## Facts

- Bulova Watch Co., a New York corporation, owned a U.S.-registered “Bulova” trademark for watches and sold and advertised its watches in the United States and abroad.
- Steele, a U.S. citizen residing in San Antonio, Texas, operated a watch business in Mexico City.
- Steele assembled watches in Mexico using parts purchased in the United States and elsewhere.
- Without Bulova’s authorization, Steele stamped “Bulova” on the watches and sold them in Mexico.
- Evidence showed the counterfeit watches could harm Bulova’s reputation and that some of Steele’s “Bulova” watches entered the United States and caused consumer confusion.
- Steele asserted he held Mexican trademark registration for “Bulova,” but Mexican authorities later nullified that registration.

## Issues

1. Whether a federal district court has jurisdiction under the Lanham Act to award relief for trademark infringement and unfair competition consummated abroad by a U.S. citizen.
2. Whether the Lanham Act applies where the foreign conduct has effects on U.S. commerce and the goodwill associated with a U.S. trademark.
3. Whether injunctive relief directing a defendant to cease conduct abroad is permissible when foreign sovereignty would not be impaired.

## Decision

- The Supreme Court affirmed the court of appeals and held that the district court had jurisdiction under the Lanham Act.
- The Court concluded the Lanham Act could reach Steele’s conduct because he was a U.S. citizen, his operation involved purchases in the United States, and some counterfeit goods entered the United States, creating domestic effects.
- The Court held it was not dispositive that the infringing mark was affixed abroad or that isolated domestic acts (such as purchasing parts) were not themselves unlawful.
- The Court rejected the argument that applying U.S. law would improperly regulate foreign commerce where the conduct produced domestic consequences.
- The Court found no meaningful conflict with Mexican sovereignty because Steele’s Mexican registration had been nullified.
- The Court stated that, when foreign sovereignty is not affected, a court sitting in equity may order a party subject to personal jurisdiction to stop acts occurring outside the court’s territory.

## Legal Principles

- Congress may extend statutory regulation to the conduct of U.S. citizens outside the United States when the statute’s purposes and language support that application.
- The Lanham Act can apply extraterritorially where a U.S. defendant’s foreign infringement has substantial effects on U.S. commerce or on the U.S. trademark owner’s goodwill.
- A federal court with personal jurisdiction over a defendant may grant equitable relief compelling or restraining extraterritorial conduct when the decree does not interfere with another nation’s sovereignty.
- Territorial limits on applying U.S. law do not bar relief where the challenged course of conduct has domestic spillover effects and the application of U.S. law does not conflict with foreign law.

## Conclusion

The Court held that the Lanham Act authorized federal jurisdiction and relief against a U.S. citizen’s foreign trademark infringement where the conduct affected U.S. commerce and Bulova’s U.S. trademark goodwill, and where an injunction would not conflict with foreign sovereignty.


Steele v. Bulova Watch Co., 344 U.S. 280 (1952)