C’est Toi Jeans USA: A Trademark or a Country of Origin Reference?

This is exactly what US Customs and Border Protection (CBP) attempted to do to the jeans manufacturer JBLU, Inc., whose “C’est Toi Jeans USA” trademark had been in use, but not yet registered.
 
Fortunately, the United States Court of Appeals for the Federal Circuit (CAFC) disagreed with CBP’s attempt to limit the definition of trademark in the context of CBP’s country of origin marking regulations, finding instead that trademark rights stem from use, not registration. The result: a more lenient application of the country of origin marking rules when an imported article contains a trademark referencing a geographic location other than the country of origin, whether or not the trademark is registered.

CBP’s country of origin marking regulations require that, when any reference to a geographical location appears on an imported article, the actual country of origin must be marked in close proximity to the geographical reference and in a comparable size font. 19 C.F.R. 134.46. However, in cases where the geographical reference is part of a trademark, the CBP regulations are more lenient, eliminating the comparable size font requirement, and more leniently applying the “close proximity” rule. 19 C.F.R. 134.47.

JBLU, Inc., a Los Angeles apparel company registered to do business as “C’est Toi Jeans USA,” imported jeans manufactured in China that were embroidered with “C’est Toi Jeans USA,” “CT Jeans USA,” or “C’est Toi Jeans Los Angeles” on their backs, pocket linings, waistbands, and tags. At the border, CBP inspected the shipments and determined that the company violated CBP’s country of origin marking regulations because the “Made in China” label sewn into the seam of JBLU’s jeans was not in close proximity or comparable size to the trademark referencing USA or Los Angeles. JBLU argued that the markings were not in violation because the more lenient trademark marking regulation applied. However, CBP disagreed and interpreted the trademark regulation as applying only to registered trademarks or trademarks for which an application is pending. The Court of International Trade (CIT) agreed with CBP and dismissed the case.

On appeal, the CAFC overturned the CBP and CIT decisions, affirming the long established common law principle that trademark rights stem from use, not registration. In its analysis, the CAFC turned to the dictionary meaning of trademark and the definition under the Lanham Act, noting that neither definition is limited to registered trademarks or trademarks subject to a pending application. The Court also cited a number of cases expressly stating that a trademark is not created by registration, and unregistered trademarks are protected by the Lanham Act and common law. Finding no ambiguity in the word “trademark,” the CAFC held that for purposes of CBP’s country of origin marking regulations, the word “trademark” includes registered and unregistered trademarks, and thus applying the more lenient marking rules, found the jeans in question to be properly marked with origin.

Based on this case, importers who have a geographical reference in a trademark, even when that trademark is unregistered, can now avail themselves of the more lenient marking rules, which require only that the country of origin marking of foreign-made goods be legible, conspicuous and permanent enough to reach the ultimate consumer. Such goods do not need to have an origin marking in close proximity to, and in a comparable size font to, the geographical reference in the trademark.