Court of International Trade Flexes Its Muscle

By Lincoln, Sheryl | Law and Policy in International Business, Spring 1994 | Go to article overview

Court of International Trade Flexes Its Muscle


Lincoln, Sheryl, Law and Policy in International Business


I. Introduction

The Court of International Trade (CIT) is not renowned for its jurisdiction over intellectual property law. However, in Ross Cosmetics Distribution Ctrs., Inc. v. U.S.(1), the issue for the court was whether the use of well-known trademarks on the packaging of imitation cosmetic products constituted a counterfeit use of trademarks. Ross Cosmetics illustrates both the type of substantive issues that arise under the court's jurisdiction and the court's procedural role in ensuring that agency decisions are based on relevant factors without a clear error of judgment.(2)

The Ross Cosmetics decision on intellectual property and the unfair use of trademarks demonstrates the expanse and weight of the court's judicial review authority. The range of issues that the CIT hears confirms the breadth of the court's jurisdictional grant. While most of the court's decisions revolve around valuation, antidumping, and countervailing duty issues,(3) any civil action arising out of an import transaction may come within the court's jurisdiction.(4) Plaintiffs may not raise civil claims in the court unless they are protesting claims that have already been raised before Customs.(5) Either full or partial denial of an importer's valid protest is a jurisdictional prerequisite to suit.(6)

Despite perceptions that the court sometimes defers to administrative decisions, the Ross Cosmetics court demonstrated its judicial review authority.(7) In Ross, the court challenged a U.S. Customs Service ruling on trademark violation and ordered on remand that Customs reconsider its "arbitrary and capricious" action. The court found that Customs did not have sufficient evidence before it when it held that Ross had made counterfeit use of trademarks. It remains to be seen if this judicial micromanagement of Custom's regulations is the opening round of a protracted dispute between Customs and the court regarding the analysis of trademark infringement, an indication of the court's role in setting procedures for Customs, an emerging substantive area for the court, or simply a reminder to Customs to articulate its standards clearly in its briefs before the court.

Congress created the CIT in 1980 as the successor to the U.S. Customs Court,(8) intending that the CIT would eliminate confusion about the court's status, jurisdiction, and power.(9) Congress granted the CIT exclu- sive jurisdiction over actions arising under the customs laws of the United States.(10) Ross Cosmetics manifests the broad reach of that jurisdiction.

II. The Facts of Ross Cosmetics

Ross Cosmetics Distribution Centers, Inc., a manufacturer, importer, and distributer of cosmetics, filed suit against the U.S. Customs Service in response to an unfavorable ruling that its proposed labels and packages for imported cosmetics products constituted counterfeit use of trademarks under 19 U.S.C. [section] 1526.(11) The CIT's chief judge, Dominick L. DiCarlo, found the Customs Service ruling to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law."(12)

Ross had requested a Customs ruling on whether its proposed packages for imported bath oils and proposed labels for fragrance oils complied with the laws relating to trademarks. Ross had wanted to compare its own brand "Perfumers Pride" with better-known, more expensive fragrances. The proposed package for bath oils was to read, for example:(13)

COMPARE TO

GIORGIO [famous brand name]

YOU WILL SWITCH TO GORGEOUS [plaintiff's product name]

OUR PRODUCT IS IN NO MANNER ASSOCIATED WITH OR LICENSED BY THE MAKERS OF GIORGIO

Ross submitted the following names to Customs as proposed comparatives to appear on the package:

Famous Brand Names   Plaintiff's "Alternative Brand" Names
Youth Dew            Morning Dream
Giorgio              Gorgeous
Opium                Oblivion
Ombre Rose           Whisper
Oscar                Oscent
L'Air du Temps       Love Birds

There were six trademarks at issue. …

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