United States Court of Appeals

For the First Circuit

No. 04-2733

CECIL McBEE,

Plaintiff, Appellant,

v.

DELICA CO., LTD.,

Defendant, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MAINE

[Hon. Gene Carter, Senior U.S. District Judge]

Before

 Selya, Lynch, and Howard,

Circuit Judges.

Alfred C. Frawley, with whom Robert O. Newton and Preti,

Flaherty, Beliveau, Pachios & Haley, LLP were on brief, for

plaintiff, appellant.

Todd S. Holbrook, with whom John G. Osborn and Bernstein,

Shur, Sawyer & Nelson were on brief, for defendant, appellee.

August 2, 2005
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LYNCH, Circuit Judge. It has long been settled that the

Lanham Act can, in appropriate cases, be applied

extraterritorially. See Steele v. Bulova Watch Co., 344 U.S. 280

(1952). This case, dismissed for lack of subject matter

jurisdiction, requires us, as a matter of first impression for this

circuit, to lay out a framework for determining when such

extraterritorial use of the Lanham Act is proper. 

In doing so, we choose not to adopt the formulations used

by various other circuits. See, e.g., Reebok Int'l, Ltd. v.

Marnatech Enters., 970 F.2d 552, 554-57 (9th Cir. 1992); Vanity

Fair Mills v. T. Eaton Co., 234 F.2d 633, 642-43 (2d Cir. 1956).

The best-known test, the Vanity Fair test, asks (1) whether the

defendant is an American citizen, (2) whether the defendant's

actions have a substantial effect on United States commerce, and

(3) whether relief would create a conflict with foreign law. 234

F.2d at 642-43. These three prongs are given an uncertain weight.

Based on Steele and subsequent Supreme Court case law, we

disaggregate the three prongs of the Vanity Fair test, identify the

different types of "extraterritorial" application questions, and

isolate the factors pertinent to subject matter jurisdiction. 

Our framework asks first whether the defendant is an

American citizen; that inquiry is different because a separate

constitutional basis for jurisdiction exists for control of

activities, even foreign activities, of an American citizen.
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Further, when the Lanham Act plaintiff seeks to enjoin sales in the

United States, there is no question of extraterritorial

application; the court has subject matter jurisdiction. 

In order for a plaintiff to reach foreign activities of

foreign defendants in American courts, however, we adopt a separate

test. We hold that subject matter jurisdiction under the Lanham

Act is proper only if the complained-of activities have a

substantial effect on United States commerce, viewed in light of

the purposes of the Lanham Act. If this "substantial effects"

question is answered in the negative, then the court lacks

jurisdiction over the defendant's extraterritorial acts; if it is

answered in the affirmative, then the court possesses subject

matter jurisdiction. 

We reject the notion that a comity analysis is part of

subject matter jurisdiction. Comity considerations, including

potential conflicts with foreign trademark law, are properly

treated as questions of whether a court should, in its discretion,

decline to exercise subject matter jurisdiction that it already

possesses. Our approach to each of these issues is in harmony with

the analogous rules for extraterritorial application of the

antitrust laws. See Hartford Fire Ins. Co. v. California, 509 U.S.

764, 795-99 (1993).

The plaintiff, Cecil McBee, an American citizen and

resident, seeks to hold the defendant, Delica Co., Ltd. (Delica),
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responsible for its activities in Japan said to harm McBee's

reputation in both Japan and the United States and for Delica's

purported activities in the United States. McBee is a well-known

American jazz musician; Delica is a Japanese corporation that

adopted the name "Cecil McBee" for its adolescent female clothing

line. McBee sued for false endorsement and dilution under the

Lanham Act. The district court dismissed all of McBee's Lanham Act

claims, concluding that it lacked subject matter jurisdiction. See

McBee v. Delica Co., No. 02-198-P-C, 2004 WL 2674360 (D. Me. Nov.

19, 2004) (unpublished). 

We affirm, albeit on different reasoning. We conclude

that the court lacked jurisdiction over McBee's claims seeking (1)

an injunction in the United States barring access to Delica's

Internet website, which is written in Japanese, and (2) damages for

harm to McBee due to Delica's sales in Japan. McBee has made no

showing that Delica's activities had a substantial effect on United

States commerce. As to McBee's claim for (3) an injunction barring

Delica from selling its goods in the United States, we hold that

the district court had jurisdiction but conclude that this claim is

without merit because the only sales Delica has made into the

United States were induced by McBee for purposes of this

litigation, and there is no showing that Delica plans on selling

into the United States again. 
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I.

The relevant facts are basically undisputed. McBee, who

lives in both Maine and New York, is a jazz bassist with a

distinguished career spanning over forty-five years. He has

performed in the United States and worldwide, has performed on over

200 albums, and has released six albums under his own name

(including in Japan). He won a Grammy Award in 1989, was inducted

into the Oklahoma Jazz Hall of Fame in 1991, and teaches at the New

England Conservatory of Music in Boston. McBee has toured Japan

several times, beginning in the early 1980s, and has performed in

many major Japanese cities, including Tokyo. He continues to tour

in Japan. McBee has never licensed or authorized the use of his

name to anyone, except of course in direct connection with his

musical performances, as for example on an album. In his own

words, he has sought to "have [his] name associated only with

musical excellence." 

Delica is a Japanese clothing retailer. In 1984, Delica

adopted the trade name "Cecil McBee" for a line of clothing and

accessories primarily marketed to teen-aged girls. Delica holds a

Japanese trademark for "Cecil McBee," in both Japanese and Roman or

English characters, for a variety of product types. Delica owns

and operates retail shops throughout Japan under the brand name

"Cecil McBee"; these are the only stores where "Cecil McBee"

products are sold. There are no "Cecil McBee" retail shops outside
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of Japan. Delica sold approximately $23 million worth of "Cecil

McBee" goods in 1996 and experienced steady growth in sales in

subsequent years; in 2002, Delica sold $112 million worth of "Cecil

McBee" goods.

Delica puts out a "style book" or catalog that includes

pictures and descriptions of the products in its "Cecil McBee"

line; this style book is written in Japanese with some English

words for effect. The style book is available in Japan at the

retail stores and in certain other locations; sometimes it is

included with shipped packages of "Cecil McBee" products. The

style book contains telephone and fax numbers which allow a

customer to order "Cecil McBee" merchandise from another company,

Opus M. Co., Ltd., and have it shipped directly to the customer.

Opus M. Co. buys the goods from Delica for this purpose, and then

uses yet another company, Hamasho Co., Ltd., to do the shipping.

It is undisputed that Hamasho Co. has never shipped any "Cecil

McBee" goods outside of Japan. As described later, Delica's policy

generally is to decline orders from the United States. 

Delica operates a website, http://www.cecilmcbee.net,

which contains pictures and descriptions of "Cecil McBee" products,

as well as locations and telephone numbers of retail stores selling

those products. The website is created and hosted in Japan, and is

written almost entirely in Japanese, using Japanese characters

(although, like the style book, it contains some English words).
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The website contains news about the "Cecil McBee" line, including

promotions. Customers can log onto the site to access their

balance of bonus "points" earned for making past "Cecil McBee"

purchases, as well as information about how to redeem those points

for additional merchandise. However, the site does not allow

purchases of "Cecil McBee" products to be made online. The website

can be viewed from anywhere in the Internet-accessible world. 

McBee produced evidence that, when searches on Internet

search engines (such as Google) are performed for the phrase "Cecil

McBee," Delica's website (www.cecilmcbee.net) generally comes up as

one of the first few results, and occasionally comes up first,

ahead of any of the various websites that describe the musical

accomplishments of the plaintiff. Certain other websites

associated with Delica's "Cecil McBee" product line also come up

when such searches are performed; like www.cecilmcbee.net, it is

evident from the search results page that these websites are

written primarily in Japanese characters. 

In 1995, plaintiff McBee became aware that Delica was

using his name, without his authorization, for a line of clothing

in Japan. He contacted an American lawyer, who advised him that

Delica was unlikely to be subject to personal jurisdiction in the

United States. McBee retained a Japanese attorney, who sent a

letter to Delica asking it to cease using the "Cecil McBee" name.
The Japanese courts' rationale for finding in favor of Delica 1

was (1) while Japanese law protects a person's full name from

exploitation, McBee's full name, including his middle name, was

"Cecil Leroy McBee," and thus the "Cecil McBee" line of products

was not an exact copy of McBee's full name; and (2) McBee received

no protection for the abbreviated version of his name, "Cecil

McBee," because the name had not received sufficient recognition in

general Japanese society.

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When Delica declined, McBee petitioned the Japanese Patent Office

to invalidate Delica's English-language trademark on "Cecil McBee."

On February 28, 2002, the Japanese Patent Office ruled

Delica's trademark in Japan invalid. However, Delica appealed to

the Tokyo High Court, which on December 26, 2002, vacated the

decision of the Japanese Patent Office. On remand, the Japanese

Patent Office found for Delica and reinstated Delica's registration

of the "Cecil McBee" trademark. McBee appealed that ruling to the

Tokyo High Court and lost; the trademark reinstatement has become

final.1

In early 2002, Delica formulated a policy not to sell or

ship "Cecil McBee" brand products to the United States and informed

its managers throughout the company. Delica's admitted reason for

this policy was to prevent McBee from being able to sue Delica in

the United States. 

McBee was beginning to consider just such a strategy.

From December 2001 through early 2003, McBee retained three

Japanese-speaking investigators to attempt to purchase "Cecil

McBee" products from Delica and have them shipped to Maine. They
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met with mixed success. One initially, in December 2001, contacted

the webmaster of http://www.cecilmcbee.net by email, asking about

certain jewelry displayed on the website; that webmaster referred

the investigator to the "Cecil McBee" retail shops in Japan for

further information, but noted that at that time only domestic

shipping was available. 

The investigators then used the telephone numbers on the

http://www.cecilmcbee.net website to contact various "Cecil McBee"

retail stores in Japan directly. The investigators made it clear

that they were residents of the United States inquiring about

purchasing "Cecil McBee" goods. When the investigators requested

an opportunity to buy merchandise and have it shipped to them in

Maine, some stores stated that this could not be done, some of the

stores worked out an arrangement whereby they would ship to an

address in Japan but the investigator would then arrange to have

the products forwarded to Maine, and some of the stores, at various

times, shipped directly to the investigators in Maine. The total

value of "Cecil McBee" merchandise purchased by these three

investigators -- including both goods shipped directly to Maine by

Delica and goods shipped via the indirect method -- was

approximately $2,500. As counsel for McBee has conceded, there is

no evidence of any other "Cecil McBee" sales by Delica to the

United States. 
McBee's expert, Joseph McNulty, testified that Delica's use 2

of the name "Cecil McBee" on its Internet website could decrease

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Further, there is virtually no evidence of "Cecil McBee"

brand goods entering the United States after being sold by Delica

in Japan. McBee stated in affidavit that "[f]riends, fellow

musicians, fans, students, and others . . . have reported seeing

[his] name on clothing, shopping bags [and] merchandise (whether

worn or carried by a young girl walking on the street in Boston or

New York or elsewhere) . . . ." But no further evidence or detail

of these sightings in the United States was provided. McBee also

provided evidence that Cecil McBee goods have occasionally been

sold on eBay, an auction website that allows bids to be placed and

items sold anywhere in the world. Most of the sellers were not

located in the United States, and there is no evidence that any of

the items were purchased by American buyers. 

McBee states that he finds the use of his name by Delica

"undignified, highly offensive and repugnant." He feels that he

has been harmed by Delica's use of his name because people have

reported to him that they have seen his name on Delica's products,

either in the United States or in Japan, or on Delica's website,

and have asked him if he endorsed those products. Even when he

denies having a relationship with Delica, some people do not

believe him, and some have asked him, "both in jest and with some

degree of seriousness," whether he is "into young girls," the

target audience for Delica's "Cecil McBee" line.2
McBee's ability to receive compensation for lending his name to

another company's brand. However, as McBee's own brief points out,

McBee has never shown any interest in this kind of product

marketing.

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McBee produces little evidence relating to the frequency

of such incidents, nor does he give many specific examples. He

testified in deposition that two of his American friends and fellow

musicians, while touring Japan, had seen a "Cecil McBee"

advertisement created by Delica and had become confused as to

whether McBee had some relationship with a clothing line; they

asked McBee about the relationship when they returned to the United

States. McBee told some of his students at the New England

Conservatory of Music about his lawsuit against Delica, in order to

help them understand the value of intellectual property law to a

musician; some of his students found the Delica website and started

rumors of his having a relationship with a women's clothing

company. He feels that some of his students may have lost their

focus during his classes because they are thinking about his

connection to women's clothing. Further, his class enrollment has

dropped "for one reason or another" and so his position as a

professor at the Conservatory has been made more uncertain.

McBee has seen his own name on "Cecil McBee" merchandise

in Japan while touring and has become angry. His Japanese touring

partner during his recent tours of Japan (from 2002 onwards) has

made announcements before concerts that McBee had no relationship

with the Delica clothing line. In McBee's view, his audience of
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Japanese fans at his concerts has become younger through time and

therefore more in line with the core age group of consumers for

Delica's brand. McBee also notes that a fan once came up to him

while he was performing in Taiwan to speak with him about Delica's

line; the fan apparently presumed a connection between McBee and

the line. As of 2003, McBee only had one regular tour in Japan

each year, lasting three weeks or so each time; in McBee's view

"[i]t is speculating, but it is . . . possible" that Delica's

"Cecil McBee" brand had led to his failure to receive additional

Japanese touring opportunities. 

II.

McBee's complaint, filed October 1, 2002, alleged

trademark dilution and unfair competition claims under the Lanham

Act, 15 U.S.C. § 1051 et seq., as well as various pendent Maine

state law claims. McBee requested injunctive relief, damages, and

attorney's fees. The core of McBee's Lanham Act claims is false

endorsement: that the unlicensed use of his name has "made a

misleading and false inference" that McBee endorses, approves, or

sponsors Delica's product, and that inference has caused McBee

harm. See 15 U.S.C. § 1125(a); 4 J.T. McCarthy, McCarthy on

Trademarks and Unfair Competition § 28.14, at 28-19 (4th ed. 2005);

see also Wendt v. Host Int'l, Inc., 125 F.3d 806, 812 (9th Cir.

1997).
Delica's laches claim was rejected in a separate, earlier 3

recommended decision of the magistrate judge, see McBee v. Delica

Co., No. 02-198-P-C, 2003 WL 22586387 (D. Me. Nov. 10, 2003)

(unpublished), which was adopted by the district court. 

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Delica first moved to dismiss the complaint, under Fed.

R. Civ. P. 12(b)(2), on the ground that the Maine federal district

court lacked personal jurisdiction over it. A magistrate judge

recommended that the motion be denied, emphasizing the existence of

Delica's website and the $2,500 in sales to McBee's investigators

in Maine, see McBee v. Delica Co., No. 02-198-P-C, 2003 WL 1872907

(D. Me. April 14, 2003) (unpublished); the district court adopted

the magistrate judge's recommendation on July 9, 2003. Discovery

proceeded. Delica then moved to dismiss McBee's complaint under

Fed. R. Civ. P. 12(b)(1), asserting that the court lacked subject

matter jurisdiction over McBee's Lanham Act claims because Delica's

actions constituted extraterritorial conduct outside the ambit of

the Act. Delica also moved for summary judgment under Fed. R. Civ.

P. 56 based on laches, collateral estoppel due to the Japanese

court decision against McBee, and various merits issues, including

McBee's alleged failure to make a sufficient showing of likelihood

of confusion to sustain his Lanham Act claims. McBee opposed but

not on grounds of insufficient discovery, nor did he file a Rule

56(f) affidavit.

The magistrate judge issued a recommended decision on

these motions on August 19, 2004. See McBee v. Delica Co., No. 3

02-198-P-C, 2004 WL 2634465 (D. Me. Aug. 19, 2004) (unpublished).
The magistrate judge recommended that Delica's motion for 4

summary judgment on the remaining Lanham Act damages claims and on

the various pendent state law claims be denied. See McBee, 2004 WL

2634465, at *5-*15.

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On the subject matter jurisdiction question, the magistrate judge

first noted that the Supreme Court had held, in Steele v. Bulova

Watch Co., 344 U.S. 280 (1952), that the Lanham Act could, in some

circumstances, be applied to reach extraterritorial conduct. See

McBee, 2004 WL 2634465, at *2. The magistrate judge also noted

that this circuit has never laid out a test for when such

extraterritorial application is appropriate. See id. at *2 n.3.

The magistrate judge thus utilized the test stated by the Second

Circuit in Vanity Fair Mills, Inc. v. T. Eaton Co., 234 F.2d 633,

642 (2d Cir. 1956), described earlier. See McBee, 2004 WL 2634465,

at *2. However, the magistrate judge accepted the Fifth Circuit's

modification of the first prong in Am. Rice, Inc. v. Arkansas Rice

Growers Coop. Ass'n, 701 F.2d 408, 414 n.8 (5th Cir. 1983), and

required a showing of only "some" effect on United States commerce.

See McBee, 2004 WL 2634465, at *4. The magistrate judge

recommended that all of McBee's Lanham Act claims for injunctive

relief be dismissed because they failed two of the three Vanity

Fair factors, but that all of his Lanham Act damages claims be

allowed to go forward because they met two prongs of the test.4

See id. at *3-*4. 

Delica filed an objection, arguing that all of McBee's

Lanham Act claims -- and not just those claims requesting
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injunctive relief -- failed the Vanity Fair test for

extraterritorial application. McBee moved that the recommended

decision be modified. He conceded that American courts had no

extraterritorial jurisdiction to enjoin sales that occurred in

Japan, but argued that there was jurisdiction for his damages claim

against those sales. McBee also stated that he sought an

injunction against Delica's sales of "Cecil McBee" goods in the

United States and against Delica's use of the "Cecil McBee" website

to reach United States consumers; these forms of relief, he argued,

did not constitute extraterritorial applications of the Lanham Act

at all and therefore the court should assert subject matter

jurisdiction over them.

The district court amended the magistrate judge's

recommended decision by holding that it lacked subject matter

jurisdiction over all of McBee's Lanham Act claims, including both

those for injunctive relief and damages. See McBee v. Delica Co.,

No. 02-198-P-C, 2004 WL 2674360 (D. Me. Nov. 19, 2004)

(unpublished). The district court, like the magistrate judge,

applied essentially the test laid out by the Second Circuit in

Vanity Fair. See id. at *1. But the district court disagreed with

the magistrate judge's application of that test, finding that a

claim for damages, like a claim for injunctive relief, would create

a conflict with Japanese trademark law. See id. at *2. Finding

two of the three factors unsatisfied, the court ordered McBee's
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Lanham Act claims dismissed for lack of subject matter jurisdiction

without considering the effect of Delica's actions on United States

commerce. See id. With respect to this factor, however, the court

noted that Delica's only sales into the United States "appear to

have been made for purposes of this lawsuit alone." Id. at *1 n.2.

After dismissing McBee's Lanham Act claims, the court declined to

exercise supplemental jurisdiction over his pendent state law

claims. See id. at *2. This made it unnecessary for the court to

consider Delica's summary judgment motion on other bases. 

On appeal, McBee renews his argument that his claims for

a domestic injunction, both against Delica's sales into the United

States and against its broadcasting of its website in the United

States, do not constitute extraterritorial applications of the

Lanham Act at all. Further, while McBee concedes that United

States courts lack jurisdiction over his Lanham Act claim for an

injunction against Delica's sales in Japan, he argues that the

district court had extraterritorial jurisdiction over damages

claims against those same sales. Delica responds by arguing that

United States courts lack extraterritorial jurisdiction over all of

McBee's Lanham Act claims, and further urges lack of personal

jurisdiction, preclusion due to collateral estoppel based on the

Japanese judgment, and laches as alternative grounds for

affirmance.
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III.

A. Framework for Assessing Extraterritorial Use of the Lanham Act

By extraterritorial application of the Lanham Act, we

mean application of the Act to activity (such as sales) of a

defendant outside of the territorial boundaries of the United

States. In addressing extraterritorial application of the Lanham

Act, we face issues of Congressional intent to legislate

extraterritorially, undergirded by issues of Congressional power to

legislate extraterritorially. Usually in addressing questions of

extraterritoriality, the Supreme Court has discussed Congressional

intent, doing so by employing various presumptions designed to

avoid unnecessary international conflict. See, e.g., Spector v.

Norwegian Cruise Line Ltd., 125 S. Ct. 2169, 2177 (2005); F.

Hoffman-La Roche Ltd. v. Empagran S.A., 124 S. Ct. 2359, 2366-73

(2004); see also EEOC v. Arabian Am. Oil Co., 499 U.S. 244, 248

(1991) ("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." (internal quotation marks and citation omitted)). 

The parties characterize the extraterritoriality issue

as, at least in part, one of subject matter jurisdiction under the

Act, and it is often viewed that way. See, e.g., Levi Strauss &

Co. v. Sunrise Int'l Trading Co., 51 F.3d 982, 984 (11th Cir.

1995); Ocean Garden, Inc. v. Marktrade Co., Inc., 953 F.2d 500, 502
The Lanham Act was substantially amended in 1988, see 5

Trademark Law Revision Act of 1988, Pub. L. No. 100-667, 102 Stat.

3935, and was amended again in 1999, see Trademark Amendments Act

of 1999, Pub. L. No. 106-43, 113 Stat. 218, but the key

jurisdictional language of the Lanham Act has remained unchanged

since Steele. 

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(9th Cir. 1991); see also United Phosphorus, Ltd. v. Angus Chem.

Co., 322 F.3d 942, 945-51 (7th Cir. 2003) (en banc) (question

whether Sherman Act applied extraterritorially under the Foreign

Trade Antitrust Improvements Act (FTAIA), 15 U.S.C. § 6a, went to

subject matter jurisdiction of court). 

The Supreme Court has long since made it clear that the

Lanham Act could sometimes be used to reach extraterritorial

conduct, but it has never laid down a precise test for when such

reach would be appropriate. Steele v. Bulova Watch Co., 344 U.S. 5

280 (1952); see also Arabian Am. Oil Co., 499 U.S. at 252-53

(distinguishing Steele). The circuit courts have established a

variety of tests for determining when extraterritorial application

of the Lanham Act is appropriate, treating different factual

contexts as all subject to the same set of criteria. See Vanity

Fair Mills v. T. Eaton Co., 234 F.2d 633, 642 (2d Cir. 1956); see

also Int'l Café, S.A.L., v. Hard Rock Café Int'l (U.S.A.), Inc.,

252 F.3d 1274, 1278-79 (11th Cir. 2001) (applying Vanity Fair);

Nintendo of Am., Ltd., v. Aeropower Co., 34 F.3d 246, 250-51 (4th

Cir. 1994) (adopting the Vanity Fair test, although requiring a

"significant effect" rather than a "substantial effect" on United

States commerce); Reebok Int'l, Ltd. v. Marnatech Enters., Inc.,
The Court in a more recent case held that Title VII could not 6

be applied extraterritorially at all, even to domestic employees

working for domestic employers overseas. See Arabian Am. Oil Co.,

499 U.S. at 250-54. The Court held that Title VII's jurisdictional

language, in contrast to the language of the Lanham Act, did not

evince a Congressional intent to apply Title VII abroad sufficient

to overcome the presumption against such extraterritorial

application. See id. 

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970 F.2d 552, 554-57 (9th Cir. 1992) (applying the jurisdictional

"rule of reason" from Timberlane Lumber Co. v. Bank of Am., 549

F.2d 597 (9th Cir. 1977): plaintiff must show (1) some effect on

United States commerce, (2) an effect that is sufficiently great to

be a cognizable injury to plaintiff under the Lanham Act, and (3)

the interests and links to American commerce must be sufficiently

strong in relation to those of other nations to justify, in terms

of comity, an extraterritorial application of the act); Am. Rice,

Inc. v. Ark. Rice Growers Coop. Ass'n, 701 F.2d 408, 414 & n. 8

(5th Cir. 1983) (modifying Vanity Fair's first prong to require

only "some effect" on United States commerce). This court has not

previously addressed the question.

Steele found that there was Lanham Act jurisdiction over

a defendant, selling watches in Mexico, who was a United States

citizen and whose "operations and their effects were not confined

within the territorial limits of a foreign nation." 344 U.S. at 6

286. Defendant made no sales within the United States. The Court

held that the Lanham Act conferred broad jurisdiction in that its

purpose was to regulate "commerce within the control of Congress."

15 U.S.C. § 1127. The Act prohibits the use of certain infringing
The nationality basis for extraterritorial jurisdiction is 7

also explicit in certain statutes. For example, both the treason

statute, see 18 U.S.C. § 1381, and the selective service statute,

see 50 U.S.C. App. § 453, apply to all American citizens regardless

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marks "in commerce." 15 U.S.C. § 1114(1); Id. § 1125(a).

Importantly, commerce is defined in the Act as "all commerce which

may lawfully be regulated by Congress." Id. § 1127. 

The Steele Court did not define the outer limits of

Congressional power because it was clear that the facts presented

a case within those limits. The Steele Court explicitly and

implicitly relied on two different aspects of Congressional power

to reach this conclusion. First, it explicitly relied on the power

of Congress to regulate "the conduct of its own citizens," even

extraterritorial conduct. Steele, 344 U.S. at 285-86. This

doctrine is based on an idea that Congressional power over American

citizens is a matter of domestic law that raises no serious

international concerns, even when the citizen is located abroad.

See id. at 285-86 (citing Skiriotes v. Florida, 313 U.S. 69, 73

(1941) (Florida state criminal law banning taking of sponges from

high seas) and Branch v. Federal Trade Comm'n, 141 F.2d 31, 35 (7th

Cir. 1944) (federal unfair competition law)); see also F. HoffmanLa Roche Ltd., 124 S. Ct. at 2367; Cook v. Tait, 265 U.S. 47, 54-56

(1924) (income tax law); Restatement (Third) of Foreign Relations

Law of the United States § 402(2) (1986) ("[A] state has

jurisdiction to prescribe law with respect to . . . the activities

. . . of its nationals outside as well as within its territory.").7
of whether they might be located abroad. 

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Second, Steele also implicitly appears to rely on

Congressional power over foreign commerce, although the Foreign

Commerce clause is not cited -- the Court noted that the

defendant's actions had an impact on the plaintiff's reputation,

and thus on commerce within the United States. See 344 U.S. at

286-87, 288. The Steele Court concluded that an American citizen

could not evade the thrust of the laws of the United States by

moving his operations to a "privileged sanctuary" beyond our

borders. Id. at 287.

For purposes of determining subject matter jurisdiction,

we think certain distinctions are important at the outset. The

reach of the Lanham Act depends on context; the nature of the

analysis of the jurisdictional question may vary with that context.

Steele addressed the pertinent Lanham Act jurisdictional analysis

when an American citizen is the defendant. In such cases, the

domestic effect of the international activities may be of lesser

importance and a lesser showing of domestic effects may be all that

is needed. We do not explore this further because our case does

not involve an American citizen as the alleged infringer. 

When the purported infringer is not an American citizen,

and the alleged illegal activities occur outside the United States,

then the analysis is different, and appears to rest solely on the

foreign commerce power. Yet it is beyond much doubt that the
-22-

Lanham Act can be applied against foreign corporations or

individuals in appropriate cases; no court has ever suggested that

the foreign citizenship of a defendant is always fatal. See, e.g.,

Sterling Drug, Inc. v. Bayer AG, 14 F.3d 733, 746 (2d Cir. 1994);

Wells Fargo & Co. v. Wells Fargo Express Co., 556 F.2d 406, 429

(9th Cir. 1977). Some academics have criticized treating the

Lanham Act differently from patent and copyright law, which

generally are not applied extraterritorially. See C. Bradley,

Extraterritorial Application of U.S. Intellectual Property Law, 37

Va. J. Int'l L. 505 (1997); but see R. Schechter, Comment, The Case

For Limited Extraterritorial Reach of the Lanham Act, 37 Va. J.

Int'l L. 619 (1997). Nonetheless, the Supreme Court recently

reaffirmed the Steele approach to extraterritorial jurisdiction

under the Lanham Act by distinguishing it in Arabian American Oil

Co. See 499 U.S. at 252-53. The question becomes one of

articulating a test for Lanham Act jurisdiction over foreign

infringing activities by foreign defendants.

The decisions of the Supreme Court in the antitrust

context seem useful to us as a guide. The Court has written in

this area, on the issue of extraterritorial application, far more

recently than it has written on the Lanham Act, and thus the

decisions reflect more recent evolutions in terms of legal analysis

of extraterritorial activity. As the Court noted in Steele, Lanham

Act violations abroad often radiate unlawful consequences into the
-23-

United States, see 344 U.S. at 288; see also Schecter, supra, at

629-30. One can easily imagine a variety of harms to American

commerce arising from wholly foreign activities by foreign

defendants. There could be harm caused by false endorsements,

passing off, or product disparagement, or confusion over

sponsorship affecting American commerce and causing loss of

American sales. Further, global piracy of American goods is a

major problem for American companies: annual losses from

unauthorized use of United States trademarks, according to one

commentator, now amount to $200 billion annually. See Schecter,

supra, at 634. In both the antitrust and the Lanham Act areas,

there is a risk that absent a certain degree of extraterritorial

enforcement, violators will either take advantage of international

coordination problems or hide in countries without efficacious

antitrust or trademark laws, thereby avoiding legal authority. 

In Hartford Fire Ins. Co. v. California, 509 U.S. 764

(1993), the Supreme Court addressed the issue of when a United

States court could assert jurisdiction over Sherman Act claims

brought against foreign defendants for a conspiracy that occurred

abroad to raise reinsurance prices. It held that jurisdiction over

foreign conduct existed under the antitrust laws if that conduct

"was meant to produce and did in fact produce some substantial

effect in the United States." Id. at 796; see also United States

v. Nippon Paper Indus. Co., 109 F.3d 1, 4 (1st Cir. 1997); Doe I v.
This effects test had its origins in United States v. 8

Aluminum Co. of Am., 148 F.2d 416 (2d Cir. 1945), although it took

a considerable period of time to gain widespread acceptance. See

generally 1 W. Fugate, Foreign Commerce and the Antitrust Laws §

2.10 (5th ed. 1996). An older and now discredited view, reflected

in American Banana Co. v. United Fruit Co., 213 U.S. 347, 356

(1909), was that antitrust laws were wholly territorial in nature.

Notably, Steele cited American Banana and rejected a territorial

interpretation of that case; it read American Banana as applying

only when there were no effects in the United States from the

foreign antitrust violation. See Steele, 344 U.S. at 288.

In 1982, Congress passed the FTAIA, which provided that the

Sherman Act "shall not apply to conduct involving trade or commerce

(other than import trade or import commerce) with foreign nations

unless . . . such conduct has a direct, substantial, and reasonably

foreseeable effect" on United States commerce. 15 U.S.C. § 6(a);

see 1 Fugate, supra, § 2.14. The Supreme Court has never explained

the relationship between the FTAIA and the older, judiciallycreated effects test; thus it remains unclear the extent to which

the FTAIA is a codification of that test and the extent to which

the FTAIA amends it. See Hartford Fire, 509 U.S. at 796 n.23; see

also Nippon Paper, 109 F.3d at 4. 

-24-

Unocal Corp., 395 F.3d 932, 961 (2d Cir. 2002) (applying the

substantial effects test to determine whether jurisdiction should

be asserted over foreign securities fraud). The Hartford Fire 8

Court also held that comity considerations, such as whether relief

ordered by an American court would conflict with foreign law, were

properly understood not as questions of whether a United States

court possessed subject matter jurisdiction, but instead as issues

of whether such a court should decline to exercise the jurisdiction

that it possessed. See id. at 797-98 & n.24. 

The framework stated in Hartford Fire guides our analysis

of the Lanham Act jurisdictional question for foreign activities of

foreign defendants. We hold that the Lanham Act grants subject

matter jurisdiction over extraterritorial conduct by foreign
The traditional extraterritorial test for jurisdiction in the 9

antitrust area has often, including in Hartford Fire, been

articulated as containing a requirement that the defendant intend

to cause the substantial effects on United States commerce that

actually have been created. 509 U.S. at 796. The FTAIA's

"reasonably foreseeable" requirement appears to be related to this

traditional intent requirement. See 15 U.S.C. § 6a. We need not

and do not decide whether a defendant's intent to target United

States commerce plays any role in the jurisdictional inquiry for

purposes of extraterritorial application of the Lanham Act --

either, for example, as a requirement in addition to the

substantial effect requirement, or instead as a factor that, if

present, may reduce the amount of effects on United States commerce

that a plaintiff must show. It is evident that Delica, in this

case, had no intent to target United States commerce. 

We do note that lack of intent can sometimes change the scope

of remedies under the Lanham Act. For example, an innocent

infringer can generally only be subject to an injunction against

future use. See 15 U.S.C. § 1114(2). This, of course, is not a

jurisdictional matter.

-25-

defendants only where the conduct has a substantial effect on

United States commerce. Absent a showing of such a substantial 9

effect, at least as to foreign defendants, the court lacks

jurisdiction over the Lanham Act claim. Congress has little reason

to assert jurisdiction over foreign defendants who are engaging in

activities that have no substantial effect on the United States,

and courts, absent an express statement from Congress, have no good

reason to go further in such situations. See 1A P. Areeda & H.

Hovenkamp, Antitrust Law ¶ 272f (2d ed. 2000) ("When a government's

interest in a transaction is remote, minor, tangential, or

otherwise insignificant, that government would presumably not seek

to control it."); 1 W. Fugate, Foreign Commerce and the Antitrust

Laws § 2.13, at 99-100 (5th ed. 1996).
Some courts have criticized Vanity Fair's "substantial 10

effects" inquiry as having been taken out of context, and have

replaced it with a much less demanding "some effect" inquiry.

These courts state that the "substantial effects" test was not

clearly embraced in Steele and stems from attempts to determine

when local commerce has a sufficient effect on interstate commerce

to be congressionally reachable, which has no relevance to the

question of determining when wholly foreign commerce can be

reached. See Am. Rice, 701 F.2d at 414 n.8; Wells Fargo & Co. v.

Wells Fargo Express Co., 556 F.2d 406, 428 (9th Cir. 1977).

-26-

The substantial effects test requires that there be

evidence of impacts within the United States, and these impacts

must be of a sufficient character and magnitude to give the United

States a reasonably strong interest in the litigation. See, e.g.,

1 Fugate, supra, §§ 2.9, 2.12, 2.13; see also 1A Areeda &

Hovenkamp, supra, ¶ 272f2; United Phosphorus, 322 F.3d at 952-53.

The "substantial effects" test must be applied in light of the core

purposes of the Lanham Act, which are both to protect the ability

of American consumers to avoid confusion and to help assure a

trademark's owner that it will reap the financial and reputational

rewards associated with having a desirable name or product. See,

e.g., Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S.

23, 33-34 (2003); see also Atl. Richfield Co. v. ARCO Globus Int'l

Co., 150 F.3d 189, 193-94 (2d Cir. 1998). The goal of the

jurisdictional test is to ensure that the United States has a

sufficient interest in the litigation, as measured by the interests

protected by the Lanham Act, to assert jurisdiction.

Of course, the Vanity Fair test includes a "substantial

effects" inquiry as part of its three-part test. We differ from 10
American Rice involved domestic defendants, although the court did

not restrict the modification of its test to such situations. The

Supreme Court has embraced the "substantial effects" test for

extraterritorial application of the antitrust laws, and Congress,

in the FTAIA, has either codified that understanding or established

an even more restrictive test. We see no reason to treat the

Lanham Act differently. 

-27-

the Vanity Fair court in that we disaggregate the elements of its

test: we first ask whether the defendant is an American citizen,

and if he is not, then we use the substantial effects test as the

sole touchstone to determine jurisdiction. 

If the substantial effects test is met, then the court

should proceed, in appropriate cases, to consider comity. We also

transplant for Lanham Act purposes Hartford Fire's holding that

comity considerations are properly analyzed not as questions of

whether there is subject matter jurisdiction, but as prudential

questions of whether that jurisdiction should be exercised. See

Hartford Fire, 509 U.S. at 798 n.24. Our analysis differs again

from Vanity Fair on this point. See Vanity Fair, 234 F.2d at 642.

Vanity Fair and other cases have considered as part of the basic

jurisdictional analysis whether the defendant acted under color of

protection of the trademark laws of his own country. We disagree

and do not see why the scope of Congressional intent and power to

create jurisdiction under the Lanham Act should turn on the

existence and meaning of foreign law. 

Congress could, of course, preclude the exercise of such

Lanham Act jurisdiction by statute or by ratified treaty. Or it
As we noted above, the subject matter jurisdiction issue was 11

determined on a summary judgment record, after extensive discovery;

McBee did not file a Rule 56(f) affidavit below stating that he

needed more discovery. We note also that in this context, the

jurisdictional inquiry will generally not be wholly distinct from

the merits. See 1A Areeda & Hovenkamp, supra, ¶ 273a.

-28-

could by statute define limits in Lanham Act jurisdiction in such

international cases, as it has chosen to do in the antitrust area.

See 15 U.S.C. § 6a. It has not done so. 

B. Application of the Framework

We apply the framework we have established to the facts

of this case. Although district court fact-finding is permissible

in a subject matter jurisdiction inquiry, and we defer to such

fact-finding, here all the relevant facts are undisputed and the

district court did not find any facts. Our review is de novo, 11

see, e.g., Skwira v. United States, 344 F.3d 64, 71-72 (1st Cir.

2003), and the burden is on McBee to establish jurisdiction, see,

e.g., Able Sales Co. v. Compañía de Azúcar de P.R., 406 F.3d 56, 61

(1st Cir. 2005). 

1. Claim for Injunction Barring Delica's United States Sales

McBee contends that his claim for an injunction against

Delica's sales to consumers inside the United States does not

constitute an extraterritorial application of the Lanham Act, and

therefore the district court should have taken jurisdiction over

this claim without pausing to consider whether there was a

substantial effect on United States commerce. The factual

predicate for this argument is the $2,500 of "Cecil McBee" brand
-29-

goods that Delica sold to McBee's investigators in Maine; there is

no evidence of any other sales made by Delica to United States

consumers. McBee is correct that the court had subject matter

jurisdiction over this claim. 

There can be no doubt of Congress's power to enjoin sales

of infringing goods into the United States, and as a matter of

Congressional intent there can be no doubt that Congress intended

to reach such sales via the Lanham Act. Courts have repeatedly

distinguished between domestic acts of a foreign infringer and

foreign acts of that foreign infringer; the extraterritoriality

analysis to determine jurisdiction attaches only to the latter.

See, e.g., Totalplan Corp. of Am. v. Colborne, 14 F.3d 824, 829-30

(2d Cir. 1994); Sterling Drug, 14 F.3d at 744-47 & n.8; Wells

Fargo, 556 F.2d at 426-30; Vanity Fair, 234 F.2d at 638-39, 645;

see also 4 J. T. McCarthy, McCarthy on Trademarks and Unfair

Competition § 29:56, at 29-151 (4th ed. 2005). Since sales in the

United States are domestic acts, McBee need not satisfy the

"substantial effect on United States commerce" test for this claim;

jurisdiction exists because, under the ordinary domestic test, the

$2,500 worth of goods sold by Delica to McBee's investigators in

the United States were in United States commerce, at least insofar

as some of those goods were shipped directly by Delica to the

buyers in the United States. See Carpet Group Int'l v. Oriental

Rug Importers Ass'n, Inc., 227 F.3d 62, 71-75 (3d Cir. 2000). 
We do not reach the more complicated question of whether 12

comity concerns would ever allow a court to decline to exercise

jurisdiction when an injunction is sought against sales in the

United States.

-30-

Our holding that the extraterritoriality tests are

inapplicable where plaintiff seeks a remedy for imported goods sold

to American consumers is supported in the antitrust context by the

language of the FTAIA. The FTAIA provides that the Sherman Act: 

shall not apply to conduct involving trade or

commerce (other than import trade or import

commerce) with foreign nations unless . . .

such conduct has a direct, substantial, and

reasonably foreseeable effect (A) on trade or

commerce which is not trade or commerce with

foreign nations, or on import trade or import

commerce with foreign nations; or (B) on

export trade or export commerce with foreign

nations, of a person engaged in such trade or

commerce in the United States . . . .

15 U.S.C. § 6(a)(1). The statute exempts "import trade or import

commerce" from its extraterritoriality effects test; such import

trade or import commerce would seem to be reachable so long as the

domestic commerce tests are met. See Carpet Group Int'l, 227 F.3d

at 71-75; W. Fugate & L. Simonwitz, Foreign Commerce and the

Antitrust Laws § 2.14, at 30 (5th ed. Supp. 2004).

The district court thus had subject matter jurisdiction

over McBee's claim for an injunction against Delica's sales of

"Cecil McBee" goods in the United States. Nonetheless, dismissal

of the claim was appropriate for reasons stated later.12
Preliminarily, Delica disputes whether it is technologically 13

possible to prevent access by American consumers while

simultaneously allowing access to the website in the rest of the

world. We lack the information to resolve this dispute, and at any

rate we need not resolve it in order to decide this dispute.

The cases cited by McBee involve such situations and are 14

therefore easily distinguishable; as well, they contain no analysis

at all of the question McBee has raised. See Euromarket Designs,

Inc. v. Crate & Barrel Ltd., 96 F. Supp. 2d 824, 831-33 (N.D. Ill.

-31-

2. Claim for Injunction Barring Access to Internet Website

McBee next argues that his claim for an injunction

against Delica's posting of its Internet website in a way that is

visible to United States consumers also does not call for an

extraterritorial application of the Lanham Act. Here McBee is

incorrect: granting this relief would constitute an

extraterritorial application of the Act, and thus subject matter

jurisdiction would only be appropriate if McBee could show a

substantial effect on United States commerce. McBee has not shown 13

such a substantial effect from Delica's website. 

We begin with McBee's argument that his website claim,

like his claim for Delica's sales into the United States, is not an

extraterritorial application of the Lanham Act. McBee does not

seek to reach the website because it is a method, by Delica, for

selling "Cecil McBee" goods into the United States. In such a

case, if a court had jurisdiction to enjoin sales of goods within

the United States, it might have jurisdiction to enjoin the website

as well, or at least those parts of the website that are necessary

to allow the sales to occur. Rather, the injury McBee complains 14
2000); Playboy Enters. v. Chuckleberry Publ'g, Inc., 939 F. Supp.

1032, 1039-40 (S.D.N.Y. 1996). 

-32-

about from the website is that its mere existence has caused him

harm, because United States citizens can view the website and

become confused about McBee's relationship with the Japanese

clothing company. In particular, McBee argues that he has suffered

harm from the fact that Delica's website often comes up on search

engines ahead of fan sites about McBee's jazz career.

Delica's website, although hosted from Japan and written

in Japanese, happens to be reachable from the United States just as

it is reachable from other countries. That is the nature of the

Internet. The website is hosted and managed overseas; its

visibility within the United States is more in the nature of an

effect, which occurs only when someone in the United States decides

to visit the website. To hold that any website in a foreign

language, wherever hosted, is automatically reachable under the

Lanham Act so long as it is visible in the United States would be

senseless. The United States often will have no real interest in

hearing trademark lawsuits about websites that are written in a

foreign language and hosted in other countries. McBee attempts to

analogize the existence of Delica's website, which happens to be

visible in any country, to the direct mail advertising that the

Vanity Fair court considered to be domestic conduct and so held

outside the scope of the extraterritoriality analysis. See Vanity

Fair, 234 F.2d at 638-39. The analogy is poor for three reasons:
-33-

first, the advertising in Vanity Fair was closely connected with

mail-order sales; second, direct mail advertising is a far more

targeted act than is the hosting of a website; and third, Delica's

website, unlike the advertising in Vanity Fair, is in a foreign

language. 

Our conclusion that McBee's website claim calls for

extraterritorial application of the Lanham Act is bolstered by a

consideration of the now extensive case law relating to treatment

of Internet websites with respect to personal jurisdiction. We

recognize that the contexts are distinct, but the extraterritorial

application of jurisdiction under the Lanham Act evokes concerns

about territorial restraints on sovereigns that are similar to

concerns driving personal jurisdiction. To put the principle

broadly, the mere existence of a website that is visible in a forum

and that gives information about a company and its products is not

enough, by itself, to subject a defendant to personal jurisdiction

in that forum. See, e.g., Jennings v. AC Hydraulic A/S, 383 F.3d

546, 549-50 (7th Cir. 2004); ALS Scan, Inc. v. Digital Serv.

Consultants, Inc., 293 F.3d 707, 713-15 (4th Cir. 2002). 

Something more is necessary, such as interactive features

which allow the successful online ordering of the defendant's

products. See, e.g., Jennings, 383 F.3d at 549. The mere

existence of a website does not show that a defendant is directing

its business activities towards every forum where the website is
-34-

visible; as well, given the omnipresence of Internet websites

today, allowing personal jurisdiction to be premised on such a

contact alone would "eviscerate" the limits on a state's

jurisdiction over out-of-state or foreign defendants. Id. at 549-

50. 

Similarly, allowing subject matter jurisdiction under the

Lanham Act to automatically attach whenever a website is visible in

the United States would eviscerate the territorial curbs on

judicial authority that Congress is, quite sensibly, presumed to

have imposed in this area.

Our conclusion does not make it impossible for McBee to

use the Lanham Act to attack a Japan-based website; it merely

requires that McBee first establish that the website has a

substantial effect on commerce in the United States before there is

subject matter jurisdiction under the Lanham Act. We can imagine

many situations in which the presence of a website would ensure

(or, at least, help to ensure) that the United States has a

sufficient interest. The substantial effects test, however, is not

met here. 

Delica's website is written almost entirely in Japanese

characters; this makes it very unlikely that any real confusion of

American consumers, or diminishing of McBee's reputation, would

result from the website's existence. In fact, most American

consumers are unlikely to be able to understand Delica's website at
-35-

all. Further, McBee's claim that Americans looking for information

about him will be unable to find it is unpersuasive: the Internet

searches reproduced in the record all turned up both sites about

McBee and sites about Delica's clothing line on their first page of

results. The two sets of results are easily distinguishable to any

consumer, given that the Delica sites are clearly shown, by the

search engines, as being written in Japanese characters. Finally,

we stress that McBee has produced no evidence of any American

consumers going to the website and then becoming confused about

whether McBee had a relationship with Delica. 

3. Claim for Damages for Delica's Japanese Sales

McBee's claim for damages due to Delica's sales in Japan

fares no better, because these sales as well have no substantial

effect on commerce in the United States. McBee seeks damages for

Delica's sales in Japan to Japanese consumers based on (a)

tarnishing of McBee's image in the United States, and (b) loss of

income in the United States due to loss of commercial opportunity

as a jazz musician in Japan, stemming from the tarnishing of

McBee's reputation there. The alleged tarnishing -- both in the

United States and Japan -- is purportedly caused by the confusion

of McBee's name with a brand selling (sometimes provocative)

clothing to young teenage girls in Japan. McBee presents

essentially no evidence that either type of tarnishing has
-36-

occurred, much less that it has any substantial effect on United

States commerce.

McBee's first argument, that American consumers are being

confused and/or led to think less of McBee's name because of

Delica's Japanese sales, cuts very close to the core purposes of

the Lanham Act. See Atl. Richfield Co., 150 F.3d at 193; Sterling

Drug, Inc., 14 F.3d at 746; see also Schechter, supra, at 628-30

(arguing that what distinguishes the Lanham Act from areas like

patent or copyright, and makes extraterritorial jurisdiction proper

in the trademark context while it is improper in those other areas,

is the risk that the trademark infringer's foreign sales will

eventually confuse domestic consumers, thus costing the mark holder

sales domestically as well as abroad). Such confusion and

reputational harm in the eyes of American consumers can often --

although not always -- be inferred from the fact that American

consumers have been exposed to the infringing mark. But no

inference of dilution or other harm can be made in situations where

American citizens are not exposed at all to the infringing product.

The trouble with McBee's argument is that there is virtually no

evidence that American consumers are actually seeing Delica's

products.

Quite commonly, plaintiffs in these sorts of cases can

meet their burden by presenting evidence that while the initial

sales of infringing goods may occur in foreign countries, the goods
-37-

subsequently tend to enter the United States in some way and in

substantial quantities. See, e.g., Steele, 344 U.S. at 286;

Nintendo of Am., 34 F.3d at 249, 251; Atl. Richfield Co., 150 F.3d

at 193; Totalplan, 14 F.3d at 830. McBee has presented essentially

no evidence that Delica's products have been brought into the

United States after their initial sale in Japan. McBee's own

statement, without more, that people have seen women wearing Delica

clothing in the United States does not show very much; likewise,

McBee's evidence that Delica's goods are occasionally sold on eBay

shows little, given particularly that such goods need not have been

auctioned to buyers in the United States. The evidence indicates

only one incident in which an American citizen saw McBee

advertisements while traveling in Japan and demonstrated confusion

upon returning to the United States. 

Beyond that, there is also nothing that indicates any

harm to McBee's career in the United States due to Delica's product

sales. McBee's argument that there has potentially been harm to

McBee's career as a product endorser is most unlikely, especially

given his own disinterest in performing such endorsements.

Further, McBee's statement that his teaching career may have been

hindered by Delica is speculation.

McBee's second argument is that Delica's sales have

confused Japanese consumers, hindering McBee's record sales and

touring career in Japan. Evidence of economic harm to McBee in
-38-

Japan due to confusion of Japanese consumers is less tightly tied

to the interests that the Lanham Act intends to protect, since

there is no United States interest in protecting Japanese

consumers. American courts do, however, arguably have an interest

in protecting American commerce by protecting McBee from lost

income due to the tarnishing of his trademark in Japan. Courts

have considered sales diverted from American companies in foreign

countries in their analyses. See Totalplan, 14 F.3d at 830-31; see

also Am. Rice, 701 F.2d at 414-15 (considering diverted sales in

finding "some effects" test met).

Assuming arguendo that evidence of harm to an American

plaintiff's economic interests abroad, due to the tarnishing of his

reputation there, might sometimes meet the substantial effects

test, McBee has presented no evidence of such harm in this case.

McBee has presented no evidence of economic harm due to losses in

record sales or touring opportunities in Japan. McBee's statement

that he might have expected more Japanese touring opportunities by

now, and may have had such opportunities absent Delica's sales, is

wholly speculative. There is no probative evidence of any decline

in McBee's touring revenue as compared to past patterns, nor is

there any evidence of any decline in McBee's Japanese record sales.

McBee has not shown that Delica's Japanese sales have a

substantial effect on United States commerce, and thus McBee's

claim for damages based on those sales, as well as McBee's claim
Were we to reach comity principles, they would most likely 15

counsel for dismissal of McBee's claim seeking damages for Delica's

sales in Japan. McBee argues that so long as he seeks only damages

and not an injunction, there is no "true conflict" with Japanese

law because it would be theoretically possible for Delica to comply

with both Japanese and United States law. See Hartford Fire, 509

U.S. at 798-99. McBee's argument makes no sense: an injunction

would no more create a "true conflict" under this definition than

damages, for under either form of relief it would be theoretically

possible for Delica to comply with both nations' laws by not using

the trademark. There is no meaningful distinction between an

injunction and damages for this purpose. The reasoning developed

in the antitrust context in Hartford Fire is not "automatically

transferable" to the trademark context: "It is one thing for the

British reinsurers in Hartford Fire to be barred under United

States law from boycotting activity that they might be free to

engage in without violating British law. But it is quite a

different thing for the holder of rights in a mark under German law

to be ordered to refrain from uses of that mark protected by German

law." Sterling Drug, 14 F.3d at 746-47.

-39-

for an injunction against Delica's website, must be dismissed for

lack of subject matter jurisdiction. We need not reach the issue

of whether we should decline jurisdiction because of comity.15

Were we to assert jurisdiction in this case, where there is no

evidence of any harm to American commerce beyond the facts that the

plaintiff is an American citizen and that the allegedly infringing

goods were sold and seen in a foreign country, we would be forced

to find jurisdiction in almost all false endorsement or trademark

cases involving an American plaintiff and allegedly infringing

sales abroad.
It is true that we lack subject matter jurisdiction over 16

claims that involve no real federal controversy because they

"clearly appear[] to be immaterial and made solely for the purpose

of obtaining jurisdiction or where such a claim is wholly

insubstantial and frivolous." Steel Co. v. Citizens for a Better

Env't, 523 U.S. 83, 89-90 (1998). This test goes to whether,

legally, there is any real federal interest involved in the case.

The fatal flaw in McBee's claim here, as we explain below, is that

the only sales made to the United States were sales instigated at

his own behest. This sort of factual weakness in a claim does not

go to subject matter jurisdiction. 

-40-

C. Frivolousness of Claim Based on Delica's Product Sales in the 

 United States

Because we do have subject matter jurisdiction over

McBee's claim for an injunction against Delica's sales in the

United States, we proceed on that claim. 16

We dispose of a preliminary issue: whether there is any

required order for deciding the remaining issues. We would

ordinarily next reach Delica's defense that the federal district

court, sitting in Maine, lacked personal jurisdiction over it.

See, e.g., United States v. Swiss Am. Bank, Ltd., 191 F.3d 30, 46

(1st Cir. 1999). But we choose to decide this case on much simpler

grounds. Although the Supreme Court in Steel Co. v. Citizens for

a Better Env't, 523 U.S. 83 (1998), generally barred the practice

of "hypothetical jurisdiction," we have noted that "the rule does

not appear to be an absolute one," Parella v. Ret. Bd. of the R.I.

Employees' Ret. Sys., 173 F.3d 46, 53-56 (1st Cir. 1999), and we

have consistently interpreted the rule as applying in its strict

form only to issues going to Article III's requirements. See,

e.g., Cozza v. Network Assocs., Inc., 362 F.3d 12, 15 (1st Cir.
-41-

2004); Restoration Pres. Masonry v. Grove Europe Ltd., 325 F.3d 54,

59-60 (1st Cir. 2003); United States v. Woods, 210 F.3d 70, 74 n.2

(1st Cir. 2000); Parella, 173 F.3d at 53-56. 

The requirements of personal jurisdiction are not rooted

in Article III, although they do have constitutional resonance

through the Due Process clause. See Ins. Corp. of Ir. v. Compagnie

des Bauxites de Guinee, 456 U.S. 694, 702-03 (1982). Unlike

subject matter jurisdiction under Article III, which goes to the

fundamental institutional competence of the court and can be raised

sua sponte at any time, personal jurisdiction is an individual

liberty right and is therefore waivable; a court cannot raise

personal jurisdiction sua sponte. See id. at 702-05. In Parella,

we held that Eleventh Amendment immunity is not subject to the

strict form of Steel Co. and can be bypassed in certain cases,

stressing the waivability of the immunity and the fact that a court

need not raise it sua sponte. See Parella, 173 F.3d at 54-55. As

in the sovereign immunity area, we do not wish to force defendants

to expend resources on difficult personal jurisdiction issues or

courts to reach more difficult issues when there is an

exceptionally easy method -- on the merits -- for the defendant to

prevail. See id. at 56. 

Here, where McBee's claim for an injunction barring

Delica's sales in the United States is wholly without merit, and

where the personal jurisdiction question is briefed only as a
Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574 (1999), is not 17

to the contrary. Although Ruhrgas contained language on the

importance of personal jurisdiction, the decision merely

established that a court can, in some circumstances, dispose of a

case on a different threshold ground before reaching subject matter

jurisdiction. See id. at 584-85; see also Tenet v. Doe, 125 S. Ct.

1230, 1234 n.4 (2005). The thrust of Ruhrgas was to increase

judicial flexibility, not to decrease it. See Ruhrgas AG, 526 U.S.

at 587-88. 

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subsidiary issue by both sides, providing us with little guidance,

we have the power to pretermit the personal jurisdiction question.17

We reach these merits now, noting that the questions appealed to us

were decided on a summary judgment record and that we may affirm on

any ground supported by that record, see, e.g., Cimon v. Gaffney,

401 F.3d 1, 4 (1st Cir. 2005), as well as that the ground for our

decision on the merits is closely tied to the facts we used to

decide the jurisdictional question. 

As to the merits, there is no evidence of existing

confusion or dilution due to Delica's past sales, since these few

sales were all made to McBee's own investigators, who were brought

in to assist in this litigation and therefore fully understood

McBee's lack of any relationship with Delica. See Millenium

Enters., Inc. v. Millenium Music, Inc., 33 F. Supp. 2d 907, 911 (D.

Or. 1999) (gravamen of unfair competition claim is whether

defendant's actions have created confusion; sale to plaintiff's

agent could not have created any). There is no evidence of any

other sales, nor any evidence that Delica has any desire to sell

into the United States in the future. All the evidence, in fact,
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is to the contrary. Thus, there is no justification for injunctive

relief, and summary judgment must enter for Delica on this claim.

Absent any viable federal claim, the district court's

dismissal of all of McBee's pendent state law claims (without

prejudice to their being refiled in state court) was fully

appropriate and was not an abuse of discretion -- McBee has not

argued otherwise. See 28 U.S.C. § 1367(c); González-de-Blasini v.

Family Dep't, 377 F.3d 81, 89 (1st Cir. 2004). We need not reach

Delica's laches or collateral estoppel arguments.

IV.

The district court's decision ordering judgment for the

defendant Delica is affirmed. Costs are awarded to Delica.