Trade Associations Push Against 7 Day Waiting Period on Counterfeit IP Rights

CBP should remove language in proposed regulations that would allow importers seven days to prove to CBP that detained merchandise doesn't have counterfeit trademarks, said the International Trademark Association (INTA) in comments filed with CBP June 25. INTA was responding to a CBP request for comments on interim rule allowing CBP to disclose to an intellectual property (IP) right holder information appearing on merchandise or its retail packaging that may comprise information otherwise protected by the Trade Secrets Act, for the purpose of assisting CBP in determining whether the merchandise bears a counterfeit mark.

The INTA said it supports the disclosure requirements but the seven day waiting period for when information can be shared with the owner of the mark isn't necessary. The waiting period doesn't preserve the goals of the Trade Secrets Act and instead "handicaps CBP officials' and mark owners' ability to protect the public from the real threats of counterfeiting, which have grown in recent years to epidemic proportions." The INTA comments are (here).

The American Intellectual Property Law Association (AIPLA) also said the seven day notice wasn't necessary. "This provision provides counterfeiters with opportunity to justify importation without giving intellectual property rights holders adequate opportunity to inspect the merchandise," the association said. Today's counterfeiters are often sophisticated enough to formulate the necessary proof to bypass the need to submit verification to intellectual property rights owners, it said. AIPLA also said the rules are too limited and also protect other forms of IP, such as suspected copyright infringing goods. The AIPLA comments are (here).

The U.S. Council for International Business (USCIB) agreed that the seven day period would lessen CBP's ability to protect IP rights. While USCIB understands CBP has this notice provision to prevent economic harm to legitimate importers, the Council urged the CBP to "allow both the right holder and the importer to be involved in the process of demonstrating that an article in question does not bear a counterfeit mark."

USCIB also said CBP should reconsider the scope of allowable redactions to information provide to the mark holder. Under the interim rule, possible redactions include serial numbers, dates of manufacture, lot codes, batch numbers, universal product codes, the name or address of the manufacturer, exporter, or importer of the merchandise, or any mark that could reveal the name or address of the manufacturer, said USCIB. A review of possibly counterfeit goods may require product codes, packaging and SKUs, sometimes dictated by the right holder instead of the importer, the council said. The marks and numbers may not identify the importer at all and CBP should "be allowed to release such information as necessary to allow the right holder to determine if an item is counterfeit." The USCIB comments are (here).

A disclosure of detained products' shouldn't be limited to the 'owner of the mark' sometime the owner assigns the right to use the trademark in the U.S. to a licensee, which would then be in the best position to help CBP determine if the merchandise is counterfeit, said National Tobacco Company (NTC). For instance, NTC is licensed to use the Zig-Zag trademark in the U.S., and would therefore be the best party to help identify counterfeit Zig-Zag products, it said. NTC's comments are (here).

CBP should make available samples of detained goods under bond to importers, as CBP does for trademark holders, said World Data Products in comments. Often, importers haven't had a chance to inspect the goods before they are detained, said World Data. Giving importers some access to the goods would allow them to potentially quickly demonstrate authenticity to CBP, the company said. World Data comments are (here).

Comments were due June 25.

(See ITT's Online Archives 12042320 for summary of the proposed changes.)