Abitron Austria GmbH v. Hetronic International, Inc.

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Supreme Court of the United States
Abitron Austria GmbH v. Hetronic International, Inc.
Term: 2022
Important Dates
Argued: March 21, 2023
Decided: June 29, 2023
Outcome
vacated and remanded
Vote
9-0
Majority
Samuel Alito • Clarence Thomas • Neil Gorsuch • Brett Kavanaugh • Ketanji Brown Jackson
Concurring
Sonia Sotomayor • Chief Justice John Roberts • Elena Kagan • Amy Coney Barrett • Ketanji Brown Jackson

Abitron Austria GmbH v. Hetronic International, Inc. is a case that was decided by the Supreme Court of the United States on June 29, 2023, during the court's October 2022-2023 term. The case was argued before the court on March 21, 2023.

The court affirmed the decision of the United States Court of Appeals for the Tenth Circuit in a 9-0 ruling, holding that the application of the "presumption against extraterritoriality, §1114(1)(a) and §1125(a)(1) of the Lanham Act are not extraterritorial and extend only to claims where the infringing use in commerce is domestic."[1] Justice Samuel Alito delivered the majority opinion of the court.[1] Click here for more information about the ruling.

HIGHLIGHTS
  • The issue: The case concerned the Lanham Act of 1946 and trademark infringement claims. Click here to learn more about the case's background.
  • The questions presented: "Whether the court of appeals erred in applying the Lanham Act extraterritorially to petitioners' foreign sales, including purely foreign sales that never reached the United States or confused U.S. consumers."[2]
  • The outcome: In a 9-0 ruling, the court affirmed the decision of the United States Court of Appeals for the Tenth Circuit


    • The case came on a writ of certiorari to the United States Court of Appeals for the 10th Circuit. To review the lower court's opinion, click here.

    Timeline

    The following timeline details key events in this case:

    Background

    Tenth Circuit opinion

    On August 24, 2021, the U.S. Court of Appeals for the 10th Circuit affirmed the lower court's ruling in part, reversed it in part, and remanded the case for further proceedings. Judge Gregory Alan Phillips authored the court's majority opinion:[4]

    “ Hetronic International, Inc., a U.S. company, manufactures radio remote controls—the kind used to remotely operate heavy-duty construction equipment (think cranes). Defendants, none of whom are U.S. citizens, distributed Hetronic's products, mostly in Europe. That relationship worked well for nearly a decade. But then one of Defendants’ employees stumbled across an old research-and-development agreement between the parties. Embracing a creative legal interpretation of the agreement endorsed by Defendants’ lawyers, Defendants concluded that they—not Hetronic—owned the rights to Hetronic's trademarks and other intellectual property.


    That caused some tension in the relationship. Defendants began manufacturing their own products—identical to Hetronic's—and selling them under the Hetronic brand, mostly in Europe. They even kept the same product names. Hetronic terminated the parties’ distribution agreements, but that didn't stop Defendants from making tens of millions of dollars selling their copycat products (which they continue to sell today). Defendants attempted a brief foray into the U.S. market but backed off after Hetronic sued them.

    Hetronic asserted numerous claims against Defendants, but we're here concerned almost exclusively with its trademark claims under the Lanham Act. A jury sitting in the Western District of Oklahoma awarded Hetronic over $100 million in damages, most of which related to Defendants’ trademark infringement. Then on Hetronic's motion, the district court entered a worldwide injunction barring Defendants from selling their infringing products. Defendants have ignored the injunction.

    In the district court and now on appeal, Defendants have focused on one defense in particular: Though they accept that the Lanham Act can sometimes apply extraterritorially, they insist that the Act's reach doesn't extend to their conduct, which generally involved foreign defendants making sales to foreign consumers. Our circuit has yet to grapple with that question. After considering the Supreme Court's lone decision on the issue and persuasive authority from our sibling circuits, we conclude that the district court properly applied the Lanham Act to Defendants’ conduct. But we narrow the district court's expansive injunction. And so, exercising jurisdiction under 28 U.S.C. § 1291, we affirm in part, reverse in part, and remand for further consideration consistent with this opinion.[5]

    		”

    Lanham Act of 1946

    According to the Cornell Law School Legal Information Institute:[6]

    “ The Lanham Act, 15 U.S.C. §§ 1051 et seq., was enacted by Congress in 1946. The Act provides for a national system of trademark registration and protects the owner of a federally registered mark against the use of similar marks if such use is likely to result in consumer confusion, or if the dilution of a famous mark is likely to occur. [5] ”

    Questions presented

    The petitioner presented the following questions to the court:[2]

    Questions presented:
    “ Whether the court of appeals erred in applying the Lanham Act extraterritorially to petitioners' foreign sales, including purely foreign sales that never reached the United States or confused U.S. consumers.[5] ”

    Oral argument

    Audio

    Audio of oral argument:[7]




    Transcript

    Transcript of oral argument:[8]

    Outcome

    In a 9-0 opinion, the court vacated and remanded the judgment of the United States Court of Appeals for the Tenth Circuit, holding that the application of the "presumption against extraterritoriality, §1114(1)(a) and §1125(a)(1) of the Lanham Act are not extraterritorial and extend only to claims where the infringing use in commerce is domestic."[1] Justice Samuel Alito delivered the opinion of the court.[1]

    Opinion

    In the court's majority opinion, Justice Samuel Alito wrote:[1]

    “

    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. [5]

    		”
    —Justice Samuel Alito

    Concurring opinion: Jackson

    Justice Ketanji Brown Jackson filed a concurring opinion.

    In her concurring opinion, Justice Jackson wrote:[1]

    “

    I agree with the Court that 15 U. S. C. §1114(1)(a) and §1125(a)(1) do not apply extraterritorially. Ante, at 7. I also agree that the “‘use in commerce’ of a trademark” that both statutory sections describe “provides the dividing line between foreign and domestic applications” of these provisions. Ante, at 14. The Court has no need to elaborate today upon what it means to “use [a trademark] in commerce,” §1127, nor need it discuss how that meaning guides the permissible-domestic-application question in a particular case. I write separately to address those points. [5]

    		”
    —Justice Ketanji Brown Jackson

    Concurring opinion: Sotomayor

    Justice Sonia Sotomayor also filed a concurring opinion, joined by Chief Justice John Roberts, and Justices Elena Kagan and Amy Coney Barrett.

    In her concurring opinion, Justice Sotomayor wrote:[1]

    “

    Sections 32(1)(a) and 43(a)(1)(A) of the Lanham Act prohibit trademark infringement and unfair competition activities that are “likely to cause confusion, or to cause mistake, or to deceive.” 60 Stat. 437, 441, as amended, 15 U. S. C. §§1114(1)(a), 1125(a)(1)(A).1 The issue in this case is whether, and to what extent, these provisions apply to activities that occur in a foreign country. I agree with the majority’s conclusion that the decision below must be vacated. I disagree, however, with the extraterritoriality framework that the Court adopts today. In my view, §§32(1)(a) and 43(a)(1)(A) of the Lanham Act extends to activities carried out abroad when there is a likelihood of consumer confusion in the United States. [5]

    		”
    —Justice Sonia Sotomayor

    Text of the opinion

    Read the full opinion here.

    October term 2022-2023

    See also: Supreme Court cases, October term 2022-2023

    The Supreme Court began hearing cases for the term on October 3, 2022. The court's yearly term begins on the first Monday in October and lasts until the first Monday in October the following year. The court generally releases the majority of its decisions in mid-June.[9]


    See also

    External links

    Footnotes

    1. ↑ 1.0 1.1 1.2 1.3 1.4 1.5 1.6 United States Supreme Court, "ABITRON AUSTRIA GMBH ET AL. v. HETRONIC INTERNATIONAL, INC.," decided June 29, 2023
    2. ↑ 2.0 2.1 U.S. Supreme Court, "21-1043 ABITRON AUSTRIA GMBH V. HETRONIC INTERNATIONAL, INC. QUESTION PRESENTED," CERT. GRANTED November 4, 2022
    3. ↑ U.S. Supreme Court, "Abitron Austria GmbH v. Hetronic International, Inc., On Petition for a Writ of Certiorari to the United States Court of Appeals for the Tenth Circuit," filed January 21, 2022
    4. ↑ 4.0 4.1 U.S. Court of Appeals for the Tenth Circuit, Hetronic Int'l v. Hetronic Ger. Gmbh, decided August 24, 2021
    5. ↑ 5.0 5.1 5.2 5.3 5.4 5.5 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
    6. ↑ Cornell Law School Legal Information Institute, "Lanham Act," accessed November 8, 2022
    7. ↑ Supreme Court of the United States, "Oral Argument - Audio," argued March 21, 2022
    8. ↑ Supreme Court of the United States, "Oral Argument - Transcript," argued March 21, 2022
    9. ↑ SupremeCourt.gov, "The Supreme Court at Work: The Term and Caseload," accessed January 24, 2022
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