In this case we are called upon to interpret provisions of the Tariff Act of
Except as provided in subsection (d) of this section, it shall be unlawful to import into the United States any merchandise of foreign manufacture if such merchandise, or the label, sign, print, package, wrapper, or receptacle, bears a trademark owned by a citizen of, or by a corporation or association created or organized within, the United States, and registered in the Patent and Trademark Office by a person domiciled in the United States, under the provisions of sections 81 to 109 of Title 15, and if a copy of the certificate of registration of such trademark is filed with the Secretary of the Treasury, in the manner provided in section 106 of said Title 15, unless written consent of the owner of such trademark is produced at the time of making entry.
19 U.S.C. § 1526. In other words, the Act provides so-called “gray market”
2
protection to U.S. owners of trademarks associated with goods of foreign manufacture, prohibiting any other person or entity from importing goods bearing that trademark into the United States without the consent of the trademark owner.
See, e.g., K Mart Corp. v. Cartier, Inc.,
The district court granted VNA partial summary judgment, holding that the evidence showed that VNA owns and has properly registered the Vittoria trademark in the United States, that Vittoria-branded bicycle tires are manufactured overseas, and that EAI has imported Vittoria tires into the United States without VNA’s consent. EAI now appeals, arguing that the evidence was insufficient to support summary judgment on the issue of whether VNA is the U.S. owner of the Vittoria trademark. EAI further argues that VNA is not entitled to protection under the Act because VNA is controlled by the foreign manufacturer of Vittoria tires. In addition, EAI argues we should reverse because the district court improperly denied it an opportunity to file a surrebuttal to VNA’s reply brief on its motion for summary judgment. We AFFIRM.
On November 25, 1992, VNA’s predecessor Hibdon Tire Center entered into an agreement (“the 1992 Agreement”) with Vittoria S.p.A. (“Vittoria Italy”), a company organized under the laws of Italy and with headquarters in Bergamo, Italy. Hibdon Tire Center agreed to form VNA as a North American distributor of Vitto-ria tires, and Vittoria Italy agreed to designate VNA as its exclusive distributor in the United States, Canada, and Mexico. VNA distributed Vittoria-branded bicycle tires in the United States from that time forward. In February 1999, Vittoria Italy entered into an agreement (“Assignment Agreement”) with VNA purporting to assign VNA “all right, title and interest in and to the United States Trademark ‘VIT-TORIA’ and the registration therefore ..., together with the goodwill of the business connected with the use of and symbolized by said Trademark, as well as the right to sue for infringement of the Trademark or injury to said goodwill.” The Assignment Agreement stated that “[t]he purpose of this Agreement is to permit Assignee [VNA] to act against infringers and unauthorized importers of Vittoria trademarked products into the United States.” Vittoria Italy retained the right to retake title to the Trademark and its associated goodwill upon giving thirty days’ written notice to VNA.
Shortly thereafter, VNA filed suit against EAI alleging that it infringed on VNA’s trademark rights by importing Vit-toria tires into the United States without first gaining VNA’s consent. EAI concedes that it has been purchasing Vittoria-branded tires overseas and importing the tires into the United States since the early 1980s. VNA’s suit seeks damages, an injunction to prevent further importation by EAI, and confiscation of EAI’s inventory of Vittoria-branded products.
The district court granted VNA’s motion for partial summary judgment, holding that undisputed facts in the case established VNA’s right to protection under 19 U.S.C. § 1526. Vittoria N. Am., L.L.C. v. Euro Asia Imports, No. CIV-99-1357 A, slip op. at 1 (W.D.Okla. July 12, 2000). Specifically, the district court found that “Vittoria” is a registered United States Trademark, id. at 3, that Vittoria Italy assigned all of its rights, title and interest in the mark to VNA, and that the Assignment Agreement was recorded in the U.S. Patent and Trademark Office, id. The district court also found that VNA is not a subsidiary of Vittoria Italy, and has no common officers or directors with Vittoria, id. Finally, the district court found that the evidence showed EAI had imported and sold Vittoria-branded products in the United States. Id. The district court therefore enjoined EAI from further importation of Vittoria-branded products into the United States, although it did not address the issue of damages in its order. Id. at 12.
EAI now appeals the district court’s injunction. EAI contends that the evidence relied upon by the district court was insufficient to prove VNA’s ownership of the Vittoria trademark in the United States. Further, EAI argues that VNA is not entitled to protection under the Act because it falls under a regulatory exception denying gray market protection to U.S. companies if they are owned by or subject to common control with a foreign manufacturer of the trademarked goods. See 19 C.F.R. § 133.23(d)(1). Finally, EAI argues that the district court erred by failing to grant it leave to file a surrebuttal.
II. DISCUSSION
The district court had jurisdiction pursuant to 28 U.S.C. § 1331, and we exercise jurisdiction pursuant to 28 U.S.C.
We review de novo a district court’s grant of summary judgment, and affirm only if the “pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c);
see also, e.g., Simms v. Okla. ex rel. Dep’t of Mental Health & Substance Abuse Servs.,
A. Local Rule 56.1(c)
Before reaching the merits of the arguments before us, we must briefly consider a threshold issue raised by VNA. VNA contends that a statement of facts appended to VNA’s summary judgment motion should be construed as true for the purposes of this appeal because EAI violated Rule 56.1(c) of the Local Court Rules for the Western District of Oklahoma in crafting its answer brief to the summary judgment motion. Rule 56.1(c) reads:
The brief in opposition to a motion for summary judgment (or partial summary judgment) shall begin with a section which contains a concise statement of material facts to which the party asserts genuine issues of fact exist. Each fact in dispute shall be numbered, shall refer with particularity to those portions of the record upon which the opposing party relies, and, if applicable, shall state the number of the movant’s facts that is disputed. All material facts set forth in the statement of the material facts of the movant shall be deemed admitted for the purpose of summary judgment unless specifically controverted by the statement of material facts of the opposing party.
We have reviewed EAI’s answer brief, and we agree with VNA that it deviates from the requirements of Rule 56.1(c) in important respects. Nevertheless, we note that the district court did not rely on these imperfections in issuing its order, and “[t]his court has ... recognized that district courts have discretion in applying local rules.”
Hernandez v. George,
B. Transfer of Vittoria Trademark to VNA
We next consider EAI’s contention that VNA is not entitled to gray market protection under the Act. In order to prove entitlement to protection under the Act, VNA must show that it is a corporation or association created or organized within the United States, that it owns the Vittoria trademark in the United States, that the trademark is registered in the Patent and Trademark Office of the United States Customs Service, and that EAI is, without VNA’s consent, importing Vittoria-branded
EAI contests whether the evidence demonstrates that VNA owns the Vittoria trademark in the United States. First, EAI asserts that the transfer was invalid for purposes of establishing any rights to gray market protection because the transaction was not at arm’s-length and because VNA did not “pay dearly” for the assignment. EAI relies on
K Mart Corp. v. Cartier, Inc.,
EAI next asserts that the transfer was invalid because the Assignment Agreement failed to transfer the goodwill associated with the trademark along with the trademark itself. Courts have consistently held that a valid assignment of a trademark or service mark requires the transfer of the goodwill associated with the mark.
See, e.g., Sands, Taylor & Wood Co. v. Quaker Oats Co.,
EAI points to several perceived distinctions between
Premier Dental Prods,
and the facts of this case to suggest that goodwill did not transfer under the Assignment Agreement. EAI notes that the assignee
The purpose for requiring transfer of goodwill along with the transfer of the trade or service mark is to ensure that consumers receive accurate information about the product or service associated with the mark.
Sugar Busters LLC v. Brennan,
Transfer of assets is not a
sine qua non
for transferring the goodwill associated with a trademark.
See Sands, Taylor & Wood Co.,
[C]ourts now evaluate each assignment in light of the circumstances of the particular case, including both the terms of the transfer and the nature of the as-signee’s subsequent use. Recent decisions recognize that the central enquiry is whether the use of the mark by the assignee is likely to confuse prospective purchasers by departing from the expectations created by the presence of the trademark. The traditional requirement of accompanying transfer of goodwill can thus be understood as requiring that the assignment not disrupt the existing significance of the mark to consumers.
Restatement (Third) of Unfair Competition
§ 34, cmt. b (1995);
see also
J. Thomas McCarthy,
McCarthy on Trademarks and Unfair Competition,
§ 18:24 (4th ed.1997). “The courts have upheld such assignments if they find that the assignee is producing a product or performing a service substantially similar to that of the assignor and that the consumers would not be deceived or harmed.”
Marshak,
In this case, VNA’s actions both prior and subsequent to the transfer of the Vit-toria trademark were calculated to maintain continuity in the use of the mark and the public’s perceptions of the products associated with it. The record shows that VNA took significant steps throughout its
C. The Common Control Exception
We next consider whether, in spite of a valid transfer of the trademark from Vittoria Italy to VNA, a regulatory exception to the Act removes VNA from the scope of its gray market protections. The regulation in question, 19 C.F.R. § 133.23(d)(1), reads, in relevant part:
Gray market goods subject to the restrictions of this section shall be detained for 30 days from the date on which the goods are presented for Customs examination, to permit the importer to establish that any of the following exceptions ... are applicable:
(1) The trademark or trade name was applied under the authority of a ... trade name owner who is the same as the U.S. owner, a parent or subsidiary of the U.S. owner, or a party otherwise subject to common ownership or control with the U.S. owner (in an instance covered by § 133.2(d) and 133.12(d) of this part).
EAI does not allege that VNA is the same as Vittoria Italy, is a parent or subsidiary of Vittoria Italy, or that it is subject to common ownership with Vittoria Italy. Rather, EAI argues that the evidence is sufficient to show common control of the two companies or control of VNA by Vitto-ria Italy.
For the purpose of applying § 133.23(d)(1), common control is defined as “effective control in policy and operations and is not necessarily synonymous with common ownership.” 19 C.F.R. § 133.2(d)(2);
see also United States v. Eighty-Three Rolex Watches,
In this case, EAI asserts genuine questions of material fact exist with respect to the following allegations: (1) VNA and Vittoria Italy work in concert to design, develop and distribute Vittoria products; (2) VNA and Vittoria Italy make joint decisions as to “present and future product ranges”; (3) Vittoria Italy sells Vittoria-branded products directly to original equipment manufacturers in the United States; (4) Vittoria Italy pays a significant percentage of VNA’s advertising budget and exercises some measure of control over VNA’s marketing of Vittoria products; (5) Vittoria Italy determines which product lines VNA is allowed to market in the United States; (6) Vittoria Italy reim
For example, allegations of joint decision making and cooperative efforts to develop and market products for the United States at most give rise to an inference that a close business relationship exists between VNA and Vittoria Italy. Indeed, such cooperative planning is required by the 1992 Agreement. (Aplt.App. at 39, ¶ 4.2.) Similarly, Vittoria Italy’s reimbursing VNA for warranty liabilities does not give rise to an inference of control. While Vittoria Italy provides funding to support VNA’s advertising, Vittoria Italy has no legal control over how those funds are spent. EAI’s evidence that Vittoria Italy controls VNA’s employment decisions apparently consists of a single e-mail from Campagne expressing his disapproval with VNA’s management team and a “strong request” that it rehire a retired former officer of the company, which it did. Again, this is not evidence of control, but only evidence of VNA’s understandable desire to preserve a good business relationship with Vittoria Italy.
VNA is referred to as the U.S. distributor for the “Vittoria Group” in the catalog. However, deposition testimony by VNA executives explains that the term “Vittoria Group” is a collective, descriptive term used to refer to several independent companies, each of which is somehow engaged in the production or sale of Vittoria products. In contrast, EAI has offered no evidence of any legal authority enabling Vittoria Italy or any other party to control VNA’s actions.
EAI relies on a concurrence by Justice Brennan in
K Mart Corp. v. Cartier, Inc.,
discussing the legislative history behind the Act and concluding that “Congress did not intend to extend § 526’s protections to affiliates of foreign manufacturers.”
We believe EAI reads too much into Justice Brennan’s concurrence by attempting to apply the descriptive word “affiliate” to this context. First, extending the common control exception to companies who merely work together under cooperative contractual arrangements would not advance the two policy considerations for § 526 that Justice Brennan identified in his concurrence. The first of these is that independent U.S. entities which acquire rights to trademarks have significantly greater investment-backed expectations at stake than subsidiaries or other “affiliates” of foreign manufacturers.
Finally, we find no evidence that VNA and Vittoria Italy have engaged in fraud or otherwise have attempted to subvert the limits Congress placed on § 526’s protections. Although EAI alleges that VNA was created “at the behest” of Vittoria Italy, it points to no evidence that the agreement leading to the creation of VNA was anything but an arm’s-length transaction between the Hibdon Tire Center and Vittoria Italy. Further, there is no evidence that Vittoria Italy has any legal authority to control VNA’s actions, and no evidence of other connections between them such as interlocking officers or directors.
In sum, we hold that EAI has failed to demonstrate the existence of genuine questions of material fact sufficient to implicate the common control exception to the Act.
D. Denial of Leave to File Surrebuttal
EAI’s final assignment of error flows from the district court’s grant of VNA’s motion to file a reply brief in support of its motion for partial summary judgment to respond to points raised in EAI’s answer brief to the motion. VNA’s reply brief incorporated by reference an earlier submission in the case, and it contained references to some evidence that was not specifically referenced in VNA’s initial motion for partial summary judgment, although the evidence was previously before the court. Finally, VNA’s reply brief contained evidence pertaining to its registration of its trademark with the U.S. Customs Service. EAI moved unsuccessfully to file a surrebuttal to respond to the new evidence not specifically discussed in VNA’s initial summary judgment motion.
On appeal, we review the district court’s decision denying EAI’s request to file a surrebuttal for abuse of discretion.
See Beaird v. Seagate Tech., Inc.,
EAI does not allege that VNA’s reply brief contained any new legal arguments in favor of summary judgment. Further, most of the alleged new factual evidence in VNA’s reply brief was either not relied upon by the district court or was cumulative of other evidence that was already before the court. EAI does not show why it could not have included in its initial responsive brief any further factual evidence that would have been helpful to its position. More importantly, EAI does not even now clearly set forth what additional evidence it would have included had it been allowed to file a surrebuttal brief nor does it explain how such new evidence, if any, would have defeated VNA’s motion for summary judgment. Accordingly, we find no reversible error in this regard.
III. CONCLUSION
For the reasons set forth herein, we AFFIRM the grant of partial summary judgment for VNA.
Notes
. Robert Hansing died shortly before oral argument in this case. Accordingly, the Court granted a motion by trustees of the Hansing Family trust to substitute themselves for Hansing as defendants-appellants.
. "Gray market goods” are defined to include "[f]oreign-manufactured goods, bearing a valid United States trademark, that are imported without the consent of the U.S. trademark holder.” Black’s Law Dictionary 701 (6th ed.1990).
. To the extent that EAI's briefs can be construed to argue that the evidence gives rise to an inference that the Assignment Agreement was a sham, we disagree. EAI notes correctly that the evidence is sufficient to show that Vittoria Italy continues to market directly to original equipment manufacturers
("OEMs”)
— i.e., bicycle manufacturers — in the United States and Canada. Further, EAI points out that the Assignment Agreement contains a clause entitling Vittoria Italy to retake possession of the U.S. rights to the trademark with thirty days written notice. However, Vittoria Italy’s continued sales to U.S. OEMs does not show that the transfer lacked validity. Rather, it demonstrates only that VNA has failed to enforce its trademark with respect to that market against Vittoria Italy. Likewise, the thirty-day reassignment clause does not establish that the transfer is a sham, as the district court noted in its summary judgment order.
Premier Dental Prods. Co. v. Darby Dental Supply Co.,