Abitron: Media Coverage Round-Up
March 30, 2023
On March 21, the Supreme Court heard oral arguments in Abitron Austria GmbH v. Hetronic International, Inc., a case on review from the Tenth Circuit raising the geographic reach of federal law. The respondent, an Oklahoma-based electronics manufacturing company, brought a trademark infringement claim under the Lanham Act against the petitioner, a group of German and Austrian companies. This case asks the Court to consider whether the Lanham Act applies to uses of trademarks in foreign sales, including sales of products that never reach the United States. In the limited coverage of last Tuesday’s arguments, little consensus has emerged as to which direction the justices are most likely to take.
Writing for TLB, Bill Dodge, who also submitted an amicus brief in the case, surmises that the U.S. Solicitor General’s middle path was “more attractive to the justices than any other.” The Solicitor General argued that the Lanham Act does not rebut the presumption against extraterritoriality, but that its domestic application covers foreign trademark uses that cause confusion among U.S. consumers. Dodge goes on to highlight the justices’ recurring concern with how the parties’ alternative arguments would apply in today’s internet-based, cross-border economy. In particular, Dodge examines Justices Kavanaugh and Alito’s interest in how the Lanham Act’s extraterritorial application could interact with other nations’ trademark laws and walks through several justices’ curiosity about overruling Steele v. Bulova Watch Co., the Court’s 1952 decision that applied the Lanham Act to an infringing use of a U.S. trademark in Mexico. Dodge wraps up his analysis by parsing the many questions that he was surprised didn’t come up at oral argument, including whether the modern presumption against extraterritoriality should apply to the Lanham Act at all and the implications of the Court’s potential decision for the respondent’s recovery in this case.
For Bloomberg Law, Kyle Jahner agrees with Dodge’s bet on the Solicitor General’s middle path. Reviewing the predictions shared by attorneys who listened to oral arguments, Jahner says that most agree that the justices will overturn the Tenth Circuit’s decision and limit the Lanham Act’s extraterritorial application. Jahner also details the parties’ responses to questions from Justices Jackson and Thomas, who both sought to test the outer limits of the parties’ arguments, and he notes the split between Justices Barrett and Alito, who entertained the idea of overturning Steele, and Justice Kagan, who seemed disinclined to do so. Jahner concludes by characterizing the justices’ apparent views along traditional ideological lines, suggesting that the three liberal justices seemed partial to an effects-based test, while the conservative justices sought a clearer but more rigid standard to apply.
Eileen McDermott disagrees with Dodge’s and Jahner’s predictions in IPWatchdog, predicting that the justices will affirm the Tenth Circuit to deal with “the need for a new or narrowed test to account for the realities of modern commerce.” McDermott points out Justice Sotomayor’s skepticism of Abitron’s argument for a rigidly territorial standard in “the world of the internet” and details how the hypotheticals posed by Justice Jackson reveal her doubts about whether the foreseeability of consumer confusion even matters to Lanham Act analysis. McDermott goes on to present commentary from four attorney-readers, who variably discuss the justices’ concern with whether to overrule Steele, their questions’ conformity with traditional ideological camps, and the “uniquely broad” Commerce Clause language in the Lanham Act.
And on JDSupra, Tejaswini Gupta and Anna Naydonov of White & Case LLP aren’t sure whether the Court will take the opportunity to “fundamentally alter the scope and reach of the Lanham Act” or confine their opinion to the narrow facts of this case. Summarizing the arguments, Gupta and Naydonov break the justices’ questioning down into two central foci: the consumer confusion element of the Lanham Act and the challenge of applying territorial trademark law in the “digital, Internet-connected world of today.” In sum, Gupta and Naydonov describe the Court as “grappling with the need to modernize the test for an era where the majority of sales and interactions occur online.”
Beyond that, greater elucidation of the justices’ views won’t come until the Court issues its opinion, most likely in June. Until then, the answer to what Dodge calls Hetronic’s “$88 million question” will remain unanswered.