## Facts

- Atlantic Richfield Company (Arco) owned extensive U.S. registrations for the “ARCO” trademark, first used in 1909 and broadly used across Arco’s petroleum and petrochemical businesses by the late 1980s.
- Arco was a well-known U.S. oil and gas company with domestic operations and international activities.
- Arco Globus International Company entities (AGI) used the name “Arco Globus International” for oil and gas trading activities centered in Moscow and conducted primarily in the former Soviet Union.
- AGI maintained a small New York office but did not trade or sell petroleum products in the United States; an attempted Texas joint venture did not result in U.S. sales.
- Arco sued AGI in the Southern District of New York for trademark infringement and related claims under the Lanham Act and state law, seeking to stop AGI’s foreign use of “Arco Globus International.”
- After a bench trial, the district court dismissed the claims, concluding the Lanham Act did not reach AGI’s challenged foreign use; Arco appealed.

## Issues

1. Whether the Lanham Act applies extraterritorially to AGI’s use of “Arco Globus International” in the former Soviet Union.
2. Whether AGI’s foreign conduct produced substantial effects on U.S. commerce sufficient to justify applying U.S. trademark law.
3. Whether considerations of comity and the primarily foreign locus of the alleged confusion weigh against extraterritorial application.

## Decision

- The Second Circuit affirmed the district court’s judgment dismissing Arco’s claims.
- The court held the Lanham Act did not reach AGI’s present use of the “ARCO” mark in the former Soviet Union on these facts.
- The court agreed that AGI’s U.S. contacts were minimal and that its challenged commercial activity and any likely confusion were predominantly foreign.
- The court found no substantial domestic effect from AGI’s foreign use, given the absence of U.S. sales and only an unsuccessful U.S. business initiative.
- The court deferred to the district court’s factual findings following the bench trial.

## Legal Principles

- The Lanham Act may apply to foreign activities when those activities have substantial effects in U.S. commerce, but its extraterritorial reach is limited.
- In determining extraterritorial application, courts consider factors including: (1) potential conflict with foreign law or policy, (2) the parties’ nationality, and (3) whether the defendant’s conduct has substantial effects in the United States (along with related jurisdictional/comity concerns).
- Where the alleged infringement occurs abroad, defendants do not sell into the U.S. market, and any harm in the United States is indirect or speculative, courts will generally decline to extend the Lanham Act to police foreign markets.

## Conclusion

The Second Circuit refused to extend the Lanham Act to primarily foreign trademark use by a foreign-centered business with no U.S. sales and no substantial effects on U.S. commerce, and it affirmed dismissal of the trademark and related unfair-competition claims.


Atl. Richfield Co. v. Arco Globus Int’l Co., 150 F.3d 189 (2d Cir. 1998)