INTERNATIONAL CAFÉ, S.A.L., A Lebanon corporation, Plaintiff-Appellant,
v.
HARD ROCK CAFÉ INTERNATIONAL (U.S.A.), INC., a Florida corporation, HRC Canada, Inc., an
Ontario corporation, Defendants-Appellees.
No. 00-11742.
United States Court of Appeals,
Eleventh Circuit.
May 31, 2001.
Appeal from the United States District Court for the Middle District of Florida.(No. 99-01065-CV-ORL-
19C), Patricia C. Fawsett, Judge.
Before EDMONDSON and RONEY, Circuit Judges, and DIMITROULEAS*, District Judge.
PER CURIAM:
This case requires us to determine whether a United States district court has subject matter
jurisdiction—based on the Lanham Act, 15 U.S.C. § 1051 et seq, and the Paris Convention for the Protection
of Industrial Property, 24 U.S.T. 21401—over a claim for unfair competition by a foreign Plaintiff against a
United States corporation for acts occurring mainly outside the United States. The district court dismissed
for lack of subject-matter jurisdiction. We also conclude that no subject-matter jurisdiction exists, and we
therefore affirm.
Plaintiff International Café, S.A.L. is a Lebanese corporation that operates a restaurant called Hard
Rock Café in Beirut, Lebanon.
Defendants are Hard Rock Café International (U.S.A.), Inc. ("HRC"), a Florida corporation that
licenses Hard Rock Café restaurants worldwide and claims control of the Hard Rock Café brand; HRC
Canada, Inc. ("HRCC"), a Canadian corporation that Plaintiff alleges is a wholly owned subsidiary controlled
by HRC; and Rank Canada, Inc., a Canadian corporation that guaranteed HRCC's obligations under a
purchase agreement. Also pertinent to this appeal is Hard Rock Café Limited ("HRC Limited"), which issued
Hard Rock Café franchises to individuals in countries other than the United States. HRCC purchased HRC
Limited in 1996.
*
Honorable William P. Dimitrouleas, U.S. District Judge for the Southern District of Florida, sitting
by designation.
1
The United States and Lebanon are signatories to the Paris Convention.
According to the complaint, in August, 1991, Nouhad Khalil obtained the exclusive rights to use the
Hard Rock Café name and logo in Lebanon with the express authorization of HRC Limited. In Lebanon,
Khalil registered the Hard Rock Café name and logo, obtained a Certificate of Registration of a Commercial
Store and a Permit for Deposit of a Trademark, and received notification from the Head of the Protection
Ownership Administration. He also procured a 25-year lease, built a restaurant and parking facility, and
purchased original rock 'n roll memorabilia from around the world. In June 1996, Plaintiff2 and HRC Limited
formalized their agreement in writing, and Plaintiff's Hard Rock Café restaurant opened in November 1996.
Approximately one month later, HRC authorized another Hard Rock Café franchise in Beirut, less
than one mile from Plaintiff's Hard Rock Café restaurant.3 During this same time, HRCC purchased HRC
Limited. The purchase price for HRC Limited included the licensing rights that HRC Limited possessed for
the Hard Rock Café name and marks worldwide.
Plaintiff alleges that, since HRCC's purchase of HRC Limited and the opening of the second Hard
Rock Café restaurant in Beirut, HRC has attempted to close down Plaintiff's Hard Rock Café restaurant. HRC
specifically refused to distribute Hard Rock Café merchandise to Plaintiff, and HRC filed criminal and civil
charges against Khalil in Lebanon.4 Plaintiff claims that HRC receives benefits from its Lebanon restaurant
in the United States in the form of franchise fees, royalties, and commissions from the sale of merchandise.
Plaintiff then filed suit in the Middle District of Florida alleging unfair competition under the Lanham
Act, 15 U.S.C. § 1126, and breach of contract under state law. Plaintiff claimed that he has the exclusive
rights to use the Hard Rock Café name and logos in Lebanon because he first registered and used the name
and logo there. Plaintiff also sought permanent injunctive relief and declaratory relief. The district court
granted Defendants' motion to dismiss based on lack of subject-matter jurisdiction. Plaintiff appeals.
The district court concluded that, although the Lanham Act implements the Paris Convention, see 15
U.S.C. §§ 1126(b), (h) & (i), the Lanham Act and Paris Convention create no additional substantive rights
for parties and confers no additional jurisdiction on the courts. The court also concluded that no jurisdiction
2
In April, 1996, Khalil transferred his exclusive rights to Hard Rock Café to Plaintiff International
Café, S.A.L.
3
The franchise agreement was actually with Hard Rock Limited, which Plaintiff alleges is a
wholly-owned subsidiary of HRC.
4
The criminal charges were dismissed, and the Lebanese Penal Court of Appeal affirmed. The civil
charges remained pending at the time the district court dismissed the case.
existed based on any other provision of the Lanham Act because Plaintiff had no trademark rights in the
United States. The district court alternatively concluded that the complaint failed to state a claim. See
Fed.R.Civ.P. 12(b)(6).
We review a district court's determination that it is without jurisdiction de novo. Barnett v. Bailey,
956 F.2d 1036, 1039 (11th Cir.1992). A facial attack on the complaint requires the court to look and see if
the plaintiff has sufficiently alleged a basis of subject-matter jurisdiction. "[A] federal court may dismiss a
federal question claim for lack of subject matter jurisdiction only if: (1) the alleged claim under the
Constitution or federal statutes clearly appears to be immaterial and made solely for the purpose of obtaining
jurisdiction; or (2) such a claim is wholly insubstantial and frivolous." Blue Cross & Blue Shield of Alabama
v. Sanders, 138 F.3d 1347, 1352 (11th Cir.1998) (quoting Bell v. Hood, 327 U.S. 678, 66 S.Ct. 773, 776, 90
L.Ed. 939 (1946)). We consider allegations in the complaint as true for the purposes of the motion.
Plaintiff argues that Section 44 of the Lanham Act incorporates the provisions governing unfair
competition in the Paris Convention. The Paris Convention ensures that "foreign nationals should be given
the same treatment in each of the member countries as that country makes available to its own citizens" as
to trademark and related rights. Vanity Fair Mills, Inc. v. T. Eaton Co., 234 F.2d 633, 640 (2nd Cir.1956).
The Convention also sought to create uniformity by obligating each member nation "to assure to nationals
of countries of the Union an effective protection against unfair competition." 53 Stat. 1780, art. 10(1).
Subject-matter jurisdiction may arise under an international treaty like the Paris Convention if
domestic law incorporates the treaty.5 See United States v. Postal, 589 F.2d 862, 878 (5th Cir.1979). Section
44 of the Lanham Act provides that "[a]ny person whose country of origin is a party to the convention ... shall
be entitled to benefits [under § 1126] to the extent necessary to give effect to any provision of such
convention ..." 15 U.S.C. § 1126(b). Also, any person covered by § 1126(b) "shall be entitled to effective
protection against unfair competition, and the remedies ... shall be available so far as they may be appropriate
5
A treaty can also be self-executing if it "directly accords enforceable rights to persons without the
benefit of Congressional implementation." Haitian Refugee Ctr., Inc. v. Baker, 949 F.2d 1109, 1110
(11th Cir.1991). The Paris Convention is not self-executing because, on its face, the Convention provides
that it will become effective only through domestic legislation. See 53 Stat. 1780, art. 17 ("It is
understood that at the time an instrument of ratification or accession is deposited on behalf of a country,
such country will be in a position under its domestic law to give effect to the provisions of this
Convention."); see also Mannington Mills, Inc. v. Congoleum Corp., 595 F.2d 1287, 1298 (3rd
Cir.1979); Ortman v. Stanray Corp., 371 F.2d 154, 157 (7th Cir.1967). But see Vanity Fair, 234 F.2d at
640 (noting, without discussion, that plaintiff "would appear to be correct" in asserting that Paris
Convention is self-executing).
in repressing acts of unfair competition." 15 U.S.C. § 1126(h).
We agree that section 44 of the Lanham Act incorporated, to some degree, the Paris Convention.
But we disagree that the Paris Convention creates substantive rights beyond those independently provided
in the Lanham Act. As other courts of appeals have noted, the rights articulated in the Paris Convention do
not exceed the rights conferred by the Lanham Act. See Scotch Whisky Assoc. v. Majestic Distilling Co., Inc.,
958 F.2d 594, 597 (4th Cir.1992); Vanity Fair, 234 F.2d at 644; see also L'Aiglon Apparel v. Lana Lobell,
Inc., 214 F.2d 649, 652-54 (3rd Cir.1954). Instead, we conclude that the Paris Convention, as incorporated
by the Lanham Act, only requires "national treatment."
National treatment means that "foreign nationals should be given the same treatment in each of the
member countries as that country makes available to its own citizens." Vanity Fair, 234 F.2d at 640. So,
section 44 of the Lanham Act gives foreign nationals the same rights and protections provided to United
States citizens by the Lanham Act. As such, foreign nationals like Plaintiff may seek protection in United
States courts for violations of the Lanham Act. But the Paris Convention, as incorporated by section 44 of
the Lanham Act, creates no new cause of action for unfair competition. Any cause of action based on unfair
competition must be grounded in the substantive provisions of the Lanham Act.
We will now consider whether jurisdiction exists under the substantive provisions of the Lanham Act
for unfair competition.
In Steele v. Bulova Watch Co., 344 U.S. 280, 73 S.Ct. 252, 97 L.Ed. 319 (1952), the Supreme Court
considered the extraterritorial application of a Lanham Act claim. The court concluded that a United States
company could sue a United States citizen for trademark infringement occurring in Mexico under the Lanham
Act. The Court recognized that Congress may "project the impact of its laws beyond the territorial boundaries
of the United States," id. at 254, but that such legislation "will not extend beyond the boundaries of the United
States unless a contrary legislative intent appears." Id. at 255. The Court concluded that the Lanham Act
conferred jurisdiction over extraterritorial disputes involving trademark infringement and unfair competition
when: 1) Defendant is a United States corporation; 2) the foreign activity had substantial effects in the
United States; and 3) exercising jurisdiction would not interfere with the sovereignty of another nation.
The first element from Bulova is obviously present here: HRC is a United States corporation.
Congress has authority to regulate the conduct of United States corporations conducting business abroad.
But Plaintiff's complaint fails to allege sufficiently facts to support the two other elements of the
Bulova test. See Vanity Fair, 234 F.2d at 643 ("[T]he absence of one of the [Bulova ] factors might well be
determinative and [ ] the absence of both is certainly fatal."). The Bulova court explained that "[u]nlawful
effects in this country ... are often decisive." Id. at 288, 73 S.Ct. 252 (noting as unlawful effects that
"spurious [watches] filtered through the Mexican border into this country" and that the defendant's
"competing goods could well reflect adversely on [the plaintiff's] trade reputation in markets cultivated by
advertising here as well as abroad" ). The only substantial effect in the United States alleged by Plaintiff is
financial gain by Defendant, like royalties and merchandise commission. But the financial gain from royalties
that HRC, the United States parent company, received from the subsidiary abroad is insufficient in this case
to establish the "substantial effects" required by Bulova. Cf. Vanity Fair, 234 F.2d at 638, 642 (concluding
substantial effect on domestic commerce where defendant advertised product in United States and sold
product by mail to customers in United States).
Also, civil suits against Plaintiff about the validity of certain Hard Rock Café trademarks remain
pending in Lebanon. Thus, a ruling by a United States court on allegations of unfair competition based on
the use of Hard Rock Café trademarks might interfere with an inconsistent ruling from the Lebanon courts.
Cf. Bulova, 73 S.Ct. at 257 (Mexican courts had already cancelled the U.S. defendant's trademark registration;
so, "there can be no interference with the sovereignty of another nation").
We finally note that the Paris Convention, as incorporated by the Lanham Act, is premised on the idea
that each nation's law should only have territorial application. "Thus, a foreign national of a member nation
using his trade-mark in commerce in the United States is accorded extensive protection here against
infringement." Vanity Fair Mills, 234 F.2d at 640-41. The source of that protection rests in domestic law,
not the foreign state's law. But here, Plaintiff is not competing in nor using his trademark in the United States.
All Plaintiff alleges is that a United States company is infringing on its rights in a foreign country. HRC's
use of its Hard Rock trademark in Lebanon is subject to Lebanese law.
Thus, the district court correctly dismissed Plaintiff's complaint for lack of subject-matter jurisdiction.
AFFIRMED.