The United States' adoption of the well-known foreign mark exception.

• Author: Brook, Rachel

Introduction I. Background Principles A. The Territoriality Principle and the Well-Known Foreign Mark Exception 1. The Territoriality Principle 2. The Well-Known Foreign Mark Exception B. U.S. Adoption of International Treaties and Federal Trademark Law 1. International Treaties and Their Incorporation into U.S. Federal Law 2. Federal Trademark Law and the Lanham Act 3. The Paris Convention II. Conflict Over the Well-Known Foreign Mark Exception's Incorporation into U.S. Law A. Courts Holding the Well-Known Foreign Mark Exception is Incorporated into U.S. Law 1. Article 6bis of the Paris Convention is Incorporated into U.S. Federal Law Through the Lanham Act 2. Public Policy Necessitates the Recognition of the Well-Known Foreign Mark Exception in the United States B. Courts Holding that the Well-Known Foreign Mark Exception is Not Incorporated into U.S. Federal Law 1. Article 6bis of the Paris Convention is Not Incorporated into U.S. Federal Law via the Lanham Act 2. Public Policy Rationales Alone Cannot Support the Recognition of the Well-Known Foreign Mark Exception III. The Well-Known Foreign Mark Exception Should be Recognized as U.S. Federal Trademark Law A. Section 44(b) of the Lanham Act Incorporates the Paris Convention and Article 6bis into U.S. Law B. The International Trademark Rights Enjoyed by U.S. Businesses Under the Well-Known Foreign Mark Exception are Reliant on Reciprocal U.S. Recognition of the Exception INTRODUCTION

In 1993, George Sombonos, the managing director of a South African Hamburger chain, applied for registration of the "McDonald's" mark in South Africa. (1) This mark had been used exclusively by the U.S. McDonald's Corporation since 1955 (though not in South Africa), and consumers worldwide have associated the name "McDonald's" with that successful company. (2) A South African court refused to grant Sombonos the requested trademark rights, holding that protection must be provided to the McDonald's Corporation despite its lack of use of the mark in South Africa. (3) While McDonald's had not used its trade name in that country, the court found that the "McDonald's" mark was so well known that its use by another business would create consumer confusion as to who produces McDonald's products. (4)

Internationally, courts recognize similar protections for world-renowned marks under the well-known foreign mark exception. (5) However, this exception has received varied treatment in the United States, with some courts applying the rule and others refusing to do so. (6) U.S. recognition of this international doctrine continues to be fervently debated by circuit courts, especially because the United States is a signatory to the Paris Convention, (7) the treaty that established the well-known foreign mark exception. (8)

This Note discusses the attempts of U.S. courts to establish a clear rule regarding the application of the well-known foreign mark exception. Part I explores the development of the well-known foreign mark exception and other legal principles related to the conflict over whether to adopt and recognize it. Part II examines the existing conflict between circuit courts over whether to apply the exception and provide trademark rights for marks that have never been used in commerce in the United States. Part III of this Note argues that the well-known foreign mark exception should be applied as part of U.S. law for two reasons: first, the well-known foreign mark exception is incorporated into U.S. law through [section] 44(b) of the Lanham Act; second, the international trademark rights currently enjoyed by U.S. entrepreneurs depend on the exception's recognition in the United States.

1. BACKGROUND PRINCIPLES

   This section discusses the principles underlying the debate between circuits about recognition of the well-known foreign mark exception in the United States. First, this section explains the territoriality principle, an internationally accepted trademark concept under which each country grants distinct rights according to its own trademark system. The discussion then turns to a description of the well-known foreign mark exception, an exception to the territoriality rule for famous marks that are recognized worldwide even without registration or use in commerce. This section then discusses certain federal laws pertaining to how treaties are adopted and applied in the United States. The discussion about federal law continues with a description of U.S. federal trademark law embodied in the Lanham Act. Lastly, this section explores the Paris Convention for the Protection of International Industrial Property, a treaty that established international trademark standards, including the well-known foreign mark exception.

   1. The Territoriality Principle and the Well-Known Foreign Mark Exception

      1. The Territoriality Principle

         A trademark is "a word, phrase, logo, or other graphic symbol used by a manufacturer or seller to distinguish its product or products from those of others." (9) The purpose of the trademark system is to identify the source of a product, (10) which indirectly indicates to consumers the quality of that product when consumers recognize that source. Because trademarks trigger consumer recognition of products (and hopefully sales), (11) companies are eager to protect their marks and the consumer goodwill established through those marks.

         Countries throughout the world provide for extensive trademark protections, but most do so in accordance with the territoriality principle. (12) The long-recognized territoriality doctrine states that a trademark has "a separate existence in each sovereign territory in which the mark is registered or legally recognized as a mark." (13) Under the territoriality rule, each country has its own trademark system governed by domestic statutory provisions and uninfluenced by the systems of other countries. (14) In order for a company to enjoy trademark protection for its mark in a country that adheres to the territoriality doctrine, that company must satisfy the requirements as designated in that country's domestic laws. (15)

         The territoriality doctrine "is basic to American trademark law." (16) Thus, if a mark-holder wants trademark protection in the United States, he must satisfy the requirements of U.S. trademark law. (17) U.S. trademark protection is grounded in the theory of priority of use, (18) so in order to obtain trademark protection, a company's mark must be distinctive (19) and attached to a product that is used in commerce. (20) "'[C]ommerce' means all commerce which may lawfully be regulated by Congress." (21) Registration of a mark with the U.S. Patent and Trademark Office is another option for securing federal trademark rights, but this method of protection also requires an accompanying use of that mark in commerce. (22) Some courts, however, have recognized that the modern global economy necessitates the occasional award of trademark rights to international businesses, despite the absence of use of their mark in the country where protection is sought. (23)

      2. The Well-Known Foreign Mark Exception

         The well-known foreign mark exception to the territoriality rule delineates the circumstances in which a mark-holder may obtain protection for its mark in a foreign country, even though the mark has never been registered or used in that part of the world. (24) Under this exception, the senior user (25) of a foreign mark receives trademark protection when that mark is globally recognized. (26) A mark is globally recognized when it is so well-known that its use by a second entity would likely confuse consumers in the country in which protection is sought. (27) The well-known foreign mark exception provides protection only when the second entity attempts to use the mark "for identical or similar goods." (28) Countries that apply the exception must provide foreign mark-holders a minimum of five years to bring a claim, allowing for the discovery of the use of its mark by a junior user. (29)

         The well-known foreign mark exception was created as an alternative to the territoriality doctrine for two reasons. First, the exception eliminates confusion in the minds of consumers by preventing the use of the same mark by two different companies on similar products. (30) When a mark is used by a single company, consumers know exactly who created a product when it is labeled with that mark. (31) Second, the exception provides property rights in a mark for a senior user that has put extensive efforts into establishing that mark on a global level. (32)

         The well-known foreign mark exception was first discussed in Article 6bis of the Paris Convention for Protection of International Industrial Property (the "Paris Convention"). (33) One hundred and seventy-three countries, including the United States, have signed this treaty, (34) and most apply the well-known foreign mark exception when confronted with internationally-famous marks that have never been used within their borders. (35) U.S. courts, however, continue to debate whether the recognition of this exception in federal law is appropriate. For example, the Ninth Circuit acknowledged and applied the exception in 2004, (36) while more recently, in 2007, the Second Circuit refused to recognize it as law in the United States. (37) An understanding of the incorporation of international treaties and domestic trademark law is necessary to determine whether the Paris Convention and its well-known foreign mark exception are, in fact, included in U.S. law.

   2. U.S. Adoption of International Treaties and Federal Trademark Law

      1. International Treaties and Their Incorporation into U.S. Federal Law Under the laws of the United States, a treaty refers to any of four types of international agreements. (38) The first type consists of treaties authorized by Article II of the U.S. Constitution. (39) Article II grants the president the power to enter into treaties, requiring his signature combined with the...