Opinion ID: 389212
Heading Depth: 1
Heading Rank: 4

Heading: federal unfair competition

Text: 24 Toho asserts a claim against Sears based upon a federal law of unfair competition. It grounds this claim on subsections 44(b), (h), and (i) of the Lanham Act, 15 U.S.C. § 1126(b), (h), (i) (1976), as interpreted by our decisions in Stauffer v. Exley, 184 F.2d 962 (9th Cir. 1950), and Pagliero v. Wallace China Co., 198 F.2d 339 (9th Cir. 1952). Subsection 44(b) of the Lanham Act provides that citizens of foreign nations with which the United States has trademark, trade name, or unfair competition treaties shall be entitled to the benefits of section 44 to the extent necessary to give effect to the provisions of the treaty. Subsection (h) provides that persons described in subsection (b) shall be entitled to effective protection against unfair competition, and the remedies provided in this chapter for infringement of marks shall be available so far as they may be appropriate in repressing acts of unfair competition. 15 U.S.C. § 1126(h) (1976). Finally, subsection (i) grants citizens or residents of the United States the same benefits that section 44 confers upon foreigners described by subsection (b). In Stauffer and Pagliero we construed these provisions 3 to create a federal law of unfair competition that prohibited false designation of the origin of goods. Both Toho and some commentators have read language in those cases to grant to all persons a federal right to effective protection from unfair competition by use of appropriate trademark remedies. E. g., 2 J. T. McCarthy, Trademarks & Unfair Competition § 32:2E (1973). 25 We recently considered the Stauffer/Pagliero language in International Order of Job's Daughters v. Lindeburg & Co., 633 F.2d 912 (9th Cir. 1980). There we stated that the Lanham Act's protections extend to only two species of the generic tort of unfair competition: infringement of registered trademarks, 15 U.S.C. § 1114 (1976), and false designation of the origin of goods, 15 U.S.C. § 1125(a) (1976). 633 F.2d at 915. Thus, federal law does not prohibit a broad range of acts defined as unfair competition by the law of many states. Id. at 916. Job's Daughters limited the federal tort of unfair competition created by Stauffer and Pagliero to the type of conduct actually involved in those cases: false designation of the origin of goods. Id. at 915 n.5. 4 26 Unlike Job's Daughters, Stauffer, and Pagliero, however, this case involves a plaintiff who is a national of a country with which the United States has a trademark treaty. See Treaty of Friendship, Commerce and Navigation, Apr. 2, 1953, United States Japan, art. X, 4 U.S.T. 2063, 2071, T.I.A.S. No. 2863. We therefore must decide what protection section 44 provides to nationals of countries having trademark treaties with the United States. 5 27 Section 45 of the Lanham Act, 15 U.S.C. § 1127 (1976), states that one intent of the Lanham Act is to provide rights and remedies stipulated by treaties and conventions respecting trade-marks, trade names, and unfair competition entered into between the United States and foreign nations. Section 44 carries out this intent. The grant in subsection (h) of effective protection against unfair competition is tailored to the provisions of the unfair competition treaties by subsection (b), which extends the benefits of section 44 only to the extent necessary to give effect to the treaties. The federal right created by subsection 44(h) is coextensive with the substantive provisions of the treaty involved. L'Aiglon Apparel, Inc. v. Lana Lobell, Inc., 214 F.2d 649, 654 (3d Cir. 1954); cf. Pagliero, 198 F.2d at 342 (We do not think that the rights created by § 44(h) go further than the treaties in this respect.). In this way, subsections (b) and (h) work together to provide federal rights and remedies implementing federal unfair competition treaties. 6 See generally SCM Corp. v. Langis Foods Ltd., 539 F.2d 196, 199-200 (D.C. Cir. 1976); L'Aiglon, 214 F.2d at 651-54; American Auto. Ass'n v. Spiegel, 205 F.2d 771, 774-75 (2d Cir. 1953). 28 The Treaty of Friendship, Commerce and Navigation, Apr. 2, 1953, United States Japan, art. X, 4 U.S.T. 2063, 2071, T.I.A.S. No. 2863, requires the United States to accord Japanese nationals and companies treatment with respect to rights in trade marks, trade names, trade labels and industrial property of ever kind that is at least as favorable as (1) the treatment accorded nationals and companies of the United States and (2) that accorded to the nationals and companies of most favored nations. See also id. art. XXII (1), (2), (4). The treaty's requirement that Japanese companies be treated at least as favorably as the companies of most favored nations does not require treatment as favorable as that accorded to companies with which the United States has special arrangements. See Bartram v. Robertson, 122 U.S. 116, 119-21, 7 S.Ct. 1115, 11171118, 30 L.Ed. 1118 (1887). The treaty at issue here therefore requires only that Japanese companies be treated as favorably as domestic companies. 29 Domestic companies are entitled to federal protection against trademark infringement, 15 U.S.C. § 1114 (1976), and passing off, 15 U.S.C. § 1125(a) (1976). They are also entitled to the protection accorded them by any applicable state law of unfair competition. Subsection 44(h) requires only that Toho be granted these same protections because it extends only as far as is necessary to give effect to the treaty. Thus, the practical effect of section 44 and this treaty is to provide a federal forum in which Toho can pursue its state claims. We therefore consider Toho's state and federal unfair competition claims together.