## Facts

- Grupo Gigante, a Mexican grocery chain, began using the name “Gigante” in 1962 and maintained Mexican trade name registration from 1963 onward.
- By 1991, Grupo Gigante operated nearly 100 stores in Mexico, including stores in Tijuana near the U.S.–Mexico border, but none in the United States.
- In August 1991, Michael Dallo opened a grocery store in San Diego under the name “Gigante Market,” and in 1996 opened a second store with related entities controlling operations.
- By 1995, Grupo Gigante explored entering Southern California and learned of the San Diego “Gigante Market,” but did not sue or otherwise stop the use at that time.
- In 1998, Grupo Gigante decided to enter Southern California; discussions with Michael Dallo did not resolve the dispute, and both sides obtained California trademark registrations that year.
- In 1999, after Grupo Gigante opened its first U.S. “Gigante” store (Los Angeles area), the Dallos demanded it stop using “Gigante” in the United States; Grupo Gigante filed suit under the Lanham Act and related theories, and the Dallos counterclaimed based on first U.S. use.

## Issues

1. Whether U.S. trademark law recognizes a “famous-marks” exception to the territoriality principle, allowing a foreign mark owner without U.S. use to claim priority in a U.S. market where the mark is well known.
2. What evidentiary standard governs a foreign owner’s claim of priority under the famous-marks doctrine.
3. Whether laches limits or bars relief based on Grupo Gigante’s delay after learning of the Dallos’ use.

## Decision

- The Ninth Circuit adopted a limited famous-marks doctrine: a foreign mark may receive protection in a particular U.S. market without prior U.S. use if it is famous there.
- The court held the foreign plaintiff must prove a “substantial percentage” of consumers in the relevant American market were familiar with the foreign mark before the defendant began U.S. use.
- The court vacated and remanded because the district court did not make the required finding on substantial pre-use consumer familiarity in the relevant market.
- The court instructed the district court to reconsider laches on remand under the articulated standard, including findings on unreasonable delay and prejudice, and to shape any equitable relief accordingly.

## Legal Principles

- Trademark priority in the United States generally depends on priority of use in U.S. commerce, reflecting the territorial nature of trademark rights.
- A narrow famous-marks exception exists where a foreign mark is so well known in a defined U.S. market that the defendant’s later use is likely to cause source confusion.
- To establish priority under the famous-marks doctrine, the foreign owner must show that a substantial percentage of consumers in the relevant U.S. market knew the mark before the defendant’s first use.
- The relevant market is the geographic and consumer market where the defendant uses the mark and where confusion is likely, which may be localized rather than nationwide.
- Laches may limit relief in trademark cases when the plaintiff’s delay is unreasonable and the defendant is prejudiced; application is equitable and may affect the scope of injunctive relief.

## Conclusion

The Ninth Circuit recognized a limited famous-marks exception to territoriality and required proof that a substantial share of consumers in the relevant U.S. market recognized the foreign mark before the defendant’s first use, then vacated and remanded for findings on consumer familiarity and a renewed equitable laches analysis.


Grupo Gigante S.A. de C.V. v. Dallo & Co., 391 F.3d 1088 (9th Cir. 2004)