K Mart Corp. v. Cartier, Inc., et al. (486 U.S. 281)
U.S. Supreme Court · decided May 31, 1988 · Supreme Court Database (Spaeth)
- Citation
- 486 U.S. 281 · 108 S. Ct. 1811
- Decided
- May 31, 1988
- Term
- October Term 1987
- Vote
- 5–4
- Majority author
- Justice Kennedy
- Issue area
- Economic Activity
- Disposition
- Affirmed and reversed (or vacated) in part
- Outcome
- Petitioning party won
- Ideological direction
- Liberal
Opinion excerpt
Justice Kennedy announced the judgment of the Court and delivered the opinion of the Court with respect to Parts I, II-A, and II-C, and an opinion with respect to Part II-B, in which White, J., joined. 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. These cases present the issue whether the Secretary of the Treasury’s regulation permitting the importation of certain gray-market goods, 19 CFR § 133.21 (1987), is a reasonable agency interpretation of § 526 of the Tariff Act of 1930 (1930 Tariff Act), 46 Stat. 741, as amended, 19 U. S. C. § 1526. I A The gray market arises in any of three general contexts. The prototypical gray-market victim (case 1) is a domestic firm that purchases from an independent 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. Especially where the foreign firm has already registered the trademark in the United States or where the product has already earned a reputation for quality, the right to use that trademark can be very valuable. If the foreign manufacturer could import the trademarked goods and distribute them here, despite having sold the trademark to a domestic firm, the domestic firm would be forced into sharp intrabrand…
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