Trademarks

Steele v. Bulova Watch Co.: The Lanham Act Follows the Citizen Across the Border

The 1952 decision that first let an American trademark owner reach a U.S. citizen's infringing conduct abroad — and seeded seven decades of doctrinal fights over the foreign reach of the Lanham Act.

February 10, 2025
Vintage watch assembly bench with loose movements and dials
Bulova-stamped watches assembled in Mexico City filtered back across the border and into the case that started it all. 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.

Steele v. Bulova Watch Co., No. 38, 344 U.S. 280 (argued Nov. 10, 1952; decided Dec. 22, 1952), is the headwater of every modern argument about how far the Lanham Act reaches beyond the water’s edge. Writing for the Court, Justice Clark held that a United States District Court had jurisdiction to award relief to an American corporation for trademark infringement and unfair competition that a U.S. citizen had carried out largely on foreign soil. Justice Reed, joined by Justice Douglas, dissented; Justice Black took no part. For seventy years the opinion supplied the gravitational center for the “effects” tests, the citizenship distinctions, and the comity carve-outs that lower courts built around it — and it remains the case the Supreme Court had to reckon with when it recalibrated the doctrine in 2023.

At a glance

  • Case: Steele v. Bulova Watch Co., No. 38, 344 U.S. 280 (1952)
  • Court: Supreme Court of the United States
  • Argued / decided: November 10, 1952 / December 22, 1952
  • Opinion: Justice Clark for the Court; Justice Reed dissenting (joined by Justice Douglas); Justice Black not participating
  • Holding: The Lanham Act’s grant of jurisdiction over “all commerce which may lawfully be regulated by Congress” reaches the foreign acts of a U.S. citizen where those acts have effects on U.S. commerce and do not conflict with valid foreign trademark rights
  • Disposition: Judgment of the Court of Appeals (sustaining jurisdiction) affirmed; cause remanded for adjudication on the merits

The facts: a Texan, a Mexican workshop, and watches that came home

Sidney Steele was a U.S. citizen who lived in San Antonio, Texas, and ran a watch business out of Mexico City. There he assembled timepieces from Swiss movements and dials, with component parts drawn from Switzerland and the United States, and stamped the assembled watches with the name “Bulova.” He had obtained a Mexican registration of the “Bulova” mark — a registration that Mexican courts later nullified. Bulova Watch Company, a New York corporation, had spent decades building the mark in the United States and held U.S. registrations for it.

The two countries did not stay neatly separated. “Spurious” Bulova watches assembled in Mexico filtered back across the border, and Bulova’s authorized Texas retailers began fielding complaints about defective “Bulovas” they had never sold. Bulova sued in the Western District of Texas under the Lanham Act. The district court dismissed for want of jurisdiction, reasoning that the operative conduct occurred in Mexico; the Fifth Circuit reversed; and the Supreme Court granted certiorari to resolve whether the Act could reach Steele’s foreign acts.

The reasoning: a broad commerce grant plus a citizen plus an effect at home

Justice Clark anchored the holding in the breadth of the statute. The Lanham Act defines “commerce” as “all commerce which may lawfully be regulated by Congress,” and Congress’s constitutional authority over foreign commerce is not confined to transactions completed inside the territorial United States. Because Steele’s “operations and their effects were not confined within the territorial limits of a foreign nation” — the bogus watches reached U.S. consumers and injured Bulova’s domestic reputation and trade — his conduct fell within the regulated zone. The Court underscored that Steele was an American citizen, and that “the United States is not debarred by any rule of international law from governing the conduct of its own citizens upon the high seas or even in foreign countries when the rights of other nations or their nationals are not infringed.”

The Court took pains to distinguish Justice Holmes’s foundational restraint in American Banana Co. v. United Fruit Co., 213 U.S. 347 (1909), which had read the Sherman Act not to reach acts done in a foreign country under that country’s authority. Steele, the majority said, was different on two axes. First, the defendant was a U.S. citizen, not a foreign actor, and the United States may regulate its own nationals abroad. Second — and this carried real weight — there was no subsisting conflict with foreign law: Steele’s Mexican registration of “Bulova” had been declared invalid by the Mexican courts, so a U.S. decree would not order him to do something Mexican law affirmatively permitted or protected. With the foreign-law conflict dissolved and a concrete domestic effect established, the presumption against extraterritoriality gave way.

What the dissent feared

Justice Reed, joined by Justice Douglas, would have left the foreign conduct beyond the Act’s reach. The dissent emphasized that the assembly and sale were consummated in Mexico, that Steele had at the relevant time operated under a Mexican registration, and that extending U.S. trademark law to acts completed in another sovereign’s territory invited friction with that sovereign’s own regulation of marks within its borders. The disagreement was not really about whether Bulova had been harmed; it was about the wisdom and limits of projecting domestic trademark policy onto conduct occurring under another nation’s flag — the same anxiety that animates the modern debate.

How Steele became a framework

Steele decided a case; it did not hand down a tidy multi-factor test. That synthesis came from the courts of appeals. Within four years the Second Circuit, in Vanity Fair Mills, Inc. v. T. Eaton Co., 234 F.2d 633 (2d Cir. 1956), distilled the decision into three considerations: whether the defendant’s conduct had a substantial effect on U.S. commerce, whether the defendant was a U.S. citizen, and whether applying the Act would conflict with trademark rights established under foreign law. Vanity Fair declined to reach a Canadian defendant who held valid Canadian registrations — precisely the foreign-law conflict that was absent in Steele. Other circuits elaborated their own variants: the Ninth Circuit’s Timberlane-derived balancing for the foreign-commerce nexus, and, decades later, the First Circuit’s substantial-effects test for non-citizen defendants in McBee v. Delica Co., 417 F.3d 107 (1st Cir. 2005). Each of these is, in the end, a gloss on the three variables Steele put in play: effect, citizenship, and comity.

Open questions

  • What survives after the 2023 recalibration? In Abitron Austria GmbH v. Hetronic International, Inc., 600 U.S. 412 (2023), the Court reframed the inquiry around whether the infringing “use in commerce” is domestic, rather than around a free-floating effects test. Steele was distinguished, not overruled — leaving open how much of its citizenship-and-effects logic still does independent work.
  • Does citizenship still matter on its own? Steele leaned on Steele’s U.S. citizenship. After Abitron keyed liability to the location of the infringing use, it is unsettled whether a defendant’s nationality remains an independent thumb on the scale or merely a fact bearing on where conduct occurs.
  • How is “conflict with foreign law” measured today? Steele turned in part on the nullification of the Mexican registration. Courts continue to wrestle with how robust a foreign right must be — and how directly it must clash with a U.S. decree — to defeat application of the Act.

Implications

  • For brand owners: Steele established the enduring principle that a U.S. mark holder is not automatically barred from federal relief merely because the wrongdoer staged the conduct abroad; the existence of a genuine domestic effect and the absence of a conflicting foreign right remain the touchstones.
  • For defendants operating across borders: Citizenship and the cover of a foreign registration are double-edged. A U.S. citizen abroad has historically been more exposed, and a foreign registration shields only while it is valid — as Steele learned when his Mexican grant was voided.
  • For litigators: Even after Abitron, Steele is unavoidable citation. The smart move is to translate its three variables into the post-2023 “domestic use in commerce” vocabulary rather than to argue the old effects test on its own terms.
  • For comity-minded courts: The decision’s most durable lesson may be procedural humility — its insistence on checking for a live conflict with foreign trademark law before projecting U.S. policy across a border.

Frequently asked questions

Did Steele v. Bulova hold that the Lanham Act applies everywhere in the world? No. It held that the Act could reach a U.S. citizen’s foreign conduct on the specific facts presented — a domestic effect on U.S. commerce and no valid conflicting foreign trademark right. The Court was careful to tie its result to those conditions, not to announce a borderless rule.

Is Steele still good law after Abitron v. Hetronic? Steele has not been overruled. Abitron (2023) reframed the governing test around domestic “use in commerce” and distinguished Steele on its facts, including the defendant’s citizenship and the absence of a foreign-law conflict. Steele remains foundational, but its multi-factor progeny must now be read through Abitron’s lens.

Why did the defendant’s U.S. citizenship matter so much? Because international law generally permits a nation to regulate the conduct of its own nationals abroad. Steele’s American citizenship let the Court invoke that authority without trespassing on Mexico’s regulation of conduct within its territory, especially once Steele’s Mexican registration had been nullified.

Authorities and sources