I think this is an unusual decision, so if you know of similar ones, please send them along. A Southern District of New York court last week denied reconsideration of its refusal to dismiss a 43(a) false advertising claim arising from activities in Germany. In so doing it adopted an expansive view of the reach of the false advertising provisions of the Lanham Act and of what constitutes ‘commerce’ under the Act (matched by, in my view, few other cases, most notably the Casino du Monte Carlo decision from the Fourth Circuit).
The three prong Vanity Fair test is the well-settled test in this circuit determining whether the Lanham Act can be applied to activities abroad (234 F.2d 633 (2d Cir 1956).
1. Is there a substantial affect on US commerce;
2. Is there a US defendant;
3. Is there no conflict with the substantive law of the non-US jursidiction affected.
So, for example, a US company sold PENNSYLVANIA cream cheese in Bolivia, and Kraft (owner of the PHILADELPHIA cream cheese mark) sued the US company here (necessitating an evaluation by the US court as to how Bolivian law would handle the matter).
AFAIK, the doctrine tends to be applied, for the most part, to trademark infringement cases relating to goods, but that’s only as far as I know. There was a 43(a) case a while back involving basketballs, but I think the non-US portion was trimmed from the case.
Now, the doctrine has been applied, to services, under a 43(a) false advertising case. In NewMarkets v Oppenheim, decision below, Plaintiff contracted with Defendant to form an investment fund. Defendant allegedly circulated the prospectus of a competing fund in Germany falsely stating that plaintiff would manage that fund. Plaintiff sued here, alleging, among other causes, 43(a) false advertising. Court applies Vanity Fair test and determines it will exercise subject matter jurisdiction. Defendant moves for reconsideration saying that use in Germany is not use in commerce, and court denies motion (see text of decision at bottom), holding that the Vanity Fair test determines what is and what is not commerce regulated by Congress.
Some background here and here.
Decision Extra-territorial Jurisdiction Lanham Act
Decision Reconsideration Extra-territorial
North American sub of Software AG enters into contract with US corporation and its Brazilian agent to provide support in Brazil for Software AG’s Brazilian customers. There was a dispute and the contract was terminated, leaving the Brazilian agent exposed in its support commitments. The Brazilian agent then made statements in Brazil to its customers that were allegedly false (essentially implying that it had Software AG’s continuing resources and support, when that was no longer the case).
The Southern District of NY applied the Vanity Fair three part test to exercise jurisdiction over the statements: (1) US citizenship of defendant (the Brazilian agent’s parent); (2) no conflict with foreign law (Brazil bars false statements as well); and (3) effect on US commerce (Software AG’s American sub was injured by the false statements).
Software AG, Inc. et al v. Consist Software Solutions, Inc. et al, 1:08-cv-00389-CM (SDNY Feb 21, 2008).
Comprehensive discussion by 43(B)log here.
43(B)log: “Globetrotting: Foreign B-Ball Manufacturer Not Liable For Failure To Mark Origin“:
“Molten advertised its “Dual Cushion Technology” as its own innovation, and it was featured as a proprietary design created by Molten in FIBA Assist Magazine, “[t]echnology that only Molten can create.” Amazon.com labels Molten balls as featuring “Innovative Molten Dual Cushion Technology” Baden objected to this advertising, as well as to the absence of country of origin marking; since the balls are not US-made, this allegedly deceives consumers as to source.”
Short Second Circuit decision affirming District court injunction against Alfredo Versace, who continues to violate an injunction against him to stop using the VERSACE mark. Discussion of extraterritorial application of Lanham Act.
The TTAB (in a citable decision) holds that a Canadian entity did not use its mark in foreign commerce with the U.S. despite spillover advertising into the U.S. and some sales to U.S. customers. In so doing, the TTAB declined to apply the wide definition of ‘foreign trade’ in the Monte Carlo case.
More discussion by TTABlog.
First Niagara Insurance v. First Niagara Financial, Opposition Nos. 9112072 et al. (October 21, 2005).