Vivitar Corp. v. United States

• Decision Date: 20 August 1984
• Docket Number: Court No. 84-1-00067.
• Citation: 593 F. Supp. 420
• Parties: VIVITAR CORPORATION, Plaintiff, v. The UNITED STATES, et al., Defendants, and 47th Street Photo, Inc., Defendant-Intervenor.
• Court: U.S. Court of International Trade

593 F. Supp. 420

VIVITAR CORPORATION, Plaintiff, v. The UNITED STATES, et al., Defendants and 47th Street Photo, Inc., Defendant-Intervenor.

Court No. 84-1-00067.

United States Court of International Trade.

August 20, 1984.

COPYRIGHT MATERIAL OMITTED

Stein, Shostak, Shostak & O'Hara, Steven P. Kersner, Irwin P. Altschuler and Donald S. Stein, R. Kenton Musgrave, Wiley, Johnson & Rein, James M. Johnstone, Thomas W. Kirby and Dwight G. Rabuse, Washington, D.C., for plaintiff.

Richard K. Willard, Acting Asst. Atty. Gen., David M. Cohen, Director, Commercial Lit. Branch, Washington, D.C., and Velta A. Melnbrencis, New York City, for defendants.

Miller, Cassidy, Larroca & Lewin, Nathan Lewin, Jamie S. Gorelick, James L. Volling and Rory K. Little, Washington, D.C., Groman & Wolf, Marvin H. Wolf, Mineola, N.Y., for intervenor.

Covington & Burling, William H. Allen, Eugene A. Ludwig, Scott D. Gilbert and Daniel A. Rowley, Washington, D.C., for amici curiae Coalition to Preserve the Integrity of American Trademarks, et al.

James C. Tuttle and Deborah L. Miela, Troy, Mich., Steele, Simmons & Fornaciari, Robert W. Steele and Robert E. Hebda, Howrey & Simon, John F. Bruce, Kevin P. O'Rourke, Catherine Shea, Washington, D.C., for amicus curiae K mart Corp.

Bass, Ullman & Lustigman, New York City (Robert Ullman, Sandler & Travis, New York City, of counsel), for amicus curiae American Free Trade Ass'n.

Olwine, Connelly, Chase, O'Donnell & Weyher, William F. Sondericker, New York City, for amicus curiae Progress Trading Co., Inc.

Kelly, Lucas & Mohen, Richard B. Kelly and Thomas P. Mohen, New York City, for amicus curiae Nat. Ass'n of Catalog Showroom Merchandisers.

Memorandum Opinion and Order

RESTANI, Judge.

Background

In this action plaintiff seeks a declaratory judgment that the United States Customs Service must exclude all imports bearing plaintiff's trademark that are entered without the written consent of plaintiff.¹ Plaintiff contends that 19 U.S.C. § 1526(a) (1982) gives it an unqualified right to demand such exclusion.²

Plaintiff is a California corporation and the owner of the Vivitar trademark in the United States. Plaintiff licenses foreign manufacturers to apply the Vivitar trademark to a variety of photographic equipment. Plaintiff's wholly owned subsidiaries market this equipment outside of the United States. Apparently these subsidiaries are not licensed to market these goods in the United States. The parties agree that third parties unrelated to plaintiff are importing into the United States equipment bearing the Vivitar trademark, which equipment was manufactured by the foreign licensees. The parties also agree that plaintiff has not given its written consent to these particular imports.

The unauthorized importation of genuine trademarked goods is a widespread practice. Apparently a number of American trademark owners authorize foreign companies to apply the American-owned trademark to goods manufactured abroad. Often the foreign companies are authorized to market the trademarked goods abroad, but are not authorized to import the goods into the United States except through channels approved by the trademark owner. Due to a variety of market conditions there are often substantial price differences between the price the foreign companies charge abroad and the price in the United States. When the United States price is substantially higher than the foreign price, importers can profitably buy large quantities of the trademarked goods overseas, import them to the United States, and sell them to distributors and retailers at a discount. American companies such as intervenor 47th Street Photo, Inc. and amicus curiae K mart Corporation, see 585 F.Supp. 1415, purchase large quantities of these imports and offer them for sale at prices often far below those of retailers selling goods the American trademark owner has authorized for importation. However, since these goods are sold outside of the trademark owner's intended chain of distribution, they frequently have different warranties and packaging from that intended by the trademark owner. This pattern of unauthorized importation is part of what is known as the gray market.

The Customs Service does not prohibit gray market imports as described above. The Customs Service interprets § 1526(a) to deny trademark owners the right to require the exclusion of trademarked goods manufactured abroad when the trademark owner has authorized the foreign manufacturer to apply the trademark to the goods. 19 C.F.R. § 133.21 (1983).³ Plaintiff contends that the Customs Service's interpretation of § 1526(a) is contrary to law. This matter is before the court on plaintiff's and defendants' cross-motions for summary judgment.⁴

Exhaustion of Administrative Remedies

Initially, amicus curiae K mart contends that this action should be dismissed because plaintiff has failed to exhaust its administrative remedies. This court will, where appropriate, require the exhaustion of administrative remedies. 28 U.S.C. § 2637 (1982). Plaintiff has satisfied this requirement.

On May 14, 1982, plaintiff submitted to the Customs Service a formal request for a letter ruling that would bar commercial importation of goods bearing the Vivitar trademark unless Vivitar consented to the importation.⁵ Plaintiff supplemented this request with further information on July 15, 1982 and August 25, 1982. The Customs Service has never formally responded to this request. As K mart admits, a Customs letter ruling is agency action which is subject to judicial review. Under the circumstances of this case, failure to act on plaintiff's request for a letter ruling amounts to final agency action through withholding of relief. 5 U.S.C. § 551(10)(B), (13), § 704 (1982).⁶ Plaintiff waited over eighteen months for a formal response to its request. It would be pointless and unjust to require plaintiff to await a ruling that may never be made.⁷

Moreover, the issue before the court is purely one of the validity of the administrative interpretation of a statute. There is no problem with identifying the pertinent facts contained in the administrative and legislative history. Thus, little would be gained by awaiting a possible response to plaintiff's request for a letter ruling. See National Automatic Laundry and Cleaning Council v. Schultz, 443 F.2d 689, 695 (D.C.Cir.1971).

K mart apparently contends that the present action is not presented properly as an appeal from the Customs Service's failure to act, since plaintiff's initial action was presented in the form of a mandamus action. This contention is meritless. Plaintiff's complaint is not limited to requesting mandamus relief. And in any case, since plaintiff has satisfied the requirement of exhaustion of administrative remedies, it is irrelevant how its action for judicial review is labeled.

Lack of Material Factual Disputes

Intervenor opposes plaintiff's motion for summary judgment on the grounds that material issues of fact exist requiring a trial. "`In ruling on cross-motions for summary judgment, the court must determine if there exist any genuine issues of material fact.'" PPG Industries, Inc. v. United States, 7 CIT ___, Slip Op. 84-27 at 3 (March 28, 1984) (citing American Motorists Insurance Co. v. United States, 5 CIT ___, Slip Op. 83-8 (February 1, 1983)). The court can only grant summary judgment if no material issues of fact are in dispute. Intervenor contends that a trial is necessary to determine plaintiff's corporate structure. Intervenor argues that this is needed to ascertain the proper application of the Customs Service's administrative practice to imports bearing plaintiff's trademark. Intervenor also contends that a trial is needed to determine the Customs Service's historic administrative practice concerning unauthorized importation of goods bearing genuine trademarks. Intervenor contends further that there is a factual dispute over whether plaintiff consents to the importation of all goods sold overseas by its subsidiaries, and whether plaintiff is harmed by this importation.⁸

Intervenor is correct in noting that plaintiff's relationship with its overseas manufacturers and subsidiaries is material. See 19 C.F.R. § 133.21(c) (footnote 3, supra). But no material facts concerning this relationship are in dispute. Plaintiff admits that its overseas distributors are wholly owned subsidiaries and that it consents to overseas manufacturers' applying the Vivitar trademark to goods sold overseas. Thus, plaintiff admits all the material facts necessary to application of current Customs Service policy. What plaintiff contests is the legality of that policy.

Intervenor is also correct in noting that the Customs Service's historic administrative practice is relevant to determining the proper application of § 1526(a). See Norwegian Nitrogen Products Co. v. United States, 288 U.S. 294, 311, 53 S.Ct. 350, 357, 77 L.Ed. 796 (1933). But again no trial is necessary concerning this issue. All parties and amici curiae have submitted substantial material documenting the administrative history of § 1526(a). No party has challenged the authenticity of the material submitted. The court may take judicial notice of the material submitted and of material reviewed in its independent legal research into the history of § 1526(a). These are legislative facts of general application, not specific to the parties, which the court may freely notice. See Fed.R.Evid. 201(a), Notes of Advisory Committee; Treasure Salvors, Inc. v. Unidentified Wrecked and Abandoned Sailing Vessel, 569 F.2d 330, 336 (5th Cir.1978); Association of National Advertisers, Inc. v. Federal Trade Commission, 627 F.2d 1151, 1161-1163 (D.C.Cir.1979), cert. denied, 447 U.S. 921, 100 S.Ct. 3011, 65 L.Ed.2d 1113 (1980).

Intervenor's contention that plaintiff impliedly consents to the importation of goods bearing its trademark also does not require trial. Intervenor has not contended that plai...