Appropriate and Balanced Lever Rule (19cfr13323graymarketrestrictions) application is a priority issue for the American Free Trade Association (“AFTA™”) because the threshold of what constitutes a “material difference” sufficient to restrict lawful importation of genuine, branded goods is scaringly low. Today, AFTA™ is closing watching the progress of MorrocanOil, Inc.’s Lever Rule application which was published in the Customs Bulletin of June 11, 2014 (MoroccanOil Lever-Rule application_Customs Bulletin 6-11-2014).
As described in WagTheDog, “…courts have held that even “subtle differences” are enough to give rise to consumer confusion supporting a claim of trademark infringement. Material differences have been broadly interpreted to include: different warranties, Cabbage Patch dolls with Spanish language birth certificates and adoptions, different soap ingredients, TIC TACS with a different size and different calorie counts, chocolates with different shapes, quality control differences, packaging or labeling differences, or different advertising participation of marketing methods.” (page10 of WagTheDog)
Importantly, a Gray-Market Restricted Product (19cfr13323graymarketrestrictions) has been produced under or with authority of the U.S. trademark owner. It may be physically composed, in all respects, of the very same ingredients and the very same amount of those ingredients found in the same MorrocanOil® authorized for sale in the U.S. In fact, a Gray-Market Restricted Product could qualify as such if the only “physical and/or material” difference between it and the more expensive but authorized article is something as mundane as the label language, quality or color.
As noted above, CBP published notice that MoroccanOil, Inc. had applied for Lever Rule Protection in the Customs Bulletin of June 11, 2014 (MoroccanOil Lever-Rule application_Customs Bulletin 6-11-2014). It may be several months before CBP publishes its decision whether or not to grant Lever Rule protection to this particular trademark owner. AFTA™ is, however, monitoring this application (and others) closely and urges any importer, distributor or consumer with any questions or concerns to contact us directly at firstname.lastname@example.org.