Court Opinion

ID: 819323
Source: CourtListenerOpinion
Date Created: 2013-02-05 02:37:22.711483+00
Date Added: 2024-06-11T11:22:56.589452
License: Public Domain

Slip Op. 01-72

         UNITED STATES COURT OF INTERNATIONAL TRADE

UNITED STATES,

                 Plaintiff,
                                           BEFORE: Pogue, Judge
           v.                              Court No. 96-12-02853
NIPPON MINIATURE BEARING CORPORATION
and MINEBEA CO., LTD.,

                 Defendants.

[This slip opinion was previously issued as a memorandum opinion
and order dated August 15, 2000.     It is being published as a
precedential disposition pursuant to the Court’s June 19, 2001,
order granting Plaintiff’s motion to publish.]

                                               Decided: June 19, 2001

Stewart E. Schiffer, Acting Assistant Attorney General; David M.
Cohen, Director; A. David Lafer, Senior Trial Counsel; Commercial
Litigation Branch, Civil Division, United States Department of
Justice (Michele D. Lynch); AnnMarie Highsmith, Office of the Chief
Counsel, United States Customs Service, Of Counsel; and Jeffrey B.
Whalen, Of Counsel, Attorney, Office of Regulations & Rulings,
United States Customs Service, for Plaintiff.*

Coudert Brothers (Steven H. Becker, Robert L. Eisen, Paul A.
Horowitz, Scott D. Schauf); Shaw Pittman (Jack McKay, Michele N.
Tanaka), for Defendants.

     *
      Ms. Lynch has in the meantime been substituted by Ada E.
Bosque as the attorney of record for the Plaintiff in this
action. Ms. Lynch appears in the caption because she wrote the
Plaintiff’s motion to publish and represented the Plaintiff when
the August 15, 2000 Memorandum and Order was issued.
Court No. 96-12-02853                                                       Page 2

                                    OPINION

Pogue, Judge: United States, Plaintiff, asserts that, "pursuant to

section [43](b) of the Lanham Act[, 19 U.S.C. § 1125(b) (1988)],

Customs was authorized to bar the goods [at issue] from entry into

the United States."         See Pl.’s Pretrial Mem. at 51.              Defendants

contest Customs’ authority to make independent determinations that

Section 43(a) of the Lanham Act, 19 U.S.C. § 1125(a), has been

violated,    and   allege    that   Customs   can   only   bar     admission     of

merchandise under Section 43(b) pursuant to a court order finding

a violation of Section 43(a).         See Def.’s Pretrial Mem. at 17-31.

The plain language of Section 43(b) and Customs regulation 19

C.F.R.   §   11.13(a)   indicate      that    Customs   may      deny    entry   to

merchandise    that   violates      Section   43(a).       The    key    issue   is

therefore whether Customs may deny entry upon an independent

determination that imported merchandise is in violation of Section

43(a), or if Customs may deny entry only pursuant to a court order

finding that Section 43(a) has been violated.              The Court resolves

this issue in favor of Plaintiff prior to trial pursuant to CIT

Rules 1 and 16(e).

     For convenient reference, the Court quotes Section 43 of the

Lanham Act in full:

     § 1125.     False designations            of   origin       and    false
     descriptions forbidden

     (a) Civil action

     (1) Any person who, on or in connection with any goods
     or services, or any container for goods, uses in commerce
Court No. 96-12-02853                                       Page 3

     any word, term, name, symbol, or device, or any
     combination thereof, or any false designation of origin,
     false or misleading description of fact, or false or
     misleading representation of fact, which B

          (A)   is likely to cause confusion, or to cause
                mistake, or to deceive as to the affiliation,
                connection, or association of such person with
                another   person,  or   as   to  the   origin,
                sponsorship, or approval of his or her goods,
                services, or commercial activities by another
                person, or
          (B)   in   commercial   advertising   or promotion,
                misrepresents the nature, characteristics,
                qualities, or geographic origin of his or her
                or another person’s goods, service, or
                commercial activities

     shall be liable in a civil action by any person who
     believes that he or she is or is likely to be damages by
     such act.

     (b) Importation

          Any goods marked or labeled in contravention of the
     provisions of this section shall not be imported into the
     United States or admitted to entry at any customhouse of
     the United States. The owner, importer, or consignee of
     goods refused entry at any customhouse under this section
     may have any recourse by protest or appeal that is given
     under the customs revenue laws or may have the remedy
     given by this chapter in cases involving goods refused
     entry or seized.

15 U.S.C. § 1125(a)-(b) (1988).1

     Customs’ regulation for enforcing Section 43 provides:

     Articles which bear, or the containers of which bear,

     1
      The entries in question occurred between 1986 and 1989.
Thus, the Court notes that the 1982 version of Section 43(a) is
essentially the same as the 1988 version. The 1982 version,
however, does not contain the language of 43(a)(1)-(2) found in
the 1988 version. The 1982 version defines a "false description
or representation" as "words or other symbols tending falsely to
describe or represent." 15 U.S.C. § 1125(a) (1982). This
language is identical to that used in Customs regulation 19
C.F.R. § 11.13(a). The 1982 version of Section 43(b) is
identical.
Court No. 96-12-02853                                                  Page 4

     false designations of origin, or false descriptions or
     representations, including words or other symbols tending
     falsely to describe or represent the articles, are
     prohibited importation and shall be detained.

19 C.F.R. § 11.13(a)(1986).2

     The    Court   holds   that     Customs   may   make   an    independent

determination that Section 43(a) has been violated.              First, it has

been held that Customs may make such a determination in other

contexts.    For example, in Ross Cosmetics Distribution Centers,

Inc. v. United States, 18 CIT 979 (1994), Customs issued a letter

ruling pursuant to a pre-importation request from Ross Cosmetics

that found that Ross Cosmetics’ merchandise was marked so as to

constitute a counterfeit use of trademarks.          Id. at 979.     The court

held that Customs had authority to protect the trademarks at issue,

regardless of whether they had been registered with the Patent and

Trademark Office or recorded with Customs, "[b]y virtue of th[e]

broad coverage of Section 43."        Id., 18 CIT at 983; see also Reebok

International Ltd. v. Marnatech Enterprises, Inc., et. al 737 F.

Supp.    1515,   1517   (S.D.Cal.,    1989).    In   the    context    of   the

protection of trademark rights, Customs’ determination in the form

of letter ruling finding a violation of Section 43(a) was held to

be a permissible exercise of its authority.            No court order was

required to deny entry of the merchandise pursuant to Section

43(b).

     2
      The footnote to this regulation quotes, among other
statutory provisions, 15 U.S.C. § 1125. The 1987 and 1988
versions of the regulation are identical. The 1989 version of
the regulation includes the text of 15 U.S.C. § 1125 in the body
of the regulation.
Court No. 96-12-02853                                                      Page 5

       Customs     may    also     make   an   independent   determination     that

merchandise has been marked with a false indication of origin

pursuant to several statutes, including Section 43(b). As noted in

the treatise Customs Law and Administration, "[Section 43(b)] also

prohibits the importation of merchandise bearing a false country of

origin or false description. . . . As a practical matter, this

provision is redundant of 19 U.S.C. § 1304." [1 Commentary] Customs

Law and Administration, Booklet 4, Part 1, § 12.1 at 68 (Dec.

1999).        And "[p]ursuant to 19 U.S.C. § 1304 all merchandise

imported into the United States must be marked with the country of

origin. If the merchandise is not properly marked with the country

of origin, it cannot be released from Customs custody and admitted

into    the    country.     .    .   .    Customs   may    utilize   [enforcement

procedures] when it finds that goods were not properly marked."

Id. at 67.         This discussion suggests that Customs may make an

independent finding that the provisions of Section 43(a) have been

violated, and thus need not obtain a court order to act pursuant to

Section 43(b).

       The Court sees no reason why Customs should not be allowed to

exercise similar authority in the context of false descriptions of

merchandise.           In this case, Defendants did not request a pre-

importation letter from Customs, although they could have. Rather,

Customs made its determination to deny entry to the merchandise

because       of   a     Section     43(a)     violation     following   its    own

investigation of the matter. The Court does not, however, consider

this difference in procedural circumstance to require a different
Court No. 96-12-02853                                        Page 6

decision regarding Customs’ authority.     The language of Section

43(b) does not specify that Customs is required to obtain a court

order before acting to deny entry to merchandise that is in

violation of the statute, and the Court refuses to read such a

provision into the statute.     See VE Holding Corp. v. Johnson Gas

Appliance Co., 917 F.2d 1574, 1579 (Fed. Cir. 1990) ("It is

axiomatic that statutory interpretation begins with the language of

the statute.   If . . . the language is clear and fits the case, the

plain   meaning    of    the    statute   will   be   regarded   as

conclusive.")(citations omitted).    See also SKF v. United States,

24 CIT __, __, 94 F. Supp. 2d 1351, 1357 (2000).

     Moreover, the second part of Section 43(b) provides the

importer with a right to challenge Customs’ determination to bar

entry to falsely described goods. It is inconsistent to argue that

Customs may exclude falsely described goods only pursuant to a

court order, and that the statute permits challenges to Customs’

decisions to deny entry to goods in violation of Section 43(a).

While a civil action by a third party is one way to enforce the

provisions of Section 43(a), Section 43(b) and 19 C.F.R. § 11.13(a)

allow Customs to act independently, though subject to review, to

enforce Section 43(a) at the border by denying entry to merchandise

that violates its provisions.   See Vivitar Corp. v. United States,

761 F.2d 1552, 1569 (1985) ("Customs’ administrative determination

[pursuant to 15 U.S.C. § 1124] that importations bear a mark that

is not likely to cause confusion with a recorded mark has no effect

on a trademark owner’s right to obtain a judicial determination of
Court No. 96-12-02853                                        Page 7

infringement and, thereafter, to have such goods excluded (or vice

versa).") (cites omitted).

     Therefore,   upon   consideration   of   Plaintiff’s   Pretrial

Memorandum, and Defendants’ and Counterclaim Plaintiff’s Pretrial

Memorandum, and upon all other papers and proceedings herein, it is

hereby

     ORDERED that Customs, pursuant to its authority set forth at

Section 43(b) of the Lanham Act, 15 U.S.C. § 1125(b) (1994), may

prevent importation of merchandise that Customs determines violates

Section 43(a) of that Act, 15 U.S.C. § 1125(a).

                                         Donald C. Pogue
                                               Judge

Dated:    June 19, 2001
          New York, New York