More Lenient Labeling Regulation Applies to Imports Bearing Unregistered Marks with US Indicia: Fed. Cir. | Practical Law

More Lenient Labeling Regulation Applies to Imports Bearing Unregistered Marks with US Indicia: Fed. Cir. | Practical Law

In JBLU, Inc. v. US, the US Court of Appeals for the Federal Circuit held that, for foreign goods bearing a potentially misleading geographic term, the more lenient country-of-origin labeling requirements apply when the term is part of a registered or unregistered trademark.

More Lenient Labeling Regulation Applies to Imports Bearing Unregistered Marks with US Indicia: Fed. Cir.

by Practical Law Intellectual Property & Technology
Published on 04 Mar 2016 • USA (National/Federal)
In JBLU, Inc. v. US, the US Court of Appeals for the Federal Circuit held that, for foreign goods bearing a potentially misleading geographic term, the more lenient country-of-origin labeling requirements apply when the term is part of a registered or unregistered trademark.
On March 2, 2016, in JBLU, Inc. v. US, the US Court of Appeals for the Federal Circuit held that US Customs and Border Protection (Customs) should have applied a more lenient country of origin marking regulation to imported goods bearing unregistered trademarks containing US indicia ( (Fed Cir. Mar. 2, 2016)).
JBLU, Inc., doing business as C'est Toi Jeans USA, imported over 350,000 jeans manufactured in China into the US between September 11, 2010 and October 20, 2010. The jeans were embroidered with the designations "C'est Toi Jeans USA," "CT Jeans USA," or "C'est Toi Jeans Los Angeles" on the back. The jeans also had labels indicating they were "Made in China" in small font on the front waistband.
JBLU filed applications to register "C'est Toi Jeans USA" and "CT Jeans USA" in the US on October 8, 2010, and registrations issued for these marks in 2011. JBLU did not apply to register the designation "C'est Toi Jeans Los Angeles."
Customs inspected samples of the jeans and determined that JBLU violated Section 304 of the Tariff Act, which requires that imported articles be adequately marked with their country of origin (19 U.S.C. § 1304(a)). Two Customs regulations govern how imported articles may satisfy this requirement when the articles include potentially misleading geographic terms:
  • 19 C.F.R. Section 134.46, which requires that, if words, letters, or names appear on an article which may mislead or deceive as to the actual country of origin, the article must be marked with its country of origin in a manner that is legible and permanent in close proximity to the potentially misleading words.
  • 19 C.F.R. Section 134.47, which applies where the potentially misleading words, letters, or name are part of a trademark or trade name, and only requires that the country of origin marking be:
    • legible;
    • permanent;
    • conspicuous; and
    • either in close proximity to the trademark or in another conspicuous location.
Customs determined that JBLU's jeans were marked with the misleading "USA" and "Los Angeles" indicia and that the Made in China labels did not meet the Section 134.46 country of origin labeling requirements. JBLU filed protests arguing that the terms "USA" and "Los Angeles" were parts of trademarks within the meaning of Section 134.47, and therefore the more lenient country of origin requirements should apply. Customs agreed that JBLU's Made in China labels met the more lenient standard of Section 134.47, but determined that Section 134.47 only applies when the potentially misleading geographic designation appears in a registered trademark. Therefore, Customs accepted JBLU's protest with respect to jeans bearing the designations "C'est Toi Jeans USA" and "CT Jeans USA" that were imported after JBLU filed applications to register those marks, but denied the protest as to jeans bearing the unregistered designation "C'est Toi Jeans Los Angeles" and all jeans imported before the October 8, 2010 application date.
JBLU challenged Customs' determination in the US Court of International Trade (USCIT). In its summary judgment decision, the USCIT deferred to Customs' interpretation that the word trademark in Section 134.47 only applies to registered trademarks, and Section 134.46's requirements apply to goods bearing unregistered trademarks. The USCIT granted summary judgment that Customs correctly determined that JBLU violated Section 304 by failing to comply with Section 134.46.
On appeal, the Federal Circuit reversed and remanded the summary judgment decision. It first explained that:
  • If a regulation is clear on its face, no deference is given to the promulgating agency’s interpretation.
  • The fact that a term is not defined by a regulation does not make it ambiguous and entitled to deference.
The Federal Circuit rejected the USCIT's determination that because Section 134.47 did not expressly define the term trademark, Customs' interpretation that it did not apply to unregistered trademarks was entitled to substantial deference. The Federal Circuit held that the word trademark in Section 134.47 unambiguously includes trademarks without a pending application. It explained that this holding is consistent with:
  • The dictionary definition of trademark of record.
  • The definitions of trademark in both today's Lanham Act and the original in 1946.
  • Other uses of the term in regulations within the same chapter as Section 134.47.
Therefore, the Federal Circuit held that the USCIT erred in deferring to Customs' interpretation because the term trademark in Section 134.47 unambiguously includes unregistered trademarks. Since Customs conceded that JBLU's Made in China labels satisfied the more lenient standard of Section 134.47, the court remanded the USCIT's decision.