Extraterritorial Trademark Infringement Considered by First Circuit

According to Lewis R. Clayton writing for the National Law Journal on September 26, 2005, the U.S. Circuit Court of Appeals for the First Circuit announced a new test last month for determining when federal trademark law will extend to extraterritorial conduct by foreign defendants. In McBee v. Delica Co. Ltd., 417 F.3d 107 (1st Cir. 2005):

McBee sued Delica in Japan, but, after several appeals, the Japanese courts
affirmed Delica's trademark. In 2002, McBee commenced an action in Maine federal
court under the Lanham Act seeking, among other things, damages based on the
Japanese sales of "Cecil McBee" products, and an injunction prohibiting Delica
from making its [Japanese-language] Web site available in the United States. The district court found jurisdiction was lacking. . . .

In affirming dismissal, the 1st Circuit rejected Vanity Fair's three-part
test, and instead reduced the analysis of jurisdiction over the extraterritorial
conduct of foreign nationals to a single factor: whether that conduct "has a
substantial effect on United States commerce." In applying its test to McBee's claims, the court considered two key extraterritorial activities: Delica's Japanese sales and the operation of Delica's Web site. Unfortunately for McBee, the court found that he had failed to show evidence of resale into the United States, or harm to his career or lost revenue, either in the United States or in Japan. . . .

The court ruled that, on its own, the visibility of the Web site within the United States does not constitute domestic conduct sufficient to ground subject-matter jurisdiction. . . . The court also emphasized that both the Web site and the Google results were written almost entirely in Japanese characters. This fact made the possibility of any real confusion in U.S. markets "very unlikely."