ITC tastes victory in US Bukhara case

The New York Court of Appeals recently adjudicated on in favour of ITC Ltd relating to foreign trademarks and common law unfair competition claims. Overall, it is reassuring for foreign companies to know that they may be able to protect well-known trademarks in the US, even without registration or actual use there.

A brief roundup of the facts: ITC opened two branches of its near legendary Delhi restaurant Bukhara (rated the best in Asia, and among the best in the world here) in the US in the 1986-87, only to shut them down in 1991 and 1997. Two years on, three former Delhi Bukhara employees with a few others joined to form Punchgini Inc. This group was behind two new restaurants in New York City – Bukhara Grill and Bukhara II – that allegedly “openly mimicked the logos, decor, staff uniforms, wood-slab menus, red-checkered bibs and other aspects of the original “Bukhara.””

ITC sued Punchgini in 2003, claiming their use of the “Bukhara” name and trade dress amounted to trademark infringement, unfair competition, and false advertising under federal and state law.

The case eventually reached the New York court of appeals, which was asked to decide on two questions: (1) Does New York common law permit the owner of a famous mark or trade dress to assert property rights therein by virtue of the owner’s prior use of the mark or dress in a foreign country?; and (2) If so, how famous must a foreign mark be to permit a foreign mark owner to bring a claim for unfair competition?

It held that New York law “recognizes common law unfair competition claims, but not the ‘famous’ or ‘well-known’ marks doctrine.” Crucially, although it technically rejected the famous/well-known marks doctrine, its decision hinged on the question of whether or not the mark was known by consumers in New York. It held that when a business, through renown in New York, possesses goodwill constituting property or a commercial advantage in this State, that goodwill is protected from misappropriation under New York unfair competition law. That is so whether the business is domestic or foreign.

For those interested, a version of the December 2007 judgement is available here.
A couple of excellent analyses can be found here (registration required), and here.


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