Steele v. Bulova Watch Company/Dissent Reed

by Stanley Forman Reed

United States Supreme Court

344 U.S. 280

Steele  v.  Bulova Watch Company

 Argued: Nov. 10, 1952. --- Decided: Dec 22, 1952

Mr. Justice REED, with whom Mr. Justice DOUGLAS joins, dissenting.

The purpose of the Lanham Act is to prevent deceptive and misleading use of trade-marks. § 45, 15 U.S.C. § 1127, 15 U.S.C.A. § 1127. To further that purpose the Act makes liable in an action by the registered holder of the trade-mark 'any person who shall, in commerce,' infringe such trade-mark. § 32(1), 15 U.S.C. § 1114(1), 15 U.S.C.A. § 1114(1). 'Commerce' is defined as being 'all commerce which may lawfully be regulated by Congress.' § 45, 15 U.S.C. § 1127, 15 U.S.C.A. § 1127.

The Court's opinion bases jurisdiction on the Lanham Act. In the instant case the only alleged acts of infringement occurred in Mexico. The acts complained of were the stamping of the name 'Bulova' on watches and the subsequent sale of the watches. There were purchases of assembly material in this country by petitioners. Purchasers from petitioners in Mexico brought the assembled watches into the United States. Assuming that Congress has the power to control acts of our citizens throughout the world, the question presented is one of statutory construction: Whether Congress intended the Act to apply to the conduct here exposed.

'The canon of construction which teaches that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States, Blackmer v. United States, 284 U.S. (421), at 437, 52 S.Ct. (252), at page 254, 76 L.Ed. 375, is a valid approach whereby unexpressed congressional intent may be ascertained.' Foley Bros., Inc. v. Filardo, 336 U.S. 281, 285, 69 S.Ct. 575, 577, 93 L.Ed. 680. Utilizing this approach, does such a contrary intent appear in the Lanham Act? If it does, it appears only in broad and general terms, i.e., 'to regulate commerce within the control of Congress * * *.' § 45, 15 U.S.C. § 1127, 15 U.S.C.A. § 1127. Language of such nonexplicit scope was considered by the Court in construing the Sherman Act in American Banana Co. v. United Fruit Co., 213 U.S. 347, 357, 29 S.Ct. 511, 513, 53 L.Ed. 826. 'Words having universal scope, such as 'every contract in restraint of trade,' 'every person who shall monopolize,' etc., will be taken, as a matter of course, to mean only everyone subject to such legislation, not all that the legislator subsequently may be able to catch.' The American Banana Co. case confined the Sherman Act in its 'operation and effect to the territorial limits over which the law-maker has general and legitimate power.' 213 U.S. at page 357, 29 S.Ct. at page 513, 53 L.Ed. 826. This was held to be true as to acts outside the United States, although the parties were all corporate citizens of the United States subject to process of the federal courts.

The generally phrased congressional intent in the Lanham Act is to be compared with the language of the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq., which we construed in Vermilya-Brown Co. v. Connell, 335 U.S. 377, 69 S.Ct. 140, 93 L.Ed. 76. There we held that by explicitly stating that the Act covered 'possessions' of the United States, Congress had intended that the Act was to be in effect in all 'possession' and was not to be applied merely in those areas under the territorial jurisdiction or sovereignty of the United States.

There are, of course, cases in which a statement of specific contrary intent will not be deemed so necessary. Where the case involves the construction of a criminal statute 'enacted because of the right of the government to defend itself against obstruction, or fraud * * * committed by its own citizens,' it is not necessary for Congress to make specific provisions that the law 'shall include the high seas and foreign countries'. United States v. Bowman, 260 U.S. 94, 98, 43 S.Ct. 39, 41, 67 L.Ed. 149. This is also true when it is a question of the sovereign power of the United States to require the response of a nonresident citizen. Blackmer v. United States, 284 U.S. 421, 52 S.Ct. 252, 76 L.Ed. 375. A similar situation is met where a statute is applied to acts committed by citizens in areas subject to the laws of no sovereign. See Skiriotes v. State of Florida, 313 U.S. 69, 61 S.Ct. 924, 85 L.Ed. 1193; Old Dominion S. S.C.o. v. Gilmore, 207 U.S. 398, 28 S.Ct. 133, 52 L.Ed. 264.

In the instant case none of these exceptional considerations come into play. Petitioner's buying of unfinished watches in the United States is not an illegal commercial act. Nor can it be said that petitioners were engaging in illegal acts in commerce when the finished watches bearing the Mexican trade-mark were purchased from them and brought into the United States by such purchasers, all without collusion between petitioner and the purchaser. The stamping of the Bulova trade-mark, done in Mexico, is not an act 'within the control of Congress.' It should not be utilized as a basis for action against petitioner. The Lanham Act, like the Sherman Act, should be construed to apply only to acts done within the sovereignty of the United States. While we do not condone the piratic use of trade-marks, neither do we believe that Congress intended to make such use actionable irrespective of the place it occurred. Such extensions of power bring our legislation into conflict with the laws and practices of other nations, fully capable of punishing infractions of their own laws, and should require specific words to reach acts done within the territorial limits of other sovereignties.

Notes