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A company that has not used its mark on products sold in the United States cannot acquire a U.S. trademark through the operation of the famous marks doctrine, a federal judge in Manhattan has ruled. Southern District Judge Jed Rakoff dismissed three claims brought under the Lanham Act by a Colombian retail giant against the operators of several small grocery stores in Manhattan and the Bronx, saying that allowing the claims would amount to a “radical” change in federal trademark law. In Almacenes Exito S.A. v. El Gallo Meat Market, 05 Civ. 3434, Almacenes Exito, the largest retail superstore chain in Colombia, claimed that defendants were using a virtual copy of its famed “EXITO” mark on their stores in New York City. The defendant’s stores, which specialize in marketing groceries and fresh foods, including Latin American produce, use “an exact replica” of the EXITO mark, Judge Rakoff said, adding that “[d]efendants adopted the EXITO mark with intent to cause consumer confusion and capitalize on plaintiff’s good will.” Almacenes sued for false designation of origin and false descriptions under �43(a)(1) of the Lanham Act, trademark infringement under Article 6bis(1) of the Paris Convention as implemented by �44(b) of the Lanham Act and violation of trade name rights under Article 8 of the Paris Convention as implemented by �44(g) of the Lanham Act. It also sued for alleged trademark dilution under New York General Business Law �360-1 and trademark infringement and unfair competition under New York Common Law. On the Lanham Act claims, Judge Rakoff said the 2nd U.S. Circuit Court of Appeals, in Empresa Cubana Del Tabaco v. Culbro Corp., 399 F.3d 462 (2005), “left open” the question of whether a company can invoke the famous marks doctrine where it has not used its mark on products sold in the United States. Judge Rakoff said that it “has long been a bedrock principle of federal trademark law that registration or prior use of a mark in the United States is a precondition to maintaining a cause of action for infringement of the mark and the like.” This so-called “territoriality principle,” he said, is based on the idea that priority of trademark rights in the United States depends on priority of use here and not on priority of use in other parts of the world. An exception to this requirement is the so-called famous marks doctrine, which allows for the protection of foreign marks, even without registration or use in the United States, where the marks are so well known that the use of the mark by someone else in the United States might cause confusion. “To the extent the doctrine is a creature of common law, it may support state causes of action, but it has no place in federal law where Congress has enacted a statute, the Lanham Act, that carefully prescribes the bases for federal trademark claims,” Judge Rakoff said. “The Lanham Act nowhere specifies the well-known or famous marks doctrine.” ADDITIONAL RIGHTS CLAIMED The plaintiff had argued that the sections of the Paris Convention implemented in the Lanham Act provided the company with additional substantive rights that went beyond those provided for by the act. But the 2nd Circuit, Judge Rakoff said, effectively “rejected” that notion in the Empressa Cubana case, when it expressly adopted the view of the 11th Circuit in Int’l Caf�, S.A.L. v. Hard Rock Caf� Int’l Inc., 252 F.3d 1274 (2001). The 11th Circuit said in Int’l Caf�, “We agree that Section 44 of the Lanham Act incorporated to some degree the Paris Convention. But we disagree that the Paris Convention creates substantive rights beyond those independently provided in the Lanham Act.” Rakoff said, “Since it is conceded that a United States citizen who claimed to own the EXITO mark could not bring a Lanham Act claim for infringement or the like against a defendant here if he had neither registered the mark in the United States nor made prior use of it in the United States, it follows from the above-quoted language that the Second Circuit has effectively concluded that a foreign owner of an EXITO mark could not bring such an action either.” While the 9th Circuit and two Southern District courts have recognized “on policy grounds” a limited exception to the territoriality principle for a famous marks doctrine, Rakoff was unpersuaded. “[S]uch a radical change in the federal trademark law may, in this Court’s view, only be made by Congress, not the courts,” he said. Fortunately for the plaintiff, however, its New York state claims survived the motion to dismiss, he said, “because New York has fully adopted the well-known or famous marks doctrine as part of its common law.” Bruce R. Ewing of Dorsey & Whitney and Lile H. Deinard of Healy & Baillie represented Almacenes Exito. Stephen Edward Feldman represented some of the defendant grocery stores, as did Harvey L. Goldstein of Finkel Goldestein Rosenbloom & Nash.

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