The extraterritorial application of U.S. statutes allowing civil actions for damages has generated significant and developing jurisprudence. [FOOTNOTE 1] A decision last year by U.S. District Judge Lewis A. Kaplan clarifies the requisite effect on U.S. commerce for Lanham Act jurisdiction and is an important precedent, especially for foreign licensees of U.S. trademarks. [FOOTNOTE 2] The case establishes that a trademark licensee with an exclusive territory outside the U.S. who alleges “gray market exportation,” “transshipment” or “parallel exportation” by U.S. entities (including U.S. co-licensees, brokers, and manufacturers) into the foreign licensee’s exclusive territory should be able to maintain a cause of action in the Second Circuit under the Lanham Act, despite the absence of any allegation of deception or confusion of U.S. consumers.

The Lanham Act provides little indication of the extent to which Congress intended to exercise its power beyond a broad definition of the “commerce” subject to the Act, encompassing “all commerce which may lawfully be regulated by Congress.”� [FOOTNOTE 3] The extraterritorial reach of the Act was first addressed by the Supreme Court in Steele v. Bulova Watch Co., 344 U.S. 280 (1952).

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