Abitron Austria GmbH v. Hetronic International, Inc./Opinion of the Court
Notice: This opinion is subject to formal revision before publication in the preliminary print of the United States Reports. Readers are requested to notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in order that corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
No. 21–1043
ABITRON AUSTRIA GMBH, ET AL., PETITIONERS v. HETRONIC INTERNATIONAL, INC.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT
[June 29, 2023]
Justice Alito delivered the opinion of the Court.
This case requires us to decide the foreign reach of 15 U. S. C. §1114(1)(a) and §1125(a)(1), two provisions of the Lanham Act that prohibit trademark infringement. Applying the presumption against extraterritoriality, we hold that these provisions are not extraterritorial and that they extend only to claims where the claimed infringing use in commerce is domestic.
I
This case concerns a trademark dispute between a United States company (Hetronic International, Inc.) and six foreign parties (five companies and one individual (collectively Abitron)).[1] Hetronic manufactures radio remote controls for construction equipment. It sells and services these products, which employ “a distinctive black-and-yellow color scheme to distinguish them from those of its competitors,” in more than 45 countries. 10 F. 4th 1016, 1024 (CA10 2021) (case below).
Abitron originally operated as a licensed distributor for Hetronic, but it later concluded that it held the rights to much of Hetronic’s intellectual property, including the marks on the products at issue in this suit. After reverse engineering Hetronic’s products, Abitron began to sell Hetronic-branded products that incorporated parts sourced from third parties. Abitron mostly sold its products in Europe, but it also made some direct sales into the United States.
Hetronic sued Abitron in the Western District of Oklahoma for, as relevant here, trademark violations under two related provisions of the Lanham Act. First, it invoked §1114(1)(a), which prohibits the unauthorized “use in commerce [of] any reproduction … of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services” when “such use is likely to cause confusion.” Hetronic also invoked §1125(a)(1), which prohibits the “us[e] in commerce” of a protected mark, whether registered or not, that “is likely to cause confusion.” Hetronic sought damages under these provisions for Abitron’s infringing acts worldwide.
Throughout the proceedings below, Abitron argued that Hetronic sought an impermissible extraterritorial application of the Lanham Act. But the District Court rejected this argument, and a jury later awarded Hetronic approximately $96 million in damages related to Abitron’s global employment of Hetronic’s marks. This amount thus included damages from Abitron’s direct sales to consumers in the United States, its foreign sales of products for which the foreign buyers designated the United States as the ultimate destination, and its foreign sales of products that did not end up in the United States. The District Court later entered a permanent injunction preventing Abitron from using the marks anywhere in the world. On appeal, the Tenth Circuit narrowed the injunction to cover only certain countries but otherwise affirmed the judgment. It concluded that the Lanham Act extended to “all of [Abitron’s] foreign infringing conduct” because the “impacts within the United States [were] of a sufficient character and magnitude as would give the United States a reasonably strong interest in the litigation.” 10 F. 4th, at 1046.
We granted certiorari to resolve a Circuit split over the extraterritorial reach of the Lanham Act. 598 U. S. ___ (2023).
II
A
“It is a ‘longstanding principle of American law “that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States.” ’ ” Morrison v. National Australia Bank Ltd., 561 U. S. 247, 255 (2010). We have repeatedly explained that this principle, which we call the presumption against extraterritoriality, refers to a “presumption against application to conduct in the territory of another sovereign.” Kiobel v. Royal Dutch Petroleum Co., 569 U. S. 108, 119 (2013) (citing Morrison, 561 U. S., at 265). In other words, exclusively “ ‘[f]oreign conduct is generally the domain of foreign law.’ ” Microsoft Corp. v. AT&T Corp., 550 U. S. 437, 455 (2007) (alteration omitted). The presumption “serves to avoid the international discord that can result when U. S. law is applied to conduct in foreign countries” and reflects the “ ‘commonsense notion that Congress generally legislates with domestic concerns in mind.’ ” RJR Nabisco, Inc. v. European Community, 579 U. S. 325, 335–336 (2016).
Applying the presumption against extraterritoriality involves “a two-step framework.” Id., at 337. At step one, we determine whether a provision is extraterritorial, and that determination turns on whether “Congress has affirmatively and unmistakably instructed that” the provision at issue should “apply to foreign conduct.” Id., at 335, 337; accord, Kiobel, 569 U. S., at 117 (asking whether Congress “intends federal law to apply to conduct occurring abroad”); Nestlé USA, Inc. v. Doe, 593 U. S. ___, ___ (2021) (slip op., at 3). If Congress has provided an unmistakable instruction that the provision is extraterritorial, then claims alleging exclusively foreign conduct may proceed, subject to “the limits Congress has (or has not) imposed on the statute’s foreign application.” RJR Nabisco, 579 U. S., at 337–338.
If a provision is not extraterritorial, we move to step two, which resolves whether the suit seeks a (permissible) domestic or (impermissible) foreign application of the provision.[2] To make that determination, courts must start by identifying the “ ‘ “focus” of congressional concern’ ” underlying the provision at issue. Id., at 336. “The focus of a statute is ‘the object of its solicitude,’ which can include the conduct it ‘seeks to “regulate,” ’ as well as the parties and interests it ‘seeks to “protect” ’ or vindicate.” WesternGeco LLC v. ION Geophysical Corp., 585 U. S. ___, ___ (2018) (slip op., at 6) (alterations omitted).
Step two does not end with identifying statutory focus. We have repeatedly and explicitly held that courts must “identif[y] ‘the statute’s “focus” ’ and as[k] whether the conduct relevant to that focus occurred in United States territory.” Id., at ___ (slip op., at 5) (emphasis added); accord, e.g., RJR Nabisco, 579 U. S., at 337. Thus, to prove that a claim involves a domestic application of a statute, “plaintiffs must establish that ‘the conduct relevant to the statute’s focus occurred in the United States.’ ” Nestlé, 593 U. S., at ___–___ (slip op., at 3–4) (emphasis added); see, e.g., WesternGeco, 585 U. S., at ___–___ (slip op., at 6–8) (holding that a claim was a domestic application of the Patent Act because the infringing acts—the conduct relevant to the focus of the provisions at issue—were committed in the United States); Morrison, 561 U. S., at 266–267, 271–273 (concluding that a claim was a foreign application of the Securities and Exchange Act because the “purchase-and-sale transactions” at issue occurred outside of the United States).
Step two is designed to apply the presumption against extraterritoriality to claims that involve both domestic and foreign activity, separating the activity that matters from the activity that does not. After all, we have long recognized that the presumption would be meaningless if any domestic conduct could defeat it. See Morrison, 561 U. S., at 266. Thus, “ ‘[i]f the conduct relevant to the statute’s focus occurred in the United States, then the case involves a permissible domestic application’ of the statute, ‘even if other conduct occurred abroad.’ ” WesternGeco, 585 U. S., at ___ (slip op., at 6) (quoting RJR Nabisco, 579 U. S., at 337). And “if the relevant conduct occurred in another country, ‘then the case involves an impermissible extraterritorial application regardless of any other conduct that occurred in U. S. territory.’ ” WesternGeco, 585 U. S., at ___ (slip op., at 6) (quoting RJR Nabisco, 579 U. S., at 337). Of course, if all the conduct “ ‘regarding [the] violations ‘took place outside the United States,’ ” then courts do “not need to determine … the statute’s ‘focus’ ” at all. RJR Nabisco, 579 U. S., at 337. In that circumstance, there would be no domestic conduct that could be relevant to any focus, so the focus test has no filtering role to play. See, e.g., Nestlé, 593 U. S., at ___ (slip op., at 5); Kiobel, 569 U. S., at 124.
B
With this well-established framework in mind, the first question is whether the relevant provisions of the Lanham Act, see §§1114(1)(a), 1125(a)(1), provide “a clear, affirmative indication” that they apply extraterritorially, RJR Nabisco, 579 U. S., at 337.[3] They do not.
It is a “rare statute that clearly evidences extraterritorial effect despite lacking an express statement of extraterritoriality.” Id., at 340. Our decision in RJR Nabisco illustrates the clarity required at step one of our framework. There, we held that the Racketeer Influenced and Corrupt Organizations Act could have extraterritorial application in some circumstances because many of its predicate offenses “plainly apply to at least some foreign conduct” and “[a]t least one predicate … applies only to conduct occurring outside the United States.” Id., at 338.
Here, neither provision at issue provides an express statement of extraterritorial application or any other clear indication that it is one of the “rare” provisions that nonetheless applies abroad. Both simply prohibit the use “in commerce,” under congressionally prescribed conditions, of protected trademarks when that use “is likely to cause confusion.” §§1114(1)(a), 1125(a)(1).
Hetronic acknowledges that neither provision on its own signals extraterritorial application, but it argues that the requisite indication can be found in the Lanham Act’s definition of “commerce,” which applies to both provisions. Under that definition, “ ‘commerce’ means all commerce which may lawfully be regulated by Congress.” §1127. Hetronic offers two reasons why this definition is sufficient to rebut the presumption against extraterritoriality. First, it argues that the language naturally leads to this result because Congress can lawfully regulate foreign conduct under the Foreign Commerce Clause. Second, it contends that extraterritoriality is confirmed by the fact that this definition is unique in the U. S. Code and thus differs from what it describes as “boilerplate” definitions of “ ‘commerce’ ” in other statutes. Brief for Respondent 23.
Neither reason is sufficient. When applying the presumption, “ ‘we have repeatedly held that even statutes … that expressly refer to “foreign commerce” ’ ” when defining “commerce” are not extraterritorial. Morrison, 561 U. S., at 262–263; see also RJR Nabisco, 579 U. S., at 344. This conclusion dooms Hetronic’s argument. If an express statutory reference to “foreign commerce” is not enough to rebut the presumption, the same must be true of a definition of “commerce” that refers to Congress’s authority to regulate foreign commerce. That result does not change simply because the provision refers to “all” commerce Congress can regulate. See Kiobel, 569 U. S., at 118 (“[I]t is well established that generic terms like ‘any’ or ‘every’ do not rebut the presumption against extraterritoriality”). And the mere fact that the Lanham Act contains a substantively similar definition that departs from the so-called “boilerplate” definitions used in other statutes cannot justify a different conclusion either.
C
Because §1114(1)(a) and §1125(a)(1) are not extraterritorial, we must consider when claims involve “domestic” applications of these provisions. As discussed above, the proper test requires determining the provision’s focus and then ascertaining whether Hetronic can “establish that ‘the conduct relevant to [that] focus occurred in the United States.’ ” Nestlé, 593 U. S., at ___–___ (slip op., at 3–4).
Much of the parties’ dispute in this case misses this critical point and centers on the “focus” of the relevant provisions without regard to the “conduct relevant to that focus.” WesternGeco, 585 U. S., at ___ (slip op., at 5). Abitron contends that §1114(1)(a) and §1125(a)(1) focus on preventing infringing use of trademarks, while Hetronic argues that they focus both on protecting the goodwill of mark owners and on preventing consumer confusion. The United States as amicus curiae argues that the provisions focus on only likely consumer confusion.
The parties all seek support for their positions in Steele v. Bulova Watch Co., 344 U. S. 280 (1952), but that decision is of little assistance here. There, we considered a suit alleging that the defendant, through activity in both the United States and Mexico, had violated the Lanham Act by producing and selling watches stamped with a trademark that was protected in the United States. Although we allowed the claim to proceed, our analysis understandably did not follow the two-step framework that we would develop decades later. Our decision was instead narrow and fact-bound. It rested on the judgment that “the facts in the record … when viewed as a whole” were sufficient to rebut the presumption against extraterritoriality. Id., at 285. In reaching this conclusion, we repeatedly emphasized both that the defendant committed “essential steps” in the course of his infringing conduct in the United States and that his conduct was likely to and did cause consumer confusion in the United States.[4] Id., at 286–287; accord, e.g., id., at 286 (“His operations and their effects were not confined within the territorial limits of a foreign nation”); id., at 288 (“[P]etitioner by his ‘own deliberate acts, here and elsewhere, brought about forbidden results within the United States’ ” (alteration omitted)). Because Steele implicated both domestic conduct and a likelihood of domestic confusion, it does not tell us which one determines the domestic applications of §1114(1)(a) and §1125(a)(1).
With Steele put aside, then, we think the parties’ particular debate over the “focus” of §1114(1)(a) and §1125(a)(1) in the abstract does not exhaust the relevant inquiry. The ultimate question regarding permissible domestic application turns on the location of the conduct relevant to the focus. See, e.g., RJR Nabisco, 579 U. S., at 337. And the conduct relevant to any focus the parties have proffered is infringing use in commerce, as the Act defines it.
This conclusion follows from the text and context of §1114(1)(a) and §1125(a)(1). Both provisions prohibit the unauthorized use “in commerce” of a protected trademark when, among other things, that use “is likely to cause confusion.” §§1114(1)(a), 1125(a)(1). In other words, Congress proscribed the use of a mark in commerce under certain conditions. This conduct, to be sure, must create a sufficient risk of confusion, but confusion is not a separate requirement; rather, it is simply a necessary characteristic of an offending use.[5] Because Congress has premised liability on a specific action (a particular sort of use in commerce), that specific action would be the conduct relevant to any focus on offer today. See, e.g., WesternGeco, 585 U. S., at ___–___ (slip op., at 6–8).
In sum, as this case comes to us, “use in commerce” is the conduct relevant to any potential focus of §1114(1)(a) and §1125(a)(1) because Congress deemed a violation of either provision to occur each time a mark is used in commerce in the way Congress described, with no need for any actual confusion. Under step two of our extraterritoriality standard, then, “use in commerce” provides the dividing line between foreign and domestic applications of these Lanham Act provisions.
III
Resisting this straightforward application of our precedent, Justice Sotomayor concludes that step two of our extraterritoriality framework turns solely on whether “the object of the statute’s focus is found in, or occurs in, the United States.” Post, at 5 (opinion concurring in judgment). Applied to the Lanham Act, the upshot of this focus-only standard is that any claim involving a likelihood of consumer confusion in the United States would be a “domestic” application of the Act. This approach is wrong, and it would give the Lanham Act an untenably broad reach that undermines our extraterritoriality framework.
A
To justify looking only to a provision’s “focus,” Justice Sotomayor maintains that “an application of a statute” can still be domestic “when foreign conduct is implicated.” Post, at 7. If this assertion simply means that a permissible domestic application can occur even when some foreign “activity is involved in the case,” Morrison, 561 U. S., at 266, then it is true but misses the point. When a claim involves both domestic and foreign activity, the question is whether “ ‘the conduct relevant to the statute’s focus occurred in the United States.’ ” Nestlé, 593 U. S., at ___–___ (slip op., at 3–4). If that “ ‘conduct … occurred in the United States, then the case involves a permissible domestic application’ of the statute ‘even if other conduct occurred abroad.’ ” WesternGeco, 585 U. S., at ___ (slip op., at 6). But “if the conduct relevant to the focus occurred in a foreign country, then the case involves an impermissible extraterritorial application regardless of any other conduct that occurred in U. S. territory.” RJR Nabisco, 579 U. S., at 337; see, e.g., WesternGeco, 585 U. S., at ___ (slip op., at 6–8); Nestlé, 593 U. S., at ___–___ (slip op., at 4–5); Morrison, 561 U. S., at 266–267, 271–273.
These holdings were not, as Justice Sotomayor suggests, premised on this Court’s “first conclud[ing] (or assum[ing] without deciding) that the focus of the provision at issue was conduct.” Post, at 9. They were unambiguously part of this Court’s articulation of the two-step framework, and, in each case, these holdings came before we began analyzing the focus of the provisions at issue. For this reason, none of our cases has ever held that statutory focus was dispositive at step two of our framework. To the contrary, we have acknowledged that courts do “not need to determine [a] statute’s ‘focus’ ” when all conduct regarding the violations “ ‘took place outside the United States.’ ” RJR Nabisco, 579 U. S., at 337 (quoting Kiobel, 569 U. S., at 124); see, e.g., Nestlé, 593 U. S., at ___ (slip op., at 5) (“To plead facts sufficient to support a domestic application of the [Alien Tort Statute], plaintiffs must allege more domestic conduct than general corporate activity”). That conclusion, as well as the decisions applying it, are inexplicable under a focus-only standard. See supra, at 5.
Beyond straying from established precedent, a focus-only approach would create headaches for lower courts required to grapple with this new approach. For statutes (like this one) regulating conduct, the location of the conduct relevant to the focus provides a clear signal at both steps of our two-step framework. See RJR Nabisco, 579 U. S., at 335, 337. Under Justice Sotomayor’s standard, by contrast, litigants and lower courts are told that the step-two inquiry turns on the “ ‘focus’ ” alone, which (as we have said) “can be ‘conduct,’ ‘parties,’ or ‘interests’ that Congress sought to protect or regulate.” Post, at 8; see WesternGeco, 585 U. S., at ___ (slip op., at 6). As a result, almost any claim involving exclusively foreign conduct could be repackaged as a “domestic application.” And almost any claim under a non-extraterritorial provision could be defeated by labeling it a “foreign application,” even if the conduct at issue was exclusively domestic. This is far from the measure of certainty that the presumption against extraterritoriality is designed to provide.
B
Justice Sotomayor’s expansive understanding of the Lanham Act’s domestic applications threatens to negate the presumption against extraterritoriality. In Morrison, we warned that “the presumption against extraterritorial application would be a craven watchdog indeed if it retreated to its kennel whenever some domestic activity is involved in the case.” 561 U. S., at 266. If a claim under the Act involves a domestic application whenever particular “ ‘effects are likely to occur in the United States,’ ” post, at 5–6, the watchdog is nothing more than a muzzled Chihuahua. Under such a test, it would not even be necessary that “some” domestic activity be involved. It would be enough for there to be merely a likelihood of an effect in this country. Applying that standard here would require even less connection to the United States than some explicitly extraterritorial statutes, which must have, at a minimum, actual domestic effects to be invoked. See, e.g., Hartford Fire Ins. Co. v. California, 509 U. S. 764, 796 (1993) (holding that the extraterritorial provision at issue “applies to foreign conduct that was meant to produce and did in fact produce some substantial effect in the United States”).
This approach threatens “ ‘international discord.’ ” Kiobel, 569 U. S., at 115. In nearly all countries, including the United States, trademark law is territorial—i.e., “a trademark is recognized as having a separate existence in each sovereign territory in which it is registered or legally recognized as a mark.” 5 McCarthy §29:1, at 29–4 to 29–5. Thus, each country is empowered to grant trademark rights and police infringement within its borders. See, e.g., ibid.; Ingenohl v. Olsen & Co., 273 U. S. 541, 544 (1927); A. Bourjois & Co. v. Katzel, 260 U. S. 689, 692 (1923).
This principle has long been enshrined in international law. Under the Paris Convention for the Protection of Industrial Property, July 14, 1967, 21 U. S. T. 1583, T. I. A. S. No. 6923, a “mark duly registered in a country of the Union shall be regarded as independent of marks registered in other countries of the Union,” and the seizure of infringing goods is authorized “on importation” to a country “where such mark or trade name is entitled to legal protection.” Arts. 6(3), 9(1), id., at 1639, 1647. The Convention likewise provides mechanisms for trademark holders to secure trademark protection in other countries under the domestic law of those countries. Arts. 2(1), 4(1)–(2), id., at 1631–1632; see also 5 McCarthy §29:1, at 29–6 to 29–7; Protocol Relating to Madrid Agreement Concerning International Registration of Marks, June 27, 1989, T. I. A. S. No. 03–112, S. Treaty Doc. No. 106–41 (entered into force Dec. 1, 1995) (providing mechanisms for the extension of trademark protection to multiple jurisdictions under domestic law). The Lanham Act, which is designed to implement “treaties and conventions respecting trademarks,” §1127, incorporates this territorial premise, mandating that registration of a foreign trademark in the United States “shall be independent of the registration in the country of origin” and that the rights of that mark in the United States are governed by domestic law, §1126(f).
Because of the territorial nature of trademarks, the “probability of incompatibility with the applicable laws of other counties is so obvious that if Congress intended such foreign application ‘it would have addressed the subject of conflicts with foreign laws and procedures.’ ” Morrison, 561 U. S., at 269. The use of a mark—even confined to one country—will often have effects that radiate to any number of countries. And when determining exactly what form of abstract consumer confusion is sufficient in a given case, the Judiciary would be thrust into the unappetizing task of “navigating foreign policy disputes belong[ing] to the political branches.” Jesner v. Arab Bank, PLC, 584 U. S. ___, ___ (2018) (Gorsuch, J., concurring in part and concurring in judgment) (slip op., at 1). If enough countries took this approach, the trademark system would collapse.
This tension has not been lost on other sovereign nations. The European Commission gravely warns this Court against applying the Lanham Act “to acts of infringement occurring … in the European Union” and outside of the United States. Brief for European Commission on Behalf of the European Union as Amicus Curiae 4 (emphasis added). To “police allegations of infringement occurring in Germany,” it continues, would be an “unseemly” act of “meddling in extraterritorial affairs,” given “international treaty obligations that equally bind the United States.” Id., at 28. As the Commission and other foreign amici recognize, the “system only works if all participating states respect their obligations, including the limits on their power.” Id., at 29; see also, e.g., Brief for German Law Professors as Amici Curiae 12; Brief for Guido Westkamp as Amicus Curiae 2–3. It thus bears repeating our longstanding admonition that “United States law governs domestically but does not rule the world.” Microsoft Corp., 550 U. S., at 454.
IV
In sum, we hold that §1114(1)(a) and §1125(a)(1) are not extraterritorial and that the infringing “use in commerce” of a trademark provides the dividing line between foreign and domestic applications of these provisions. Under the Act, the “term ‘use in commerce’ means the bona fide use of a mark in the ordinary course of trade,” where the mark serves to “identify and distinguish [the mark user’s] goods … and to indicate the source of the goods.” §1127.[6] Because the proceedings below were not in accord with this understanding of extraterritoriality, we vacate the judgment of the Court of Appeals and remand the case for further proceedings consistent with this opinion.
- ↑ The foreign companies are Abitron Germany GmbH, Abitron Austria GmbH, Hetronic Germany GmbH, Hydronic-Steuersysteme GmbH, and ABI Holding GmbH.
- ↑ As we have noted, courts may take these steps in any order. See, e.g., Yegiazaryan v. Smagin, 599 U. S. ___, ___–___, n. 2 (2023) (slip op., at 6–7, n. 2).
- ↑ Our cases sometimes refer to whether the “statute” applies extraterritorially, but the two-step analysis applies at the level of the particular provision implicated. See, e.g., RJR Nabisco, 579 U. S., at 346; Morrison v. National Australia Bank Ltd., 561 U. S. 247, 264–265 (2010).
- ↑ For example, we noted that the trademark owner’s “Texas sales representative received numerous complaints from [American] retail jewelers … whose customers brought in for repair defective” branded watches. Steele, 344 U. S., at 285; accord, Bulova Watch Co. v. Steele, 194 F. 2d 567, 571 (CA5 1952).
- ↑ Both provisions “refer to a ‘likelihood’ of harm, rather than a completed harm.” Moseley v. V Secret Catalogue, Inc., 537 U. S. 418, 432 (2003). In other words, “actual confusion is not necessary in order to prove infringement.” Restatement (Third) of Unfair Competition §23, at 250, Comment b (1993); accord, id., §23, at 251, Comment d; 4 J. McCarthy, Trademarks and Unfair Competition §23:12, at 23–157 (5th ed. 2023) (McCarthy) (“ ‘[I]t is black letter law that actual confusion need not be shown to prevail under the Lanham Act, since … the Act requires only a likelihood of confusion’ ”). Instead, the provisions treat confusion as a means to limit liability to only certain “bona fide use[s] of a mark in the ordinary course of trade.” 15 U. S. C. §1127 (defining “use in commerce”); see Patent and Trademark Office v. Booking.com B. V., 591 U. S. ___, ___ (2020) (slip op., at 12) (“[A] competitor’s use does not infringe a mark [under §1114(1)(a) and §1125(a)(1)] unless it is likely to confuse consumers”).
- ↑ Justice Jackson has proposed a further elaboration of “use in commerce,” see post, at 1–4 (concurring opinion), but we have no occasion to address the precise contours of that phrase here.