Source: https://www.legalcrystal.com/case/98640/steele-vs-bulova-watch-co-inc
Timestamp: 2018-02-20 17:46:07
Document Index: 508950502

Matched Legal Cases: ['§ 1051', '§ 1051', '§ 45', '§ 1127', '§ 32', '§ 45', '§ 1127', '§ 39', '§ 1121', '§ 34', '§ 1116', '§ 1116', '§ 94', '§ 45', '§ 1127']

Steele Vs Bulova Watch Co Inc - Citation 98640 - Court Judgment | LegalCrystal
Steele Vs. Bulova Watch Co., Inc. - Court Judgment
LegalCrystal Citation legalcrystal.com/98640
Case Number 344 U.S. 280
Appellant Steele
Respondent Bulova Watch Co., Inc.
.....november 10, 1952 decided december 22, 1952 344 u.s. 280 certiorari to the united states court of appeals for the fifth circuit syllabus 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.....
Steele v. Bulova Watch Co., Inc. - 344 U.S. 280 (1952)
U.S. Supreme Court Steele v. Bulova Watch Co., Inc., 344 U.S. 280 (1952)
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 .
The issue is whether a United States 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. Bulova Watch Company, Inc., a New York corporation, sued Steele, [ Footnote 1 ] petitioner here, in the United States District Court for the Western District of Texas. The gist of its complaint charged that "Bulova," a trademark properly registered under the laws of the United States, had long designated the watches produced and nationally advertised and sold by the Bulova Watch Company, and that petitioner, a United States citizen residing in San Antonio, Texas, conducted a watch business in Mexico City where, without Bulova's authorization and with the purpose of deceiving the buying public, he stamped the name "Bulova" on watches there assembled and sold. Basing its prayer on these asserted violations of the trademark laws of the United States, [ Footnote 2 ] Bulova requested injunctive and monetary
relief. Personally served with process in San Antonio, petitioner answered by challenging the court's jurisdiction over the subject matter of the suit and by interposing several defenses, including his due registration in Mexico of the mark "Bulova" and the pendency of Mexican legal proceedings thereon, to the merits of Bulova's claim. The trial judge, having initially reserved disposition of the jurisdictional issue until a hearing on the merits, interrupted the presentation of evidence and dismissed the complaint "with prejudice" on the ground that the court lacked jurisdiction over the cause. This decision rested on the court's findings that petitioner had committed no illegal acts within the United States. [ Footnote 3 ] With one judge dissenting, the Court of Appeals reversed; it held that the pleadings and evidence disclosed a cause of action within the reach of the Lanham Trade-Mark Act of 1946, 15 U.S.C. 1051 et seq.. [ Footnote 4 ] The dissenting judge thought that,
"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 ]"
Petitioner concedes, as he must, that Congress, in prescribing standards of conduct for American citizens, may project the impact of its laws beyond the territorial boundaries of the United States. Cf. Foley Bros., Inc. v. Filardo, 336 U. S. 281 , 336 U. S. 284 -285 (1949); Blackmer v. United States, 284 U. S. 421 , 284 U. S. 436 -437 (1932); Branch v. Federal Trade Commission, 141 F.2d 31 (1944). Resolution of the jurisdictional issue in this case therefore depends
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.
§ 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.
"Bulova." He subsequently transferred his business to Mexico City, and, discovering that "Bulova" had not been registered in Mexico, in 1933 procured the Mexican registration of that mark. Assembling Swiss watch movements and dials and cases imported from that country and the United States, petitioner, in Mexico City, stamped his watches with "Bulova" and sold them as such. As a result of the distribution of spurious "Bulovas," Bulova Watch Company's Texas sales representative received numerous complaints from retail jewelers in the Mexican border area whose customers brought in for repair defective "Bulovas" which, upon inspection ,often turned out not to be products of that company. Moreover, subsequent to our grant of certiorari in this case, the prolonged litigation in the courts of Mexico has come to an end. On October 6, 1952, the Supreme Court of Mexico rendered a judgment upholding an administrative ruling which had nullified petitioner's Mexican registration of "Bulova." [ Footnote 10 ]
On the facts in the record, we agree with the Court of Appeals that petitioner's activities, when viewed as a whole, fall within the jurisdictional scope of the Lanham Act. This Court has often stated that the legislation of Congress will not extend beyond the boundaries of the United States unless a contrary legislative intent appears. E.g., Blackmer v. United States, 284 U. S. 421 , 284 U. S. 437 (1932); Foley Bros., Inc. v. Filardo, 336 U. S. 281 , 336 U. S. 285 (1949). The question, thus, is "whether Congress intended to make the law applicable" to the facts of this case. Ibid. For
Skiriotes v. Florida, 313 U. S. 69 , 313 U. S. 73 (1941). [ Footnote 11 ] As MR. JUSTICE MINTON, then sitting on the Court of Appeals, applied the principle in a case involving unfair methods of competition:
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).
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.
American Banana Co. v. United Fruit Co., 213 U. S. 347 (1909), compels nothing to the contrary. This Court there upheld a Court of Appeals' affirmance of the trial court's dismissal of a private damage action predicated on alleged violations of the Sherman Act. [ Footnote 14 ] The complaint in substance charged United Fruit Company with monopolization of the banana import trade between Central America and the United States, and with the instigation of Costa Rican governmental authorities to seize plaintiff's plantation and produce in Panama. The Court of Appeals reasoned that plaintiff had shown no damage from the asserted monopoly, and could not found liability on the seizure, a sovereign act of another nation. [ Footnote 15 ] This Court agreed that a violation of American laws could not be grounded on a foreign nation's sovereign acts. Viewed in its context, the holding in that case was not meant to confer blanket immunity on trade practices which radiate unlawful consequences here, merely because they were initiated or consummated outside the territorial limits of the United States. Unlawful effects in this country, absent in the posture of the Banana case before us, are often decisive; this Court held as much in Thomsen v. Cayser, 243 U. S. 66 (1917), and United States v. Sisal Sales Corp., 274 U. S. 268 . [ Footnote 16 ] As in Sisal, the crux of the complaint here is "not merely of something done by another government at the instigation of private parties;" petitioner, by his "own deliberate acts, here and elsewhere, . . . brought about forbidden results within the United States." 274 U.S. at 274 U. S. 276 . And, unlike the
Nor do we doubt the District Court's jurisdiction to award appropriate injunctive relief if warranted by the facts after trial. 15 U.S.C. §§ 1116, 1121. Mexico's courts have nullified the Mexican registration of "Bulova;" there is thus no conflict which might afford petitioner a pretext that such relief would impugn foreign law. The question, therefore, whether a valid foreign registration would affect either the power to enjoin or the propriety of its exercise is not before us. Where, as here, 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. New Jersey v. New York, 283 U. S. 473 (1931); Massie v. Watts, 6 Cranch 148 (1810); The Salton Sea Cases, 172 F. 792 (1909); cf. United States v. National Lead Co., 332 U. S. 319 , 332 U. S. 351 -352, 332 U. S. 363 (1947). [ Footnote 17 ]
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., [1952] All Eng. 780, 782 (C.A.).
"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 .
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 .