Court Denies Extraterritorial Appliation of Lanham Act

In a February 1, 2016 ruling, Judge Jed S. Rakoff issued a decision explaining his reasoning for the dismissal of the plaintiffs trademark action seeking to find that the holder of a presumptively valid foreign trademark had abandoned the mark. The plaintiff and defendant had originally been commonly owned. After a corporate reorganization, the plaintiff became an exclusive licensee of the defendants trademarks outside the United States. The plaintiff began this action contending that the defendant had abandoned the foreign marks under the Lanham Act by failing to exercise any control, including quality control, over the marks. Judge Rakoff ruled that

as a matter of law, . . . the Lanham Act may not be applied extraterritorially to adjudicate the validity or ownership status of foreign trademarks. This is because it is firmly settled that [a] trademark has separate legal existence under each countrys laws, and trademark rights exist in each country solely according to that nations laws. . . . Consistent with that principle, courts in this Circuit have repeatedly held that determination of the validity of foreign trademarks in their foreign applications is not just a matter of choice of law but that, rather, United States courts are simply not in the business of adjudicating foreign trademark rights in such circumstances.