In about 1994, Panduit began to produce a cable tie similar to
that of T & B, sold under the trademark "BARB-TY." Panduit's
product is substantially similar in appearance to that produced
by T & B.
T & B originally brought this action in five counts against
defendant Panduit. Count I alleges that Panduit's metal barb oval
head shaped cable tie infringes on the trade dress of T & B's
cable tie in violation of 15 U.S.C. § 1125(a) (hereinafter the
"Lanham Act"). Count II alleges that Panduit's use of the name
BARB-TY constitutes unfair competition and seeks cancellation of
Panduit's trademark registration of the term BARB-TY under
15 U.S.C. § 1064(3). T & B also alleged that Panduit's conduct
violates the common law of unfair competition (Count III); the
Illinois Consumer Fraud and Deceptive Business Practices Act, 815
ILCS 505/2 and the Uniform Deceptive Trade Practices Act, 815
ILCS 510/1 et seq. (Count IV); and the Illinois Anti-Dilution
Act, 765 ILCS 1035/15 (Count V). Counts III through V are no
longer involved in the case.
T & B previously brought a motion for a preliminary injunction
which was granted by the trial court in Thomas & Betts Corp. v.
Panduit Corp., No. 94 C 2656, 1994 WL 714619 (N.D.Ill.Dec.19,
1994), and later reversed by the Seventh Circuit. Thomas & Betts
Corp. v. Panduit Corp., 65 F.3d 654 (7th Cir. 1995) (hereinafter
"T & B I"). The case was then transferred to this Court which
granted summary judgment against T & B on counts I, III, IV, and
V. Thomas & Betts Corp. v. Panduit Corp., 935 F. Supp. 1399
(N.D.Ill. 1996). This Court subsequently granted summary judgment
against T & B with regard to count II. Thomas & Betts Corp. v.
Panduit Corp., 940 F. Supp. 1337 (N.D.Ill. 1996). On appeal, the
Seventh Circuit reversed the summary judgment on Counts I and II.
Thomas & Betts Corp. v. Panduit Corp., 138 F.3d 277 (7th Cir.
1998) (hereinafter "T & B II"). No appeal was taken regarding
Counts III through V.
Panduit then brought a motion to dismiss Count II for lack of
subject matter jurisdiction. This Court denied Panduit's motion
to dismiss. Thomas & Betts Corp. v. Panduit Corp.,
48 F. Supp.2d 1088 (N.D.Ill. 1999).
The parties are currently engaged in discovery while preparing
for trial. The issue of extraterritorial jurisdiction first arose
in the context of the scope of discovery. Subsequently, T & B
filed its motion to delay adjudication of its extraterritorial
Lanham Act claims, which is now before the Court.
II. ISSUES PRESENTED
T & B now moves for an order to delay adjudication of its
extraterritorial Lanham Act claims until after adjudication of
its domestic Lanham Act claims. T & B proposes to go to trial
first on Lanham Act claims arising from domestic business
conducted by Panduit. In an effort to curb expenses relating to
foreign discovery, if T & B does not prevail on its domestic
claims, it agrees to voluntarily dismiss its Lanham Act claims
arising out of foreign business conducted by Panduit. Conversely,
if T & B does prevail on its domestic claims, T & B will seek a
second trial on Lanham Act claims arising from foreign business
Therefore, the issues before the Court are 1) whether this
Court has jurisdiction to hear T & B's extraterritorial claims,
2) whether this Court has the discretion to decline to exercise
its jurisdiction over T & B's extraterritorial claims, and 3)
whether such discretion should be exercised at this time. The
Court concludes that it has jurisdiction to hear T & B's
extraterritorial claims. Furthermore, the Court has the
discretion to decline to exercise its jurisdiction over Lanham
Act claims arising from foreign business activities, however a
full consideration should await the outcome of the trial on the
domestic Lanham Act claims.
III. EXTRATERRITORIAL JURISDICTION OF THE LANHAM ACT
A. District Courts Have Extraterritorial Jurisdiction Under
the Lanham Act
1. The Lanham Act Confers Broad Extraterritorial Jurisdiction
The Lanham Act provides a civil action against "any person who
shall, without consent of the registrant, use in commerce any
reproduction, counterfeit copy, or colorable imitation of a
registered mark in connection with the sale, offering for sale,
distribution, or advertising of any goods . . . with which such
use is likely to cause confusion, or to cause mistake, or to
deceive." 15 U.S.C. § 1114(1)(a). The action is available to any
plaintiff with a registered United States trademark and may be
based, among other things, upon any "device . . . which is likely
to cause confusion, or to cause mistake, or to deceive."
15 U.S.C. § 1125(a)(1). Commerce is sweepingly defined as "all
commerce which may lawfully be regulated by Congress."
15 U.S.C. § 1127.
The Lanham Act confers broad judicial jurisdiction over all
commerce which may lawfully be regulated by Congress. Steele v.
Bulova Watch Co., 344 U.S. 280, 283, 73 S.Ct. 252, 254, 97 L.Ed.
319 (1952); Ocean Garden, Inc. v. Marktrade Co., Inc.,
953 F.2d 500, 503 (9th Cir. 1991). Congress has the power to regulate
foreign trade practices of United States citizens, even though
those acts might occur outside the territorial boundaries of the
United States, Bulova Watch Co., 344 U.S. at 286, 73 S.Ct. at
255. It has long been established that "the United States is not
debarred by any rule of international law from governing the
conduct of its own citizens upon the high seas or even in foreign
countries when the rights of other nations or their nationals are
not infringed." Bulova Watch Co., 344 U.S. at 285, 73 S.Ct. at
255 (quoting Skiriotes v. Florida, 313 U.S. 69, 73, 61 S.Ct.
924, 927, 85 L.Ed. 1193 (1941)).
2. Courts Have Formulated A Three Part Test to Determine
The Lanham Act can be applied to foreign activities where the
defendant is a United States citizen, the defendant's actions
affect American commerce, and there is no conflict with foreign
trademark law. In Bulova, the Court exercised extraterritorial
jurisdiction in a case between United States citizens involving a
United States trademark, acts of trademark infringement in a
foreign country, no foreign trademark issue, and no conflict with
foreign trademark laws. Bulova Watch Co.,