]

In this short decision rendered in early August 2005, again in the Southern District of New York, the Court took a definitive position in a case that facially resembled the Grupo Gigante facts. The plaintiff is a large superstore operating in Columbia and Venezuela under the “EXITO” mark, but does not utilize the mark within the United States. El Gallo Meat Market is the representative for a class of defendants using an exact replica of the “EXITO” mark in New York City against grocery stores. Almacenes Exito claimed that the well-known marks doctrine granted a protected right to the mark within the United States despite lack of use in domestic commerce.

The Court herein considered the language of §44(b) of the Lanham Act, which the plaintiff read as granting additional rights by virtue of the Paris Convention, specifically via Article 6bis and Article 8.[109] The District Court dismissed this application, citing the Second Circuit decision in Empresa, which in turn incorporated the Eleventh Circuit’s view in Int’l Café, S.A.L. v. Hard Rock Café Int’l, Inc., 252 F.3d 1274, 1277-78 (11^thCir. 2001), which stated,

“We agree that Section 44 of the Lanham Act incorporated to some degree the Paris Convention. But we disagree that the Paris Convention creates substantive rights beyond those independently provided in the Lanham Act. As other courts of appeals have noted, the rights articulated in the Paris Convention do not exceed the rights conferred by the Lanham Act. Instead, we conclude that the Paris Convention, as incorporated by the Lanham Act, only requires ‘national treatment.’”[110]

Applying this “national treatment,” the Court concluded that a U.S. citizen could not bring an action for infringement without prior use or registration in the United States, and declared that a foreign party similarly situated should not be able to achieve rights not available to the domestic party.[111]

The Court does acknowledge the Grupo Gigante decision, as well the District Court decisions in the Second Circuit (not including ITC), and concedes that the Second Circuit Court of Appeals did not foreclose the possibility for the exception. Addressing such as a doctrine based on “policy” grounds, the Court summarized, “such a radical change in basic federal trademark law may, in this Court’s opinion, only be made by Congress, not the courts.”[112]

Ultimately, the answer to the above is simply, both. The Lanham Act, as the operative U.S.-source for trademark rights, is a statute of national law with an ambition to provide protection within U.S. borders. To the extent, however, that it incorporates international guidance, via treaty or otherwise, it also seeks to provide rights to marks originating in other jurisdictions and finding use in the U.S., usually as a quid pro quo arrangement with the assumption that U.S.-based will find similar protections extended in those jurisdictions.

As noted by the court in the Almacenes Exito decision above, it is a settled principle that the Paris Convention does not grant separate substantial rights to a party.[113] However, as the U.S. is a signatory to that convention, it is proper to assume that its rights are embedded within the Lanham Act.

Left unconsidered in the Circuit Court decision in Empresa was the unfair competition under §43(a). The De Beers court, however, did state, “[a]lthough the language of Section 43(a) imposes a requirement of ‘use [ ] in commerce only on the infringing mark, courts impose the requirement that an unregistered trademark in which a plaintiff claims a protectable interest must likewise be used in commerce”[114]

The challenge of the Lanham Act application and the rising variance of application in the courts, arises because protection for well-known marks not in present use in the United States is not explicitly specified in the Act. The Almacenes Exito court is correct that use is a prerequisite for domestic parties to procure trademark rights, yet there are circumstances, like Grupo Gigante, where the distances and specific facts seem to support a judicial mitigation of the expected consumer confusion.

The U.S. system has long complained of the theft of intellectual property and the lax protections afforded in foreign jurisdictions. Although the opinions in Person’s and Grupo Gigante certainly find support in national U.S. law, a review exclusive of those legal trappings find fact patterns where a U.S. person knew of a foreign use and opted to appropriate such for himself. Law is, of course, a vehicle of contrary parties, but it is not unreasonable to imagine that Christman and the Dallos brothers would expect their own marks to be protected in foreign jurisdictions if the order of adoption was reversed.

Although an overarching goal of trademark law is to inform consumer decisions by assisting them in the consistent identification of favored products, this is a goal to be balanced with other elements of trademark law in the current national structures. The well-known mark exception addresses this in part by extending a degree of protection to marks that, by reputation alone, transcend national borders.

As Professor Graeme Dinwoodie has stated, however, “[t]he costs to producers of deferring wholly to cross-border consumer goodwill in defining the scope of rights may outweigh the gains of reduced consumer confusion.”[115] Trademarks do not live separately from simple economics, and there exists a point of diminishing returns where the benefit of reduced consumer confusion is outweighed by the increased expense passed on by the manufacturer who must expend additional resources to secure a mark.

Nor do trademarks exist separately from world events. The MAXIM restaurant in Paris closed during World War II, and the Cuban trade embargo restrained free trade in COHIBA cigars. Regardless of political circumstance, these marks retained their ability to function as such and results contrary to those reached in both decisions may have inspired consumer confusion.

The well-known marks doctrine, albeit with rare and differed application, does attempt to balance national laws with the goodwill of a mark, but it does so somewhat naively in its present form. Although the PERSONS mark was not well-known in the United States, it had reached that level of reputation in Japan. As the mark had not yet expanded to U.S. distribution, it had not gained the requisite fame therein, however Christman’s own importation of the trademarked products acts as a prime example of the mobility of goods in commerce. By focusing on the destination state instead of the originating one, the well-known marks exception may intrude upon goodwill even as it respects national boundaries.

Under the Lanham Act, use is a condition to continued rights in a trademark as concerns domestic applications.[116] Other jurisdictions, however, are registration-based, which grant a conceptual advantage to non-U.S. mark holders. In addition, an inequity arose through the §44 amendments, which permit a foreign user of a mark to obtain U.S. trademark rights without use in the U.S.[117]

The trademark structure in the United States attempts to ensure that suitable marks remain available if not in use, which certainly serves the public policy of disallowing entities of simply maintaining registrations as an inventory of marks for future, or indeed, blocking use. The availability of intent-to-use registrations relaxed the standard somewhat by permitting the application for a mark intended for use within a reasonable period of time, however even this allowance requires actual use to secure the final registration.

The language of the Paris Convention, as codified domestically in §44, disallows a member state from making use a prerequisite to the issuance of the registration for the foreign mark. If the foreign user is able to secure a registration premised on simply an application, the ability to subsequently apply to extend this mark to the United States without use runs counter to the Lanham Act’s central ambition, and may disadvantage domestic trademark owners. Because the statute permits the extension to the U.S. within six months of the foreign filing, the statute provides for a period of ambiguity wherein a domestic user may not be aware of the mark’s possible extension to the U.S. and may initiate use of the mark for his own goods. Although a clearance search may reveal the issue, such may be prohibitively expensive if it must attach to any registered use worldwide.

Under the present definition, a trademark operating as such in multiple foreign jurisdictions may be effectively shut-out of the U.S. marketplace by virtue of a competing U.S. mark. In some cases, the domestic mark may represent an imitation product with a perceived lower quality, so even in cases where consumers are aware of a superior good represented by a similar mark, they will be unable to (legally) procure it in the local marketplace.[118] Similarly, even if the foreign user is willing to enter the U.S. market under a separate mark, the inability to reference the primary trademark and utilize its standard marketing materials will likely result in an inefficient and more costly distribution system.[119]

Therein lies the larger issue. In acknowledging that trademarks exist in a global marketplace, it is disingenuous to concurrently maintain that the use of a domestic mark will always alleviate consumer confusion. Indeed, given the U.S. presence in the worldwide economy, there may be an expectation that the mark seen on vacation in London is the same as they would experience upon a return to Cleveland. If the London mark is blocked from U.S. entry via a subsequent mark registered in the U.S., the consumer may well be confused or prompted to purchase an item not contemplated. As noted above, the U.S. mark may be of inferior quality to the expected product as seen in London, but even if it is a superior product, the consumer did not acquire what was desired as a result of the mark’s deception.

Concurrent use, even if its continued viability is questioned by the TTAB, is a concept understood in the U.S. courts. It embraces a degree of fairness even as it contemplates probabilities of consumer confusion. Unfortunately, concurrent use finds its support in U.S., not international, law. As appealing as the equitable structure may be, it doesn’t translate well to a community of national trademark laws. Because of limits on the extraterritoriality application of laws, the courts are not in the position to structure the same divisions of rights across foreign jurisdictions, nor to enforce them. At best, the courts are equipped to apply this rationale to direct conflicts with marks within the U.S.

As mentioned, a small business can post a webpage on the Internet in a very short time, essentially casting their trade name and any associated trademarks into global commerce. In a use-based jurisdiction, this raises the question of what constitutes sufficient use as to bar others from the mark, and likewise, whether this type of use would be enough to infringe on a previous mark in that jurisdiction . In a registration-based system, the latter question survives.

The Internet presents a unique problem, as where a similar mark may be used against several dissimilar goods without inspiring consumer confusion, for example Delta Airlines versus Delta Faucets, an Internet address is capable of only one use by the multiple entities that wish to utilize their mark as such. Although consumers are likely more acclimated to understanding this issue and are less likely to believe that Delta is the provider of both airline transport and plumbing, there are instances where the consumer impression will be far less distinct.[120]

In an ever-evolving international economic community, it may not be realistic to expect that countries set aside a history of national trademark law to embrace elements of international practice that may substantially alter national rights. On the other hand, to remain viable in that community, the individual countries must strive to protect their own domestic rights-holders in balance with rights that may be arising from alternate foreign jurisdictions. This quid pro quo approach has found application in the early Paris Convention as well as in the relatively recent Joint Recommendation. The inequitable and consistent enforcement of rights against foreign users will eventually preclude economic opportunities in the international arena.

There is no single “solution” that will erase national boundaries to respect trademarks as purely instruments of business goodwill. Regional trademarks and multinational registration methods offer new means of formalizing protection, subject to their own requirements and reducing reliance on equitable interventions, such as the well known marks doctrine. One step removed, treaties and related guidance can prompt national measures to provide protection for marks, again utilizing as an example the well-known marks inclusion in the Paris Convention, which doesn’t attempt to protect every mark, but simply those that have established some quantum of fame in the expansion market.

The “solutions” below represent the possible and the impossible, with some eventual merger to the practical.

As academically appealing as this approach may be, it is equally infeasible when considering its practicality. In an intellectual property environment presently dominated by national laws, the creation of a single international trademark would require vast changes in national laws beyond those that have heretofore been enacted via treaty. Even allowing that such would grandfather past national marks, the creation of such a device would require disparate national laws to converge to a single definition of a trademark. For example, and as was discussed above, the U.S. may need to acquiesce to a registration-based system in sharp contradiction to its present use-based version. Movement to a single definition of a mark means concessions, and even within a single nation, this has ramifications to existing and future marks-holders.

Alternatively, commentators have suggested that the issue could be resolved by granting rights to a trademark according to the registration, and thus the domestic laws, of the home nation. Here again the approach calls for the global acceptance of marks that may run counter to national laws, and the same examples as noted above apply. To some degree, however, this has been accomplished, as the “as-is” provision of the Paris Convention requires Member nations to accept marks as registered in the country of origin, subject to several exceptions.[121]

An international trademark remains an alternative, albeit an alternative with a dubious future. Although any number of treaties relegate national economic interests, it is unlikely that even the U.S. would yield all of its trademark authority to international norms.

The European Union (“EU”) has installed what essentially constitutes a regional trademark through the Community Trade Mark (“CTM”) system, which permits a mark owner to procure rights within the EU via a single application. Unlike the Madrid Union, to be discussed below, the CTM has risen above strictly political boundaries to create a regional mark with unitary rights. By procuring a CTM, a mark owner is able to secure rights in the 25 countries of the EU with equal legal effect throughout.[122] This same unitary nature, however, offers the advantage that use in one country of the EU constitutes use in all the members, satisfying the five-year “genuine use” requirement of Article 15.[123]

Although regional trademarks certainly offer efficiency in protection, the unitary nature as noted has the disadvantage of possibly precluding protection as the list of members increases. A CTM will not issue, or may be opposed if it has issued, where the mark infringes on a prior right in any of the countries of the Union.[124] As a result, national rights still maintain a degree of superiority, and the presence of one prior right may force a second comer to a mark into the national systems of each of the members.

Because the national systems have survived the overlying regional version, the CTM is not an optimal trademark vehicle, but is certainly an efficient means to procure multinational rights where previously the mark owner may not have made multiple applications through each national office.

In November 2003, the United States joined the Madrid Union by virtue of the Madrid Protocol, codified in the Lanham Act via sections 60 through 74.[125] The Protocol permits the owner of a registered mark in a member country to file one application for consideration by any of the other specified member countries. The international registration that issues is more an administrative convenience versus a true international trademark, however, as each member country may then consider the mark under its own national laws.[126] Other elements of the Protocol amplify the national aspects of the international registration, such as the five year period wherein the validity of the international registration is dependent upon the basic registration.[127] If the international registration fails within that period, the Protocol allows for transformation of the international registration into national applications, subject to temporal and class guidelines.[128]

Although a multinational system such as the Madrid Protocol does not establish a true international mark, it does facilitate the registration of a mark internationally, at least to extent of like membership in the Madrid Union. To the extent that marks may be upheld under such a system, dependence on the equity-based well known marks doctrine is diminished.

Article 6bis of the Paris Convention established an obligation for member countries to provide protection for well-known marks, inspiring and demanding that the U.S. trademark authority recognize such through statutory enactment. Absent actual international or regional trademarks, this type of treaty-led responsibility enabled through national law provides mark owners a chance for judicial or administrative recourse if not absolute reliance of rights. As the fame of a mark is certainly subjective, a mark owner would be foolhardy to assume that the well known marks doctrine would provide protection in a jurisdiction where alternate methods of securing the right were available. Fame in one country does not necessary extend to another, nor do rights procured by virtue of the well known marks doctrine necessarily trump other rights in a foreign jurisdiction.[129]

In an increasingly global environment, both internal and external pressures will prompt government negotiation. Trademark owners seeking to expand into other markets will seek recognition of their goodwill past political boundaries, and the governments with a vested interest in their domestic business owners will be forced to the negotiation table. Likewise, foreign jurisdictions wishing to attract outside business activity must extend reasonable protections to these incoming entities.

Although the ultimate effect of treaty obligations may create different results in each of the members of that treaty, the resulting national laws do create, at a minimum, the proverbial nail to hang at least part of the trademark hat upon.

The well-known mark doctrine presently considers the fame within the country where expansion is desired versus that within the country originating the trademark. The discord in this approach lies in that the fame in the latter may prompt others to secure foreign rights to the mark. As a result, the originator may be foreclosed from use of the mark in some markets, and may have his goodwill impacted by negative experiences of consumers with the second mark.

Absent other considerations, a modification of the well-known marks doctrine to consider the fame of a mark in the originating country is a rational means to provide protection in the situation presented above. Ultimately, however, this approach contains several challenges, not the least of which would involve the difficulties of national administrative and judicial systems to define “fame” as within a foreign jurisdiction. Likewise, such a change would monumentally increase the transaction costs in researching a new mark, as the entity wishing to procure the rights would essentially need to consider the fame of like and similar marks in every jurisdiction party to the enacting treaty.

Perhaps the greatest danger in changing the emphasis to the fame within the country of origin involves the de facto creation of an international mark without need for registration or use within the country where a second comer has sought to utilize the mark. In a system of national and regional laws, the well-known marks doctrine should not operate to restrict use of a like mark where little or no likelihood of confusion exits, particularly where the original mark is not present.

Several courts, including the district court in Grupo Gigante, have noted that intent to imitate the mark is a probative element in determining how well-known a mark may be.[130] In Person’s, Christman copied the designs and logo from the Japanese version of the mark, yet the court was unwilling to find bad faith on the basis that Christman could not have had notice regarding the eventual expansion of the Japanese company.[131] One commentator suggested:

“Today, however, the trademark originator’s intent to expand beyond its original market should be presumed. The requirement that an unregistered foreign mark must be well known in the domestic market for it to be protected should be abandoned in favor of an ‘awareness of foreign use’ rule”[132]

Regardless of the standard and weight of such applied in considering the intent of the second adopter, it remains that a global environment should recognize at least the potential for a mark to enter other markets.

Given the close ties of the trademark in practice to political boundaries, the bulk of the remedies suggested arise via political intervention. In the instance of Internet domain names, the ICANN has instituted contractual aspects that control in the event of conflict between domain owners.[133] The relative novelty of the Internet may have permitted this innovation, but similar mechanisms may be available for trademark governance.

The adage “treat others as you’d wish others to treat you” returns us to lessons imparted during our youth as one of the foundations of humanity. In Person’s court, citing in part from Selfway, Inc. v. Travelers Petroleum, Inc., 579 F.2d 75 at 79 (CCPA 1978), stated, “’The law pertaining to registration of trademarks does not regulate all aspects of business morality.’ When the law has been crafted with the clarity of crystal, it also has the qualities of a glass slipper: it cannot be show-horned onto facts it does not fit, no matter how appealing they might appear.”[134] In commenting on Christman’s use of the “PERSON’S” mark, the court made that morality judgment anyway when it found that “Christman’s conduct in appropriating and using appellant’s mark in a market where he believed the Japanese manufacturer did not compete can hardly be considered unscrupulous commercial conduct.”[135]

The Joint Recommendation promulgated by WIPO and the WTO recognizes bad faith as an element of determining conflict between competing marks. There is a thin line between morality and business entrepreneurship, as Christman steadfastly maintained that he didn’t expect that the Japanese company would expand to the United States. Bad faith and bad judgment are severable concepts, and the parties in Person’s would each select only one to describe Christman’s adoption of a mark he knew to be utilized in a foreign jurisdiction.

The pure function of a trademark is a simple one; to act as an indicator of source and quality. Territoriality complicates this simplicity, both domestically under one set of national laws through concurrent use, and internationally when goods and services are desired to cross political boundaries.

At the District Court level in Grupo Gigante, the court sought to establish parameters around the well-known marks doctrine, and settled on secondary meaning primarily because of the distances involved and the easy comparison to a domestic concurrent use issue. In remanding for further consideration, the Ninth Circuit therein explicitly found for the existence of the well-known marks exception to territoriality, on a rationale of preventing consumer confusion in a global environment.[136]

The Second Circuit, however, is not irrational in the District Court’s “EXITO” decision. The Court therein found that “[d]efendants adopted the EXITO mark with intent to cause consumer confusion and to capitalize on plaintiff’s goodwill”[137] The focus in the decision was how a mark, never utilized in the U.S. by the foreign mark owner, could establish rights when a domestic person could not gain those same rights without use. The court was unwilling to accept that inequity, but it remains that the Second Circuit expressly left the well-known marks doctrine viable in the Empresa decision.

At present, then, Grupo Gigante is on remand in the Ninth Circuit, and it is feasible to expect Second Circuit review of Almacenes Exito. For a doctrine that has been relatively silent, the near-future promises to be telling for this exception with such impact of global commerce.

[1] Grupo Gigante S.A. de C.V. v. Dallo & Co., 391 F.3d 1088 (9th Cir. 2004).

[2] Id. at 1098. (emphasis in original)

[3] For example, as federal registrations were not procured by either party, Lanham Act protections were not directly deployed.

[4] For example, use of a Community Trademark and/or the Madrid registration system, to be discussed in Section 5 below.

[5] Hanover Star Milling Co. v. Metcalf, 240 U.S. 403, 415 (1916).; United Drug Co. v. Theodore Rectanus Co., 248 U.S. 90, 100-01 (1918).

[6] Hanover Star Milling, 240 U.S. at 412. (“The primary and proper function of a trademark is to identify the article to which it is affixed. Where a party has been in the habit of labeling his goods with a distinctive mark, so that purchasers recognize goods thus marked as being of his production, others are debarred from applying the same mark to goods of the same description, because to do so would in effect represent their goods to be of his production and would tend to deprive him of the profit he might make through the sale of the goods which the purchaser intended to buy.”).

[7] Id. at 414.

[8] See Lanham Act of 1946 § 1, 15 U.S.C. § 1051 (1946) [hereinafter Lanham Act]. Later amendments established an intent-to-use language to comply with treaty obligations, but still require a subsequent statement of actual use. The present statute requires, as concerns an application for registration, “the date of the applicant’s first use of the mark, the date of the applicant’s first use of the mark in commerce, the goods in connection with which the mark is used…” 15 U.S.C. § 1051(a)(2).

[9] Hanover Star Milling, 240 U.S. at 415.

[10] United Drug Co., 248 U.S. 90 (1918).

[11] Id. at 100.

[12] See 4 McCarthy §26:4. (“A clear majority of the cases applying the common law Tea Rose-Rectanus doctrine hold that in order to prove the defense, the junior user must prove both of two elements: (1) its first use was in ‘good faith’; and (2) its first use was in a ‘remote area.’”). (internal footnotes omitted).

[13] Lanham Act § 2(d), 15 U.S.C. § 2(d)

[14] Id.

[15] Lanham Act § 33(a), 15 U.S.C. § 1115(a) (1946). (“Any registration issued (…) on the principal register provided by this Act and owned by a party to an action shall be admissible in evidence and shall be prima facie evidence of the validity of the registered mark and of the registration of the mark, of the registrant’s ownership of the mark, and of the registrant’s exclusive right to use the registered mark in commerce on or in connection with the goods or services specified in the registration subject to any conditions or limitations stated therein.”).

[16] Dawn Doughnut Company v. Hart’s Food Stores, Inc., 267 F.2d 358 (2^nd Cir. 1959).

[17] Id. at 360.

[18] Id. at 362-363.

[19] Fairway Foods, Inc. v. Fairway Market, Inc., 227 F.2d 193 (9^th Cir. 1955).

[20] Circuit City Stores, Inc. v. Carmax, Inc., 165 F.3d 1047 (6^th Cir. 1999). This case was plagued with evidentiary issues as well which may have indicated that the defendant was utilizing the mark prior to the intent-to-use application filed by Circuit City.

[21] See generally, Thomas L. Casagrande, “The Dawn Doughnut Rule”: Still Standing (Article III, That Is) Even With the Rise of the Internet. <http://www.howrey.com/pratices/ip/index.cfm?contentID=273>. (visited May 5, 2005).

[22] For example, the local market may have a similarly-named business or brand, but a consumer would need to be first aware of such in order to be confused by the mark on the Internet representing an alternate source.

[23] Hubcap Heaven, LLC v. Hubcap Heaven, Inc., 2005 WL 363418 (Trademark Tr. & App. Bd.). (“We acknowledge the juxtaposition, on the one hand, of use of a mark on the Internet, and on the other hand, the seeking of a geographically restricted registration is troubling. Indeed, in the age of the Internet, concurrent use registrations premised on geographically distinct uses appear to be a legal fiction as the Internet is accessible not only nationwide but world-wide.”).

[24] Paris Convention for the Protection of Intellectual Property, July 14, 1967, 21 U.S.T. 1583, 828 U.N.T.S. 305 [hereinafter Paris Convention].

[25] Id., art. 2(1). (“Nationals of any country of the Union shall, as regards the protection of industrial property, enjoy in all the other countries of the Union the advantages that their respective laws now grant, or may hereafter grant, to nationals; all without prejudice to the rights specially provided for by this Convention. Consequently, they shall have the same protection as the latter, and the same legal remedy against any infringement of their rights, provided that the conditions and formalities imposed upon nationals are complied with.”)

[26] See Joanna Schmidt-Szalewski, The International Protection of Trademarks After the TRIPS Agreement, 9 Duke J. Comp. & Int’l L. 189, at 194. (suggesting “[a] member state could also subject protection for these non-members to a condition of reciprocity, residence, the payment of a supplementary fee, or anything else.”).

[27] Paris Convention, supra note 24, art. 6(1).

[28] Id. art. 6(2). (“However, an application for the registration of a mark filed by a national of a country of the Union in any country of the Union may not be refused, nor may a registration be invalidated, on the ground that filing, registration, or renewal, has not been effected in the country of origin.”).

[29] Id. art. 6(3).

[30] Id. art. 6quinquies, section A(1).

[31] Id. art. 6quinquies, section B.

[32] Id. art. 4.

[33] As §1(b) of the Lanham Act would permit an intent-to-use application to establish an application date, subject to later proof-of-use.

[34] Paris Convention, supra note 24, art.6bis.

[35] Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15, 1994, art. 3, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, Legal Instruments—Results of the Uruguay Round vol. 31, 33 I.L.M. 81, 85 (1994) [hereinafter TRIPS].

[36] Id., art. 3(1) states ” Each Member shall accord to the nationals of other Members treatment no less favourable than that it accords to its own nationals with regard to the protection of intellectual property…”; Article 4 states, “With regard to the protection of intellectual property, any advantage, favour, privilege or immunity granted by a Member to the nationals of any other country shall be accorded immediately and unconditionally to the nationals of all other Members.”

[37] See id. Art. 15(3) (“Members may make registrability depend on use. However, actual use of a trademark shall not be a condition for filing an application for registration. An application shall not be refused solely on the ground that intended use has not taken place before the expiry of a period of three years from the date of application.”).

[38] Id. Art. 16(1)

[39] Id.

[40] Id. art. 16(2).

[41] Id. art. 16(3).

[42] Joint Recommendation Concerning Provisions on the Protection of Well-Known Marks, adopted by Assembly of the Paris Union for the Protection of Intellectual Property and General Assembly of the World Intellectual Property Organization, WIPO Doc. 833(e) (Sept. 1999) [hereinafter Joint Recommendation]. Replicated herein at Appendix A.

[43] Id.

[44] Id. art. 2(1)(a).

[45] Id. art. 2(1)(b).

[46] Id. art. 2(2)(a).

[47] Id. arts. 2(2)(b) and 2(2)(b).

[48] Id. art. 2(3).

[49] Id.

[50] Id. art. 4(1)(a).

[51] Id. art. 4(1)(b).

[52] Id. art. 3.

[53] A. Steele v. Bulova Watch Co., 344 U.S. 280 (1952).

[54] Id. at 287; But See dissenting opinion (Reed and Douglas) “The Lanham Act (…) should be construed to apply only to acts done within the sovereignty of the United States. While we do not condone the piratic use of trade-marks, neither do we believe that Congress intended to make such use actionable irrespective of the place it occurred.” Id, At 292.

[55] Vanity Fair Mills, Inc. v. T. Eaton Co., 234 F.2d 633 (1956).

[56] Id. at 643.

[57] Vaudable v. Montmartre, Inc., 20 Misc.2d 757, 193 N.Y.S.2d 332, (NY Sup. Ct. 1959).

[58] Id. at 758.

[59] Id. at 759

[60] Person’s Co., LTD. v. Christman, 900 F.2d 1565, (Fed. Cir. 1990).

[61] Id. at 1568.

[62] Woman’s World Shops, Inc. v. Lane Bryant, Inc., 5 U.S.P.Q. 2d. 1985 (TTAB 1985).

[63] Person’s, at 1569.

[64] Id, at 1569-1570. (“In the present case, when Christman initiated use of the mark, Person’s Co. had not yet entered U.S. commerce. The Person’s Co. had no goodwill in the United States and the ‘PERSON’S’ mark had no reputation here. Appellant’s argument ignores the territorial nature of trademark rights.”).

[65] Id.

[66] See Sweats Fashions, Inc. v. Pannill Knitting Co., 833 F.2d 1560 (Fed.Cir. 1987).

[67] Int’l Bancorp, LLC v. Societe des Bains de Mer et du Cercle des Etrangers a Monaco, 329 F.3d 359 (4th Cir. 2003) (Motz, J. dissenting).

[68] Id. at 375, note 8.

[69] See Buti v. Perosa, S.R.L., 139 F.3d 98 (2^nd Cir. 1998). The plaintiff conceded in this case that the food and drink services of the “FASHION CAFÉ” were not themselves in trade between the U.S. and Italy. The International Bancorp majority found that even in the absence of this concession in Buti, the random distribution of promotional material within the modeling industry may not have qualified as a use in commerce.

[70] Lanham Act § 45, 15 U.S.C. § 1127.

[71] Id.

[72] Int’l Bancorp, at 364. (citing U.S. Const. art. I, § 8, cl.3).

[73] Id. at 385 (Motz, J., dissenting).

[74] Id. at 387-388. (citing Rivard v. Linville, 133 F.3d 1446 (Fed. Cir. 1998)).

[75] Empresa Cubana del Tabaco v. Culbro Corp., 2004 WL 602295, 70 U.S.P.Q.2d 1650 (S.D.N.Y. 2004).

[76] Id. at 9-10.

[77] Id. at 34.

[78] Joint Recommendation, supra note 42.

[79] Empresa Cubana, at 34 (citing Gennesse Brewing Co. v. Stroh Brewing Co., 124 F.3d 137, 143 (2^nd Cir. 1997), in turn quoting from Centaur Communications, Ltd. V. A/S/M Communications, Inc., 830 F.2d 1217, 1221 (2^nd Cir. 1987)).

[80] Empresa Cubana, at 36.

[81] Id. at 37.

[82] Id. at 38. (citing Bristol-Myers Squibb Co. v. McNeil-P.P.C., Inc., 973 F.2d 1033, 1042 (2d Cir 1992)).

[83] Id. at 39.

[84] Grupo Gigante S.A. de C.V. v Dallo & Co., Inc., 119 F.Supp.2d 1083 (C.D. Cal 2000), at 1091.

[85] Id. at 1091-1092.

[86] Id. at 1091. (referencing Filipino Yellow Pages, Inc. v. Asian Journal Publications, Inc., 198 F.3d 1143, 1151 (9^th Cir. 1991).

[87] Id. at 1093. It bears comment that the survey started with a population of 78 individuals lived in San Diego county, spoke Spanish, and had recently bought Mexican food at a grocery store. 24 individuals within that population actually attributed “GIGANTE” with a Mexican supermarket. Although the court accepted this limited population as probative, it appears to be statistically lacking given the larger populations at issue.

[88] Id. at 1098 (emphasis in original). Cited supra at note 1.

[89] Int’l Bancorp, at 389, note 9 (Motz, J. dissenting).

[90] Empresa Cubana del Tabaco v. Culbro Corporation, 399 F.3d 462 (2^nd Cir. 2005).

[91] Id. at 476-477 (citing 31 C.F.R. §515.310).

[92] Id. at 472.

[93] Id. at 479.

[94] Id. at 481.

[95] ITC Limited v. Punchgini, Inc., 373 F.Supp.2d 275 (Feb 10, 2005).

[96] Id. at 285 (citing the Lanham Act’s prescription in 15 U.S.C. §1127).

[97] Id. at 286.

[98] Id. at 287. (discussing the use of “secondary meaning” within the context of the doctrine).

[99] Id.

[100] Id., at 287, note 12.

[101] Id. at 290.

[102] Id. at 291.

[103] De Beers LV Trademark Limited v. De Beers Diamond Syndicate, 2005 WL 1164073, (S.D.N.Y. 2005).

[104] Id. at 1. The court did, however, note that De Beers LV had been associated with the “A Diamond Is Forever” advertising campaign utilized in the U.S. market.

[105] Id. at 8.

[106] Id. at 8.

[107] Almacenes Exito S.A. v. El Gallo Meat Market, Inc., 2005 WL 1863435 (S.D.N.Y. 2005).

[108] Id. at 1. (citing Empresa Cubana del Tabaco v. Culbro Corporation, 399 F.3d 462 (2nd Cir. 2005)).

[109] The Lanham Act § 44(b) reads, “Any person whose country of origin is a party to any convention or treaty relating to trademarks, trade or commercial names, or the repression of unfair competition, to which the United States is also a party, or extends reciprocal rights to nationals of the United States by law, shall be entitled to the benefits of this section under the conditions expressed herein to the extent necessary to give effect to any provision of such convention, treaty or reciprocal law, in addition to the rights to which any owner of a mark is otherwise entitled by this Act.” 15 U.S.C. §1126(b).

[110] Almacenes Exito, at 3.(citing Int’l Café, 252 F.3d 1274, 1277-78 (11^th Cir. 2001), quoted in Empresa Cubana, 399 F.3d 462, 484-485 (2^nd Cir. 2005)).

[111] Id, at 3.

[112] Id.

[113] Supra, note 110.

[114] De Beers, 2005 WL 1164073 at 7.

[115] Graeme B. Dinwoodie, Trademarks and Territory: Detaching Trademark Law from the Nation-State, 41 Hous. L. Rev. 885 (2004).

[116] Lanham Act § 1, 15 U.S.C. § 1051.

[117] Id. § 44(e), 15 U.S.C. § 1126(e). (“A mark duly registered in the country of origin of the foreign applicant may be registered on the principal register if eligible, otherwise on the supplemental register herein provided. (…) The application must state the applicant’s bona fide intention to use the mark in commerce, but use in commerce shall not be required prior to registration.”).

[118] See James A. Carney, Setting Sights on Trademark Piracy: The Need for Greater Protection Against Imitation of Foreign Trademarks, 81 Trademark Rep. 30, at 39.

[119] Id. at 39.

[120] See GOTO.Com, Inc. v. Disney, 202 F.3d 1199 (9th Cir. 2000).

[121] Paris Convention, supra note 24, art. 6quinquies.

[122] Council Regulation No. 40/94, 1994 O.J. (L 11) 3, Art. 1(2) [hereinafter “CTM Regulation”]. “A Community trade mark shall have a unitary character. It shall have equal effect throughout the Community: it shall not be registered, transferred or surrendered or be the subject of a decision revoking the rights of the proprietor or declaring it invalid, nor shall its use be prohibited, save in respect of the whole Community. This principle shall apply unless otherwise provided in this Regulation.”

[123] Id. art. 15.

[124] Id. arts. 8, 42.

[125] Lanham Act, 15 U.S.C. §§ 1141-1141n.

[126] Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks, art. 5(1) (June 28, 1989) < http://www.wipo.int/madrid/en/legal_texts/trtdocs_wo016.html#P19_169> [hereinafter Madrid Protocol]. (“[w]here the applicable legislation so authorizes, any Office of a Contracting Party which has been notified by the International Bureau of an extension to that Contracting Party, under Article 3ter(1) or (2), of the protection resulting from the international registration shall have the right to declare in a notification of refusal that protection cannot be granted in the said Contracting Party to the mark which is the subject of such extension. Any such refusal can be based only on the grounds which would apply, under the Paris Convention for the Protection of Industrial Property, in the case of a mark deposited direct with the Office which notifies the refusal. However, protection may not be refused, even partially, by reason only that the applicable legislation would permit registration only in a limited number of classes or for a limited number of goods or services.”).

[127] Id. art. 6(3).

[128] Id. art. 9quinquies. The Madrid Agreement, a parallel element to the Protocol within the Madrid Union, has not been joined by the United States, in part because of the lack of a transformation clause therein.

[129] See generally Playboy Enterprises, Inc. v. Chuckleberry Publishing, Inc., 939 F.Supp. 1032, (S.D.N.Y. 1196). (citing a previous decision in which the “PLAYBOY” mark was found by the Italian courts to be a weak mark within that country and not subject to protection).

[130] Grupo Gigante S.A. de C.V. v. Dallo & Co., Inc., 119 F.Supp.2d 1083 (C.D. California 2000), at footnote 11. See also note 86 supra.

[131] See id. at 40-41.

[132] Beth Fulkerson, Theft by Territorialism: A Case for Revising TRIPS to Protect Trademarks from National Market Foreclosure, 17 Mich. J. Int’l L. 801, 802.

[133] See Uniform Domain Name Dispute Resolution Policy (Oct. 24, 1999) <http://www.icann.org/dndr/udrp/policy.htm>

[134] Person’s, at 1570.

[135] Id.

[136] Grupo Gigante, 391 F.3d 1088, at 1094. (“We hold […] that there is a famous mark exception to the territoriality principle. While the territoriality principle is a long-standing and important doctrine within trademark law, it cannot be absolute. An absolute territoriality rule without a famous-mark exception would promote consumer confusion and fraud. Commerce crosses borders. In this nation of immigrants, so do people.”).

[137] Almacenes Exito, at 1.