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Porcelain Importer Loses Appeal

October 2, 1989

WASHINGTON (AP) _ An importer of fine Spanish porcelain that accuses another company of illegally selling the product in the United States at a discount lost a Supreme Court appeal today.

The court, without comment, let stand a ruling that permitted the so-called ″gray market″ import of Lladro porcelain.

The 3rd U.S. Circuit Court of Appeals had ruled last May in favor of Jalyn Corp. of New Jersey and against Weil Ceramics and Glass Inc., a New York firm.

The appeals court relied in part on a 1988 Supreme Court ruling that upheld a lion’s share of the multibillion-dollar gray market.

The justices said then that the U.S. Customs Service does not have to shut down the gray market - famous-name, foreign-made goods bearing valid U.S. trademarks sold in this country at reduced prices without approval from trademark owners.

Weil Ceramics is a wholly owned subsidiary of Lladro Exportadora of Spain. Weil became the exclusive U.S. distributor of the hand-made porcelain in 1966, and later was acquired by the Spanish company.

Jalyn Corp. and its president, Bernard Dash, began importing Lladro porcelain in 1982.

Weil, seeking to collect damages and block the rival imports, sued Jalyn over alleged trademark infringement.

The 3rd Circuit court rejected Weil’s arguments that the Supreme Court’s 1988 ruling does not apply to it because it is the independent owner of the U.S. trademark for Lladro porcelain.

″Although Weil was not a sham incorporated by Lladro with the specific intent to benefit from the protection of the trademark act, its present relationship with Lladro nonetheless presents the potential for undesired monopoly of the domestic (U.S.) market,″ the appeals court said.

Weil said it should have exclusive rights to sell the porcelain in this country because its marketing, promotion and distribution efforts have built the popularity of the Lladro name.

The case is Weil Ceramics vs. Dash, 89-173.