COAC to Recommend Prohibited Parties List for IPR Violations

CBP should “seek and obtain the legal authority” to create a Restricted and Prohibited Parties List of known intellectual property rights violators to help fight imports of counterfeit goods, the Commercial Customs Operations Advisory Committee IPR Working Group said in recommendations. The list should consist “of foreign and domestic parties (i.e., individuals, companies or organizations) who are known offenders due to repeat violations,” it said. The group will present the recommendations during the July 15 COAC meeting.

Such a list would “serve to deter and reduce the numbers of de minimis (Section 321) as well as other informal and formal entries of counterfeit shipments flooding the country,” the working group said. CBP should publicly release criteria for the list, which could be based on the numbers of seizures, uncontested detention notices and other IPR violations tracked by CBP, it said.

The list should also be public, similar to other denied parties lists, such as those maintained by the Bureau of Industry and Security, the Directorate of Defense Trade Controls and the Office of Foreign Assets Control. The agency should also create an appeals process for removal from the list, it said. The COAC proposed last year in comments to the Commerce Department that an enforcement list based on the commodities involved could help prevent counterfeits (see 1908070022).

CBP “has a history of repeatedly detaining genuine goods based upon reasonable suspicions that the goods are counterfeit because they are goods traded lawfully in the secondary, unauthorized, parallel, or gray market,” the IPR Working Group said in a separate paper on the subject. Due to the concerns around “false positives (e.g., gray market importers), we have not and do not suggest that IPR holders designate such [prohibited list] parties,” it said.

The list would also resolve a complaint that known bad actors aren't identified by CBP to compliant importers, it said. “An IPR Restricted and Prohibited Parties List would constitute such notice. In addition, shipments involving bad actors would be presumptively inadmissible, clearing up CBP’s resources to identify whether goods are counterfeit. The mere risk of being put on a list might chill illegal conduct.” The group also suggests the use of a Trusted IPR Vendor list. “Several factors could indicate whether a party should be considered a Trusted IPR Vendor such as receipt of a binding ruling from the Office of Regulations & Rulings confirming the genuine nature of merchandise,” it said.