Opinion ID: 201739
Heading Depth: 3
Heading Rank: 3

Heading: Claim for Damages for Delica's Japanese Sales

Text: 62 McBee's claim for damages due to Delica's sales in Japan fares no better, because these sales as well have no substantial effect on commerce in the United States. McBee seeks damages for Delica's sales in Japan to Japanese consumers based on (a) tarnishing of McBee's image in the United States, and (b) loss of income in the United States due to loss of commercial opportunity as a jazz musician in Japan, stemming from the tarnishing of McBee's reputation there. The alleged tarnishing — both in the United States and Japan — is purportedly caused by the confusion of McBee's name with a brand selling (sometimes provocative) clothing to young teenage girls in Japan. McBee presents essentially no evidence that either type of tarnishing has occurred, much less that it has any substantial effect on United States commerce. 63 McBee's first argument, that American consumers are being confused and/or led to think less of McBee's name because of Delica's Japanese sales, cuts very close to the core purposes of the Lanham Act. See Atl. Richfield Co., 150 F.3d at 193; Sterling Drug, Inc., 14 F.3d at 746; see also Schechter, supra, at 628-30 (arguing that what distinguishes the Lanham Act from areas like patent or copyright, and makes extraterritorial jurisdiction proper in the trademark context while it is improper in those other areas, is the risk that the trademark infringer's foreign sales will eventually confuse domestic consumers, thus costing the mark holder sales domestically as well as abroad). Such confusion and reputational harm in the eyes of American consumers can often — although not always — be inferred from the fact that American consumers have been exposed to the infringing mark. But no inference of dilution or other harm can be made in situations where American citizens are not exposed at all to the infringing product. The trouble with McBee's argument is that there is virtually no evidence that American consumers are actually seeing Delica's products. 64 Quite commonly, plaintiffs in these sorts of cases can meet their burden by presenting evidence that while the initial sales of infringing goods may occur in foreign countries, the goods subsequently tend to enter the United States in some way and in substantial quantities. See, e.g., Steele, 344 U.S. at 286, 73 S.Ct. 252; Nintendo of Am., 34 F.3d at 249, 251; Atl. Richfield Co., 150 F.3d at 193; Totalplan, 14 F.3d at 830. McBee has presented essentially no evidence that Delica's products have been brought into the United States after their initial sale in Japan. McBee's own statement, without more, that people have seen women wearing Delica clothing in the United States does not show very much; likewise, McBee's evidence that Delica's goods are occasionally sold on eBay shows little, given particularly that such goods need not have been auctioned to buyers in the United States. The evidence indicates only one incident in which an American citizen saw McBee advertisements while traveling in Japan and demonstrated confusion upon returning to the United States. 65 Beyond that, there is also nothing that indicates any harm to McBee's career in the United States due to Delica's product sales. McBee's argument that there has potentially been harm to McBee's career as a product endorser is most unlikely, especially given his own disinterest in performing such endorsements. Further, McBee's statement that his teaching career may have been hindered by Delica is speculation. 66 McBee's second argument is that Delica's sales have confused Japanese consumers, hindering McBee's record sales and touring career in Japan. Evidence of economic harm to McBee in Japan due to confusion of Japanese consumers is less tightly tied to the interests that the Lanham Act intends to protect, since there is no United States interest in protecting Japanese consumers. American courts do, however, arguably have an interest in protecting American commerce by protecting McBee from lost income due to the tarnishing of his trademark in Japan. Courts have considered sales diverted from American companies in foreign countries in their analyses. See Totalplan, 14 F.3d at 830-31; see also Am. Rice, 701 F.2d at 414-15 (considering diverted sales in finding some effects test met). 67 Assuming arguendo that evidence of harm to an American plaintiff's economic interests abroad, due to the tarnishing of his reputation there, might sometimes meet the substantial effects test, McBee has presented no evidence of such harm in this case. McBee has presented no evidence of economic harm due to losses in record sales or touring opportunities in Japan. McBee's statement that he might have expected more Japanese touring opportunities by now, and may have had such opportunities absent Delica's sales, is wholly speculative. There is no probative evidence of any decline in McBee's touring revenue as compared to past patterns, nor is there any evidence of any decline in McBee's Japanese record sales. 68 McBee has not shown that Delica's Japanese sales have a substantial effect on United States commerce, and thus McBee's claim for damages based on those sales, as well as McBee's claim for an injunction against Delica's website, must be dismissed for lack of subject matter jurisdiction. We need not reach the issue of whether we should decline jurisdiction because of comity. 15 Were we to assert jurisdiction in this case, where there is no evidence of any harm to American commerce beyond the facts that the plaintiff is an American citizen and that the allegedly infringing goods were sold and seen in a foreign country, we would be forced to find jurisdiction in almost all false endorsement or trademark cases involving an American plaintiff and allegedly infringing sales abroad. 69