Opinion ID: 480175
Heading Depth: 2
Heading Rank: 1

Heading: The Genuineness of the Shoes Sold by Shoe World.

Text: 12 In order to make out a claim for trademark infringement, a holder must show, inter alia, that the alleged infringement is likely to cause confusion, or to cause mistake, or to deceive. 15 U.S.C. Sec. 1114(1)(a). Shoe World strenuously urges that the sale of genuine goods cannot give rise to the necessary likelihood of confusion, citing Monte Carlo Shirt, Inc. v. Daewoo International (America) Corp., 707 F.2d 1054 (9th Cir.1983), and DEP Corp. v. Interstate Cigar Co., 622 F.2d 621, 622 n. 1 (2d Cir.1980). Even if this is so, however, the goods sold by Shoe World cannot be considered genuine. 13 One of the most valuable and important protections afforded by the Lanham Act is the right to control the quality of the goods manufactured and sold under the holder's trademark. Menendez v. Faber, 345 F.Supp. 527 (S.D.N.Y.1972), aff'd in relevant part and modified, 485 F.2d 1355 (2d Cir.1973), modification rev'd sub nom. Alfred Dunhill, Inc. v. Republic of Cuba, 425 U.S. 682, 96 S.Ct. 1854, 48 L.Ed.2d 301 (1976). For this purpose the actual quality of the goods is irrelevant; it is the control of quality that a trademark holder is entitled to maintain. Professional Golfers Association of America v. Bankers Life & Casualty Co., 514 F.2d 665, 670-71 (5th Cir.1975). 14 The holder of a trademark is entitled to require, as El Greco did here, that no merchandise be distributed without its first being inspected by the holder or its agent to insure quality. Here, not only did El Greco not waive the right to such inspection, it required the inspection certificate as a condition for Solemio to draw upon the letter of credit. 15 The original order placed by El Greco specifically restricted distribution of the shoes with the CANDIE'S mark. As the district court noted, No shoes are approved or accepted unless and until a principal of Sapatus [El Greco's agent in Brazil] signs an Inspection Certificate certifying that the lot of shoes to which it relates fully complies with [El Greco's] standards and specifications. 599 F.Supp. at 1384. It is undisputed that no such certificates of inspection were ever signed or issued with respect to lots F and G. 16 The certificates of inspection required in this case were an integral part of appellant's effort at quality control. Earlier inspections by Sapatus of the shoes that eventually comprised lots A-E resulted in some shoes being rejected, and in changes in the procedures being followed in production. 599 F.Supp. at 1385. While we accept as not clearly erroneous the conclusion of the district court that poor quality was not the reason lots F and G were cancelled, the inspection step was nevertheless an integral part of El Greco's procedure for determining whether to accept shoes and allow them to be sold under its trademark. 17 The district court concluded the shoes were genuine because they had been manufactured pursuant to an order by El Greco, the undisputed holder of the CANDIE'S trademark, and because El Greco did not specifically instruct Solemio on how to dispose of the shoes once it cancelled the order. 18 This is an unjustifiably narrow view of the protection afforded trademark holders by the Lanham Act. The mere act of ordering a product to be labeled with a trademark does not deprive its holder of the right to control the product and the trademark. It is true that El Greco did not, at the time it cancelled the last two lots of its order, give instructions on how to dispose of the shoes that had already been manufactured and affixed with the CANDIE'S trademark. But we do not view such a step as necessary on the facts presented here. 19 Once it cancelled the order, El Greco was entitled to assume that Solemio would not dispose of the shoes without either removing the CANDIE'S trademark (as in the custom and practice in the industry), or affording El Greco an opportunity to inspect the goods and certify their quality prior to disposal, or, at the minimum, seeking instructions from El Greco on how to dispose of them. Since Solemio, at best, received no instructions from El Greco, this case is distinguishable from Diamond Supply Co. v. Prudential Paper Products Co., 589 F.Supp. 470 (S.D.N.Y.1984), wherein the trademark holder specifically instructed the manufacturer that he did not care how the cancelled goods were disposed of. 589 F.Supp. at 474. No similar waiver here was given, or even sought. 20