US Supreme Court tosses Hetronic's $96 million trademark win against European distributor

Methode Electronics

29/06/2023 15:16

By Blake Brittain
       WASHINGTON, June 29 (Reuters) - Limiting the foreign
reach of American trademark law, the U.S. Supreme Court on
Thursday threw out a $96 million jury award for Methode
Electronics Inc's  MEI.N  Hetronic International in its fight
with its former European distributor for selling
Hetronic-branded products with unauthorized parts.
    The decision overturned a lower court's ruling that Abitron
Germany GmbH was liable in the United States for trademark
infringement that occurred abroad. Abitron had appealed the
ruling by the Denver-based 10th U.S. Circuit Court of Appeals.
        Oklahoma-based Hetronic makes remote-control systems for
cranes and other industrial machinery. Hetronic Germany, which
was later bought by Abitron Germany GmbH, distributed its
products in Europe.
    Hetronic sued Abitron and its affiliates in federal court in
Oklahoma for making and selling Hetronic-branded products with
unauthorized parts. A jury found in favor of Hetronic and
awarded more than $115 million in damages, $96 million of which
was for violating federal trademark law. That $96 million was
the subject of the appeal to the Supreme Court.
    The Denver-based 10th U.S. Circuit Court of Appeals affirmed
the verdict, rejecting Abitron's argument that it should not be
liable because it was a foreign company and nearly all of the
allegedly infringing sales happened in Europe.
    The 10th Circuit decided that Abitron's actions had a
substantial effect on American commerce and "diverted tens of
millions of dollars of foreign sales from Hetronic that
otherwise would have ultimately flowed into the United States."
    President Joe Biden's administration told the Supreme Court
that Abitron should be liable only for its acts abroad that were
likely to confuse consumers in the United States.

 (Reporting by Blake Brittain in Washington; Editing by Will
Dunham)
 ((blake.brittain@tr.com; +1 (202) 938-5713;))