American Rice, Inc., a U.S. corporation, sold its goods in Saudi Arabia under the trade name of ABU BINT, which means “of the girl.” Another American corporation, the Arkansas Rice Gro wers Cooperative Association, marketed similar products in Saudi Arabia using the name BINT ALARAB, which in English means “Gulf Girl.”

American Rice sued Arkansas in federal district court under the Lanham Act, alleging an infringement by Arkansas of American Rice’s exclusive trademark. None of the Arkansas rice products that American Rice complained of had entered any market within the United States. Arkansas argued that the federal district court had no extraterritorial power to mediate this international trade dispute. Was Arkansas correct? Explain.

American Rice, Inc., v. Arkansas Rice Growers Coop. Ass’n., 701 F.2d 414 (5th Cir.).