Type: Law Bulletins
Date: 07/05/2022

Lodestar v. Bacardi Has Implications for Protection of US Marks Under Madrid Protocol

The US Court of Appeals for the Ninth Circuit has issued a remarkable opinion in Lodestar Anstalt v. Bacardi & Co Ltd (Case Number 19-55864, 2022 WL 1180767, at *22, 9th Circuit 21 April 2022) exploring the scope of rights and priority provided by an extension of protection for a trademark registered in the United States under the Madrid Protocol. The opinion provides crucial guidance on who holds enforceable trademark priority: “when (1) a registration was obtained under the Madrid Protocol without showing pre-registration use in commerce; and (2) the registrant’s actual use in commerce did not begin until after the allegedly infringing use began” (emphasis original).

In 2009, Lodestar applied to register the UNTAMED word mark and logo in the United States for rum and other products under the Madrid Protocol, with no showing of actual US use and claiming a 16 July 2009 priority date under Section 67 of the Lanham Act. The USPTO issued the registrations in 2011. Around November 2013, Bacardi began advertising a rum product using the phrase BACARDI UNTAMEABLE. Thereafter, Lodestar sued Bacardi and its affiliates in the Central District of California, alleging infringement of the registered UNTAMED marks. The parties contested Lodestar’s date of actual first use in US commerce. The district court granted summary judgment to Bacardi, finding that no reasonable jury could find a likelihood of confusion.

The Court of Appeals affirmed this conclusion and addressed a new question on which it found no direct prior authority: where a registrant has obtained a Madrid Protocol registration prior to the accused infringer’s actual US use – but fails to establish bona fide use in US commerce prior to commencement of the accused infringer’s US use – can it establish priority and infringement?

The court, finding no controlling authority, analogized the circumstances to those in decisions applying the comparable provisions of Section 44(d) of the Lanham Act, which governs constructive use priority for US registrations granted on the basis of other treaties, such as Paris Convention registrations. After analyzing facts relating to Lodestar’s post-registration use of its marks, the court determined that Lodestar’s earliest bona fide use in commerce did not predate Bacardi’s first use of the allegedly infringing mark. Finding the Section 44(d) standards to be analogous and applicable, the court applied these to find that Lodestar’s Madrid Protocol registrations and subsequent actual use entitled it to constructive use priority extending back to its earliest claimed priority date of 16 July 2009, and to the presumptions of validity, registration, ownership, and exclusive rights to use afforded by US trademark registration. The court decided that:

once a registrant under the Madrid Protocol actually begins using the registered mark within the U.S., it is then entitled to assert an infringement claim, based on its statutory priority of right, against those who may have used the mark after the registrant’s constructive use date but before the registrant’s actual use in the U.S.

It thus clarified that the Madrid Protocol registrations could provide a claim to priority but could provide no rights to remedies under the Lanham Act for trademark infringement or unfair competition until after the registrant has established actual use in US commerce. Having determined that Lodestar had established priority, the court turned to the typical likelihood of confusion analysis, and affirmed the district court’s determination that Lodestar failed to carry its burden to show a likelihood of confusion. 

The Lodestar decision provides trademark practitioners with some new and welcome guidance on US priority battles involving Madrid Protocol registrations. 

This article originally appeared in World Trademark Review Weekly on May 5, 2022, and is reprinted with permission. 

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