PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

INTERNATIONAL BANCORP, LLC; 

INTERNATIONAL SERVICES,

INCORPORATED; INTERNATIONAL

LOTTERIES, LLC; LAS VEGAS

SPORTSBOOK, INCORPORATED;

BRITANNIA FINANCE CORPORATION,  No. 02-1364 Plaintiffs-Appellants,

v.

SOCIETE DES BAINS DE MER ET DU

CERCLE DES ETRANGERS A MONACO,

Defendant-Appellee. 

Appeal from the United States District Court

for the Eastern District of Virginia, at Alexandria.

T. S. Ellis, III, District Judge.

(CA-01-115-A)

Argued: December 3, 2002

Decided: May 19, 2003

Before NIEMEYER, LUTTIG, and MOTZ, Circuit Judges.

Affirmed by published opinion. Judge Luttig wrote the majority opinion, in which Judge Niemeyer joined. Judge Motz wrote a dissenting

opinion. 

COUNSEL

ARGUED: Anthony James DeGidio, Jr., Toledo, Ohio, for Appellants. George Reynolds Hedges, QUINN, EMANUEL, URQUHART,
OLIVER & HEDGES, L.L.P., Los Angeles, California, for Appellee.

ON BRIEF: James W. Pravel, Alexandria, Virginia, for Appellants.

Gregory P. Barbee, QUINN, EMANUEL, URQUHART, OLIVER &

HEDGES, L.L.P., Los Angeles, California; Carl J. Nichols, BOIES,

SCHILLER & FLEXNER, L.L.P., Washington, D.C., for Appellee. 

OPINION

LUTTIG, Circuit Judge: 

Plaintiff companies appeal from the district court’s summary judgment that their registration and use of forty-three domain addresses

infringe a foreign corporation’s rights under the Lanham Act and violate the Anticybersquatting Act, where the foreign corporation advertised its trademark domestically, but only rendered services under it

abroad. We conclude that the district court’s judgment, although not

its reasoning, was correct, and therefore affirm. 

I.

Appellee, Societe des Bains de Mer et du Cercle des Etrangers a

Monaco ("SBM"), owns and operates historic properties in Monte

Carlo, Monaco, including resort and casino facilities. One of its properties, a casino, has operated under the "Casino de Monte Carlo"

trademark since 1863. The mark is registered in Monaco, but not in

the United States. SBM promotes this casino, along with its other

properties, around the world. For 18 years, SBM has promoted its

properties from a New York office staffed with four employees.

SBM’s promotions within the United States, funded with $1 million

annually, include trade show participation, advertising campaigns,

charity partnerships, direct mail solicitation, telephone marketing, and

solicitation of media coverage. 

Appellants, the plaintiff companies, are five companies formed and

controlled by a French national, which operate more than 150 web

sites devoted to online gambling. Included in this roster are 53 web

sites whose domain addresses incorporate some portion of the term

"Casino de Monte Carlo."1 These web sites, along with the gambling

1E.g., casinodemontecarlo.com, casinodemontecarlo.net, casinomontecarlo.com, casinomontecarlo.net, casinomontecarlo.org, and casino2 INTERNATIONAL BANCORP v. SOCIETE DES BAINS
software they employ, also exhibit pictures of the Casino de Monte

Carlo’s exterior and interior, contain renderings that are strikingly

similar to the Casino de Monte Carlo’s interior, and make allusion to

the geographic location of Monte Carlo, implying that they offer

online gambling as an alternative to their Monaco-based casino,

though they operate no such facility. 

When SBM learned of the plaintiff companies’ web sites and their

uses of the "Casino de Monte Carlo" mark, it challenged them in the

World Intellectual Property Organization (WIPO). A WIPO panel

ruled against the plaintiff companies and ordered the transfer of the

53 domain addresses to SBM. To escape this judgment, the plaintiff

companies brought suit in federal court against SBM seeking declaratory judgment, pursuant to 28 U.S.C. § 2201(a), that they are entitled

to the disputed domain names. SBM counterclaimed under the Lanham Act (15 U.S.C. § 1111 et seq.) for trademark infringement under

section 1125(a);2 trademark dilution under section 1125(c); cybersquatting under section 1125(d)(1); and unfair competition in violation of section 1126(h). The district court ruled against SBM on its

section 1125(c) trademark dilution claim, because SBM had not

shown actual economic harm, and on its section 1126(h) unfair competition claim. But the court ruled in favor of SBM on its trademark

infringement claim and on its cybersquatting claim, awarding SBM

$51,000 in statutory damages and transfer of 43 of the 53 contested

domain addresses.3 The plaintiff companies now appeal from that

adverse judgment. 

montecarlo.net. 

2SBM actually styled its section 1125(a) counterclaim as an unfair

competition suit. See J.A. at 64. The district court, although recognizing

it as such at the outset of its opinion, treated the counterclaim throughout

as a trademark infringement claim. Because the tests for trademark

infringement and unfair competition under section 1125(a) are identical,

we adopt the district court’s usage and refer to this claim as a trademark

infringement claim. 

3SBM also alleged Virginia common law trademark infringement, but

the district court deemed it unnecessary to address this claim because

federal law provided adequate relief. 

INTERNATIONAL BANCORP v. SOCIETE DES BAINS 3
II.

Although the district court decided this case on motions for summary judgment, factual determinations underlay its ultimate ruling

(e.g., findings as to likelihood of confusion and secondary meaning).

The plaintiff companies contend that the court exceeded its summary

judgment authority by resolving such questions of fact. Two factors

present in this case justify the judicial posture taken by the court,

however. First, the parties, having prepared for a bench trial, agreed

to submit the voluminous record to the court for dispositive decision

at the time of the summary judgment motions, see J.A. at 1002-03

(the court: "there is really no reason why the Court should not dispose

of this matter on the current record; isn’t that right?" Attorney for the

plaintiff companies: "I believe that’s correct, your Honor." Attorney

for SBM: "I think that sounds sensible, your Honor." Attorney for

defendant Levy: "That’s exactly what I would ask for, your Honor."

The court: "All right."). 

Secondly, the court’s disposition of the case was consistent with

the fact that the parties did not contradict one another’s proffered

facts, but only disputed the inferences that a fact finder would draw

from those underlying facts. With the parties’ voluntary submission

of the record, comprised of only uncontroverted proffers, before it,

and being en route to a bench trial anyway, the court properly proceeded to judgment in the case. Cf. Matter of Placid Oil Co., 932 F.2d

394, 398 (5th Cir. 1991) ("[I]t makes little sense to forbid the judge

from drawing inferences from the evidence submitted on summary

judgment when that same judge will act as the trier of fact, unless

those inferences involve issues of witness credibility or disputed

material facts. If a trial on the merits will not enhance the court’s ability to draw inferences and conclusions, then a district judge properly

should draw his inferences without resort to the expense of trial."

(quotations and citations omitted)). 

Because the court decided the case on summary judgment motions,

we review its legal determinations de novo, see Lone Star Steakhouse

& Saloon, Inc. v. Alpha of Virginia, Inc., 43 F.3d 922, 928 (4th Cir.

1995). But since it also engaged in fact-finding to dispose of the matter, we review its findings of fact for clear error. See, e.g., Petro Stopping Centers, L.P. v. James River Petroleum, Inc., 130 F.3d 88, 91-

4 INTERNATIONAL BANCORP v. SOCIETE DES BAINS
92 (4th Cir. 1997) ("This circuit reviews district court determinations

regarding likelihood of confusion under a clearly erroneous standard."); RFE Industries, Inc. v. SPM Corp., 105 F.3d 923, 925 (4th

Cir. 1997) ("[The] district court’s findings [as to secondary meaning]

may be disturbed on appeal only if they are clearly erroneous.").4

III.

The plaintiff companies first challenge the district court’s determination that their use of 43 domain addresses violated 15 U.S.C.

§ 1125(a) of the Lanham Act, infringing on SBM’s trademark. Central to their challenge is the claim that SBM did not have a protectible

interest in the "Casino de Monte Carlo" mark, a prerequisite to SBM’s

ability to claim against the plaintiff companies under the Act. See 15

U.S.C. § 1125(a)(1) (allowing only a person "who believes that he or

she is or is likely to be damaged" by the defendant’s use of a confusing mark to bring a civil action); see also Lone Star Steakhouse &

Saloon, Inc., 43 F.3d at 930 (proving trademark infringement under

15 U.S.C. § 1125(a) requires a plaintiff to prove it has a protectible

mark). 

This circuit requires that an unregistered trademark satisfy two

requirements if its owner is to have a protectible interest in the trademark: The mark must be used in commerce, see 15 U.S.C. § 1051

(only trademarks "used in commerce," or which a person has a bona

4Though the dissent initially notes the two bases on which we conclude

that the district court properly decided this case upon the submission of

the record, it only takes issue with the first, that the parties intended their

submission to allow the court to reach dispositive judgment. See post at

54-58. Yet, the strength of our second rationale is only made more clear

by the dissent’s own analysis. 

In discussing the factual findings the district court made, the dissent

says repeatedly that "a fact-finder could well infer" differently. See post

at 61. But, of course, that misses the whole point. The court, by the

agreement of the parties (who agreed to a bench trial), was the fact

finder. And all of the factual issues decided, were issues resolved by

inference of the fact finder from undisputed facts. With no dispute as to

the facts present, it was not improper for the court, here the fact finder,

to make its findings at this point in the proceedings. 

INTERNATIONAL BANCORP v. SOCIETE DES BAINS 5
fide intention to use in commerce, can be registered, signaling Lanham Act protectibility); see also Larsen v. Terk Technologies Corp.,

151 F.3d 140, 146 (4th Cir. 1998) ("to receive protection under

[1125(a)] a trademark . . . must be "in use" in commerce"), and it

must be distinctive, see Sara Lee Corp. v. Kayser-Roth Corp., 81 F.3d

455, 464 (4th Cir. 1996) (noting that the degree of protection a mark

may receive is directly related to its distinctiveness). The plaintiff

companies argue that the district court erred in concluding that SBM

met these two requirements. We address both arguments in turn. 

A.

Both parties have agreed, in their briefs and at oral argument, that

the critical question in assessing whether SBM "used its mark in commerce" is whether the services SBM provided under the "Casino de

Monte Carlo" mark were rendered in commerce. As shown below, the

Lanham Act’s plain language makes this conclusion unavoidable and

the parties’ agreement unsurprising. 

We must first contend with a threshold matter, however. This circuit has never directly addressed the scope of the term "commerce"

within the Lanham Act. Because of the clarity of the Act’s own definition of the term, see 15 U.S.C. § 1127 (defining "commerce" as "all

commerce which may lawfully be regulated by Congress"), we now

hold that "commerce" under the Act is coterminous with that commerce that Congress may regulate under the Commerce Clause of the

United States Constitution. The other circuits to address this question

have concluded the same. See, e.g., United We Stand America, Inc.

v. United We Stand, America, NY, Inc., 128 F.3d 86, 92-93 (2nd Cir.

1997); Planetary Motion v. Techsplosion, 261 F.3d 1188, 1194 (11th

Cir. 2001). Of course, Article I of the Constitution provides that,

[t]he Congress shall have Power . . . to regulate Commerce

with foreign nations, and among the several States, and with

the Indian Tribes[.] 

U.S. Const. art. I, § 8, cl. 3. Consequently, "commerce" under the

Lanham Act necessarily includes all the explicitly identified variants

of interstate commerce, foreign trade, and Indian commerce. 

6 INTERNATIONAL BANCORP v. SOCIETE DES BAINS
Understanding commerce under the Act to be coterminous with

that commerce Congress may regulate under the Commerce Clause,

we turn next to the determination of what constitutes "use in commerce" under the Act. Again we rely on section 1127, which provides,

of particular relevance here, a specific definition of that term as it

relates to servicemarks, which the "Casino de Monte Carlo" mark

unquestionably is:

The term "use in commerce" means the bona fide use of a

mark in the ordinary course of trade, and not made merely

to reserve a right in a mark. For purposes of this chapter,

a mark shall be deemed to be used in commerce — 

. . . . 

(2) 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. 

15 U.S.C. § 1127 (emphasis added). 

Consistent with this definition of the statutory "use in commerce"

requirement, the Supreme Court has said that "[t]here is no such thing

as property in a trade-mark except as a right appurtenant to an established business or trade in connection with which the mark is

employed. . . . [T]he right to a particular mark grows out of its use,

not its mere adoption;" United Drug Co. v. Theodore Rectanus, Co.,

248 U.S. 90, 97 (1918). Because a mark is used in commerce only if

it accompanies services rendered in commerce, i.e., it is employed

appurtenant to an established business or trade that is in commerce,

"mere advertising" of that mark does not establish its protectibility,

though advertising is itself commerce that Congress may regulate. 

With these principles in clear view, we proceed to address whether

the "Casino de Monte Carlo" mark was used in commerce. In their

briefs and before the court below, the parties debate principally

INTERNATIONAL BANCORP v. SOCIETE DES BAINS 7
whether the activities of SBM’s New York office conducted under the

"Casino de Monte Carlo" mark constitute services rendered in interstate commerce. SBM, for its part, contends that the office’s booking

of reservations is a rendered service, and that its maintenance of the

office, its advertising in this country, and its promotional web page

attach the "Casino de Monte Carlo" mark for sales and advertising

purposes to this interstate service, thereby satisfying the "use in commerce" requirement. The plaintiff companies argue, to the contrary,

that there is no evidence in the record that the New York office books

reservations to the casino, and that, as a result, the office engages in

no activity beyond "mere advertising." They argue further that the

casino gambling services are the only established business to which

the trademark applies, and that that service, being rendered in

Monaco, is not rendered in commerce that Congress may regulate.

The district court, accepting SBM’s arguments, concluded as follows:

[I]t is clear from the undisputed record that SBM’s New

York office was one of SBM’s many international sales

offices from which customers could book reservations.

Thus, the record shows that in this respect, SBM "services

are rendered" in the United States. 

Int’l Bancorp v. SBM, 192 F. Supp. 2d 467, 479-80 (E.D. Va. 2002)

[Summary Judgment]. 

SBM’s argument and the district court’s reasoning are in error

because the New York-office bookings on which they rely do not

relate to the casino in question, but, rather, to SBM’s resort facilities.

As became evident at oral argument and upon our review of the

record, SBM’s assertion that the record contains evidence that its

New York office booked reservations to the casino is unsubstantiated.

The plaintiff companies correctly point out that since the "Casino de

Monte Carlo" mark only pertains to the casino and its gambling services, any guest reservations SBM’s New York office and web site

book for SBM’s various resorts, which reservation services the record

does disclose, are irrelevant to the analysis. And the other operations

of SBM’s New York office, at least as they appear in the record, are

merely promotional in nature. The Lanham Act and the Supreme

Court, as shown above, make clear that a mark’s protection may not

be based on "mere advertising." 

8 INTERNATIONAL BANCORP v. SOCIETE DES BAINS
Because SBM presented no record evidence that the New York

office did anything other than advertise the "Casino de Monte Carlo"

mark, if its case rested on this alone, the plaintiff companies would

have the better of the argument. When they appeared before the court,

however, we asked the parties to address themselves to the question

of whether the casino services at issue were rendered in foreign trade,

and the plaintiff companies conceded that the record contained evidence that United States citizens went to and gambled at the casino.

This concession, when taken together with the undisputed fact that the

Casino de Monte Carlo is a subject of a foreign nation, makes

unavoidable the legal conclusion that foreign trade was present here,

and that as such, so also was "commerce" under the Lanham Act.

Since the nineteenth century, it has been well established that the

Commerce Clause reaches to foreign trade. And, for the same length

of time, the Supreme Court has defined foreign trade as trade between

subjects of the United States and subjects of a foreign nation. See In

re: Trademark Cases, 100 U.S. 82, 96 (1879) ("commerce with foreign nations means commerce between citizens of the United States

and citizens and subjects of foreign nations"); see also Henderson v.

Mayor of City of New York, 92 U.S. 259, 270 (1875) (same); United

States v. Holliday, 70 U.S. 407, 417 (1865) (same). And, of course,

commerce does not solely apply "to traffic, to buying and selling, or

the interchange of commodities . . . Commerce, undoubtedly, is traffic, but it is something more: it is [commercial] intercourse." Gibbons

v. Ogden, 22 U.S. 1, 189 (1824) (C.J. Marshall). Service transactions

are clearly commercial intercourse, and by extension can clearly constitute foreign trade. Cf. United States v. American Building Maintenance Indus., 422 U.S. 271, 283 (1975) (noting that an entity engages

in commerce when it is "directly engaged in the production, distribution, or acquisition of goods or services in interstate commerce")

(emphasis added). Thus, while SBM’s promotions within the United

States do not on their own constitute a use in commerce of the "Casino de Monte Carlo" mark, the mark is nonetheless used in commerce because United States citizens purchase casino services sold by

a subject of a foreign nation, which purchases constitute trade with a

foreign nation that Congress may regulate under the Commerce

Clause. And SBM’s promotions "use[ ] or display[ ] [the mark] in the

sale or advertising of [these] services . . . rendered in commerce." 

INTERNATIONAL BANCORP v. SOCIETE DES BAINS 9
At oral argument, the plaintiff companies objected to this straightforward reasoning. They argued first that any trade that United States

citizens engaged in at the casino was not subject to regulation by Congress since it did not occur in the United States.

COURT: Commerce [i.e., commerce within Congress’ regulatory ambit, and thus equally commerce under the Lanham

Act] includes services with a foreign country doesn’t it? 

Appellant: Not unless they’re rendered in the United States.

COURT: Unless the Supreme Court has held otherwise? 

Appellant: Unless the Supreme Court has held otherwise, of

course. 

Oral Argument, Dec. 3, 2002. In the alternative, they argued that even

if Congress could regulate transactions between United States citizens

and foreign subjects that occur abroad, the particular transactions at

issue here should not be considered foreign trade because the Casino

de Monte Carlo was a "playground for the very, very rich," id., and

thus did not have a substantial effect on foreign trade. Both arguments

are unavailing. 

The plaintiff companies’ first argument fails because the locality in

which foreign commercial intercourse occurs is of no concern to Congress’ power under the Constitution to regulate such commerce. In

United States v. Holliday, when examining the extent of Congress’

authority over Indian commerce, the Supreme Court noted that under

Gibbons v. Ogden the foreign commerce power "must be exercised

wherever the subject exists. . . . The locality of the traffic can have

nothing to do with the power." Holliday, 70 U.S. at 417-18 (emphasis

added). The subject of foreign trade, as the Supreme Court noted in

In re: Trademark Cases, Henderson, and Holliday, is defined not by

where the trade occurs, but by the characteristics of the parties who

engage in the trade, just as the Holliday Court concluded that the subject of Indian commerce is defined not by whether the commerce

occurs on Indian territory, but rather by whether the trade brings

United States citizens and tribal Indians together as transacting part10 INTERNATIONAL BANCORP v. SOCIETE DES BAINS
ners. See also United States v. Mazurie, 419 U.S. 544, 554 (1975)

("This Court has repeatedly held that [the Indian commerce clause]

affords Congress the power to prohibit or regulate the sale of alcoholic beverages to tribal Indians, wherever situated . . ." (emphasis

added)). 

Thus it is that Congress has validly enacted laws such as the Trading With the Enemy Act (TWEA), Act of Oct. 6, 1917, ch. 106, 40

Stat. 411, and the International Emergency Economic Powers Act

(IEEPA), title II, Pub. L. 95-223, 91 Stat. 1626 et seq., codified at 50

U.S.C. § 1701 et seq., under its authority to regulate foreign commerce and has provided, via those enactments, for the regulation of

commercial intercourse between United States citizens and subjects of

foreign nations, see, e.g., United States v. Yoshida International, Inc.,

526 F.2d 560 (C.C.P.A. 1975) (upholding broad import surcharge on

products imported by United States citizens in transactions with Japanese sellers, which regulation was issued by the executive under

TWEA’s delegation of foreign commerce authority). And more

importantly here, thus it is also that these laws extend their regulations to reach commercial intercourse that occurs solely on the foreign

sovereign’s soil. See, e.g., 31 C.F.R. § 515.560(a)(3) (1977) (prohibiting United States citizens from purchasing merchandise in Cuba with

a foreign market value in excess of $100). Such embargo authority,

encompassing embargoes of commercial intercourse abroad by

United States citizens with subjects of foreign nations, has long been

recognized to be a valid exercise of Congress’ foreign commerce

clause power: 

It has, we believe, been universally admitted, that [the foreign commerce clause] comprehend[s] every species of

commercial intercourse between the United States and foreign nations. No sort of trade can be carried on between this

country and any other, to which this power does not extend.

Gibbons v. Ogden, 22 U.S. at 193-94. 

Congress are, by the Constitution, vested with the power to

regulate commerce with foreign nations; and however, at

periods of high excitement, an application of the terms "to

regulate commerce" such as would embrace absolute prohiINTERNATIONAL BANCORP v. SOCIETE DES BAINS 11
bition may have been questioned, yet, since the passage of

the embargo and non-intercourse laws, and the repeated

judicial sanctions those statutes have received, it can

scarcely, at this day, be open to doubt, that every subject

falling within the legitimate sphere of commercial regulation may be partially or wholly excluded . . . Such exclusion

cannot be limited to particular classes or descriptions of

commercial subjects; it may embrace manufactures, bullion,

coin, or any other thing. The power once conceded, it may

operate on any and every subject of commerce to which the

legislative direction may apply it. 

United States v. Marigold, 50 U.S. 560, 566-67 (1850). The Supreme

Court’s acceptance of this expansive authority confirms that Congress

may regulate foreign trade wherever it occurs. 

Nor, in modern times, has the Supreme Court ever suggested that

Congress’ authority over foreign trade is limited in the manner that

the plaintiff companies suggest. To the contrary, when it has considered the scope of Congress’ authority over foreign trade, the Court

has emphasized the expansive nature of that authority. See, e.g.,

Pfizer, Inc. v. India, 434 U.S. 308, 313 n.11 (1978) ("The Chief Justice’s dissent seems to contend that the Sherman Act’s reference to

commerce with foreign nations was intended only to reach conspiracies affecting goods imported into this county. But the scope of congressional power over foreign commerce has never been so limited

. . ." (citations omitted)). 

Congress’ interest in foreign trade and the Executive’s interest in

foreign affairs unavoidably intersect, and this intersection can give the

mistaken impression that Congress’ authority over foreign trade must

be limited so as to accommodate the President’s authority over foreign affairs. The first interest, that of foreign trade, the Constitution

assigns entirely to the legislative authority of Congress. See U.S.

Const. art. I, § 8, cl. 3. The second, that of foreign affairs, it assigns

jointly to the political branches (i.e., Congress and the Executive). See

U.S. Const. art. I, § 8, cl. 1 and 11; id. art. II, § 2. The intersection of

these two interests, and the dual allocation of authority over the latter,

has long been noted: 

12 INTERNATIONAL BANCORP v. SOCIETE DES BAINS
If our government should make [restrictions on foreign commerce] the subject of a treaty, there could be no doubt that

such a treaty would fall within the power conferred on the

President and the Senate by the Constitution. [Foreign commerce] is in fact, in an eminent degree, a subject which concerns our international relations, in regard to which foreign

nations ought to be considered and their rights respected,

whether the rule be established by treaty or by legislation.

Henderson, 92 U.S. at 273. But no precedent suggests that the intersecting foreign affairs power the Constitution vests in the Executive

in any way curtails the foreign trade power the Constitution vests in

Congress, and there is thus no rationale for limiting the scope of congressional authority in the realm of foreign commerce to commercial

intercourse that occurs solely within the United States.5

The plaintiff companies’ second argument, that the purchase of

gambling services by United States citizens at the Casino de Monte

Carlo is not commerce because it does not have a substantial effect

on the foreign commerce of the United States, also fails. The substantial effects test is not implicated here at all. 

The Supreme Court has articulated the substantial effects test to

ensure that Congress does not exceed its constitutional authority to

regulate interstate commerce by enacting legislation that, rather than

regulating interstate commerce, trammels on the rights of states to

regulate purely intra-state activity for themselves pursuant to their

police power. See United States v. Morrison, 529 U.S. 598, 608-09

(2000). But while "Congress’ power to regulate interstate commerce

5United States courts may lack jurisdiction under which to enforce legislation Congress promulgates concerning trade that occurs on foreign

soil between United States citizens and foreign subjects, particularly

against those foreign subjects, but this inability to secure jurisdictional

authority creates only a practical shortcoming with such legislation, making it perhaps less effective a manner to regulate foreign trade than treaty

or convention. Though "in the case of foreign commerce the national

government might act through a treaty," Bob-Lo Excursion Co. v. Michigan, 333 U.S. 28, 42 (1948) (Douglas, J., dissenting), Congress’ authority under Article I of the Constitution remains whole and undiminished.

INTERNATIONAL BANCORP v. SOCIETE DES BAINS 13
may be restricted by considerations of federalism and state sovereignty[,] [i]t has never been suggested that Congress’ power to regulate

foreign commerce could be so limited." Japan Line Ltd. v. Los Angeles County, 441 U.S. 434, 448 n.13 (1979). 

Although the Constitution, Art. I, § 8, cl. 3, grants Congress

the power to regulate commerce "with foreign Nations" and

"among the several States" in parallel phrases, there is evidence that the Founders intended the scope of the foreign

commerce power to be the greater. 

Id. at 448. The rationale that underlies application of the substantial

effects test in the analysis of congressional legislation purporting to

regulate interstate commerce is therefore absent from analysis of congressional legislation purporting to regulate foreign commerce. 

Furthermore, the substantial effects test only limits Congress’

authoritative reach with respect to one of the three broad categories

of activity that Congress may regulate under the Commerce Clause.

First, Congress may regulate the use of the channels of

interstate commerce. . . . Second, Congress is empowered to

regulate and protect the instrumentalities of interstate commerce . . . . Finally, Congress’ commerce authority includes

the power to regulate . . . those activities that substantially

affect interstate commerce. 

Morrison, 529 U.S. at 609 (emphasis added). Consequently, the substantial effects test does not limit Congress’ regulation of activity that

is itself commercial intercourse occurring interstate; it governs only

Congress’ regulation of non-commercial intercourse activity that

effects interstate commerce. 

Here, the regulated activity at issue is itself commercial intercourse

(i.e., the trademarks are an instrumentality of commercial intercourse

and the provision of the services necessarily involves both channels

of and instrumentalities of that commercial intercourse). And the regulated commercial intercourse involves transactions between United

States citizens and the subject of a foreign nation, qualifying the inter14 INTERNATIONAL BANCORP v. SOCIETE DES BAINS
course as a literal example of foreign trade. Even were the substantial

effects test to govern some instances of congressional regulation of

foreign trade, the present case, because it involves only the first two

"broad categories of activity that Congress may regulate under its

commerce power," id. at 608, and not the third, does not implicate the

substantial effects test.6

The plaintiff companies, seeking to avoid the full import of this

foreign trade analysis, ask us to be wary in addressing whether United

States trademark protection can extend to services rendered abroad

and suggest that other courts have decided this question in the negative with reasoning that should persuade us not to extend trademark

protection in this instance. In particular, the plaintiff companies point

to the Second Circuit’s opinion in Buti v. Perosa, S.R.L., 139 F.3d 98

(2nd Cir. 1998). In Buti, the Second Circuit decided that the ad hoc

distribution in the United States of an Italian restaurant’s t-shirts, key

chains, and cards, by the owner of the restaurant who was also the

owner of a modeling agency, to his colleagues in the modeling industry, did not establish that the mark was used in commerce. 

Buti is not persuasive authority to us for several reasons, however.

First, the Buti court did not analyze the application of the Lanham Act

to foreign trade because, as it noted, the plaintiff, in a "pivotal concession[ ], . . . conceded at oral argument that . . . the food and drink services [it sells] form no part of the trade between Italy and the United

States." Id. at 103. And in fact, even though the Buti court did not

analyze trademark rights created via foreign trade, it did acknowledge

the basis for such. See id. (noting that a key inquiry is "whether [the

plaintiff] has conducted the affairs of its Milan Fashion Cafe in such

a way as to "substantially affect" United States interstate or foreign

commerce, and thereby fall within Congress’ authority under the

6

Insofar as the plaintiff companies are instead relying on their "substantial effects" argument not to challenge the determination that the

activity at issue constitutes foreign trade, but to challenge the court’s

exercise of jurisdiction over them with regards to their extraterritorial

conduct, see Steele v. Bulova Watch Co., 344 U.S. 280 (1952), their

objection fails. Both they and SBM submitted to the federal court’s exercise of in personam jurisdiction over them. They cannot now challenge

its exercise of such. 

INTERNATIONAL BANCORP v. SOCIETE DES BAINS 15
Commerce Clause"). Secondly, even had the Buti plaintiff not explicitly conceded that his business was not foreign trade, it is not clear

that the facts before the Buti court would have established that the

plaintiff used the mark in that putative foreign trade. As the Second

Circuit carefully noted, the restaurant undertook no "formal advertising or public relations campaign [aimed at United States citizens]."

Id. at 100. 

Here, SBM does not concede that its services do not constitute foreign trade when United States citizens purchase them. Instead, the

plaintiff companies concede the very elements we conclude constitute

foreign trade. And quite clearly SBM has used the mark in its foreign

trade, formally, and at great cost, advertising its services intentionally

to United States citizens under the "Casino de Monte Carlo" mark.

Because SBM used its mark in the sale and advertising of its gambling services to United States citizens; because its rendering of gambling services to United States citizens constitutes foreign trade;

because foreign trade is commerce Congress may lawfully regulate;

and because commerce under the Lanham Act comprises all commerce that Congress may lawfully regulate, the services SBM renders

under the "Casino de Monte Carlo" mark to citizens of the United

States are services rendered in commerce, and the "use in commerce"

requirement that the Lanham Act sets forth for the mark’s protectibility is satisfied. 

B.

The use of an unregistered mark in foreign trade does not in any

way assure its owner that the mark will merit Lanham Act protection;

it only makes such protection possible. For an unregistered mark that

is used in foreign trade to merit Lanham Act protection, that mark

must be distinctive among United States consumers. The plaintiff

companies argue that even if the "Casino de Monte Carlo" mark is

used in commerce, it is not distinctive because it is merely geographically descriptive, and that since it is not distinctive, it is not protectible. 

Though the plaintiff companies correctly argue that the mark is

geographically descriptive (i.e., it geographically describes where the

casino is located and nothing more), this objection does not foreclose

16 INTERNATIONAL BANCORP v. SOCIETE DES BAINS
the mark’s distinctiveness. Descriptive marks will be deemed distinctive if they achieve secondary meaning. See Perini Corp. v. Perini

Construction, Inc., 915 F.2d 121, 125 (4th Cir. 1990) ("Secondary

meaning is the consuming public’s understanding that the mark, when

used in context, refers, not to what the descriptive mark ordinarily

describes, but to the particular business that the mark is meant to

identify." (emphasis added)). Thus, the relevant question here is

whether the district court correctly found that the mark possessed secondary meaning. 

The district court employed two distinct analyses to assess the secondary meaning of "Casino de Monte Carlo." The court engaged in

traditional Perini analysis, examining a variety of factors — the Perini factors — that we have said are relevant in assessing secondary

meaning. Though proof of secondary meaning is a "vigorous evidentiary requirement[ ]," see id., plaintiffs can meet their burden by offering proof including, though not limited to, 1) advertising

expenditures; 2) consumer studies linking the mark to a source; 3)

sales success; 4) unsolicited media coverage of the product; 5)

attempts to plagiarize the mark; and 6) the length and exclusivity of

the mark’s use. See id. 

The district court, finding that SBM provided proof of substantial

advertising expenditures; significant sales success within the United

States; substantial unsolicited media coverage of the casino; frequent

attempts by others to plagiarize the mark; and a long history of continuous, if not exclusive, use of the mark; concluded that SBM had

met its burden. Summary Judgment, 192 F. Supp. 2d at 481-82. Upon

our review of the record, we conclude that the court’s conclusion as

to these points is not clear error. 

Furthermore, the district court noted that under our precedent in

Larsen v. Terk Technologies, 151 F.3d 140, 148-49 (4th Cir. 1998),

SBM met its burden of proving secondary meaning, irrespective of

the Perini test, because it had established that the plaintiff companies

directly and intentionally copied the "Casino de Monte Carlo" mark.

See Summary Judgment, 192 F. Supp. 2d at 481 ("the record leaves

no doubt that the plaintiff companies intentionally and directly copied

SBM’s mark"). Under Larsen, a trademark plaintiff that proves that

the defendant directly and intentionally copied its mark is presumed

INTERNATIONAL BANCORP v. SOCIETE DES BAINS 17
to have proved that mark’s secondary meaning, and the defendant

must then disprove that presumption. We decided Larsen on the logic

of two prior cases, Osem Food Industries Ltd. v. Sherwood Foods,

Inc., 917 F.2d 161 (4th Cir. 1990), and M. Kramer Mfg. Co., Inc. v.

Andrews, 783 F.2d 421 (4th Cir. 1986), which established that a person who directly and intentionally copies another’s trade dress has

the burden of refuting a presumption that the trade dress has secondary meaning. 

The plaintiff companies argue that applying the presumption to

trademarks, as Larsen does, as opposed to trade dress, as Osem and

M. Kramer do, is unsupported by policy, violates Fed. R. Evid. 301,

and has been rejected by other circuits. None of this, however, diminishes the precedential force that Larsen has on this case. And since

the plaintiff companies did not present evidence sufficient to rebut the

Larsen presumption, let alone to counter the Perini factors discussed

above, the district court’s conclusion that the "Casino de Monte

Carlo" mark is distinctive, see Summary Judgment, 192 F. Supp. 2d

at 482, must be affirmed. 

The dissent contends that the district court did not engage in two

distinct analyses of secondary meaning, but rather applied the Larsen

presumption, and then improperly shifted the burden of proof to the

plaintiff companies, in effect requiring them, unfairly, to prove that

SBM’s mark did not have secondary meaning. The district court did

not so merge the analyses, and though it intertwined its two analyses,

such was only natural since it was in the posture of the fact finder,

and not simply addressing questions of law. 

The district court’s conclusion that the Larsen presumption applied

placed a rebuttal burden on the plaintiff companies. That is, if SBM

had offered no proof of secondary meaning whatsoever, SBM would

still be due a finding that its mark enjoyed secondary meaning unless

the plaintiff companies proffered some evidence, not ultimately persuasive evidence, just some evidence, that the fact finder concluded

was probative in disproving secondary meaning. Here, upon looking

at the relevant evidence presented by the plaintiff companies, which

as one would expect the court did through the lens of the traditional

Perini categories, the district court found that none of that evidence

was probative, at any level. 

18 INTERNATIONAL BANCORP v. SOCIETE DES BAINS
In addition, having evaluated the evidence and found that none of

it successfully rebutted the Larsen presumption, the court also noted

that SBM’s evidence, when evaluated in the applicable Perini categories resulted in findings sufficient to establish secondary meaning.

Thus, the court said,

In sum, far from rebutting the [Larsen] presumption of distinctiveness that operates here, the Perini factors, when

applied to the facts of this case, actually support that presumption.

Summary Judgment, 192 F. Supp. 2d at 482 (emphasis added). 

That the dissent, had it been the fact finder, might have drawn different inferences from the evidence, and so concluded that the Larsen

presumption was rebutted, is irrelevant here. The district court was

the fact finder, charged with drawing inferences from the evidence;

it was that court’s responsibility (as it would have been the jury’s

responsibility had the parties instead opted for a jury trial) to determine whether or not the plaintiff companies’ presented any evidence

that rebutted the Larsen presumption. The district court quite simply

found that none of the evidence presented by the plaintiff companies

was probative of a lack of secondary meaning, and on that finding

alone, it could have concluded that SBM met the secondary meaning

requirement. That the court went on to note that even under the Perini

analysis SBM met its burden does not transform its analysis into one

that requires the plaintiff companies to carry the ultimate burden. 

C.

Because the district court properly concluded, though for the wrong

reasons, that the "Casino de Monte Carlo" mark was used in commerce, and because its conclusion that the mark had secondary meaning was not clearly erroneous, the court’s determination that the mark

was protectible was proper, and it did not err by proceeding to assess

whether the plaintiff companies’ use of the mark constituted trademark infringement. 

D.

The dissent’s disagreement with this part of our holding today is

based on (1) a conflation of the two critical elements of the "use in

INTERNATIONAL BANCORP v. SOCIETE DES BAINS 19
commerce" inquiry, see post at 37-38 ("The majority reaches the

unprecedented conclusion that an entity’s use of its foreign trademarks solely to sell services in a foreign country entitles it to trademark protection under United States law, even though the foreign

mark owner has never used or registered its mark in the United

States."); (2) two cases decided by the Trademark Trial and Appellate

Board ("TTAB"), which cases, like the dissent here, conflate the distinct elements of the two-pronged "use in commerce" requirement,

see post at 42-43, 44-45 (citing to Mother’s Restaurant, Inc. v. Mother’s Other Kitchen, Inc., 218 U.S.P.Q. 1046 (TTAB 1983), and to

Linville v. Rivard, 41 U.S.P.Q.2d 1731 (TTAB 1997) ("Linville II"));

and (3) policy arguments. See post at 46. With these grounds as its

justification for deciding the matter differently, the dissent labels our

application of the straightforward statutory command of the Lanham

Act as one that "threatens to wreak havoc over our country’s trademark law and would have a stifling effect on United States commercial interests generally," see post at 46. We address the dissent’s bases

for its disagreement seriatim. 

But, before we address the dissent’s reasoning, we note, we think

importantly, that: 

(1) The dissent does not disagree with the court’s conclusion that

the text of the Lanham Act extends protection to marks that meet the

statutory requirements for being "used in commerce," provided they

also enjoy secondary meaning; 

(2) The dissent does not disagree with the court’s conclusion that

the "use in commerce" requirement entails two distinct elements: a

service being rendered in commerce, and a mark for that service being

used or displayed in the sale or advertising of that service. 

(3) The dissent does not disagree with the conclusion that "commerce" under the Lanham Act is coterminous with commerce that

Congress may regulate; 

(4) The dissent does not disagree with the court’s conclusion that

the commerce at issue, the selling by SBM of gambling services to

United States citizens abroad, constitutes foreign commerce under

20 INTERNATIONAL BANCORP v. SOCIETE DES BAINS
Article I of the United States Constitution and so also constitutes

commerce under the Lanham Act; and 

(5) The dissent does not disagree with the court’s conclusion that

SBM did intentionally and formally use and display its mark in the

sale and advertising of its services in the United States to United

States citizens in an effort to spur sales of its services to them. 

We believe that these conclusions alone justify our holding that

SBM’s mark would merit Lanham Act protection (provided the mark

also enjoyed secondary meaning), and absent the dissent’s disagreement on these points, we do not understand the statutory basis for its

disagreement. 

As to the dissent’s failings, as we imagine them, first the dissent

conflates the two distinct aspects of the statutory "use in commerce"

requirement. The distinct elements of the analysis are set out above.

See supra p. 7. But in short, section 1127 defines the term "use in

commerce" with respect to services as being when a mark is "used or

displayed in the sale or advertising of services and the services are

rendered in commerce." As a consequence of the conjunctive command, it is not enough for a mark owner simply to render services in

foreign commerce for it to be eligible for trademark protection. Nor

is it enough for a mark owner simply to use or display a mark in the

sale or advertising of services to United States consumers. Both elements are required, and both elements must be distinctly analyzed. 

Though the dissent contends that it understands there are two distinct elements to the use in commerce requirement, see post at 37-38,

its opinion betrays its claim. It must necessarily conflate the two elements to conclude, as it does, that today we hold "the protection of

United States trademark law extends to a mark used exclusively in

Monaco," post at 37, for it readily admits that only one of the two elements of use occurred abroad, the rendering of services, and that the

other element, SBM’s New York City-based brand-building efforts,

did indeed occur in the United States. 

This case presents a record replete with demonstrations of SBM’s

singularly impressive commitment to building brand identity in the

United States. These efforts constitute, as we explain above, see supra

INTERNATIONAL BANCORP v. SOCIETE DES BAINS 21
p. 21, a "use or display in the sale or advertising" of the services that

we elsewhere determined were also rendered in commerce. It cannot

but be concluded that this use of the mark — that is the building of

brand identity among United States consumers — very much

occurred in the United States, and indisputably so. 

On our understanding of the statutory language it does not follow

that since the mark has not been rendered in commerce in the United

States it is equally fair to say that the mark has not been used in the

United States, when in fact it has been widely used in the United

States for advertising and marketing purposes. Unless one conflates

these two elements then, one cannot fairly criticize our holding today

as protecting a mark "exclusively" used in Moncaco. At most one can

criticize us for providing protection to a mark used in both Monaco

and the United States. 

The dissent’s different understanding of the statute and of the two

elements it sets out for establishing "use in commerce" is that both

elements of "use in commerce" must occur within the geographic borders of the United States, a merging of the contents of the two elements that is not provided for by the statute. The dissent believes it

can defend this proposition on the basis that many courts over the

years have said that "use" must occur in the United States in order for

a mark to merit Lanham Act protection. But, a "use in commerce"

whose elements occur, as here, both in the United States and abroad

is not exclusive foreign use, and is not controlled by the principles of

law upon which the dissent relies. Indeed, that the statute’s definition

of the term commerce encompasses foreign commerce (thus naturally

including some services rendered outside the United States borders)

points, in fact, in the opposite direction from the dissent’s conclusion.

Yet we reject the dissent’s interpretation of "use" not only because

the statute does not suggest it, but also because the authorities to

which the dissent cites for its rule that "[b]oth elements must occur

in the United States in order to satisfy the use in commerce requirement" do not yield the precise formulation that the dissent suggests

they do. While these cases support the general contention that "use"

must be in the United States, they do not support the very different

conclusion that both distinct elements of the statutory "use in commerce" definition for servicemarks must occur within the United

22 INTERNATIONAL BANCORP v. SOCIETE DES BAINS
States. Rather, these authorities, employing the term "use" in loose

and often varying ways, have either not drawn the distinction between

the two elements of use that are required in the statutory analysis of

servicemarks, or have drawn the distinction but then have not stated

that both elements of a servicemark’s use must occur within the geographic confines of the United States. 

Indeed, of the many cases the dissent cites, only two provide the

support it seeks. Both of those cases decided by the TTAB, Mother’s

Restaurant, Inc. and Linville II, are unpersuasive authority to us

because of their failure properly to distinguish analytically between

the two distinct elements of the "use in commerce" requirement, and

between the distinct content of those elements. But before we reject

the reasoning of those two cases, we first owe the dissent a run-down

on the other cases it presents as contrary precedent to our decision

today. 

The dissent suggests that the Federal Circuit opposes our rule. In

particular, it points to Person’s Co. Ltd. v. Christman, 900 F.2d 1565

(Fed. Cir. 1990). In Person’s, however, the court faced the question

of whether a Japanese manufacturer of clothes that had sold its

clothes in Japan, and had never used or displayed its mark to advertise or sell its products in the United States, could establish priority

of use in the mark based on its Japanese operations. Though the

record did disclose a single occurrence when a United States citizen

purchased goods in Japan from the company, thus arguably meeting

the commerce requirement, no evidence whatsoever was proffered

that the company had in any way used or displayed its mark to advertise or sell its product to United States consumers. Thus it was that

only "foreign use" (i.e., the foreign advertising of its product to foreign consumers) of the mark existed.7

 Of course, the court’s rejection

7As will quickly be seen in the analysis that follows, courts have long

loosely used the term "foreign use." Sometimes the term signals that the

commerce at issue does not qualify as commerce that Congress may regulate, and that thus there is only "foreign use." Sometimes the term signals that, though qualifying commerce is present, the mark owner has not

used or displayed the mark in advertising and sales efforts directed at

United States consumers, and thus that there is only "foreign use." And

sometimes, the term signals that neither qualifying commerce, nor qualiINTERNATIONAL BANCORP v. SOCIETE DES BAINS 23
of such foreign use in no way reflects upon the case before us today

where SBM did use and display its mark to advertise or sell its services in the United States to United States consumers.8

The dissent also points to Imperial Tobacco Limited v. Philip Morris, Inc., 899 F.2d 1575 (Fed. Cir. 1990), as its justification. But, just

a glance at the first paragraph in the first section of that opinion tips

off the careful reader that that court too understood that varied forms

of commerce could support trademark protection:

No use of the mark in commerce in or with the United States

was alleged. 

Id. at 1577 (emphasis added). By this factual notation, the court made

clear, albeit by implication, that commerce in the United States is not

fying use or display in advertising or sales, is present, and thus that there

is only "foreign use." 

Of equal importance, the Lanham Act provides different statutory definitions of use for marks attached to goods and services. Thus, the term

"use" when used in the context of a case involving goods bears one

meaning, and, when used in the context of a case involving services,

bears another. 

To the extent that this prior imprecision underlies the dissent’s reasoning, its approach to the question is somewhat understandable. However,

after today, such imprecision can no longer, in this circuit, cause

improper decision of these difficult cases. 

8The dissent suggests that our distinguishing of Person must be wrong

because application of our rule to the facts of the Person case would

result in a different outcome than the Federal Circuit reached in that case.

See post at 48. That is not correct. The 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 provisions addressing services to a case

involving goods. We only examine Person, and the other cases we

address that involve goods instead of services, in order to demonstrate

that the dissent’s importation of language about "foreign use" from those

cases into the case at bar does not result, when applied within the services construct, to the absurd results that the dissent suggests it would.

24 INTERNATIONAL BANCORP v. SOCIETE DES BAINS
the only commerce that can satisfy the Act, but that commerce with

the United States is also implicated. 

The analysis that follows then confirms that the court was not there

crafting a rule requiring both elements of "use in commerce" to occur

in the United States. The court faced a claim by a United Kingdom

mark owner that it had not abandoned its mark’s United States registration (obtained under the Lanham Act’s provision allowing registration of foreign marks employed exclusively in foreign use). The mark

owner claimed that either its intent to employ the mark in exclusively

United States use (i.e., its claimed intent to sell goods in the United

States to United States citizens), or its existent exclusively foreign use

(i.e., its selling and advertising of goods to foreigners in foreign

lands) could satisfy the Act’s ongoing use in commerce requirement.

Faced with these two claimed uses, the court said, "the terms ‘use’

and ‘nonuse’ mean use and nonuse in the United States[,]" id. at 1579,

thus holding that the exclusively foreign use the mark owner relied on

could not satisfy the Act, and proceeding only to inquire whether the

claimed intent to employ the mark in exclusively domestic use had

been established. 

Imperial Tobacco’s "use in the United States" principle, then, presents a distinction between two particular types of uses: one exclusively domestic, one exclusively foreign. And, just as with Person’s,

the "use" (exclusively foreign) that Imperial Tobacco determined cannot support protection is different from the use at issue here, where

the mark is both used in advertising and displays in the United States

and attached to services rendered in qualifying commerce overseas.

The dissent also argues that the appeal of the TTAB’s decision in

Linville II, Rivard v. Linville, 133 F.3d 1446 (Fed. Cir. 1998) (Rivard

II), qualifies as relevant Federal Circuit precedent on this issue. However, such is not the case. The circuit court’s holding in that case,

however, can only be understood after explication of the case’s procedural history. 

First, the TTAB, in Linville v. Rivard, 26 U.S.P.Q.2d 1508 (TTAB

1993) (Linville I), addressed a petition to cancel a mark owner’s registration on summary judgment. As in Imperial Tobacco, the mark

owner acquired Lanham Act registration by relying on the Act’s proINTERNATIONAL BANCORP v. SOCIETE DES BAINS 25
vision for registration of foreign marks. The mark owner was Canadian and used the mark on his Canadian beauty salons. He also

engaged in some advertising to United States consumers, and had

some United States clientele. The Board concluded that these facts

did not constitute use in commerce because the alleged qualifying

commerce at issue (selling to United States consumers) was not qualifying commerce. 

On appeal to the Federal Circuit, the court, in an unpublished decision, agreed with the Board’s conclusion that use in commerce had

not been established, but not on the basis of the Board’s decision, and

in fact without any consideration of whether selling to United States

consumers constituted qualifying commerce, or whether use in commerce was established when such was combined with a use in United

States advertising. Instead, assuming that exclusively Canadian use

was at issue, the court relied entirely on its holding from Imperial

Tobacco. See Rivard v. Linville, 11 F.3d 1074, 1993 WL 472795 at

2 (Rivard I). That the court never considered the mark owner’s claim

that his servicing of United States consumers and his United States

advertising constituted use in commerce is made apparent by the fact

that the court nowhere mentions those facts. 

Despite agreeing with the Board’s ultimate disposition of the use

in commerce question, the court vacated and remanded the Board’s

decision on other grounds. On remand, in Linville II, the Board reiterated its exact Linville I holding as to the use in commerce issue. That

is, it again concluded that the sale of services to United States consumers was not qualifying commerce. 

Following Linville II appeal was again taken, and Rivard II, the

case on which the dissent relies, resulted. In that decision, the circuit

court affirmed the judgment of the Board as to the use in commerce

question, but again, not on the Board’s reasoning and without any

consideration of whether servicing United States consumers constituted qualifying commerce. Instead, the court omitted the relevant

facts (again) and solely relied on its prior unpublished opinion.9 Thus,

9

"Linville established a prima facie case that Rivard abandoned the

ULTRACUTS mark because he did not use it in connection with hair

dressing and beauty salon services in the United States during the relevant time period. 31 U.S.P.Q.2d at 1220." 133 F.3d at 1449. 

26 INTERNATIONAL BANCORP v. SOCIETE DES BAINS
the Federal Circuit in Rivard II only reiterated its holding from Rivard

I (unpublished) and thus likewise only reiterated the principle from

Imperial Tobacco, which principle, as we demonstrate above, is inapplicable to the case before us today. 

The dissent would also rely on Fifth Circuit precedent to overcome

our reasoning. That decision, Fuji Photo Film Co., Inc. v. Shinohara,

754 F.2d 591 (5th Cir. 1985), has no bearing here for the same reasons as we rejected Person’s. Fuji involved two Japanese companies,

formed in 1919 and 1934, respectively. Both manufactured and sold

products within Japan. Beginning in 1967 and 1954, respectively, the

two companies sold their products in the United States. The Fuji court

said that the companies’ Japan operations — that is, their manufacturing and selling products to Japanese locals as they had been doing for

generations — did not figure into the trademark analysis. Just as in

Person’s, such foreign use (i.e., non-qualifying commerce and the

foreign use and display of the mark to advertise and sell products to

foreign consumers) is not what is before us today. 

The dissent would also have it that we are now in conflict with the

Second Circuit on this issue as well. For the reasons given above, we

reject the dissent’s contentions as to Buti. See supra pp. 15-16. But

so, too, do we reject the dissent’s claim that La Societe Anonyme des

Parfums le Galion v. Jean Patou, Inc., 495 F.2d 1265 (2nd Cir.

1974), bears on this case. In that case, the court faced a trademark

claim by a foreign perfume manufacturer against a domestic perfume

manufacturer. The plaintiff initially asked the court to rule that it had

United States trademark rights in its mark, which it had attached to

products it manufactured abroad, had advertised abroad to foreigners,

and had sold abroad to foreigners. The court found that such foreign

use (i.e., again, non-qualifying commerce and foreign use and display

of the mark to advertise and sell the product to foreign consumers)

could not create trademark rights in the plaintiff. Again, such foreign

use is not what is at issue today.10

10The dissent would also have it that The Morningside Group Limited

v. Morningside Capital Group, LLC, 182 F.3d 133 (2nd Cir. 1999), supports its position. However, that case did not involve anything like the

case before us. It involved services provided in the United States, and so

INTERNATIONAL BANCORP v. SOCIETE DES BAINS 27
Closer to home, the dissent suggests that a Fourth Circuit case on

trade dress, CBS, Inc. v. Logical Games, 719 F.2d 1237 (4th Cir.

1983), though not controlling, ought provide parallel reasoning by

which we should abide. Not only does that case not support the dissent’s position, but explicit language within it in fact points toward

our decision today. That case involved a trademark infringement suit

by the distributor of Rubik’s Cube, against a former distributor of the

product who sold his copied version under the trademark, Magic

Cube. The court rejected the defendant’s claim that, based on the

third-party manufacturer’s foreign production of and foreign sale to

foreign consumers of the product, he somehow was due trade dress

rights in the product, accruing at the time that he imported the product

into the United States. Such foreign use by the third-party, foreign

manufacturer could not lead to trade dress rights, the court said. Id.

at 1239. Again, such "foreign use" is not what is at stake here. 

Perhaps more illuminating from the CBS decision is the following

language the dissent chooses not to highlight, which language seems

in fact to portend something akin to the very case before us today:

[F]actual situations can be imagined in which extensive —

especially reiterated — purchase abroad and marketing in

the United States might operate to create in the American

importer trade dress rights in the United States for a format

employed elsewhere by the foreign manufacturer. 

Id. 

the court distinguished it from Buti with the language the dissent cites.

We whole-heartedly agree with the principle enunciated by that court in

its distinguishing of Buti, particularly with its statement of the governing

principal: "Mere advertising and promotion of a mark in this country are

not enough to constitute "use" of the mark "in commerce," so as to bring

the activity within the scope of the Lanham Act." The whole point, of

course, is that with respect to services, further inquiry must be made as

to whether such use (advertising and promotion in the United States) is

conjoined with qualifying commerce. Thus, ultimately in Morningside

Group, the court did provide the mark owner with Lanham Act protection. 

28 INTERNATIONAL BANCORP v. SOCIETE DES BAINS
The dissent would also rely on a long-line of decisions from the

TTAB, to which, the dissent says, proper deference would result in

our adoption of its suggested disposition. However, as noted above,

only two of the cases cited are on point. The remainder are inapposite

for much the same reason as the circuit court cases discussed above

are inapposite.11

11In Techex, Ltd. v. Dvorkovitz, 220 U.S.P.Q. 81 (TTAB 1983), the

Board considered whether a British company that "resells the equipment

[it purchases from an American company] to its European customers and

provides warranty services to them," and that only intentionally advertises to those European consumers, had United States trademarks rights

as a result of that "foreign use." The board said no. Once more, a different foreign use was at issue than is at issue today. 

In Stagecoach Properties, Inc. v. Wells Fargo & Co., 199 U.S.P.Q.

341 (TTAB 1978), the Board considered whether a domestic company

that owned a mark, but had not at all used it to advertise or identify

resorts it operated in Mexico, had Lanham Act trademark rights in that

mark as a result of the fact that its resorts engaged in qualifying foreign

commerce. The Board, wisely we think, said no. In reaching its decision

it said, "There is [ ] no evidence to show that the Colorado company

used a design of a stagecoach, in any form, as a sign or mark to identify

its services at [its Mexican resorts]." Id. at 349 (emphasis added). Thus,

the Board rejected the contention that the mark was used or displayed in

the advertising or sale of those services to United States consumers. The

Board did go on in the next sentence as follows: "In addition, applicant’s

argument ignores the fundamental rule that activity outside of the United

States is ineffective to create rights in marks in the United States." But

we do not think that this latter statement can be understood, as the dissent

would have it, to be a considered holding that where a United States firm

sells its foreign resort services to United States consumers and advertises

its services to those United States consumers under the mark, that such

a mark would merit no Lanham Act protection. Yet, this is indeed the

result to which the dissent’s reasoning tends. Given the immediately preceding sentence, we read this language to say simply what all the other

courts in the cases we have been reviewing thus far have said: that "foreign use" of marks as so understood (that is as foreign sale and/or foreign marketing to foreigners) does not establish Lanham Act protection.

In Oland’s Breweries v. Miller Brewing Co., 189 U.S.P.Q. 481 (TTAB

1976), the Board dealt with a case in which it explicitly found there was

no foreign commerce (i.e., that commerce that Congress may regulate).

See id. at 488 ("[T]he record shows that opposer has not sold any beer

INTERNATIONAL BANCORP v. SOCIETE DES BAINS 29
Thus we are left with only two TTAB cases remaining from those

proposed by the dissent that actually bear on the issue before us

today. We recognize that those cases, Rivard and Mother’s Restaurant, Inc., are due "great weight" from us. See post at 42. But great

weight certainly does not mean obeisance, and it does not even mean

deference, particularly in the face of overwhelmingly clear statutory

language that leads us to a contrary conclusion. And that there is no

under the mark "SCHOONER" in commerce which may lawfully be regulated by Congress[.]"). Based on this lacking ingredient to Lanham Act

protection, the Board found that the mark had been abandoned. Then,

and only then, did the Board inquire as to whether advertising the mark

owner had done in the United States was evidence of an intent not to

abandon the mark. Thus, it is not a case, as the dissent would have it,

where the presence of foreign commerce, and associated United Statesbased advertising was not sufficient to justify trademark protection.

Instead, the mark was abandoned because there was simply no commerce

at all. 

Lastly, in Sterling Drug, Inc. v. Knoll A.G. Chemische Fabriken, 159

U.S.P.Q. 628 (TTAB 1968), the Board considered whether a German

pharmaceutical manufacturer had Lanham Act rights to its mark in the

United States where the manufacturer had not advertised in the United

States or to United States consumers, though some United States consumers had been treated with the pharmaceutical in Germany. Again, the

obvious element that is missing here is the use and display of the mark

to advertise or sell the product to United States consumers engaging in

qualifying foreign commerce. See id. at 630 ("Though German publications containing applicant’s advertisements of "TALUSIN" or references

to that mark were received in the United States, there is no indication in

the record that these publications obtained such circulation in the United

States as to make the relevant public for applicant’s goods, physicians

and pharmacists, aware of applicant’s use of "TALUSIN." In other

words, the advertising in a foreign publication which may occasionally

be found in some library in the United States does not create protectible

rights in the advertised mark in the United States." (emphasis added)).

That the Board would in this case, as in so many others, note that such

"foreign use" (i.e., here, the foreign marketing to foreign consumers) is

not sufficient to establish Lanham Act rights is entirely unobjectionable

in our eyes, and again deals with different "foreign use" than that which

is at issue here. 

30 INTERNATIONAL BANCORP v. SOCIETE DES BAINS
other precedent to support these two decisions by the TTAB simply

confirms all the more our decision to reject its reasoning. 

In Linville II, the Board considered whether a Canadian beauty

salon that solely operated Canadian facilities, engaged in certain

Canadian advertising that reached across the border into the United

States, had distributed promotional materials at a single county fair in

the United States, and had at times serviced United States customers,

had "used" its mark under the terms of the Lanham Act. See Linville

II, 41 U.S.P.Q.2d at 1735-36. Faced with these facts, the Board concluded that qualifying commerce was not present, and so denied the

mark any protection. In its opinion, the Board reincorporated its initial

analysis in Linville I. See Linville II, 41 U.S.P.Q.2d at 1736 ("For the

reasons set forth by the Board in the summary judgment decision, we

find that the above activities neither individually nor collectively constituted use of the ULTRACUTS mark in commerce[.]").12

The Linville I opinion moves seamlessly between its rejection of

the presence of qualifying commerce, to a rejection of "use" of the

mark based on that lack of qualifying commerce, thus conflating the

two inquiries and giving its opinion the superficial appearance of having rejected a claim similar to that at issue here.

We reject respondent’s argument that, through its advertising, he has used the mark ULTRACUTS in the United

States continuously since 1986. Although the definition of

use in commerce in the statute refers to a mark being "used

or displayed in the sale or advertising of services," the definition continues with the requirement that[: "]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.["] Respondent

also argues that his services are rendered in commerce

because of the effect on commerce which is created by his

12The Board in Linville II proceeded to reiterate nearly verbatim its

reasoning from Linville I. We analyze the language from Linville I on

which the Board relies, though the same conclusions apply to its duplicative reasoning in Linville II. 

INTERNATIONAL BANCORP v. SOCIETE DES BAINS 31
business, i.e., customers must travel from the United States

to Canada in order to obtain his services, and therefore the

customers travel in commerce. . . . [The cases respondent

cites] in support of his position . . . involved services which

were actually rendered in the United States, i.e., a restaurant

located in Tennessee and a hotel in New York which

attracted interstate travelers. Those fact situations were

manifestly different from that presented here, where during

the relevant time period respondent’s hair salons were

located only in Canada. 

. . . . 

The mere fact that residents of the United States have

availed themselves of respondent’s services while in Canada

does not constitute technical trademark use of respondent’s

service mark which is sufficient to obtain or maintain a registration in the United States. 

26 U.S.P.Q.2d at 1512 (emphasis added). 

Having determined that no qualifying commerce was present, the

Board did not reject a position similar to that present here. And

regardless of whether we approve or disapprove of the Board’s Commerce Clause analysis, it is readily apparent that their holding, rejecting trademark protection where no qualifying commerce is present,

comports with ours. 

In Mother’s Restaurants, the Board considered whether a Canadian

restaurant that engaged in "advertising and promotional efforts

directed to Americans entering Canada from the United States along

tourist routes," had, by that advertising, created Lanham Act rights

under that mark. The Board, relying fully on a decision of the District

Court for the Western District of New York, said: 

[W]e decline to hold that opposer’s promotional activities in

Canada regarding "MOTHER’S" and "MOTHER’S PIZZA

PARLOUR & SPAGHETTI HOUSE" prior to 1976 resulted

in superior rights in said marks in the United States so as to

32 INTERNATIONAL BANCORP v. SOCIETE DES BAINS
preclude applicant from registering a confusingly similar

mark. Rather, it is our view that prior use and advertising of

a mark in connection with goods and services marketed in

a foreign country (whether said advertising occurs inside or

outside the United States) creates no priority rights in said

mark in the United States as against one who, in good faith,

has adopted the same or similar mark for the same or similar

goods or services in the United States prior to foreigner’s

first use of the mark on goods or services sold and/or

offered in the United States. . ., at least unless it can be

shown that the foreign party’s mark was, at the time of the

adoption and first use of a similar mark by the first user in

the United States, a "famous" mark[.] 

Id. at 1048. 

We are unpersuaded that this conclusory determination should govern our analysis. Most importantly, the Board never addressed the

question of whether commerce that Congress could regulate was at

issue. While it appears that such was the case from the factual

description provided, the Board suggests that the only relevant question was whether "promotional activities in Canada" could create a

right in a mark. By this formulation of the Lanham Act standard, the

Board seems, like the dissent, to conflate the "commerce" element of

the "use in commerce" requirement with the "use or display of the

mark" element of that same requirement. 

The conflation becomes most apparent in the Board’s next declaration that such Canadian (or even it says, United States) promotions

attached to Canadian trade "create[ ] no priority rights in said mark

in the United States." Id. It thus appears that the Board, while first

measuring the mark owner’s "use" of the mark by promotional activity, then measures it by whether it is attached to interstate commerce,

never pausing to inquire as to the subtleties of the qualifying commerce requirement. Compare id. ("[W]e decline to hold that opposer’s

promotional activities in Canada . . . resulted in superior rights[.]"),

with id. ("[A]dvertising of a mark[, wherever occurring,] in connection with goods and services marketed in a foreign country . . . creates

no priority rights in said mark in the United States[.]"). 

INTERNATIONAL BANCORP v. SOCIETE DES BAINS 33
In contrast, the proper inquiry in such circumstances is to evaluate

first whether the commerce to which both parties claim their mark is

attached may be regulated by Congress, and then to evaluate at what

point in time the mark owners’ began to use or display the mark in

the advertising and sale of those qualifying services to the qualifying

consumers. Our disagreement with the Board’s analytical approach in

Mother’s Restaurant convinces us that our circuit’s law will be better

served if we hew to the language of the statute and apply the Lanham

Act with a careful eye toward, and an appreciation of, the two distinct

elements of the "use in commerce" requirement. 

Indeed, that it is not enough for a mark owner to engage in qualifying commerce to create rights in his mark, and that it is not enough

for a mark owner to use or display the mark in the advertising or sale

of services to create rights in his mark, is critical. This point cannot

be missed else the holding we reach today will indeed be distorted,

as the dissent’s misreading of it illustrates.13 Rather, a mark owner

must both engage in qualifying commerce and use or display its mark

in the sale or advertising of these services to the consumers that

engage in that qualifying commerce. Of course, such was not found

by the circuit courts or the Board to be the case in any of the decisions

the dissent cites. While Rivard and Mother’s Restaurant may have

presented such facts, the Board in Rivard explicitly disclaimed that

foreign commerce was present, and in Mother’s Restaurant it did not

inquire into these distinct elements so that we could even say with

confidence that there the two distinct elements of the "use in commerce" requirement were, or were not, in fact met. 

13See post at 39 ("The majority determines that [SBM’s casino] services ‘constitute trade with a foreign nation that Congress may regulate

under the Commerce Clause.’" Based on this determination, the majority

accords SBM, the holder of the foreign mark, "Casino de Monte Carlo,"

eligibility for trademark protection[.]"). Of course, that SBM’s service

are qualifying commerce did not terminate our analysis of whether SBM

had used its mark in commerce. The second step was to adjudge whether

SBM’s massive advertising campaign in the United States, directed to

United States consumers and intended to spur the qualifying commerce

that is in question, constituted a use or display of the mark in the advertising of SBM’s qualifying services. 

34 INTERNATIONAL BANCORP v. SOCIETE DES BAINS
As to the dissent’s last principal basis for its objection to our holding today, it is one of policy. The dissent fears that we are undoing

all of the good of our country’s trademark laws. See post at 45-46. We

do concede that policy is not our forte. But, we cannot help but note

that since avoidance of consumer confusion is the ultimate end of all

trademark law, this case presents a paradigmatic situation in which

we may see our laws working, as intended, to reduce consumer confusion. 

Indeed, the very fact that the Board in Mother’s Restaurant would

acknowledge that foreign trademarks deemed "famous" can, with neither a demonstrated connection to qualifying commerce nor a demonstrated use or display of the mark in order to advertise or sell services

in such qualifying commerce, enjoy Lanham Act protection, see

Mother’s Restaurant, 218 U.S.P.Q. at 1048, illustrates the very real

interest that our trademark laws have in minimizing consumer confusion, so that our economy may enjoy the greatest possible of efficiencies and confirms that trademarks developed overseas can themselves

lead to such undesirable and inefficient consumer confusion here at

home. 

Ultimately, though, if SBM’s mark merits protection under the statute, we must provide it to them.14 We do not know that this is "reverse

imperialism," see post at 46, but we do know that the law requires that

we permit mark owners like SBM to petition our courts for protection.

And we know as well that if such owners, upon their petition, can

14The dissent also implies that since SBM could register its mark in the

United States, we should not be overly concerned with providing them

the right of Lanham Act protection we today provide them. See post at

43-44. That fact is, in our minds, as irrelevant here as it would be in a

case involving a domestic manufacturer who, having sold products in

interstate commerce under an unregistered mark, sought the protection of

the Lanham Act from an infringer. 

It is inconceivable that courts would interpret the Lanham Act to punish such mark owners for failing to register their mark where their mark

otherwise meets the statutory requirements for protection. Here, as much,

it is inconceivable that SBM’s registration status should affect our analysis of whether or not its mark qualifies for protection under the plain text

of the statute. 

INTERNATIONAL BANCORP v. SOCIETE DES BAINS 35
demonstrate that they meet the requirements of the statute, that they

are then entitled to protection, and that it is beyond us to refuse it to

them. 

IV.

Having determined that the district court properly ruled that SBM’s

mark was protectible under the Lanham Act, we turn next to review

its conclusion that its mark was infringed by the plaintiff companies’

activity. 

To prove infringement of a protectible trademark, a trademark

owner must demonstrate that the infringer’s use of the mark is likely

to cause consumer confusion. See Lone Star Steakhouse & Saloon,

Inc., 43 F.3d at 930. On the record before us we cannot conclude that

the district court committed clear error in determining that the plaintiff companies’ use of the mark would cause consumer confusion. The

domain addresses in question, their use of pictures and renderings of

the actual Casino de Monte Carlo, and the web sites implying that

they provided online gambling as an alternative to their non-existent

Monte Carlo-based casino all support the conclusion that ordinary

consumers would be confused. The district court’s grant of summary

judgment to SBM for trademark infringement under § 1125(a) was

therefore justified. 

V.

The plaintiff companies lastly argue that the district court’s injunctive remedy, ordering transfer of 43 domain names to SBM, was overbroad and vague, and that less burdensome remedies were available.

But the injunctive order was proper under § 1125(d)(1), the anticybersquatting provision that the court concluded the plaintiff companies

had violated, since that provision expressly provides domain name

transfer as remedy. The plaintiff companies do not challenge the district court’s determination under § 1125(d)(1), other than by their

objection that the "Casino de Monte Carlo" mark is not protectible,

which contention we reject above. In light of SBM’s protectible interest in the mark, and the plaintiff companies’ failure to challenge the

judgment under § 1125(d)(1) on other grounds, we conclude that the

court’s provision of injunctive remedy was proper. 

36 INTERNATIONAL BANCORP v. SOCIETE DES BAINS
CONCLUSION

For the reasons provided herein, the judgment of the district court

is affirmed. 

AFFIRMED

DIANA GRIBBON MOTZ, Circuit Judge, dissenting: 

The majority reaches the unprecedented conclusion that an entity’s

use of its foreign trademark solely to sell services in a foreign country

entitles it to trademark protection under United States law, even

though the foreign mark holder has never used or registered its mark

in the United States. In my view, the majority errs in holding that the

protection of United States trademark law extends to a mark used

exclusively in Monaco by a company incorporated there. For this reason and others set forth within, I respectfully dissent. 

I.

Under United States law, the holder of an unregistered mark must

demonstrate "use in commerce" of that mark in order to be eligible

for trademark protection. The Lanham Act provides that "[a] mark

shall be deemed to be in use in commerce . . . on services when it is

used or displayed in the sale or advertising of services and the services are rendered in commerce." 15 U.S.C.A. § 1127 (West Supp.

2003). Thus, there are two essential elements that must be present to

constitute "use in commerce" for Lanham Act purposes: (1) advertising that employs the mark and (2) the rendering of services to which

the mark attaches. Neither alone is sufficient. This two-pronged statutory meaning of "use in commerce" is what I refer to when I say that

SBM did not "use" its mark in commerce because it did not "use" the

mark in the United States.1 Prior to today’s holding, all existing

1This two-pronged meaning of "use" originated in the pre-Lanham Act

trademark cases. See, e.g., Trade Mark Cases, 100 U.S. 82, 94-95

(1879). The Lanham Act’s "use in commerce" requirement draws

directly on this earlier understanding. See Zazu Designs v. Loreal, S.A.,

979 F.2d 499, 503 (7th Cir. 1992). In a case presenting facts almost idenINTERNATIONAL BANCORP v. SOCIETE DES BAINS 37
authority, employing precisely this same two-pronged understanding

of use, has similarly concluded that use in the United States is necessary to meet the Lanham Act’s use in commerce requirement. None

of this authority has ever suggested that if one element of the use in

commerce requirement — advertising — takes place in the United

States while the other — the rendering of services — occurs outside

the United States, there has been use in the United States. Both elements must occur in the United States in order to satisfy the use in

commerce requirement. 

Indisputably, SBM has satisfied the first element of the use in commerce requirement, for no one questions that SBM employed the

Casino de Monte Carlo mark in the United States to advertise and

promote the gambling services that it provides exclusively at its

casino in Monaco. This is not and has never been a case about advertising. Rather, the question here is whether the second element of the

use in commerce requirement has been satisfied, i.e. have the services

that give rise to the Casino de Monte Carlo mark been rendered in

commerce of the United States. The majority holds that they have and

thus accords SBM’s mark eligibility for trademark protection under

United States law. I believe, however, that because SBM has not rendered its casino services in the United States, it has not satisfied the

statutory use in commerce requirement in a manner sufficient to merit

protection under the Lanham Act. Subsection I.A provides my analysis of this question; subsection I.B sets forth my response to the

majority’s efforts to rebut that analysis. 

A.

In this case, some United States citizens purchased "casino services" in Monaco from the Societe des Bains de Mer et du Cercle des

tical to the case at hand, the Second Circuit clearly recognized this

understanding of "use" and its grounding in earlier Supreme Court doctrine. See Buti v. Perosa, S.R.L., 139 F.3d 98, 103 (2d Cir. 1998) ("Under

this rule, therefore, Santambrogio’s mere advertising of the Fashion Cafe

mark, standing alone did not constitute ‘use’ of the mark within the

meaning of the Lanham Act." (citing United Drug Co. v. Theodore Rectanus Co., 248 U.S. 90, 97 (1918)). 

38 INTERNATIONAL BANCORP v. SOCIETE DES BAINS
Estrangers a Monaco (SBM), a "subject of a foreign nation." The

majority determines that those services "constitute trade with a foreign nation that Congress may regulate under the Commerce Clause."

Ante at 14. Based on this determination, the majority accords SBM,

the holder of the foreign mark, "Casino de Monte Carlo," eligibility

for trademark protection under the Lanham Act for that mark even

though SBM has never used the mark in the United States. 

SBM has not argued, and the district court did not hold,2 that the

mark was entitled to protection under the Lanham Act simply because

SBM used it to sell gambling services in Monaco to United States citizens. Nor did SBM argue, or the trial court hold, that these sales of

gambling services in Monaco to United States citizens constitute foreign trade that has been regulated by Congress under the Lanham Act.

Indeed, prior to today, no court, administrative agency, or treatise has

ever espoused or adopted this theory. 

Rather, it has long been recognized that use of a foreign mark in

a foreign country creates no trademark rights under United States law.

As the foremost trademark authority has explained, "[f]or purposes of

trademark rights in the United States, ‘use’ means use in the United

States, not use in other nations." 2 J. Thomas McCarthy, McCarthy

on Trademarks and Unfair Competition § 17.9 (4th ed. 2000)

("McCarthy"); see also 3 Rudolf Callman, The Law of Unfair Competition, Trademarks and Monopolies § 19.24 (4th ed. 1998)

("Callman") (noting that "[t]he use required under United States law

as the foundation of trademark rights must be use in this country and

not abroad . . . . It is well settled that foreign use creates no trademark

rights in the United States.").3

2The majority properly rejects the only rationale offered by SBM (and

adopted by the district court) for finding the mark used in United States

commerce for Lanham Act purposes, i.e. that advertising in the United

States combined with the booking of reservations to SBM’s various

resorts through SBM’s New York office sufficed to meet the use in commerce requirement. See ante at 7-9. 

3This principle, that use in the United States provides the foundation

for U.S. trademark rights, is a corollary of the well-established principle

that trademark rights exist in each country solely as determined by that

country’s law. See Ingenohl v. Olsen & Co., Inc., 273 U.S. 541, 544

INTERNATIONAL BANCORP v. SOCIETE DES BAINS 39
Until today, every court to address this issue has held that use of

a foreign trademark in connection with goods and services sold only

in a foreign country by a foreign entity does not constitute "use of the

mark" in United States commerce sufficient to merit protection under

the Lanham Act. As the Federal Circuit explained in rejecting the

contention that a Japanese mark holder’s use of a trademark solely in

Japan in connection with goods sold to a United States citizen constituted use of the mark in commerce for Lanham Act purposes: 

Such foreign use has no effect on U.S. commerce and cannot form the basis for a holding that appellant has priority

here. The concept of territoriality is basic to trademark law;

trademark rights exist in each country solely according to

that country’s statutory scheme. 

Person’s Co., Ltd. v. Christman, 900 F.2d 1565, 1568-69 (Fed. Cir.

1990); accord Fuji Photo Film Co., Inc. v. Shinohara Shoji Kabushiki

Kaisha, 754 F.2d 591, 599 (5th Cir. 1985); Fin. Matters, Inc. v. Pepsico, Inc., 806 F. Supp. 480, 484 (S.D.N.Y. 1992); see also La Societe

Anonyme des Perfums Le Galion v. Jean Patou, 495 F.2d 1265, 1270

n.4 (2d Cir. 1974) ("[I]t is well settled that foreign use [of a trademark] is ineffectual to create trademark rights in the United States.").

Although we have never before directly addressed this question, we

(1927) ("A trade-mark started elsewhere would depend for its protection

in Honkong upon the law prevailing in Honkong and would confer no

rights except by the consent of that law."). The United States has long

committed itself to this territoriality principle by joining international

agreements based on it. See, e.g., Paris Convention for the Protection of

Industrial Property, March 20, 1883, art. 6(3), available at

http://www.wipo.int/clea/docs/en/wo/wo020en.htm (last visited March

20, 2003) — a convention that the United States joined in 1883. The

majority builds its contrary thesis on the unremarkable proposition that

for Lanham Act purposes "commerce" is defined as "all commerce which

may lawfully be regulated by Congress." 15 U.S.C.A. § 1127 (West 1998

and Supp. 2002). What the majority overlooks is that to the extent Congress can regulate sales of goods and services by foreigners, bearing foreign marks, in foreign nations, it has chosen to do so by providing in the

Lanham Act for compliance with international agreements based on the

territoriality principle. See, e.g., 15 U.S.C. § 1126(b) (West 1998). 

40 INTERNATIONAL BANCORP v. SOCIETE DES BAINS
have "accept[ed] the assertion . . . that ‘trade dress use in foreign

countries does not create protectible trade-mark rights in the United

States.’" CBS, Inc. v. Logical Games, 719 F.2d 1237, 1239 (4th Cir.

1983); cf. Buti v. Perosa, 139 F.3d 98, 103 (2d Cir. 1998) (noting that

plaintiff conceded that "Congress has no constitutional authority to

regulate the operation of the Fashion Cafe in Milan" perhaps in "recognition of the fact that . . . registration and use of the Fashion Cafe

name in Italy has not, given the territorial nature of trademark rights,

secured it any rights under the Lanham Act"). 

Aside from its singularly unpersuasive attempt to distinguish Buti,

4

the majority ignores all of this authority. The majority also ignores the

fact that courts have uniformly rejected its precise argument, i.e., use

of a foreign mark in a foreign country somehow grants the foreign

holder of the mark priority over one who uses the mark first in the

United States. See, e.g., Person’s, 900 F.2d at 1567-69; Fuji Photo

4Contrary to the majority’s suggestion, ante at 15-16, the plaintiff’s

concession in Buti that it did not sell cafe services in "foreign trade" with

the United States, does not render Buti "unpersuasive" here. This is so

because SBM has made — albeit implicitly — exactly the same concession. Indeed, SBM does not argue that its sale of services abroad constitutes use in the "foreign trade" of the United States. Rather, like the

plaintiff in Buti, SBM claims only that its U.S. advertisement and promotion activities constitute use in the United States. See Brief of Appellees

at 19 (arguing that record provides "evidence of its mark’s use in the

United States"); 22 (same); 23 (same); see also id. at 28 (arguing that

application of famous marks doctrine entitles it to trademark protection

"as an alternative to a showing of ‘use’ in the United States."). Thus, in

a context very similar to that at hand, the Second Circuit in Buti recently

indicated its agreement with the rule that rendering services in a foreign

country does not suffice to establish use in commerce for Lanham Act

purposes. Moreover, Morningside Group Ltd. v. Morningside Capital

Group, L.L.C., 182 F.3d 133 (2d Cir. 1999), decided a year after Buti,

makes clear the Second Circuit’s intent. There, in the course of holding

that a mark claimant met the "use in commerce" requirement by "conduct[ing] material aspects of its investment services in the United

States," the Second Circuit distinguished Buti as a case "in which the service mark claimant did not provide its actual business services (the conduct of a restaurant business) in the United States, but only advertised

and promoted those services in the United States." Id. at 138. 

INTERNATIONAL BANCORP v. SOCIETE DES BAINS 41
Film, 724 F.2d at 599; Fin. Matters, 806 F. Supp. at 484-85; Johnson

& Johnson v. Diaz, 339 F. Supp. 60, 63 (C.D. Cal. 1971). 

Like the courts, the Trademark Trial and Appellate Board (TTAB),

whose decisions are entitled to "great weight," Buti, 139 F.3d at 105

(internal quotation marks omitted); see also In re Dr. Pepper Co., 836

F.2d 508, 510 (Fed. Cir. 1987), has also long rejected this theory, concluding instead that "[p]riority of right in a trademark in the United

States depends on priority of use in the United States and is not

affected by priority of use in a foreign country." Sterling Drug Inc.

v. Knoll A.-G. Chemische Fabriken, 159 U.S.P.Q. 628, 630 (TTAB

1968); see also Techex Ltd. v. Dvorkovitz, 220 U.S.P.Q. 81, 83

(TTAB 1983); Mother’s Restaurants Inc. v. Mother’s Other Kitchen,

Inc., 218 U.S.P.Q. 1046, 1048 (TTAB 1983); Stagecoach Properties,

Inc. v. Wells Fargo & Co., 199 U.S.P.Q. 341, 349 (TTAB 1978); see

also McCarthy § 29.3 ("Prior use of a trademark in a foreign country

does not entitle its owner to claim exclusive trademark rights in the

United States as against one who used a similar mark in the U.S. prior

to entry of the foreigner into the domestic American market.")5

Nor is the rule any different when, as here, the mark is used in a

foreign country in connection with services or goods sold to United

States citizens. See, e.g., Person’s, 900 F.2d at 1567-69 (rejecting

argument that use of trademark on goods sold in Japan by Japanese

company to a U.S. citizen could establish priority rights against person using mark first in the United States); Mother’s Restaurants, 218

U.S.P.Q. at 1047-48 (rejecting argument that use of trademark on restaurant services provided in Canada by Canadian entity to Americans

created "priority rights in said mark in the United States"); Stagecoach Properties, 199 U.S.P.Q. at 349 (rejecting argument that use of

5Even if the plaintiff companies knew of SBM’s use of its foreign

mark in connection with services rendered in Monaco, this does not render the plaintiff companies bad-faith users of the mark in the United

States or preclude them from using the mark in the United States. See

Person’s, 900 F.2d at 1570 ("Knowledge of a foreign use does not preclude good faith adoption and use in the United States."); accord Buti,

139 F.3d at 106; Callman § 19.24 and cases cited therein ("[E]ven an

intentional imitator may acquire domestic trademark rights if the mark he

imitates is used in a foreign country."). 

42 INTERNATIONAL BANCORP v. SOCIETE DES BAINS
trademark on hotel and restaurant services provided in Mexico to

"people from the United States" created rights protectible under U.S.

law in part because this "argument ignores the fundamental rule that

activity outside the United States is ineffective to create rights in

marks within the United States"); see also Sterling Drug, 159

U.S.P.Q. at 630-31. 

I recognize that, consistent with the Paris Convention and other

international agreements, owners of foreign trademarks can obtain

United States trademark protection by registering their marks in the

United States without having to show actual prior use in this country.

See 15 U.S.C.A. § 1126(e) (West Supp. 2002) (providing that a foreign applicant from a country with whom the United States maintains

certain treaty rights can obtain a U.S. registration for a mark registered in its home country that it intends to use in U.S. commerce).

But, as the majority acknowledges, SBM has not registered its mark

in the United States. See ante at 2.6

Moreover, when the owner of a foreign trademark, like SBM, has

properly registered its foreign mark under the Lanham Act, that registration merely entitles it to the "same national treatment as any other

registrant." Imperial Tobacco Ltd. v. Philip Morris, Inc., 899 F.2d

1575, 1578 (Fed. Cir. 1990). Therefore, after it has registered its foreign mark, the holder of the mark can maintain United States protection of the mark only if it complies with the requirements of United

6Of course, the Supreme Court has long held that when a United States

trademark (i.e., a mark used or registered in this country) is at issue, no

"rule of international law" prevents the United States "‘from governing

the conduct of its own citizens . . . in foreign countries when the rights

of other nations or their nationals are not infringed.’" Steele v. Bulova

Watch Co., 344 U.S. 280, 285-86 (1952) (quoting Skiriotes v. Florida,

313 U.S. 69, 73 (1941)). For this reason, Congress has the power, which

it has exercised in the Lanham Act, to prohibit United States citizens

from engaging in "deliberate acts" abroad which result in "[u]nlawful

effects in this country," i.e., infringement of a trademark registered in the

United States. Bulova, 313 U.S. at 288. As the majority seems to recognize (by citing Bulova briefly only to distinguish it, see ante 15 n.6),

Bulova offers no support for its theory, which arises from a claim by a

foreign entity to United States trademark protection for a foreign mark

never used or registered in this country. 

INTERNATIONAL BANCORP v. SOCIETE DES BAINS 43
States law. Id. at 1578-79. The Lanham Act provides that any mark

owner — including the owner of a foreign mark — that discontinues

use of the mark may be deemed to have "abandoned" the mark and

that "nonuse" for a statutorily required period of time, now three consecutive years (formerly two consecutive years) "shall be prima facie

evidence of abandonment." 15 U.S.C.A. § 1127 (West 1998 & Supp.

2002); see also Emergency One, Inc. v. American Fireagle, Ltd., 228

F.3d 531, 536 (4th Cir. 2000). In this context too "‘use’ and ‘nonuse’

[of a trademark] mean use and nonuse in the United States." Imperial

Tobacco, 899 F.2d at 1579 (emphasis added); see also Rivard v. Linville, 133 F.3d 1446, 1449 (Fed. Cir. 1998); Oland’s Breweries Ltd.

v. Miller Brewing Co., 189 U.S.P.Q. 481, 487-88 (TTAB 1976). 

Thus, even when the owner of a foreign mark has registered its

mark in the United States, it will be presumed to have abandoned the

mark if it does not use the mark for the statutorily required period of

time in the United States. Use, no matter how extensive, of the mark

in a foreign country during this period, does not rebut the presumption

of abandonment. See Rivard, 133 F.3d at 1448-49; Imperial Tobacco,

899 F.2d at 1579; Oland’s, 189 U.S.P.Q. at 487-88. In Oland’s, for

example, although a Canadian company used its mark extensively on

beer sold in Canada to United States citizens, because it did not sell

any beer with this mark in the United States during the required statutory period, "a prima facie case of abandonment . . . [was] shown."

Oland’s, 189 U.S.P.Q. at 488. 

Indeed, in recent years one of our sister circuits has considered and

rejected the majority’s theory in the context of facts far more favorable to the owner of the foreign trademark. See Rivard v. Linville, 133

F.3d 1446 (Fed Cir. 1998), aff’g, 41 U.S.P.Q.2d 1731 (TTAB 1997).

There, an owner of thirty-seven hair styling salons in Canada (the

majority of which were within one hour of the U.S. border) maintained that although he had not used his mark in the United States

itself, he had nonetheless "engaged in activities . . . which constitute

use of the mark in [United States] commerce." 41 U.S.P.Q.2d at 1735.

Specifically, the owner maintained that far-reaching Canadian

advertisement that extended into the United States; distribution of

coupons, gift certificates, and balloons in the United States; and, most

importantly here, purchase by a "‘significant’ United States clientele"

44 INTERNATIONAL BANCORP v. SOCIETE DES BAINS
of the salon services in Canada constituted use of his mark in the

United States sufficient to merit protection under the Lanham Act.

The TTAB concluded that "the above activities neither individually

or collectively constituted use of the . . . mark in commerce," and specifically rejected the owner’s "argument" that "travel of customers

from the United States to [his] Canadian salons" meant that those services had been rendered "in commerce" because "activity outside the

United States does not create rights in marks within the United

States." Id. at 1735-37. The Federal Circuit affirmed, explaining that

"a prima facie case" had been established that the owner abandoned

his mark "because he did not use it in connection with hairdressing

and beauty salon services in the United States during the relevant time

period." 133 F.3d at 1449. 

In sum, as the cases and commentary make clear, a mark cannot

satisfy the use in commerce requirement sufficient to merit protection

under the Lanham Act without a claimant showing use in the United

States. Indeed, I have failed to find, and the majority fails to cite, a

single case in which a court has accorded trademark rights to a foreign mark holder absent a showing of use in the United States. Moreover, as all of the existing authorities to address this issue have

concluded, such use requires that both the advertising that employs

the mark and the rendering of the services to which the mark attaches

take place in the United States. Advertising in the United States alone,

no matter how extensive, does not suffice to demonstrate the necessary use in the United States. 

Before concluding, I must note the potential consequences of adoption of the majority’s rule. The rule announced by the majority today

would mean that any entity that uses a foreign mark to advertise and

sell its goods or services to United States citizens in a foreign country

would be eligible for trademark protection under United States law.7

7

It is worth noting here that, contrary to the majority’s suggestion, ante

at 16, proof of distinctiveness by way of secondary meaning does not

necessarily operate as a check on the massive expansion of protection

that would be accorded to foreign marks used solely in foreign countries

under the majority’s "use in commerce" holding. This is so because if a

mark is inherently distinctive, the mark holder need not offer any proof

of secondary meaning in order to receive protection. See, e.g., Two

Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768 (1992). 

INTERNATIONAL BANCORP v. SOCIETE DES BAINS 45
Such a rule threatens to wreak havoc over this country’s trademark

law and would have a stifling effect on United States commercial

interests generally. Before investing in a mark, firms and individuals

would be forced to scour the globe to determine when and where

American citizens had purchased goods or services from foreign subjects to determine whether there were trademarks involved that might

be used against them in a priority contest or in an infringement action

in the United States.8 On the other hand, SBM and companies like it

would, under the majority’s rule, suddenly acquire a windfall of

potential United States trademark rights for all of the goods and services advertised to and purchased by United States citizens while

traveling in their countries. Like some sort of foreign influenza, these

new entitlements would accompany American travelers on their

return home, creating a vast array of new duties for individuals in the

United States seeking to use the same or similar marks on goods or

services sold in the United States. 

Of course, if the law required us to permit this sort of reverse imperialism, whereby foreign subjects would be allowed to colonize

American markets with their foreign trademarks based on sales conducted exclusively abroad, we would have no choice but to allow it.

But the law does not compel this. Rather, the majority’s new theory

is contrary to all extant authority. Applying this authority here leads

to only one conclusion: SBM’s use in Monaco of its "Casino de

Monte Carlo" mark does not constitute "use in commerce" of the

United States sufficient to gain protection under the Lanham Act.

Therefore, the grant of summary judgment to SBM should be reversed.9

8Although I appreciate the majority’s concern with the policy objective

of avoiding consumer confusion, ante at 35, I do not see how its rule

would enhance the ability of trademark law to achieve this objective.

Indeed, by allowing foreign mark holders to acquire trademark protection

in the United States for goods and services sold exclusively abroad, the

majority’s rule would likely generate a whole new set of trademark disputes in the United States, exacerbating consumer confusion in the process. Moreover, for the reasons mentioned in the text, the "notice"

function of trademarks vis-a-vis other firms would be severely undermined by the majority’s rule. See Zazu, 979 F.2d at 503 (discussing

notice function of "use" requirement under U.S. trademark law). 

9Nor does the "famous marks" doctrine provide SBM any refuge. That

doctrine has been applied so seldom (never by a federal appellate court

46 INTERNATIONAL BANCORP v. SOCIETE DES BAINS
On this ground, the plaintiff companies were entitled to judgment as

a matter of law. 

B.

My friends in the majority respond, at length but without effect, to

the above analysis. See ante at 19-36. It is unclear to me precisely

what they believe the cases, the TTAB decisions, and the treatises discussed above mean by their repeated directive that the statutory use

in commerce requirement mandates use in the United States. See ante

at 23-24 n.7. What is clear is that the majority contends that this

directive does not require that both elements of the statutory use in

commerce requirement occur in the United States. For, according to

the majority, existing authority, with only two exceptions, presents no

obstacle to the majority’s own view that the second element of use in

commerce — the rendering of services — need not occur in the

United States. To bolster that argument, the majority valiantly tries to

distinguish the wealth of authority discussed above. But its distinctions rest on a misreading of the cases. In truth, contrary to the majority’s assertions, the new rule it announces today does place our court

squarely in conflict with at least two of our sister circuits, the TTAB,

and all other existing authority on this issue. 

First, the Federal Circuit has clearly and repeatedly embraced a

rule that directly conflicts with the majority’s. See, e.g., Rivard v. Linville, 133 F.3d 1446 (Fed. Cir. 1998), aff’g 41 U.S.P.Q.2d 1731

(TTAB 1997); Person’s, 900 F.2d at 1567-69; see also Imperial

Tobacco, 899 F.2d at 1579 noting that "‘use’ and ‘nonuse’ [of a trademark] mean use and nonuse in the United States"). The majority mistakenly attempts to diminish Rivard’s precedential value, by

explaining at length that this 1998 opinion was preceded by a prior

unpublished opinion vacating an earlier TTAB decision. See ante at

25-27. In fact, the Federal Circuit’s 1998 opinion does indeed constiand only by a handful of district courts) that its viability is uncertain. Perhaps for this reason, SBM conceded in the district court that it could not

prevail on a famous marks argument without showing "some use" of its

mark in the United States. See J.A. 196. Since SBM has shown no use

of its mark in the United States, this concession forecloses appellate pursuit of this argument. 

INTERNATIONAL BANCORP v. SOCIETE DES BAINS 47
tute recent precedent on this precise issue, and clearly holds that the

TTAB correctly concluded that "activity outside of the United States

does not create rights in marks within the United States," 41

U.S.P.Q.2d at 1736; Rivard, 133 F.3d at 1449-50. The resulting rule

is unambiguous: in order for a service mark to qualify for U.S. trademark protection, the services to which that mark attaches must be rendered in commerce in the United States. 

The majority’s attempt to distinguish Person’s is equally misguided. For the majority contends that the Person’s court, in holding

that a foreign mark on goods sold abroad to a United States consumer

was not used in the United States and so not subject to U.S. trademark

protection, was relying on the fact that there had been only "foreign

advertising of [the] product to foreign consumers." See ante at 23-24.

But, in fact, Person’s involved a mark for goods, not services; under

the Lanham Act, as long as a mark is attached to the goods it signifies, there is no advertising requirement akin to that pertaining to service marks. See 15 U.S.C.A. § 1127 (paragraph 16). This was clearly

the case in Person’s, where the court specifically found that the Japanese clothing manufacturer had "applied a stylized logo bearing the

name ‘PERSON’S’ to clothing in his native Japan," and that a United

States citizen "purchased several clothing items bearing the ‘PERSON’S’ logo and returned with them to the United States." 900 F.2d

at 1566-67. Thus, the Person’s court could not have been relying on

the lack of U.S. advertising as the basis for its holding; instead, it

must have grounded its conclusion that the mark had not been used

in the United States, and for that reason did not qualify for U.S. trademark protection, on the fact that the goods had not been sold in the

United States. Although the majority does not suggest that the Person’s holding was incorrect, applying the majority’s new rule to the

facts of Person’s would lead to a holding exactly the opposite of that

reached by the Federal Circuit. Because the mark owner in Person’s

sold his goods (with mark attached) to a U.S. citizen, those goods

were, under the majority’s new rule, sold in foreign commerce of the

United States, thereby making the mark eligible for U.S. trademark

protection. 

The majority’s new rule also conflicts with the Second Circuit’s

view on this question. In addition to rejecting my analysis of Buti,

ante at 27, the majority dismisses the more recent Second Circuit

48 INTERNATIONAL BANCORP v. SOCIETE DES BAINS
opinion in Morningside, 182 F.3d 133, which eliminates any doubt as

to the correctness of my analysis of Buti. Ante at 27 n.10. In Morningside, the Second Circuit explained that a foreign financial services

firm, unlike the Italian cafe owner in Buti, did have a valid mark

under United States law because: 

this is not a case like Buti v. Impressa Perosa, S.R.L., 139

F.3d 98 (2d Cir. 1998), in which the service mark claimant

did not provide its actual business services (the conduct of

a restaurant business) in the United States, but only advertised and promoted those services in the United States. Mere

advertising and promotion of a mark in this country are not

enough to constitute "use" of the mark "in commerce," so as

to bring the activity within the scope of the Lanham Act (id.

at 105). By contrast, here Morningside Group does conduct

material aspects of its investment services in the United

States. 

Morningside, 182 F.3d at 138. 

The majority also ignores the fact that the Buti court itself, 139

F.3d at 103-05, after holding that the foreign mark holder’s promotional "activities in the United States were insufficient to establish

‘use in commerce’ of the Fashion Cafe name absent proof that [it]

offered any restaurant services in United States commerce," explicitly

embraced the TTAB rule adopted in Rivard, 41 U.S.P.Q.2d 1735-37,

and Mother’s Restaurant, 218 U.S.P.Q. at 1047-48 — the two TTAB

cases that the majority explicitly concedes are "on point" with this

case but which reach a contrary conclusion. See ante at 23, 30-36;

Buti, 139 F.3d at 105 ("We take particular comfort in our reliance on

the TTAB decisions cited above [i.e., Mother’s Restaurants and

Rivard] because the principles enunciated therein rest on solid footing."). As the Buti Court explained, the basic principle animating

these TTAB decisions has long been recognized by the Supreme

Court. Id. at 105 (quoting United Drug Co. v. Theodore Rectanus,

Co., 248 U.S. 90, 98 (1918) ("[T]hat a trademark right is not limited

in its enjoyment by territorial bounds, is true only in the sense that

wherever the trade goes attended by the use of the mark, the right of

INTERNATIONAL BANCORP v. SOCIETE DES BAINS 49
the [markholder] . . . will be sustained." (emphasis added by Buti

court)).10

Furthermore, all of the other federal appellate decisions, which I

have cited and the majority has rejected, do, in fact, explicitly

embrace the general principle that United States trademark rights, or

trade dress rights, cannot be based on "use" of the trademark or trade

dress in a foreign country. See Fuji Photo Film, 754 F.2d at 599;

Patou, 495 F.2d at 1270 n.4; Logical Games, 719 F.2d at 1239; see

also Rogers v. Ercona Camera Corp., 277 F.2d 94, 97 (D.C. Cir.

1960) ("We take it as settled that ownership rights in a trademark in

the United States, in the case of private persons, exist only as an

appurtenance to a manufacturing or marketing business conducted in

the United States in which the mark is used." (footnote providing citation omitted)). The majority tries to distinguish these cases on the

ground that although they admittedly involved exclusively "foreign

use" such "‘foreign use’ . . . is not what is before us today" given the

purchase of casino services by United States citizens in Monaco. Ante

at 27.11 But there is nothing in any of these cases (or any of the other

cases cited in part I.A above) to suggest that the purchase of goods

10This principle — that the trade upon which the trademark is based

(i.e. the goods or services to which the mark attaches) must reach those

markets in which the trader seeks protection — inevitably leads to the

conclusion that foreign conduct that does not reach United States markets

does not suffice as a basis for according eligibility for U.S. trademark

rights. See United Drug, 248 U.S. at 98; Hanover Star Milling Co. v.

Metcalf, 240 U.S. 403, 416-17 (1916) ("But the mark, of itself, cannot

travel to markets where there is no article to wear the badge and no trader

to offer the article. . . . [T]he trade-mark right assigned" cannot be

"greater in extent than the trade in which it [is] used." (internal quotation

marks omitted)). The majority’s rule turns this principle on its head.

Under its rule, whenever United States citizens go into foreign markets

to purchase goods or services, they render any foreign marks attached to

those goods and services eligible for trademark protection in United

States markets. 

11The majority also suggests that some language in Logical Games

"portend[s] something akin to the very case before us today." Ante at 27.

Actually, when read in context, it is clear that this language merely refers

to situations in which an American importer purchases goods abroad and

sells them in the United States. 

50 INTERNATIONAL BANCORP v. SOCIETE DES BAINS
or services by American citizens traveling abroad would somehow

render the use of trademarks to sell those goods or services no longer

"foreign." The crux of the matter, again, is whether the claimant can

demonstrate use in the United States. 

As for the numerous TTAB decisions holding that eligibility for

trademark protection requires use in the United States, the majority

dismisses most of them as inapposite and rejects the two (Rivard, 41

U.S.P.Q.2d at 1735-37, and Mother’s Restaurants, 218 U.S.P.Q. at

1047-48) that it concedes are "on point." Ante at 30-35. In fact, the

assertedly "inapposite" cases are not inapposite at all; each supports

the basic rule that foreign "use," including sales to United States citizens traveling abroad, does not entitle a foreign mark to eligibility for

trademark protection under United States law.12

12Thus, Techex cites the rule announced in Mother’s Restaurants, supporting the conclusion that, for the TTAB at least, there is no valid distinction between foreign use that involves the purchase of goods or

services by U.S. citizens traveling abroad and foreign use that does not

involve such purchases. 220 U.S.P.Q at 83. Stagecoach Properties cites

the same principle to reject the argument that use of a mark to sell hotel

and restaurant services to United States citizens in Mexico sufficed to

create U.S. trademark rights. 199 U.S.P.Q. at 349. 

In Oland’s, the Board concluded that the Canadian brewer had abandoned its American registration of the SCHOONER mark in the United

States, even though the Canadian company had advertised with its mark

extensively in the United States and even though United States citizens

had purchased the company’s beer in Canada. Oland’s, 189 U.S.P.Q. at

482-83. Thus, although the Board concluded that a prima facie case of

abandonment had been shown because the Canadian brewer had not sold

any beer under the SCHOONER mark "in commerce which may be lawfully regulated by Congress," id. at 488, it did so on facts identical to

those in this case (U.S. advertising plus sales to U.S. citizens in a foreign

country). 

Finally, in Sterling Drug, a goods case, the TTAB concluded that even

though the German manufacturer had provided its drug "denoted as

TALUSIN" to doctors who then prescribed it to United States citizens in

Germany, such use did not qualify as "use in commerce" sufficient to

merit protection under the Lanham Act. 159 U.S.P.Q. at 630-31. In

attempting to distinguish this case on the ground that the advertising

there was insufficient to merit trademark protection, the majority makes

the same mistake it made in trying to distinguish Person’s, i.e. importing

the advertising requirement for service mark protection to trademark protection for goods. 

INTERNATIONAL BANCORP v. SOCIETE DES BAINS 51
Moreover, the majority’s two reasons for rejecting Rivard and

Mother’s Restaurants — that "there is no other precedent to support

these two decisions," ante at 30-31, and that their reasoning is in error

because they "conflate" the two distinct elements of the use in commerce requirement, ante at 20 — do not withstand scrutiny. First, as

demonstrated above, both the Federal Circuit and the Second Circuit

have explicitly embraced the rule articulated in the TTAB’s Rivard

and Mother’s Restaurants decisions, see Rivard, 133 F.3d 1446, and

Buti, 182 F.3d at 103-105, and every other court has adopted an

approach entirely consistent with those TTAB decisions. Second, in

both Rivard and Mother’s Restaurants, the TTAB, in expressly refusing to embrace an interpretation of use in commerce like that of the

majority, took great pains not to "conflate" the two elements of the

use in commerce requirement. 

Thus, in the TTAB’s 1997 decision in Rivard (not the earlier 1993

decision quoted by the majority), the Board canceled a United States

mark registered by the owner of Canadian beauty salons because the

Canadian owner had failed to demonstrate use in the United States,

even though (1) he had engaged in extensive advertising that reached

the United States; and (2) his beauty salon services had been sold to

a "significant United States clientele." 41 U.S.P.Q.2d at 1735-36. In

doing so, the Board took care to separate the two elements of the use

in commerce requirement: 

We reject respondent’s argument that through his advertising, he has used the mark ULTRACUTS in the United

States since 1986. Under Section 45 of the Trademark Act,

a mark is deemed to be used in commerce on services 

when it is used or displayed in the sale or advertising of services and the services are rendered in

commerce. . . . [emphasis added by TTAB] 

Similarly, we reject respondent’s argument that his services are rendered in commerce because commerce is

affected by the travel of customers from the United States

to respondent’s Canadian salons. . . . This case is readily

distinguishable [from the single-location service provider

cases cited by respondent] as respondent rendered no hair

52 INTERNATIONAL BANCORP v. SOCIETE DES BAINS
dressing and beauty salon services in the United States during the relevant time period. 

. . . . 

It is well settled that activity outside the United States

does not create rights in marks within the United States. See

Stagecoach Properties, Inc. v. Wells Fargo & Company,

199 U.S.P.Q. 341 (TTAB 1978). The concept of territoriality is basic to trademark law. See Person’s Co. Ltd. v.

Christman, 900 F.2d 1565, 14 U.S.P.Q.2d 1477 (Fed. Cir.

1990). Thus, the fact that United States residents have

availed themselves of respondent’s services while in Canada

does not constitute technical trademark use of respondent’s

service mark which is sufficient to obtain or maintain a registration in the United States. 

Id. at 1736-37. 

There is no conflation of the two elements of use in commerce

here. In fact, the Board’s conclusion is unambiguous: mere advertising that reaches the United States is not enough to constitute use in

commerce; rather, such advertising must be combined with a rendering of services in the United States in order to "constitute technical

trademark use of respondent’s service mark" and thereby "obtain or

maintain a registration in the United States." Id. at 1737. Thus, contrary to the majority’s assertion, ante at 32, the Board did in fact "reject a position similar to that present here" (indeed, the relevant facts

are identical to those here: advertising that reaches the United States

plus purchase of services by United States citizens abroad) to reach

precisely the opposite conclusion — "that no qualifying commerce

was present." While the majority may disagree with the Board’s conclusion (and with the Federal Circuit’s published affirmance of this

conclusion, 133 F.3d 1446), it can not fairly do so on the ground that

the Board’s reasoning somehow conflated the two elements of use in

commerce. 

The same is true for Mother’s Restaurants, which presents a virtually identical set of facts in the context of a priority contest. In that

case, the opposer argued that advertising of Canadian restaurant serINTERNATIONAL BANCORP v. SOCIETE DES BAINS 53
vices that reached into the United States combined with purchase of

those services by United States citizens traveling in Canada sufficed

to establish priority of use in the United States. 218 U.S.P.Q. at 1047-

48. In rejecting this claim, the Board certainly did not engage in anything approaching the elaborate "use in commerce" analysis advanced

by the majority today. But the Board, like every court to address this

issue, clearly saw no reason to do so because it determined that advertising that reached American consumers could not by itself provide

the basis for trademark protection in the United States absent a showing of "use of the mark on goods or services sold and/or offered in

the United States." 218 U.S.P.Q. at 1048. Thus, the Board recognized

and correctly addressed both elements necessary to establish priority

of use in disposing of opposer’s claim. That it reached a contrary conclusion from the majority when confronted with the same set of relevant facts simply illustrates, once again, the extent to which the

majority’s rule breaks with all prior authority on the matter. 

II.

Even if my colleagues in the majority had correctly resolved the

"use in commerce" issue, I would nonetheless have to dissent. This

is so because, contrary to their holding, the district court erred in

resolving disputed material facts when granting summary judgment to

SBM on the secondary meaning issue and applied an improper secondary meaning analysis. 

A.

The majority properly acknowledges both that the district court

decided the case on cross motions for summary judgment and that in

doing so the court engaged in factfinding. Ante at 4-5. However, the

majority apparently believes that this was justified because the parties

agreed to submit on the "voluminous record" to a bench trial and "did

not contradict one another’s proffered facts, but only disputed the

inferences that a fact-finder could draw from those underlying facts."

Id. at 4. In truth, the parties never agreed to submit on the "voluminous record" to a bench trial. Rather, the parties and the district court

agreed that the court would review that record and, on the basis of it,

grant summary judgment to the appropriate party, unless the court

54 INTERNATIONAL BANCORP v. SOCIETE DES BAINS
determined that material factual disputes required a trial, in which

case the court would hold a trial. 

Thus, the district court was not entitled to find facts and resolve

conflicting inferences at this stage of the proceedings. Nor was it

allowed to draw reasonable inferences from the facts before it as if

it were a factfinder. Indeed, given the posture of the case, the court

was required to resolve all inferences in favor of the non-moving

party. Because the plaintiff companies opposed SBM’s motion for

summary judgment on trademark infringement, they were entitled to

all such favorable inferences in the context of the secondary meaning

inquiry. See United States v. Diebold Inc., 369 U.S. 654, 655 (1962)

("On summary judgment the inferences to be drawn from the underlying facts . . . must be viewed in the light most favorable to the party

opposing the motion."); Rossignol v. Voorhaar, 316 F.3d 516, 523

(4th Cir. 2003) ("When faced with cross-motions for summary judgment, the court must review each motion separately on its own merits

‘to determine whether either of the parties deserves judgment as a

matter of law.’. . . When considering each individual motion, the

court must take care to ‘resolve all factual disputes and any competing, rational inferences in the light most favorable’ to the party opposing that motion." (citations omitted)). 

The small portion of transcript quoted by the majority, when considered in context, does not suggest that the parties ever agreed to

anything other than the attempted resolution of the case via summary

judgment. Both before and after the exchange quoted by the majority,

which for clarity I emphasize in the material quoted below, the district

court and the parties made their intentions clear:

THE COURT: . . . I am going to proceed to scour the

record, if you all submit it to the Court on summary judgment, and I will make my own determinations under Rule

56, Local Rule 56(b) and the like, and I will see what I ultimately come up with. If you have some concerns about that,

we will go ahead and have a trial on Monday. 

[Counsel for plaintiff companies]: . . . . we would submit

with the record to the Court for consideration without a trial.

. . . 

INTERNATIONAL BANCORP v. SOCIETE DES BAINS 55
. . . .

THE COURT: So then it seems to me that the most efficient

way to proceed is to decide now — is for me to decide

whether there is a necessity for a trial. It seems to me that

there are no experts. I have excluded the plaintiff’s. That

would have been an issue of dispute, presumably. . . . so

there is really no reason why the Court should not dispose

of this matter on the current record; isn’t that right? 

[Counsel for plaintiff companies]: I believe that’s correct,

your Honor. 

. . . .

[Counsel for SBM]: I think that sounds sensible, your

Honor. 

. . . .

[Counsel for plaintiff companies]: That’s exactly what I

would ask for, your Honor.

. . . . .

THE COURT: . . . I will now proceed to attack this matter

on the basis of the existing summary judgment record. 

. . . . If there is a potential hearing, it will be in two weeks

or three weeks or four weeks, when I get to the bottom. 

[Counsel for SBM]: Okay. 

THE COURT: There is always the possibility — I don’t see

it happening in this case, but I have had the experience of

a voluminous record where counsel and I thought it was

properly disposable on summary judgment, and when I

finally got through working my way through this voluminous record, out popped a disputed issue of fact that I had

56 INTERNATIONAL BANCORP v. SOCIETE DES BAINS
to call to the parties’ attention. And that may happen, but I

don’t think so. I don’t think so. 

. . . .

In any event, so unless I hear from counsel jointly on Monday on this issue, I will assume that I will proceed on the

summary judgment issue — on the summary judgment

record, and then I will ask for oral argument only if it’s

needed. 

I will enter an order today indicating that. . . . 

J.A. 998-1005 (emphasis added to indicate portion of transcript

quoted by majority). 

That very day the district court did issue an order stating: "The parties, by counsel, agreed that the matter should be submitted to the

Court on the existing summary judgment record. Should further oral

argument be necessary, the parties will be advised." Order, December

7, 2001 (emphasis added). 

Moreover, after filing its initial memorandum opinion granting

summary judgment to SBM, when the district court reopened the proceedings on the plaintiff companies’ motion for reconsideration, the

court continued to recognize that the matter would be resolved either

on summary judgment or after an actual trial, if the court determined

that there were disputed issues of fact. For example, the court noted

that "Rule 56(e) requires a party opposing summary judgment to submit affidavits setting forth specific facts showing that there is a genuine issue for trial." J.A. 1020-21. In a later exchange with counsel for

SBM, the court again remarked, "[y]our predecessor indicated in

court that he thought it was appropriate to submit it on summary judgment. . . . So you need to have that in mind. Now — but I want to

get these issues correct, and so if the record needs [to be] reopened

for either side, I will do so, and try the matter if necessary." J.A.

1023. The district court also recognized that "[t]he Celotex trilogy of

cases . . . govern in this case." J.A. 1024-25. Finally, the court stated

that in its view, "the defendants either prevail or don’t prevail on sumINTERNATIONAL BANCORP v. SOCIETE DES BAINS 57
mary judgment on the record as it existed at the time the original

memorandum opinion issued." J.A. 1041. 

Given all of these statements and the fact that the court ultimately

granted SBM summary judgment, JA 1115, it is clear that the majority

is mistaken in concluding that the parties "agreed to submit the voluminous record to the court" for a bench trial. Ante at 4. The parties

agreed only to submit the voluminous record as it stood — without

further evidence or witnesses — for determination on summary judgment, if that was possible, i.e., only if, as the district court put it, no

"disputed issue of fact . . . popped out," J.A. 1003, after the court

reviewed the record. Therefore, the district court’s resolution of material factual disputes and conflicting inferences from the submitted

facts when granting summary judgment constituted error, which the

majority compounds with its attempted justification. 

B.

The district court’s error in resolving material factual disputes

infected its holding on secondary meaning. In addition, the district

court erred in the manner in which it conducted its secondary meaning inquiry. 

In order to receive trademark protection for a geographically

descriptive mark like "Casino de Monte Carlo" the party seeking protection must prove not only that the mark was used in commerce but

also that the mark has attained secondary meaning. Perini Corp. v.

Perini Constr., Inc., 915 F.2d 121, 125 (4th Cir. 1990).13 A party

establishes secondary meaning "when, ‘in the minds of the public, the

primary significance of [the mark] is to identify the source of the

product rather than the product itself.’" Wal-Mart Stores, Inc. v.

Samara Bros., Inc., 529 U.S. 205, 211 (2000) (quoting Inwood Labs.,

Inc. v. Ives Labs., Inc., 456 U.S. 844, 851 n. 11 (1982)); see also

Resorts of Pinehurst, Inc. v. Pinehurst Nat’l Corp., 148 F.3d 417, 421

13For those marks found to be inherently distinctive, the mark holder

would not need to offer any proof of secondary meaning to merit protection (assuming, of course, that the mark also satisfies the use in commerce requirement). See, e.g., Two Pesos, Inc. v. Taco Cabana, Inc., 505

U.S. 763, 768 (1992). 

58 INTERNATIONAL BANCORP v. SOCIETE DES BAINS
(4th Cir. 1998) ("Secondary meaning has been established in a geographically descriptive mark where the mark no longer causes the

public to associate the goods with a particular place, but to associate

the goods with a particular source." (internal quotation marks, alteration, and citation omitted)). 

In this circuit, "[p]roof of secondary meaning entails vigorous evidentiary requirements." Perini, 915 F.2d at 125 (listing six factors

"relevant to" but "not dispositive of" secondary meaning inquiry —

"(1) advertising expenditures; (2) consumer studies linking the mark

to a source; (3) sales success; (4) unsolicited media coverage of the

product; (5) attempts to plagiarize the mark; and (6) the length and

exclusivity of the mark’s use" (internal quotation marks and citation

omitted)). Ordinarily, a party claiming trademark protection must

meet its burden on secondary meaning by offering proof under the

Perini factors. We held, in Larsen v. Terk Technologies Corp., 151

F.3d 140, 148-49 (4th Cir. 1998), however, that evidence of "intentional, direct copying" of a mark, provides the party claiming protection with "a presumption of secondary meaning." Under the Larsen

rule, if the alleged infringer fails to rebut that presumption, the party

claiming infringement is entitled to judgment. Id.

But even if the Larsen presumption did apply here,14 it must be

properly applied. In Larsen, we expressly held that an alleged

infringer could rebut the presumption. Id. at 148 (noting that evidence

of intentional, direct copying creates a presumption entitling the party

claiming infringement to judgment "in the absence of rebutting

proof"). Because the alleged infringer in Larsen "failed to rebut the

presumption," we did not there address the question of the effect of

such rebuttal evidence. However, the ultimate burden of proof always

remains on the one asserting a claim. See St. Mary’s Honor Ctr. v.

Hicks, 509 U.S. 502, 507 (1993); Fed. R. Evid. 301. Therefore,

Larsen must be read as consistent with Fed. R. Evid. 301, which provides that "a presumption imposes on the party against whom it is

directed the burden of going forward with evidence to rebut or meet

14Of course, I do not believe the Larsen presumption applies here

because copying a foreign trademark that has not been used or registered

in the United States violates no law of this country. See, e.g., Buti, 139

F.3d at 106; Person’s, 900 F.2d at 1570. 

INTERNATIONAL BANCORP v. SOCIETE DES BAINS 59
the presumption, but does not shift to such party the burden of proof

in the sense of risk of nonpersuasion, which remains throughout the

trial upon the party on whom it was originally cast." Thus, evidence

proffered by an alleged infringer that rebuts the Larsen presumption

shifts the burden of establishing secondary meaning back to the party

seeking protection, who must then make the requisite showing under

the Perini factors that its mark had in fact attained secondary meaning. 

Properly applied to the case at hand, this would mean that the

plaintiff companies’ extensive evidence rebutting the presumption of

secondary meaning, including abundant third-party use of the Casino

de Monte Carlo mark by both land-based and web-based casinos

located in the United States, at least some of which SBM conceded

it knew of yet made no effort to eliminate, would shift the burden of

proof on this issue back to SBM. At that point, SBM should have

been required to prove secondary meaning under the Perini factors.

The district court, however, did not interpret Larsen in this way and

so did not require SBM, the party seeking protection, to prove that its

mark had, in fact, attained secondary meaning.15

Instead, the district court found that the Larsen presumption

applied, even though "there [w]as no direct evidence of intentional

copying," because "inferring intent of the plaintiff companies is

proper given that the putative infringing term is identical to SBM’s

mark and the infringing use is in the same relevant market: gambling

services." Assuming such an inference is permissible, surely the

plaintiff companies’ evidence of similar extensive third-party use

(known and undisturbed by SBM) should have been considered as

rebutting the presumption of secondary meaning, thereby shifting the

burden of proof back to SBM on that issue. But that did not happen.

Upon concluding that the Larsen presumption applied, the district

court then determined not whether SBM had proved secondary mean15Contrary to the majority’s suggestion, the district court did not "employ[ ] two distinct analyses to assess the secondary meaning," beginning

with the "traditional Perini analysis" and then "furthermore" proceeding

under Larsen. See ante at 17-18. Rather, the district court first applied

the Larsen presumption and then considered the Perini factors in light of

this presumption. 

60 INTERNATIONAL BANCORP v. SOCIETE DES BAINS
ing but whether the plaintiff companies had "show[n] that the Perini

factors weigh against secondary meaning." (Emphasis added). Thus

the district court placed the burden of proof on the wrong party —

requiring the alleged infringer to prove no secondary meaning, rather

than requiring SBM to prove secondary meaning. 

The district court also made improper factual determinations in

resolving the matter in SBM’s favor. For example, the district court

determined that the extensive third-party use of the mark, constituted

evidence of "plagiarism." Yet a fact-finder could well infer from this

evidence that SBM’s "Casino de Monte Carlo" mark was not distinctive enough to have achieved the requisite level of secondary meaning

necessary to merit protection under United States law. See, e.g., Echo

Travel, Inc. v. Travel Assoc., Inc., 870 F.2d 1264, 1269 (7th Cir.

1989) (stating that evidence of "third party use of a substantially similar mark to promote the same goods or services to the same consumer

class weighs against a finding that the consumer class associates the

mark with one source" (emphasis in original)).16

Similarly, the district court ignored the evidence of SBM’s failure

to police its mark in any systematic or vigorous way; yet a fact finder

could conclude from this evidence that SBM’s mark had lost any distinctiveness that it may have had. See McCarthy, § 17:17 ("‘Without

question, distinctiveness can be lost by failing to take action against

infringers. If there are numerous products in the marketplace bearing

the alleged mark, purchasers may learn to ignore the "mark" as a

source identification. When that occurs, the conduct of the former

16The majority’s recognition, ante at 5 n.4, 18, that conflicting inferences could be drawn from the plaintiff companies’ evidence of thirdparty use simply confirms, once again, that the district court erred in

drawing the inferences it did given that it decided the case on summary

judgment. Because the plaintiff companies were the non-moving party on

the issue of secondary meaning, any such inferences should have been

viewed and resolved in the light most favorable to them. See Diebold,

369 U.S. at 655; Harley-Davidson Motor Co., Inc. v. Powersports, Inc.,

319 F.3d 973, 989 (7th Cir. 2003) ("The phrase in the light most favorable to the nonmoving party . . . simply means that summary judgment

is not appropriate if the court must make a choice of inferences." (internal quotation marks and citation omitted)). 

INTERNATIONAL BANCORP v. SOCIETE DES BAINS 61
owner, by failing to police its mark, can be said to have caused the

mark to lose its significance as a mark.’" (quoting Wallpaper Mfrs.,

Ltd. v. Crown Wallcovering Corp., 680 F.2d 755, 766 (C.C.P.A.

1982)). 

For these reasons, I would conclude that, even if the plaintiff companies were not entitled to summary judgment on the use in commerce question (which I believe they were), they have produced

sufficient evidence to raise genuine issues of material fact as to

whether SBM shouldered its burden under the Perini factors. Accordingly, even if the majority’s holding on "use in commerce" were correct, I would reverse the district court’s grant of summary judgment

to SBM.

62 INTERNATIONAL BANCORP v. SOCIETE DES BAINS