Court rulings don’t solve global enforcement

The US Supreme Court’s decision reining in the global reach of US trademark law left practitioners questioning brand owners’ ability to combat foreign parties indirectly selling knock-offs into the country. While nixing a $90 million award based mostly on foreign infringement, the high court ruled that whether plaintiffs can obtain damages turns on whether the “use in commerce” that could confuse consumers was domestic—defined by the infringer’s conduct, not the consumer confusion itself. Four justices concurred with Justice Samuel Alito’s majority opinion, agreeing that Hetronic International Inc.’s award was unwarranted, but disagreeing on why. They said trademark law is primarily focused on preventing US consumer confusion, rather than the actions that cause it. Alito left few clues on the boundaries of “use in commerce,” raising the question of what conduct does and doesn’t qualify. Attorneys said the lack of clarity leaves complicated questions for enforcement against typical infringing supply chains in an increasingly global and digital marketplace. Additionally, neither Alito’s opinion nor Justice Sonia Sotomayor’s dissent-like concurrence addressed secondary or vicarious liability—in which the defendant doesn’t infringe but knowingly encourages or benefits from it—adding to the ambiguity. “I think he thought he was settling a lot, but he didn’t know all the fact patterns out there,” intellectual property law professor Rochelle C. Dreyfuss of New York University said. “Whatever was a hard question before is still a hard question.” Those hard questions leave brand owners and practitioners unsure of what they have to do to prevent infringement that affects the US. If a foreign infringer is causing confusion in the US, Alito’s opinion seems to suggest companies have to be very active protecting their rights even in countries where they don’t operate, attorneys said. “This has the potential to have a profound impact on trademark enforcement and how brands develop trademark portfolios internationally,” IP attorney Andrea Stein Fuelleman of Neal Gerber Eisenberg LLP said. “In the digital age, it’s hard to talk about where the sale occurred, where the conduct occurred. The conduct isn’t always squarely in one country or another. It really does blur the lines.”