The Lanham Act stops at the water’s edge. In Abitron Austria GmbH v. Hetronic International, Inc., 600 U.S. 412 (2023), the Supreme Court held that the statute’s core infringement provisions, 15 U.S.C. §§ 1114(1)(a) and 1125(a)(1), reach only claims where the infringing “use in commerce” is domestic. A foreign company that copies a U.S. brand and sells the knockoffs abroad, to foreign buyers, is not liable under U.S. trademark law, no matter how much the American owner bleeds.
That is a narrower rule than U.S. brand owners lived with for seventy years, and it is the single most consequential trademark decision of the last decade for anyone selling across borders.
Hetronic is an Oklahoma manufacturer of radio remote controls for construction cranes. Its former European distributors, the Abitron entities, reverse-engineered the products and kept selling them under Hetronic’s marks. Of roughly $90 million in infringing sales, about $87 million was sold abroad to foreign buyers with no U.S. destination, roughly $2 million was sold abroad but designated for the United States, and only about $240,000 went directly to U.S. buyers. A jury awarded about $96 million anyway, and the Tenth Circuit affirmed, reasoning that the foreign sales had a substantial effect on U.S. commerce.
The Supreme Court vacated, unanimously in the judgment. Justice Alito’s majority applied the two-step framework from RJR Nabisco v. European Community (2016). Step one asks whether Congress clearly signaled that the provision applies abroad. It did not: the statute’s definition of “commerce” in § 1127 as all commerce Congress may lawfully regulate is boilerplate, not an extraterritoriality clause. Step two asks for the provision’s focus, and identifies the conduct relevant to that focus. The majority held that the focus is use in commerce, so the statute applies only when that use happens here.
The Court split five to four on the reasoning. Justice Sotomayor, joined by Chief Justice Roberts and Justices Kagan and Barrett, concurred only in the judgment; she would have located the focus in the likelihood of confusion among U.S. consumers, which would have let some foreign conduct in through the front door. Justice Jackson joined the majority but wrote separately to make a point it did not foreclose: a mark is used in commerce wherever the goods bearing it are sold or transported, so a product stamped abroad can still be used domestically once it is resold to American consumers. On remand, the district court entered an amended judgment of roughly $34.4 million in August 2024, a two-thirds cut driven entirely by stripping out the foreign sales.
Trademark rights are national. A registration is a grant from one sovereign, effective in that sovereign’s territory, and nowhere else. Owning MONOLITH in the United States gives you nothing in Brazil, and the Brazilian registrant of MONOLITH can do as it pleases there. This is the territoriality principle, and it follows from what a trademark is: not a property right in a word, but a right against confusion in a particular market of consumers.
Extraterritorial application of one country’s trademark law is therefore not a technicality. It means a U.S. court telling a German company how it may label goods sold to German buyers, in a market where a German court may have already said the label is fine. The Abitron majority leaned hard on that risk of international discord, and the presumption against extraterritoriality exists to keep courts from creating it by accident.
Steele v. Bulova Watch Co., 344 U.S. 280 (1952), was the old anchor. Sidney Steele, a U.S. citizen, assembled watches in Mexico City, stamped them BULOVA, and sold them there. Component parts came from the United States, and the fakes leaked back across the border, where American consumers brought them to Bulova’s Texas dealers for repair. The Court allowed the suit.
Courts spent decades generalizing that outcome. The Second Circuit’s Vanity Fair Mills v. T. Eaton Co., 234 F.2d 633 (1956), turned it into a three-factor test: substantial effect on U.S. commerce, U.S. citizenship of the defendant, and absence of conflict with rights under foreign law. Other circuits built variations, some balancing seven or more factors. The practical result was that a well-resourced U.S. plaintiff could often drag foreign sales into a U.S. damages award.
Abitron did not overrule Steele. It reread it. The majority characterized Steele as a domestic-conduct case all along, since Steele bought parts here and the watches circulated here. The effects-based gloss the lower courts had layered on top of it is what died.
The line is drawn at conduct, not consequences. Some rough markers, with the caveat that lower courts are still working this out:
This is the mirror-image problem: a brand famous everywhere but unused in the United States, whose name a domestic opportunist has grabbed. Territoriality says the domestic user wins. The famous marks doctrine, drawn from Article 6bis of the Paris Convention and Article 16 of TRIPS, says a sufficiently well-known foreign mark should be protected anyway.
U.S. courts disagree. In Grupo Gigante S.A. de C.V. v. Dallo & Co., 391 F.3d 1088 (9th Cir. 2004), a Mexican supermarket chain that had used GIGANTE since 1962 sued a San Diego grocer using the same name. The Ninth Circuit recognized a famous marks exception to territoriality, holding that a foreign mark can be protected here if a substantial percentage of consumers in the relevant American market already knew it, then remanded for findings under that standard. The chain did not simply win: the district court had held laches barred it from ousting the grocer’s existing stores. In ITC Ltd. v. Punchgini, Inc., 482 F.3d 135 (2d Cir. 2007), the owner of the Bukhara restaurants in India lost to former employees who opened Bukhara Grill in New York; the Second Circuit found no congressional grant of a famous marks exception in federal law, though it certified a question to the New York Court of Appeals, which recognized a narrow state misappropriation theory. The Ninth Circuit remains the only federal appeals court to embrace the doctrine outright, and the Supreme Court has never taken it up.
Nothing in Abitron leaves a global brand defenseless. It just moves the work off the U.S. docket and onto the calendar.
Register where you sell, before you sell there, using the Madrid Protocol to extend a U.S. application or registration into member countries from a single filing. Sue foreign infringers in foreign courts, which is where the conduct is anyway. Stop counterfeits at the border: record marks with U.S. Customs and use Section 337 of the Tariff Act, 19 U.S.C. § 1337, which targets importation rather than foreign use and is untouched by Abitron. Draft distribution agreements with real termination and post-termination trademark clauses, since Hetronic’s whole problem started as a distributor relationship. And police marketplaces, where the sale to the U.S. consumer is domestic by definition.
Does the Lanham Act apply to trademark infringement outside the United States? Generally no. In Abitron Austria GmbH v. Hetronic International, 600 U.S. 412 (2023), the Supreme Court held that 15 U.S.C. §§ 1114(1)(a) and 1125(a)(1) are not extraterritorial and reach only claims where the infringing use in commerce is domestic. Foreign sales to foreign buyers are outside the statute even when the defendant copied a U.S. company’s mark and the harm lands on a U.S. business.
What did Abitron v. Hetronic change? It replaced a decades-old effects-based inquiry with a single conduct question. Lower courts had applied multifactor tests descended from Steele v. Bulova (1952) and Vanity Fair Mills v. T. Eaton (1956), weighing the defendant’s citizenship, the effect on U.S. commerce, and conflicts with foreign law. After Abitron, the only question at step two is whether the infringing use in commerce occurred in the United States. Hetronic’s judgment fell from roughly $96 million to about $34.4 million on remand.
Is Steele v. Bulova still good law? It has not been overruled, but Abitron confined it. The Abitron majority read Steele as a case that involved domestic conduct, since the defendant bought component parts in the United States and the counterfeit watches flowed back across the border. The broader effects-on-commerce language courts drew from Steele no longer supports reaching purely foreign sales.
Can a foreign brand that is famous abroad sue in the United States without using its mark here? It depends on the circuit, and the split is unresolved. The Ninth Circuit recognized a famous marks exception to territoriality in Grupo Gigante S.A. de C.V. v. Dallo & Co., 391 F.3d 1088 (2004). The Second Circuit declined to find one in federal law in ITC Ltd. v. Punchgini, Inc., 482 F.3d 135 (2007), though it left room for a state unfair competition theory in New York.
Going further: International IP Protection, a country-by-country primer .
This page is general legal information, not legal advice, and it does not create an attorney-client relationship.
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.
The Ninth Circuit reached counterfeit sales in Mexican border towns and upheld a pretrial asset freeze, a holding reshaped by Abitron in 2023.
The Supreme Court holds the Lanham Act's core infringement provisions reach only conduct where the infringing use in commerce is domestic, vacating a $96 million judgment.
The Second Circuit's classic three-factor framework for the Lanham Act's reach abroad, refusing to apply U.S. trademark remedies against a Canadian retailer holding a valid Canadian mark.
The Ninth Circuit revived Trader Joe's claims against a Canadian reseller, holding that the Lanham Act's foreign reach is a question on the merits (not federal jurisdiction) and that buying and harming a brand inside the U.S. can supply the needed domestic nexus.
The First Circuit's 2005 decision built a separate, tougher test for foreign defendants (demanding a substantial effect on U.S. commerce) and refused to let a Japanese-language website carry an American trademark claim across the Pacific.
The 1952 decision that first let an American trademark owner reach a U.S. citizen's infringing conduct abroad, and seeded seven decades of doctrinal fights over the foreign reach of the Lanham Act.
