Thursday, April 28, 2016

The US Court of Appeals for the Federal Circuit reversed the US Court of International Trade’s (CIT’s) decision in favor of US Customs and Border Protection, finding that Customs’ definition of “trademark” under the Tariff Act and its applicable regulations is unambiguous and includes unregistered trademarks and trademarks not subject to a pending application (in addition to registered marks and marks subject to a pending registration). JBLU, Inc. v. United States, Case No. 15-1509 (Fed. Cir., Mar. 2, 2016) (Moore, J).

JBLU, a California corporation registered as C’est Toi Jeans USA, imported jeans manufactured in China into the United States between September 11 and October 20, 2010. Multiple parts of the jeans were embroidered with “C’est Toi Jeans USA,” “CT Jeans USA” and “C’est Toi Jeans Los Angeles.” On October 8, 2010, JBLU filed trademark applications with the US Patent and Trademark Office (PTO) for C’est Toi Jeans USA and CT Jeans USA, but not C’est Toi Jeans Los Angeles. When the shipments arrived in the United States, Customs inspected the samples of jeans and determined that JBLU violated § 304 of the Tariff Act and the relevant regulations promulgated by Customs, 19 CFR §§ 134.46 and 134.47.

Under 19 CFR §§ 134.46, when words referring to a geographical location appear on an imported article or its container that “may mislead or deceive the ultimate purchaser as to the actual country of origin of the article,” the article must also be marked with the country of origin in a manner that is legible, permanent, in close proximity to the geographical words, and in at least a comparable size.” The more lenient requirements under § 134.37 specify that the country of origin marking must be legible and permanent, conspicuous, and either in close proximity to the geographical words or in some other conspicuous location. Customs determined that because JBLU’s jeans were marked with “USA” or “Los Angeles,” they also must meet the country of origin labeling requirements of § 134.46.

JBLU argued that its “Made in China” labels met the requirements of § 134.47. Customs agreed, but only as to the jeans that were marked with C’est Toi Jeans USA or CT Jeans USA and were imported after JBLU filed its trademark applications for those marks. Customs determined that the more stringent § 134.46 requirements applied to the jeans that were marked with C’est Toi Jeans USA or CT Jeans USA and were imported before JBLU filed its trademark application.

JBLU filed suit against the US government at the CIT. The CIT granted the government’s motion for summary judgment, giving deference to Customs’ definition of “trademark” as limited to trademarks registered with the PTO and trademarks subject to pending registration applications. The CIT found that C’est Toi Jeans USA, CT Jeans USA and C’est Toi Los Angeles were not trademarks under § 134.47, and that therefore the more stringent requirements of § 134.46 applied. JBLU appealed.

On appeal, JBLU argued that the trial court erred because an agency’s interpretation of a regulation is given deference only when the regulation is ambiguous, and that the word trademark as used in § 134.47 unambiguously includes both common law trademarks and federally registered trademarks.

The Federal Circuit agreed. The Court looked to the definition of trademark in the dictionary and in the Lanham Act, neither of which limit the term to registered trademarks or trademarks subject to pending applications. The Court reasoned that trademark rights stem from use, not registration. The government acknowledged the Lanham Act and dictionary definitions, but argued that the use of the word trademark in the intellectual property context does not inform its meaning in the context of § 134.47. The Federal Circuit disagreed. The Court looked to various regulations and the Tariff Act, and found that when the regulations intended to limit a regulation to “registered trademarks,” they expressly did so, whereas § 134.47 does not.