Source: https://supreme.justia.com/cases/federal/us/344/280/
Timestamp: 2019-04-26 01:45:10+00:00

Document:
Justia › US Law › US Case Law › US Supreme Court › Volume 344 › Steele v. Bulova Watch Co., Inc.
Under the Lanham Trade-Mark Act of 1946, 15 U.S.C. § 1051 et seq., a federal district court has jurisdiction to award relief to an American corporation against acts of trademark infringement and unfair competition consummated in a foreign country by a citizen and resident of the United States who purchases parts here and some of whose products, sold abroad, enter this country where they may reflect adversely on the American corporation's trade reputation. Pp. 344 U. S. 281-289.
(a) It is not material that the infringing trademark was affixed in a foreign country, or that the purchase of parts in this country, when viewed in isolation, did not violate any law of the United States. P. 344 U. S. 287.
(b) American Banana Co. v. United Fruit Co., 213 U. S. 347, distinguished. Pp. 344 U. S. 288-289.
(c) Where there can be no interference with the sovereignty of another nation, the district court, in exercising its equity powers, may command persons properly before it to cease or perform acts outside its territorial jurisdiction. P. 344 U. S. 289.
A Federal District Court dismissed a suit for injunctive and monetary relief brought by an American corporation against a citizen and resident of the United States for acts of trademark infringement and unfair competition consummated in Mexico. The Court of Appeals reversed. 194 F.2d 567. This Court granted certiorari. 343 U.S. 962. Affirmed, p. 344 U. S. 289.
"since the conduct complained of substantially related solely to acts done and trade carried on under full authority of Mexican law, and were confined to and affected only that Nation's internal commerce, [the District Court] was without jurisdiction to enjoin such conduct. [Footnote 5]"
We granted certiorari, 343 U.S. 962.
on construction of exercised congressional power, not the limitations upon that power itself. And since we do not pass on the merits of Bulova's claim, we need not now explore every facet of this complex [Footnote 6] and controversial [Footnote 7] Act.
into between the United States and foreign nations."
§ 45, 15 U.S.C. § 1127. To that end, § 32(1) holds liable in a civil action by a trademark registrant "[a]ny person who shall, in commerce," infringe a registered trademark in a manner there detailed. [Footnote 8] "Commerce" is defined as "all commerce which may lawfully be regulated by Congress." § 45, 15 U.S.C. § 1127. The district courts of the United States are granted jurisdiction over all actions "arising under" the Act, § 39, 15 U.S.C. § 1121, and can award relief which may include injunctions, [Footnote 9] "according to the principles of equity," to prevent the violation of any registrant's rights. § 34, 15 U.S.C. § 1116.
the rights of other nations or their nationals are not infringed. With respect to such an exercise of authority, there is no question of international law, but solely of the purport of the municipal law which establishes the duty of the citizen in relation to his own government."
"Congress has the power to prevent unfair trade practices in foreign commerce by citizens of the United States, although some of the acts are done outside the territorial limits of the United States."
owners, even prior to the advent of the broadened commerce provisions of the Lanham Act. [Footnote 12] George W. Luft Co. v. Zande Cosmetic Co., 142 F.2d 536; Hecker H-O Co. v. Holland Food Corp., 36 F.2d 767 (1929); Vacuum Oil Co. v. Eagle Oil Co., 154 F. 867 (1907), aff'd, 162 F. 671 (1908). Cf. Morris v. Altstedter, 93 Misc. 329, 156 N.Y.S. 1103, aff'd, 173 App.Div. 932, 158 N.Y.S. 1123 (1916). Even when most jealously read, that Act's sweeping reach into "all commerce which may lawfully be regulated by Congress" does not constrict prior law or deprive courts of jurisdiction previously exercised. We do not deem material that petitioner affixed the mark "Bulova" in Mexico City, rather than here, [Footnote 13] or that his purchases in the United States, when viewed in isolation, do not violate any of our laws. They were essential steps in the course of business consummated abroad; acts in themselves legal lose that character when they become part of an unlawful scheme. United States v. Bausch & Lomb Optical Co., 321 U. S. 707, 321 U. S. 720 (1944); United States v. Univis Lens Co., 316 U. S. 241, 316 U. S. 254 (1942).
"[I]n such a case, it is not material that the source of the forbidden effects upon . . . commerce arises in one phase or another of that program."
Mandeville Island Farms v. American Crystal Sugar Co., 334 U. S. 219, 334 U. S. 237 (1948). Cf. United States v. Frankfort Distilleries, 324 U. S. 293, 324 U. S. 297-298 (1945). In sum, we do not think that petitioner, by so simple a device, can evade the thrust of the laws of the United States in a privileged sanctuary beyond our borders.
Banana case, whatever rights Mexico once conferred on petitioner its courts now have decided to take away.
Joined as parties defendant were S. Steele y Cia., S.A. a Mexican corporation to whose rights Steele had succeeded, and Steele's wife Sofia, who possessed a community interest under Texas law.
While the record shows that plaintiff fully relied on his asserted cause of action "arising under" the Lanham Act, diversity of citizenship and the jurisdictional amount were also averred. As we are concerned solely with the District Court's jurisdiction over the subject matter of this suit, we do not stop to consider the significance, if any, of those averments. Cf. Pecheur Lozenge Co. v. National Candy Co., 315 U. S. 666 (1942), decided prior to passage of the Lanham Act. See also note 6 infra.
The District Court's unreported findings of fact and conclusions of law, as amended, appear at R. 246-248. Cf. R. 232, 237.
For able Court of Appeals discussions of the impact of Erie R. Co. v. Tompkins, 304 U. S. 64 (1938), on the law prior and subsequent to the Lanham Act, see Dad's Root Beer Co. v. Doc's Beverages, Inc., 193 F.2d 77 (1951); S.C. Johnson & Son v. Johnson, 175 F.2d 176 (1949); Campbell Soup Co. v. Armour & Co., 175 F.2d 795 (1949); Stauffer v. Exley, 184 F.2d 962 (1950). See also National Fruit Product Co. v. Dwinell-Wright Co., 47 F.Supp. 499 (1942). And see Zlinkoff, Erie v. Tompkins: In Relation to the Law of Trade-Marks and Unfair Competition, 42 Col.L.Rev. 955 (1942); Bunn, The National Law of Unfair Competition, 62 Harv.L.Rev. 987 (1949).
See, e.g., Timberg, Trade-Marks, Monopoly, and the Restraints of Competition, 14 Law & Contemp.Probs. 323 (1949); cf. Brown, Advertising and the Public Interest: Legal Protection of Trade Symbols, 57 Yale L.J. 1165 (1948). Compare, e.g., Pattishall, Trade-Marks and The Monopoly Phobia, 50 Mich.L.Rev. 967 (1952); Rogers, The Lanham Act and The Social Function of Trade-Marks, 14 Law & Contemp.Probs. 173 (1949).
"Any person who shall, in commerce, (a) use, without the consent of the registrant, any reproduction, counterfeit, copy, or colorable imitation of any registered mark in connection with the sale, offering for sale, or advertising of any goods or services on or in connection with which such use is likely to cause confusion or mistake or to deceive purchasers as to the source of origin of such goods or services; or (b) reproduce, counterfeit, copy, or colorably imitate any such mark and apply such reproduction, counterfeit, copy, or colorable imitation to labels, signs, prints, packages, wrappers, receptacles, or advertisements intended to be used upon or in connection with the sale in commerce of such goods or services, shall be liable to a civil action by the registrant for any or all of the remedies hereinafter provided in this chapter. . . ."
See also § 35, 15 U.S.C. § 1117 (profits, damages and costs); § 36, 15 U.S.C. § 1118 (destruction of infringing articles); § 38, 15 U.S.C. § 1120 (damages for fraudulent registration).
Cf. 15 U.S.C. §§ 96, 124, requiring the infringing use to be "in commerce among the several States, or with a foreign nation." United States Printing & Lithograph Co. v. Griggs, Cooper & Co., 279 U. S. 156 (1929); Pure Oil Co. v. Puritan Oil Co., 127 F.2d 6 (1942).
See Vacuum Oil Co. v. Eagle Oil Co., 154 F. 867 (1907).
166 F. 261, aff'g 160 F. 184.
166 F. at 264, 266.
See also United States v. Aluminum Co. of America, 148 F.2d 416, 443-444 (1945). Cf. Ford v. United States, 273 U. S. 593, 273 U. S. 620-621 (1927); Lamar v. United States, 240 U. S. 60, 240 U. S. 65-66 (1916); Strassheim v. Daily, 221 U. S. 280, 221 U. S. 284-285 (1911).
Cf. Cole v. Cunnigham, 133 U. S. 107, 133 U. S. 117-119 (1890); Phelps v. McDonald, 99 U. S. 298, 99 U. S. 307-308 (1878); Securities and Exchange Commission v. Minas de Artemisa, S.A., 150 F.2d 215 (1945); Restatement, Conflict of Laws, §§ 94, 96. And see British Nylon Spinners, Ltd. v. Imperial Chemical Industries, Ltd.,  All Eng. 780, 782 (C.A.).
in an action by the registered holder of the trademark "any person who shall, in commerce," infringe such trademark. § 32(1), 15 U.S.C. § 1114(1). "Commerce" is defined as being "all commerce which may lawfully be regulated by Congress." § 45, 15 U.S.C. § 1127.
The Court's opinion bases jurisdiction on the Lanham Act. In the instant case, the only alleged acts of infringement occurred in Mexico. The acts complained of were the stamping of the name "Bulova" on watches and the subsequent sale of the watches. There were purchases of assembly material in this country by petitioners. Purchasers from petitioners in Mexico brought the assembled watches into the United States. Assuming that Congress has the power to control acts of our citizens throughout the world, the question presented is one of statutory construction: whether Congress intended the Act to apply to the conduct here exposed.
"The canon of construction which teaches that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States, Blackmer v. United States, [284 U.S. 421], 284 U. S. 437, is a valid approach whereby unexpressed congressional intent may be ascertained."
Foley Bros., Inc. v. Filardo, 336 U. S. 281, 336 U. S. 285. Utilizing this approach, does such a contrary intent appear in the Lanham Act? If it does, it appears only in broad and general terms, i.e., "to regulate commerce within the control of Congress. . . ." § 45, 15 U.S.C. § 1127. Language of such nonexplicit scope was considered by the Court in construing the Sherman Act in American Banana Co. v. United Fruit Co., 213 U. S. 347, 213 U. S. 357.
"Words having universal scope, such as 'every contract in restraint of trade,' 'every person who shall monopolize,' etc., will be taken, as a matter of course, to mean only everyone subject to such legislation, not all that the legislator subsequently may be able to catch."
Banana Co. case confined the Sherman Act in its "operation and effect to the territorial limits over which the law-maker has general and legitimate power." 213 U.S. at 213 U. S. 357. This was held to be true as to acts outside the United States, although the parties were all corporate citizens of the United States subject to process of the federal courts.
The generally phrased congressional intent in the Lanham Act is to be compared with the language of the Fair Labor Standards Act, which we construed in Vermilya-Brown Co. v. Connell, 335 U. S. 377. There, we held that, by explicitly stating that the Act covered "possessions" of the United States, Congress had intended that the Act was to be in effect in all "possessions," and was not to be applied merely in those areas under the territorial jurisdiction or sovereignty of the United States.
There are, of course, cases in which a statement of specific contrary intent will not be deemed so necessary. Where the case involves the construction of a criminal statute "enacted because of the right of the government to defend itself against obstruction, or fraud . . . committed by its own citizens," it is not necessary for Congress to make specific provisions that the law "shall include the high seas and foreign countries." United States v. Bowman, 260 U. S. 94, 260 U. S. 98. This is also true when it is a question of the sovereign power of the United States to require the response of a nonresident citizen. Blackmer v. United States, 284 U. S. 421. A similar situation is met where a statute is applied to acts committed by citizens in areas subject to the laws of no sovereign. See Skiriotes v. Florida, 313 U. S. 69; Old Dominion S.S. Co. v. Gilmore, 207 U. S. 398.
in illegal acts in commerce when the finished watches bearing the Mexican trademark were purchased from them and brought into the United States by such purchasers, all without collusion between petitioner and the purchaser. The stamping of the Bulova trademark, done in Mexico, is not an act "within the control of Congress." It should not be utilized as a basis for action against petitioner. The Lanham Act, like the Sherman Act, should be construed to apply only to acts done within the sovereignty of the United States. While we do not condone the piratic use of trademarks, neither do we believe that Congress intended to make such use actionable irrespective of the place it occurred. Such extensions of power bring our legislation into conflict with the laws and practices of other nations, fully capable of punishing infractions of their own laws, and should require specific words to reach acts done within the territorial limits of other sovereignties.

References: v. 
 § 1051
 v. 

§ 45
 § 1127
 § 32
 § 45
 § 1127
 § 39
 § 1121
 § 34
 § 1116
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 § 35
 § 1117
 § 36
 § 1118
 § 38
 § 1120
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 § 32
 § 1114
 § 45
 § 1127
 v. 
 v. 
 § 45
 § 1127
 v. 
 v. 
 v. 
 v. 
 v. 
 v.