Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-06-56033/USCOURTS-ca9-06-56033-0/pdf.json

Parties Involved:
Able Time, Inc.
Appellee
United States of America
Appellant

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA, 

Plaintiff-Appellant, No. 06-56033

v. D.C. No.  CV-04-02695-RMT ABLE TIME, INC., a California

corporation, OPINION

Defendant-Appellee. 

Appeal from the United States District Court

for the Central District of California

Robert M. Takasugi, District Judge, Presiding

Argued and Submitted

February 15, 2008—Pasadena, California

Filed September 25, 2008

Before: Stephen S. Trott, Richard R. Clifton, and

Consuelo M. Callahan, Circuit Judges.

Opinion by Judge Clifton

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COUNSEL

Charles E. Mullins (argued), United States Nuclear Regulatory Commission, Rockville, Maryland, and Anthony Steinmeyer, Department of Justice, Washington, D.C. for the

plaintiff-appellant. 

Elon A. Pollack (argued), Stein Shostak Shostak Pollack &

O’Hara, Los Angeles, California, and Phyllis G. Pollack, Law

Offices of Phyllis G. Pollack, Los Angeles, California for the

defendant-appellee Able Time, Inc. 

OPINION

CLIFTON, Circuit Judge: 

Able Time, Inc. imported a shipment of watches into the

United States. The watches bore the mark “TOMMY,” which

is a registered trademark owned by Tommy Hilfiger Licensing, Inc. The Bureau of Customs and Border Protection seized

the watches pursuant to the Tariff Act, which authorizes seizure of any “merchandise bearing a counterfeit mark.” 19

U.S.C. § 1526(e). Tommy Hilfiger did not make or sell

watches at the time of the seizure. Customs later imposed a

civil penalty upon Able Time pursuant to 19 U.S.C. § 1526(f),

which authorizes the imposition of a fine upon any person

who imports merchandise that is seized under § 1526(e).1 The

1The Tariff Act provides as follows: 

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district court concluded that, because Tommy Hilfiger did not

make watches at the time of the seizure, the watches imported

by Able Time were not counterfeit, and the civil penalty

imposed by Customs was unlawful. 

The government argues that the Tariff Act does not require

the owner of the registered mark to make the same type of

goods as those bearing the offending mark. The government

acknowledges that such a requirement is commonplace in

many related trademark statutes but maintains that Congress

did not intend to include such a requirement—known as an

“identity of goods or services” requirement—in the Tariff

Act. Able Time responds by arguing that Congress expressed

its intent to require identity of goods in related statutes and

legislative history. 

(e) Merchandise bearing counterfeit mark; seizure and forfeiture;

disposition of seized goods 

Any such merchandise bearing a counterfeit mark (within the

meaning of section 1127 of Title 15) imported into the United

States in violation of the provisions of section 1124 of Title 15,

shall be seized and, in the absence of the written consent of the

trademark owner, forfeited for violations of the customs laws. 

. . . . 

(f) Civil Penalties 

(1) Any person who directs, assists financially or otherwise,

or aids and abets the importation of merchandise for sale or

public distribution that is seized under subsection (e) of this

section shall be subject to a civil fine. 

(2) For the first such seizure, the fine shall be not more than

the value that the merchandise would have had if it were

genuine, according to the manufacturer’s suggested retail

price, determined under regulations promulgated by the Secretary. 

19 U.S.C. § 1526. “Any such merchandise” refers to merchandise of foreign manufacture bearing a registered trademark owned by a U.S. citizen

or corporation. 19 U.S.C. § 1526(a). 

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We conclude that the Tariff Act does not contain an identity of goods or services requirement. We hold that Customs

may impose a civil penalty pursuant to 19 U.S.C. § 1526(f)

upon an importer of merchandise bearing a counterfeit mark,

even though the owner of the registered mark does not manufacture or sell the same type of merchandise. We reverse the

district court’s order granting Able Time’s motion for summary judgment and remand for further proceedings. 

I. Background

Tommy Hilfiger registered the trademark “TOMMY” in

International Class 3, which encompasses cosmetics, cologne

and similar products, in September 1996. Customs seized a

shipment of watches imported by Able Time bearing the mark

“TOMMY” on May 7, 1999. At the time, Tommy Hilfiger

did not manufacture or sell watches, nor was its mark registered in International Class 14, the class that includes

watches. Tommy applied for registration in that class on

November 30, 1999, and received it on September 17, 2002.

Tommy Hilfiger currently sells watches with the “TOMMY”

mark. 

A. The Forfeiture Action

Customs filed an in rem forfeiture action against the

watches pursuant to 19 U.S.C. § 1526(e) on November 3,

2000. The district court granted Able Time’s motion for

judgment on the pleadings on September 24, 2002. The government appealed, and we vacated the district court’s judgment and remanded for further proceedings. See United States

v. 2,164 Watches, 366 F.3d 767 (9th Cir. 2004). The district

court dismissed the forfeiture suit without prejudice for defective service of process on September 9, 2004. The government was unable to re-file the forfeiture suit because the

statute of limitations had run. It returned nearly all of the

watches to Able Time on April 8, 2005.

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B. The Civil Penalty Action

Customs issued Able Time several notices of civil penalty

in February and March of 2004. Customs filed this civil penalty action pursuant to 19 U.S.C. § 1526(f) on April 15, 2004.

Able Time filed a motion for summary judgment which the

district court initially denied, concluding that jurors could reasonably return a verdict for the government that the watches

bore a counterfeit mark. The district court subsequently issued

sua sponte an order to show cause why it should not reconsider its decision. After further briefing, the district court

granted Able Time’s motion for summary judgment, concluding as a matter of law that the imported watches could not be

counterfeit because Tommy Hilfiger did not make watches at

the time of the seizure. The government timely appealed. 

II. Discussion 

We have jurisdiction pursuant to 28 U.S.C. § 1291. “We

review a grant of summary judgment de novo.” Universal

Health Servs., Inc. v. Thompson, 363 F.3d 1013, 1019 (9th

Cir. 2004). “The district court’s interpretation of a statute is

a question of law also subject to de novo review.” Beeman v.

TDI Managed Care Servs., Inc., 449 F.3d 1035, 1038 (9th

Cir. 2006). We first consider whether this case is moot, which

is an issue subject to de novo review that the parties may raise

at any time. S. Or. Barter Fair v. Jackson County, 372 F.3d

1128, 1133 & n.8 (9th Cir. 2004).

A. Mootness

Able Time argues that this case is moot because Customs

has returned nearly all the watches. A case becomes moot

when there no longer exists a “present controversy as to

which effective relief can be granted.” Vill. of Gambell v.

Babbitt, 999 F.2d 403, 406 (9th Cir. 1993) (internal quotation

omitted). 

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[1] This action is not moot because the civil penalty remedy

is still available. See Friends of the Earth v. Laidlaw Envtl.

Servs. (TOC), Inc., 528 U.S. 167, 192-93 (2000) (reasoning

that the availability of civil penalties rendered the case not

moot); Ecological Rights Found. v. Pac. Lumber Co., 230

F.3d 1141, 1153 (9th Cir. 2000) (same). The provision that

authorizes civil penalties, 19 U.S.C. § 1526(f), does not

require Customs to retain possession of the offending merchandise during the pendency of a civil penalty suit, nor does

it require Customs to successfully attain forfeiture of the merchandise. Subsection (f) requires only that the merchandise be

“seized under subsection (e),” which it was. 19 U.S.C.

§ 1526(f). If the forfeiture action in this case had been dismissed with prejudice, or if Able Time were to show that the

seizure was otherwise invalid, then a civil penalty would not

be appropriate. But the forfeiture action here was dismissed

without prejudice, and Able Time has not shown that the seizure was unlawful. Accordingly, the civil penalty remedy is

still available and the case is not moot. 

B. Relevant Statutes 

We turn next to the language of the relevant statutes. See

Consumer Prod. Safety Comm’n v. GTE Sylvania, Inc., 447

U.S. 102, 108 (1980) (“[T]he starting point for interpreting a

statute is the language of the statute itself. Absent a clearly

expressed legislative intention to the contrary, that language

must ordinarily be regarded as conclusive.”). The government

argues that the Tariff Act and the statutes that it incorporates

do not require the owner of the trademark to manufacture the

same goods as those bearing the offending mark. The government argues in the alternative that the agency’s interpretation

is entitled to deference under Chevron U.S.A., Inc. v. Natural

Resources Defense Council, Inc., 467 U.S. 837, 843 (1984),

a position we decline to adopt and discuss below at 25-26.

Able Time responds by arguing that other sources, such as

other statutory language and legislative history, show Congress’s intent to require identity of goods or services in the

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Tariff Act. We conclude that the plain language is unambiguous and does not contain an identity of goods or services

requirement. On remand, the district court will consider

whether the other requirements of the Tariff Act have been

met. 

[2] The Tariff Act prohibits the importation of merchandise

bearing a registered trademark without the permission of the

owner of the trademark: 

[I]t shall be unlawful to import into the United States

any merchandise of foreign manufacture if such merchandise . . . bears a trademark owned by a citizen

of, or by a corporation or association created or organized within, the United States . . . unless written

consent of the owner of such trademark is produced.

19 U.S.C. § 1526(a). The Tariff Act also authorizes seizure

and forfeiture if the merchandise bears a counterfeit mark: 

Any such merchandise bearing a counterfeit mark

(within the meaning of section 1127 of Title 15)

imported into the United States in violation of the

provisions of section 1124 of Title 15, shall be

seized and, in the absence of the written consent of

the trademark owner, forfeited for violations of the

customs laws. 

19 U.S.C. § 1526(e). The Tariff Act authorizes the imposition

of a civil penalty upon an importer whose goods are seized,

in an amount not more than the value the merchandise would

have had if it were genuine:

(1) Any person who directs, assists financially or

otherwise, or aids and abets the importation of merchandise for sale or public distribution that is seized

under subsection (e) of this section shall be subject

to a civil fine. 

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(2) For the first such seizure, the fine shall be not

more than the value that the merchandise would have

had if it were genuine, according to the manufacturer’s suggested retail price, determined under regulations promulgated by the Secretary. 

19 U.S.C. § 1526(f). None of these provisions require the

owner of the registered mark to make or sell the same goods

as those bearing the offending mark. 

[3] Subsection (e) of the Tariff Act incorporates two other

statutes, 15 U.S.C. § 1127 and 15 U.S.C. § 1124. Both are

part of the Trademark Act of 1946, known as the Lanham

Act, and neither contains an identity of goods or services

requirement. The Tariff Act incorporates the definition of the

term “counterfeit” from the first statute: “A ‘counterfeit’ is a

spurious mark which is identical with, or substantially indistinguishable from, a registered mark.” 15 U.S.C. § 1127. Able

Time argues that 15 U.S.C. § 1127 also defines other terms,

such as “trademark” and “use in commerce,” that do contain

an identity of goods or services requirement. The Tariff Act

incorporates only the definition of “counterfeit.” Other definitions contained in 15 U.S.C. § 1127 are not at issue here. 

[4] The Tariff Act incorporates from the second statute the

requirement that the offending merchandise “copy or simulate” a registered trademark, which amounts to a requirement

that the offending merchandise be likely to cause confusion.

The second statute provides: “[N]o article of imported merchandise . . . which shall copy or simulate a trademark registered in accordance with the provisions of this chapter . . .

shall be admitted to entry at any customhouse of the United

States . . . .” 15 U.S.C. § 1124. Customs has defined a “copying or simulating” trademark as “one which may so resemble

a recorded mark or name as to be likely to cause the public

to associate the copying or simulating mark or name with the

recorded mark or name.” 19 C.F.R. § 133.22(a). This is equivalent to the traditional “likelihood of confusion” test for trade13662 UNITED STATES v. ABLE TIME, INC.

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mark infringement. See Ross Cosmetics Distrib. Ctrs., Inc. v.

United States (“Ross I”), 17 C.I.T. 814, 817-18 (1993) (equating the “copy or simulate” requirement from 15 U.S.C.

§ 1124 with the likelihood of confusion standard); Ross Cosmetics Distrib. Ctrs., Inc. v. United States (“Ross II”), 18

C.I.T. 979, 984-85 (1994) (same); 5 J. Thomas McCarthy,

McCarthy on Trademarks and Unfair Competition § 29:37

(4th ed. 2007) [hereinafter McCarthy] (“[The] ‘copy or simulate’ . . . test is the same as that used to determine the

infringement of a federally registered mark in ordinary litigation.”); see also AMF Inc. v. Sleekcraft Boats, 599 F.2d 341,

348-49 (9th Cir. 1979) (listing factors relevant to likelihood

of confusion analysis, including the strength of the mark, the

proximity of the goods, and the similarity of the marks,

among others), abrogated on other grounds by New Kids on

the Block v. News Am. Publ’g, Inc., 971 F.2d 302, 308-09 (9th

Cir. 1992). While public confusion may be more likely where

the owner of the registered mark manufactures the same

goods as those bearing the offending mark, identity of goods

or services is not a requirement, particularly where the other

factors weigh in favor of finding confusion. 

[5] To run afoul of the civil penalty provision of the Tariff

Act, then, the offending merchandise must bear a mark identical to or substantially indistinguishable from a registered

trademark owned by a United States citizen or corporation,

where the offending merchandise copies or simulates the registered trademark, meaning that it is likely to cause the public

to associate the offending merchandise with the registered

trademark under the Sleekcraft factors. See 19 U.S.C.

§ 1526(e)-(f); 15 U.S.C. §§ 1124, 1127; 19 C.F.R.

§ 133.22(a). Nowhere does this statutory scheme require the

owner of the registered mark to make the same goods as those

bearing the offending mark.

[6] Able Time argues that the reference to “genuine” merchandise and its retail price in 19 U.S.C. § 1526(f)(2), quoted

above at 8, shows that Congress intended a civil penalty to

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apply only where there is, in fact, a genuine article with which

to compare the merchandise bearing a counterfeit mark, i.e.,

where the owner of the registered mark manufactures the

same goods as those bearing the offending mark. The reference to “genuine” goods does not establish such a requirement, however, because the provision in which it appears

affects the calculation of the civil penalty, not the initial determination of whether a penalty should apply. This language at

best implies that the drafters did not anticipate the specific circumstances of the instant case, not that they intended the civil

penalty to be limited to cases involving identity of goods or

services. And on its face, the language of 19 U.S.C.

§ 1526(f)(2) does not require the genuine merchandise to be

manufactured by the trademark owner. Here, the term “genuine” could refer to genuine name-brand watches generally. 

[7] Able Time makes the related argument that it is impossible to calculate the fine in the manner required by

§ 1526(f)(2), since there can be no retail price for genuine

Tommy watches if genuine Tommy watches did not exist at

the time. Able Time argues that this impossibility shows that

Congress intended to require the owner of the registered mark

to manufacture the same goods as those bearing the offending

mark. We disagree. The Tariff Act specifies that the fine must

be no more than the manufacturer’s suggested retail price that

the merchandise would have had if it were genuine. The legislative history of § 1526(f)(2) provides that the fine should be

“meted out at the discretion of the U.S. Customs Service,

within the boundaries set out by Congress in the bill.” S. Rep.

No. 104-177, at 6 (1995). In this case, Customs acted within

its discretion when it used the “domestic value” of the merchandise as an approximation in accordance with a Customs

directive applicable in similar circumstances.2

2Domestic value is the estimated price an importer will charge a wholesale purchaser. Because retailers must charge more than the wholesale

price in order to make a profit, Customs reasonably assumed that the

domestic value of the watches would be less than their retail price. In this

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C. Congressional Intent 

In order to overcome this plain language, Able Time must

identify a “clearly expressed legislative intention to the contrary.” GTE Sylvania, Inc., 447 U.S. at 108. Able Time argues

that the presence of an identity of goods or services requirement in related statutes and legislative history shows Congress’s intent to require identity of goods or services in the

Tariff Act. We disagree. The plain language of the Tariff Act

is unambiguous, so related statutes are of limited help. The

sequence of enactments of and amendments to the relevant

statutes strongly supports the inference that the omission of an

identity of goods or services requirement from the Tariff Act

was intentional. And the legislative histories of the statutes at

issue, and of related statutes, support the plain text interpretation.

1. The Lanham Act 

[8] Able Time argues that numerous portions of the Lanham Act contain an identity of goods or services requirement,

see, e.g., 15 U.S.C. §§ 1051(a)(1), 1057(b), 1058(b),

1114(1)(a), 1115(a), and 1116(d)(1)(B)(i), and that we should

read the Tariff Act consistently with the Lanham Act because

they are related statutes. The principle that related statutes

should be interpreted harmoniously applies only where the

plain language of the statute at issue is ambiguous. See Jonah

R. v. Carmona, 446 F.3d 1000, 1005, 1007 (9th Cir. 2006)

(quoting Jett v. Dallas Indep. Sch. Dist., 491 U.S. 701, 738-39

case, Customs approximated the price Able Time paid the manufacturer,

the expense of bringing the watches to the United States, and a markup for

Able Time’s estimated profit in selling the watches to a wholesaler. The

domestic value determined by Customs in this case is $11.78 per watch.

If the district court on remand upholds the imposition of a civil penalty

here, it may consider any challenge to this calculation and may set the

amount of the civil penalty as it sees fit in accordance with 19 U.S.C.

§ 1526(f). 

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(1989) (“[W]here text permits, statutes dealing with similar

subjects should be interpreted harmoniously.”) (emphasis

added) (Scalia, J., concurring)). The statutory provisions cited

by Able Time are not at issue here. The plain language of the

statutes that are at issue is unambiguous and does not require

Tommy Hilfiger to have manufactured watches at the time of

the seizure for a civil penalty to be imposed. And the presence

of an identity of goods and services requirement in related

statutes does not constitute a clearly established legislative

intention to include a similar requirement in the Tariff Act. 

2. Sequence of Statutory Enactments 

Congress has shown more than once that it is able to

impose an identity of goods or services requirement when it

wishes by saying so explicitly in the relevant statutory text.

Congress enacted the definition of “counterfeit” in 15 U.S.C.

§ 1127, at issue here and discussed above, in the Lanham Act

in 1946. Congress created the seizure and forfeiture provision

of the Tariff Act, 19 U.S.C. § 1526(e), also discussed above,

in the Customs Procedural Reform and Simplification Act of

1978 (the “1978 Act”), Pub. L. No. 95-410, 92 Stat 888. Congress created criminal and civil provisions that contain an

explicit identity of goods or services requirement in the

Trademark Counterfeiting Act of 1984 (the “1984 Act”), ch.

XV, §§ 1501-03, Pub. L. No. 98-473, H. R. J. Res. 648

(1984), 98 Stat. 2178.3 The 1984 Act also amended portions

3The criminal provision of the 1984 Act penalizes “[w]hoever intentionally traffics or attempts to traffic in goods or services and knowingly uses

a counterfeit mark on or in connection with such goods or services.” 98

Stat. 2178 (1984) (codified at 18 U.S.C. § 2320(a) (2008)) (emphasis

added). The criminal provision originally defined “counterfeit mark” as “a

spurious mark . . . used in connection with trafficking in goods or services

. . . that is identical with, or substantially indistinguishable from, a mark

registered for those goods or services . . . .” 98 Stat. 2178, 2179 (1984)

(codified at 18 U.S.C. § 2320(d)(1)(A) (2006)) (emphasis added). The

civil provision created by the 1984 Act defines a “counterfeit mark” as a

“counterfeit of a mark that is registered . . . for such goods or services

sold, offered for sale, or distributed and that is in use.” 98 Stat. 2178, 2180

(1984) (codified at 15 U.S.C. § 1116(d)(1)(B)(i) (2008)) (emphasis

added). 

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of the Lanham Act, but it did not alter the definition of “counterfeit” in 15 U.S.C. § 1127, nor did it add an identity of

goods or services requirement to the seizure and forfeiture

provision, 19 U.S.C. § 1526(e).

Congress created the civil penalty provision of the Tariff

Act discussed above, 19 U.S.C. § 1526(f), in 1996 as part of

the Anticounterfeiting Consumer Protection Act (“ACPA”),

Pub. L. No. 104-153, 110 Stat. 1386. In 2006, Congress

amended the language in the criminal provision’s definition of

“counterfeit mark” to make the identity of goods or services

requirement even clearer.4 Once again, it did not change the

definition of “counterfeit” in 15 U.S.C. § 1127, nor did it add

an identity of goods or services requirement to the provisions

of Tariff Act at issue here, 19 U.S.C. § 1526(e) and (f).

[9] That Congress included an explicit identity of goods or

services requirement in both the civil and criminal provisions

of the 1984 Act, amended the Lanham Act in 1984, amended

the Tariff Act in 1996, and then clarified the requirement in

the criminal provision of the 1984 Act in 2006, but never

added such a requirement to the provisions of the Tariff Act

and Lanham Act at issue here, supports the inference that the

omission of such a requirement from those provisions was

intentional. See Beach v. Ocwen Fed. Bank, 523 U.S. 410,

418 (1998) (“[W]here Congress includes particular language

in one section of a statute but omits it in another section of the

same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.”) (internal quotation and citations omitted). Congress

4As amended by the Stop Counterfeiting in Manufactured Goods Act,

the criminal provision of the 1984 Act now defines a “counterfeit mark”

as “a spurious mark . . . used in connection with trafficking in any goods

[or] services . . . that is identical with, or substantially indistinguishable

from, a mark registered . . . and in use . . . that is applied to or used in connection with the goods or services for which the mark is registered.” Pub.

L. No. 109-181, 120 Stat. 285, 286-87 (2006) (codified at 18 U.S.C.

§ 2320(e)(1)(A) (2008)) (emphasis added). 

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may have wanted to apply a more restrictive definition in the

context of criminal suits and civil actions by self-interested

private plaintiffs than in penalty suits brought by the government. Whatever its reasons, Congress simply did not include

an identity of goods or services requirement in the definition

of “counterfeit” contained in 15 U.S.C. § 1127.

3. The Legislative Histories of 19 U.S.C. § 1526(e) and

(f) 

Congress enacted the civil penalty provision, 19 U.S.C.

§ 1526(f), in the ACPA in 1996. The legislative history of the

ACPA demonstrates that Congress intended to protect consumers who unwittingly purchase “counterfeit products”

because such products “are rarely of the same quality as the

genuine article,” because consumers may blame the owner of

the registered mark for their shoddy purchases, and because

consumers may suffer harm when substandard products fail.

H.R. Rep. No. 104-556, at 1-4 (1996), reprinted in 1996

U.S.C.C.A.N. 1074, 1074-77. Able Time argues that this legislative history shows that Congress was thinking in terms of

counterfeit goods, not counterfeit trademarks separate and

apart from the products on which they appear. Able Time

argues that this requires reading an identity of goods and services requirement into the Tariff Act. 

[10] The references to “counterfeit products” and the “genuine article” in the legislative history of § 1526(f) do not constitute the sort of “clearly expressed legislative intention”

required to overcome plain statutory text. GTE Sylvania, 447

U.S. at 108. The recognition that some cases of counterfeiting

will involve the same goods as those manufactured by the

owner of the registered mark does not mean that all cases

must involve the same goods, particularly in light of plain

statutory language with no such requirement. See 4 McCarthy

§ 25:10 (“Often, counterfeit merchandise is made so as to imitate a well-known product . . . .”) (emphasis added). The references to counterfeit products rather than counterfeit marks

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appear in a general discussion of the statute, in a section entitled “Background and Need for the Legislation.” H.R. Rep.

No. 104-556, at 1, reprinted in 1996 U.S.C.C.A.N. at 1075.

The passages containing these references do not specifically

discuss the definition of the term “counterfeit,” and they do

not appear intended to define or restrict its meaning. Moreover, applying a civil penalty in the instant case will combat

the very harm identified in the legislative history: it will protect consumers from being misled into purchasing generic

watches that they mistakenly believe come from Tommy Hilfiger. 

[11] The legislative history of 19 U.S.C. § 1526(e) also

does not undercut the plain text of the Tariff Act. Congress

enacted § 1526(e), the seizure and forfeiture provision, in the

1978 Act. The legislative history of the 1978 Act explains that

the Senate amendment containing what eventually became

§ 1526(e) was intended “solely to strengthen the remedies

available to prevent the importation of merchandise bearing [a

counterfeit] mark.” H.R. Rep. No. 95-1517, at 17 (1978)

(Conf. Rep.), reprinted in 1978 U.S.C.C.A.N. 2249, 2259.5 If

anything, this weighs in favor of construing § 1526(e) to more

broadly prevent the importation of merchandise bearing a

counterfeit mark. The legislative history also refers to counterfeit marks, which shows Congress was not thinking purely

in terms of counterfeit products when it enacted the statute. 

5The legislative history of the § 1526(e) provides: 

The House receded from its disagreement with the Senate amendment with amendments to clearly limit the Senate amendment to

merchandise bearing a counterfeit mark as defined in section 45

of the Act of July 5, 1946 (the Lanham Act) [15 U.S.C. § 1127],

as the amendment is intended solely to strengthen the remedies

available to prevent the importation of merchandise bearing such

a mark . . . . 

H.R. Rep. No. 1517, at 17 (1978), reprinted in 1978 U.S.C.C.A.N. 2249,

2259. 

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Accordingly, the legislative histories of § 1526(e) and (f)

tend to support the plain text interpretation. Our review of the

legislative histories of the other statutory provisions directly

at issue reveals nothing to the contrary. 

4. The Legislative History of the 1984 Act 

[12] Able Time argues that the legislative history of the

1984 Act shows that Congress was attempting to combat

counterfeit products that might cause consumers harm, not

counterfeit marks in isolation. We decline to rely on the legislative history of the 1984 Act, however, because it relates

only to statutory provisions that are not at issue. Accord

United States v. 10,510 Packaged Computer Towers, 152 F.

Supp. 2d 1189, 1199 (N.D. Cal. 2001) (“Aside from the fact

that the cited language [in the legislative history of the 1984

Act] refers to an entirely different statute, its reference is to

a criminal statute.”); see also 2 Anne Gilson LaLonde, Gilson

on Trademarks § 5.19[2][a] at 5-218 & nn. 16-17 (2007)

[hereinafter Gilson] (discussing the civil and criminal provisions of the 1984 Act, not the definition of counterfeit in 15

U.S.C. § 1127). 

[13] As discussed above, the 1984 Act established civil and

criminal provisions with definitions of “counterfeit” that

include an express identity of goods or services requirement.

See 15 U.S.C. § 1116(d)(1)(B)(i); 18 U.S.C. § 2320(e)(1)

(A)(iii). Neither of these provisions is at issue. The legislative

history of the 1984 Act warns us that “[u]nless it does so

explicitly, this act does not in any way modify the Lanham

Act or judicial interpretation of it.” Joint Congressional Statement on 1984 Trademark Counterfeiting Legislation, 130

Cong. Rec. H12076, H12076 (Oct. 10, 1984) [hereinafter

Joint Statement], reprinted in 7 McCarthy at App. A8-3. It

also recognized that the “Lanham Act relates to ‘marks’ rather

than ‘goods or services’ ” and stated that changing the Lanham Act definition of “counterfeit” to follow the definitions

established by the 1984 Act was “beyond the scope” of the

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1984 Act, because the 1984 Act was a “compromise” bill, not

“an overall redrafting of the trademark law.” Joint Statement

at H12076, reprinted in 7 McCarthy at App. A8-3 to A8-4.6

These statements weigh against relying on the legislative history of the 1984 Act in any context other than the civil and

criminal provisions that it established, neither of which is at

issue. 

[14] Two other aspects of the 1984 Act deserve mention.

Its legislative history states that the definitions of “counterfeit” in the civil and criminal provisions are “identical in substance.” Joint Statement at H12078, reprinted in 7 McCarthy

at App. A8-9.7 This statement equates the civil provision with

6The Joint Statement provides: 

This key criminal provision represents a compromise between the

Senate and House bills. The Senate bill was drafted to prohibit

“trafficking in counterfeit goods or services,” while the House

bill barred “use of a counterfeit mark” in connection with goods

or services. Both the House and Senate sponsors recognize that

a mark can be “counterfeit” only if it is used in connection with

certain types of goods or services. However, conduct regulated

by the Lanham Act relates to “marks” rather than “goods or services”: the sponsors feared that it might create confusion to adopt

the terminology of “counterfeit goods or services” in a piecemeal

fashion. An overall redrafting of the trademark laws is an appropriate way to make such changes and is beyond the scope of this

legislation. 

Joint Statement at H12076, reprinted in 7 McCarthy at App. A8-3 to A8-

4. 

7The Joint Statement continues: 

The proposed act defines “counterfeit mark” in two places—in

the criminal code amendment, proposed 18 U.S.C. 2320(d), and

in the Lanham Act amendment, proposed 15 U.S.C.

1116(d)(1)(B) . . . . For technical reasons, the two definitions of

“counterfeit mark” differ slightly in their terms, but they are identical in substance. The Lanham Act already contains a definition

of the term “counterfeit”: a “spurious mark which is identical

with, or substantially indistinguishable from, a registered mark.”

15 U.S.C. 1127 [sic]. Because it is part of the Lanham Act, the

definition of “counterfeit mark” contained in proposed subsection

1116(1)(B) incorporates the section 1127 definition. 

Joint Statement at H12078, reprinted in 7 McCarthy at App. A8-9. 

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the criminal provision. It does not equate either of them with

the definition at issue here, which is contained in 15 U.S.C.

§ 1127. It also states that the civil provision’s definition “incorporates the section 1127 definition.” Id; accord 2 Gilson

§ 5.19[3][a] at 5-220. It does not state the converse—that the

Section 1127 definition incorporates the civil provision’s definition. We reject the contrary conclusions of other authorities.

See United States v. 1,234 Watches, No. CV-00 11782, Doc.

No 46, slip op. at 20-21 (C.D. Cal. Jan. 16, 2002) (unpublished) (concluding that watches bearing the mark “TOMMY”

were not subject to forfeiture as counterfeit under 19 U.S.C.

§1526(e) because Tommy Hilfiger did not manufacture

watches or related goods at the time of seizure) (citing 4

McCarthy § 25:15; Playboy Enters. v. Universal Tel-A-Talk

Inc., 48 U.S.P.Q. 2d 1779, 1782 & n.8 (E.D. Pa. 1998)); Ross

II, 18 C.I.T. at 986.

We decline to narrow the definition of counterfeit contained in 15 U.S.C. § 1127 beyond its plain meaning simply

because much of the litigation and academic discussion

regarding counterfeit goods arises in the context of the civil

and criminal provisions of the 1984 Act, statutes that are not

at issue here. 

D. “Right in Gross”

[15] The district court granted summary judgment to Able

Time in large part because it believed that the government’s

interpretation ran afoul of the principle that a trademark is not

a “right in gross.” See 4 McCarthy § 24:11. This principle

holds that a registered trademark can be used by someone

other than its owner so long as the use does not confuse the

public, because trademarks are tied to their use on products

and do not exist in the abstract. See id. The statutory scheme

at issue here sufficiently connects the marks and the goods on

which they are used. The offending merchandise must “copy

or simulate” a registered mark, 15 U.S.C. § 1124, which

means that the watches must be likely to cause confusion in

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order for a civil penalty to apply. See 19 C.F.R. § 133.22(a);

supra Part II.B. This requirement prevents a step backwards

towards a “right in gross” theory of trademark because it

requires the owner to use the registered mark. If the owner did

not use the mark, then the public would be unlikely to confuse

it with the offending mark. Accordingly, even under the government’s theory of the case, a trademark is still a “right

appurtenant to an established business or trade in connection

with which the mark is employed,” not a “right in gross or at

large.” United Drug Co. v. Theodore Rectanus Co., 248 U.S.

90, 97 (1918).

E. Chevron Deference

[16] Because the statutes at issue are not ambiguous, we

decide this case without giving deference to the government

agency. See Chevron, 467 U.S. 837, 843 (1984). But even if

the statutes were ambiguous, Customs would not be entitled

to Chevron deference because its position is not the product

of sufficiently careful, consistent, or formal procedures “tending to foster the fairness and deliberation that should underlie

a pronouncement of [legal] force.” See United States v. Mead

Corp., 533 U.S. 218, 228, 230 (2001). Customs has not

pointed to any regulation, ruling, directive, notice, or other

agency determination that formally resolves—or even directly

addresses—whether the statutes at issue require an identity of

goods or services. The regulations upon which Customs relies

track the language of the applicable statutes. See 19 C.F.R.

§§ 133.21, 133.27. If the statutes were ambiguous, the regulations would be just as ambiguous. Customs is merely advancing a litigation position. See United States v. Trident Seafoods

Corp., 60 F.3d 556, 559 (9th Cir. 1995) (“No deference is

owed when an agency has not formulated an official interpretation of its regulation, but is merely advancing a litigation

position.”); accord Rhodes-Bradford v. Keisler, 507 F.3d 77,

80 (2d Cir. 2007). Accordingly, Customs’s position is due no

Chevron deference. 

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F. Remand

[17] We remand for the district court to determine whether

(1) the mark on the watches is identical to or substantially

indistinguishable from the registered mark pursuant to 15

U.S.C. § 1127, and (2) whether the offending mark copies or

simulates the registered mark pursuant to 15 U.S.C. § 1124,

which amounts to the traditional likelihood of confusion test

for infringement. See supra Part II.B. 

[18] Able Time repeatedly cites Montres Rolex, S.A., v.

Snyder, 718 F.2d 524, 532 (2d Cir. 1983), for the proposition

that Customs must compare the registered mark as it appears

on actual merchandise with the allegedly counterfeit mark on

the watches. Montres Rolex does not stand for this proposition. While comparing actual products is preferred, Montres

Rolex explicitly provided that a comparison to the registration

information alone could be sufficient. Id. (“We see no reason

why a trademark owner would not eagerly cooperate with

Customs [by providing product samples with authentic

marks], and even if the owner failed to do so after receiving

notice of the seizure, Customs could still make its determination based on the mark as registered.”). While Montres Rolex

rejected a comparison to the registration information in that

particular case, it did not establish a categorical rule. On

remand, the factfinder may compare the offending mark to the

mark on the registration certificate, or the district court may

admit additional product samples bearing the registered mark

into evidence. 

III. Conclusion

We hold that Customs may impose a civil penalty pursuant

to 19 U.S.C. § 1526(f) upon an importer of merchandise bearing a counterfeit mark, even though the owner of the registered mark does not manufacture the same type of

merchandise. 

REVERSED and REMANDED. 

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