Grupo Gigante v. Dallo: The Ninth Circuit Carves a Famous-Marks Exception

The Ninth Circuit recognizes a famous-marks exception to trademark territoriality, allowing a foreign mark to be protected in the United States when a substantial share of the relevant American market knows it.

By Lidiia Levitska  ·  June 16, 2025
Shopper pushing a cart down a stocked supermarket grocery aisle
Grupo Gigante asks whether American shoppers near the border already knew a Mexican grocery brand. Shutterstock
Educational content, not legal advice. This article explains general legal concepts. It does not create an attorney–client relationship. For your specific situation, consult a licensed attorney.

In Grupo Gigante S.A. de C.V. v. Dallo & Co., Inc., No. 00-57118 (9th Cir. Dec. 15, 2004), the U.S. Court of Appeals for the Ninth Circuit became the first federal appellate court to expressly recognize a “famous-marks” exception to the territoriality principle. Argued and submitted May 6, 2002, and filed December 15, 2004, the decision (reported at 391 F.3d 1088) was authored for a panel that included Circuit Judges Kleinfeld and Graber, sitting with District Judge Collins. The dispute pitted a large, well-established Mexican grocery chain against a small Southern California grocer that had been first to use the GIGANTE name on U.S. soil. The case asked whether the bright-line rule that foreign use creates no domestic rights must yield when a foreign mark is genuinely famous among the relevant American consumers.

At a glance

  • Case: Grupo Gigante S.A. de C.V. v. Dallo & Co., Inc., No. 00-57118
  • Court: U.S. Court of Appeals for the Ninth Circuit
  • Argued / Decided: May 6, 2002 / December 15, 2004 (filed)
  • Reported: 391 F.3d 1088
  • Panel: Kleinfeld and Graber, Circuit Judges; Collins, District Judge
  • Holding: There is a famous-marks exception to the territoriality principle; a foreign mark may receive U.S. protection if a substantial percentage of consumers in the relevant American market are familiar with it.
  • Disposition: Vacated and remanded for application of the newly articulated standard. The separate summary judgment for the Dallos on laches, which barred injunctive relief, was upheld.

Grupo Gigante had operated “Gigante” grocery stores in Mexico since 1962, building a large chain and substantial recognition, including among the Mexican-American population of Southern California. It did not, however, open a U.S. store until 1999. By then, the Dallo family had been operating “Gigante” markets in the San Diego area since 1991. When Grupo Gigante moved north, the two clashed. The district court split the difference: it held that Grupo Gigante had a protectable interest in the mark because its use had acquired secondary meaning in the San Diego area, but it granted the Dallos summary judgment on laches, barring injunctive relief. Both sides appealed, and the Ninth Circuit took the opportunity to address, as a matter of first impression in the circuit, whether such an exception exists and what it requires.

The territoriality principle and its limits

The court began where American trademark law always begins in cross-border disputes: with territoriality. Trademark rights are national in scope, and priority ordinarily depends on use in the relevant country’s commerce. Under that default, the Dallos (first to use GIGANTE in the United States) would hold the senior domestic rights, notwithstanding Grupo Gigante’s far older and larger Mexican operation.

But the court refused to treat territoriality as absolute. An unqualified rule, it reasoned, would invite consumer confusion and a species of fraud: a domestic newcomer could appropriate a foreign mark that American consumers already associate with a particular foreign source, then trade on that borrowed recognition. Where a foreign mark is truly famous in the U.S. market, protecting the local copyist rather than the foreign originator inverts the consumer-protection purpose that animates trademark law. The court therefore held that territoriality admits a famous-marks exception.

Defining the standard

Recognizing the exception was the easier half of the task; defining it was harder, and the panel split on the details. The majority rejected the idea that a foreign mark need only meet the ordinary “secondary meaning” threshold to qualify. Something more was required: a showing that the mark is genuinely well known to the relevant American consumers, not merely that it has acquired some local association. The court framed the test in terms of whether “a substantial percentage of consumers in the relevant American market is familiar with the foreign mark.”

That phrasing left the operative threshold unsettled, though the court was concrete about one input: it defined the relevant American market as “the geographic area where the defendant uses the alleged infringing mark,” here the San Diego area rather than the nation as a whole. It also told the district court to weigh factors such as intentional copying by the defendant and whether the American firm’s customers are likely to think they are patronizing the same firm that uses the mark abroad, then vacated and remanded for the standard to be applied to the evidence. Judge Graber’s concurrence pressed for a more demanding and concrete benchmark, borrowing from McCarthy’s niche-fame writing to argue that the owner should have to show that a majority of the defendant’s customers and potential customers, in the aggregate, were familiar with the foreign mark when the defendant began its use. She would also have held the record insufficient already, faulting a survey that turned up only seventeen people who had heard of Gigante before 1991 and that limited the relevant public to Mexican-American shoppers when, in her view, everyone eats and the relevant public was all of San Diego County. The divergence between the majority’s open-textured “substantial percentage” and the concurrence’s majority floor would become a focal point for later criticism and litigation.

A doctrine without a clear federal anchor

A persistent difficulty haunting Grupo Gigante (and one the Punchgini litigation would later seize upon) is the statutory home of the famous-marks exception. The Ninth Circuit grounded its holding largely in policy and common-law reasoning about consumer confusion and the purposes of trademark protection. It did not rest the exception on a specific operative provision of the Lanham Act that, by its terms, protects unregistered foreign marks famous in the United States. Nor did it rest the exception on the Paris Convention. The court went the other way on the treaty: it said the United States is arguably required by the Paris Convention to preserve the territoriality principle in some form, and it separately held that the Convention creates neither a federal cause of action nor additional substantive rights, so Grupo Gigante’s Article 6bis and Article 10bis claims were properly dismissed.

That methodological choice is the decision’s most vulnerable seam. By deriving the exception from the structure and purposes of trademark law rather than from clear statutory text, the court exposed the doctrine to the charge that it is judicial policymaking unmoored from congressional command. When the Second Circuit confronted the same question a few years later, it would find that gap dispositive at the federal level, declining to read a famous-marks exception into the Lanham Act and setting up a square circuit conflict.

Open questions

  • What percentage is “substantial”? The majority left the figure open; the concurrence urged a majority of the relevant market. The threshold remains the single most contested element.
  • Who is in the “relevant market”? The majority fixed the geography (where the defendant uses the mark) but not the population inside it. The district court had surveyed a narrow demographic slice; the concurrence would have counted every grocery shopper in the county. How narrowly or broadly that population may be drawn shapes outcomes decisively.
  • Where does the exception live in the statute? The opinion’s policy-based grounding invites the objection that the Lanham Act contains no textual hook, the precise basis on which other circuits have balked.
  • How does fame interact with secondary meaning and confusion? The court demanded more than ordinary secondary meaning, but the relationship among fame, secondary meaning, and likelihood of confusion was left to be worked out on remand and in later cases.

Implications

  • Foreign reputation can matter, in the Ninth Circuit. A foreign brand famous among relevant U.S. consumers may enforce against a domestic copyist even without prior U.S. use, a meaningful departure from a strict territoriality default.
  • Evidence of U.S. consumer awareness is the ballgame. Survey data and proof of familiarity within a carefully defined relevant market are essential to invoking the exception.
  • The circuit split is real and consequential. With the Ninth Circuit recognizing the exception and the Second Circuit declining to find it in federal law, forum and choice-of-law considerations carry outsized weight.
  • Define the market deliberately. Plaintiffs benefit from narrow, favorable relevant-market definitions; defendants will push for broader, nationwide framings that dilute apparent fame.

Frequently asked questions

What is the famous-marks exception? It is a recognized departure from the territoriality principle under which a foreign mark not yet used in the United States can still be protected here if it is famous, meaning known to a substantial share of relevant American consumers. Grupo Gigante is the leading federal appellate decision recognizing it.

How famous must the foreign mark be? The Ninth Circuit required a showing, by a preponderance of the evidence, that “a substantial percentage of consumers in the relevant American market is familiar with the foreign mark,” on top of ordinary secondary meaning. The majority did not fix a number; Judge Graber’s concurrence would have required a majority of the defendant’s customers and potential customers, in the aggregate.

Does every court accept the famous-marks exception? No. The Second Circuit, in the ITC Ltd. v. Punchgini litigation, concluded that Congress has not incorporated a famous-marks doctrine into federal trademark law, creating a split. Whether and how the doctrine applies can therefore turn on jurisdiction.

Authorities and sources

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Lidiia Levitska
About the Author

Lidiia Levitska

International Intellectual Property Attorney

Lidiia Levitska focuses on intellectual property dispute resolution, policy, and advisory work across international institutions and government bodies. From 2021 to 2025 she served at the World Intellectual Property Organization (WIPO), managing arbitration cases and overseeing compliance with the Uniform Domain-Name Dispute-Resolution Policy (UDRP), and earlier led IP policy research as a Senior Policy Officer at the American Chamber of Commerce in Ukraine. She holds an LL.M. in International Intellectual Property Law from Chicago-Kent College of Law and an M.A. in Information Technology Law from the University of Tartu, and was admitted to the Ukrainian Bar in 2019.

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