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McBee v. Delica Co.

United States Court of Appeals for the First Circuit

August 2, 2005, Decided

No. 04-2733


 [***1610]   [*110]  LYNCH, Circuit Judge. It has long been settled that the Lanham Act can, in appropriate cases, be applied extraterritorially. See  Steele v. Bulova Watch Co., 344 U.S. 280, 97 L. Ed. 319, 73 S. Ct. 252, 1953 Dec. Comm'r Pat. 424 (1952). This case, dismissed for lack of subject matter jurisdiction, requires us, as a matter of first impression for this circuit, to lay out a framework for determining when such extraterritorial use of the Lanham Act is proper.

In doing so, we choose not to adopt the formulations used by various other circuits. See, e.g.,  Reebok Int'l, Ltd. v. Marnatech Enters., 970 F.2d 552, 554-57 (9th Cir. 1992);  Vanity Fair Mills v. T. Eaton Co., 234 F.2d 633, 642-43 (2d Cir. 1956). [**2]  The best-known test, the Vanity Fair test, asks (1) whether the defendant is an American citizen, (2) whether the defendant's  [*111]  actions have a substantial effect on United States commerce, and (3) whether relief would create a conflict with foreign law.  234 F.2d at 642-43. These three prongs are given an uncertain weight. Based on Steele and subsequent Supreme Court case law, we disaggregate the three prongs of the Vanity Fair test, identify the different types of "extraterritorial" application questions, and isolate the factors pertinent to subject matter jurisdiction.

Our framework asks first whether the defendant is an American citizen; that inquiry is different because a separate constitutional basis for jurisdiction exists for control of activities, even foreign activities, of an American citizen. Further, when the Lanham Act plaintiff seeks to enjoin sales in the United States, there is no question of extraterritorial application; the court has subject matter jurisdiction.  [***1611]  

In order for a plaintiff to reach foreign activities of foreign defendants in American courts, however, we adopt a separate test. We hold that subject matter jurisdiction under the [**3]  Lanham Act is proper only if the complained-of activities have a substantial effect on United States commerce, viewed in light of the purposes of the Lanham Act. If this "substantial effects" question is answered in the negative, then the court lacks jurisdiction over the defendant's extraterritorial acts; if it is answered in the affirmative, then the court possesses subject matter jurisdiction.

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417 F.3d 107 *; 2005 U.S. App. LEXIS 15826 **; 75 U.S.P.Q.2D (BNA) 1609 ***; 2005-2 Trade Cas. (CCH) P74,904

CECIL McBEE, Plaintiff, Appellant, v. DELICA CO., LTD., Defendant, Appellee.

Prior History:  [**1]  APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MAINE. [Hon. Gene Carter, Senior U.S. District Judge].

 McBee v. Delica Co., 2004 U.S. Dist. LEXIS 23414 (D. Me., Nov. 19, 2004)


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