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A rare trademark case decided by the Federal Circuit addressed question of conflict between trademarks and compliance with country-of-origin marking.

Posted on March 10, 2016

In a rare trademark case decided by the Federal Circuit, the Court in JBLU v. United States addressed a novel question of conflict between trademarks and compliance with country-of-origin marking.  The decision illustrates the strength of trademark rights, even for common law, unregistered trademarks. 

JBLU imports jeans manufactured in China, but bearing unregistered trademarks containing “USA.”  Since 2005, JBLU asserts, it has used the trademarks “C’est Toi Jeans USA” and “CT Jeans USA” embroidered on the back, inside the waistband of imported jeans.  A smaller “Made in China” label hangs from the front, inside the waistband, in compliance with a statutory provision regarding country-of-origin marking.  Customs regulations pursuant to that statutory provision require that geographic marks, when having the potential to mislead customers, be accompanied by such country-of-origin marking “in close proximity” and “in at least comparable size” – unless the geographic designation is part of a trademark.  When the geographic term forms or is part of a trademark, the country-of-origin marking need only be legible, permanent, and in some conspicuous location.

Reading the regulations as requiring a registered trademark, Customs denied entry for 350,000 pairs of JBLU jeans.  JBLU sued in the U.S. Court of International Trade, which affirmed the refusal to allow importation in deference to the agency’s interpretation of “trademark” within its own regulations.  The Federal Circuit, however, accorded the agency interpretation of “trademark” no deference.  The unqualified trademark exemption within the regulation applied to any alleged trademark, the Federal Circuit held, whether registered or unregistered. 

Because the appeal was from a summary judgment against JBLU, the Federal Circuit did not address whether the JBLU marks were, in fact, trademarks.  JBLU did not file trademark registration applications, but has been granted registrations.   On remand, therefore, the Court of International Trade will likely treat the marks as trademarks. 

The value of trademarks is illustrated by this decision, in which even a conflicting designation of geographic origin was not be precluded based on the allegation of the mark functioning as an indication of source or quality.