U.S. Supreme Court, Abitron Austria GmbH v. Hetronic Int’l, Inc., Docket No. 21-1043, 600 U.S. 412

Extraterritoriality

 

Presumption Against Extraterritoriality

 

Conflict of Laws

 

Foreign Law

 

International Relations

 

Trademark Infringement

 

Circuit Split

 

 

 

 

This case requires us to decide the foreign reach of 15 U.S.C. §1114(1)(a) and §1125(a)(1), two provisions of the Lanham Act that prohibit trademark infringement. Applying the presumption against extraterritoriality, we hold that these provisions are not extraterritorial and that they extend only to claims where the claimed infringing use in commerce is domestic. 

 

§1114(1)(a) prohibits the unauthorized “use in commerce of any reproduction . . . of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services” when “such use is likely to cause confusion.” 

 

§1125(a)(1) prohibits the “use in commerce” of a protected mark, whether registered or not, that “is likely to cause confusion.”

 

We granted certiorari to resolve a Circuit split over the extraterritorial reach of the Lanham Act. 598 U.S. ––– (2023).

 

“It is a `longstanding principle of American law “that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States.” '” Morrison v. National Australia Bank Ltd., 561 U.S. 247, 255 (2010). We have repeatedly explained that this principle, which we call the presumption against extraterritoriality, refers to a “presumption against application to conduct in the territory of another sovereign.” Kiobel v. Royal Dutch Petroleum Co., 569 U.S. 108, 119 (2013) (citing Morrison, 561 U.S., at 265). In other words, exclusively “`foreign conduct is generally the domain of foreign law.'” Microsoft Corp. v. AT&T Corp., 550 U.S. 437, 455 (2007) (alteration omitted). The presumption “serves to avoid the international discord that can result when U.S. law is applied to conduct in foreign countries” and reflects the “`commonsense notion that Congress generally legislates with domestic concerns in mind.'” RJR Nabisco, Inc. v. European Community, 579 U.S. 325, 335–336 (2016).

 

Applying the presumption against extraterritoriality involves “a two-step framework.” Id., at 337. At step one, we determine whether a provision is extraterritorial, and that determination turns on whether “Congress has affirmatively and unmistakably instructed that” the provision at issue should “apply to foreign conduct.” Id., at 335, 337; accord, Kiobel, 569 U.S., at 117 (asking whether Congress “intends federal law to apply to conduct occurring abroad”); Nestlé USA, Inc. v. Doe, 593 U.S. –––, ––– (2021). If Congress has provided an unmistakable instruction that the provision is extraterritorial, then claims alleging exclusively foreign conduct may proceed, subject to “the limits Congress has (or has not) imposed on the statute's foreign application.” RJR Nabisco, 579 U.S., at 337–338.

 

If a provision is not extraterritorial, we move to step two, which resolves whether the suit seeks a (permissible) domestic or (impermissible) foreign application of the provision. To make that determination, courts must start by identifying the “` “focus” of congressional concern' ” underlying the provision at issue. Id., at 336. “The focus of a statute is `the object of its solicitude,' which can include the conduct it `seeks to “regulate,”' as well as the parties and interests it `seeks to “protect” ' or vindicate.” WesternGeco LLC v. ION Geophysical Corp., 585 U.S. –––, ––– (2018) (alterations omitted).

 

Step two does not end with identifying statutory focus. We have repeatedly and explicitly held that courts must “identify `the statute's “focus” ' and ask whether the conduct relevant to that focus occurred in United States territory.” Id., at ––– (emphasis added); accord, e.g., RJR Nabisco, 579 U.S., at 337. Thus, to prove that a claim involves a domestic application of a statute, “plaintiffs must establish that `the conduct relevant to the statute's focus occurred in the United States.'” Nestlé, 593 U.S., at ––– – ––– (emphasis added); see, e.g., WesternGeco, 585 U.S., at ––––––– (holding that a claim was a domestic application of the Patent Act because the infringing acts—the conduct relevant to the focus of the provisions at issue—were committed in the United States); Morrison, 561 U.S., at 266–267, 271–273 (concluding that a claim was a foreign application of the Securities and Exchange Act because the “purchase-and-sale transactions” at issue occurred outside of the United States).

 

Step two is designed to apply the presumption against extraterritoriality to claims that involve both domestic and foreign activity, separating the activity that matters from the activity that does not. After all, we have long recognized that the presumption would be meaningless if any domestic conduct could defeat it. See Morrison, 561 U.S., at 266. Thus, “`if the conduct relevant to the statute's focus occurred in the United States, then the case involves a permissible domestic application' of the statute, `even if other conduct occurred abroad.'” WesternGeco, 585 U.S., at ––– (quoting RJR Nabisco, 579 U.S., at 337). And “if the relevant conduct occurred in another country, `then the case involves an impermissible extraterritorial application regardless of any other conduct that occurred in U.S. territory.'” WesternGeco, 585 U.S., at ––– (quoting RJR Nabisco, 579 U.S., at 337). Of course, if all the conduct “`regarding the violations `took place outside the United States,'” then courts do “not need to determine . . . the statute's `focus'” at all. Id., at 337. In that circumstance, there would be no domestic conduct that could be relevant to any focus, so the focus test has no filtering role to play. See, e.g., Nestlé, 593 U.S., at –––; Kiobel, 569 U.S., at 124.

 

With this well-established framework in mind, the first question is whether the relevant provisions of the Lanham Act, see §§ 1114(1)(a), 1125(a)(1), provide “a clear, affirmative indication” that they apply extraterritorially, RJR Nabisco, 579 U.S., at 337. They do not.

 

(…) When applying the presumption, “`we have repeatedly held that even statutes . . . that expressly refer to “foreign commerce” '” when defining “commerce” are not extraterritorial. Morrison, 561 U.S., at 262–263; see also RJR Nabisco, 579 U.S., at 344.

 

See Kiobel, 569 U. S., at 118 (“It is well established that generic terms like `any' or `every' do not rebut the presumption against extraterritoriality”). And the mere fact that the Lanham Act contains a substantively similar definition that departs from the so-called “boilerplate” definitions used in other statutes cannot justify a different conclusion either.

 

In other words, Congress proscribed the use of a mark in commerce under certain conditions. This conduct, to be sure, must create a sufficient risk of confusion, but confusion is not a separate requirement; rather, it is simply a necessary characteristic of an offending use.5 Because Congress has premised liability on a specific action (a particular sort of use in commerce), that specific action would be the conduct relevant to any focus on offer today. See, e.g., WesternGeco, 585 U.S., at ––– – –––.

 

In sum, as this case comes to us, “use in commerce” is the conduct relevant to any potential focus of §1114(1)(a) and §1125(a)(1) because Congress deemed a violation of either provision to occur each time a mark is used in commerce in the way Congress described, with no need for any actual confusion. Under step two of our extraterritoriality standard, then, “use in commerce” provides the dividing line between foreign and domestic applications of these Lanham Act provisions. 

 

5 Both provisions “refer to a `likelihood' of harm, rather than a completed harm.” Moseley v. V Secret Catalogue, Inc., 537 U.S. 418, 432 (2003). In other words, “actual confusion is not necessary in order to prove infringement.” Restatement (Third) of Unfair Competition §23, at 250, Comment b (1993); accord, id., §23, at 251, Comment d; 4 J. McCarthy, Trademarks and Unfair Competition § 23:12, at 23–157 (5th ed. 2023) (McCarthy) (“ `It is black letter law that actual confusion need not be shown to prevail under the Lanham Act, since . . . the Act requires only a likelihood of confusion' ”). Instead, the provisions treat confusion as a means to limit liability to only certain “bona fide use[s] of a mark in the ordinary course of trade.” 15 U. S. C. § 1127 (defining “use in commerce”); see Patent and Trademark Office v. Booking.com B. V., 591 U.S. –––, ––– (2020) (“A competitor's use does not infringe a mark [under §1114(1)(a) and § 1125(a)(1)] unless it is likely to confuse consumers”).

 

When a claim involves both domestic and foreign activity, the question is whether “`the conduct relevant to the statute's focus occurred in the United States.'” Nestlé, 593 U.S., at ––– – –––. If that “`conduct . . . occurred in the United States, then the case involves a permissible domestic application' of the statute `even if other conduct occurred abroad.’” WesternGeco, 585 U.S., at –––. But “if the conduct relevant to the focus occurred in a foreign country, then the case involves an impermissible extraterritorial application regardless of any other conduct that occurred in U.S. territory.” RJR Nabisco, 579 U.S., at 337; see, e.g., WesternGeco, 585 U.S., at –––; Nestlé, 593 U.S., at ––– – –––; Morrison, 561 U.S., at 266–267, 271–273.

 

In nearly all countries, including the United States, trademark law is territorial—i.e., “a trademark is recognized as having a separate existence in each sovereign territory in which it is registered or legally recognized as a mark.” 5 McCarthy §29:1, at 29–4 to 29–5. Thus, each country is empowered to grant trademark rights and police infringement within its borders. See, e.g., ibid.; Ingenohl v. Olsen & Co., 273 U.S. 541, 544 (1927); A. Bourjois & Co. v. Katzel, 260 U.S. 689, 692 (1923).

 

This principle has long been enshrined in international law. Under the Paris Convention for the Protection of Industrial Property, July 14, 1967, 21 U. S. T. 1583, T. I. A. S. No. 6923, a “mark duly registered in a country of the Union shall be regarded as independent of marks registered in other countries of the Union,” and the seizure of infringing goods is authorized “on importation” to a country “where such mark or trade name is entitled to legal protection.” Arts. 6(3), 9(1), id., at 1639, 1647.

 

Because of the territorial nature of trademarks, the “probability of incompatibility with the applicable laws of other counties is so obvious that if Congress intended such foreign application `it would have addressed the subject of conflicts with foreign laws and procedures.'” Morrison, 561 U.S., at 269.

 

Secondary Sources: McCarthy, Trademarks and Unfair Competition § 23:12, at 23–157 (5th ed. 2023).

 

 

(U.S. Supreme Court, June 29, 2023, Abitron Austria GmbH v. Hetronic Int’l, Inc., Docket No. 21-1043, 600 U.S. 412, J. Alito)

 

 

WesternGeco LLC v. ION Geophysical Corp.

Export: Jurisdiction: Presumption against extraterritoriality: Patent infringement: Lost foreign profits:

Under the Patent Act, a company can be liable for pa­tent infringement if it ships components of a patented invention overseas to be assembled there. See 35 U. S. C. §271(f)(2). A patent owner who proves infringement under this provision is entitled to recover damages. §284.The question in this case is whether these statutes allow the patent owner to recover for lost foreign profits. We hold that they do.

(Section 271(f)(1) addresses the act of exporting a substantial portion of an invention’s components: “Whoever without authority supplies or causes to be supplied in or from the United States all or a substan­tial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce the com­bination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.”)

Section 271(f)(2), the provision at issue here, addresses the act of exporting components that are specially adapted for an invention: “Whoever without authority supplies or causes to be supplied in or from the United States any component of a patented invention that is especially made or es­pecially adapted for use in the invention and not a staple article or commodity of commerce suitable for substantial noninfringing use, where such component is uncombined in whole or in part, knowing that such component is so made or adapted and intending that such component will be combined outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.”

Courts presume that federal statutes “apply only within the territorial jurisdiction of the United States.” Foley Bros., Inc. v. Filardo, 336 U. S. 281, 285 (1949). This principle, commonly called the presumption against extra­territoriality, has deep roots.

This Court has established a two-step framework for deciding questions of extraterritoriality. The first step asks “whether the presumption against extraterritoriality has been rebutted.” RJR Nabisco, Inc. v. European Com­munity, 579 U. S. ___, ___ (2016) (slip op., at 9). It can be rebutted only if the text provides a “clear indication of an extraterritorial application.” Morrison v. National Aus­tralia Bank Ltd., 561 U. S. 247, 255 (2010). If the pre­sumption against extraterritoriality has not been rebut­ted, the second step of our framework asks “whether the case involves a domestic application of the statute.” RJR Nabisco, 579 U. S., at ___ (slip op., at 9). Courts make this determination by identifying “the statute’s ‘focus’” and asking whether the conduct relevant to that focus occurred in United States territory. Ibid. If it did, then the case involves a permissible domestic application of the statute. See ibid.

We resolve this case at step two. While “it will usually be preferable” to begin with step one, courts have the discretion to begin at step two “in appropriate cases.”

The focus of a statute is “the object of its solicitude,” which can include the conduct it “seeks to ‘regulate,’” as well as the parties and interests it “seeks to ‘protect’” or vindicate. Morrison, supra, at 267 (quoting Superintendent of Ins. of N. Y. v. Bankers Life & Casualty Co., 404 U. S. 6, 12, 10 (1971)). “If the conduct relevant to the statute’s focus occurred in the United States, then the case involves a permissible domestic application” of the statute, “even if other conduct occurred abroad.” RJR Nabisco, 579 U. S., at ___ (slip op., at 9). But if the rele­vant conduct occurred in another country, “then the case involves an impermissible extraterritorial application regardless of any other conduct that occurred in U. S. territory.” Ibid.

We begin with §284. It provides a general damages remedy for the various types of patent infringe­ment identified in the Patent Act. The portion of §284 at issue here states that “the court shall award the claimant damages adequate to compensate for the infringement.” We conclude that “the infringement” is the focus of this statute. As this Court has explained, the “overriding purpose” of §284 is to “afford patent owners complete compensation” for infringements.

But that observation does not fully resolve this case, as the Patent Act identifies several ways that a patent can be infringed. See §271. To determine the focus of §284 in a given case, we must look to the type of infringement that occurred. We thus turn to §271(f)(2), which was the basis for WesternGeco’s infringement claim and the lost-profits damages that it received.

Section 271(f)(2) focuses on domestic conduct. It pro­vides that a company “shall be liable as an infringer” if it “supplies” certain components of a patented invention “in or from the United States” with the intent that they “will be combined outside of the United States in a manner that would infringe the patent if such combination occurred within the United States.” The conduct that §271(f)(2) regulates—i.e., its focus—is the domestic act of “supplying in or from the United States.” As this Court has acknowledged, §271(f) vindicates domestic interests: It “was a direct response to a gap in our patent law,” Microsoft Corp., 550 U. S., at 457, and “reaches compo­nents that are manufactured in the United States but assembled overseas,” Life Technologies, 580 U. S., at ___ (slip op., at 11). As the Federal Circuit explained, §271(f)(2) protects against “domestic entities who export components . . . from the United States.” 791 F. 3d, at 1351.

(Because the Federal Circuit did not address §271(f)(1), (…) we limit our analysis to §271(f)(2).)

(…) Thus, the lost-profits damages that were awarded to WesternGeco were a domestic application of §284.

(…) Specifically, a patent owner is entitled to recover “‘the difference between its pecuniary condition after the infringement, and what its condition would have been if the infringement had not occurred.’” Aro Mfg. Co., at 507. This recovery can include lost profits. See Yale Lock Mfg. Co. v. Sargent, 117 U. S. 536, 552–553 (1886). And, as we hold today, it can include lost foreign profits when the patent owner proves infringement under §271(f)(2).

(…) In reaching this holding, we do not address the extent to which other doctrines, such as proximate cause, could limit or preclude damages in particular cases.

(U.S.S.C., June 22, 2018, WesternGeco LLC v. ION Geophysical Corp., Docket 16-1011, J. Thomas)

Exportation de composants à partir des Etats-Unis, montage du produit à l’étranger, vente du produit et réalisation d’un profit à l’étranger. Si le montage avait eu lieu aux Etats-Unis, le brevet d’invention d’un tiers domicilié aux Etats-Unis aurait été violé.

La question est de savoir si ce tiers titulaire du brevet peut agir devant une cour fédérale en violation de son brevet contre l’exportateur, et conclure au paiement de son manque à gagner résultant des profits ainsi réalisés à l’étranger. La Cour répond par l’affirmative.

La loi fédérale applicable : 35 U.S.C. §271(f)(2), soit une disposition de la loi fédérale sur les brevets d’invention. Elle prévoit qu’une entreprise peut être responsable de la violation d’un brevet si elle exporte à l’étranger des composants d’une invention brevetée pour assemblage à l’étranger. La Section 284 de la loi dispose que le titulaire du brevet peut conclure à l’octroi de dommages-intérêts. La question est de savoir si cette disposition permet au titulaire du brevet d’obtenir paiement de son manque à gagner du fait des profits réalisés à l’étranger. La Cour répond donc par l’affirmative.

Le principe de base est celui de la présomption contre l’application extraterritoriale du droit fédéral.

La présomption peut être renversée seulement si le texte de la loi fédérale donne l’indication claire d’une application extraterritoriale. Si la présomption ne peut pas être renversée, la loi fédérale peut tout de même s’appliquer si le cas d’espèce implique une « application domestique » de la loi. A cet égard s’agit-il d’identifier le « focus » de la loi, puis d’examiner si la conduite spécifiquement liée à ce « focus » s’est produite aux Etats-Unis.

In casu, le « focus » de la loi, soit son objet, ou encore la conduite que la loi cherche à régler, est la violation d’un brevet, l’objectif de la loi étant de permettre au titulaire du brevet d’obtenir pleine compensation. La section 271(f)(2) précise le type de violation, soit l’exportation, depuis le sol des Etats-Unis, de composants. La conduite visée par cette disposition légale est donc l’acte, domestique, d’exporter. Ainsi, le paiement au titulaire du brevet de son manque à gagner déduit des profits réalisés à l’étranger s’analyse en une application domestique de la Section 284. Concrètement, ce titulaire peut obtenir paiement de la différence entre sa situation économique après la violation et sa situation économique telle qu’elle aurait été en l’absence de violation. La perte de gain est comprise dans ce calcul. Et la présente affaire juge que la perte de gain réalisée à l’étranger l’est également.