Lanham Act Not Applicable to the Foreign Activity Of Foreign Defendants Without Substantial Effect On United States Commerce

Case: McBee v. Delica Co., Case No. 04-2733 (1st Cir. August 2, 2005).

The One-Sentence Summary: The First Circuit announced a new test for extraterritorial application of the Lanham Act, and found no jurisdiction over the use of an American artist's name by a Japanese corporation that did not substantially affect United States commerce.

First Circuit Holdings:

• Affirmed dismissal of claims brought by American jazz musician Cecil McBee against a Japanese corporation that adopted the name "Cecil McBee" for a line of clothing marketed to teenage girls.
• American courts do not have subject matter jurisdiction under the Lanham Act over the foreign activities of foreign defendants unless there is a substantial effect on United States commerce.
• District court lacked jurisdiction over McBee's claim for an injunction barring access in the United States to defendant's internet website, which is written almost entirely in Japanese and does not allow on-line purchases.
• District court lacked jurisdiction over McBee's claim for damages caused by defendant's sales in Japan, the only place the "Cecil McBee" products are sold.
• While the court had jurisdiction over McBee's claim for an injunction barring defendant from selling its goods in the United States, this claims was without merit because the only sales made into the United States were induced by McBee for purposes of the litigation.