Supreme Court Decides Abitron Austria GMBH v. Hetronic International, Inc.

On June 29, 2023, the U.S. Supreme Court decided Abitron Austria GMBH v. Hetronic International, Inc., No. 21-1043, holding that two provisions of the Lanham Act that prohibit trademark infringement — sections 1114(1)(a) and 11125(a)(1) — are not extraterritorial and extend only to claims where the alleged infringing “use in commerce” of a trademark is domestic.

Respondent Hetronic International, Inc., is a United States company that manufactures, sells, and services products for use with construction equipment. Petitioners are five foreign companies and an individual who originally operated as a licensed distributor for Hetronic. After Petitioners began selling Hetronic-branded products as their own, Hetronic sued, alleging trademark violations under the Lanham Act and seeking worldwide damages. Petitioners argued that Hetronic sought an impermissible extraterritorial application of the Lanham Act, but the District Court rejected this argument, and the Tenth Circuit affirmed.

The Supreme Court granted certiorari to resolve a circuit split over the extraterritorial reach of sections 1114(1)(a) and 11125(a)(1) of the Lanham Act. The Court used a two-step framework to apply its long-standing presumption against extraterritoriality of federal statutes.

First, the Court concluded that neither provision gave a clear, affirmative indication that the provision applied extraterritorially. Both sections simply prohibit the use “in commerce,” under congressionally prescribed conditions, of protected trademarks when that use “is likely to cause confusion.” The fact that the Lanham Act defines “commerce” to include foreign commerce is not a sufficiently clear statement.

Second, the Court clarified the test for applying the presumption against extraterritoriality to claims that involve both domestic and foreign activity. The proper test requires first determining the focus of the provision at issue and then ascertaining whether the conduct relevant to that focus occurred in the United States. The Court concluded that the “use in commerce” is the conduct relevant to the focus of sections 1114(1)(a) and 11125(a)(1). Because the prior proceedings did not accord with this understanding of extraterritoriality, the Court vacated the judgment of the Court of Appeals and remanded for further proceedings.

Justice Alito delivered the opinion of the Court, in which Justices Thomas, Gorsuch, Kavanaugh, and Jackson joined. Justice Jackson filed a concurring opinion, and Justice Sotomayor filed an opinion concurring in the judgment.