The World in U.S. Courts: Fall 2017 - Intellectual Property – Trademarks/Lanham Act | August.01.2017
Furniture manufacturer Herman Miller held registered and unregistered trade dress rights to certain chairs. It sued Office Star, a competitor, under the Lanham Act for infringing these rights in connection with Office Star chairs that resembled the Herman Miller models and were allegedly of inferior quality. After trial and extensive post-trial proceedings, the Court entered judgment for Herman Miller. One issue was whether Office Star would be enjoined from selling its infringing sales outside the US, given the Lanham act’s limited extraterritorial reach.
In deciding the issue, the Court identified a three-part test that would have to be satisfied for entry of the extraterritorial injunction: (i) whether the non-US sales had “some effect on American foreign commerce,” (ii) whether the effect was “sufficiently great to present a cognizable injury” to Herman Miller, and (iii) whether “the interests of and links to American foreign commerce [are] sufficiently strong in relation to those of other nations to justify an assertion of extraterritorial authority.”
The Court found tests (i) and (ii) satisfied. As to the first test, the critical factor was evidence that Herman Miller sold its chairs in substantial numbers outside the US—with about half in Canada—meaning that Office Star’s infringing ex-US sales “would have an effect” in the US The same information satisfied the second test. But the Court found that Herman Miller had not made a strong showing as to the relative interests of the US and other countries except for Canada, where its sales of the subject chairs were especially numerous. The Court thus enjoined Office Star from making infringing US domestic sales as well as sales to customers in Canada.