Friday, February 01, 2013

New Proposal on Counterfeits

Currently, when Customs and Border Protection detains merchandise suspected of being counterfeit, it has to do a fairly difficult dance with respect to dealing with the owner of the trademark. This is because the importer has rights under the federal Trade Secrets Act that protect it from Customs releasing business proprietary information to the anyone including the trademark owner. Consequently, the Import Specialist who suspects a product is counterfeit cannot simply send a complete sample to the trademark holder and ask for confirmation.

Rather, at the time the merchandise is presented to Customs for examination, Customs may provide pictures or samples of the merchandise and its packaging, provided that identifying information has been removed or obliterated. The information that needs to be removed includes serial numbers, dates of manufacture, UPC codes, patch numbers, exporter, importer, etc. For the trademark owner, much of that information is very helpful in determining whether the product is counterfeit.

Note that after an actual seizure, Customs can provide much of that information and samples to the rights owner for examination, testing, or use in conjunction with civil trademark infringement actions.

On January 3, 2013, Congressman Ted Poe (R-TX) introduced H.R. 22 to address this issue. Under the proposed law:

It shall not be a violation of this section for an officer or employee of U.S. Customs and Border Protection, upon detention and thereafter, to provide to the owner of a copyright or a registered mark, or to any person who may be injured by a violation of section 1201 of title 17-- 
     (1) any information appearing on the merchandise, including its retail packaging,
     (2) a sample of the merchandise and its retail packaging, or
     (3) digital images of the merchandise and its retail packaging,
as it was presented to U.S. Customs and Border Protection, without redaction, whether imported into or exported from the United States, or attempted to be exported from the United States, for purposes of determining whether the merchandise or its retail packaging infringes the copyright, bears or consists of a counterfeit mark of the registered mark, or is in violation of section 1201 of title 17, as the case may be.
 
After the merchandise is actually seized, Customs may provide more information to the trademark holder including, but not limited to, the following:

  1. The date of importation.
  2. The port of entry.
  3. The description of the merchandise from the entry.
  4. The quantity involved.
  5. The country of origin of the merchandise.
  6. The name and address of the foreign manufacturer.
  7. The name and address of the exporter.
  8. The name and address of the importer.
  9. Photographic or digital images of the merchandise
In addition to these changes, the proposal designates certain aircraft parts, motor vehicle equipment, and semiconductors as "critical merchandise." The Secretary of Homeland Security would be able to permitted to designate other products as critical merchandise of counterfeits present a danger to the health, safety, and welfare of consumers or to the national security. For critical merchandise, Customs and Border Protection would be empowered to provide unredacted information and samples to the U.S. trademark holder upon detention without having to wait until a decision is made to seize the goods.

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