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HQ H005065




April 5, 2007

RR: BSTC: IPR H005065 WRB

CATEGORY: TRADEMARKS

Mr. Russell Bruce Thornburg
Russell Bruce Thornburg, Customhouse Broker 11256 Candleberry Court
San Diego, CA 92128

RE: Whether the presence of certain registered and recorded trademarks on various articles made of recycled aluminum cans constitutes trademark infringement; NY File: N004351.

CATEGORY: Trademark

TARIFF NO.: 7616.99.5090; 8306.29.000

Dear Mr. Thornburg:

This is regarding your letter, dated November 13, 2006, on behalf of Neil Lewow, regarding the classification of various articles made of recycled aluminum cans under the Harmonized Tariff Schedule of the United States (HTSUS), and whether these articles constitute an infringement of United States trademarks. We have examined photographs of the articles you submitted, and examined a sample of the metal from the cans used to fashion these articles.

FACTS:

The merchandise in question is fashioned from discarded aluminum beverage cans. Photographs of the visors, handbags, and caps submitted with the request show that each of these articles is fashioned from discarded beverage cans. Applicant submitted samples of the beverage can material, which are appended below:

Each sample submitted bears, in whole or in part, one or more registered and recorded United States Trademarks: the Stylized Coca-Cola trademark (USPTO Registration No. 238,146; CBP Recordation No. TMK 92-00492) owned by The Coca-Cola Company; the 7-UP word mark (USPTO Registration No. 1,676,040; CBP Recordation No. TMK 03-00118) owned by Dr. Pepper/Seven Up, Inc.; the “Pepsi” word mark (USPTO Registration No. 824,150; CBP Recordation No. TMK 88-00112), or the Pepsi design mark (USPTO Registration No. 824,153; CBP Recordation No. TMK 98-00991).

In each case, an article is fashioned solely from cans bearing the same trademark. For example, the photographs of the visor shows articles bearing only Coca-Cola marks or only Pepsi marks. Similarly, a photograph of the handbag shows it to be fashioned solely from cans bearing a Pepsi mark. The photograph of the baseball cap shows an item fashioned completely from cans bearing the Coca-Cola mark.

Visor:

The photographs of the visor submitted by the applicant show a product made of several aluminum pieces, all of which bear the same registered and recorded mark. One piece consists of an adjustable headband; and the other consists of the bill or brim, which forms a sunshade over the face. Each of these two pieces appears to be fashioned of parts of several cans. The two pieces appear to be laced together. One photo shows a single visor bearing the Coca-Cola mark; the other photo shows two visors, bearing either the Coca-Cola or Pepsi marks. Below are images of the visor:

Handbag:

The photograph of the handbag submitted by the applicant shows a product made of several aluminum pieces, all of which bear the Pepsi marks. One piece consists of the body of the handbag; and the other consists of the flap. The design is replicated on the front of the handbag, forming a smaller pouch. Each of these pieces appears to be fashioned of parts of several cans, with the pieces laced together. Below is an image of the handbag:

Baseball Cap:

The photograph of the baseball cap submitted by the applicant shows a product made of several aluminum pieces, all of which bear the Coca-Cola mark. One piece consists of a domed body of the hat, which is fashioned from several triangular panels; and the other consists of the bill or brim, which forms a sunshade over the face. Each of these pieces appears to be fashioned of parts of several cans. The pieces appear to be laced together. Below is an image of an advertisement showing the cap:

Non-Beverage Marketing:

It is significant that some of these beverage manufacturers have engaged in widespread marketing and licensing of their marks to non-beverage products. The most prolific has probably been Coca-Cola. The Stylized Coca-Cola trademark, supra, has been registered and recorded for a wide range of non-beverage products. Most applicable to this matter is the Stylized Coca-Cola registration; USPTO Registration No. 1,451,756; CBP Recordation No. TMK 90-00614, which covers a wide variety of goods for garments and items made of metal, including International Class Of Goods 025 for men's and women's pants, shirts, blouses, jogging suits, jeans, vests, aprons, pajamas, and outerwear, namely jackets and caps and visors (emphasis supplied), as well as international classes of goods 028, for games and toys, 006, for containers and banks made of tin and metal, 009 for decorative magnets and magnetic memo holders for refrigerators and kitchen cabinets, and 014 for jewelry. Other registrations of the Coca-Cola word mark have included such a wide variety of goods made from metal and bearing the Coca-Cola mark, as music boxes, musical figurines and musical dioramas (USPTO Registration No. 2,843,239; CBP Recordation No. TMK 06-00618); electric ceiling light fixtures (USPTO Registration No. 2,843,237; CBP Recordation No. TMK 06-00621); and, bicycles (USPTO Registration No. 1,530,760; CBP Recordation No. TMK 06-00635). Similarly, Pepsi has registered, but not recorded with CBP, its mark for use on such metal objects as toy can banks, toy trucks, toy railroad cars, toy soda dispensers, electric lamps and charcoal burning barbecue grills, and key chains (USPTO Registration No. 1,317,551).

ISSUE:

The issue is whether the items fashioned from discarded and recycled beverage cans bearing registered and recorded United States trademarks infringe upon those marks.

LAW AND ANALYSIS:

Insofar as our administration of the trademark laws to protect against the importation of goods bearing counterfeit marks is concerned, section 526(e) of the Tariff Act of 1930, as amended (19 U.S.C. § 1526(e)) provides that merchandise bearing a counterfeit mark (within the meaning of section 1127 of Title 15) that is imported into the United States in violation of 15 U.S.C. § 1124 shall be seized and, in the absence of the written consent of the trademark owner, forfeited for violation of the customs laws, where the trademark in question is registered with the U.S. Patent & Trademark Office and recorded with Customs (U.S. Customs and Border Protection, hereinafter "CBP"). see, 19 U.S.C. § 1526(e). See also, 19 CFR § 133.21(b). The term “counterfeit” is defined as “a spurious mark that is identical with, or substantially indistinguishable from, a registered mark.” 15 U.S.C. § 1127. See also, 19 CFR § 133.21(a).

CBP also maintains authority to prevent the importation of goods bearing "confusingly similar" marks which, although neither identical nor substantially indistinguishable from protected marks, are violative nonetheless. 15 U.S.C. § 1114. See also, 19 CFR § 133.22.

In either regard, as a general proposition, the Lanham Act provides for a claim of trademark infringement when a trademark holder can demonstrate that the use of its trademark by another is “likely to confuse" consumers as to the source of a product. The term “source” is construed liberally. That is, “likelihood of confusion" relates to any type of confusion, including confusion of source, confusion of affiliation, confusion of connection; or confusion of sponsorship. (See, McCarthy, Trademarks and Unfair Competition, Section 23:8 (Rel. 2 6/97); Lanham Act, Section 43(a)). We note that a plaintiff in a trademark infringement case need not establish that all or even most customers are likely to be confused. Plaintiff need only prove that an appreciable number of ordinarily prudent consumers will be confused. Estee Lauder, Inc. v. The Gap, Inc., 932 F. Supp. 595 (S.D.N.Y. 1996).

In order to establish “likelihood of confusion”, courts in each of the Federal Circuits have adopted the test first laid out in Polaroid v. Polarad Electronics Corp., 287 F.2d 492, (2d Cir), cert. denied, 368 U.S. 820, 7 L. Ed. 2d 25, 82 S. Ct. 36 (1961). (See also, White v. Samsung Electronics America Inc., 971 F.2d 1395, amended, rehearing denied, 989 F.2d 1512, cert. denied, 113 S.Ct 2443 (9th Cir. 1992); E.A. Engineering, Science and Technology Corp. v. Environmental Audit, Inc., 703 F.Supp. 853 (C.D.Cal 1989); Escerzio v. Roberts, 944 F.2d 1235, rehearing denied (6th Cir. 1991). According to Polaroid, an analysis of factors including, but not limited to, the strength of the mark, the similarity of the marks, the proximity of the products, actual confusion and sophistication of the buyers are germane to establishing likelihood of confusion. Courts have been careful to note that no single Polaroid factor is more important than any other and that not all factors need be considered. Notwithstanding, in the vast majority of trademark infringement cases, “similarity of the marks” has been a factor upon which most courts have placed great emphasis. Regarding "similarity" between marks, it has been noted that "a mark should not be dissected and considered piece-meal; rather, it must be considered as a whole in determining likelihood of confusion." Franklin Mint v. Master Mfg. Co., 667 F.2d 1005, 1007 (C.C.P.A. 1981).

Jurisprudence has held that re-use or remanufacture of goods bearing legitimate trademarks may constitute counterfeiting. In Champion Spark Plug Co. v. Sanders, 331 U.S. 125 (U.S. 1947), the Supreme Court upheld rulings by the district court and Circuit Court of Appeals that remanufacture of goods bearing legitimate and authorized trademarks, without notice to the consumer that the goods were remanufactured, not only infringed the trade mark but also constituted unfair competition. Justice Douglas, writing for the Court, remarked, “Cases may be imagined where the reconditioning or repair would be so extensive or so basic that it would be a misnomer to call the article by its original name, even though the words "used" or "repaired" were added.” Champion, 331 U.S. at 129. The United States Court of Appeals for the Ninth Circuit picked up on this language in Rolex Watch, U.S.A., Inc. v. Michel Co., 179 F.3d 704 (9th Cir. 1999), when it held that alterations made to used Rolex wristwatches resulted in a new product, and that the retention of Rolex's trademarks the altered watches constituted trademark infringement. In Rolex, the Ninth Circuit also harkened back to a prior decision involving remanufacture of trademarked items, saying, “[T]he public is more likely to be deceived by an original mark because it serves as a perfect imitation. . . . . When an original mark is attached to a product in such a way as to deceive the public, the product itself becomes a "counterfeit" just as it would if an imitation of the mark were attached.” Westinghouse Elec. Corp. v. General Circuit Breaker & Elec. Supply, 106 F.3d 894 (9th Cir. 1997).

Professor McCarthy writes, “(t)here is a possibility that ‘collateral use’ of a trademark by rebottlers and repackagers could constitute ‘dilution’ even in the absence of proof of likelihood of confusion. Such a claim might arise as a form of dilution by tarnishment if the goods were changed in such a way as to result in an inferior product which could damage the goodwill of the trademark owner.” (See, McCarthy, Trademarks and Unfair Competition, Section 25:38 (Rel. #8 12/98)(Citations Omitted) In By-Rite Distributing, Inc. v. Coca-Cola Co., 577 F.Supp. 530 (Utah, 1983), a case where trademarked soft drinks were re-bottled and sold in non-original containers, the court held that such re-bottling could create a substantial likelihood of confusion as to the quality and sponsorship of products, giving rise to trade-mark and unfair competition claims. The re-bottler failed to meet, and could not meet, the quality control standards and product specifications established by the trademark owners for the bottled products, sold under the same name as the re-bottled drinks. The sale of re-bottled, trade-marked products caused confusion as to the quality and sponsorship of the products sold and damaged the defendants' goodwill and reputation for high quality products. Similarly, in Intel Corp. v. Terabyte Intern., Inc., 6 F.3d 614 (C.A.9 (Cal.), 1993), the court held that unauthorized modification or re-marking of a product bearing a genuine trademark rendered that product a counterfeit. The court remarked, “In other words, by the time the Intel markings had been scraped off or printed over, Intel did make the chip but it was no longer the source of the product which was being sold, except in the most ethereal of senses.” 6 F.3d at 620.

In turning to the goods at issue herein, the various items fashioned from discarded and recycled beverage cans are intended to derive their value and appeal from the registered and recorded marks borne on the metal of the recycled cans, as indicated by the consistent use of a single trademark on each item. Even in the absence of proof of consumer confusion, the use of these marks constitutes a form of dilution by tarnishment as the goods have been changed in such a way as to result in a product which could damage the goodwill of the trademark owner. The owners of these marks cannot control the quality of the goods bearing their marks and, therefore, the potential for tarnishment damaging their goodwill and reputation is great.

HOLDING:

The subject items, fashioned from discarded and recycled beverage cans, bearing without authority identical versions of trademarks registered with the U.S. Patent and Trademark Office and recorded with Customs and Border Protection create a substantial likelihood of confusion as to the quality and sponsorship of products such that said items are considered to bear counterfeit marks. Accordingly, said goods, if imported, would be subject to seizure and forfeiture pursuant to 15 U.S.C. 1526(e).

You are directed to mail this decision to the advice applicant, no later than 60 days from the date of this letter. On that date the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other public methods of distribution.

Sincerely,

George Frederick McCray, Esq.

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