-- The value and vanity of fame
[Note: In this posting, the term "trademark" includes both trademark and service mark. Also, jurisdictionally I refer primarily to federal trademark protections, not state protections, except where explicitly stated otherwise.]
Trademark protections are generally limited by national boundaries. A trademark that is protected in, say, Germany does not automatically mean it will be protected in US. Particularly, trademark protections are conditioned on "use", but this "use" generally is limited geographically only to uses within US territories. Therefore, a trademark first used in a foreign country may not necessarily be protected in US, if it was not first used in US.
In an increasingly globalized economy, such territorial limit is bound to give rise to an increasing number of disputes. The recession and the consequential shift of focus to the domestic economy in many developing countries (particularly BRIC: Brazil, Russia, India, & China) will only accelerate the trend. -- Many small, strictly domestic businesses in these developing countries will benefit from the thriving domestic economy and grow quickly into national franchises. At that point, these businesses will seriously plan expansions into the US markets, but might find their trademarks already used by others in US. It's predictable that many of these foreign businesses will challenge the existing US trademarks, in an attempt to extend their foreign trademark protections to US.
In general, because of the territorial limit of trademark protections described above, these foreign businesses will not prevail. US courts, nonetheless, have recognized an exception to the territorial limit of trademark protections, and have granted protections to foreign trademarks (that were used in US later than other domestic trademarks) if they are "famous" or "well-known" in US. This "well-know mark" exception, however, is not derived from express US trademark laws, and as a consequence has created conflicts among different courts.
Consider first a case in California. A large supermarket chain in Mexico had used and registered the mark GIGANTE in Mexico (but not in US) since 1960s. A US company opened two food stores in California in 1990s and called them "Gigante Market". Then beginning in 1999, the Mexican supermarket chain entered the US market and opened several stores in Los Angeles and called them "Gigante". Lawsuits ensued to determine who, the US company or the Mexican supermarket, has right to the GIGANTE mark. The 9th Circuit Court recognized the "well-known mark" exception and held that the Mexican supermarket chain, which first used the GIGANTE mark in Mexico, could have rights to the mark in US, if the mark was determined to have been "well-known" in California, among other factors.
In 2007, however, the 2nd Circuit Court in NY reached an opposite conclusion from the 9th Circuit Court. In the NY case, the ITC Hotel established Bukhara Restaurant in 1977 in New Delhi, India. The restaurant was voted Best Asian restaurant and one of the top 50 in the world by Restaurant Magazine of UK in 2007. ITC did open a restaurant in Manhattan in 1987 but closed it in 1991. In 1999, several ex-employees of the original Bukhara Restaurant opened two restaurants in Manhattan. The new restaurants were named Bukhara Grill and had similar interior deco as the original ones. The New Delhi Bukhara sued the New York Bukhara, asserting the "well-known mark" protection. The 2nd Circuit Court, however, refused to recognize the "well-known mark" exception, citing absence of a clear intention of the Congress to enact such an exception into federal trademark laws.
As a result, currently foreign "well-known marks" can be protected by federal laws in the states within the 9th Circuit (AK, AZ, CA, HI, ID, MT, NV, OR, WA), but not in NY. The conflict will need to be resolved by the Supreme Court or by the Congress.
Finally, I note that the 2nd Circuit Court in the Bukhara case eventually asked the NY State's highest court to help answer whether a foreign "well know mark" may be protected under NY state laws. The NY's highest court answered, "Yes", although under the theory of misappropriation of commercial advantages in the unfair competition context, not as a "well-known mark" exception to the territorial limit on trademark protections.
The pursuit of fame
Turns out to be not in vain,
Insofar as a mark of trade
Is the center of the realm.
It's the federal or the state
That will be the game.
