The famous marks exception to the territoriality principle in American trademark law.

• Author: Faris, James

INTRODUCTION

Over the course of thirty years of continuous operation, a restaurant named "Bukhara" in New Delhi, India, develops a reputation as one of the world's finest restaurants. (2) The restaurant becomes famous throughout much of the world, and the restaurant's owners decide to open several additional Bukhara restaurants outside of India. (3) Meanwhile, five individuals in New York, familiar with the famous Bukhara restaurant in New Delhi, decide to open an Indian restaurant in New York called "Bukhara Grill." (4) The New York restaurateurs, in addition to choosing a similar name for their restaurant, also replicate the New Delhi restaurant's logos, decor, staff uniforms, menus, and red-checkered bibs. (5) The owners of the New York Bukhara Grill admit they chose their restaurant's name, at least in part, due to the recognition of the "Bukhara" mark among the relevant population in New York familiar with the New Delhi restaurant. (6) The owners of the New Delhi Bukhara restaurant do not operate any restaurants in the United States, and they do not currently have the Bukhara mark registered with the United States Patent and Trademark Office ("USPTO"). (7) Can the owners of the New Delhi Bukhara restaurant assert any substantive rights in U.S. courts to enjoin the owners of the New York Bukhara Grill from infringing its famous trademark?

Under Article 6bis of the Paris Convention for the Protection of Industrial Property (the "Paris Convention") and Article 16(2) of the Agreement on Trade-Related Aspects of Intellectual Property Rights ("TRIPS"), international treaties to which the United States is a signatory, the "famous marks" doctrine might preclude the New York restaurateurs' use of the Bukhara mark in the situation described above. (8) Under the famous marks doctrine, "[i]f a mark used only on products or services sold abroad is so famous that its reputation is known in the United States, then that mark should be legally recognized in the United States." (9) But a majority of U.S. courts have held that the Paris Convention is not self-executing and cannot form the basis of a claim in federal court absent federal legislation giving effect to its articles. (10) Congress codified federal trademark law with the Lanham Act in 1946, (11) and the Ninth Circuit and the Second Circuit are currently split as to whether the Lanham Act recognizes the famous marks doctrine. (12)

One important reason why Congress might have chosen not to incorporate the famous marks doctrine into the Lanham Act is that the doctrine runs contrary to the territoriality principle of American trademark law. (13) The territoriality principle, which is basic to U.S. trademark law, (14) provides that, "a trademark is recognized as having a separate existence in each sovereign territory in which it is registered or legally recognized as a mark." (15) As such, "ownership of a mark in one country does not automatically confer upon the owner the exclusive right to use that mark in another country." (16) Therefore, if federal trademark law recognizes the famous marks doctrine, it does so as an exception to the territorial nature of a trademark.

This Note addresses the dichotomy between the famous marks doctrine and the territoriality principle in U.S. trademark law. Part I describes the legal background of trademarks, the territoriality principle, and the famous marks doctrine. Part I also discusses the relationship between the Paris Convention, TRIPS, and the Lanham Act. Part II examines the decisions of courts in the United States that have addressed the famous marks doctrine, including the current split between the Ninth Circuit and the Second Circuit in their treatment of the famous marks doctrine under the Lanham Act. Part III discusses the need for a famous marks exception to the territoriality principle. Part III also considers various standards for determining whether a mark would qualify as famous under the famous marks doctrine and argues that a variation of the Ninth Circuit's "secondary meaning plus" is the appropriate standard. The secondary meaning plus standard would best balance the aims of the territoriality principle with the need to prevent consumer confusion and ensure compliance with international treaty obligations.

1. LEGAL BACKGROUND OF THE TERRITORIALITY PRINCIPLE AND THE FAMOUS MARKS DOCTRINE

   A trademark is "any word, name, symbol, or device, or any combination thereof ... used by a person ... to identify and distinguish his or her goods ... from those manufactured or sold by others...." (17) The primary policy underlying the law of trademarks is the interest in protecting the public from confusion and deceit. (18) A secondary policy justification for trademark law is the trademark owner's interest in not having "the fruit of his labor misappropriated." (19) But a trademark owner's interest in protecting his mark from misappropriation often runs contrary to the fundamental policy of the law regulating the free market economy--that the public benefits from the encouragement of free competition. (20) As such, exclusive rights in intellectual property, including trademarks, are the exception to the general preference for free copying and imitation. (21)

   1. The Lanham Act

      In the United States, trademark law developed as a derivative of the common law tort of fraud and deceit during the nineteenth century. (22) Congress first attempted to pass federal legislation providing for trademark registration in 1870, (23) but the Supreme Court held the legislation unconstitutional in violation of Congress's Commerce Clause authority in 1879. (24) Unlike copyrights and patents, the Constitution does not grant Congress exclusive power to regulate trademarks. (25) Therefore, Congress has power to regulate trademarks only under its Commerce Clause authority to "regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes." (26)

      From 1879 to 1946, Congress passed a series of statutes and amendments under its Commerce Clause authority directed at regulating trademarks within the United States, but they were all inadequate to handle the realities of commerce in a rapidly industrializing nation. (27) In response to these inadequacies, a committee of the Patent Section of the American Bar Association together with Congressman Fritz Lanham, chairman of the House Patent Committee dealing with trademarks, introduced a new and comprehensive federal trademark registration act. (28) The Lanham Trademark Act, which represents the codification of federal trademark law, became law in 1946. (29)

   2. The Territoriality Doctrine

      Under section 32(1)(a) of the Lanham Act, the owner of a mark registered with the USPTO can bring a civil suit for trademark infringement against a person who used the mark without the owner's consent. (30) Under section 43(a)(1)(A) of the Lanham Act, the producer of a product or service can sue a person who uses "any word, term, name, symbol, or device, or any combination thereof ... which ... is likely to cause confusion ... as to the origin, sponsorship, or approval of [the producer's] ... services." (31) Unlike an infringement claim under section 32, a claim under section 43 is available for marks not registered with the USPTO. (32) But before a plaintiff can show that an infringer's use of a mark is likely to cause confusion under section 43, he must prove his own right to use that mark. (33)

      Under federal trademark law, to prove his own right to use the mark in the United States a plaintiff who has not registered his mark with the USPTO must demonstrate prior use of the mark within the United States. (34) Courts refer to the requirement of prior use in the United States as the "territoriality" doctrine. (35) Under the territoriality doctrine, "[p]riority of trademark rights in the United States depends solely upon priority of use in the United States, not on priority of use anywhere in the world." (36) This rule of territoriality is contrary to the "universality" doctrine, which states that, "if a trademark [is] lawfully affixed to merchandise in one country, the merchandise would carry that mark lawfully wherever it went and could not be deemed an infringer although transported to another country where the exclusive fight to the mark was held by someone other than the owner of the merchandise." (37) Courts have rejected the universality doctrine in the United States. (38)

      The territoriality principle "is basic to American trademark law." (39) Thus, for an owner of a mark in another country to ensure that U.S. trademark law will recognize his rights to the mark in the United States, he must use that mark in the United States. (40) But under the territoriality principle, if a foreign mark holder has not used his mark in the United States before someone else, he will not be able to assert priority rights under federal law--"even if a United States competitor has knowingly appropriated that mark for his own use." (41) For the most part, the territoriality principle is the rule among foreign nations as well. (42) Article 6(3) of the Paris Convention provides that "[a] mark duly registered in a country of the [Paris] Union shall be regarded as independent of marks registered in other countries of the Union, including the country of origin." (43) Thus, each country's mark is independent of another's. Courts have viewed the United States' adherence to the Paris Convention as committing to U.S. law the territoriality doctrine as embodied in Article 6(3) of the Paris Convention. (44)

   3. The Paris Convention, TRIPS, and the Famous Marks Doctrine

      The Paris Convention, of which the United States is a signatory, has over 110 adhering nations and is the primary international treaty governing patents, trademarks, and unfair competition. (45) The principal purpose of the Paris Convention is to ensure that foreign nationals receive the same treatment within the member countries regarding...