Court Opinion

ID: 9486016
Source: CourtListenerOpinion
Date Created: 2023-08-05 11:36:03.666896+00
Date Added: 2024-06-11T17:51:29.659755
License: Public Domain

FERGUSON, Circuit Judge,
concurring:
I concur in the majority opinion, but file this separate concurrence to the discussion of the alleged Lanham Act violation in Part II of the opinion.
I am of the opinion that the law in this circuit regarding the Lanham Act permits a more direct dismissal of Summit’s claim of reverse palming off.
The contract between Summit and the Chinese manufacturer ZMTW, provides that Summit has the exclusive right to purchase the lathes manufactured by ZMTW based upon Summit’s designs and specifications, or any lathes that were substantially the same except for lathes which ZMTW would sell only in the Chinese market and which would not be exported outside of China.
Victor purchased seven lathes from ZMTW for resale in the United States. At the time of the purchase, Victor had no knowledge of the contract between Summit and ZMTW, never misrepresented anything about the lathes, nor modified them in any way. Victor, however, applied its own label to the lathes it purchased. This label does not represent that Victor is the manufacturer or designer. J. McCarthy, Trademarks and Unfair Competition § 16:15 (2nd ed. 1984 and Supp.1991).
The design of the Summit lathes was neither patented nor copyrighted, and therefore, Victor has the right to copy them. Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 84 S.Ct. 784, 11 L.Ed.2d 661 (1963).
Summit, however, claims that it has a cause of action under 15 U.S.C. § 1125(a) (§ 43(a)) of the Lanham Trademark Act of 1946, based upon a theory of “reverse passing off.”
The leading ninth circuit case on the subject is Smith v. Montoro, 648 F.2d 602 (9th Cir.1981). In La Mothe v. Atlantic Recording Corp., 847 F.2d 1403, 1406 (9th Cir.1988), Smith was summarized as follows:
We began our analysis in Smith by defining “passing off’ as the practice of selling one person’s product or service under the name or mark of another. Id. Passing off may be either “express” or “implied.” Id. Express passing off occurs when a business labels its goods or services with a mark identical to that of another enterprise, or otherwise expressly misrepresents the origin of the goods or services. Id. Implied passing off involves the use of a competitor’s advertising material, or a sample or photograph of the competitor’s product, to impliedly represent that the product being sold is made by the competitor. Id.
In Smith, we further explained that section 43(a) also encompasses merchandising “practices or conduct ‘economically equivalent’ to palming off.” Id. at 605. Among those practices is “reverse passing off,” which may be either “express” or “implied.” Express reverse passing off is “accomplished ... when the wrongdoer removes the name or trademark on another party’s product and sells that product under a name chosen by the wrongdoer.” Id. Implied reverse passing off is accomplished simply be removing or obliterating the name of the source and then selling the product in an unbranded state. Id.
In this case, at no time did Victor do anything with regard to the lathes it purchased from ZMTW that constituted a reverse palming off violation of the Lanham *1444Act. Victor did not remove nor obliterate Summit’s name or mark from the lathes.