The Franchise Memorandum

A United States District Court in California last month dismissed Pinkberry’s case against parties who registered the trademark “Pinkberry” in Japan, concluding the Lanham Act did not extend to defendants’ activities outside the United States. Pinkberry, Inc., et al., v. JEC International Corp., et al., 2011 U.S. Dist. LEXIS 140669 (C.D. Cal. Dec. 7, 2011). The defendants registered the trademark at issue in Japan but never used it. After unsuccessfully attempting to purchase the right to the trademark from defendants, Pinkberry initiated a proceeding in Japan to cancel defendants’ registration of the mark and, while that proceeding was still pending, it filed suit in California under the Lanham Act.  

For the Lanham Act to apply extraterritorially, (1) the alleged violations must create some effect on American foreign commerce, (2) the plaintiff must suffer a cognizable injury, and (3) the interests of and links to U.S. foreign commerce must be sufficiently strong in relation to those of other nations to justify an assertion of extraterritorial authority. Pinkberry satisfied the first two elements because the defendants acted from within the United States and effectively precluded Pinkberry from entering the Japanese market, causing it harm. Pinkberry failed to satisfy the third element, however, primarily because the dispute between the parties had a relatively greater effect on foreign countries than on the United States.