Issue 112 | September 24, 2003
Gray Market Non-Physical
Differences Under Review
 In a case that has yet to generate much media attention, the U.S. International Trade Commission is considering what scope of non-physical differences must exist between authorized products and unauthorized gray market imports before the goods can be excluded from entry into the U.S.

The case arises under the so-called "Lever-rule," codified in 19 CFR 133.23, requiring that imported gray market goods be "physically and materially different" from the articles that are authorized by the U.S. trademark owner before the Customs Service will require a (sales-killing) label stating that "This product is not a product authorized by the United States trademark owner for importation and is physically and materially different from the authorized product.''

During its Bearings investigation, 337-TA-469, the Commission announced in June 2003 that it would review Administrative Law Judge Terrell's recommendation for issuing a general exclusion order stopping the gray market imports. The Notice specifically requested that the parties "discuss any legal and policy bases for finding gray market trademark infringement where no physical differences exist between the authorized an unauthorized products." Upon reviewing the parties' submissions on that legal issue, the Commission decided to remand the case to Judge Terrell for further findings on the factual issues surrounding differences in warranties, product recall procedures, post-sale services, and sales volumes. A hearing on those issues in now scheduled for October 28-30, 2003 with Judge Terrell's Initial Determination to be completed by February 12, 2004.

In other Section 337 news, the ITC Trial Lawyers Association will hold its Annual Meeting on November 13, 2003 at 2:00 PM EST in the ITC main hearing room and then adjourn for a cocktails and dinner at 5:00 PM. The activities include two panel presentations and a review of the past year's case law developments. ITCTLA members can also participate by video conference at the Palo Alto, California offices of Finnegan Henderson, beginning with brunch at 10:30 AM PST and concluding at 2:00 PST. ITCTLA membership information is available at http://www.itctla.org/membersh.htm.

Contact the author of this issue, Bill Heinze (bill.heinze@tkhr.com) at Thomas, Kayden, Horstemeyer & Risley in Atlanta, Georgia USA.

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