Trademark Infringement in the United States

ITC opened a restaurant called Bukhara in New Delhi in 1977 which became very popular worldwide and registered its trademark BUKHARA. Keeping in view the popularity of the restaurant, ITC opened up its branches in across the geographical boundary in the areas of Hong Kong, Bangkok, Ajman, Singapore, etc. The Bukhara brand which became known in the United States, ITC opened its branch in 1986 in New York and in 187 its franchisee opened a Bukhara restaurant in Chicago. Both were going very well and won many awards and were recognized by the media all over the world.

Since the Indian regulations on overseas investment were particularly strict and neither restaurant was able to provide adequate returns to satisfy Indian regulatory requirements, the New York and Chicago restaurants were closed in 1997. Since 1997, ITC has not operated a Bukhara restaurant in the United States.

Meanwhile in 1999, three former employees of ITC Bukhara together with others opened a restaurant in New York under the name and style of Bukhara Grill restaurant, and advertised as associated with ITC Bukhara in reviews and media articles and became popular among consumer as an associated restaurant of original ITC Bukhara of New Delhi.

In 2003, ITC filed an action in the US District Court against the owners of the Bukhara Grill restaurants in the US District Court claiming that the defendants’ actions in connection with Bukhara Grill were acts of infringement and unfair competition which is prohibited by the Lanham Act and under New York state common law. ITC based its claims for unfair competition in part, on the well-known marks of famous marks doctrine which states that “a trademark or service mark is protected within a nation if it is well known in that nation even though the mark is not actually used or registered in that nation”. The Dist. Court granted summary judgment to the defendants and that decision was affirmed by the Second Circuit which held that because ITC had closed its restaurant in US, it had abandoned its rights through domestic use or through registration, so the only possible basis is to assert rights in the US was through the well known or famous marks doctrine. When the case came to the Ninth Circuit (US appellate court), the court while reviewing federal statutory and case law, considered the relevant international treaties and applicable policy considerations, and determined that no famous marks exception to the territoriality principle had been adopted in the United States. Since priority of use in one geographic area within the United States does not necessarily suffice to establish priority in another area, the different users of the same mark may have priority to use the mark in different geographic regions of the US. However, if the ITC, being the first user can demonsrate that its mark is well known in a region where it has not used the mark, then it can enjoin another from using the mark when it will cause confusion. ITC has now filed a petition for certiorary with the Supreme Court of the United States, requesting that the court take up the split between the Second Circuit and the Ninth Circuit over the status of the well-known marks doctrine in the United States ;and decide whether the a foreign famous mark is protectable when a misuse or infringement occurs.

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