Abitron Austria GmbH v. Hetronic Int’l Inc
- Mckayla Mccloskey
- Aug 11, 2023
- 2 min read
The New Scope of Trademarks:
In June, the Supreme Court ruled on Abitron Austria GmbH v. Hetronic International Inc. It was a ruling that has a strong impact on trademark law due to the narrow reading which limits the Act's reach between American and international business transactions. Today, I will break down the case, ruling, and explain why this is such an impactful decision for SCOTUS to make.
The Case:
Technological equipment - radio remote controls to be precise - owned and developed by US company Hetronic, was licensed out to Abitron for distribution throughout Europe. In the concluded case, it is alleged that Abitron, instead of distributing the licensed products from Hetronic, produced the remotes as their own IP and sold them throughout Europe with the Hetronic name.
When originally brought to court in the Oklahoma District Court, the lawsuit included claims of $100 million in damages from the sale of said infringed products. Justices decided through the Lanham act, a portion of federal trademark law, that Abitron was infringing on Hetronic's Trademark and barred the European company from selling the infringing products.
The Lanham act examines infringement with two main tests (these tests include many others, you can read about all of the LAPP tests here). The first test in the Act seeks to define if the products are similar and if so, is the similarity authorized? After similarity, the courts move to pondering the second test, whether or not the use, if unauthorized and infringing, will cause confusion regarding the product source within the market in which the commerce takes place. It is the second test which was used to determine the SCOTUS ruling.
The Ruling:
The Supreme Court ruled that in trademark disputes dealing with domestic and international commerce, the Lanham Act only reaches as far as America's borders. As long as international businesses don't sow confusion in the domestic American market, they are free to conduct business as they wish.
While the Lanham Act provides a fairly straight forward legal test, this case posed an interesting legal issue to the Supreme Court and the anticipating public. Could the Lanham Act allow for legal counterfeiting by foreign markets when commerce is conducted outside of American boarders? The Supreme Court's narrow conclusion seems to suggest that if the products aren't sold in America, then yes.
The Impact:
When one considers the court's ultimate ruling in relation to last month's post, the situation becomes even more intriguing. Could SCOTUS’s new trademark ruling impact future recognition of geographical indications and foreign trademarks within American boarders? If so, how will that impact America’s trading abilities with other countries?
The Lanham Act and it's use are extremely influential to domestic trademarks, trading, and international business relations. SCOTUS's ruling narrows the scope of the Act, making clear distinctions that the Lanham Act only protects products produced and distributed within a domestic commerce market. This will be essential to consider for future liability under the Act for businesses operating within the United States.
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Thanks for reading,
Kayla
Abitron Austria GmbH v. Hetronic Int’l Inc., 21-1043 (U.S.)
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