CPB expands information sharing to address counterfeit imports

Originally published by Mayura Noordyke (US).

On September 18, 2015, U.S. Customs and Border Protection (“CBP”) published a final rule that allows for increased information sharing between CBP and trademark owners in cases of importation of merchandise suspected of bearing counterfeit marks. The new rule, which went into effect October 19, 2016, allows CBP to release information to mark owners that was traditionally protected by the Trade Secrets Act for the limited purpose of identifying counterfeit marks.

Background

Traditionally, CBP could disclose to mark owners only limited information, such as the date of importation, the port where merchandise was received, the country of origin, and a basic description. In April 2012, CBP published an interim rule that established a process for CBP to disclose additional information to mark owners for the purpose of assisting CBP in identifying counterfeit marks. In the past, the Trade Secrets Act (18 U.S.C. §1905) was interpreted as preventing CBP from disclosing any markings, symbols, or codes on imported products to mark owners – exactly the kind of information that is most helpful to mark owners when determining the legitimacy of imported goods. The interim rule and now the final rule address that issue.

Changes implemented by new rule

The new regulations allow CBP to release information that would otherwise be protected by the Trade Secrets Act to the mark owner in cases where merchandise is suspected of bearing counterfeit marks. CBP will now also be able to disclose serial numbers, codes, or any other identifying marks or symbols on the merchandise or packaging as well as unredacted samples (subject to a bond requirement) and/or photographs or images of the merchandise to mark owners. The new regulations also require CBP to release basic information about importation of suspected merchandise to mark owners, at the latest, by the date of issuance of the detention notice.

Additionally, CBP will release unredacted images or samples of any suspicious merchandise to the importer after the presentation of the merchandise for examination, giving the importer a chance to show that the goods do not bear counterfeit marks.

As a summary, the following describes the disclosures that CBP can now make:

• After merchandise is presented to CBP, basic importation information may be released to a mark owner. CBP will also disclose unredacted images or samples of the merchandise to the importer any time after presentation.
• CBP will issue a detention notice to the importer within five business days from a decision to detain. If CBP has not already provided the mark owner with limited importation information, it will do so no later than the date of issuance of the detention notice.
• The importer has seven days after the issuance of the detention notice to present information showing that the merchandise does not bear a counterfeit mark. If the importer fails to do so, CBP may disclose additional information, including any symbols or codes appearing on the merchandise or its packaging as well as unredacted photographs, images, or samples, to the mark owner.

Concerns and Take-Aways

Some commenters expressed concerns over mark owners receiving information about an importer’s supply chain which could lead to competitive disadvantages and may upset the parallel market for “gray market” goods. The CBP has stated that it has addressed these issues in the new rule. When additional information is released to mark owners, they are advised that some of the information provided to them may be protected by the Trade Secrets Act. Also, the more detailed information is not disclosed to mark owners until after the importer has had the opportunity to show that the goods do not bear counterfeit marks.

The new rules apply only to marks that have been registered with the U.S. Patent and Trademark Office and recorded with CBP. These are important first steps for any brand owner seeking to protect its marks. Furthermore, mark owners should provide the CBP with as much information as possible about their own marks and goods as well as any known counterfeit marks or importers. The more information the CBP has about a recorded mark, the more efficiently and accurately CBP can identify counterfeit marks. With this greater information sharing between CBP, importers, and mark owners, the new regulations will make the policing of counterfeit marks more collaborative, and perhaps, more effective.

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