344 U.S. 280 (1952), 38, Steele v. Bulova Watch Co., Inc.

Docket Nº:No. 38
Citation:344 U.S. 280, 73 S.Ct. 252, 97 L.Ed. 319
Party Name:Steele v. Bulova Watch Co., Inc.
Case Date:December 22, 1952
Court:United States Supreme Court
 
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344 U.S. 280 (1952)

73 S.Ct. 252, 97 L.Ed. 319

Steele

v.

Bulova Watch Co., Inc.

No. 38

United States Supreme Court

Dec. 22, 1952

Argued November 10, 1952

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

Syllabus

Under the Lanham Trade-Mark Act of 1946, 15 U.S.C. § 1051 et seq., a federal district court has jurisdiction to award relief to an American corporation against acts of trademark infringement and unfair competition consummated in a foreign country by a citizen and resident of the United States who purchases parts here and some of whose products, sold abroad, enter this country where they may reflect adversely on the American corporation's trade reputation. Pp. 281-289.

(a) It is not material that the infringing trademark was affixed in a foreign country, or that the purchase of parts in this country, when viewed in isolation, did not violate any law of the United States. P. 287.

(b) American Banana Co. v. United Fruit Co., 213 U.S. 347, distinguished. Pp. 288-289.

(c) Where there can be no interference with the sovereignty of another nation, the district court, in exercising its equity powers, may command persons properly before it to cease or perform acts outside its territorial jurisdiction. P. 289.

194 F.2d 567 affirmed.

A Federal District Court dismissed a suit for injunctive and monetary relief brought by an American corporation against a citizen and resident of the United States for acts of trademark infringement and unfair competition consummated in Mexico. The Court of Appeals reversed. 194 F.2d 567. This Court granted certiorari. 343 U.S. 962. Affirmed, p. 289.

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CLARK, J., lead opinion

MR. JUSTICE CLARK delivered the opinion of the Court.

The issue is whether a United States District Court has jurisdiction to award relief to an American corporation against acts of trademark infringement and unfair competition consummated in a foreign country by a citizen and resident of the United States. Bulova Watch Company, Inc., a New York corporation, sued Steele,1 petitioner here, in the United States District Court for the Western District of Texas. The gist of its complaint charged that "Bulova," a trademark properly registered under the laws of the United States, had long designated the watches produced and nationally advertised and sold by the Bulova Watch Company, and that petitioner, a United States citizen residing in San Antonio, Texas, conducted a watch business in Mexico City where, without Bulova's authorization and with the purpose of deceiving the buying public, he stamped the name "Bulova" on watches there assembled and sold. Basing its prayer on these asserted violations of the trademark laws of the United States,2 Bulova requested injunctive and monetary

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relief. Personally served with process in San Antonio, petitioner answered by challenging the court's jurisdiction over the subject matter of the suit and by interposing several defenses, including his due registration in Mexico of the mark "Bulova" and the pendency of Mexican legal proceedings thereon, to the merits of Bulova's claim. The trial judge, having initially reserved disposition of the jurisdictional issue until a hearing on the merits, interrupted the presentation of evidence and dismissed the complaint "with prejudice" on the ground that the court lacked jurisdiction over the cause. This decision rested on the court's findings that petitioner had committed no illegal acts within the United States.3 With one judge dissenting, the Court of Appeals reversed; it held that the pleadings and evidence disclosed a cause of action within the reach of the Lanham Trade-Mark Act of 1946, 15 U.S.C. 1051 et seq..4 The dissenting judge thought that,

since the conduct complained of substantially related solely to acts done and trade [73 S.Ct. 254] carried on under full authority of Mexican law, and were confined to and affected only that Nation's internal commerce, [the District Court] was without jurisdiction to enjoin such conduct.5

We granted certiorari, 343 U.S. 962.

Petitioner concedes, as he must, that Congress, in prescribing standards of conduct for American citizens, may project the impact of its laws beyond the territorial boundaries of the United States. Cf. Foley Bros., Inc. v. Filardo, 336 U.S. 281, 284-285 (1949); Blackmer v. United States, 284 U.S. 421, 436-437 (1932); Branch v. Federal Trade Commission, 141 F.2d 31 (1944). Resolution of the jurisdictional issue in this case therefore depends

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on construction of exercised congressional power, not the limitations upon that power itself. And since we do not pass on the merits of Bulova's claim, we need not now explore every facet of this complex6 and controversial7 Act.

The Lanham Act, on which Bulova posited its claims to relief, confers broad jurisdictional powers upon the courts of the United States. The statute's expressed intent is

to regulate commerce within the control of Congress by making actionable the deceptive and misleading use of marks in such commerce; to protect registered marks used in such comme[r]ce from interference by State or territorial legislation; to protect persons engaged in such commerce against unfair competition; to prevent fraud and deception in such commerce by the use of reproductions, copies, counterfeits, or colorable imitations of registered marks, and to provide rights and remedies stipulated by treaties and conventions respecting trademarks, trade names, and unfair competition entered

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into between the United States and foreign nations.

§ 45, 15 U.S.C. § 1127. To that end, § 32(1) holds liable in a civil action by a trademark registrant "[a]ny person who shall, in commerce," infringe a registered trademark in a manner there detailed.8 "Commerce" is defined as "all commerce which may lawfully be regulated by Congress." § 45, 15 U.S.C. § 1127. The district courts of the United States are granted [73 S.Ct. 255] jurisdiction over all actions "arising under" the Act, § 39, 15 U.S.C. § 1121, and can award relief which may include injunctions,9 "according to the principles of equity," to prevent the violation of any registrant's rights. § 34, 15 U.S.C. § 1116.

The record reveals the following significant facts which, for purposes of a dismissal, must be taken as true: Bulova Watch Company, one of the largest watch manufacturers in the world, advertised and distributed "Bulova" watches in the United States and foreign countries. Since 1929, its aural and visual advertising, in Spanish and English, has penetrated Mexico. Petitioner, long a resident of San Antonio, first entered the watch business there in 1922, and in 1926 learned of the trademark

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"Bulova." He subsequently transferred his business to Mexico City, and, discovering that "Bulova" had not been registered in Mexico, in 1933 procured the Mexican registration of that mark. Assembling Swiss watch movements and dials and cases imported from that country and the United States, petitioner, in Mexico City, stamped his watches with "Bulova" and sold them as such. As a result of the distribution of spurious "Bulovas," Bulova Watch Company's Texas sales representative received numerous complaints from retail jewelers in the Mexican border area whose customers brought in for repair...

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