Exhibit 17-1 Accuraphoto USA (AUSA) owns the "Accuraphoto" trademark in the United States. AUSA produces the "SureShot" camera, which is known to consumers as a moderately priced quality product. AUSA entered into a contract with Honshu Photographic,

Question

Inc (HPI), a Japanese corporation. Pursuant to the terms of the contract, HPI was permitted to manufacture and market "SureShot" cameras utilizing the "Accuraphoto" trademark in return for payment of royalties based upon a percentage of HPI's sales. After producing "SureShot" cameras for a short time at its Japanese facility, HPI moved production to its facility in the Philippines in order to reduce labor costs. The cameras produced at the Philippine facility utilized the "Accuraphoto" trademark but were marketed under the name "SharpShot." Additionally, these cameras contained improved electronic features incorporated into the product by HPI engineers. Despite the inclusion of these improvements, "SharpShot" cameras proved to be of inferior quality. Furthermore, "SharpShot" cameras have begun to show up on the shelves of U.S. discount retailers such as K-Mart and Wal-Mart. Additionally, several "SharpShot" cameras have been sent by American consumers to AUSA's American facilities for repair. Finally, HPI has refused to share access with AUSA to the electronic improvements incorporated into the "SharpShot" on the basis that they are confidential proprietary information. Refer to Exhibit 17-1. What remedies may AUSA seek against HPI as a result of its conduct? What do these remedies provide?

Answer 1

AUSA could seek relief pursuant to Section 337 of the Tariff Act of 1930. Section 337 provides that the holder of a valid U.S. intellectual property right can prevent importation of merchandise even if it is lawfully produced and sold abroad. AUSA could seek an exclusion order. An exclusion order prevents goods from entering the United States and may be specific as to certain manufacturers or general and thus applying to all unlicensed goods of the same type. AUSA could also seek a cease and desist order. A cease and desist order prohibits distribution of infringing items already in the United States or which Customs fails to exclude at time of importation.