## Facts

- Lever Brothers Company (Lever U.S.) owned and used the trademarks “Shield” (deodorant soap) and “Sunlight” (dishwashing liquid) in the United States.
- A foreign corporate affiliate (Lever U.K.) used the same trademarks abroad on similar product lines.
- The U.S. and U.K. products bore substantially similar trade dress and marks, but differed materially in formulation and performance to suit local conditions.
- Unauthorized importers brought U.K.-made “Shield” and “Sunlight” goods into the United States without Lever U.S.’s consent.
- Lever U.S. presented evidence that consumers encountering the U.K. goods under the same marks experienced post-purchase confusion and attributed quality differences to the U.S. brand, harming goodwill.
- The dispute concerned Customs’ practice, by regulation, of allowing importation of trademarked goods from foreign affiliates on the theory that such goods were not “copies or simulations” barred by Lanham Act § 42 (15 U.S.C. § 1124).

## Issues

1. Whether goods made by a foreign affiliate bearing the same trademark, but materially different from the U.S. version, can “copy or simulate” a U.S.-owned mark under Lanham Act § 42.
2. Whether Customs’ regulatory “affiliate exception” is entitled to decisive deference in construing § 42’s “copy or simulate” language.
3. Whether the district court properly denied preliminary injunctive relief based on acceptance of Customs’ interpretation.

## Decision

- The D.C. Circuit vacated the district court’s denial of preliminary injunctive relief to the extent it rested on uncritical acceptance of Customs’ interpretation.
- The court held that the meaning of § 42’s “copy or simulate” language presented a judicial question not resolved simply by Customs’ affiliate-exception regulation.
- The court remanded for the district court to complete the statutory analysis, including consideration of legislative history and relevant administrative practice bearing on § 42’s scope.
- The court indicated that trademark policy concerns—especially consumer reliance on marks as indicators of consistent product attributes—supported serious doubt about allowing materially different gray-market imports under the same marks.

## Legal Principles

- Trademarks serve to signal product characteristics and allow consumers to rely on those signals; materially different goods sold under the same mark can create actionable confusion and threaten goodwill.
- Corporate affiliation alone does not necessarily determine whether imported goods fall outside Lanham Act § 42’s prohibition on goods that “copy or simulate” a U.S. trademark.
- Agency enforcement regulations do not automatically control statutory meaning where the statute’s operative terms implicate core trademark policies; courts must independently interpret the statute’s text, history, and relevant practice.
- In preliminary-injunction litigation, likelihood of success and related equitable factors may turn on the correct construction of the governing statute; where that construction is incomplete or inadequately analyzed, remand may be required.

## Conclusion

The D.C. Circuit required a fuller judicial interpretation of Lanham Act § 42 before accepting Customs’ affiliate-based approach to gray-market imports, vacating the denial of preliminary relief and remanding for a more complete statutory and historical analysis focused on whether materially different affiliate-source goods “copy or simulate” a U.S. trademark.


Lever Bros. Co. v. United States, 877 F.2d 101 (D.C. Cir. 1989)