The World in U.S. Courts: Spring 2013 - Intellectual Property (Trademark)
The U.S.-based mega airline carrier United Airlines sued a company that was allegedly using United’s trademarks worldwide. The defendant company failed to appear, and a federal magistrate in the federal court in Brooklyn, NY recommended that a default judgment be entered and that United’s motion for an injunction also be granted—but only as to the U.S. and U.S. territories.
Plaintiff United Airlines sued “United Airways, Ltd.” over the latter’s use of “United” trademarks for operations in certain countries in Southeast Asia, the Middle East, and the UK. The defendant failed to appear to respond to the complaint. United Airlines asked the court to enter a default judgment and a permanent injunction prohibiting the defendant from infringing United Airlines’ trademarks worldwide. Specifically, it asked that the geographic scope of the injunction encompass (a) the U.S., (b) any country in which plaintiff renders air transportation services under any of the UNITED marks, (c) any country in which plaintiff owns a trademark registration for any of its UNITED marks, and (d) any country in which a member airline of the Star Alliance, to which plaintiff belongs, renders air transportation services.
After granting default judgment against United Airways, Ltd., the magistrate considered the scope of an appropriate injunction. After acknowledging that U.S. courts have jurisdiction to enforce the Lanham Act extraterritorially in order to prevent harm to U.S. commerce, the court held that an extraterritorial injunction was appropriate if “(1) the defendant’s conduct has a substantial effect on U.S. commerce, (2) the defendant is a U.S. citizen, and (3) a conflict exists between defendant’s trademark rights under foreign law and plaintiff’s trademark rights under domestic law.” The magistrate concluded that this standard had not been met, in part because the U.S. plaintiff failed (1) to provide evidence of which marks it has registered in specific foreign jurisdictions, and (2) to argue that its operations of direct flights to and from specific countries entitles it to trademark rights superior to defendant under those countries’ laws. The magistrate noted that United Airlines had been successful in separate litigation in India and the U.K., concluding that those decisions mean that it has superior trademark rights in those two countries. But the court was not willing to extend that fact-specific finding to other countries in the absence of evidence. The court thus issued an injunction barring use of the United Airlines trademarks that was limited to the U.S. and U.S. territories.