(4) the mink pelt is correctly classified according to Legend's instructions.
37. EMBA and GLMA each have committees to police the use of members' pelts and to enforce all of their trademark rights.
38. Neither Hudson nor any fur auction house has ever been licensed to use trademarks owned by EMBA and GLMA. Hudson has been authorized by contract to offer for sale mink pelts produced by EMBA, GLMA or Legend members which carry such a trademark.
39. While American mink ranchers are free to sell their pelts without an EMBA or GLMA trademark wherever they wish [Trans. 10/14 at 90:23 - 91:11], the availability of EMBA and GLMA trademarks is now restricted to pelts sold through SFX.
E. The Industry
40. The number of American mink ranchers is declining.
41. American ranch mink is produced on approximately 1150 mink ranches in the United States and is known by the trade to be generally of a high quality in terms of pelt color and lustre. American ranch mink is produced for the fur trade as either standard dark mink or mutation mink of various colors. [Stipulations 36 and 37.]
42. Mink pelts are not homogeneous or fungible but are diverse in color, quality, size and other characteristics. [Stipulation 48.]
43. Because mink pelts are diverse in color, quality, size and other characteristics, they cannot be bought or sold sight unseen; rather, they are sold at auction or in private sales. Value is assigned to mink pelts based primarily upon an inspection preliminary to sale to the trade through widely announced auctions conducted by auction houses.
44. When EMBA and GLMA unified, nearly 80% of the mink ranchers in the United States became members of Legend. All members of Legend are members of EMBA and GLMA. [Stipulation 11.] The balance of American mink ranchers belong to Amerimink; in late 1986 Amerimink merged with Legend.
45. Prior to the formation of Legend, EMBA had traditionally represented ranchers who bred mutation mink of various color types, and GLMA had traditionally represented ranchers who bred standard dark mink. Ranchers who bred both types of mink could belong to either or both EMBA and GLMA. The Amerimink ranchers produce both types of mink. [Stipulation 38.]
46. There are currently three companies conducting fur auctions in the United States, Hudson, SFX and Elbeco. The number and identity of these companies have not changed since 1982. [Stipulation 56.]
47. The fur auction houses receive pelts from ranchers, grade them as to color, size and quality, and sort them into lots to achieve uniformity of color and character in each lot. [Stipulation 49.]
48. Barriers to entry into the fur auction business are low; entry into the business requires only a facility to conduct the auction, a source of financing, and personnel.
49. Since Elbeco had contracted to handle and auction only Amerimink mink, Legend members could not ship to Elbeco.
50. Ranchers customarily ship their pelts to auction houses in November and December to be ready for the first auction sales of the year in January. The January auction sales are traditionally the largest sales of the year. Many ranchers offer a substantial portion of their annual pelt crop in the January auction sales. [Stipulation 60.]
51. The auction dates for mink pelts are fixed in accordance with the time cycle for mink ranching and by agreement between the rancher organizations and the auction houses. Such dates are widely disseminated to avoid overlap with other auctions around the world.
52. The New York metropolitan area is where the largest number of fur buyers, fur garment manufacturers and fur brokers in the United States are found. [Stipulations 135 through 138.] It has significant advantages over Seattle from both an industry and geographic point of view.
53. The rancher organizations have traditionally entered into agreements with competing auction houses, detailing the general terms by which association members ship their pelts to the auction house of their choice for grading, sorting and sale for the individual accounts of the ranchers. These agreements have also governed the use of trademarks.
54. Prior to June, 1986, mink ranchers shipped their pelts to an auction house (with which the rancher organizations had agreements concerning marketing of fur pelts) for grading, marking and sale under appropriate trademarks. Prior to June, 1986, rancher members of EMBA, GLMA and Legend were free to use, and did use, the trademarks of their rancher associations on their mink pelts at either SFX or Hudson. Subsequent to June, 1986, although the members of Legend are free to sell their pelts through any agency or auction house they so choose, the availability of the Blackglama and other trademarks at issue is restricted to pelts sold through SFX.
F. The Relevant Market
55. The relevant product markets are mink produced worldwide and auction houses operating worldwide.
56. Geographically, the mink business spans the globe. [P-1; P-2; P-3; P-7; P-25; P-99; D-5; D-30; Trans. 10/8 at 136:4-18.]
57. Mink is raised in, among other places, the United States, Canada, Norway, Denmark, Finland, the Soviet Union and The Peoples' Republic of China. [Stipulation 30.]
58. Worldwide production increased from approximately twenty-five million pelts in 1981 to approximately thirty-five million mink pelts in 1985. Mink pelt production in 1985 was approximately as follows:
United States = 4.1 million pelts
Canada = 1.4 million pelts
Scandinavia = 14-16 million pelts
Soviet Union = 11 million pelts
China = 2-3 million pelts
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