American Rice, Inc. v. Arkansas Rice Growers Cooperative Association

American Rice, Inc. (ARI) (plaintiff), based in Texas, marketed rice for rice farmer-members in the United States (U.S.). Arkansas Rice Growers Cooperative Association (Riceland) (defendant) also marketed rice for its members. ARI and Riceland both sold rice in Saudi Arabia. ARI had about 73 percent of the Saudi market. In 1975, ARI acquired Blue Ribbon Mills and its trademarks. The marks, used in Saudi Arabia since 1966, included “Abu Bint” (literally, girl brand) and a design depicting the head and torso of a young Asian woman. ARI registered “Abu Bint” and the girl design in the U.S., but its agent’s attempt to register “Abu Bint” in Saudi Arabia failed. Riceland sold bags of rice in Saudi Arabia of the same general appearance as ARI’s bags. Riceland began using the same color scheme as ARI and introduced the names “Abu Binten” (twin girl), “Bint al-Arab” (daughter of the Arabs), and “Gulf Girl.” Riceland’s labels depicted a young Arab woman or a young western-looking woman from the waist up. The “Bint al Arab” mark was registered in Saudi Arabia by Alamoudi, a merchant supplied by Riceland. Under Saudi law, one who used a mark for over a year before a similar mark was registered could use the mark, but the right was personal and could not be transferred. ARI sued in U.S. federal district court for damages and injunctive relief, claiming that Riceland had violated the Lanham Act. ARI’s evidence showed that Saudi Arabian sellers, longshoremen, and consumers confused Bint-al-Arab rice with Abu Bint rice. The district court found that ARI had a substantial likelihood of success on the merits and granted ARI’s motion for a preliminary injunction barring Riceland from using the similar marks. Riceland appealed, arguing that the Lanham Act’s application to Saudi sales was outside the extraterritorial jurisdiction of the district court.