Application for Further Review Protest No. 2704-10-102184; Marking of JBLU, Inc. jeans

HQ H137556 June 13, 2011 CLA-2-OT:RR:CTF:TCM H137556 TNA CATEGORY: Marking Port Director Port of Los Angeles/ Long Beach Seaport U.S. Customs and Border Protection 301 E. Ocean Blvd., Suite 1400Long Beach, CA 90802 Attn: Patti Dondero, SIS Re: Application for Further Review Protest No. 2704-10-102184; Marking of JBLU, Inc. jeans Dear Port Director: The following is our decision on the application for further review (“AFR”) of Protest No. 2704-10-102184, filed by counsel on behalf of JBLU, Inc (“JBLU”), protesting U.S. Customs and Border Protection’s (“CBP”) decision that its merchandise was improperly marked. In reaching our decision, we have taken into consideration additional arguments contained in a supplemental submission dated April 28, 2011, as well as arguments supplied during a conference with members of my staff on May 5, 2011. FACTS: The subject merchandise consists of various styles of jeans containing different logos in several places on the pants. The logos read “C’est Toi Jeans USA,” “CT Jeans USA,” “C’est Toi Jeans Los Angeles,” “Papaya Los Angeles Jeans,” “Papaya U.S.A.,” and various versions of the C’est Toi name with other non-origin geographical references. The logos are displayed on the back of the jeans, inside the waistband, on the hangtag at the side of the jeans, and on a metal tag attached to the outside of the waistband at the back of the jeans. For many styles, the country of origin marking “Made in China” is displayed on a label sewn onto the waistband towards the front of the jeans, several inches from the zipper, on a smaller label than the displays of the logos. However, some of the jeans sampled by the Port of Los Angeles/Long beach (“Port”) had no country of origin marking. Pictures of the subject merchandise, along with pictures of the country of origin marking and various logos, were submitted to this office for review. JBLU has submitted an application to the United States Patent and Trademark Office (“PTO”) to register a trademark for the logo “C’est Toi Jeans USA.” The application, which was filed on October 7, 2010, claims a stylized lettering of “C’est Toi Jeans USA” and the stylized wording of “CT Jeans USA” as a trademark. It does not claim color as a feature of the mark. The application, which is still pending before the PTO, was filed after some of the entries that this protest covers. The subject merchandise was entered between September 11, 2010, and October 13, 2010. CBP issued CF4647 between September 29, 2010 and October 15, 2010. The port found that the merchandise was improperly marked. This protest was filed on November 5, 2010, asserting that the merchandise is properly marked “Made in China” and that the merchandise’s logo, which contains the words “USA” and other non-origin geographical references, is the subject of a trademark application before the PTO. ISSUE: Whether JBLU’s C’est Toi Jeans, which contain a marking for which JBLU has applied for trademark status, were marked properly with their country of origin? LAW AND ANALYSIS: Initially, we note that the matter is protestable under 19 U.S.C. §1514(a)(2) as a decision on country of origin marking. This protest was timely filed within 180 days of the liquidation of the subject entries, for entries made on or after December 18, 2004. (Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, § 2103(2)(B)(ii), (iii) (codified as amended at 19 U.S.C. § 1514(c)(3) (2006))). Further Review is properly accorded to Protest No. 2704-10-102184 pursuant to 19 C.F.R. § 174.24(a) because the decision against which the protest was filed is alleged to be inconsistent with several CBP rulings. Specifically, Protestant argues that HQ 561060, dated November 3, 1998, HQ 734455, dated July 1, 1992, and HQ 734644, dated July 1, 1992, all provide that CBP accepts a pending application with the PTO as sufficient evidence of use of a trademark for purposes of 19 C.F.R. §134.47. Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. §1304), requires that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit in such manner as to indicate to the ultimate purchaser the English name of the country of origin of the article. The regulations implementing the requirements and exceptions to 19 U.S.C. §1304 are set forth in Part 134, CBP Regulations (19 C.F.R. Part 134). Section 134.46, CBP Regulations (19 C.F.R. §134.46), states the following: In any case in which the words “United States,” or “American,” the letters “U.S.A.,” any variation of such words or letters, or the name of any city or location in the United States, or the name of any foreign country or locality other than the country or locality in which the article was manufactured or produced appear on an imported article or its container, and those words, letters or names may mislead or deceive the ultimate purchaser as to the actual country of origin of the article, there shall appear legibly and permanently in close proximity to such words, letters or name, and in at least a comparable size, the name of the country of origin preceded by “Made in,” “Product of,” or other words of similar meaning. Section 134.47, CBP Regulations (19 C.F.R. §134.47), states the following: When as part of a trademark or trade name or as part of a souvenir marking, the name of a location in the United States or “United States” or “America” appear, the article shall be legibly, conspicuously, and permanently marked to indicate the name of the country of origin of the article preceded by “Made in,” “Product of,” or other similar words, in close proximity or in some other conspicuous location. Protestant argues that its pending trademark application is sufficient evidence of use of a trademark for purposes of 19 C.F.R. §134.47 and cites to prior CBP rulings where CBP has accepted a pending trademark application as sufficient. See HQ 561060, HQ 734455, and HQ 734644. Protestant further argues that its trademark application triggers the less stringent marking requirements of 19 C.F.R. §134.47, which simply requires that the marking be in a conspicuous location. Protestant, citing T.D. 71-264(3) and numerous CBP rulings, asserts that this “conspicuous location” includes marking the jeans’ inner waistband. See T.D. 71-264(3); HQ 735437, dated June 22, 1994; HQ 734294, dated March 20, 1992; HQ 733701, dated October 9, 1990; NY N026447, dated May 22, 2008. As a result, Protestant argues that the country of origin marking on the subject merchandise is in accord with these requirements. We agree with Protestant with respect to the entries of the subject merchandise that entered after the trademark application was filed with the PTO. First, CBP has long accepted an application filed with the PTO as sufficient evidence of a trademark for purposes of 19 CFR §134.47 because the regulation does not specify what evidence is necessary to establish a trademark. If the trademark application is denied, however, the requirements of 19 CFR §134.46 may be applicable. Therefore, if an application for a trademark has been filed, CBP will allow the more lenient requirements of 19 CFR §134.47 to apply. See HQ 734455 dated July 1, 1992; HQ 735180, dated May 17, 1994; HQ 561060; HQ 735019, dated June 28, 1998; and HQ 735085, dated June 4, 1993. Accordingly, in the present case, the use of trademarks with a non-origin reference to “USA,” trigger the 19 CFR §134.47 requirement that the country of origin marking be in a conspicuous location. Secondly, as Protestant argues, CBP has defined this “conspicuous location” to include marking the jeans’ inner waistband. See T.D. 71-264(3). Subsequent CBP rulings have found various marking locations to meet these requirements, such as trousers marked by means of a fabric label sewn inside the zipper three inches below the waistband with the words “assembled in Honduras”; a fabric label sewn into a pair of shorts 2 ½ inches from the waistband and 2 ½ inches from the zipper with the words “Made in Hong Kong”; and a heat-transferred label with the words “Assembled in Haiti” in red 5-point type two inches below the waistband. See HQ 735437, dated June 22, 1994; HQ 734294, dated March 20, 1992; HQ 733701, dated October 9, 1990; NY N026447, dated May 22, 2008. We have also stated that the marking requirements do not require the country of origin marking in one and only one specific location in order to be conspicuous within the meaning of 19 U.S.C. 1304. See HQ 734294. Prior rulings have also noted that even a fabric label sewn on the rear inner pocket of a pair of trousers directly below the rear waistband satisfied the requirements of T.D. 71-264(3) because the label was “prominently located on the trousers in that it can be easily seen and read upon casual examination.” See HQ 735437. In the present case, the subject jeans’ country of origin marking is displayed on a label sewn onto the waistband towards the front of the jeans, several inches from the zipper. While it is a smaller label than those which display the various “C’est Toi” logos, it is still a legible marking that is affixed in a permanent location inside the jeans’ waistband. As a result, we find that it conforms to the requirements of 19 C.F.R. §134.47. With respect to the entries of the subject merchandise that entered before Protestant’s trademark application was filed, or with logos containing non-originating place names for which no evidence of a trademark application was submitted, protestant argues that its trademark applications are based on the mark’s use in commerce, and that CBP should accept evidence of use in commerce as evidence of a trademark for the purposes of 19 C.F.R. §134.47. Protestant claims that each of its marks has been used in commerce since 2005. As evidence, Protestant points to the fact that each trademark application contains a date in 2005 as the date on which the marks began to be used in commerce. Protestant argues that the penalties for lying on a trademark application are severe, and that as a result, there is an incentive to be accurate when applying for a trademark, which bolsters the credibility of the date of first use in commerce as claimed by its pending trademark application. In support of its argument, Protestant cites HQ 734073, dated July 10, 1991, which stated that CBP was reviewing the issue of whether a trademark must be registered in order to qualify for the more lenient requirements of 19 C.F.R. §134.47. There, CBP stated that until the issue had been resolved, “the requirements of 19 C.F.R. §134.47 rather than 19 C.F.R. §134.46 will be applied to all trademarks with a U.S. reference, registered or not.” See HQ 734073. Protestant also cites HQ 734644, HQ 734455, and HQ 561060 for the proposition that CBP may accept evidence of a trademark other than registration or evidence of a pending registration application before the USPTO. At the May 5 meeting, Protestant also submitted pictures of the logos in question from their files, with dates that preceded their trademark applications, as evidence that these logos have been in commerce since 2005. In response to Protestant’s claim that the USPTO might accept evidence of use in commerce in support of a trademark application, we note that another agency’s practices are not binding on CBP. See, e.g., Amersham Corp. v. United States, 5 C.I.T. 49, 56, 564 F.Supp. 813, 817 (1983) (“statutes, regulations and administrative interpretations relating to ‘other than tariff purposes’ are not determinative of [CBP] classification disputes.”); see also HQ 962181, dated January 13, 1999; HQ H017181, dated August 25, 2008. Despite dicta in the rulings cited, CBP has never accepted evidence of use in commerce as evidence of a trademark. See HQ 561060. Even if we were to consider evidence of a trademark without actual registration or application of such, Protestant’s evidence does not show consistent use of any trademark whatsoever. The pictures of the logos at issue submitted at the May 5 meeting show only that C’est Toi has been in existence for a few years, and that the C’est Toi logo has been in flux ever since it started being used. The pictures submitted show numerous variations between the lettering and words used, both between the pictures themselves and as compared to the logos at issue in this protest. Thus, if these pictures prove anything, they undermine Protestant’s claim of a consistent trademark use. As a result, we find that for the entries of the subject merchandise that entered before Protestant’s trademark application was filed, or with logos containing non-originating place names for which no evidence of a trademark application was submitted, the more stringent marking standards of 19 C.F.R. §134.46 apply. Thus, we now examine whether the “Made in China” label on the inside of the jeans’ waistband legibly, permanently appears in close proximity to the “C’est Toi” logos. We note that the logos are displayed in multiple places inside and outside the jeans: they are displayed on the back of the jeans, inside the waistband; on the hangtag at the side of the jeans; and on a metal tag attached to the outside of the waistband at the back of the jeans. Their lettering is large and stylized. By contrast, the “Made in China” label appears in only one place: on the label sewn into the front of the jeans, near the jeans’ zipper. Furthermore, the lettering on the country of origin label is smaller and plainer than that of the “C’est Toi” logos. As a result, we find this marking insufficient for the jeans imported before JBLU’s trademark application was filed. Lastly, with respect to the samples of the imported merchandise that CBP found without any country of origin marking, this constitutes a violation of the marking statute, 19 U.S.C. §1304. As such, the regulatory standards found in 19 C.F.R. §134.46 and §134.47 are inapplicable to such merchandise. HOLDING: In accordance with provisions of 19 USC 1304 and Part 134 of the CBP Regulations, the entries of the subject merchandise entered before JBLU’s trademark application were improperly marked with the merchandise’s country of origin. The entries of the subject merchandise without any country of origin marking were also improperly marked. The entries of the subject merchandise entered after JBLU’s trademark application were properly marked with the merchandise’s country of origin. The protest and application for further review should be denied in part and allowed in part. In accordance with the Protest/Petition Processing Handbook, (CIS HB, January 2002, pp 18 and 21), you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution. Sincerely, Myles B. Harmon, Director Commercial and Trade Facilitation Division