Louis Vuitton Malletier, S.A. v. Akanoc Solutions, Inc. et al

Filing 245

SUPPLEMENTAL RULE 50(a) BRIEF ON NON-APPLICATION OF LANHAM ACT TO EXTRATERRITORIAL TRADEMARK INFRINGEMENT filed byAkanoc Solutions, Inc., Steven Chen, Managed Solutions Group, Inc.. (Related document(s) 210 ) (Lowe, James) (Filed on 10/27/2009) Modified text on 10/29/2009,(to conform with document posted by counsel.) (cv, COURT STAFF).

Louis Vuitton Malletier, S.A. v. Akanoc Solutions, Inc. et al

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GAUNTLETT & ASSOCIATES David A. Gauntlett (SBN 96399) James A. Lowe (SBN 214383) Brian S. Edwards (SBN 166258) Christopher Lai (SBN 249425) 18400 Von Karman, Suite 300 Irvine, California 92612 Telephone: [phone] Facsimile: [phone] [e-mail] [e-mail] [e-mail] [e-mail] Attorneys for Defendants Akanoc Solutions, Inc., Managed Solutions Group, Inc. and Steve Chen UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA, SAN JOSE DIVISION

LOUIS VUITTON MALLETIER, S.A., Plaintiff, vs. AKANOC SOLUTIONS, INC., et al., Defendants.

) ) ) ) ) ) ) ) ) ) ) )

Case No.: C 07-3952 JW Hon. James Ware DEFENDANTS' SUPPLEMENTAL RULE 50(a) BRIEF ON NON-APPLICATION OF LANHAM ACT TO EXTRATERRITORIAL TRADEMARK INFRINGEMENT

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 C. B. III. II. I.

TABLE OF CONTENTS Page VUITTON'S EVIDENCE INSUFFICIENT TO SUPPORT A JURY VERDICT ........... 1 A. B. C. No Proof of Direct Trademark Infringement ........................................................... 1 No Proof of Likelihood of Confusion......................................................................... 2 Procedural History...................................................................................................... 3

THE LANHAM ACT DOES NOT APPLY EXTRATERRITORIALLY IN THIS CASE.............................................................................................................................. 3 A. The Lanham Act Does Not Apply Extraterritorially Under Supreme Court's Test in Steele v. Bulova Watch Co. ............................................................... 3 1. 2. 3. The Direct Infringers Are Citizens of China Operating Out Of China ................................................................................................................ 5 Chinese Sales Did Not Have Substantial Effects in the United States................................................................................................................. 6 The Extraterritoriality Test In Timberlane Has Been Superseded By Statute Requiring Substantial Effects for Extraterritorial Application of Antitrust Laws........................................................................ 7

NO DIRECT TRADEMARK INFRINGEMENT PROVEN BECAUSE NO EVIDENCE OF "USE IN COMMERCE" ........................................................................... 8 A. Presence of Digital Data on Servers Is Not "Use in Commerce" ............................ 8 1. 2. 3. No Trademarks Affixed to Goods on Servers............................................... 8 No Sale or Transportation of Goods on Servers........................................... 9 Just Raw Incomprehensible Code Is Stored on Servers ............................ 10

Content-Neutral Automatic Data Processing is Not "Use in Commerce" ........... 10 1. 2. Digital Data Storage and Transmission Is a Non-Trademark Use to Which Lanham Act Does Not Apply....................................................... 10 Internal Utilization of Mark Is Not a Trademark Use .............................. 12

A Trademark is Used in Commerce Only When It is Affixed to Goods Sold or Transported In Commerce In the United States....................................... 14 1. 2. 3. Trademark Must be Affixed and Sold or Transported in the United States .................................................................................................. 14 "Use in Commerce" Different for Trademarks and Service Marks ........ 15 A Trademark Cannot Be "Used in Commerce" By Advertising .............. 16 i
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a. b. D. E. IV.

Advertising Goods for Sale Bearing Trademarks Is Not Circumstantial Evidence of Use in Commerce ............................... 16 Advertising Goods for Sale Bearing Trademarks Is Relevant Only to Issues Other Than "Use in Commerce" ............ 18

No Evidence of Sale or Transportation of Goods in Commerce in the U.S. ........ 20 Without Proof of Direct Trademark Infringement in the U.S. There Cannot Be Contributory Infringement ................................................................... 20

NO DIRECT TRADEMARK INFRINGEMENT PROVEN BECAUSE NO EVIDENCE OF "LIKELIHOOD OF CONFUSION" BY U.S. PUBLIC ....................... 21 A. B. C. No Likelihood of Confusion Because Data on Server Not Directly Viewable ..................................................................................................................... 21 Any Use of Vuitton's Trademarks Was Authorized .............................................. 22 Vuitton Presented No Evidence to Support Finding Likelihood of Confusion ................................................................................................................... 23

V.

CONCLUSION...................................................................................................................... 25

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TABLE OF AUTHORITIES Page(s) FEDERAL CASES 1-800 Contacts, Inc. v. WhenU.Com, Inc., 414 F.3d 400 (2d Cir. 2005) ........................................................................................ 11, 12, 15, 19 A.V. by Versace, Inc. v. Gianni Versace, S.p.A., 126 F. Supp. 2d 328 (S.D.N.Y. 2001) ........................................................................................... 23 Academy of Motion Picture Arts and Sciences v. Creative House, 944 F.2d 1446 (9th Cir. 1991)....................................................................................................... 24 Acme Valve & Fittings Co. v. Wayne, 386 F. Supp. 1162 (S.D. Tex. 1974) ............................................................................................. 15 Aerogroup Intern., Inc. v. Marlboro Footworks, Ltd., 955 F. Supp. 220 (S.D.N.Y. 1997) ............................................................................................ 5, 23 American Rice, Inc. v. Producers Rice Mill, Inc., 518 F.3d 321 (5th Cir. 2008)........................................................................................................... 5 Atlantic Richfield Co. v. Arco Globus Int'l Co., 150 F.3d 189 (2d Cir. 1998) ............................................................................................................ 8 Blazon, Inc. v. DeLuxe Game Corp., 268 F. Supp. 416 (S.D.N.Y 1965) ................................................................................................. 17 Bosley Medical Institute, Inc. v. Kremer, 403 F.3d 672 (9th Cir. 2005)......................................................................................................... 22 Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036 (9th Cir. 1999)................................................................................................. 17, 18 Buti v. Perosa, S.R.L., 139 F.3d 98 (2d Cir. 1998) ...................................................................................................... 14, 16 Calvin Klein Indus., Inc. v. BFK Hong Kong, Ltd., 714 F. Supp. 78 (S.D.N.Y. 1989) .................................................................................................... 6 Committee for Idaho's High Desert v. Yost, 92 F.3d 814 (9th Cir. 1996)..................................................................................................... 12, 13 Custom Mfg. and Engineering, Inc. v. Midway Services, 508 F.3d 641 (11th Cir. 2007)....................................................................................................... 22 DaimlerChrysler AG v. Bloom, 315 F.3d 932 (8th Cir. 2003)......................................................................................................... 11 Dr. Seuss Enterprises, L.P. v. Penguin Books USA, Inc., 109 F.3d 1394 (9th Cir. 1997)....................................................................................................... 23

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E. Remy Martin & Co., S.A. v. Shaw-Ross Intern. Imports, Inc., 756 F.2d 1525 (11th Cir. 1985)..................................................................................................... 13 EEOC v. Arabian Am. Oil Co., 499 U.S. 244, 111 S.Ct. 1227 (1991) .......................................................................................... 3, 6 Elvis Presley Enterprises, Inc. v. Capece, 141 F.3d 188 (5th Cir. 1998)......................................................................................................... 19 Emergency One, Inc. v. American FireEagle, Ltd., 228 F.3d 531 (4th Cir. 2000)......................................................................................................... 15 Fun-Damental Too, Ltd. v. Gemmy Indus. Corp., 111 F.3d 993 (2d Cir. 1997) ............................................................................................................ 6 G. Heileman Brewing Co. v. Anheuser-Busch, Inc., 873 F.2d 985 (7th Cir. 1989)......................................................................................................... 19 Glass v. Kemper Corp., 133 F.3d 999 (7th Cir. 1998)........................................................................................................... 4 Interactive Products Corp. v. a2z Mobile Office Solutions, 326 F.3d 687 (6th Cir. 2003)......................................................................................................... 11 International Cafe, S.A.L. v. Hard Rock Cafe Intern. (U.S.A.), Inc., 252 F.3d 1274 (11th Cir. 2001)................................................................................................... 4, 5 Karl Storz Endoscopy-America, Inc. v. Surgical Techs., Inc., 285 F.3d 848 (9th Cir. 2002)................................................................................................... 21, 24 Knipe v. SmithKline Beecham, 583 F. Supp. 2d 553 (E.D. Pa. 2008) ............................................................................................ 19 Laurel Capital Group, Inc. v. BT Financial Corp., 45 F. Supp. 2d 469 (W.D. Pa. 1999) ............................................................................................. 17 Leigh v. Warner Bros., Inc., 212 F.3d 1210 (11th Cir. 2000)..................................................................................................... 16 Lockheed Martin Corp. v. Network Solutions, Inc., 985 F. Supp. 949 (C.D. Cal. 1997)................................................................................................ 10 Lucasfilm, Ltd. v. High Frontier, 622 F. Supp. 931 (D.D.C. 1985) ................................................................................................... 11 Marlyn Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co., 571 F.3d 873 (9th Cir. 2009)................................................................................................. 1, 3, 20 Mastercrafters Clock & Radio Co. v. Vacheron & Constantin-LeCoultre Watches, Inc., 221 F.2d 464 (2d Cir. 1955) .......................................................................................................... 25 McBee v. Delica Co., Ltd., 417 F.3d 107 (1st Cir. 2005) ..................................................................................................... 7, 24

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McGlinchy v. Shell Chemical Co., 845 F.2d 802 (9th Cir. 1988)........................................................................................................... 8 Merck & Co., Inc. v. Mediplan Health Consulting, Inc., 425 F. Supp. 2d 402 (S.D.N.Y. 2006) ........................................................................................... 15 Millennium Enters., Inc. v. Millennium Music, Inc., 33 F. Supp. 2d 907 (D. Or. 1999).................................................................................................. 24 New Kids on the Block v. New America Pub., Inc., 971 F.2d 302 (9th Cir. 1992)......................................................................................................... 10 Optimum Technologies, Inc. v. Henkel Consumer Adhesives, Inc., 496 F.3d 1231 (11th Cir. 2007)..................................................................................................... 15 Perfect 10, Inc. v. Visa International Service Association, 494 F.3d 788 (9th Cir. 2007)....................................................................................................... 3, 9 Perfumebay.com Inc. v. EBAY, Inc., 506 F.3d 1165 (9th Cir. 2007)....................................................................................................... 18 Philip Morris, Inc. v. Imperial Tobacco Co., 251 F. Supp. 362 (D. Va. 1965) .................................................................................................... 13 Religious Tech. Ctr. v. Netcom On-Line Communication Servs., Inc., 907 F. Supp. 1361 (N.D. Cal. 1995) ............................................................................................. 20 Rescuecom Corp. v. Computer Troubleshooters USA, Inc., 464 F. Supp. 2d 1263 (N.D. Ga. 2005) ......................................................................................... 14 Ringling Bros.-Barnum & Bailey Combined Shows, Inc. v. Utah Div. of Travel Dev., 955 F. Supp. 605 (E.D. Va. 1997), aff'd, 170 F.3d 449 (4th Cir. 1999)........................................ 13 Saint Louis University v. Meyer, 625 F. Supp. 2d 827 (E.D. Mo. 2008) ..................................................................................... 12, 13 Southern Grouts & Mortars, Inc. v. 3M Company, 575 F.3d 1235 (11th Cir. 2009)..................................................................................................... 17 Sports Auth., Inc. v. Prime Hospitality Corp., 89 F.3d 955 (2d Cir. 1996) ............................................................................................................ 18 Starter Corp. v. Converse, Inc., 84 F.3d 592 (2d Cir. 1996) ............................................................................................................ 15 Steele v. Bulova Watch Co., 344 U.S. 280 (1952) .................................................................................................................... 4, 5 Subafilms, Ltd. v. MGM-Pathe Communications Co., 24 F.3d 1088 (9th Cir. 1994)........................................................................................................... 1 Sun Banks of Fla., Inc. v. Sun Fed. Sav. & Loan Ass'n, 651 F.2d 311 (5th Cir. 1981)......................................................................................................... 18

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Thane Int'l v. Trek Bicycle Corp., 305 F.3d 894 (9th Cir. 2002)......................................................................................................... 23 Tiffany (NJ) Inc. v. eBay, Inc., 576 F. Supp. 2d 463 (S.D.N.Y. 2008) ............................................................................................. 3 Timberlane Lumber Co. v. Bank of America, N.T. and S.A., 549 F.2d 597 (9th Cir. 1976)........................................................................................................... 7 TNT USA, Inc v. TrafiExpress, S.A. de C.V.. 434 F. Supp. 2d 1322 (S.D. Fla. 2006)............................................................................................ 4 Totalplan Corp. of America v. Colborne, 14 F.3d 824 (2d Cir. 1994) ...................................................................................................... 4, 5, 6 Vanity Fair Mills v. T. Eaton Co., 234 F.2d 633 (2d Cir. 1956) ............................................................................................................ 4

DOCKETED CASES A.V. By Versace, Inc. v. Gianni Versace S.p.A., Nos. 96 Civ. 9721PKLTHK, 98 Civ. 0123PKLTHK, 01 Civ. 9645PKLTHK, 2006 WL 90062 (S.D.N.Y. Jan. 12, 2006) ...................................................................................................... 6 Felix Cat Productions, Inc. v. New Line Cinema, No. CV 99-9339 FMC (RCx), 2000 WL 35729983 (C.D. Cal. July 31, 2000) ............................ 14 I.H.T. Corp. v. News World Communications, Inc., No. 83 Civ. 3862-CSH, 1984 WL 604 (S.D.N.Y. July 3, 1984)................................................... 23 Pet Stop Professional Pet Sitting Service, LLC v. Professional Pet-Sitting Service, Inc., No. 07-90-ST, 2007 WL 1876517 (D. Or. June 26, 2007) ........................................................... 21 FEDERAL RULES AND STATUTES 15 U.S.C. § 6a ....................................................................................................................................... 8 15 U.S.C. § 1114 ................................................................................................................................. 14 15 U.S.C. § 1127 ..................................................................................... 8, 9, 14, 15, 16, 17, 18, 19, 20 Fed. R. Civ. P. Rule 50(a) ............................................................................................................... 3, 25

OTHER AUTHORITIES 4 MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION (4th ed. 2009) ................................... 2, 23

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I.

VUITTON'S EVIDENCE INSUFFICIENT TO SUPPORT A JURY VERDICT A. No Proof of Direct Trademark Infringement

Without proof of direct infringement there can be no contributory infringement. Subafilms, Ltd. v. MGM-Pathe Communications Co., 24 F.3d 1088, 1092 (9th Cir. 1994) (" `There can, by definition, be no contributory liability if that conduct which is aided by the putative contributory infringer is not itself infringing.' "). Direct trademark infringement requires proof that a trademark has been "used in commerce." Marlyn Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co., 571 F.3d 873, 877 (9th Cir. 2009) ("[T]o be liable for trademark infringement, someone must `(1) use in commerce (2) any word, false designation of origin, false or misleading description, or representation of fact, which (3) is likely to cause confusion or misrepresents the characteristics of his or another person's goods or services.' " (emphasis added)). But Vuitton presented no evidence of direct infringement of its trademark from which a reasonable jury could find even the first and essential element of contributory trademark infringement. Direct infringement was not proven because there was no trial evidence that Vuitton's trademarks were used in commerce in the United States. First, the direct infringers in this case are apparently Chinese citizens operating out of China ­ not the United States. The Lanham Act's limited extraterritorial reach does not apply to the overseas activities of foreign nationals. Second, no sales were made over the Internet using the Defendants' servers (or anyone else's). Vuitton's investigator purchased goods via commercial email communications and Western Union money transfer ­ not through any accused website or any e-commerce site. Defendants cannot be liable for "contributing" to purchases that did not occur over the Internet or through their services. Third, "use in commerce" cannot be inferred from circumstantial evidence. None of the accused websites were even capable of selling products over the Internet. But even if they could, or it was obvious they had, or intended to do so in the future - that would not matter. "Use in commerce" requires actual "sale" or "distribution" of goods bearing Vuitton's trademarks in commerce; neither of which occurred over the Internet in this case. Fourth, the fact that goods were advertised at accused websites is not evidence of "use in commerce." In contrast to a service mark that can be used in commerce through advertising, a trademark must be affixed to goods and then sold or distributed in
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commerce in order to be "used in commerce." Fifth, any appearance of Vuitton's trademarks on Defendants' servers is a non-trademark use that does not violate the Lanham Act because (1) it is part of an ISP's automatic and neutral function of storing and transmitting data regardless of content; (2) it is part of a machine-linking or technical function that does not entail promoting marks; and (3) storage of computer code on Defendants' servers is not a use in public. Sixth, the Lanham Act also does not prohibit the transactions in evidence here because the goods involved in this case were shipped to the United States with Vuitton's express authorization and request. There was no unauthorized sale or import. The sham transactions created to bolster a lawsuit provide no evidence of trademark infringement in the United States. B. No Proof of Likelihood of Confusion

No evidence was presented of likelihood of confusion either. Vuitton's evidence actually showed there is no possibility of confusion in this case. First, confusion cannot occur on the servers. The public cannot peer inside a server to view a server's contents. If they did they would see only incomprehensible computer code, not text or images. Nothing is visible to the public until and unless an end-user elsewhere downloads data and then converts it to text or images with his or her software and equipment ­ none of that takes place on an ISP's servers. Second, for the Lanham Act to apply, the U.S. public must be confused ­ not non-U.S. citizens in foreign countries including Vuitton's Paris personnel. Although Vuitton's forensic examination revealed that persons from other countries had visited the accused websites, there was no evidence that anyone in the United States other than Vuitton's investigator ever accessed the accused websites. Vuitton's investigator was obviously not confused about the source or origin of goods for sale at those websites. Third, there could not have been any post-sale or non-purchaser confusion because there was no opportunity for the public to be confused. Vuitton's investigator purchased items for use as evidence in this lawsuit. They were never seen in public. Post-sale confusion was never possible because none of the products at issue were ever used or displayed in an environment where the U.S. public could have been confused. Fourth, because there is no possibility for confusion in this case, whether the direct infringers' intended to confuse is irrelevant. See 4 MCCARTHY ON TRADEMARKS
AND

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alleged infringer's intent cannot transmute a lawful act into an unlawful one."). C. Procedural History

The Defendants' Fed. R. Civ. P. Rule 50(a) motion concerning Vuitton's contributory trademark infringement claim was timely filed. [Docket No. 210] The Court took the motions under submission and requested additional briefing about whether (and if so, to what extent) the United States copyright and trademark laws applied to content transmitted to Defendants' servers from outside the United States. This supplemental brief addresses questions the Court raised concerning Vuitton's Lanham Act claim. Defendants are filing a separate supplemental brief on extraterritorial copyright issues. II. THE LANHAM ACT DOES NOT APPLY EXTRATERRITORIALLY IN THIS CASE A. The Lanham Act Does Not Apply Extraterritorially Under Supreme Court's Test in Steele v. Bulova Watch Co.

The elements of Vuitton's contributory trademark infringement claims are (1) direct infringement; and (2) intentionally inducing others to infringe a mark, or continuing to supply an infringing product to an infringer with knowledge that the infringer is mislabeling the particular product supplied. Perfect 10, Inc. v. Visa International Service Association, 494 F.3d 788, 806-807 (9th Cir. 2007) [citing Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 855, 102 S.Ct. 2182, 72 L.Ed.2d 606 (1982)]. Direct trademark infringement requires proof according to the Ninth Circuit of (1) use in commerce (2) of a trademark that (3) is likely to cause confusion or misrepresents the characteristics of his or another person's goods or services. Marlyn Nutraceuticals, Inc., supra, 571 F.3d at 877. See also Tiffany (NJ) Inc. v. eBay, Inc., 576 F. Supp. 2d 463, 495 (S.D.N.Y. 2008). Vuitton's evidence indicates that the alleged direct infringers are Chinese citizens located in China and operating exclusively out of China. The activities of foreign citizens outside the United States rarely can violate the Lanham Act. So Vuitton's evidence cannot establish direct trademark infringement upon which this Court or jury can rely. EEOC v. Arabian Am. Oil Co., 499 U.S. 244, 248, 111 S.Ct. 1227 (1991) ("It is a longstanding principle of American law `that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of
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the United States.' "); Federal statutes "presumptively lack extraterritorial reach." Glass v. Kemper Corp., 133 F.3d 999, 1000 (7th Cir. 1998). Use of a U.S. trademark in a foreign country cannot form the basis of an infringement claim against an American. Steele v. Bulova Watch Co., 344 U.S. 280, 292 (1952) ("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."). Courts rarely apply the Lanham Act to infringement occurring overseas. In Bulova, a case Vuitton has described as a "controlling decision" [Docket No. 169, 7:6-8], the United States Supreme Court considered three relevant factors, the so-called Bulova factors, in making this determination: The [Steele v. Bulova Watch Co.] Court concluded that the Lanham Act conferred jurisdiction over extraterritorial disputes involving trademark infringement and unfair competition when: 1) Defendant is a United States [citizen]; 2) the foreign activity had substantial effects in the United States; and 3) exercising jurisdiction would not interfere with the sovereignty of another nation. International Cafe, S.A.L. v. Hard Rock Cafe Intern. (U.S.A.), Inc., 252 F.3d 1274, 1278 (11th Cir. 2001) (emphasis added).1 The absence of just one of the above factors is likely determinative and the absence of two is certainly fatal to application of the Lanham Act extraterritorially. See Vanity Fair Mills, Inc. v. T. Eaton Co., 234 F.2d 633, 643 (2d Cir. 1956) ("[T]he absence of one of the [Bulova] factors might well be determinative and [ ] the absence of both is certainly fatal."); see also Totalplan Corp. of America v. Colborne, 14 F.3d 824, 831 (2d Cir. 1994) ("Two of the three conditions necessary to See also Vanity Fair Mills v. T. Eaton Co., 234 F.2d 633, 642-43 (2d Cir. 1956) (same); TNT USA, Inc v. TrafiExpress, S.A. de C.V.. 434 F. Supp. 2d 1322, 1328 (S.D. Fla. 2006) (same).
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bring appellees' conduct within the Lanham Act, United States citizenship and a substantial effect on United states commerce, have thus not been established by Totalplan. . . . [T]he absence of two of the three Bulova factors in this case is fatal to an argument that the conduct is governed by the Lanham Act."); International Cafe, S.A.L., 252 F.3d at 1278 (same). 1. The Direct Infringers Are Citizens of China Operating Out Of China

Vuitton's only evidence indicates that the alleged direct infringers are not United States citizens or foreigners operating from inside the United States. Vuitton ordered the products from China. The shipping labels for the allegedly infringing items are written in Chinese, were shipped from China, and list return addresses inside China. Payment was made to individuals in China using Western Union money transfer to China, Aerogroup Intern., Inc. v. Marlboro Footworks, Ltd., 955 F. Supp. 220, 227 (S.D.N.Y. 1997) ("[T]he citizenship of the [direct infringer] is the most significant factor in determining whether to apply the Lanham Act extraterritorially to a [direct infringer's] foreign activities."). The Bulova Court also found the citizenship of the direct infringer to be of critical importance. Starting with the premise that "the legislation of Congress will not extend beyond the boundaries of the United States unless a contrary legislative intent appears," the Court inferred such an intent based upon "the duty of the citizen in relation to his own government." Bulova, 344 U.S. at 286. The Supreme Court held that applying the Lanham Act to foreign activities of United States citizens was justified because " `Congress has the power to prevent unfair trade practices in foreign commerce by citizens of the United States, although some of the acts are done outside the territorial limits of the United States.' " Id. See Totalplan Corp. of America, 14 F.3d at 830 ("First, none of the appellees is a United States citizen. Thus, unlike Bulova, this case does not implicate the United States' `broad power to regulate the conduct of its citizens in foreign countries.' . . . [A]ppellees' Canadian citizenship . . . is a factor weighing against extraterritorial application of the Lanham Act."). Bulova held that when the direct infringer is a United States citizen, the Lanham Act "extends to reach United States citizens' infringing acts in foreign countries where some lawful acts were commenced in the United States." American Rice, Inc. v. Producers Rice Mill, Inc., 518 F.3d
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321, 328 n.9 (5th Cir. 2008) [citing Steele v. Bulova Watch Co., 344 U.S. 280, 285-86, 73 S. Ct. 252, 97 L. Ed. 319 (1952)]. But the converse is not true. Mr. Justice Marshall explained in E.E.O.C. v. Arabian American Oil Co., 499 U.S. 244, 274, 111 S. Ct. 1227, 1244 (1991) that the Lanham Act does not apply to conduct of foreign nationals outside the U.S. Because two different rules of construction apply depending on the national identity of the regulated parties, the same statute might be construed to apply extraterritorially to United States nationals but not to foreign nationals. Compare Steele v. Bulova Watch Co., supra, 344 U.S., at 285-287, 73 S.Ct., at 255-256 (applying Lanham Act to United States national for conduct abroad) with Vanity Fair Mills, Inc. v. T. Eaton Co., 234 F.2d 633, 642-643 (CA2) (declining to apply Lanham Act to foreign national for conduct abroad), cert. denied, 352 U.S. 871, 77 S.Ct. 96, 1 L.Ed.2d 76 (1956). [Marshall, dissenting] The Lanham Act does not apply to the conduct of foreign nationals abroad even if the infringing goods are later shipped into the United States. See Totalplan, 14 F.3d at 830-31 (declining to extend the Lanham Act to a foreign defendant's sales of disposable cameras abroad, even when those goods had been shipped through, and labeled with the allegedly infringing name in, the United States). For the Lanham Act to apply, a foreign citizen must reside in the United States or direct operations from here. A.V. By Versace, Inc. v. Gianni Versace S.p.A., Nos. 96 Civ. 9721PKLTHK, 98 Civ. 0123PKLTHK, 01 Civ. 9645PKLTHK, 2006 WL 90062, at *6 (S.D.N.Y. Jan, 12, 2006) ("Alfredo could not rely on his Italian citizenship to shield him from application of the Lanham Act because there was evidence that Alfredo, who had resided in and conducted business in the United States for more than 40 years, was the controlling force behind Foldom, a New York corporation."); Fun-Damental Too, Ltd. v. Gemmy Indus. Corp., 111 F.3d 993 (2d Cir. 1997) (enjoining a United States corporation from distributing infringing items abroad); Calvin Klein Indus., Inc. v. BFK Hong Kong, Ltd., 714 F. Supp. 78, 80 (S.D.N.Y. 1989) (individual defendant, a United States resident alien, treated as a U.S. citizen for purposes of the Lanham Act because he was the controlling force behind the co-defendant, a New York corporation). 2. Chinese Sales Did Not Have Substantial Effects in the United States

Vuitton's website printouts do not show any impacts within the United States. The only evidence of effects in the United States are the items Vuitton itself purchased and paid for in China from several websites and had shipped into the United States in an effort to create jurisdiction.
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Shipment of individual items into the United States at the express direction of the trademark owner does not constitute substantial effects on U.S. commerce. Vuitton could have easily had the products shipped to France, some other country, or not shipped at all. This is not a situation where an infringer is operating inside the United States or ships out numerous products already located in the United States. McBee v. Delica Co., Ltd., 417 F.3d 107, 120 (1st Cir. 2005) ("The [Bulova] substantial effects test requires that there be evidence of impacts within the United States, and these impacts must be of a sufficient character and magnitude to give the United States a reasonably strong interest in the litigation." (emphasis added)). See Reebok Int'l, Ltd, Marnatech Enterprises, Inc., 970 F.2d 552, 554-555 (9th Cir. 1992) (Substantial effects shown where infringer "organized and directed the manufacture of counterfeit REEBOK shoes from the United States," and evidence presented that infringer's "sales of counterfeit REEBOK shoes decreased the sale of genuine REEBOK shoes in Mexico and the United States and directly decreased the value of Reebok's consolidated holdings."). 3. The Extraterritoriality Test In Timberlane Has Been Superseded By Statute Requiring Substantial Effects for Extraterritorial Application of Antitrust Laws

The Ninth Circuit is consistent with the other circuits - the Lanham Act does not apply outside the U.S. unless the direct infringement has a substantial effect on United States commerce. Vuitton concedes that Bulova is binding precedent [See Docket No. 169, 7:6-8] but argues the Court should follow the test in Marnatech, 970 F.2d at 554. In Marnatech the Ninth Circuit analogized the Lanham Act to the Sherman Act for extraterritoriality purposes and applied the test for extraterritorial application of the antitrust laws set forth in Timberlane Lumber Co. v. Bank of America, N.T. and S.A., 549 F.2d 597 (9th Cir. 1976).2 Based on the Timberlane test as applied to the Lanham Act by Marnatech, Vuitton argues that only "some" effect on interstate commerce Marnatech, 970 F.2d at 554 ("The Lanham Act's coverage of foreign activities may be analyzed under the test for extraterritorial application of the federal antitrust laws set forth in Timberlane Lumber Co. v. Bank of America National Trust & Savings Ass'n, 549 F.2d 597 (9th Cir.1976) (Timberlane I ).... In Timberlane I, we held: first, there must be some effect on American foreign commerce; second, the effect must be sufficiently great to present a cognizable injury to plaintiffs under the federal statute; and third, the interests of and links to American foreign commerce must be sufficiently strong in relation to those of other nations to justify an assertion of extraterritorial authority.").
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sufficiently great to present a cognizable injury to plaintiffs is required. But Vuitton fails to mention that Timberlane and its tri-partite test for determining extraterritorial application of the antitrust laws has been overruled and superseded by statute ­ a statute that clarified the law in this area by requiring substantial effects on U.S. commerce. [15 U.S.C. § 6a]; see McGlinchy v. Shell Chemical Co., 845 F.2d 802, 813 n.8 (9th Cir. 1988) ("Prior to enactment of section 6a, the extraterritorial reach of the antitrust laws was governed in this circuit by a tripartite test: ... [citing Timberlane]."). That statute, 15 U.S.C. § 6a, was enacted "[i]n an effort to provide a single standard for the issue of extraterritorial application of the Sherman Act." Id. Section 6a makes clear that the Sherman Act does not apply extraterritorially unless a substantial effect on interstate commerce is shown. The antitrust laws "shall not apply ... unless (1) such conduct has a direct, substantial, and reasonably foreseeable effect ­ (A) on trade or commerce ... in the United States." 15 U.S.C. § 6a. So even if the applicable test is the same as the test for determining extraterritorial application of the Sherman Act, substantial effects on interstate commerce are still required. Because no substantial effects on interstate commerce have been shown (indeed, no effects), there is no basis for applying the Lanham Act extraterritorially.3 III. NO DIRECT TRADEMARK INFRINGEMENT EVIDENCE OF "USE IN COMMERCE" A. PROVEN BECAUSE NO

Presence of Digital Data on Servers Is Not "Use in Commerce" 1. No Trademarks Affixed to Goods on Servers

The presence of digital data on a server is not a "use in commerce." First, a trademark must be affixed to goods. 15 U.S.C. § 11274 But there are no goods, or even images of goods, on the servers ­ just computer code that is incomprehensible to humans. At trial, Defendants' expert's This approach is consistent with other circuits that require a substantial effect on commerce for the Lanham Act to apply extraterritorially. See, e.g., Atlantic Richfield Co. v. Arco Globus Int'l Co., 150 F.3d 189, 192 n.4 (2d Cir. 1998) (Second Circuit has "never applied the Lanham Act to extraterritorial conduct absent a substantial effect on United States commerce."). Section 45 of the Lanham Act (15 U.S.C. § 1127) provides: "A mark shall be deemed to be in use in commerce: (1) on goods when ­ (A) it is placed in any manner on the goods or their containers or the displays associated therewith or on the tags or labels affixed thereto, or if the nature of the goods makes such placement impracticable, then on documents associated with the goods or their sale, and (B) the goods are sold or transported in commerce . . . ." (Emphasis added.)
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unchallenged testimony established that there are no images of trademarks affixed to goods on the servers. Only the end-user's computer displays an image ­ not the servers. The computer code is retrieved from the server by an end-user's computer (at the request of the computer user ­ not Defendants) and downloaded to web browser software also located on the end-user's computer. The web browser software then translates the code, and the end-user's monitor displays the resulting image. Vuitton presented no evidence at trial to challenge the testimony of Defendants' expert on this critical point. Even if there were actual images stored on defendants' servers instead of raw computer code, those images would not be "goods" to which a trademark can be affixed. An image from China of goods in China to which a trademark is affixed is still neither a "good" nor a "trademark" on the servers. It is at most advertising of products offered for sale from China. This does not satisfy any requirement of the Lanham Act. 2. No Sale or Transportation of Goods on Servers

Even after trademarks are affixed to goods, Section 45 [15 U.S.C. § 1127] requires that the goods be "sold or transported in commerce." Vuitton presented no evidence that any goods were sold or transported in commerce over the Internet at all. Vuitton's investigator testified that he negotiated purchases using commercial and e-mail communications and Western Union money transfers to persons in China. So no direct trademark infringement was proven by Vuitton because nothing happened in the United States except that Vuitton's investigator learned from the websites that goods could be purchased in China. That does not violate the Lanham Act. Vuitton's evidence cannot support a rational jury verdict of either direct or contributory liability in this case against anyone. Certainly, Vuitton presented no evidence that Defendants "directly controlled and monitored" the e-mail and Western Union communications (the means of infringement). Perfect 10, Inc. v. Visa International Service Association, 494 F.3d 788, 807 (9th Cir. 2007) ("When the alleged direct infringer supplies a service rather than a product, under the second prong of th[e] [Inwood] test, the court must `consider the extent of control exercised by the defendant over the third party's means of infringement.' . . . For liability to attach, there must be `[d]irect control and monitoring of the instrumentality used by a third party to infringe the
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plaintiff's mark.' " (emphasis added)). Vuitton's evidence showed no direct control or monitoring of any instrumentality of infringement. In fact Vuitton's complaint was that the Defendants were not monitoring the websites. 3. Just Raw Incomprehensible Code Is Stored on Servers

There are no images of "goods" on the servers to which trademarks could be affixed ­ just raw computer data. No images of trademarks, visible or otherwise, are stored or displayed on the servers ­ just computer code virtually incomprehensible to humans. (e.g. digital data in the form of 1's and 0's such as 100111000101). There is no "use in commerce" under Vuitton's evidence. B. Content-Neutral Automatic Data Processing is Not "Use in Commerce" 1. Digital Data Storage and Transmission Is a Non-Trademark Use to Which Lanham Act Does Not Apply

No trademark use of any Vuitton mark occurred in the alleged storage and transmission of digital data using the Defendants' servers. The only possible "use" of Vuitton's marks on the servers would be as part of an ISP's automatic and neutral function of storing and transmitting data regardless of its content ­ a non-trademark "use" that does violate the Lanham Act because it is a "technical function" that does not entail promoting marks. Lockheed Martin Corp. v. Network Solutions, Inc., 985 F. Supp. 949, 958 (C.D. Cal. 1997) ("[W]here as with NSI, the pure machinelinking function is the only use at issue, there is no trademark use and there can be no infringement."). In Lockheed Martin, an Internet domain name registrar did not use an aircraft manufacturer's "SKUNK WORKS" mark for purposes of the Lanham Act because it provided a purely "technical function" of designating a set of computers on the Internet: NSI's acceptance of domain name registrations is connected only with the names' technical function on the Internet to designate a set of computers. . . . NSI merely uses domain names to designate host computers on the Internet. This is the type of purely "nominative" function that is not prohibited by trademark law. See New Kids on the Block v. New America Pub., Inc., 971 F.2d 302, 307 (9th Cir.1992) (noting that laws against infringement do not apply to "non-trademark use of a mark"). [Emphasis added.] Id. at 957. The Ninth Circuit's decision in New Kids on the Block v. News America Pub., Inc., 971 F.2d
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302, 307-08 (9th Cir. 1992) explained that there is a general class of "non-trademark" uses not within the scope of the Lanham Act: Cases like these are best understood as involving a non-trademark use of a mark-a use to which the infringement laws simply do not apply, just as videotaping television shows for private home use does not implicate the copyright holder's exclusive right to reproduction. [citing Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417, 447-51, 104 S.Ct. 774, 791-93, 78 L.Ed.2d 574 (1984).] Indeed, we may generalize a class of cases where the use of the trademark does not attempt to capitalize on consumer confusion or to appropriate the cachet of one product for a different one. [Emphasis added.] Any "use" of Vuitton's marks on the servers is purely technical. An ISP, in providing its machine-linking function, does not use, reference or exploit any trademarks. The ISP's servers provide only content-neutral data storage and transmission. Any "use" on a server occurs not because of the characteristics of the mark itself, but as part of a technical process - providing ISP services. See Interactive Products Corp. v. a2z Mobile Office Solutions, 326 F.3d 687, 695 (6th Cir. 2003) ("If defendants are only using IPC's trademark in a "non-trademark" way-that is, in a way that does not identify the source of a product-then trademark infringement and false designation of origin laws do not apply."). Like a telephone company, an ISP provides a content-neutral service to its customers; it does so to facilitate communications over the Internet ­ not to identify the source of goods or services. 1800 Contacts, Inc. v. WhenU.Com, Inc., 414 F.3d 400, 409 (2d Cir. 2005) ("[I]t is plain that WhenU is using 1-800's website address precisely because it is a website address, rather than because it bears any resemblance to 1-800's trademark, because the only place WhenU reproduces the address is in the SaveNow directory. . . . Thus, the appearance of 1-800's website address in the directory does not create a possibility of visual confusion with 1-800's mark.") (emphasis added); Lucasfilm, Ltd. v. High Frontier, 622 F. Supp. 931, 933 (D.D.C. 1985) (holding that property rights in a trademark do not extend to the use of the trademark to express ideas unconnected with the sale or offer for sale of goods or services): DaimlerChrysler AG v. Bloom, 315 F.3d 932, 938-39 (8th Cir. 2003) (holding that defendant's use and subsequent licensing of the toll-free number 1-800MERCEDE(S) did not constitute trademark infringement because there was no evidence that the defendant advertised or promoted the telephone number).
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2.

Internal Utilization of Mark Is Not a Trademark Use

The presence of a trademark within masses of data stored on Defendants' servers is also a non-trademark use because it is an internal use that is not communicated to the public. The public cannot view the contents of Defendants' server. But even if they could they would not see images of trademarks affixed to goods ­ only computer code that is incomprehensible to humans. In 1-800 Contacts, 414 F.3d at 409 the Second Circuit held that Google's use of the plaintiff's mark in its internal computer directory did not constitute an actionable trademark use. The Court analogized Google's use with an individual's private thoughts. Such a "use" cannot cause consumer confusion as to the source of goods or services: A company's internal utilization of a trademark in a way that does not communicate it to the public is analogous to a individual's private thoughts about a trademark. Such conduct simply does not violate the Lanham Act, which is concerned with the use of trademarks in connection with the sale of goods or services in a manner likely to lead to consumer confusion as to the source of such goods or services. Other courts frame the issue in terms of whether the plaintiff's mark has been used in public. In Committee for Idaho's High Desert v. Yost, 92 F.3d 814 (9th Cir. 1996) the Ninth Circuit found a trademark use in part because the mark at issue was used by the defendant intending to confuse the public. The Yost defendants were individuals opposed to the listing of a particular snail on the endangered species list. When defendants learned that the plaintiff Committee had inadvertently allowed its corporate charter to lapse, they promptly incorporated under the same name and then testified at a public hearing in support of an Air Force training range, identifying themselves as officers of the successor committee in the hopes of enhancing their environmentalist credentials while advocating a position they knew the Committee denounced. The Court of Appeals reversed the district court's dismissal of the individual defendants, finding that the act of forming the corporation and publicly testifying in the corporation's name were sufficient to hold the individual officers liable "for using in commerce, in connection with services, a name which is likely to confuse." Id. at 823. In contrast, in Saint Louis University v. Meyer, 625 F. Supp. 2d 827, 830 (E.D. Mo. 2008) a professor formed a corporation bearing the plaintiff University's registered trademark and unregistered marks, used letterhead bearing the marks in communicating with the Secretary of
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State's office, and a public record existed of the formation and dissolution of the corporation. Id. No use in commerce was found because, in contrast to Yost (a case the court distinguished), no trademarks were used in public: [Unlike Yost,] [i]n the instant case, there is no evidence that defendant used the accused marks in public. Defendant told the newspaper's editor-in-chief Diana Benanti that he had "reserved the name" of the paper for the students' use, should they want it. However, a company's internal utilization of a trademark in a way that does not communicate it to the public is analogous to an individual's private thoughts about a trademark. Such conduct simply does not violate the Lanham Act, which is concerned with the use of trademarks in connection with the sale of goods or services in a manner likely to lead to consumer confusion as to the source of such goods or services. Id. (emphasis added). Vuitton presented no evidence that the U.S. public purchased any infringing products at any accused website. That there was no evidence that U.S. computer users had even visited the only website "rebuilt" from data on the Defendants' hard drive (BigWorldShoes.com). This does not show a likelihood of confusion about the source of a mark at an accused website. 5 The Lanham Act is only concerned with the unauthorized use of marks in a manner likely to lead to consumer confusion as to the source of goods or services. There is no evidence of a likelihood of confusion and the Lanham Act cannot apply here where there is no evidence the U.S. public ever viewed the accused websites. See Philip Morris, Inc. v. Imperial Tobacco Co., 251 F. Supp. 362, 380 (D. Va. 1965) (No likelihood of confusion because no evidence "the United States public believe[d] that PLAYER'S cigarettes sold by Philip Morris in the United States are manufactured in England by Imperial." (emphasis added)).6 Of course, since the Lanham Act does not apply to infringement occurring outside of the United States, it is not relevant whether individuals located outside of the Uploading content to a website without more is equivalent to placing a business card under a tree in Montana ­ it is unlikely that the public is ever going to see it. Even Robert Holmes, Vuitton's U.S. investigator did not testify that he found any accused website. From its offices in Paris, Vuitton located the accused websites. Vuitton then instructed Mr. Holmes to make purchases of specific products. 6 See also E. Remy Martin & Co., S.A. v. Shaw-Ross Intern. Imports, Inc., 756 F.2d 1525, 1534 (11th Cir. 1985) ("Effect on public" analysis for purposes of whether to grant injunction in trademark infringement action looked at from perspective of "the United States public."); Ringling Bros.Barnum & Bailey Combined Shows, Inc. v. Utah Div. of Travel Dev., 955 F. Supp. 605, 613 n.4 (E.D. Va. 1997), aff'd, 170 F.3d 449 (4th Cir. 1999) (survey showing that over forty percent of United States general public recognized trademark supported conclusion that the mark was famous). 166017.7-10562-002-10/27/2009 SUPPLEMENTAL RULE 50(a) BRIEF ON EXTRA13 TERRITORIAL TRADEMARK INFRINGEMENT
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United States are confused. C. A Trademark is Used in Commerce Only When It is Affixed to Goods Sold or Transported In Commerce In the United States 1. Trademark Must be Affixed and Sold or Transported in the United States Vuitton presented no

Vuitton proved no Lanham Act direct trademark infringement.

evidence that Vuitton's trademarks were affixed to goods and sold or distributed in commerce over the Internet in the United States. No purchase was made over the Internet. Viewed in its most favorable light, Vuitton's evidence only shows that certain websites advertised goods bearing its trademarks. But advertising is only relevant in determining if a service mark has been "used in commerce" under the Lanham Act. It is not relevant to proving "use in commerce" of a trademark. Buti v. Perosa, S.R.L., 139 F.3d 98, 103 (2d Cir. 1998) ("Santambrogio's mere advertising of the Fashion Cafe mark, standing alone, did not constitute `use' of the mark within the meaning of the Lanham Act."); Barefoot Architect, Inc. v. Bunge, No. 2004-99, 2007 WL 4800213, at *2 (D. Virgin Islands 2007) ("[A]llegations that Barefoot used the mark for advertising and promotional purposes do not establish `use in commerce' under the Lanham Act.") Section 32(1) of the Lanham Act (15 U.S.C. § 1114) prohibits the "use in commerce [of] any reproduction, counterfeit copy of colorable imitation of a registered mark ... [if] such use is likely to cause confusion ... ." Rescuecom Corp. v. Computer Troubleshooters USA, Inc., 464 F. Supp. 2d 1263, 1265 (N.D. Ga. 2005) ("[W]ithout `use in commerce' there can be no violation of the Lanham Act."). "Use in commerce" requires that the trademarks at issue be (1) affixed to goods and (2) the goods must be sold or transported in commerce in the United States. The definition of "use in commerce" in 15 U.S.C. § 1127 applies in determining whether there has been a "use in commerce" for purposes of a trademark infringement action. Felix Cat Productions, Inc. v. New Line Cinema, No. CV 99-9339 FMC (RCx), 2000 WL 35729983, at *2 (C.D. Cal. July 31, 2000) ("The same definition of `use in commerce' [in 15 U.S.C. § 1127 - that applies to using one's mark to identify goods in the marketplace] applies to plaintiff's . . . trademark infringement claims . . . ."). Section 45 of the Lanham Act (15 U.S.C. § 1127) provides:
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A mark shall be deemed to be in use in commerce: (1) on goods when-- (A) it is placed in any manner on the goods or their containers or the displays associated therewith or on the tags or labels affixed thereto, or if the nature of the goods makes such placement impracticable, then on documents associated with the goods or their sale, and (B) the goods are sold or transported in commerce . . . . [Emphasis added.] See Acme Valve & Fittings Co. v. Wayne, 386 F. Supp. 1162, 1169 (S.D. Tex. 1974) ("A trademark on goods is considered to be used in commerce when it is placed on the goods or containers in any manner and the goods are then sold or transported in commerce . . . .").7 Of course the requirements of Section 1127 apply in the Internet context. In Merck & Co., Inc. v. Mediplan Health Consulting, Inc., 425 F. Supp. 2d 402, 415 (S.D.N.Y. 2006), the trademark "ZOCOR" was purchased by defendant Canadian online pharmacies as a keyword for "Sponsored Links" from Internet search engines Google and Yahoo!. Use of the ZOCOR trademark in this manner was not a use in commerce because "defendants do not `place' the ZOCOR marks on any goods or containers or displays or associated documents . . . . This internal use of the mark `Zocor' as a key word to trigger the display of sponsored links is not use of the mark in a trademark sense." Id. (emphasis added); see also 1-800 Contacts, Inc. v. WhenU.Com, Inc., 414 F.3d 400, 408 (2d Cir. 2005) (No use in commerce found where "WhenU does not `use' 1-800's trademark in the manner ordinarily at issue in an infringement claim: it does not `place' 1-800 trademarks on any goods or services in order to pass them off as emanating from or authorized by 1-800."). 2. "Use in Commerce" Different for Trademarks and Service Marks

Advertising is not relevant in determining use in commerce of a trademark, although it may Numerous other trademark infringement actions so hold. See, e.g., Optimum Technologies, Inc. v. Henkel Consumer Adhesives, Inc., 496 F.3d 1231, 1242 (11th Cir. 2007) ("In order for a mark to be `use[d] in commerce' the mark must be `placed in any manner on the goods or their containers or the displays associated therewith or on the tags or labels affixed thereto.' "); Starter Corp. v. Converse, Inc., 84 F.3d 592, 595 (2d Cir. 1996) ("The Lanham Act . . . applies only to a mark `use[d] in commerce', defined in 15 U.S.C. § 1127 as a mark `(1) on goods when (A) placed in any manner on the goods ... and (B) the goods are sold or transported in commerce....' "); Emergency One, Inc. v. American FireEagle, Ltd., 228 F.3d 531, 536 (4th Cir. 2000) (same).
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be considered in determining whether a service mark is used in commerce. Trademarks are not the same as service marks. Trademarks concern the sale of goods, and "include any ... symbol ... used by a person ... to identify and distinguish his or her goods ..." 15 U.S.C. § 1127 (emphasis added). In contrast, service marks apply to the provision of services: "The term `service mark' means any word, name, symbol, or device ... used by a person ... to identify and distinguish the services of one person, including a unique service, from the services of others and to indicate the source of the services." 15 U.S.C. § 1127 (emphasis added). All of Vuitton's marks are registered trademarks, not service marks. Vuitton's trademarks are only applied to goods, not services. All of Vuitton's trademark registrations are for use on goods and not services. Vuitton has not made and cannot make any claim about service marks. Because they serve different purposes, the two types of marks are used in commerce differently. Trademarks physically can and therefore must be affixed to goods and then transported in commerce. But a service mark cannot be affixed to goods so it can only be "used or displayed in the sale or advertising of services and the services are rendered in commerce . . . ." 15 U.S.C. § 1127; Leigh v. Warner Bros., Inc., 212 F.3d 1210, 1217 n.5 (11th Cir. 2000) ("Whereas trademarks identify the source of goods for sale, service marks identify the provider of services."). 3. A Trademark Cannot Be "Used in Commerce" By Advertising a. Advertising Goods for Sale Bearing Trademarks Is Not Circumstantial Evidence of Use in Commerce

Vuitton's evidence at best only indicated that certain websites advertised goods bearing Vuitton's trademarks. But advertising goods for sale, even on the Internet, does not establish use in commerce of a trademark for purposes of Section 1127. Barefoot Architect, Inc. 2007 WL 4800213 at *2 (D. Virgin Islands 2007) ("The Defendants claim that the `use in commerce' element was satisfied by allegations in the counterclaim that Barefoot used the Defendants' marks in writing, orally, and on the internet, for advertising and promotional services. However . . . allegations that Barefoot used the mark for advertising and promotional purposes do not establish `use in commerce' under the Lanham Act.") (emphasis added); Buti v. Perosa, S.R.L., 139 F.3d 98, 103 (2d Cir. 1998) ("Santambrogio's mere advertising of the Fashion Cafe mark, standing alone, did not
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SUPPLEMENTAL RULE 50(a) BRIEF ON EXTRATERRITORIAL TRADEMARK INFRINGEMENT ­ C 07-3952 JW

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constitute `use' of the mark within the meaning of the Lanham Act."). No use in commerce can be established even if the websites were capable of selling and transporting goods in commerce (or even if it is assumed that they have done so). But even that was not shown by the evidence presented. Vuitton's investigator testified that he was unable to make sales through the accused websites. Instead, he purchased products in China through an exchange of emails using other commercial communications services (i.e., Yahoo.com or MSN.com) and through Western Union money transfers from a 7-Eleven store in Dallas for delivery to China. But