Trademark Extraterritoriality: Abitron v. Hetronic Doesn’t Go the Distance (Guest Blog Post)

By Guest Bloggers Margaret Chon and Christine Haight Farley

[Margaret Chon is a Professor of Law at Seattle University School of Law, and Christine Haight Farley is a Professor of Law at American University Washington College of Law.]

In one of the last opinions announced this term, Abitron Austria GmbH v. Hetronic International Inc., the Supreme Court held that the Lanham Act does not reach trademark infringement that occurs outside of the United States (US). Involving a dispute between two former business partners, both doing business in more than one country with the same trademarks, the Court reversed the Tenth Circuit and remanded the case for a determination of whether the accused acts satisfied the “use in commerce” requirement.

Abitron garnered far less attention than did other intellectual property (IP) cases argued this term, including Jack Daniels Products, Inc. v. VIP Products LLC (covered in this excellent post by Lisa Ramsey). Nonetheless, the majority opinion will have significant practical implications for transnational litigation in all IP areas. In addition, the opinion has important ramifications for domestic trademark law through its identification of “use in commerce” as the actionable domestic conduct.

The Context for IP Extraterritoriality Analysis

At the outset, let’s identify the major values at stake in the case. Despite a partially harmonized international intellectual property system, IP laws are fundamentally territorial. Not only are IP laws creatures of domestic law, but these domestic laws also generally do not reach outside of a nation’s borders. This first principle not only prioritizes sovereign determination of national-level policies undergirding the regulation of IP-protected goods and services, but also recognizes the risks associated with interference in other nations’ norm-setting prerogatives. As legal scholars such as Graeme Dinwoodie and Srividhya Ragavan have explored in the trademark context, this territoriality principle is continually challenged when trademark goodwill crosses borders. But the principle is nonetheless the clear starting point for analysis.

Moreover, the US Supreme Court has resurrected a long-disused canon of statutory construction: The presumption against extraterritorial application of US statutes. In Yegiazaryan v. Smagin, a RICO extraterritoriality opinion decided just one week before Abitron, Justice Sotomayor reminded us that “[d]ual rationales support the presumption . . . . On the one hand, it reflects concerns of international comity insofar as it ‘serves to protect against unintended clashes between our laws and those of other nations which could result in international discord.’ On the other hand, the presumption is informed by ‘the commonsense notion that Congress generally legislates with domestic concerns in mind.’ In fact, consistent application of the presumption ‘preserv[es] a stable background against which Congress can legislate with predictable effects.’”

Yet the very nature of the Abitron dispute—between a US plaintiff (Hetronic) and its former Austrian and German distributors (together referred to here as Abitron)—vividly illustrates that territories are highly permeable and possibly even anachronistic in an age of globalized commerce and trade, especially in IP cases where intangibles know no borders. An Abitron employee had unearthed documents that suggested that Abitron (rather than Hetronic) had retained ownership of the trademarks in question after a series of business restructurings. Unbeknownst to Hetronic, Abitron began to manufacture and sell products bearing these marks, mostly in Europe. However, as discussed during oral argument, some portion of the goods initially sold in Europe were subsequently resold in the US. Only approximately 3% of Abitron’s overall global sales were direct sales to US customers. Nevertheless, a jury found Abitron liable for trademark infringement, and the district court eventually awarded damages of about $90 million to Hetronic based on 100% of Abitron’s worldwide sales.

For a textualist court, territoriality poses a conundrum because it has no statutory hook in the Lanham Act. The same is true even in trademark treaties. While the Court correctly states that “[t]his principle has long been enshrined in international law,” in fact, the principle of territoriality is not explicitly addressed; one has to read between the lines to see its foundational presence. Major multilateral treaties governing trademark law such as the Paris Convention and the WTO TRIPS Agreement indicate substantive minima within member states, but do not confine members to exercising their domestic law within their borders. Absent clear guidance or prohibition from the treaties, member states are free to create their own rules of extraterritoriality. Chapter 1 of the Restatement (Fourth) of Foreign Relations Law refers to this area of law as prescriptive jurisdiction—a type of comity or deference to foreign government actors not required by international law.

Restricting Extraterritorial Reach: The Opinions

Working within these parameters, Justice Alito delivered the opinion of the Court. Although it was a unanimous judgment, Alito was joined by just four other Justices (Thomas, Gorsuch, Kavanaugh, and Jackson). Justice Jackson wrote a separate concurrence as well. Justice Sotomayor wrote a concurring opinion, joined by Chief Justice Roberts and Justices Kagan and Barrett, which agreed with the majority on the judgment only.

First, the Court had to address its longstanding precedent in Steele v. Bulova (1952), in which it had found that the defendant Steele’s “operations and their effects were not confined within the territorial limits of a foreign nation” and therefore he could be liable for infringement under the Lanham Act. The Abitron majority deems Steele “narrow and factbound” and therefore “of little assistance here.” Nevertheless, the majority goes on to distinguish Steele as involving domestic conduct. These conclusions about Steele enabled the majority to bypass Steele’s “effects test” (versions of which lower courts had developed in the intervening 70+ years) for determining Lanham Act extraterritoriality, without explicitly overruling Steele. The majority also observes that “understandably” Steele didn’t apply the Court’s “two-step framework,” which was developed decades later.

Having “put aside” Steele, the majority applies its most recent two-step extraterritoriality test (often referred to as the RJR Nabisco, Inc. v. European Community test) to the Lanham Act. As the Court reiterates, “[a]t 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.’” The Court easily concludes that the Lanham Act does not contain this clear instruction despite its capacious definition of “commerce” in § 1127 as “all commerce which may lawfully be regulated by Congress,” which arguably could include foreign commerce since the Constitution gives Congress the power to “regulate Commerce with foreign Nations.” Prior to Abitron, the Court had repeatedly held that explicit statutory references to foreign commerce are not enough to rebut the presumption against extraterritoriality, and adds here that the inclusion of “all commerce” does not alter the analysis.

The Court then proceeds to the thornier step two, “which resolves whether the suit seeks a (permissible) domestic or (impermissible) foreign application of the provision.” The majority instructs that here, “courts must start by identifying the ‘“focus’ of congressional concern” underlying the provision at issue” and later reiterates that “the proper test requires determining the provision’s focus.” It explains that “‘[t]he 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.’” The word “focus” appears 36 times in the majority opinion and 43 times in Justice Sotomayor’s concurrence.

But here’s the thing: the majority never actually determines the focus of the Lanham Act. Instead, it concludes that “The ultimate question regarding permissible domestic application turns on the location of the conduct relevant to the focus. And the conduct relevant to any focus the parties have proffered is infringing use in commerce, as the Act defines it.” (Original emphasis.) In other words, the majority does not determine the focus because whatever it is, the conduct of that focus is use in commerce. Indeed, it inexplicably chose to leave the focus of the Lanham Act undecided rather than going so far as to state that the focus is the conduct of using a mark in commerce, as had been urged by Abitron. Here, the Court seems not only to be deciding the case on the narrowest grounds possible, it also seems to be peculiarly resistant to announcing a comprehensive new rule.

In her concurrence, Justice Sotomayor accuses the majority of introducing a new third step: The location of the conduct. The majority maintains, however, that conduct has always been a part of the analysis: “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.”” (Original emphasis.) Given that the location of the vast majority—approximately 97%—of petitioner’s conduct (use in commerce via sales of potentially infringing goods) was outside of the US, this third step presumably prevents application of the Lanham Act to those sales. However, the Court did not say so explicitly, and remanded for further proceedings. In doing so, it left questions open for the lower courts, including (oddly) a specific identification of the step two Congressional focus underlying the relevant statutory provisions and how marked goods that had been sold initially in Europe but then re-sold in the US should be treated.

In justifying its restrictive approach to the extraterritorial reach of the Lanham Act, the majority raises a parade of comity-offensive horribles that might occur under a likelihood of confusion focus, stating colorfully (and arguably hyperbolically) that “if a claim under the [Lanham] Act involves a domestic application whenever particular ‘effects are likely to occur in the United States,’ the watchdog [i.e., the presumption against extraterritoriality, would be] nothing more than a muzzled Chihuahua”—even possibly resulting in the “collapse” of the international trademark system. This language aligns with Alito’s dissent in Yegiazaryan, in which he complained that “[a] thrust of our international-comity jurisprudence is that we should not lightly give foreign plaintiffs access to U.S. remedial schemes that are far more generous than those available in their home nations.”

Justice Jackson wrote a short but potentially consequential concurrence, which formed the crucial fifth vote for the Alito majority. Picking up on the sparseness of the majority’s engagement with the facts of the case (or for that matter any other case involving use in commerce, such as Steele), she observes that “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.” Significantly, she then discusses variations of hypotheticals she had raised during oral argument, involving the sale of bags bearing a simulation of a US mark affixed to bags made in Germany and sold to US students visiting Germany. In the first, the purchasers bring these goods into the US and make personal use of them. In the second, in which Justice Jackson believes liability under the Lanham Act should lie, the goods are brought into the US by the purchasers and then resold. This concurrence suggests some challenging questions about what might constitute domestic use in commerce sufficient to trigger application of the Lanham Act even if some or most conduct occurs abroad.

Justice Sotomayor (with Chief Justice Roberts and Justices Kagan and Barrett), concurred in the judgment only. This group of Justices would have preferred a test in which the step two focus is on “likelihood of consumer confusion” of persons in the US, without consideration of the location of the use in commerce, e.g., through sale of the marked goods. As noted by one transnational litigation scholar, this test would have “made the place of the conduct producing the evil, rather than the place of the transaction, determinative.” This potentially wider net for liability was urged by the Solicitor General as well as amici Timothy Holbrook, Marketa Trimble, and Margaret Chon as more consistent with Steele, in which consumer confusion played a large, although not solely determinative, role. But the majority rejects both the Steele effects test as well as a proposed updated two-part test that hinged on the place of consumer confusion. Instead, the majority tersely states that “confusion . . . is simply a necessary characteristic of an offending use.”

Although Abitron resulted in a unanimous judgment, Justice Sotomayor’s concurrence reads more like a sharp dissent. For instance, she accuses the majority of not “apply[ing] this Court’s settled law,” and instead, “transform[ing] the Court’s extraterritoriality framework into a myopic conduct-only test.” She derisively refers to the majority’s analysis as an “unprecedented three-step framework” under which she fears “no statute can reach relevant conduct abroad, no matter the true object of the statute’s solicitude.” And she characterizes “[t]he Court’s novel approach” as “a conduct-only test, in direct conflict with this Court’s jurisprudence.”

Interestingly, the two closely timed extraterritoriality decisions reveal the Court’s two factions. In Yegiazaryan, Sotomayor wrote the majority opinion and Alito wrote the dissent. That decision was 6-3, with Justices Kavanagh and Jackson siding with Sotomayor rather than Alito. There is reason to believe that Justice Jackson may have switched her vote in Abitron.[FN1] The upshot of Abitron is that five Justices engaged in what some transnational litigation scholars have characterized as litigation isolationism and unmistakably indicated that the two (or three?) step RJR Nabisco test of extraterritoriality is trans-substantive. Now that the Court has now applied it to both the federal patent and trademark statutes, perhaps copyright law is not far behind.

[FN1: It is unusual for a decision decided unanimously in a case heard as far back as March to be released on the penultimate day of the term. Even a case heard in April that produced four opinions was released the previous day (Counterman v. Colorado). And Abitron, unlike most of the cases released in the final days, does not involve a politically-charged issue. This has caused some to speculate what could have caused the delay. A switched vote could be the answer and Justice Jackson’s concurring opinion does teeter in between the two factions. Moreover, the fact that Justice Alito had already been assigned two majority opinions in March, while Justice Sotomayor had not been assigned any, suggests that the majority opinion may have initially been assigned to Sotomayor with Justice Jackson casting the fifth vote.]

Additional Comity Considerations

While the Court did not consider whether an Austrian or German court would have allowed damages for infringement that had largely taken place outside of the borders of those countries, the European Union (EU) amicus brief, cited by both Justices Alito and Sotomayor, suggests that those jurisdictions would not have done so. It also points to the risk of inconsistent judgments and forum shopping. By enunciating a ‘location of use in commerce’ test, the majority may have been motivated by an urge to avoid these potential comity ills and to adopt a brighter-line rule than offered by a likelihood of confusion focus.

But in doing so, the majority turned its back on Steele with a cramped reading that allowed the majority to claim that the Abitron rule is faithful to stare decisis when it is arguably not. The Steele facts are not readily distinguishable from Abitron. In Steele, 100% of the allegedly infringing sales occurred abroad; the only domestic conduct by the defendant was sourcing watch parts.

IP scholars such as Professors Graeme Dinwoodie and Timothy Holbrook have advocated more contextual approaches to extraterritoriality analyses. These suggested approaches were not foreclosed by either domestic precedent (Steele) or international treaty law—although now they seem largely precluded by the Abitron majority opinion. Of course, case-by-case determination of comity poses challenges, not least that US lawyers may be uncomfortable in engaging in this kind of analysis, which involves the assessment of the laws of non-US jurisdictions. For example, the Abitron lower courts did not engage with the issue of potential conflicts between US and EU law, and we suspect it’s partly because the parties did not commission experts on this important comity question that had been an essential part of Steele and its progeny. The seeming inability to engage in contextual comity analysis is apparent in other recent trademark extraterritoriality cases.[FN2]

[FN2: For example, in Trader Joe’s v. Hallatt (9th Cir. 2016), the plaintiff had no trademark rights in Canada where all of the allegedly infringing and/or diluting activity took place. Yet the Ninth Circuit found extraterritorial application of the Lanham Act, without considering which law should be applied to conduct wholly within Canada (with the alleged likelihood of confusing consumers in the US or harming US-based owners), simply finding that there was an “effect” on the US trademark owner.]

In the on-line context, contextualized comity analysis is even more formidable. Both Justices Jackson and Sotomayor noted the thorny issue of on-line commerce in footnotes to their respective concurrences. For example, Justice Jackson stated: “I will not attempt to discuss every way in which a marked item might be ‘in commerce’ such that the trademark is being used ‘in the ordinary course of trade’ domestically. §1127. But, in the internet age, one could imagine a mark serving its critical source-identifying function in domestic commerce even absent the domestic physical presence of the items whose source it identifies.” Her reference to the “internet age” echoes some of the dialogue at oral argument (and assiduously avoided by the majority’s narrowly drawn opinion). In the future, it no doubt will be necessary to develop additional comity guideposts, not only for on-line trademark but also for copyright disputes, as Professor Marketa Trimble has detailed, despite the majority’s efforts to ground extraterritoriality on conduct within the US.

In short, the comity path chosen by the Abitron Court is one that reinforces the principle of trademark territoriality and provides a seemingly brighter line rule to determine extraterritoriality on the facts of the case before it. But it may be of limited assistance for cross-border trademark litigation where trademark “use in commerce” and attendant good will are not limited to a single jurisdiction.

The Extraterritorial Reach of the Lanham Act after Abitron

Does the Abitron decision provide clear guidance for litigants and courts in future transnational trademark disputes? Yes, and no. Gone are effect tests and their concomitant impenetrables such as how many and what kind of effects count. Gone too are the varying and sometimes unwieldy multifactor tests. Now in trademark law, extraterritorial reach is a simple on-off switch: Is there use in commerce or not? The majority opinion seems to teach that “infringing ‘use in commerce’ of a trademark provides the dividing line between foreign and domestic applications of these provisions.” That much is clear; however, we do not yet know whether the defendant must sell marked products directly into the US, or whether additional activities can trigger the required use in commerce.

Justice Alito seemed to think Justice Sotomayor’s position let the Lanham Act reach too far, while Justice Sotomayor seemed to think that Justice Alito’s position didn’t reach far enough. As we’ve suggested, Justice Jackson seems to be somewhere in the middle. Neither Alito’s nor Sotomayor’s opinion laid out how their respective rules would operate. How can one tell if either position goes too far or falls short if we don’t know what conduct will suffice? Justice Jackson then—perhaps to explain why she chose Alito over Sotomayor—plays out what use in commerce might look like and when confusion in the US may fall short.

Illustrating that Alito’s position may go farther than Sotomayor thinks, Justice Jackson states that “’use in commerce’ does not cease at the place the mark is first affixed, or where the item to which it is affixed is first sold. Rather, it can occur wherever the mark serves its source-identifying function.” She explains that after the first sale of the marked goods, the “trademark is also ‘use[d] in commerce’ wherever and whenever those goods are in commerce, because as long as they are, the trademark ‘identif[ies] and distinguish[es] . . . the source of the goods.’” Here, and in the hypos that follow, it becomes clear that Justice Jackson has in mind downstream sales.

Even in the case of subsequent sales, Justice Jackson states that “the trademark is being used by the ‘person’ who put that trademark on the goods ‘to identify and distinguish’ them in commerce and ‘indicate the[ir] source.’ Ibid. This is the ‘use in commerce’ to which §1114(1)(a) and §1125(a)(1) refer.” (Original emphasis.) Hence, the person who made the first sale abroad is subject to the Lanham Act when these subsequent sales occur in the US. However, she goes on to state, “if the mark is not serving that [source-identifying] function in domestic commerce, then the conduct Congress cared about is not occurring domestically.” (Original emphasis.) Although one could argue that a marked good is always serving its source-identifying function even when it is not being sold and/or is in personal use, Justice Jackson’s reference here to “domestic commerce” and her hypos make clear that the existence of a purchased marked product alone doesn’t fit her concept of use in commerce.

On this point, Justice Jackson appears to part company with Justice Sotomayor, who believes the Lanham Act reaches “those defendants who sell infringing products abroad that reach the United States and confuse consumers here.” Justice Jackson’s hypotheticals identify at what point—in a chain of events that begins abroad and ultimately results in domestic consumer confusion—use in commerce should, in her view, result be actionable: When the foreign-marked goods are resold in the US. This is the key difference that may have cost Justice Sotomayor the majority and may play out in future litigation on extraterritorial reach.

A closer reading of Steele reveals the distance between the two Justices’ opinions. In discussing Steele, Justice Sotomayor states that the defendant’s acts caused consumer confusion in the US. But in fact they caused consumer confusion at the point of sale in Mexico. When later, consumers expressed belief to Bulova sales agents in the US that their watches were Bulova watches, this was evidence of past confusion. Therefore, in Steele, the credited “effects” in the US included the consumers’ present realization that they had been swindled in the past (and that their blissful ignorance of that fact had presently come to an end). Yet in Justice Jackson’s hypos, both in oral argument and in her concurrence, there is no indication of past confusion on the part of the purchasers in Germany. Perhaps they were deceived, or perhaps they knew what they were buying. The consumer confusion in each of her hypos in oral argument and in her concurrence was not with the purchasers in Germany, but with third parties in the US. What her hypos isolate for their triggering impact is the offering of the marked goods for sale in the US where they would likely cause consumer confusion for this new audience of consumers.

The language of the infringement provision in §1114 of the Lanham Act doesn’t exactly square with Justice Jackson’s concept of use in commerce, which appears to merge within it a domestic commercial activity. Under §1114 (1)(a), liability hinges on both use in commerce and one of the following activities: The “sale, offering for sale, distribution, or advertising of any goods or services.” Thus, in this statutory construction, sales are a separate requirement from use in commerce, and not, as Justice Jackson maintains, the linchpin of use in commerce. Section 1114(1)(b) applies where the goods or services are not yet used in commerce, but where they are “intended to be used in commerce.” (Emphasis added.) Thus, in addition to use in commerce, §1114 requires putting products into sale[FN3], or at least intending to do so. Justice Jackson’s second hypothetical, however, would allow an action where a marked product is being resold in the US without the intent of the foreign merchant. By collapsing the commercial activity into “use in commerce,” Justice Jackson’s approach seems to obviate the need to determine the foreign merchant’s intent.

[FN3: Although the Court did not address the other types of use in commerce, such as “offering for sale, distribution, or advertising,” presumably these are also covered activities, as Justice Sotomayor pointed out in footnote 3 of her opinion.]

As was her stated objective in writing separately, Justice Jackson’s concurrence began the process of playing out the new rule in Abitron, but in just two scenarios. US trademark owners might take some comfort in Justice Jackson’s second hypothetical, which extends the Lanham Act’s reach to a person who sells a marked product abroad “whenever” that product is resold in the US. In addition to the tension with §1114, presumably such liability would have to be under a theory of secondary liability or would require proof that the injury was proximately caused by the foreign merchant—again issues left untouched by the opinions although debated at oral argument. As Justice Sotomayor noted, “the Court today does not address whether a defendant operating abroad who sells goods that reach the United States can be held liable under the Lanham Act pursuant to contributory liability principles.”

As to other scenarios, we have little guidance from any of the opinions. Professors Rochelle Dreyfuss and Linda Silberman analyze why many questions regarding Abitron’s sales are yet unresolved. For instance, on remand, the Tenth Circuit will have to consider whether the foreign sales of goods marked by Abitron to purchasers who indicated that they intended to use the products in the US constitutes use in commerce. The other issue it will have to resolve is how the new test applies to the Lanham Act’s damages provisions, as explored in a blogpost by Professor Timothy Holbrook and Anshu Garg. Internet commerce, mentioned in footnotes by both Justices Jackson and Sotomayor, may be the 800-pound gorilla in the room.

Bottom line for US trademark holders: Either file for protection in each jurisdiction where a mark is expected to be used and be prepared to litigate in those jurisdictions or, alternatively, be ready in US litigation to address the reach of domestic “use in commerce” based partially on activities abroad. For defendants, the opinions might endorse that pre-trial motions to dismiss could be brought under either Federal Rule of Civil Procedure 12(b)(1) or 12(b)(6); the Court did not take the opportunity to clear up this point, which is the subject of a circuit split.

Implications for Domestic Trademark Disputes

Outside of extraterritoriality, the biggest takeaway from Abitron is the Court’s discussion of “use in commerce” as a requirement for Lanham Act liability. The majority opinion states that “[u]nder 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.” Here, the Court mashes up “the bona fide use of a mark in the ordinary course of trade,” which is taken from the statute’s definition of “use in commerce,” with “to identify and distinguish his or her goods, … and to indicate the source of the goods,” which is taken from the statute’s definition of a “trademark”–thereby adding content to the concept of use in commerce. In doing so, the Court is seemingly unaware that Congress provided each of these two statutory phrases as requirements of a purported trademark owner, not requirements for bringing an infringement claim. But as the Court’s statement doesn’t overtly conflict with the text of the Lanham Act, it is now the new definition of “use in commerce” as a requirement of trademark infringement.

As a result, henceforth “use in commerce” means use in commerce as a trademark. This understanding invokes the concept of “trademark use,” a hotly debated doctrine (in the mid to late 2000s between Stacey Dogan and Mark Lemley and Graeme Dinwoodie and Mark Janis, among others) that establishes a functional limit to trademark infringement. The debate died down after the Second Circuit held in Rescuecom Corp. v. Google Inc. (2009) that Google’s sale of trademarks as search engine keywords was a use in commerce. In a labored appendix to that decision, the Second Circuit explained why the statutory phrase “bona fide use of a mark in the ordinary course of trade” should not be an element of infringement. The Abitron Court appears to have overruled the Second Circuit on this point and may have—without realizing it—reopened the trademark use debate.

It will be difficult to argue that the Court’s new definition of use in commerce is dicta. At the conclusion of the majority opinion, the Court restates its holding ”that the infringing ‘use in commerce’ of a trademark provides the dividing line between foreign and domestic applications of these provisions” and then states that “‘“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.’” The Court added a footnote to this statement that no more elaboration, such as Justice Jackson’s musings, was “occasion[ed] by the decision.” Taken together, these three sentences suggest that to apply “use in commerce” as the demarcation line of the Lanham Act’s reach, one must start with the Court’s definition of that phase, although in light of that definition “the precise contours of [it]” may only come into focus after development by the lower courts.

This term had the Court deciding two trademark cases. It’s not only tempting to find a through line in these cases, it’s difficult not to. In Jack Daniel’s Properties, Inc. v. VIP Products LLC, the Court stated that use of a mark to designate the source of one’s own goods, or use as a mark, fell within “the heartland of trademark law,” and in Abitron, it held that the conduct relevant to the focus of the Lanham Act was use in commerce as a mark. Putting these cases together—and possibly adding its recent certiorari grant in Vidal v. Elster, a case broadly resembling two earlier cases in which the Court held that certain registration restrictions unconstitutionally stepped over into First Amendment terrain—it appears that the Court is attempting to keep trademark law in its own lane.

In both Jack Daniel’s and Abitron, the Court opined on what kind of conduct brought defendants into the crosshairs of trademark infringement. In both, the Court—though there was no briefing on it in either case—found its way to trademark use. Taken together, we expect there to be increased focus in future trademark litigation on whether a defendant is using the accused mark as a mark. What constitutes use as a mark, however, was not elaborated on in either case and will need to be developed by lower courts starting from this barebones definition in Jack Daniel’s: ”[W]hen the accused infringer has used a trademark to designate the source of its own goods—in other words, has used a trademark as a trademark.”

Although Justice Jackson’s concurrence doesn’t have the force of law, it may provide lower courts with guidance as to how to determine liability in future cases, whether or not they involve an extraterritoriality issue. (We can’t help making the comparison to Justice Powell’s crucial fifth vote and concurring opinion in Regents of the University of California v. Bakke (1978), which became the holding because he did not join either of the plurality opinions, and which was overruled in the other case announced the same day as Abitron.) If the guidance of her hypotheticals is followed, one by-product may be that the viability of future post-sale confusion claims (not involving extraterritoriality) will be undermined. In Justice Jackson’s first hypo, when the student-purchasers brought the marked bags from Germany into the US and thereafter “employ[ed] those bags to carry personal items,” the Lanham Act was not implicated because “[t]he mark affixed to the students’ bags is not being ‘use[d] in commerce’ domestically as the Act understands that phrase: to serve a source-identifying function ‘in the ordinary course of trade,’ §1127.” Such personal use of marked goods stands in contrast to the subsequent resale of the goods in the US in her second hypo. Although not intended to instruct on purely domestic liability, the underlying logic of the results in these hypotheticals is that personal use of marked products is not actionable use in commerce, even if onlookers become confused about the source of those products. In this way, the second hypo aligns with the majority’s rejection of hinging liability on free-floating confusion, and requiring some use “in the ordinary course of trade.”

Conclusion

As with Jack Daniel’s, the Court in Abitron left us with a new rule and, other than justifying it, said no more than necessary to send the new rule back down to be applied on remand. Also in both cases, the new rule announced is dictated by the very core of trademark law. But whereas in Jack Daniel’s, the new rule need only be deciphered in cases at the margins, in Abitron, the new rule will need to take further shape in every case of extraterritoriality. We know only that bald cases of consumer confusion in the US resulting from wholly overseas use will not survive. Every other fact pattern will require guesswork as to whether the critical use in commerce threshold has been met. Here, the Court has aided future litigants only by announcing what facts and theories need not be developed. The citizenship of defendants and the treatment of the dispute under the law of the jurisdiction in which the infringing acts primarily occurred are now off the table. With online shopping continuing to grow in popularity, the watershed case of the extraterritorial reach of the Lanham Act awaits us.