99 F.4th 1150
10th Cir.2024Background
- Hetronic International, an American company, alleged that Abitron, a foreign company, infringed its U.S.-registered trademarks by selling Hetronic-branded products without permission worldwide, including in the U.S.
- Hetronic and Abitron had licensing/distribution agreements, which Hetronic terminated after Abitron began manufacturing and selling copycat products with Hetronic marks and trade dress.
- Hetronic sued Abitron in federal district court in Oklahoma, asserting breach of contract and federal/state trademark/tort claims. A jury found for Hetronic, awarding about $96 million in damages and the district court issued a worldwide injunction.
- On appeal, the Tenth Circuit initially held that the Lanham Act could apply to Abitron’s foreign sales if those sales substantially affected U.S. commerce, but the Supreme Court vacated this, holding the Act is not extraterritorial except for infringing uses in U.S. commerce (Abitron Austria GmbH v. Hetronic International, Inc., 600 U.S. 412 (2023)).
- The case was remanded to the Tenth Circuit to apply the Supreme Court’s new extraterritoriality framework; the court now focused on whether Abitron’s conduct constituted infringing "uses in commerce" within U.S. territory.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the Lanham Act allow recovery for Abitron’s purely foreign sales? | Foreign sales that affect U.S. commerce are actionable under Lanham Act. | Purely foreign sales not involving U.S. use are not actionable. | Lanham Act does not reach purely foreign sales; only U.S. "use in commerce" matters. |
| What constitutes an infringing "use in commerce" under the Lanham Act? | Broad interpretation—includes foreign sales destined for U.S. and steps taken in U.S. to facilitate infringement. | Narrow view—only sales, marketing, distribution, or advertising in U.S. are actionable uses. | Only uses in commerce (sale, marketing, advertising, distribution) that occur within U.S. are actionable. |
| Are downstream sales to U.S. by third parties after Abitron’s foreign sale actionable against Abitron? | Foreign sales are actionable if products ultimately reach U.S.; intention/knowledge suffices. | Only domestic acts by Abitron (not resales by others) can trigger liability. | Downstream U.S. sales by third parties are not actionable unless Abitron used the mark in U.S. commerce itself. |
| Can damages include profits from foreign sales tied to domestic infringing conduct? | Disgorgement should include foreign profits flowing from any domestic infringing activity (e.g., U.S. advertising). | Only profits tied directly to infringing uses in U.S. commerce are recoverable. | Damages limited to profits causally connected to infringing U.S. conduct; Hetronic bears burden to prove connection. |
Key Cases Cited
- Abitron Austria GmbH v. Hetronic International, Inc., 600 U.S. 412 (2023) (Supreme Court clarified the Lanham Act is not extraterritorial and applies only to infringing "uses in commerce" in the U.S.)
- Morrison v. National Australia Bank Ltd., 561 U.S. 247 (2010) (provided two-step framework for extraterritoriality analysis)
- RJR Nabisco, Inc. v. European Community, 579 U.S. 325 (2016) (set test for whether federal statutes rebut presumption against extraterritoriality)
- Steele v. Bulova Watch Co., 344 U.S. 280 (1952) (prior precedent on Lanham Act's reach, but limited by Abitron decision)