American Circuit v. Oregon Breakers ( 2005 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
AMERICAN CIRCUIT BREAKER 
CORPORATION, a New York
corporation,
No. 03-35375
Plaintiff-Appellant,
v.  D.C. No.
CV-01-00308-DCA
OREGON BREAKERS INC., an Oregon
OPINION
Corporation; STEPHEN REAMES, an
Oregon resident,
Defendants-Appellees.

Appeal from the United States District Court
for the District of Oregon
Donald C. Ashmanskas, Magistrate, Presiding
Argued and Submitted
June 9, 2004—Seattle, Washington
Filed April 25, 2005
Before: Melvin Brunetti, M. Margaret McKeown, and
Ronald M. Gould, Circuit Judges.
Opinion by Judge McKeown
4627
AMERICAN CIRCUIT BREAKER v. OREGON BREAKERS 4629
COUNSEL
Alan S. Cooper, Shaw Pittman, Washington, D.C., for the
plaintiff-appellant.
Todd L. Van Rysselberghe, Kennedy, Watts, Arellano &
Ricks, Portland, Oregon, for the defendant-appellee.
4630 AMERICAN CIRCUIT BREAKER v. OREGON BREAKERS
OPINION
McKEOWN, Circuit Judge:
Few subjects have generated more ink and consternation in
the trademark arena in recent years than the topic of parallel
imports/gray market goods. In general terms, a gray market
good, often referred to as a parallel import, is “[a] foreign-
manufactured good, bearing a valid United States trademark,
that is imported without the consent of the United States
trademark holder.” K Mart Corp. v. Cartier, Inc., 486 U.S.
281, 285 (1988). Indeed, the debate is not a new one, as Con-
gress jumped on the bandwagon in the early 1900s to provide
United States trademark holders a remedy under the Tariff
Act against importation of genuine goods bearing a United
States trademark. Tariff Act of 1922 § 526, 42 Stat. 975 (later
reenacted in identical form as Tariff Act of 1930 § 526, 19
U.S.C. § 1526). That legislation, amended over the years, did
not quell the confusion and uncertainty, especially regarding
the relationship between infringement claims under the Lan-
ham Act and claims under the Tariff Act.
It is no surprise then that the parties to this dispute have
diametrically opposed views as to how the case should be
analyzed. At issue is the sale in the United States of circuit
breakers imported from Canada under the trademark STAB-
LOK. In an ironic twist, the circuit breakers are gray. Whether
viewed as a gray market case or not, American Circuit
Breaker Corporation (“ACBC”) must establish a “likelihood
of confusion” to prevail.
The essential facts are undisputed. ACBC holds the STAB-
LOK trademark in the United States. Schneider Canada holds
the STAB-LOK trademark in Canada. Federal Pioneer Lim-
ited (“Pioneer”), a subsidiary of Schneider Canada, manufac-
tures circuit breakers for itself and ACBC. The circuit
breakers sold by the companies are identical except for the
casing color. Pioneer manufactures black circuit breakers for
AMERICAN CIRCUIT BREAKER v. OREGON BREAKERS 4631
ACBC and gray ones for itself. The parties have stipulated
that, except for the casing color, there are no material differ-
ences between the products, and that the gray circuit breakers
are “genuine” versions of the black ones. This dispute arose
because Oregon Breakers bought gray circuit breakers from a
Canadian third-party supplier and, without permission from
ACBC, sold them in the United States.
The question we address is whether the district court erred
in dismissing ACBC’s claims against Oregon Breakers for
trademark infringement and unfair competition. We affirm the
court’s dismissal of the claims.
I. FACTUAL BACKGROUND
Although the current relationships among the various com-
panies are fairly straightforward, we briefly discuss the his-
tory of the STAB-LOK trademark because an understanding
of where and when the parties derived their trademark rights
provides useful background to our analysis.
In 1950, Federal Pacific Electric Company (“FPE”)
adopted the trademark STAB-LOK for circuit breakers. FPE
eventually sold its U.S. circuit breaker business, including the
U.S. STAB-LOK trademark, to Challenger Electric. In 1988,
Challenger Electric sold the circuit breaker portion of its busi-
ness to ACBC’s predecessor, which in turn assigned all of its
rights in the business and trademark to Provident Industries,
Inc. Provident Industries, Inc. changed its corporate name to
American Circuit Breaker Corporation in late 1988.
Since 1950, ACBC and its predecessors have continuously
used the trademark STAB-LOK on advertising, marketing,
and sales of circuit breakers in the United States. ACBC is the
record owner of the U.S. mark STAB-LOK, which was issued
in 1988. Under the Lanham Act, the mark is incontestable and
ACBC has the exclusive right to use the mark. See Entrepre-
4632 AMERICAN CIRCUIT BREAKER v. OREGON BREAKERS
neur Media, Inc. v. Smith, 279 F.3d 1135, 1139 n.1 (9th Cir.
2002) (citing 15 U.S.C. §§ 1065, 1115(b)).
In 1952, Federal Electric Products Company, a U.S. com-
pany that was later merged into FPE, registered the trademark
STAB-LOK in Canada. Until 1988, Pioneer, the manufacturer
of the gray circuit breakers, was a Canadian subsidiary of
FPE. The Canadian registration of STAB-LOK was assigned
to Pioneer in 1986.
In 1988, FPE sold Pioneer to a Canadian company that had
no relationship to Challenger Electric or any other predeces-
sor of ACBC. In 1999, Pioneer assigned the Canadian trade-
mark STAB-LOK to its parent company, Schneider Canada.
Prior to 1993, ACBC manufactured black STAB-LOK cir-
cuit breakers for the U.S. market at its plant in Albemarle,
North Carolina, and Pioneer manufactured in Canada gray
STAB-LOK circuit breakers for the Canadian market. Follow-
ing an intellectual property dispute in the early 1990s, ACBC
entered into an agreement with Pioneer and Schneider Can-
ada.
Part of the dispute centered around Pioneer’s claim that it
had acquired rights to market under the STAB-LOK mark in
the United States, as well as Canada. Although the details of
the settlement agreement are confidential, the parties reveal
the key elements in their briefs. Under the agreement, Pioneer
manufactures black STAB-LOK circuit breakers for ACBC
for sale in the United States and ACBC has agreed to pur-
chase guaranteed minimums from Pioneer. Pioneer continues
to manufacture gray STAB-LOK circuit breakers for sale in
Canada by Pioneer. The agreement forbids Pioneer from sell-
ing its STAB-LOK circuit breakers in the United States for
the term of the agreement. The effect of the agreement is that,
although ACBC originally acquired its U.S. rights in the
STAB-LOK mark from Challenger Electric, a U.S. company,
AMERICAN CIRCUIT BREAKER v. OREGON BREAKERS 4633
ACBC’s exclusivity of those trademark rights came about
through the deal it struck with Pioneer, a Canadian company.
Accordingly, since 1993, both black and gray circuit break-
ers have been manufactured by Pioneer in Canada and both
bear the STAB-LOK trademark, as well as an indication that
“Federal Pioneer Limited” is the manufacturer and that the
breakers are manufactured in Canada. The parties agree that
there are no material differences between ACBC’s black
STAB-LOK circuit breakers and the gray STAB-LOK circuit
breakers. Finally, the agreement provides that ACBC will
assign its rights in the trademark STAB-LOK to Pioneer at the
conclusion of the agreement.
From 1997 to 2000, Oregon Breakers sold gray Pioneer-
manufactured STAB-LOK circuit breakers in the United
States. Oregon Breakers purchased the circuit breakers from
Merchant Pier, a Canadian distributor of circuit breakers and
imported them into the United States for resale.
In sum, this case involves a U.S. trademark owner which
contracts with a foreign, but historically affiliated manufac-
turer that owns the identical trademark in the foreign jurisdic-
tion. The foreign trademark owner legitimately manufactures
goods for both markets, which goods are identical except for
color. A third party then imports identical goods manufac-
tured under the foreign trademark into the United States, in
competition with the U.S. trademark owner’s products.
II. PROCEDURAL HISTORY
ACBC filed suit in the District of Oregon asserting claims
for trademark infringement, unfair competition, and trade-
mark dilution against Oregon Breakers. ACBC initially
sought partial summary judgment on its claim for trademark
infringement under § 32(1) of the Lanham Act, 15 U.S.C.
§ 1114, and the related claim of unfair competition under
§ 43(a) of the Lanham Act, 15 U.S.C. § 1125.
4634 AMERICAN CIRCUIT BREAKER v. OREGON BREAKERS
In ruling on the summary judgment motion, the district
court pointed out that “the gray circuit breakers are manufac-
tured in Canada by the same manufacture[r] from which
ACBC imports ‘genuine’ breakers” and that “[Pioneer] and
ACBC are not completely at arm’s length.” The court also
noted that “ACBC concedes that there is no material differ-
ence between the gray and black breakers.” In an Opinion and
Order, the district court denied the motion, however, because
there were material questions of fact as to whether the gray
circuit breakers were genuine and whether the quality control
procedures resulted in differences between the breakers.
After denial of ACBC’s motion, the parties stipulated to
entry of final judgment, with ACBC reserving its right to
appeal the dismissal of the trademark and unfair competition
claims. In the stipulation, the parties agreed that:
There are no material differences between ACBC’s
black STAB-LOK circuit breakers and the gray
STAB-LOK circuit breakers offered for sale and
sold by Oregon Breakers. The gray STAB-LOK cir-
cuit breakers accordingly are “genuine products” as
that term is defined by the Court at p. 6 of the Opin-
ion and Order.1
Although the stipulation effected a complete dismissal with
prejudice of all claims, the parties stipulated that in the event
of reversal and an eventual trial, the issues of the strength and
meaning of the trademark STAB-LOK, and whether ACBC
has exercised control over the quality of the black STAB-
1
In its Opinion and Order, the district court cited Iberia Foods Corp. v.
Romeo, 150 F.3d 298, 302-03 (3d Cir. 1998), for the proposition that
“[t]he test for whether an alleged infringer’s products are genuine asks
whether there are ‘material differences’ between the products sold by the
trademark owner and those sold by the alleged infringer.”
AMERICAN CIRCUIT BREAKER v. OREGON BREAKERS 4635
LOK circuit breakers manufactured by Pioneer for ACBC for
resale in the United States would be resolved at trial.2
The district court accepted the stipulation, entered a final
judgment that incorporated the stipulation and various modifi-
cations of its earlier Opinion and Order, and dismissed all of
ACBC’s claims. ACBC appeals only the dismissal of its
claims for trademark infringement and unfair competition.
III. DISCUSSION
A. Katzel AND THE EMERGENCE OF TERRITORIALITY
It is now generally agreed and understood that trademark
protection encompasses the notion of territoriality. The
Supreme Court ushered in this concept more than eighty years
ago in A. Bourjois & Co. v. Katzel, 260 U.S. 689 (1923).
Understanding Katzel in the context of the transition from the
notion of universality of trademarks to the emergence of terri-
toriality sheds light on the dispute here.
As McCarthy, one of the leading commentators in the
trademark arena notes: “Early U.S. cases refused to protect
U.S. trademark owners from parallel imports of genuine
goods obtained from the foreign manufacturer.” J. Thomas
McCarthy, McCarthy on Trademarks and Unfair Competi-
tion, § 29:51 (4th ed. West 2005) (citing Apollinaris Co. v.
Scherer, 27 F. 18 (C.C.N.Y. 1886)); Fred Gretsch Mfg. Co.
v. Schoening, 238 F. 780 (2d Cir. 1916)). These early cases
were decided under the then-dominant principle of universal-
ity of trademarks. The universality principle
2
We closely scrutinized the stipulation to assure ourselves that there was
a complete dismissal of all claims. We are satisfied that there was a final
judgment and that the parties’ articulation of these two issues was meant
to clarify that the dismissal was predicated on the stipulation and that, in
the view of the parties, these two matters were not material issues of fact
nor were they stipulated issues of fact.
4636 AMERICAN CIRCUIT BREAKER v. OREGON BREAKERS
stands for the proposition that a trademark serves the
sole purpose of identifying the source of a product.
Under this principle, a trademark is valid if it cor-
rectly identifies the origin or source of the product,
regardless of where the consumer purchases the
product. A gray market product does not violate
trademark rights under the universality principle as
long as it bears a genuine trademark that identifies
the source of the product.
Jerome Gilson, 1 Trademark Protection and Practice,
§ 4.05[5] (2004). Katzel came to the Supreme Court on a writ
of certiorari from the Second Circuit. The plaintiff in Katzel
purchased a French cosmetic firm’s U.S. business, along with
its goodwill and U.S. trademark “Java,” which was used on
face powder. Katzel, 260 U.S. at 690. The plaintiff continued
to purchase the face powder from the French firm and used
“substantially the same form of box and label as its predeces-
sors” but “uses care in selecting colors suitable for the Ameri-
can market . . . .” Id. at 691. The Court pointed out that “the
labels have come to be understood by the public here as
meaning goods coming from the plaintiff.” Id. The defendant
was a third party who purchased the same face powder in
France and resold it in the United States “in the French boxes
which closely resemble those used by the plaintiff . . . .” Id.
[1] Following precedent based on the principle of univer-
sality, the Second Circuit concluded that there was no trade-
mark infringement. A. Bourjois & Co. v. Katzel, 275 F. 539,
540 (2d Cir. 1921) (“The question is whether the defendant
has not the right to sell this article under the trade-marks
which truly indicate its origin. We think she has.”). In quick
response to the ruling and with the intent of overruling the
decision, Congress enacted § 526 of the Tariff Act of 1922,
while Katzel was on appeal. See K Mart, 486 U.S. at 287-88;
see also McCarthy, supra, § 29:51. Section 526, which has
since been reenacted as § 526 of the 1930 Tariff Act, 19
U.S.C. § 1526, prohibits importation of foreign-manufactured
AMERICAN CIRCUIT BREAKER v. OREGON BREAKERS 4637
goods bearing a registered trademark owned by a U.S. citizen
or corporation. Unlike a trademark infringement action under
§ 32 of the Lanham Act, the remedy under § 526 is prohibi-
tion of importation of the goods.
The Supreme Court subsequently reversed the Second Cir-
cuit and held that the plaintiff’s trademark rights were
infringed, though the Court did not reference the new legisla-
tion. Katzel, 260 U.S. at 691. The Court reasoned that the
“monopoly of a trade-mark . . . deals with a delicate matter
that may be of great value but that easily is destroyed, and
therefore should be protected with corresponding care.” Id. at
692. The Court then explained:
It is said that the trade-mark here is that of the
French house and truly indicates the origin of the
goods. But that is not accurate. It is the trade-mark
of the plaintiff only in the United States and indi-
cates in law, and, it is found, by public understand-
ing, that the goods come from the plaintiff although
not made by it. It was sold and could only be sold
with the good will of the business that the plaintiff
bought. It stakes the reputation of the plaintiff upon
the character of the goods.
Id. at 692 (internal citation omitted).
The Katzel decision marked a dramatic change in trade-
mark law by adopting the principle of “territoriality” of trade-
marks and moving away from the rule of “universality.” See
McCarthy, supra, § 29:51; Gilson, supra, § 4.05[5]. Under the
territoriality principle, a “trademark has a separate legal exis-
tence in each country and receives the protection afforded by
the laws of that country.” Gilson, supra, § 405[5].
Between the Supreme Court’s decision in Katzel and the
early 1980s “the legal journals [were] the main battleground”
over the issue of whether a U.S. trademark holder could pre-
4638 AMERICAN CIRCUIT BREAKER v. OREGON BREAKERS
vent the importation of “genuine” gray market goods. Bell &
Howell: Mamiya Co. v. Masel Supply Co., 548 F. Supp. 1063,
1065 (E.D.N.Y. 1982). Changing world economic conditions
during the 1980s ushered in a dramatic increase in the number
of cases dealing with the issue. See McCarthy, supra, § 29:46.
Some courts limited Katzel to its particular facts. See, e.g.,
Weil Ceramics and Glass, Inc. v. Jalyn Corp., 878 F.2d 659,
669 (3d Cir. 1989) (“We do not read Katzel to extend beyond
[its] circumstance.”); Olympus Corp. v. United States, 792
F.2d 315, 321-22 (2d Cir. 1986) (holding that § 42 of the Lan-
ham Act did not apply to genuine goods in cases that did not
present the same equities as Katzel). In contrast, in Osawa v.
B & H Photo, 589 F. Supp. 1163 (S.D.N.Y. 1984), the court
thoroughly embraced the shift from universality to territorial-
ity ushered in by Katzel, explaining that, under the territorial-
ity principle:
[a trademark’s] proper lawful function is not neces-
sarily to specify the origin or manufacture of a good
(although it may incidentally do that), but rather to
symbolize the domestic goodwill of the domestic
markholder so that the consuming public may rely
with an expectation of consistency on the domestic
reputation earned for the mark by its owner, and the
owner of the mark may be confident that his good-
will and reputation (the value of the mark) will not
be injured through use of the mark by others in
domestic commerce.
Id. at 1172.
More recently, the principle of territoriality “has been criti-
cized as obsolete in a world market where information prod-
ucts like computer programs cannot be located at a particular
spot on the globe.” McCarthy, supra, § 29:1. Nevertheless,
Katzel remains good law and found expression in the more
recent K Mart case.
AMERICAN CIRCUIT BREAKER v. OREGON BREAKERS 4639
B. K Mart AND GRAY MARKET GOODS
In 1988, the Supreme Court in K Mart provided a useful
tutorial on gray market goods. K Mart involved a challenge
to Customs Service regulations implementing § 526 of the
Tariff Act.3 The Court began its opinion by explaining that “A
gray-market good is a foreign-manufactured good, bearing a
valid United States trademark, that is imported without the
consent of the United States trademark holder.” K Mart, 486
U.S. at 285 (emphasis added). The Court then went on to
describe the three general gray market scenarios.
The “prototypical” context, based on Katzel, see id. at 287,
arises where “a domestic firm . . . purchases from an indepen-
dent foreign firm the rights to register and use the latter’s
trademark as a United States trademark and to sell its foreign-
manufactured products here.” Id. at 286. If the foreign manu-
facturer or a third party imports the products into the United
States, they would be gray market goods competing with the
trademark holder’s goods. Id.
The second gray market scenario is where a domestic firm
registers the U.S. trademark “for goods that are manufactured
abroad by an affiliated manufacturer.” Id. The Court detailed
three variations that fit under this example: a) a foreign firm
incorporates a subsidiary in the United States which then reg-
isters the U.S. trademark (which is identical to the foreign
parent firm’s trademark) in its own name; b) “an American-
based firm establishes abroad a manufacturing subsidiary cor-
poration”; or c) an American-based firm establishes abroad
“its own unincorporated manufacturing division . . . to pro-
3
Although K Mart involved § 526 of the Tariff Act, it serves as guid-
ance for our analysis of §§ 32 and 43 of the Lanham Act. See Weil Ceram-
ics & Glass, Inc., 878 F.2d at 661 (“K Mart is also instructive to the
disposition of the Appellee/Cross-Appellant’s contentions regarding §§ 42
and 32.”); see also Gilson, supra, § 4.05[4] (noting that the customs ser-
vice has adopted the likelihood of confusion test of § 32 of the Lanham
Act in determining whether a violation of § 526 exists).
4640 AMERICAN CIRCUIT BREAKER v. OREGON BREAKERS
duce its United States trademarked goods, and then imports
them for domestic distribution.” Id. at 286-87. All of these
variations involve “common control” of the United States and
foreign trademark holders. See Gilson, supra, § 4.05[6].
The third gray market scenario is where the “domestic
holder of a United States trademark authorizes an independent
foreign manufacturer to use it.” K Mart, 486 U.S. at 287
(emphasis in original). “Usually the holder sells to the foreign
manufacturer an exclusive right to use the trademark in a par-
ticular foreign location, but conditions the right on the foreign
manufacturer’s promise not to import its trademarked goods
into the United States.” Id. This situation usually arises when
the U.S. firm owns both the domestic and foreign trademarks
and licenses its use to a foreign manufacturer in a foreign
country. See Gilson, supra, § 4.05[6].
The circumstances here most closely approximate Katzel,
which is also K Mart’s case 1. There are both similarities and
differences between Katzel and the present case. In each case,
separate companies owned the trademark in the United States
and the trademark in the foreign jurisdiction. In both cases the
plaintiff and the third party defendant acquired the product
from the foreign manufacturer. And, in both cases the plain-
tiff’s product has a valid U.S. trademark and the defendant’s
product has a valid trademark from the foreign trademark
owner. Although ACBC did not purchase the U.S. trademark
from a foreign company, its predecessor purchased those
rights from a U.S. company that was a common predecessor
to ACBC and Pioneer. And, unlike the labels in Katzel, the
record here does not indicate that the black circuit breaker
casing “ha[s] come to be understood by the public here as
meaning goods coming from the plaintiff.” Katzel, 260 U.S.
at 691.
At least one prominent commentator has argued that the
first K Mart context did not fit the definition of gray market
at all because “the U.S. trademark owner did not own the
AMERICAN CIRCUIT BREAKER v. OREGON BREAKERS 4641
mark abroad.” Gilson, supra, § 4.05[6]. Indeed, determining
whether such goods should be labeled as gray market is a bit
tricky given the fact that the Supreme Court explained that
gray market goods must have “a valid United States trade-
mark,” but also described the first K Mart context as the pro-
totypical gray market situation. Caught up in the confusion,
the parties spend a great deal of energy wrangling over
whether this is a gray market case. ACBC claims it is not
bringing a gray market claim because the marks are owned by
independent corporations. Oregon Breakers argues that, as a
result of the 1993 agreement, the companies are not truly
unrelated and that the relationship fits within several of the K
Mart criteria.
[2] In the end, whether this is technically classified as a
gray market case or not does not drive the solution. Ulti-
mately, what is at issue is whether there is a likelihood of con-
fusion as to source under the well established precedent of
§§ 32 and 4B(a) of the Lanham Act.4 Neither Katzel nor K
Mart preclude a finding of trademark infringement as a matter
of law in this context. As McCarthy notes, “the ultimate issue
in a trademark infringement suit against the importer of gray
market imports is the factual question of likelihood of confu-
sion of U.S. customers.” McCarthy, supra, § 29.46; see
Brookfield Communications, Inc. v. West Coast Entm’t Corp.,
174 F.3d 1036, 1053 (9th Cir. 1999) (“The core element of
trademark infringement is the likelihood of confusion, i.e.,
whether the similarity of the marks is likely to confuse cus-
tomers about the source of the products.”) (citations omitted);
New West Corp. v. NYM Co., 595 F.2d 1194, 1201 (9th Cir.
4
It bears noting that the circumstances of this case suggest that ACBC
would have had a remedy under the Tariff Act. See K Mart, 486 U.S. at
288 (explaining that, subject to certain exceptions, § 526 of the Tariff Act
prohibits the importation of “[f]oreign-made articles bearing a trademark
identical with one owned and recorded by a citizen [or corporation] of the
United States”); Parfums Givenchy v. Drug Emporium, Inc., 38 F.3d 477,
484 (9th Cir. 1994) (explaining same, and noting that the purpose of § 526
“is to protect domestic companies against foreign competition”).
4642 AMERICAN CIRCUIT BREAKER v. OREGON BREAKERS
1979) (“Whether we call the violation infringement, unfair
competition or false designation of origin, the test is identical
is there a ‘likelihood of confusion?’ ”); see also Societe Des
Produits Nestle v. Casa Helvetia, Inc., 982 F.2d 633, 640 (1st
Cir. 1992) (“Whether the fulcrum of plaintiffs’ complaint is
perceived as section 32(1)(a), section 42, or section 43(a), lia-
bility necessarily turns on the existence vel non of material
differences between the products of a sort likely to create con-
sumer confusion.”).
C. ABSENCE OF THE LIKELIHOOD OF CONFUSION
The likelihood of confusion test centers on weighing the
so-called Sleekcraft factors that range from the strength of the
mark to the degree of care customers are likely to exercise.
See AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-49 (9th
Cir. 1979). These factors do not guide our analysis here, how-
ever, because the parties have, in effect, short circuited the
case through their stipulation.
[3] Determining whether the record sustains an infringe-
ment claim is not straightforward in this instance. This case
is made more complicated by the parties’ efforts to resolve it
via stipulation and subsequent dismissal of claims. Rather
than a clean set of district court findings or a comprehensive
opinion, we are left to piece together the meaning of the final
judgment, which incorporates but modifies the court’s earlier
Opinion and Order and encompasses the parties’ factual stipu-
lations. Reading the record in conjunction with the final judg-
ment leads us to conclude that there is no material issue of
fact with respect to infringement, that ACBC failed to estab-
lish infringement and, consequently, the dismissal of claims
was appropriate.
The bulk of the record evidence relates to the nature of the
circuit breakers sold by Oregon Breakers, namely whether
they are genuine STAB-LOK circuit breakers and the quality
control conditions of their manufacture. After much back and
AMERICAN CIRCUIT BREAKER v. OREGON BREAKERS 4643
forth, the parties stipulated that there are no material differ-
ences between the black and the gray breakers, and that the
gray breakers are “genuine” products in relation to the black
breakers.
[4] Because of this stipulation and the related court order,
this case is governed by the rule we set out in NEC Elecs. v.
Cal Circuit ABCO, 810 F.2d 1506, 1510 (9th Cir. 1987) (cita-
tions omitted): “Trademark law generally does not reach the
sale of genuine goods bearing a true mark even though such
sale is without the mark owner’s consent.” Here, the parties
have agreed that the goods were genuine vis-a-vis the ACBC
goods bearing the same mark.5 The NEC rule makes good
sense and comports with the consumer protection rationale of
trademark law: “[T]rademark law is designed to prevent sell-
ers from confusing or deceiving consumers about the origin
or make of a product, which confusion ordinarily does not
exist when a genuine article bearing a true mark is sold.” Id.
[5] The upshot of the stipulation between ACBC and Ore-
gon Breakers is that consumers purchasing circuit breakers
from Oregon Breakers are getting exactly the same circuit
breaker, both in specification and quality, as they would pur-
chase from ACBC. In other words, the goods are genuine.
Rather than being confused, customers who purchase the gray
STAB-LOK circuit breakers from Oregon Breakers get
exactly what they expect. See Iberia Foods Corp. v. Romeo,
150 F.3d 298, 303 (3d Cir. 1998) (“[W]hen the differences
between the products prove so minimal that consumers who
purchase the alleged infringer’s goods ‘get precisely what
they believed that they were purchasing,’ consumers’ percep-
tions of the trademarked goods are not likely to be affected by
5
Because of the unusual factual backdrop in this case and the multiple
stipulations of the parties, we need not consider the situation in which
goods bearing a foreign trademark are sold in the United States and the
distributor markets goods “of one make under the trademark of another.”
Champion Spark Plug Co. v. Sanders, 331 U.S. 125, 128 (1947).
4644 AMERICAN CIRCUIT BREAKER v. OREGON BREAKERS
the alleged infringer’s sales.”) (internal citation omitted). In
short, because there is no material fact as to infringement,
ACBC’s claims of trademark infringement and unfair compe-
tition must fail.
What is missing here is evidence of infringement that
undermines ACBC’s goodwill or leaves consumers in a state
of “legal confusion.” As the First Circuit observed:
By and large, courts do not read Katzel and Aldridge
to disallow the lawful importation of identical for-
eign goods carrying a valid foreign trademark. . . .
[T]erritorial protection kicks in under the Lanham
Act where two merchants sell physically different
products in the same market and under the same
name, for it is this prototype that impinges on a
trademark holder’s goodwill and threatens to deceive
consumers.
Societe Des Produits Nestle, 982 F.2d at 637 (internal cita-
tions omitted). We do not need to go as far as our sister cir-
cuit’s circumscription of Katzel because the answer here is
found in the parties’ stipulated record as to genuine products.
IV. CONCLUSION
[6] Although ACBC frames the issue as the district court’s
error in declining to grant partial summary judgment in its
favor, the stipulations changed the face of the case and moved
it beyond the initial motion. As to the motion, we agree that
the district court correctly pinpointed several material dis-
puted facts that precluded judgment in favor of ACBC. Once
those disputes fell out of the case via stipulation, the question
is whether the district court properly dismissed ACBC’s
claims. We conclude that the dismissal is supported by the
law, the stipulation, and the record.
AFFIRMED.