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Prof. McCarthy Calls 2nd Circuit's Bukhara Decision an "Embarrassment"

The July issue of InsideCounsel magazine reviews the Second Circuit’s March 28 decision on famous foreign trademarks in ITC Limited vs. Punchgini, Inc., __ F. 3d. __, 2007 WL 914742, No. 05-0933 (2nd Cir.). In that case, New Delhi’s Bukhara Restaurant claimed it should be able to enforce its internationally-famous mark despite its abandonment of the mark here. The defendants were owners of a Manhattan Indian restaurant who called their establishment the “Bukhara Grill” because there was “no restaurant Bukhara in New York, and we just thought we will take the name.” The Bukhara Grill also copied the Bukhara Restaurant’s “logos, decor, staff uniforms, wood-slab menus, and red-checkered customer bibs.” Departing from the Ninth Circuit’s decision validating the famous marks doctrine in Grupo Gigante S.A. de C.V. v. Dallo & Co., 391 F.3d 1088, (9th Cir. 2004), the Second Circuit found that continuing international use of a famous trademark was not sufficient to sustain trademark or trade dress infringement claims under U.S. law. The Second Circuit certified to the New York Court of Appeals the question of whether such a right existed under New York state law. 

When InsideCounsel asked Prof. J. Thomas McCarthy about the decision, he did not hold back. “They were wrong,” he said. “There was a way to [implicitly] incorporate the doctrine into the federal trademark statute. But the 2nd Circuit wanted to see explicit words saying the doctrine is enforceable. They gave a narrow reading to the statute.”

Prof. McCarthy warned that the decision has international implications. “This decision can be used as a club to beat our trade negotiators, with foreign governments saying, ‘Who are you to criticize us? You are not living up to your treaty obligations.”

As he told InsideCounsel, the decision is “a great embarrassment for the U.S.”

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