USA Business Digest: August 2023

August 3, 2023 | Newsletters

Authored by Manny Schoenhuber

Welcome back to the seventh edition of USA Business Digest – A Legal Newsletter for European Companies and Investors in the United States.

This month, we will take a closer look at (1) a U.S. Supreme Court ruling that limits the reach of federal trademark law; (2) the EU-U.S. Data Privacy Framework; (3) offshore wind projects; and (4) the EU-U.S. critical minerals deal.

As always, this update is available in both English and German.


US Supreme Court Rules That Federal Trademark Law Cannot Be Applied to Foreign Conduct

In the case Abitron Austria GmbH et al. v. Hetronic International Inc., the U.S. Supreme Court ruled that federal trademark law—specifically, the Lanham Act—cannot be applied to foreign conduct.

The Lanham Act prohibits the use of a trademark in commerce when such use “is likely to cause confusion.” Until now, many courts have viewed the Lanham Act as an extraterritorial statute, allowing litigants to bring U.S. claims and obtain injunctions against defendants over infringing acts abroad. Now, the U.S. Supreme Court ruled that the provisions of the Lanham Act prohibiting trademark infringement do not apply outside the U.S. Applying the presumption against extraterritoriality, the Court found the provisions are not extraterritorial and extend only to claims where the claimed infringing use in commerce is domestic.

This decision does significantly narrow the Lanham Act and its application for U.S. companies pursuing foreign defendants, where all or part of the activity may be taking place in foreign countries. In addition, this ruling significantly underscores the importance of securing foreign registrations for trademarks used abroad. ♦


Update: EU-US Data Transfer Deal Finalized

The European Commission approved a revamped framework to ease personal data transfers from the European Union to the U.S. The Commission finalized its adequacy decision concluding that the government surveillance and consumer redress commitments made by the U.S. in the EU-U.S. Data Privacy Framework were enough to ensure personal data transferred under this new arrangement would be adequately protected.

The Data Privacy Framework replaces the Privacy Shield data transfer pact struck down by the European Court of Justice in 2020. Then, the Court of Justice found that the mechanism failed to provide Europeans with effective redress rights or adequately protect them from having their data intercepted by U.S. intelligence authorities. To alleviate these concerns, the U.S. government agreed to implement enhanced protections.

The determination offers companies the ability to certify their compliance with the privacy obligations contained in the framework. This certification will enable them to transfer EU data to the U.S. without additional data protection safeguards.

Nonetheless, some claim the changes are not yet enough to address concerns or adequately protect EU citizens from unauthorized government surveillance, which means that court challenges in the EU may follow. ♦


President Biden Announced First Offshore Wind Lease Sale in the Gulf of Mexico

Shortly after his administration granted Danish energy company Orsted approval for a wind project off the New Jersey Coast, President Biden announced the first offshore wind lease sale in the Gulf of Mexico for a project that will produce 3.7 gigawatts of electricity to power an estimated 1.3 million homes.

The proposed sale notice encompasses a 102,480-acre area offshore Lake Charles, Louisiana, and two areas offshore Galveston, Texas, one comprising 102,480 acres and the other 96,786 acres.

Although President Biden stated all of the components and labor for the Gulf wind project will come from the U.S., the Gulf region will also rely on European ingenuity to bring the plans to fruition—similarly to the New Jersey project. ♦


EU-US Critical Minerals Deal Talks Advance

The EU and U.S. moved closer to finalizing a deal on critical minerals as the European Commission presented its negotiation proposal to its member council. Pending member states’ approval, the Commission could secure a deal with the U.S. that would allow European carmakers to benefit from clean energy subsidies included in the Inflation Reduction Act.

EU trade commissioner Valdis Dombrovskis stated a deal “will ensure that the EU mining and chemical companies have fair and frictionless access to the U.S. market and are able to supply both EU and U.S. electric vehicle producers.” The EU’s goal with a critical minerals deal is to boost production capacities and to ensure that electric vehicles with batteries made from EU minerals will qualify for tax credits under the Inflation Reduction Act. ♦

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