# Lodestar v. Bacardi: What a Madrid Protocol Registration Is Actually Worth

> The Ninth Circuit holds a Madrid Protocol extension confers nationwide priority without U.S. use, but priority alone does not win an infringement suit.

Topic: Trademarks  |  Author: Lidiia Levitska  |  Source: Intellectual Property Law (outsideipcounsel.com)
Canonical: https://outsideipcounsel.com/blog/lodestar-v-bacardi-madrid-protocol-priority/


In *Lodestar Anstalt v. Bacardi & Co. Ltd.*, 31 F.4th 1228 (9th Cir. 2022) (No. 19-55864), decided April 21, 2022, the Ninth Circuit confronted a question it had never squarely answered: what does a trademark registration obtained through the Madrid Protocol actually buy a foreign company in the United States? The answer is nuanced and practically important. A Madrid Protocol extension of protection confers nationwide constructive-use priority from the date of filing, even before the registrant sells a single bottle in this country. But priority is not victory. Lodestar held the senior right and still lost, because it could not show a likelihood of confusion with Bacardi's rival campaign.

The panel of Judges Bobby R. Baldock (Tenth Circuit, sitting by designation), Marsha S. Berzon, and Daniel P. Collins, in an opinion by Judge Collins, affirmed summary judgment for Bacardi. The Supreme Court denied certiorari on November 14, 2022, leaving the decision as the leading U.S. appellate statement on the reach and the limits of a Madrid Protocol registration.

## At a glance

- **Case:** *Lodestar Anstalt v. Bacardi & Co. Ltd.*, 31 F.4th 1228 (9th Cir. 2022) (No. 19-55864)
- **Court:** U.S. Court of Appeals for the Ninth Circuit
- **Decided:** April 21, 2022 (Collins, J., joined by Baldock and Berzon, JJ.); affirming summary judgment
- **Holding:** A Madrid Protocol section 66(a) extension of protection gives the registrant nationwide constructive-use priority from its constructive-use date without actual U.S. use, but the registrant still must prove likelihood of confusion, and genuine use, to prevail on infringement.
- **Status:** Final. Certiorari denied November 14, 2022.

## The Madrid Protocol route into the United States

Most U.S. trademark rights grow from use. A domestic applicant who has not yet used a mark can file an intent-to-use application under 15 U.S.C. § 1051(b), and once the registration issues, section 7(c) of the Lanham Act, 15 U.S.C. § 1057(c), treats the application filing as constructive use, giving nationwide priority back to the filing date. That constructive-use rule solved a longstanding problem: it lets a party lock in priority before actual sales, so long as it eventually uses the mark.

The Madrid Protocol grafts an international filing system onto that structure. A trademark owner with a home-country registration can seek an extension of protection to the United States under section 66(a) of the Lanham Act, 15 U.S.C. § 1141f, without first using the mark here. The statutory hook that matters is section 1141f(b), which provides that the proper filing of the request for extension of protection "shall constitute constructive use of the mark, conferring the same rights as those specified" for intent-to-use applicants under section 7(c), as of the earliest applicable date. In plain terms, Congress extended the domestic constructive-use priority rule to Madrid Protocol registrants.

Lodestar Anstalt, a Liechtenstein company, used exactly this route. In 2009 it filed a Madrid Protocol request to register the UNTAMED word mark and an associated design, claiming a priority date of July 16, 2009 under Article 4 of the Paris Convention. The PTO accepted the request for filing on August 19, 2009. It made no showing of actual U.S. use. The extension of protection issued in 2011, covering "rum, whiskey and distilled spirits."

## Priority without use: a question of first impression

The Ninth Circuit had not previously decided the question, and it resolved it in Lodestar's favor, reasoning by analogy from cases construing the older section 44 route: the D.C. Circuit's decision in *SCM Corp. v. Langis Foods Ltd.*, 539 F.2d 196 (D.C. Cir. 1976), and *American Petrofina, Inc. v. Brown*, 391 F. Supp. 757 (E.D.N.C. 1974), both of which it found persuasive. Reading section 1141f(b) together with the section 7(c) constructive-use rule it incorporates, the court held that Lodestar's Madrid Protocol filing gave it nationwide constructive-use priority as of the section 66(b) date, which the court identified as July 21, 2009. Because Bacardi did not launch its rival campaign until November 2013, Lodestar was the senior user as a matter of priority, notwithstanding that it had not sold rum in the United States when it filed. One qualification matters: the court framed priority as flowing from that constructive-use date coupled with Lodestar's later bona fide use, since a registrant must actually begin using the mark before it can sue.

That holding is the doctrinally significant part of the opinion. It confirms that a foreign company can secure U.S. priority through the Madrid system before entering the market, mirroring the advantage a domestic intent-to-use applicant enjoys. For brand owners planning a U.S. launch, the constructive-use date, not the first sale, fixes the place in line.

## Why priority did not save Lodestar

Establishing seniority answers only who came first. To prevail on infringement or unfair competition under the Lanham Act, a plaintiff must still prove a likelihood of confusion. Here two features of the record cut against Lodestar.

First, the court drew a sharp line between priority and enforceable use. Constructive-use priority secures a place in line, but the court reaffirmed that only actual use builds an enforceable mark: registration alone "does not create a mark or confer ownership," and "only use in the marketplace can establish a mark." Lodestar had made some bona fide use, printing UNTAMED on bottle back labels, which the court credited. But its later UNTAMED REVOLUTIONARY RUM line was another matter. The court found the inference "inescapable" that this product "was not a serious effort to develop a product 'for genuine commercial reasons,' but rather merely an attempt merely to reserve Lodestar's rights in the mark," created in reaction to Bacardi's campaign. The court therefore excluded that litigation-driven use from the likelihood-of-confusion analysis.

Second, on the confusion inquiry itself, the court applied the Ninth Circuit's *Sleekcraft* factors and found for Bacardi. Some factors favored Lodestar, including Bacardi's commercial strength and Bacardi's awareness of the senior mark. But the decisive considerations pointed the other way: consumers encountered the two marks in very different ways, the products moved through separate marketing channels and media, and there was no evidence of actual confusion. On that record a reasonable jury could find confusion only "possible," not "probable," and possibility is not the legal standard. The panel even noted that the district court had erred in parts of its reasoning, including aspects of the strength-of-mark and intent analysis, yet affirmed on the ultimate no-confusion conclusion.

## The doctrinal lesson: two different questions

*Lodestar* is valuable precisely because it keeps two questions apart that are easy to blur. The first is priority: who owns the senior right? On that question the Madrid Protocol delivers real value, because section 1141f(b) supplies constructive use and nationwide priority without a U.S. sale. The second is infringement: can the senior owner stop the junior user? On that question the Madrid registration does no special work. The plaintiff must prove likelihood of confusion under ordinary Lanham Act standards, and must be able to point to genuine, non-token use of its own mark. A registrant who has only reserved rights, without building a real presence, holds a strong position on paper and a weak one in court.

## Open questions

- **How much use is enough to move from priority to enforceability?** The court credited the back-label use but rejected the reactive rum line. Between those poles lies a large gray zone where the sufficiency of "genuine commercial" use will be litigated case by case.
- **How will the constructive-use priority rule interact with abandonment?** A Madrid registrant that secures priority but delays real use invites an eventual nonuse or abandonment challenge, and the opinion does not map how long the constructive-use advantage can be held in reserve.
- **Does the reasoning translate outside the Ninth Circuit?** The constructive-use holding rests on statutory text that applies nationwide, but other circuits have not all addressed it, so a uniform national rule is not yet settled.

## Implications for brands and businesses

- **Use Madrid to bank priority before a U.S. launch.** A section 66(a) extension of protection locks in a nationwide priority date as of filing. Foreign brands eyeing the U.S. market should file early rather than waiting for first sales.
- **Do not mistake priority for an infringement weapon.** Constructive-use priority decides seniority, not confusion. Plan for a full *Sleekcraft* showing, including evidence of actual confusion, before betting a case on a Madrid registration.
- **Make real use, not defensive use.** A product line launched to reserve rights after a competitor appears can be excluded from the analysis as non-genuine. Build authentic commercial use, in real channels, and document it.
- **Audit the gap between registration and market presence.** If your U.S. footprint is thin, expect challenges to both the strength of the mark and the sufficiency of use, and shore up the record before you sue.

## Frequently asked questions

**Does a Madrid Protocol registration give priority in the United States without any U.S. sales?**
Yes, as to priority. Under 15 U.S.C. § 1141f(b), a properly filed request for extension of protection is treated as constructive use of the mark, conferring nationwide priority as of the constructive-use date even before the registrant has sold anything in the United States. The Ninth Circuit held that Lodestar's right of priority ran from July 21, 2009, the section 66(b) constructive-use date, senior to Bacardi's November 2013 campaign.

**If Lodestar had priority, why did it lose?**
Priority only decides who is senior. To win an infringement claim the plaintiff still must prove a likelihood of confusion. The Ninth Circuit affirmed summary judgment for Bacardi because the marks were encountered in different ways, moved through different channels, and produced no evidence of actual confusion, so confusion was at most possible, not probable.

**What was wrong with Lodestar's Untamed Revolutionary Rum line?**
The court found that product was not a genuine commercial effort but an attempt to reserve rights in the mark after Bacardi's campaign began, so it excluded that use from the confusion analysis. The lesson is that constructive-use priority does not substitute for real, non-token use in commerce when you sue for infringement.

## Authorities and sources

- Slip opinion, *Lodestar Anstalt v. Bacardi & Co. Ltd.*, No. 19-55864 (9th Cir. Apr. 21, 2022): https://cdn.ca9.uscourts.gov/datastore/opinions/2022/04/21/19-55864.pdf
- Supreme Court docket, *Lodestar Anstalt v. Bacardi & Co. Ltd.*, No. 22-316 (petition denied Nov. 14, 2022): https://www.supremecourt.gov/search.aspx?filename=/docket/docketfiles/html/public/22-316.html
- 15 U.S.C. § 1141i (Lanham Act § 69(b)), effect of a certificate of extension of protection: https://www.law.cornell.edu/uscode/text/15/1141i
- 15 U.S.C. § 1141f (Lanham Act § 66), extension of protection and constructive use: https://www.law.cornell.edu/uscode/text/15/1141f
- 15 U.S.C. § 1057(c) (Lanham Act § 7(c)), constructive use: https://www.law.cornell.edu/uscode/text/15/1057
- Taft Law, "Lodestar v. Bacardi Has Implications for Protection of US Marks Under Madrid Protocol": https://www.taftlaw.com/news-events/law-bulletins/lodestar-v-bacardi-has-implications-for-protection-of-us-marks-under-madrid-protocol/
- Kluwer Trademark Blog, analysis of *Lodestar Anstalt v. Bacardi*: https://legalblogs.wolterskluwer.com/trademark-blog/trademark-case-lodestar-anstalt-v-bacardi-company-limited-usa/