Court: Court of Appeals for the Second Circuit; March 28, 2007; Federal Appellate Court
The case involves ITC Limited and ITC Hotels Limited (collectively "ITC"), which hold a registered U.S. trademark for the name "Bukhara" related to restaurant services. They sued Punehgini, Inc. and others for trademark infringement, unfair competition, and false advertising, claiming that the defendants' similar mark and trade dress violated federal and state laws. The U.S. District Court for the Southern District of New York granted summary judgment in favor of the defendants, leading ITC to appeal.
The appellate court affirmed the district court’s decision, agreeing that ITC abandoned its Bukhara mark for restaurant services in the U.S. ITC argued that the "famous marks" doctrine should apply to allow them to sue for unfair competition despite their abandonment, but the court found that this doctrine has not been incorporated into federal trademark law. Therefore, the court also upheld the summary judgment on ITC's federal unfair competition claim.
The court noted uncertainty regarding the application of the "famous marks" doctrine under New York common law, leading to certification of questions to the New York Court of Appeals. The court also affirmed the district court’s ruling that ITC lacks standing for a false advertising claim.
The factual background reveals that ITC owns the Bukhara restaurant in New Delhi, which has gained international recognition since its opening in 1977. ITC previously operated or franchised Bukhara restaurants in several cities, including New York and Chicago, but by 2004, only the New Delhi location remained active. ITC registered the Bukhara mark in the U.S. in 1987, but the New York restaurant closed in 1991, and the Chicago franchise was canceled in 1997, with ITC admitting it has not operated any Bukhara restaurant in the U.S. since then.
In 2001, ITC conducted a marketing study to explore the potential of selling packaged foods, including "Dal Bukhara," under the Bukhara label in the U.S. ITC subsequently applied for a trademark for "Dal Bukhara" related to ready-to-serve foods. By May 2003, ITC began selling packaged Dal Bukhara products to distributors in California and New Jersey. In June 2003, the products were showcased at the International Fancy Foods Show in New York City.
In 1999, defendants Raja Jhanjee, Vicky Vij, Dhandu Ram, Paragnesh Desai, and Vijay Roa formed Punchgini, Inc. to establish an Indian restaurant named "Bukhara Grill" in New York City, having previously worked at the New Delhi Bukhara and ITC's New York Bukhara. They considered other names but ultimately chose "Bukhara Grill," as there was no existing restaurant by that name in New York. The restaurant drew parallels to ITC’s Bukhara establishments, evidenced by similarities in name, logos, decor, staff uniforms, menus, and customer bibs, with defendant Jhanjee acknowledging the resemblance to Delhi's Bukhara.
On March 22, 2000, ITC sent a cease and desist letter to the defendants, alleging infringement of their Bukhara mark and demanding acknowledgment of ITC's rights, disclosure of the period of use, and remittance of any profits. The defendants responded on March 30, 2000, expressing a desire to avoid litigation but claimed ITC had abandoned the Bukhara mark due to non-use in the U.S. After receiving no timely reply, the defendants sent another letter on June 22, 2000, stating they would assume ITC had abandoned its rights if no response was received by June 28, 2000. There is no indication that ITC replied to this correspondence.
On April 15, 2002, ITC's counsel contacted defendants to restate demands from March 2000 and noted the defendants' lack of response. In reply, the defendants' counsel disputed ITC's claims, highlighting ITC's failure to respond to his March 22, 2000 letter and reinforced their assertion of abandonment of the Bukhara mark. No further communication occurred until the filing of this lawsuit on February 26, 2003. ITC's amended complaint alleged trademark infringement under section 32(l)(a) of the Lanham Act, along with claims of unfair competition and false advertising under sections 43(a) and 44(h) of the Lanham Act, as well as related New York common law claims. The defendants countered with a defense of abandonment and sought cancellation of ITC's Bukhara registration. The district court granted defendants summary judgment, ruling that ITC had abandoned the Bukhara mark for U.S. restaurants and found insufficient evidence to support ITC's claims under the famous marks doctrine. The court also determined that ITC lacked standing to pursue its false advertising claim. ITC appealed, arguing that (1) the record does not conclusively show abandonment, (2) the district court misapplied the famous marks doctrine, and (3) it has standing for the false advertising claim. The standard of review for the appeal is de novo, affirming summary judgment only if there are no genuine issues of material fact. Under section 32(l)(a) of the Lanham Act, a registered mark owner can sue for unauthorized use, similarly recognized under New York law.
A plaintiff can be defeated in an infringement claim if the alleged infringer proves that the trademark owner has abandoned the mark, as outlined in 15 U.S.C. § 1115(b)(2) and supported by Nercessian v. Homasian Carpet Enterprises Inc., which affirms that trade name rights can be lost through abandonment. Abandonment serves as both an affirmative defense and a basis for cancelling a federally registered mark, per 15 U.S.C. § 1064(3). In this case, defendants argued that ITC had abandoned the Bukhara mark before they opened their restaurants, leading to the court's determination that the defendants established abandonment as a matter of law, justifying summary judgment in their favor and the cancellation of ITC's registration.
The doctrine of abandonment is grounded in the principle that trademark rights are maintained through active use of the mark. Trademark rights, including those for registered marks, depend on use rather than registration alone, as noted in cases such as Pirone v. MacMillan, Inc., and United Drug Co. v. Theodore Rectanus Co. Additionally, the Lanham Act emphasizes that priority and rights arise from the first use of a mark in commerce. If a trademark owner stops using the mark without intent to resume in the foreseeable future, the mark is considered abandoned.
To demonstrate abandonment, the party asserting it must prove two elements: (1) the legal owner’s non-use of the mark, and (2) the owner's lack of intent to resume its use, as stated in 15 U.S.C. § 1127 and supported by various case law, including Stetson v. Howard D. Wolf Associates and Warner Bros. Inc. v. Gay Toys, Inc., which assigns the burden of persuasion regarding abandonment to the asserting party.
ITC acknowledges that defendants have demonstrated ITC's non-use of the Bukhara mark for restaurant services in the U.S. since August 28, 1997, satisfying the first element of abandonment. However, ITC argues that there is a triable issue regarding its intent to resume use of the mark. ITC contends that the district court applied an incorrect legal standard in concluding otherwise. The Lanham Act establishes that non-use of a mark for three consecutive years constitutes prima facie evidence of abandonment, creating a rebuttable presumption that the mark has been abandoned. Under Rule 301 of the Federal Rules of Evidence, this presumption shifts the burden of production to the mark owner, requiring them to present evidence of intent to resume use. The presumption can be rebutted by contrary evidence, which, if sufficiently compelling, negates the assumption of abandonment. Thus, the statutory presumption necessitates the mark owner to provide evidence indicating an intention to resume use within a reasonable timeframe despite the period of non-use.
To defeat a presumption of abandonment due to non-use, a defendant must demonstrate an intention to resume use "within the reasonably foreseeable future." The court noted that ITC argued the district court imposed an overly stringent standard, requiring "objective, hard evidence of actual concrete plans" to resume use. This was criticized, as the court emphasized that the burden should be to present evidence sufficient for a reasonable jury to find the non-existence of abandonment. ITC was required to provide evidence that would allow a jury to infer its intent to resume use of its mark during the three-year period of non-use from August 28, 1997, to August 28, 2000. While hard evidence of plans to resume use would fulfill this requirement, other circumstantial evidence could also suffice. Ultimately, the district court's summary judgment was justified as it conducted a thorough examination of ITC's evidence and concluded that no reasonable jury could find ITC intended to resume use of its mark during the relevant period.
ITC Ltd. failed to provide evidence during the nonuse period to demonstrate an intent to resume use of its trademark, which resulted in a statutory presumption of abandonment. Even if the district court had used an incorrect standard, its judgment would still stand if no genuine material facts warranted a trial. Intent is usually a subjective matter that complicates summary judgment, but merely claiming intent to resume use is insufficient to counter abandonment claims. Courts require more than vague assertions; a trademark owner must present evidence of specific actions or plans that indicate a genuine intent to resume use. ITC’s arguments, citing reasonable grounds for nonuse, efforts to develop a specific product line, attempts to find franchisees, and continued use of the mark outside the U.S., did not convince the court that a reasonable inference of intent to resume use could be drawn.
ITC argues for the suspension of its use of the Bukhara mark in the United States from 1997 to 2000 based on two grounds: (1) Indian regulations that required repatriation of profits hindered its ability to operate profitable Bukhara restaurants in the U.S., and (2) depressed hospitality market conditions from 1988 to 2003 limited franchise development. However, these claims lack support from record evidence. Many Indian regulations had been in effect since 1973, yet ITC successfully opened restaurants in New York in 1986 and Chicago in 1987, contradicting its assertion. An ITC representative attributed the New York restaurant's closure to financial over-leverage rather than Indian regulations, and the termination of the Chicago franchise cited non-payment issues. Additionally, ITC failed to explain how the cited regulations hindered U.S. operations while allowing a Bukhara restaurant to open in the UAE in 1998. ITC did not provide evidence that U.S. hotels were unreceptive to partnerships, nor did it demonstrate a decline in the U.S. hospitality market during the relevant period.
Regarding its intent to market Bukhara-branded packaged foods during 1997-2000, ITC presented only the minutes from a July 2000 meeting, which mentioned an initiative for "Bukhara Dal" but did not indicate plans for marketing in the U.S. Additionally, all other evidence regarding marketing activities occurred after 2000, including a 2001 study and trademark applications, and it was not until 2003 that ITC showcased products at a New York trade show. This timeline does not support a finding of intent to resume use of the Bukhara mark for restaurants in the U.S. during the non-use period. Thus, ITC's arguments lack sufficient evidence to establish the necessary intent to justify the suspension of the mark.
ITC claims that discussions about expanding the Bukhara restaurant franchise to various U.S. states indicate its intent to use its registered mark. However, evidence of these discussions consists solely of a limited number of unsolicited communications (facsimiles, emails, and letters) received over five years (1998-2002), without any initiation or serious consideration by ITC. Consequently, these communications do not create a material question of fact regarding ITC's intent to resume use of the Bukhara mark.
ITC also cites evidence of negotiations for expanding Bukhara restaurants into Starwood hotels, including a 2002 letter expressing interest in locations outside India and a 2004 news story about plans for London and Tokyo. Neither document mentions plans for the U.S. nor reflects intent during the critical non-use period (1997-2000), further failing to support ITC's claims.
In referencing La Societe Anonyme des Parfums le Galion v. Jean Patou, ITC argues that operating Bukhara restaurants internationally suggests intent to use the mark in the U.S. However, the referenced case indicates that minimal foreign sales do not establish U.S. trademark rights, and ongoing foreign use alone does not imply intent to re-use the mark domestically. Therefore, the court concludes that ITC's foreign operations do not impact the abandonment of its U.S. rights to the Bukhara mark, resulting in the affirmation of summary judgment for the defendants on ITC's infringement claims.
Additionally, ITC alleges unfair competition under Section 43(a)(1)(A) of the Lanham Act, which prohibits misleading uses of a mark that may cause confusion regarding the origin or approval of services.
The document outlines the legal framework regarding protection under section 43(a) of the Lanham Act compared to section 32(l)(a). Section 43(a) offers broader protection, covering unregistered trademarks, while section 32(l)(a) only pertains to registered marks. To succeed in a section 43(a)(1)(A) claim, a plaintiff must demonstrate that the mark is distinctive to the source of goods or services and prove the likelihood of confusion with the defendant's offerings. Moreover, the plaintiff must establish prior rights to the mark or dress in question, as abandonment of a mark can negate these rights. The case references indicate that a plaintiff must show both confusing similarity and priority over the defendant's use of the mark.
In this particular instance, the court noted that ITC had abandoned its registered "Bukhara" mark, creating a significant challenge in asserting a priority right in the U.S. ITC attempts to invoke the famous marks doctrine, arguing its continuous use of the Bukhara mark internationally since 1977 and its renown in the U.S. prior to the defendants' entry into the market. However, the court emphasizes trademark territoriality, asserting that a trademark's legal existence is separate under each country's laws, and therefore, prior international use does not automatically confer rights within the U.S. The court indicates a need to discuss the famous marks exception and related international legal principles to assess ITC's claims further.
Trademark ownership and rights are fundamentally tied to the domestic reputation and goodwill of the markholder, allowing consumers to expect consistency in the mark's value. Ownership in one country does not automatically grant exclusive rights in another; mark owners must actively secure recognition of their rights in each country. U.S. courts do not enforce trademark rights based solely on foreign law, focusing instead on U.S. trademarks and their associated goodwill. Trademark rights in the U.S. are established by priority of use, requiring that use occur within the U.S. for rights to be asserted under the Lanham Act. Foreign use does not create U.S. trademark rights, and prior use of a similar mark abroad cannot defeat a domestic claim if the claimant can prove prior use in the U.S. The principle of territoriality dictates that U.S. trademark rights depend solely on U.S. use, though the famous marks doctrine may allow exceptions for marks that have gained fame in the U.S. without domestic use.
Article 6bis of the Paris Convention, added in 1925, mandates that member states must refuse or cancel the registration and prohibit the use of trademarks that reproduce, imitate, or translate well-known marks, thereby preventing confusion. This applies to marks recognized as well-known by the competent authority in the country where registration or use occurs, even if the original mark lacks formal protection in that jurisdiction. The intent is to prevent the registration and use of trademarks that could mislead consumers regarding the source of goods.
In the United States, the famous marks doctrine emerged through a New York trial court's recognition in the case of Maison Prunier v. Prunier’s Restaurant and Caf. The French owner of "Maison Prunier" sought to stop a New York restaurant from using its name and slogan, despite not operating in the U.S. The court ruled in favor of the French plaintiff, citing the Paris Convention’s provisions for unfair competition protection, emphasizing that actual competition was not necessary for relief. The court allowed for protection against public deception caused by unauthorized use of a trade name, even acknowledging an exception to the territoriality rule in cases of bad faith by the second user.
The court recognized the fame of a trademark as critical in assessing whether a subsequent user acted in good faith when using a mark unknowingly already in use. In the Prunier case, the court ruled that the French plaintiff was protected against unfair competition due to the extensive reputation of its trademark and the defendants' clear lack of good faith. This decision was based solely on New York common law, not on the Paris Convention's Article 6bis.
In a later case, Vaudable v. Montmartre, Inc., a New York trial court granted injunctive relief to the Parisian restaurant Maxim’s against a New York establishment that copied its name and style. The court deemed the absence of direct competition irrelevant, focusing instead on whether there was misappropriation of a property right. It highlighted Maxim’s continuous operation since 1946 and its fame among New York diners, granting priority rights over the junior American user.
Decades later, the federal Trademark Trial and Appeal Board cited Vaudable in various cases. In Mother's Restaurants, Inc. v. Mother's Other Kitchen, Inc., it noted that prior foreign use does not confer rights in the U.S. against a good faith user unless the foreign mark is "famous" as defined in Vaudable. The Board also blocked the registration of a "Wimbledon Cologne" trademark, emphasizing that the Wimbledon mark had acquired fame, leading consumers to mistakenly believe the product was associated with the Wimbledon championships, thus harming the rights of the original mark holder.
Owners of well-known foreign trademarks are not required to use those marks in the U.S. to contest the registration of similar marks that could confuse consumers, as reiterated by the Trademark Board. Although decisions by the Trademark Board are not binding on courts within the Circuit, they are given significant weight due to administrative law principles. However, concerns arise because the Board does not explicitly base its recognition of the famous marks doctrine on the Lanham Act or federal law, suggesting reliance on state common law, which has been questioned by some Board members. The applicability of the famous marks doctrine under federal law appears dependent on whether Article 6bis of the Paris Convention is self-executing. The Ninth Circuit is the only federal appeals court to recognize the famous marks doctrine as federal law, as seen in Grupo Gigante S.A. De C.V. v. Dallo. Co., where the court acknowledged a famous mark exception to the territoriality principle, arguing that strict adherence to this principle could lead to consumer confusion in a global context.
Trademark law primarily aims to prevent consumer confusion and fraudulent practices, particularly in the context of misleading immigrants about product origins. The Ninth Circuit, in its decision on Grupo Gigante, did not invoke the Lanham Act or Article 6bis of the Paris Convention to endorse the famous marks doctrine, explicitly stating that the Paris Convention does not confer additional rights beyond those in the Lanham Act. Furthermore, California law does not recognize this doctrine, as noted in the court's observation that international use does not establish priority in California. The Ninth Circuit's stance on the famous marks doctrine appears to be founded on policy considerations, as a strict territoriality rule could facilitate consumer confusion and fraud.
Previous court decisions have referenced the famous marks doctrine without determining its legal standing for gaining priority rights in the U.S. for foreign marks not used domestically. For instance, in Buti v. Impressa Perosa, the court noted the doctrine's irrelevance due to the absence of a claim under it, while Empresa Cubana del Tabaco v. Culbro Corp. abstained from addressing its viability due to the Cuban embargo affecting the plaintiff's claims.
District courts have varied in their interpretations regarding the doctrine's applicability to Lanham Act claims. Judge Sweet ruled that rights under Article 6bis could only be pursued under section 44(b) of the Lanham Act, while Judge Cote viewed the doctrine as a contentious common law exception to the territoriality principle, allowing for claims under federal unfair competition law. In contrast, Judge Rakoff asserted that the famous marks doctrine, as a common law construct, could only support state claims, emphasizing that the Lanham Act defines the parameters for federal trademark claims. He described the recognition of a famous marks exception as a significant alteration to federal trademark law, one that could only be enacted by Congress, not the judiciary, and reaffirmed that the Paris Convention, as integrated into the Lanham Act, mandates only national treatment.
Article 6bis of the Paris Convention and Article 16(2) of the TRIPs Agreement support the International Trade Commission's (ITC) claim for protection of famous marks, allowing member states to prohibit the use of trademarks that reproduce, imitate, or translate well-known marks. While Article 6bis may be viewed as self-executing based on case law, Article 16(2) is not considered self-executing, requiring implementing legislation for its effect in the U.S. The Uruguay Round Agreements Act indicates that TRIPs and similar agreements lack self-executing power, and although Congress has amended various statutes for TRIPs, no specific legislation has been enacted for Article 16(2). ITC argues that sections 44(b) and (h) of the Lanham Act incorporate protections for famous marks under the Paris Convention and TRIPs. However, this contradicts a 2005 court ruling, which held that the Paris Convention does not create substantive rights beyond those provided by the Lanham Act, emphasizing that it only mandates "national treatment" for foreign nationals comparable to U.S. citizens under the Lanham Act.
The statement, originally related to substantive rights under Article lObis of the Paris Convention, also applies to famous marks protection under Article 6bis and TRIPs Article 16(2). The Lanham Act does not independently provide rights for famous marks. A prominent commentator, McCarthy, argues that both the TRIPs Agreement and Article 6bis require the U.S. to recognize rights in famous foreign marks that are unregistered or unused domestically, suggesting that this obligation is enforced by the Lanham Act. McCarthy interprets section 44(b) as establishing a federal right to famous marks protection, aligned with the international treaties.
However, the court disagrees with this interpretation, asserting that the case Toho Co. v. Sears, Roebuck, which is cited by McCarthy, does not support the notion of a famous marks exception in the Lanham Act, as it involved a different treaty and context. The court emphasizes that Toho did not grant additional rights beyond those in the Lanham Act, merely allowing a federal forum for pursuing state claims. Furthermore, the language of sections 44(b) and (h) does not indicate a congressional intent to create a famous marks exception; instead, it limits protections to those explicitly defined in U.S. law. Consequently, while Articles 6bis and 16(2) may suggest certain protections for famous marks, section 44(b) confines foreign mark holders to the rights already established in the Lanham Act, adhering to the principle of trademark territoriality.
Section 44(h) of the Lanham Act, which refers to the entitlement of foreign mark holders to protection against unfair competition, does not extend rights beyond what is specified in Section 44(b). Established case law, including *Havana Club Holding, S.A. v. Galleon S.A.*, supports this interpretation, indicating that rights under Section 44(h) are aligned with treaty rights under Section 44(b). The scope of Section 44(b) is critical to understanding these rights. Section 44(d) outlines specific conditions under which foreign registered marks can claim priority rights in the U.S., including the requirement of actual or intended use in the U.S. within a set timeframe. Congress has been explicit in its provisions for registered marks and has refrained from incorporating a famous marks exception into Sections 44(b) and (h), despite the statutory amendments made to the Lanham Act since 1947.
Furthermore, while the International Trade Commission (ITC) argues for recognizing the famous marks doctrine on policy grounds, the absence of explicit statutory support means such recognition is not warranted solely based on policy arguments. The ITC's position includes concerns about reciprocity in international trademark protection and the relevance of the famous marks doctrine in a globalized economy. Nevertheless, persuasive policy arguments alone do not justify judicial recognition of this doctrine in a statutory framework like the Lanham Act.
The court emphasizes that the relevant inquiry is whether the policy supported by petitioners aligns with the intent of Congress as expressed in the Lanham Act, rather than simply if it is good policy. The court concludes that any endorsement of the famous marks doctrine must come from Congress, as there is no existing federal recognition of this doctrine, and thus declines to accept the ITC's request for judicial acknowledgment based solely on policy grounds. Consequently, the court affirms the district court's summary judgment favoring the defendants on ITC's federal unfair competition claim.
Regarding the state law claim for unfair competition under New York law, ITC argues for the reversal of the dismissal of its claim even if the federal claim is upheld. New York common law permits claims for unfair competition based on misappropriation of a property right or commercial advantage. However, ITC's assertion of such a right is contingent on New York's recognition of the famous marks doctrine, particularly in light of its abandonment of the Bukhara mark in the U.S. While some New York cases suggest a general recognition of the doctrine, there is no definitive ruling from the state's highest court, nor a clear standard for determining the fame of a mark.
Given the uncertainty of state law, the court decides to certify the question to the New York Court of Appeals regarding the recognition of the famous marks doctrine. The decision to certify is based on several factors: the lack of authoritative interpretations of the law in question, the significance of the issue to the state, and the potential of certification to resolve the litigation. The court highlights that existing New York cases addressing the famous marks doctrine are outdated trial court decisions.
Decisions from non-New York courts frequently reference New York's common law on unfair competition and the famous marks doctrine, which, despite their foundational status, lack authoritative endorsement from New York's highest court, suggesting a need for certification. The recognition of the famous marks doctrine is significant for New York's role in international commerce, warranting input from the New York Court of Appeals. Certification will clarify whether ITC's state unfair competition claim was dismissed correctly.
Two questions are posed for certification to the New York Court of Appeals:
1. Does New York common law allow the owner of a famous mark or trade dress to claim property rights based on prior use in a foreign country?
2. If the first question is affirmed, what level of fame must a foreign mark or trade dress achieve to allow its owner to sue for unfair competition?
In discussing potential standards for the second question, "secondary meaning" is mentioned, which refers to a trademark's ability to identify the source of a product. The Court of Appeals could determine if a foreign mark's secondary meaning in New York is sufficient for common law protection. Factors relevant to this determination, as identified in previous cases, would focus on the mark’s recognition in New York. However, a Ninth Circuit ruling indicates that secondary meaning alone may not suffice, as it would undermine the territoriality principle intrinsic to common law. An alternative standard, termed "secondary meaning plus," may also be considered, which requires more than just secondary meaning for protection under the famous marks doctrine.
A foreign trademark that has not been used in the American market must demonstrate, by a preponderance of the evidence, that a substantial percentage of consumers in that market are familiar with it. A "substantial" percentage is suggested to be at least 50%. The court highlights that a higher recognition level is required for a foreign trademark owner to achieve extraterritorial protection compared to domestic cases. The standard for assessing trademark fame is intermediate; it does not require the same nationwide recognition necessary for protection against trademark dilution under the Lanham Act. The Act outlines four factors to determine a mark's fame for anti-dilution protection: (1) the scope of advertising and publicity, (2) the volume and geographic reach of sales, (3) actual recognition of the mark, and (4) whether the mark was registered under historical trademark acts. A famous mark under this statute can seek an injunction against uses that may dilute its recognition, regardless of confusion or economic injury. Although the case does not involve a dilution claim, the Court of Appeals may find these factors relevant for evaluating famous marks. Additionally, if a new standard is developed, the Court might consider factors from the World Intellectual Property Organization's 1999 Joint Recommendation, which include the mark's recognition in the relevant public sector, the extent of its use, and the scope of its promotion.
The excerpt outlines criteria relevant to the recognition and enforcement of trademark rights, specifically focusing on well-known marks, including their duration, geographical area of registration, successful enforcement records, and associated value. It notes the World Intellectual Property Organization's guidelines on well-known marks but refrains from commenting on how New York should define its common law, deferring a decision on ITC’s claim of unfair competition pending clarification from the New York Court of Appeals.
The False Advertising Claim is grounded in the Lanham Act's Section 43(a)(1)(B), which addresses false advertising related to goods and services. ITC alleges that the defendants misleadingly implied a connection between their Bukhara Grill restaurants and ITC’s Bukhara products, constituting false advertising. To establish standing for such a claim, a party must demonstrate a reasonable interest that is likely to be harmed by the misleading claims and a reasonable basis for believing that the interest will be damaged.
The excerpt details the court's dismissal of ITC’s claim due to lack of standing, noting that ITC's plans to open a new restaurant were insufficiently defined to constitute a protectable interest, especially given its abandonment of the registered Bukhara mark for restaurant services. Although ITC's marketing of its Dal Bukhara packaged foods was recognized as a reasonable interest, the court found insufficient evidence to connect defendants' actions to potential harm to this interest.
ITC contends that its claims regarding standing are valid, particularly concerning its Dal Bukhara line of packaged foods. The court, however, disagrees, stating that ITC has not sufficiently demonstrated a reasonable basis for believing that its interests are likely to be harmed by the defendants' advertising of their New York restaurants. Although ITC argues that the defendants’ misleading statements create a false comparison between their restaurants and ITC’s products, the court notes that there is no evidence of any public comparisons made by the defendants between their Bukhara Grill and ITC's packaged foods. All statements from the defendants were made prior to ITC's launch of the Dal Bukhara line in 2003, undermining ITC's claim.
Furthermore, the court explains that in the absence of direct competition or comparisons between the products, ITC must provide substantial evidence of injury and causation to establish standing, a burden which ITC has not met. The court finds it implausible that consumers would be confused about an affiliation between the packaged foods and the defendants' restaurants to the extent that it would affect their purchasing decisions. Additionally, while ITC argues that its overseas restaurants could suffer reputational damage due to the defendants’ advertising, the court concludes that ITC has not provided adequate evidence to support this claim of likely harm, reiterating that a mere belief in potential damage is insufficient for standing under U.S. law.
ITC presents evidence indicating that a considerable number of its defendants' customers are New Yorkers of Indian descent, who are more likely to travel to India and subsequently visit ITC’s Bukhara restaurants. ITC claims that negative experiences at the defendants’ Bukhara Grill could deter these travelers from patronizing ITC, thereby impacting its earnings. However, the court finds ITC's assertions rely on speculative reasoning and insufficiently demonstrate a direct link between the alleged harm and standing to sue for false advertising, citing the case Joint Stock Soc’y v. UDV N. Am. Inc. as precedent.
To further establish standing, ITC argues that the U.S. market represents a natural expansion opportunity and that it is considering reopening Bukhara restaurants. While a previous case suggested that a plaintiff contemplating future business ventures might have standing, the court notes that ITC has not presented credible evidence of a developed entry plan, leading to the conclusion that the district court correctly dismissed ITC's false advertising claim for lack of standing.
In summary, the court determines that: 1) ITC abandoned its U.S. rights in the "Bukhara" mark, precluding successful trademark infringement claims; 2) ITC cannot pursue a federal unfair competition claim due to the absence of recognized protections under federal law; and 3) the court defers its ruling on ITC’s state law unfair competition claim pending clarification from the New York Court of Appeals.
The excerpt addresses several legal questions regarding the famous marks doctrine within the context of New York's common law of unfair competition. Key points include:
1. Recognition of the famous marks doctrine under state common law, including the requirement of fame for a mark to qualify for protection.
2. Certification of questions to the New York Court of Appeals regarding whether a foreign mark owner can assert property rights in New York based on prior use in a foreign country and the necessary level of fame for such claims.
3. Clarification that the famous marks doctrine is distinct from protections under the federal anti-dilution statute, emphasizing its application to well-known marks within a nation, even if not used or registered there.
4. A decision to affirm the dismissal of ITC's federal claims while reserving judgment on its state claim, suggesting that the claim may be better suited for state court.
5. Mention of ITC's history in the restaurant industry, specifically referencing accolades received by the New Delhi Bukhara restaurant.
6. Noted abandonment of additional claims by ITC, including false designation of origin under the Lanham Act and deceptive acts under New York law, as indicated in their response to the defendants' motion for summary judgment.
7. The excerpt includes a statutory citation regarding liability for unauthorized use of a registered mark.
Overall, the court is deferring formal certification to allow ITC time to express its preferences regarding the state claim.
The Lanham Act allows a person with a bona fide intention to use a mark in commerce to apply for registration before actual use. However, the registrant must file a verified statement of use within six months for the registration to be valid. A mark holder's intent to resume use must be established during a three-year period of non-use; otherwise, it cannot challenge the rights of another party that has begun using the mark and acquired priority rights. Although evidence of intent to resume use can be presented after this period, it must demonstrate the intent was formulated within the relevant timeframe. The reasons for a mark's non-use may provide circumstantial evidence regarding the owner's intent to resume use but do not automatically negate abandonment presumption. The case references Silverman v. CBS, Inc. to emphasize that motives for non-use do not excuse long periods of inactivity. Additionally, the excerpt mentions an unfair competition claim made by ITC under section 44(h) of the Lanham Act, which the district court did not address and is now considered waived by ITC on appeal, leaving the claim treated solely under section 43(a). Lastly, it notes the distinction between the "territoriality principle" and the "universality principle."
A trademark law principle asserts that if a trademark is lawfully affixed to goods in one country, it should retain its lawful status when transported to another country, even if the mark’s exclusive rights are held by another party there. However, this universality principle has been rejected in U.S. trademark law. The reach of Article 6bis of the Paris Convention, which offers protection for trademarks, has been extended to service marks by Article 16(2) of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs). Article 10bis of the Paris Convention mandates that member states provide effective protection against unfair competition for nationals of other member states.
The Trademark Board's main role includes determining trademark registrability and managing opposition and cancellation proceedings. In the case of Empresa Cubana, it was noted that foreign claims based on the famous marks doctrine for U.S. trademarks should be asserted under Section 43(a) of the Lanham Act. Treaties can be either self-executing, becoming domestic law upon enactment, or non-self-executing, requiring implementing legislation. The Paris Convention is considered non-self-executing, necessitating domestic legislation for its provisions to take effect.
U.S. legislation has been passed to align with TRIPs, particularly concerning anti-dilution protections for famous marks, as established by the Federal Trademark Dilution Act of 1995. However, no similar legislation exists for Article 16(2) of TRIPs. Additionally, Section 44(b) of the Lanham Act provides that individuals from countries party to relevant trademark treaties with the U.S. are entitled to benefits under those treaties. Section 44(h) ensures that such individuals receive effective protection against unfair competition and can access remedies for trademark infringement as outlined in the Lanham Act.
The principle of territoriality is fundamental to trademark law, guiding the interpretation of "use in commerce" in the Lanham Act to include uses that involve the United States at some stage. The 2002 amendment to the Lanham Act aligned U.S. law with the Madrid Protocol, allowing for the registration of trademarks across multiple countries. Various case law examples illustrate this application. The formulation of certified questions for the Court of Appeals aims to permit the court to analyze the recognition of the famous marks doctrine by state common law, with the possibility of expanding or modifying the questions as needed. New York might apply a “secondary meaning plus” standard to foreign marks that were previously used domestically but are now abandoned. ITC's false advertising claim is exclusively under federal law, with no state law involvement.
