Trademarks

Grupo Gigante v. Dallo: The Ninth Circuit Carves a Famous-Marks Exception

The Ninth Circuit recognizes a famous-marks exception to trademark territoriality, allowing a foreign mark to be protected in the United States when a substantial share of the relevant American market knows it.

June 16, 2025
Shopper pushing a cart down a stocked supermarket grocery aisle
Grupo Gigante asks whether American shoppers near the border already knew a Mexican grocery brand. Shutterstock
Educational content, not legal advice. This article explains general legal concepts. It does not create an attorney–client relationship. For your specific situation, consult a licensed attorney.

In Grupo Gigante S.A. de C.V. v. Dallo & Co., Inc., No. 00-57118 (9th Cir. Dec. 15, 2004), the U.S. Court of Appeals for the Ninth Circuit became the first federal appellate court to expressly recognize a “famous-marks” exception to the territoriality principle. Argued and submitted May 6, 2002, and filed December 15, 2004, the decision—reported at 391 F.3d 1088—was authored for a panel that included Circuit Judges Kleinfeld and Graber, sitting with District Judge Collins. The dispute pitted a large, well-established Mexican grocery chain against a small Southern California grocer that had been first to use the GIGANTE name on U.S. soil. The case asked whether the bright-line rule that foreign use creates no domestic rights must yield when a foreign mark is genuinely famous among the relevant American consumers.

At a glance

  • Case: Grupo Gigante S.A. de C.V. v. Dallo & Co., Inc., No. 00-57118
  • Court: U.S. Court of Appeals for the Ninth Circuit
  • Argued / Decided: May 6, 2002 / December 15, 2004 (filed)
  • Reported: 391 F.3d 1088
  • Panel: Kleinfeld and Graber, Circuit Judges; Collins, District Judge
  • Holding: There is a famous-marks exception to the territoriality principle; a foreign mark may receive U.S. protection if a substantial percentage of consumers in the relevant American market are familiar with it.
  • Disposition: Reversed and remanded for application of the newly articulated standard.

Grupo Gigante had operated “Gigante” grocery stores in Mexico since 1962, building a large chain and substantial recognition, including among the Mexican-American population of Southern California. It did not, however, open a U.S. store until 1999. By then, the Dallo family had been operating “Gigante” markets in the San Diego area since 1991. When Grupo Gigante moved north, the two clashed. The district court ruled for Grupo Gigante, finding that the famous-marks doctrine protected its senior Mexican mark. The Dallo parties appealed, and the Ninth Circuit took the opportunity to address, as a matter of first impression in the circuit, whether such an exception exists and what it requires.

The territoriality principle and its limits

The court began where American trademark law always begins in cross-border disputes: with territoriality. Trademark rights are national in scope, and priority ordinarily depends on use in the relevant country’s commerce. Under that default, the Dallos—first to use GIGANTE in the United States—would hold the senior domestic rights, notwithstanding Grupo Gigante’s far older and larger Mexican operation.

But the court refused to treat territoriality as absolute. An unqualified rule, it reasoned, would invite consumer confusion and a species of fraud: a domestic newcomer could appropriate a foreign mark that American consumers already associate with a particular foreign source, then trade on that borrowed recognition. Where a foreign mark is truly famous in the U.S. market, protecting the local copyist rather than the foreign originator inverts the consumer-protection purpose that animates trademark law. The court therefore held that territoriality admits a famous-marks exception.

Defining the standard

Recognizing the exception was the easier half of the task; defining it was harder, and the panel split on the details. The majority rejected the idea that a foreign mark need only meet the ordinary “secondary meaning” threshold to qualify. Something more was required—a showing that the mark is genuinely well known to the relevant American consumers, not merely that it has acquired some local association. The court framed the test in terms of whether “a substantial percentage of consumers in the relevant American market is familiar with the foreign mark.”

That phrasing left the operative threshold unsettled. The relevant market in Grupo Gigante was a border-proximate population with heavy familiarity with Mexican brands—a setting unusually favorable to a famous-marks claim. The court instructed that the inquiry be conducted with reference to that relevant market rather than the nation as a whole, and it remanded for the standard to be applied to the evidence. Judge Graber’s concurrence pressed for a more demanding and concrete benchmark, suggesting that a “substantial percentage” should mean a majority—more than fifty percent—of the relevant consumers. The divergence between the majority’s open-textured “substantial percentage” and the concurrence’s majority floor would become a focal point for later criticism and litigation.

A doctrine without a clear federal anchor

A persistent difficulty haunting Grupo Gigante—and one the Punchgini litigation would later seize upon—is the statutory home of the famous-marks exception. The Ninth Circuit grounded its holding largely in policy and common-law reasoning about consumer confusion and the purposes of trademark protection, drawing support from the well-known-marks tradition reflected in international instruments such as the Paris Convention. It did not rest the exception on a specific operative provision of the Lanham Act that, by its terms, protects unregistered foreign marks famous in the United States.

That methodological choice is the decision’s most vulnerable seam. By deriving the exception from the structure and purposes of trademark law rather than from clear statutory text, the court exposed the doctrine to the charge that it is judicial policymaking unmoored from congressional command. When the Second Circuit confronted the same question a few years later, it would find that gap dispositive at the federal level, declining to read a famous-marks exception into the Lanham Act and setting up a square circuit conflict.

Open questions

  • What percentage is “substantial”? The majority left the figure open; the concurrence urged a majority of the relevant market. The threshold remains the single most contested element.
  • What is the “relevant market”? Grupo Gigante used a border-proximate, demographically specific market. How narrowly or broadly the relevant market may be drawn shapes outcomes decisively.
  • Where does the exception live in the statute? The opinion’s policy-based grounding invites the objection that the Lanham Act contains no textual hook—the precise basis on which other circuits have balked.
  • How does fame interact with secondary meaning and confusion? The court demanded more than ordinary secondary meaning, but the relationship among fame, secondary meaning, and likelihood of confusion was left to be worked out on remand and in later cases.

Implications

  • Foreign reputation can matter—in the Ninth Circuit. A foreign brand famous among relevant U.S. consumers may enforce against a domestic copyist even without prior U.S. use, a meaningful departure from a strict territoriality default.
  • Evidence of U.S. consumer awareness is the ballgame. Survey data and proof of familiarity within a carefully defined relevant market are essential to invoking the exception.
  • The circuit split is real and consequential. With the Ninth Circuit recognizing the exception and the Second Circuit declining to find it in federal law, forum and choice-of-law considerations carry outsized weight.
  • Define the market deliberately. Plaintiffs benefit from narrow, favorable relevant-market definitions; defendants will push for broader, nationwide framings that dilute apparent fame.

Frequently asked questions

What is the famous-marks exception? It is a recognized departure from the territoriality principle under which a foreign mark not yet used in the United States can still be protected here if it is famous—known to a substantial share of relevant American consumers. Grupo Gigante is the leading federal appellate decision recognizing it.

How famous must the foreign mark be? The Ninth Circuit required familiarity among “a substantial percentage of consumers in the relevant American market.” The majority did not fix a number; Judge Graber’s concurrence argued the figure should be a majority—more than fifty percent—of that market.

Does every court accept the famous-marks exception? No. The Second Circuit, in the ITC Ltd. v. Punchgini litigation, concluded that Congress has not incorporated a famous-marks doctrine into federal trademark law, creating a split. Whether and how the doctrine applies can therefore turn on jurisdiction.

Authorities and sources