ICCS USA Corp. v. United States
| Decision Date | 11 March 2020 |
| Docket Number | 2019-1561 |
| Citation | 952 F.3d 1325 |
| Parties | ICCS USA CORPORATION, Plaintiff-Appellant v. UNITED STATES, Defendant-Appellee |
| Court | U.S. Court of Appeals — Federal Circuit |
Elon Abram Pollack, Stein Shostak Shostak Pollack & O'Hara, Los Angeles, CA, argued for plaintiff-appellant. Also represented by Matthew Ross Leviton.
Jamie Shookman, International Trade Field Office, Commercial Litigation Branch, Civil Division, New York, NY, argued for defendant-appellee. Also represented by Amy Rubin, Hardeep Kaur Josan; Jeanne Davidson, Joseph H. Hunt, Washington, DC; Yelena Slepak, Office of the Assistant Chief Counsel, United States Department of Homeland Security, United States Bureau of Customs and Border Protection, New York, NY.
Before Newman, Moore, and Chen, Circuit Judges.
ICCS USA Corporation (ICCS) appeals from the United States Court of International Trade’s grant of summary judgment in favor of the government ruling that United States Customs and Border Protection (Customs) lawfully issued to ICCS a notice to redeliver merchandise that violated 19 U.S.C. § 1526(e) by displaying a counterfeit certification mark. ICCS USA Corp. v. United States , 357 F. Supp. 3d 1314 (Ct. Int’l Trade 2018). For the reasons set forth below, we affirm.
On January 19, 2017, ICCS imported 56,616 individual butane gas canisters into the United States that displayed a "PREMIUM" brand label affixed on the outside of the canisters. At the time of importation, the PREMIUM model canisters displayed a registered certification mark owned by Underwriters Laboratories Inc. (UL). Customs subsequently determined that the canisters were "counterfeit" in that they made unauthorized use of the UL certification mark. On February 23, 2017, Customs issued a notice ordering ICCS to redeliver the imported canisters to Customs’ custody pursuant to § 1526(e). ICCS redelivered only 29,008 of the 56,616 canisters to Customs for seizure. Customs issued a Notice of Penalty or Liquidated Damages Incurred and Demand for Payment to ICCS with respect to the 27,608 non-delivered canisters, and assessed damages against ICCS in the amount of $41,412.00. This appeal concerns Customs’ demand for redelivery with respect to the 27,608 canisters that were not seized by Customs.1 See ICCS , 357 F. Supp. 3d at 1319.
UL is an independent, not-for-profit laboratory that tests various products for compliance with nationally recognized safety standards and requirements. Acadia Tech., Inc. v. United States , 458 F.3d 1327, 1328–29 (Fed. Cir. 2006) ; United States v. 10,510 Packaged Computer Towers, More or Less (Computer Towers ), 152 F. Supp. 2d 1189, 1191 (N.D. Cal. 2001). "Manufacturers submit samples of their products to UL for examination and testing so that UL may independently determine if the products meet specific standards and requirements for fire, electrical, and casualty hazards." United States v. 4500 Audek Model No. 5601 AM/FM Clock Radios (Audek Model Clock Radios ), 220 F.3d 539, 540–41 (7th Cir. 2000) (). If, and when, UL finds that a manufacturer’s products comply with applicable standards, UL authorizes the manufacturer to affix UL’s certification mark to the products. Acadia Tech. , 458 F.3d at 1329. When consumers see UL’s certification mark displayed on products, the UL mark informs consumers that they are purchasing products that have UL’s "seal of approval" and comply with UL’s safety standards and requirements. 3 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 19:91 (5th ed. 2019) (McCarthy on Trademarks).
ICCS is the U.S. affiliate of One Jung Can Mtf. Co. Ltd. (OJC), and ICCS imports butane gas canisters manufactured by OJC. J.A. 64. ICCS’s PREMIUM model canister is a model of OJC’s MEGA-1 butane gas canister.2 UL certified the MEGA-1 canister for OJC in October 2001 after testing it for safety. J.A. 236–46. But as of January 19, 2017 (the date of entry), ICCS’s PREMIUM model canister had not been certified.
ICCS’s contractual relationship with UL began in October 2015, when ICCS and OJC entered into a Multiple Listing Services Agreement with UL. J.A. 185, 187. UL’s multiple listing services allow an authorized manufacturer (which in this case is OJC) to brand and label its products using the multiple listee’s name (here, ICCS) so that the products certified by UL for OJC can be marketed by ICCS. J.A. 262; see ICCS , 357 F. Supp. 3d at 1317. The contract, made pursuant to the Multiple Listing Services Agreement, was comprised of two documents: the Multiple Listing, Recognition, Verification, and Classification Services Service Terms (the Service Terms) and the Global Services Agreement. ICCS , 357 F. Supp. 3d at 1317. Under the Service Terms ¶ 1, the "basic product," which refers to OJC’s MEGA-1 canister, was authorized to display UL’s certification mark when "marked with [ICCS’s brand] label instead of [OJC’s brand] label." J.A. 262; ICCS , 357 F. Supp. 3d at 1323 n.18.
The Service Terms authorized ICCS to display UL’s certification mark on any ICCS "models" that are the same physical product as OJC’s MEGA-1 canister, but only after UL verifies that any differences between ICCS’s model and the MEGA-1 "basic product" are merely "superficial." See J.A. 264. In other words, as the Court of International Trade observed, new ICCS models can become authorized to display UL’s certification mark, but only after ICCS makes a request and UL expressly approves ICCS’s request. ICCS , 357 F. Supp. 3d at 1324 (citing J.A. 263–64). UL maintained a list of authorized models for the public on its Online Certifications Directory. Id . at 1317 ; see J.A. 376, 378.
The ICCS models of butane gas canisters at issue in this case are the PREMIUM model and the US BUTANE model. While the PREMIUM model displayed a "PREMIUM" brand label, ICCS’s US BUTANE model displayed a "US BUTANE" brand label affixed on the outside of the canisters. Oral Arg. at 20:00–20:40. Between October 2015 and February 2017, including on the date of entry (January 19, 2017), only the US BUTANE model was listed on UL’s Online Certifications Directory under ICCS’s name. J.A. 376. The PREMIUM model was not listed, and not authorized by UL to display the certification mark, until February 8, 2017. J.A. 378. This is because ICCS did not make a request for UL to add the PREMIUM model to UL’s multiple listing services until after the date of entry of the PREMIUM model canisters. Upon receiving that request, UL approved it and updated its online directory to include the PREMIUM model.
When Customs learned that, at the time of entry, UL had not authorized the use of its certification mark on the PREMIUM model, Customs issued to ICCS the notice to redeliver the 56,616 PREMIUM model canisters, stating that ICCS was in violation of § 1526(e). J.A. 381–82. ICCS redelivered 29,008 of the 56,616 canisters, but failed to redeliver the remaining 27,608 canisters, presumably because they had already entered the stream of commerce. Appellee’s Br. at 5.
On April 6, 2017, ICCS filed the protest that underlies this action, challenging Customs’ demand for redelivery. J.A. 279–90; 19 U.S.C. § 1514(a)(4) (). ICCS claimed that the redelivery notice was unlawful because ICCS had a valid license with UL to display the UL certification mark on the PREMIUM model canisters. Customs then contacted UL to inquire about ICCS’s protest, and UL confirmed that, on the date of entry, the PREMIUM model canisters "were not ... authorized to display the UL Listing Certification Marks." J.A. 292–93. Customs subsequently denied ICCS’s protest, and this action commenced, pursuant to 28 U.S.C. § 1581(a), in the Court of International Trade.
ICCS filed a complaint in the Court of International Trade on May 11, 2017, challenging Customs’ denial of ICCS’s protest of Customs’ demand for redelivery. Customs communicated to ICCS that it would "stipulate this case if [ICCS] can provide a letter from UL stating that UL does not object to the retroactive use of its mark on ‘PREMIUM’ model[ ] [canisters] ... at issue in this case." J.A. 408. ICCS’s counsel attempted to obtain such a letter from UL, and the government requested an extension of time for ICCS’s counsel to do so. J.A. 407–08.
However, UL would not consent to the retroactive use of its certification mark. J.A. 395–98. In correspondence with ICCS’s counsel, UL’s representative stated, "UL certifications are not retroactive," and therefore, the merchandise at issue "were not then and are still not authorized to display the UL certification marks." J.A. 396. "UL upholds a strict zero-tolerance policy ... [which] is uniformly applied and is considered reasonable and necessary in order to protect the integrity of UL’s [r]egistered [m]arks." Id . UL denied ICCS’s request "for a waiver" because that "would allow other companies to copy the UL Mark with impunity, safe in the knowledge that if the merchandise is intercepted at U.S. Customs, that the investment could still be salvaged." J.A. 397.
On cross-motions for summary judgment, the Court of International Trade upheld Customs’ determination that the UL certification mark displayed on ICCS’s merchandise was counterfeit. ICCS , 357 F. Supp. 3d at 1316. The court concluded, based on the Service Terms and the Global Services Agreement, that ICCS must obtain "express authorization" from UL for each model of butane gas canister prior to using UL’s certification mark on that model. Id. at 1324. Based on the Service Terms ¶¶ 2, 4(b), 6(a), and 7, the court concluded that new models can be added to UL’s multiple listing services only after ICCS makes a request to UL and UL determines that the new model is eligible because any differences between...
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