American Rice v. Arkansas Rice Growers: Trademarks

The Fifth Circuit applied the Lanham Act to a U.S. cooperative's rice branding sold only in Saudi Arabia, an effects-based reach now narrowed by Abitron.

Few doctrines in trademark law have proven as unstable as the extraterritorial reach of the Lanham Act, and American Rice, Inc. v. Arkansas Rice Growers Cooperative Ass’n, 701 F.2d 408 (5th Cir. 1983), marks one of its high-water points. The Fifth Circuit applied U.S. trademark law to a domestic cooperative’s confusingly similar rice branding sold entirely in Saudi Arabia, even though no goods ever re-entered the United States. Grounded in the defendant’s American citizenship and the effect of the foreign sales on U.S. commerce, the decision showed how far the effects-based approach could stretch. It reads differently in 2026, after the Supreme Court’s decision in Abitron Austria GmbH v. Hetronic International, Inc., 600 U.S. 412 (2023), narrowed that reach considerably, but it remains an essential waypoint in understanding how the law arrived where it is.

At a glance

Case: American Rice, Inc. v. Arkansas Rice Growers Cooperative Ass’n, 701 F.2d 408 (5th Cir. 1983).
Decided: 1983; U.S. Court of Appeals for the Fifth Circuit; preliminary injunction for American Rice affirmed.
Holding: The Lanham Act reached a U.S. cooperative’s infringing rice branding sold in Saudi Arabia because the defendant’s U.S. citizenship and the effect of the foreign sales on U.S. commerce supported extraterritorial application, even though no goods re-entered the United States.
Status: Final; its effects-based reasoning is now narrowed by Abitron (2023).

A branding war across the Persian Gulf

American Rice, Inc., a Texas-based cooperative, marketed rice on behalf of its farmer-members, and Arkansas Rice Growers Cooperative Association, doing business as Riceland Foods, did the same for its members. Both sold rice in Saudi Arabia, where American Rice held roughly seventy-three percent of the market. In 1975, American Rice acquired Blue Ribbon Mills and its trademarks, including “Abu Bint,” which the record translated as “girl brand,” and a design depicting the head and torso of a young woman. Those marks had been used in Saudi Arabia since 1966. Riceland had begun selling rice under the name “Abu Binten,” or “twin girl,” in 1974, in the same red, yellow, and black colors, though the district court did not find that mark infringing. In 1978 Riceland introduced a third brand, “Bint al-Arab,” or “daughter of the Arabs,” owned in Saudi Arabia by a merchant named Alamoudi, and in 1981 it recolored that label to red, yellow, and black and began packaging another brand called “Gulf Girl.” The district court found evidence of confusion among Saudi merchants, longshoremen, and consumers, and granted American Rice a preliminary injunction under the Lanham Act reaching the Bint al-Arab and Gulf Girl labels. Riceland appealed, contending that U.S. trademark law could not govern sales consummated on Saudi soil.

The Steele v. Bulova framework

The extraterritorial reach of the Lanham Act begins with Steele v. Bulova Watch Co., 344 U.S. 280 (1952), where the Supreme Court applied the statute to a U.S. citizen who assembled and sold counterfeit BULOVA watches in Mexico, some of which flowed back into the United States. From Steele, and the Second Circuit’s influential gloss in Vanity Fair Mills, Inc. v. T. Eaton Co., 234 F.2d 633 (2d Cir. 1956), the lower courts distilled a set of factors for deciding when the Act reaches foreign conduct. The Fifth Circuit in American Rice focused on the sufficiency of the defendant’s contacts with the United States and the nation’s interests, weighing in particular the citizenship of the defendant, the effect on United States commerce, and the existence of any conflict with foreign law. That multifactor, effects-driven inquiry was the governing method of its era.

Why the Act reached the foreign sales

Applying those factors, the Fifth Circuit affirmed the injunction and adopted the district court’s reasoning on the issues it considered. Two points carried the analysis. First, Riceland was an Arkansas cooperative, a U.S. citizen engaged in both interstate and foreign commerce. Much of the challenged conduct was domestic: the processing, packaging, transportation, and distribution of the rice took place in the United States, even though the final, allegedly unlawful sales occurred abroad. The United States has a recognized interest in regulating the conduct of its own nationals, and that interest supported reaching the ultimate foreign transactions. Second, the foreign sales had an effect on U.S. commerce. Both parties were American cooperatives competing for the same export market, so Riceland’s use of confusingly similar marks in Saudi Arabia diverted business from a U.S. competitor and thereby affected commerce that the Lanham Act protects. The court also found no meaningful conflict with foreign law that would counsel against applying the statute. On that reasoning, the absence of any goods re-entering the United States did not defeat jurisdiction, a notable extension beyond the facts of Steele, where infringing watches had crossed back over the border.

What the decision represented, and what came after

American Rice exemplified the flexible, effects-based approach that dominated Lanham Act extraterritoriality for decades. It treated the statute’s reach as a function of national interest and commercial effect rather than the precise location of the infringing act, and it was cited on both sides in later disputes about how far U.S. trademark law travels. That approach met its limit in Abitron. In 2023, the Supreme Court held that the Lanham Act’s core infringement provisions, 15 U.S.C. §§ 1114(1)(a) and 1125(a)(1), are not extraterritorial and extend only to claims where the infringing “use in commerce” is domestic. The Court rejected the sprawling multifactor tests that courts of appeals had built on Steele, replacing effects-and-citizenship balancing with a focus on the location of the infringing use itself. As of July 2026, that means the specific route American Rice took, extending the Act to purely foreign sales because the defendant was American and U.S. commerce felt the effect, no longer holds. The case survives as history and as a lesson in why the Supreme Court eventually intervened, not as a template for reaching foreign conduct today.

Open questions

What counts as domestic “use in commerce” after Abitron? The Supreme Court centered the inquiry on where the infringing use occurs, but lower courts are still working out how to locate that use in cross-border supply chains like the one in American Rice.
How much domestic activity is enough? Riceland processed and shipped rice from the United States. Whether such domestic conduct, paired with foreign sales, now suffices for a domestic use of the mark is precisely the question Abitron leaves for development.
Do the old factors retain any role? Citizenship and effect on U.S. commerce drove pre-Abitron decisions. Whether those considerations still inform the analysis at the margins, or are fully displaced, remains contested.

Implications for brands and businesses

Foreign infringement is harder to reach from a U.S. court now. After Abitron, a Lanham Act claim generally requires a domestic infringing use in commerce, so plan enforcement around where the infringing conduct actually occurs.
Register and enforce marks abroad. Because U.S. law no longer stretches easily to purely foreign sales, protecting a brand in export markets means securing trademark rights in the countries where the goods are sold.
Domestic conduct still matters. Processing, packaging, and shipping infringing goods from the United States may anchor a domestic use of the mark. Document where each step of a cross-border operation takes place.
Read old extraterritoriality cases with care. Decisions like American Rice describe a framework the Supreme Court has since narrowed. Rely on them for background, not as current authority for reaching foreign conduct.

Frequently asked questions

Can the Lanham Act apply to trademark infringement that happens abroad? Historically, yes, under limited conditions. Building on the Supreme Court’s decision in Steele v. Bulova Watch Co., courts weighed factors such as the defendant’s U.S. citizenship, the effect of the conduct on U.S. commerce, and any conflict with foreign law. In American Rice the Fifth Circuit applied the Lanham Act to a U.S. cooperative’s infringing rice sales in Saudi Arabia even though no goods re-entered the United States.

Why did U.S. citizenship of the defendant matter? Because the Lanham Act’s reach abroad rested in part on the United States’ interest in regulating its own nationals. Riceland was an Arkansas cooperative that processed, packaged, and shipped the rice from the United States, so much of its conduct was domestic and it was a U.S. citizen subject to U.S. law, which supported extending the statute to the ultimate foreign sales.

Is American Rice still good law after Abitron? Its result is historically important but its effects-based reasoning has been narrowed. In 2023 the Supreme Court held in Abitron Austria GmbH v. Hetronic International, Inc. that the Lanham Act’s infringement provisions are not extraterritorial and reach only conduct where the infringing use in commerce is domestic. That decision displaces the broad multifactor, effects-driven approach that cases like American Rice represented.