Blue Jeans Imports by LA Company Challenge Labeling Requirements

In 2010, JBlu Inc., a longtime Los Angeles clothing company, imported some 500,000 pairs of blue jeans from China in 11 shipments through the Port of Long Beach—all headed for retail stores around the country.

The jeans came in under various labels including C’est Toi Jeans USA, C’est Toi Jeans Los Angeles and CT Jeans USA. Even though the Los Angeles company had been in business for years, it had not officially registered its trademarks with the federal government. Instead it relied on usage to stake its claim to the names as common-law trademarks.

But things got a little sticky between Sept. 11 and Oct. 20 of 2010, when customs officials stopped several shipments for alleged labeling problems.

According to customs regulations going back to 1968, products that have a geographic name on them must sew the label showing where the garment was manufactured right next to the American location printed on the brand label. Trademarks only have to have the origin label sewn in a “conspicuous” location rather than in “close proximity.”

Customs officials noted that JBlu’s jeans—whose brand names included the words USA and Los Angeles—did not have the “Made in China” label right next to its brand label on the back waistband. Instead, the “Made in USA” label was sewn inside the front section of the waist band near the zipper, according to court documents.

Meanwhile, as the customs problems were unfolding, JBlu applied to register its C’est Toi Jeans USA and CT Jeans USA on Oct. 8, 2010, with the U.S. Patent and Trademark Office, showing the labels had been in use since 2005.

For the 350,000 jeans that came in before Oct. 7, before the trademark registration application was filed, customs officials said JBlu would have to go back and sew in new country-of-origin labels next to the embroidered brand label—at a cost estimated at $1.25 per pant—before entering the United States.

Customs officials pointed out that unregistered trademarks with the names of locations in them need to have their labels located “close by,” showing where the jeans were manufactured instead of in a “conspicuous” location.

Not happy with that outcome, JBlu in 2012 hired Los Angeles attorney Elon Pollack of Stein Shostak Shostak Pollack & O’Hara to contest that opinion, going to the Court of International Trade in Washington, D.C., for a ruling.

The Court of International Trade in early 2015 decided that the customs officials were correct in their decision, according to court documents.

JBlu then appealed its case to the U.S. Court of Appeals for the Federal Circuit. Pollack argued that trademark unambiguously includes federally registered and common-law trademarks.

In court papers, the company said the trademark statute, the Lanham Act, and the dictionary definitions of a trademark note that it is a “name, symbol, figure, letter, word or mark adopted and used by a manufacturer or merchant in order to designate his goods and to distinguish them from any other.”

On March 2, the appeals court ruled that the Court of International Trade had made a mistake because “trademark unambiguously includes unregistered trademarks that are not subject to a pending application” as a trademark. Basically, said Circuit Judge Kimberly Moore, a trademark is a trademark, and the three-judge panel unanimously reversed the Court of International Trade’s decision.

Pollack said the decision is significant for apparel manufacturers. It is particularly important if the goods arrive in a port and are withheld from delivery until relabeled. “If you want to establish your brand in commerce, you don’t have to worry that you are going to be told to relabel your product in a fashion that might detract from the way the product looks,” he said. “If your embroidered label is in the back, you don’t have to worry about having an inch-high ‘Made in China’ label right next to it.”