ITC Issues Final Determination And General Exclusion Order In Certain Cigarettes (337-TA-643)
On September 21, 2009, the United States International Trade Commission issued a Notice of Commission Final Determination of Violation of Section 337 in Certain Cigarettes and Packaging Thereof (Inv. No. 337-TA-643). In the notice, the Commission affirmed the ALJ’s Initial Determination (“ID”) that Alcesia SRL (“Alcesia”) violated Section 337 and issued a general exclusion order.
As explained in our April 16 post, this investigation was instituted on April 4, 2008, based on the complaint of Philip Morris USA, Inc. The respondents include Alcesia SRL; Emarket Systems Ltd. (d.b.a. all-discountcigarettes.com); Jamen Chong (d.b.a. asiadfs.com); Tri-kita (d.b.a. cheapcigarettes4all.com); Mr. Eduard Lee (d.b.a. cigarettesonlineshop.com); Zonitech Properties Limited (d.b.a. cigline.net); Zonitech Properties Limited
(d.b.a. shopping-heaven.com); Cendano (d.b.a. galastore.com); Ms. Svetlana Trevinska (d.b.a. save-on-cigarettes.com); LMB Trading SA (d.b.a. k2smokes.ch); G.K.L. International SRL (d.b.a. allcigarettes-brandsxom); G.K.L. International SRL (d.b.a. smokerjim.net); and Best Product Solution Ltd.
On February 3, 2009, ALJ E. James Gildea issued his ID granting Phillip Morris’ motion for summary determination that Alcesia had violated Section 337 with respect to three trademarks: U.S. Trademark Registration Nos. 68,502; 378,340; and 894,450. After receiving Alcesia’s petition for review of the ID (and the responses thereto), the Commission determined to review the ID.
In the September 21 notice, the Commission affirmed ALJ Gildea’s finding that Alcesia violated Section 337 by selling for importation into the U.S. gray market cigarettes that infringe Phillip Morris’s Marlboro®, Parliament®, and Virginia Slims® trademarks. In addition, the Commission adopted the ALJ’s finding that a lack of English-language warning labels from the Surgeon General on the gray market cigarette packages makes them materially different from the U.S. market cigarettes. However, the Commission declined to adopt the ID’s finding that the gray market cigarettes’ susceptibility to seizure under the Imported Cigarette Compliance Act makes them materially different from U.S. market cigarettes. Further, the Commission took no position on the ID’s finding that a material difference exists between the gray market and U.S. market cigarettes because Phillip Morris exercises quality control over procedures for distribution, storage, and transportation of the U.S. market cigarettes, while it does not exercise this control over the gray market cigarettes.
With respect to remedy, the Commission issued a general exclusion order prohibiting the unlicensed entry of Marlboro®, Parliament®, or Virginia Slims® branded cigarettes that (a) infringe one or more of U.S. Trademark Reg. Nos. 68,502, 378,340, and 894,450 and (b) are materially different from cigarettes manufactured by or under authority of Phillip Morris for sale and use in the U.S.
