Lever Brothers Company v. United States of America

981 F.2d 1330, 299 U.S. App. D.C. 128, 25 U.S.P.Q. 2d (BNA) 1579, 15 I.T.R.D. (BNA) 1065, 1993 U.S. App. LEXIS 469, 1993 WL 4918
CourtCourt of Appeals for the D.C. Circuit
DecidedJanuary 15, 1993
Docket92-5185
StatusPublished
Cited by19 cases

This text of 981 F.2d 1330 (Lever Brothers Company v. United States of America) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Lever Brothers Company v. United States of America, 981 F.2d 1330, 299 U.S. App. D.C. 128, 25 U.S.P.Q. 2d (BNA) 1579, 15 I.T.R.D. (BNA) 1065, 1993 U.S. App. LEXIS 469, 1993 WL 4918 (D.C. Cir. 1993).

Opinion

Opinion for the Court filed by Circuit Judge SENTELLE.

*1331 SENTELLE, Circuit Judge:

The District Court entered a judgment invalidating the “affiliate exception” of 19 C.F.R. § 133.21(c)(2) (1988) as inconsistent with the statutory mandate of the Lanham Act of 1946, 15 U.S.C. § 1124 (1988), prohibiting importation of goods which copy or simulate the mark of a domestic manufacturer, and issued a nationwide injunction barring enforcement of the regulation with respect to any foreign goods bearing a valid United States trademark but materially and physically differing from the United States version of the goods. The United States 1 appeals. We conclude that the District Court, obedient to our limited remand in a prior decision in this same cause, properly determined that the regulation is inconsistent with the statute. However, because we conclude that the remedy the District Court provided is overbroad, we vacate the judgment and remand for entry of an injunction against allowing the importation of the foreign-produced Lever Brothers brand products at issue in this case.

I. Background 2

Lever Brothers Company (“Lever US” or “Lever”), an American company, and its British affiliate, Lever Brothers Limited (“Lever UK”), both manufacture deodorant soap under the “Shield” trademark and hand dishwashing liquid under the “Sunlight” trademark. The trademarks are registered in each country. The products have evidently been formulated differently to suit local tastes and circumstances. The U.S. version lathers more, the soaps smell different, the colorants used in American “Shield” have been certified by the FDA whereas the colorants in British “Shield” have not, and the U.S. version contains a bacteriostat that enhances the deodorant properties of the soap. The British version of “Sunlight” dishwashing soap produces less suds, and the American version is formulated to work best in the “soft water” available in most American cities, whereas the British version is designed for “hard water” common in Britain.

The packaging of the U.S. and U.K. products is also somewhat different. The British “Shield” logo is written in script form and is packaged in foil wrapping and contains a wave motif, whereas the American “Shield” logo is written in block form, does not come in foil wrapping and contains a grid pattern. There is small print on the packages indicating where they were manufactured. The British “Sunlight” comes in a cylindrical bottle labeled “Sunlight Washing Up Liquid.” The American “Sunlight” comes in a yellow, hour-glass-shaped bottle labeled “Sunlight Dishwashing Liquid.”

Lever asserts that the unauthorized influx of these foreign products has created substantial consumer confusion and deception in the United States about the nature and origin of this merchandise, and that it has received numerous consumer complaints from American consumers who unknowingly bought the British products and were disappointed.

Lever argues that the importation of the British products was in violation of section 42 of the Lanham Act, 15 U.S.C. § 1124 which provides that with the exception of goods imported for personal use:

[N]o article of imported merchandise which shall copy or simulate the name of the [sic] any domestic manufacture, or manufacturer ... or which shall copy or simulate a trademark registered in accordance with the provisions of this chapter ... shall be admitted to entry at any customhouse of the United States.

Id. The United States Customs Service (“Customs”), however, was allowing importation of the British goods under the “affiliate exception” created by 19 C.F.R. § 133.-21(c)(2), which provides that foreign goods bearing United States trademarks are not forbidden when “[t]he foreign and domestic *1332 trademark or tradename owners are parent and subsidiary companies or are otherwise subject to common ownership or control.” 3

In Lever I, we concluded that “the natural, virtually inevitable reading of section 42 is that it bars foreign goods bearing a trademark identical to the valid U.S. trademark but physically different,” without regard to affiliation between the producing firms or the genuine character of the trademark abroad. 877 F.2d 101, 111 (D.C.Cir.1989). In so concluding, we applied the teachings of Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Under the Chevron analysis, if Congress has clearly expressed an intent on a matter, we give that intent full effect (Step One of Chevron). If there is any ambiguity, we accept Customs’ interpretation, provided only that it is reasonable (Step Two of Chevron). See Lever I, 877 F.2d at 105 (citing Chevron, 467 U.S. at 842-43, 104 S.Ct. at 2781). The Lever I panel found the present controversy to survive barely Chevron Step One and “provisionally]” concluded that the affiliate exception is inconsistent with section 42 with respect to physically different goods. 4 The “provisional” qualifier on our determination of the invalidity of the exception was a very limited one. Noting that “neither party has briefed the legislative history nor administrative practice in any detail,” we adopted the apparently controlling reading of section 42 only “tentatively” and remanded the case to the District Court to allow the parties to “join issue on those points.” Lever I, 877 F.2d at 111. The panel in Lever I thus created a very small window of opportunity for the government to establish that the affiliate exception regulation was consistent with section 42 of the Lanham Act. At that time we said, “[sjubject to some persuasive evidence running against our tentative conclusion, we must say that Lever’s probability of success on its legal argument is quite high.” Id.

Our task today is clearly circumscribed. Under the “law of the case” doctrine, any determination as to an issue in the case which has previously been determined is ordinarily binding upon us. We explained the reasons for this in Laffey v. Northwest Airlines, Inc., 642 F.2d 578 (D.C.Cir.1980):

An appellate court also is normally bound by the law of the case it established on a prior appeal, and for a very sound reason.

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981 F.2d 1330, 299 U.S. App. D.C. 128, 25 U.S.P.Q. 2d (BNA) 1579, 15 I.T.R.D. (BNA) 1065, 1993 U.S. App. LEXIS 469, 1993 WL 4918, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lever-brothers-company-v-united-states-of-america-cadc-1993.