940 F. 2d 1537 - Yamaha Corporation of America Usa v. Abc International Traders Inc Yamaha Corporation of America Usa

Nos. 90-55036, 90-55120.

United States Court of Appeals, Ninth Circuit.

Before SCHROEDER and REINHARDT, Circuit Judges, and KING,* District Judge.

MEMORANDUM**

This case began as an action filed by Yamaha Corporation of America ("Yamaha") against ABC International Traders, Inc. ("ABC"), for trademark infringement and violations of the Tariff Act, 19 U.S.C. Sec. 526, based upon ABC's parallel importation of products to which Yamaha claims exclusive trademark rights. ABC filed a counterclaim, alleging that Yamaha's practices, designed to insure the exclusivity of its distribution of the products involved, violated antitrust laws. The district court granted summary judgment against Yamaha on the trademark action, and dismissed ABC's antitrust counterclaims for failure to state a claim upon which relief could be granted. In addition, the district court held that ABC could not proceed against Yamaha's parent company, Yamaha-Japan, because the court lacked personal jurisdiction over the Japanese company. Both sides appeal the rulings against them.

Our disposition of Yamaha's appeal from the summary judgment on its trademark claims is controlled by our decision in NEC Electronics v. Cal. Circuit ABCO, 810 F.2d 1506 (9th Cir.), cert. denied, 484 U.S. 851 (1987). There, we held that federal trademark law affords no protection for a wholly owned United States subsidiary of a foreign manufacturer against a rival company that imports and sells goods made by the foreign parent company. The appearance of the trademark, affixed by the parent, on the goods imported by the rival does not constitute a false designation of origin or a close mimic of a competitor's mark likely to create confusion between two different products. The origin of the products is the same. Under NEC, there can be no successful trademark claim here, where the "Yamaha" mark appearing on goods distributed by ABC was affixed by Yamaha-Japan, the manufacturer from whom ABC acquired the goods.

Yamaha belatedly attempts to distinguish this case from NEC on the ground that the products being imported by ABC are different from those imported by Yamaha. Yamaha claims that the products distributed by ABC were not intended for distribution in the United States, and are physically different from those distributed by Yamaha. Yamaha failed to preserve this issue on appeal, however, by not timely raising it in response to ABC's summary judgment motion. The only place in the record below where Yamaha contended that there were physical differences between its products and those of ABC was in Yamaha's motion for reconsideration of the district court's order refusing to certify the summary judgment for immediate appeal. The record is devoid of any explanation for Yamaha's failure to raise this issue at an earlier point or to respond to the summary judgment motion with a request for further discovery under Fed.R.Civ.P. 56(f). There was no need for the district court to consider Yamaha's proffered evidence at the time of the reconsideration motion, particularly given that Yamaha sought to introduce it in the form of a lawyer affidavit. See Brae Transp., Inc. v. Coopers & Lybrand, 790 F.2d 1439, 1443 (9th Cir.1986) (grant of summary judgment not error where losing party made no motion under Rule 56(f), and referred to need to develop record further only in legal memoranda in opposition to summary judgment and in post-judgment motions). The district court did not err in granting summary judgment against Yamaha on the trademark claims.

The district court also correctly granted summary judgment in favor of ABC on Yamaha's claims under the Tariff Act, 19 U.S.C. Sec. 526, which prohibits the importation of foreign made goods bearing a trademark owned by a United States corporation. The regulations promulgated under that section specifically state that the prohibitions on such importation do not apply when the domestic trademark owner is a subsidiary of the company that manufactured the goods sought to be imported. 19 C.F.R. Sec. 133.21(c)(2). The Supreme Court has upheld this regulation as valid. K-Mart Corp. v. Cartier, Inc., 486 U.S. 281, 292 (1988). We affirm the district court's determination that the regulation leaves no room for Yamaha's Tariff Act claim.

After summary judgment had been granted on the trademark claims, the district court dismissed ABC's antitrust counterclaims. It noted that ABC had abandoned its claims under the section 3 of the Clayton Antitrust Act, 15 U.S.C. Sec. 3, section 73 of the Wilson Tariff Act, 15 U.S.C. Sec. 8, and California's Cartwright Act, Cal.Bus. & Prof.Code Secs. 16600 et seq. ABC does not dispute this aspect of the district court's treatment of its counterclaims. The district court also dismissed ABC's claim that Yamaha had engaged in illegal monopoly and had conspired with its authorized distributors in restraint of trade, in violation of sections 1 and 2 of the Sherman Antitrust Act, 15 U.S.C. Secs. 1 and 2. Having dismissed all of ABC's federal claims, the district court refused to continue to exercise jurisdiction over ABC's remaining pendent state law claims for interference with business relations, defamation and unfair competition. ABC appeals these aspects of the district court's ruling.

The district court first found that ABC had not adequately pled a discrete submarket of Yamaha products, and that therefore ABC could not proceed on a theory that Yamaha was attempting to create a monopoly in such a submarket. On appeal, ABC argues that the existence of such a submarket is not necessary to its antitrust claims against Yamaha. Rather, it characterizes its claims as involving antitrust violations in a relevant market consisting of certain types of electronics equipment, regardless of manufacturer.

The district court specifically held that ABC had adequately pled such a market. It then correctly noted that the question of whether Yamaha's actions violated the antitrust laws was subject to a rule of reason analysis. Continental TV, Inc. v. GTE Sylvania, Inc., 433 U.S. 36 (1977). The district court erred, however, in ruling that since similar restrictions have previously been upheld under such an analysis, Yamaha's actions were, as a matter of law, reasonable. Once it is determined that the rule of reason analysis applies, the case must be further developed to allow for such application. See Costen v. Pauline's Sportswear, Inc., 391 F.2d 81 (9th Cir.1968). Disposition at the pleading stage is inappropriate. We therefore reverse the district court's dismissal of these claims. Since we reinstate these federal claims, the district court now has a basis for exercising pendent jurisdiction over the state claims that were not abandoned. We therefore reverse the dismissal of those claims as well.

ABC also attempted to assert its antitrust claims against Yamaha's parent company, Yamaha-Japan. The district court ruled that it lacked personal jurisdiction over the Japanese company. Because we reverse the grant of summary judgment against ABC on the antitrust claims, we must consider whether such dismissal of Yamaha-Japan was correct.

Analyzing Yamaha-Japan's contacts with California under California's long arm statute, CCP Sec. 410.10, the district court found that those contacts were not sufficient to give rise to jurisdiction over that entity in a California court. Subsequent to the district court's ruling, we held that a federal court may exercise personal jurisdiction over a foreign corporation in an antitrust suit based upon that corporation's contacts with the United States as a whole. Go-Video, Inc. v. Akai Electric Co., Ltd., 885 F.2d 1406 (9th Cir.1989). We therefore remand this question to the district court so that it may consider Yamaha-Japan's contacts with the United States as a whole in determining whether to exercise personal jurisdiction over that company.

We deny ABC's motion to release its opening brief from retention under seal as moot.

AFFIRMED IN PART; REVERSED IN PART.