Webinar: Customs Enforcement of Intellectual Property Rights, May 27, 2009

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San Antonio's International Trade Center. The featured instructor is Sebastian G. Wright, the Chief of the Intellectual Property Rights Policy Branch in the Office of International Trade, U.S. …

San Antonio's International Trade Center. The featured instructor is Sebastian G. Wright, the Chief of the Intellectual Property Rights Policy Branch in the Office of International Trade, U.S. Customs and Border Protection (CBP). Mr. Wright will address the nature of IPR, the relevance of IPR to importers and IP holders/owners, and CBP's role in developing enforcement policy.

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  • 1. CBP Enforcement of Intellectual Property Rights Organized by the International Trade Center Presented by Gonzalez Rolon Valdespino & Rodriguez, Attorneys LLC & the Office of International Trade, U.S. Customs and Borders Protection 1 1
  • 2. Schedule Instructor Topic Barbara Mooney, Training Coordinator, International Trade Overview of the International Trade Center Center Sebastian Wright, Office of International Trade (CBP) - IPR Policy U.S. Customs and Border Protection: Intellectual Property Rights and Programs Enforcement Oscar Gonzalez, Attorney Intellectual Property Rights Best Practices GRVR Attorneys Panelists Questions and Answers 2 2
  • 3. Who We Are:  The Largest & Most Successful Trade Assistance Organization in the State of Texas  Funded by SBA, State of Texas & UTSA  Our Mission: help businesses become globally competitive by providing consulting, training, and market research solutions that create economic impact 3 3
  • 4. Three Primary Areas of Assistance  International Business Consulting Services  International Market Research  International Trade Training 4 4
  • 5. Our Difference: World-Class Consulting & Market Research Solutions  Staff of 5 experienced & CGBP credentialed consultants  Market research team with state-of-the-art resources  Always no-cost & 100% confidential  One-on-one, high-value & long-term consulting engagement is what differentiates the International Trade Center from the competition  The only source for technical trade consulting in the region 5 5
  • 6. Our Clients  Small & Medium-Sized Businesses  Exporters AND Importers  Experienced AND New-to-Export  Manufacturers AND Distributors  Focus: Established Mid-Market Companies 6 6
  • 7. Our Seminars  We teach “HOW TO” not “WHAT”  Interactive and Hands-On  Cover the Entire Export/Import Process  Plus Country/Region and Topic Focused Events  Combined with Consulting Process 7 7
  • 8. Our Seminars Certified Global Business Professional (CGBP) Series  Only internationally recognized certification of international business in the U.S. and Mexico  International Trade Center was the first in the USA to offer training for this credential and is a leader in producing CGBP credentialed graduates  The CGBP cover 4 areas:  International Trade Logistics  Global Management  Global Marketing  International Finance  2009: San Antonio , TX (March – April) & Monterrey, MX (October) 8 8
  • 9. Our Seminars Business China Executive Training Program – China Focused CGBP  Untapped demand in the region for in-depth training on how to do business in China  Business China Executive Training Program  An International Trade Center innovative program  Participation from three different states  Technical trade content of the CGBP  China focused culture, case studies & expert speakers  UTSA COB Liu Family Foundation students  Provide Texas companies the how-to information on doing business in China 9 9
  • 10. Other International Trade Center Seminars • How to Do Business in the United States Conference • Your Global Edge Series • Business China Roundtable • Business China Conference • Global Sourcing Essentials • Global Exporting Essentials 10 10
  • 11. Our Success is Your Success! Performance FY2006 FY2007 FY2008 Global $75.9M $95.2M $117M Sales Jobs Created & 434 925 808 Retained Consulting 4,698 4,962 5,570 Hours Clients 901 873 877 Served 11 11
  • 12. 12 12
  • 13. Contact Information  International Trade Center 501 W Durango Boulevard, 4th Fl. San Antonio, Texas 78207  T: 210.458.2470  www.texastrade.org 13 13
  • 14. U.S. Customs and Border Protection: Intellectual Property Rights Enforcement Sebastian G. Wright Office of International Trade—IPR Policy and Programs May 27, 2009 14 14
  • 15. Agenda:  Overview of CBP  CBP IPR Enforcement Process  Working with CBP to Enforce IPR  IPR Seizure Statistics—Health and Safety 15 15
  • 16. CBP’s Mission  To secure America’s borders to protect the American people and our economy while promoting the flow of legitimate trade and travel. 16 16
  • 17. A Challenging Task :  327 Ports  5,000 Miles Northern Border  1,900 Miles Southern Border  95,000 miles of shoreline 17 17
  • 18. On A Typical Day:  1.1 million people  70,000 shipping containers  331,000 private vehicles 18 18
  • 19. 19 19
  • 20. Understanding the CBP Enforcement Process: What IPR Does CBP Enforce? TRADEMARK COPYRIGHT PATENT  Only pursuant to USITC Exclusion Orders TRADE NAME RED BULL GMBH TRADE DRESS 20 20
  • 21. Growing IPR Safety, Security, and Economic Threats 21 21
  • 22. CBP Priority Trade Issues  AD/CVD  Agriculture  IPR  Import Safety  Penalties  Revenue  Textiles and Wearing Apparel 22 22
  • 23. Strategic, Multi-Layered Approach to IPR Enforcement  Stop infringing goods at the borders  Expanding the border  Partner with industry and other government agencies 23 23
  • 24. CBP IPR Enforcement Officials  Attorneys  International Trade Specialists  CBP Officers  Import Specialists  Auditors  Scientists  FP&F Officers 24 24
  • 25. CBP IPR Enforcement Process Arriving Targeting Examining Enforcing Analysis & Targeting Exam/Release Seizures Possible Conduct Document review IP Computer based IP or physical exam Violation Audits Violation Found Manual Physical exam: open shipment and pull Investigation samples for evaluation Detain goods further Penalties assess authenticity Consult rights-holders and legal counsel Other Government Agencies Foreign Government CBP Officer Import Specialist Int’l Trade Specialist Int’l Trade Specialist CBP Officer CBP Officer Import Specialist No IP Auditor Import Specialist Violation Found FP& F Officer Release into Commerce: May occur at any point during the detention and CBP Officer examination process depending on circumstances 25 25
  • 26. Stop Infringing Goods at the  Innovative tools: IPR risk model  Goal: Enhance identification and interdiction of counterfeit and pirated goods at the border by improving IPR risk analysis 26 26
  • 27. Expanding the Border  International Cooperation  IPR Audits 27 27
  • 28. International Objectives  Enhance networks of border officials  Share information and best practices for enforcement  Develop and implement joint initiatives  Build IPR enforcement capacity 28 28
  • 29. Implementing the Strategy: Operation Cisco Raider  Inter-agency and international partnerships: ICE, the Federal Bureau of Investigation, and the Royal Canadian Mounted Police  Expand border outward: Focus on North American distribution networks of counterfeit Cisco network hardware equipment from China  Results: CBP and ICE seizures of more than 74,000 counterfeit Cisco network components and labels with a total estimated retail value of more than $73 million  Criminal prosecution of individuals and companies in the United States and Canada 29 29
  • 30. IPR Audits – Post-Entry Verification  Increase effectiveness by addressing counterfeiting and piracy at the organizational level  Shift focus from transactions / individual shipments to business engaged in trade in fakes  Apply audit techniques to IPR enforcement 30 30
  • 31. Partner with Industry  COAC IPR Enforcement Subcommittee  Collaborate with right holders on IPR training & info sharing  e-Allegations  e-Recordation 31 31
  • 32. 32 32
  • 33. Product Identification Training – Why is it Important?  Familiarizes officers with the characteristics of genuine products so that they will be better able to distinguish genuine from infringing goods  Provides rights holders with the opportunity to communicate and stress concerns and circumstances surrounding any alleged infringement directly to officers 33 33
  • 34. Partner with Other Agencies  Strategy Targeting Organized Piracy (STOP!)  National Intellectual Property Rights Coordination Center (IPR Center)  Intellectual Property Enforcement Coordinator (IPEC) 34 34
  • 35. IPR Seizures FY 2004-2008 Domestic Value of Seizures 35 35
  • 36. IPR Seizures FY 2004-2008 Number of Seizures 36 36
  • 37. Top Trading Partners Percentage Change by Value – FY 2008 vs. FY 2007 Trading Partners FY 2008 Percent of FY 2007 Difference % Increase FY 2008 Domestic Value Total Value Domestic Value FY08 vs. FY 07 or Decrease China $ 221,661,579 81% $ 158,082,597 $ 63,578,982 40% India $ 16,258,368 6% $ 855,231 $ 15,403,137 1801% Hong Kong $ 13,433,606 5% $ 12,729,121 $ 704,485 5% Taiwan $ 2,631,980 1% $ 3,454,048 $ (822,068) 23% Korea $ 1,028,348 <1% $ 902,904 $ 125,444 13% Dominican Republic $ 942,128 <1% $ 23,261 $ 918,867 3950% Pakistan $ 780,109 <1% $ 2,530,545 $ 1,750,436 69% Vietnam $ 747,567 <1% $ 483,821 $ 263,746 54% United Arab Emirates $ 658,626 <1% $ 372,932 $ 285,694 76% Indonesia $ 649,066 <1% $ 96,753 $ 552,313 570% All Others $ 13,937,502 5% $ 17,223,164 $ (3,285,662) -19% Total Domestic Value of All IPR Seizures $ 272,728,879 $ 196,754,377 $ 75,974,502 38% Total Number of Seizures 14,992 13,657 1,335 9% 37 37
  • 38. Top Commodities Seized Percentage Change by Value – FY 2008 vs. FY 2007 FY 2008 FY 2008 % of Total FY 2007 Difference % Increase Commodity Domestic Value Value Domestic Value FY 08 vs. FY 07 or Decrease Footwear $ 102,316,577 38% $ 77,781,415 $ 24,535,162 31% Handbags/Wallets/Backpacks $ 29,609,053 11% $ 14,214,304 $ 15,394,749 108% Pharmaceuticals $ 28,106,578 10% $ 11,137,578 $ 16,969,000 152% Wearing Apparel $ 25,119,580 9% $ 27,005,914 $ (1,886,334) -7% Consumer Electronics/Electrical Articles $ 22,997,685 8% $ 16,041,694 $ 6,955,991 43% Sunglasses/Parts $ 7,919,385 3% $ 3,951,758 $ 3,967,627 100% Computers/Technology Components $ 7,589,534 3% $ 9,336,893 $ (1,747,359) -18% Perfumes/Colognes $ 6,716,735 2% $ 1,201,193 $ 5,515,542 459% Cigarettes $ 6,444,649 2% $ 583,349 $ 5,861,300 1004% Media $ 5,967,332 2% $ 7,884,152 $ (1,916,820) -24% All Other Commodities $ 29,941,771 11% $ 27,616,127 $ 2,325,644 8% Total Domestic Value of All IPR Seizures $ 272,728,879 $ 196,754,377 $ 75,974,502 38% Total Number of Seizures 14,992 13,657 1,335 9% 38 38
  • 39. Top Safety and Security Commodities Percentage Change by Value – FY 2008 vs. FY 2007 FY 2008 FY 2008 % of Total FY 2007 Difference % Increase Commodity Domestic Value Value Domestic Value FY 08 vs. FY 07 or Decrease Pharmaceuticals $ 28,106,578 45% $ 11,137,578 $ 16,969,000 152% Cigarettes $ 7,919,375 13% $ 583,349 $ 7,336,026 1258% Sunglasses $ 6,716,735 11% $ 3,951,758 $ 2,764,977 70% Electrical Articles $ 6,444,649 10% $ 4,087,060 $ 2,357,589 58% Critical Technology Components $ 5,020,361 8% $ 4,491,316 $ 529,045 12% Perfumes/Colognes $ 4,742,175 7% $ 1,201,193 $ 3,540,982 295% Batteries $ 1,806,821 3% $ 913,428 $ 893,393 98% Transportation/Parts $ 621,242 <1% $ 845,094 $ (223,852) -26% All Others $ 1,157,356 1% $ 681,848 $ 475,508 70% Total Domestic Value of All Import IPR Seizures $ 62,535,292 $ 27,892,624 $ 34,642,668 124% Total Number of Seizures 1,950 1,295 655 51% Electrical Articles includes power cords, lights, DVD players, etc. Critical Technology Components- previously named Computer Network Hardware/Integrated Circuits in FY 2007, includes networking equipment and semiconductor devices Transportation/Parts- previously named Automotive in FY 2007 All Others- includes detergent, bath tissue, and labels and packaging that would be applied to safety and security commodities 39 39
  • 40. Contact Information  IPR Policy & Programs Division: iprpolicyprograms@dhs.gov  http://www.cbp.gov/xp/cgov/trade/priority_trade/ipr/ (search for “IPR”)  http://cbpnet.cbp.dhs.gov/xp/cbpnet/ot/tpp/int_propertyrights/ 40 40
  • 41. Our Mission We are the guardians of our Nation’s borders. We are America’s frontline. We safeguard the American homeland at and beyond our borders. We protect the American public against terrorists and the instruments of terror. We steadfastly enforce the laws of the United States while fostering our nation’s economic security through lawful international trade and travel. We serve the American public with vigilance, integrity and professionalism. 41 41
  • 42. ™ © ™ © Intellectual Property Rights Best Practices Oscar Gonzalez, Attorney GRVR, Attorneys, LLC www.exportimportlaw.com oscarg@exportimportlaw.com (214) 720-7720 42 42
  • 43. Some Law 43 43
  • 44. 15 USC 1124 Importation of goods bearing infringing marks or names forbidden Except as provided in subsection (d) of section 1526 of Title 19, no article of imported merchandise which shall copy or simulate the name of any domestic manufacture, or manufacturer, or trader, or of any manufacturer or trader located in any foreign country which, by treaty, convention, or law affords similar privileges to citizens of the United States, or which shall copy or simulate a trademark registered in accordance with the provisions of this chapter or shall bear a name or mark calculated to induce the public to believe that the article is manufactured in the United States, or that it is manufactured in any foreign country or locality other than the country or locality in which it is in fact manufactured, shall be admitted to entry at any customhouse of the United States; and, in order to aid the officers of the customs in enforcing this prohibition, any domestic manufacturer or trader, and any foreign manufacturer or trader, who is entitled under the provisions of a treaty, convention, declaration, or agreement between the United States and any foreign country to the advantages afforded by law to citizens of the United States in respect to trademarks and commercial names, may require his name and residence, and the name of the locality in which his goods are manufactured, and a copy of the certificate of registration of his trademark, issued in accordance with the provisions of this chapter, to be recorded in books which shall be kept for this purpose in the Department of the Treasury, under such regulations as the Secretary of the Treasury shall prescribe, and may furnish to the Department facsimiles of his name, the name of the locality in which his goods are manufactured, or of his registered trademark, and thereupon the Secretary of the Treasury shall cause one or more copies of the same to be transmitted to each collector or other proper officer of customs. 44 44
  • 45. 19 USC 1526 Merchandise bearing American Trade-mark (a) Importation prohibited Except as provided in subsection (d) of this section, it shall be unlawful to import into the United States any merchandise of foreign manufacture if such merchandise, or the label, sign, print, package, wrapper, or receptacle, bears a trademark owned by a citizen of, or by a corporation or association created or organized within, the United States, and registered in the Patent and Trademark Office by a person domiciled in the United States, under the provisions of sections 81 to 109 of Title 15, and if a copy of the certificate of registration of such trademark is filed with the Secretary of the Treasury, in the manner provided in section 106 of said Title 15, unless written consent of the owner of such trademark is produced at the time of making entry. (b) Seizure and forfeiture Any such merchandise imported into the United States in violation of the provisions of this section shall be subject to seizure and forfeiture for violation of the customs laws. (c) Injunction and damages Any person dealing in any such merchandise may be enjoined from dealing therein within the United States or may be required to export or destroy such merchandise or to remove or obliterate such trademark and shall be liable for the same damages and profits provided for wrongful use of a trademark, under the provisions of sections 81 to 109 of Title 15. (d) Exemptions; publication in Federal Register; forfeitures; rules and regulations (1) The trademark provisions of this section and section 1121 of Title 15, do not apply to the importation of articles accompanying any person arriving in the United States when such articles are for his personal use and not for sale if (A) such articles are within the limits of types and quantities determined by the Secretary pursuant to paragraph (2) of this subsection, and (B) such person has not been granted an exemption under this subsection within thirty days immediately preceding his arrival. (2) The Secretary shall determine and publish in the Federal Register lists of the types of articles and the quantities of each which shall be entitled to the exemption provided by this subsection. In determining such quantities of particular types of trade-marked articles, the Secretary shall give such consideration as he deems necessary to the numbers of such articles usually purchased at retail for personal use. (3) If any article which has been exempted from the restrictions on importation of the trade-mark laws under this subsection is sold within one year after the date of importation, such article, or its value (to be recovered from the importer), is subject to forfeiture. A sale pursuant to a judicial order or in liquidation of the estate of a decedent is not subject to the provisions of this paragraph. (4) The Secretary may prescribe such rules and regulations as may be necessary to carry out the provisions of this subsection. (e) Merchandise bearing counterfeit mark; seizure and forfeiture; disposition of seized goods Any such merchandise bearing a counterfeit mark (within the meaning of section 1127 of Title 15) imported into the United States in violation of the provisions of section 1124 of Title 15, shall be seized and, in the absence of the written consent of the trademark owner, forfeited for violations of the customs laws. Upon seizure of such merchandise, the Secretary shall notify the owner of the trademark, and shall, after forfeiture, destroy the merchandise. Alternatively, if the merchandise is not unsafe or a hazard to health, and the Secretary has the consent of the trademark owner, the Secretary may obliterate the trademark where feasible and dispose of the goods seized-- (1) by delivery to such Federal, State, and local government agencies as in the opinion of the Secretary have a need for such merchandise, (2) by gift to such eleemosynary institutions as in the opinion of the Secretary have a need for such merchandise, or (3) more than 90 days after the date of forfeiture, by sale by the Customs Service at public auction under such regulations as the Secretary prescribes, except that before making any such sale the Secretary shall determine that no Federal, State, or local government agency or eleemosynary institution has established a need for such merchandise under paragraph (1) or (2). (f) Civil penalties (1) Any person who directs, assists financially or otherwise, or aids and abets the importation of merchandise for sale or public distribution that is seized under subsection (e) of this section shall be subject to a civil fine. (2) For the first such seizure, the fine shall be not more than the value that the merchandise would have had if it were genuine, according to the manufacturer's suggested retail price, determined under regulations promulgated by the Secretary. (3) For the second seizure and thereafter, the fine shall be not more than twice the value that the merchandise would have had if it were genuine, as determined under regulations promulgated by the Secretary. (4) The imposition of a fine under this subsection shall be within the discretion of the Customs Service, and shall be in addition to any other civil or criminal penalty or other remedy authorized by law. 45 45
  • 46. 19 CFR 133 Trademark • 19 CFR §§ 133.1 – 133.7 establishes the authority for registered trademarks to be recorded with CBP. • 19 CFR § 133.11 – 133.15 establishes the authority for the trade names to be recorded with CBP. • 19 CFR § 133.21 establishes the authority for CBP to seize imported articles bearing counterfeit trademarks. • 19 CFR § 133.22 establishes the authority of the port director to detain articles bearing copying or simulating trademarks. • 19 CFR § 133.23 restricts the importation of “gray market articles”. Gray market articles are foreign-made articles bearing a genuine trademark or trade name identical with or substantially indistinguishable from one owned and recorded by a citizen of the United States. Or a corporation or association created or organized within the United States and imported without the authorization of the United States owner. • 19 CFR § 133.24 establishes the restrictions on articles accompanying importer and mail imports. However, 19 CFR § 148.55 provides that a person arriving in the United States may import one article of a type bearing an unauthorized protected trademark. • 19 CFR § 133.25 establishes the procedures for the detention of articles that possibly violate trademark owner rights. • 19 CFR § 133.26 establishes the authority for the port director to demand the redelivery of the articles that violated a copyright owner’s interest. If the articles are not redelivered to CBP, a claim of liquidated damages is made in accordance with § 141.113(h) of this chapter. • 19 CFR § 133.27 establishes that CBP can file civil fines for those involved in the importation of counterfeit trademark goods. 46 46
  • 47. 19 CFR 133 Copyright • 19 CFR §§ 133.31 – 133.37 establishes the authority for the copyright recordation with CBP. • 19 CFR § 133.42 establishes the authority for CBP to seize imported articles that are infringing copies or records of works copyrighted in the United States. • 19 CFR § 133.43 establishes the procedures for imported articles that possibly violate the copyright owner rights. • 19 CFR § 133.44 establishes the authority of the port director to seize the imported article and institute forfeiture proceedings in accordance with part 162 of this chapter. • 19 CFR § 133.46 establishes the authority for the port director to demand the redelivery of the articles that violated a copyright owner’s interest. If the articles are not redelivered to CBP, a claim of liquidated damages is made in accordance with § 141.113(h) of this chapter. 47 47
  • 48. 19 USC 1595a Forfeitures and other penalties (a) Importation, removal, etc. contrary to laws of United States Except as specified in subsection (b) or (c) of section 1594 of this title, every vessel, vehicle, animal, aircraft, or other thing used in, to aid in, or to facilitate, by obtaining information or in any other way, the importation, bringing in, unlading, landing, removal, concealing, harboring, or subsequent transportation of any article which is being or has been introduced, or attempted to be introduced, into the United States contrary to law, whether upon such vessel, vehicle, animal, aircraft, or other thing or otherwise, may be seized and forfeited together with its tackle, apparel, furniture, harness, or equipment. (b) Penalty for aiding unlawful importation Every person who directs, assists financially or otherwise, or is in any way concerned in any unlawful activity mentioned in the preceding subsection shall be liable to a penalty equal to the value of the article or articles introduced or attempted to be introduced. (c) Merchandise introduced contrary to law Merchandise which is introduced or attempted to be introduced into the United States contrary to law shall be treated as follows: (1) The merchandise shall be seized and forfeited if it— (A) is stolen, smuggled, or clandestinely imported or introduced; (B) is a controlled substance, as defined in the Controlled Substances Act (21 U.S.C. 801 et seq.), and is not imported in accordance with applicable law; (C) is a contraband article, as defined in section 80302 of title 49; or (D) is a plastic explosive, as defined in section 841 (q) of title 18, which does not contain a detection agent, as defined in section 841(p) of such title. (2) The merchandise may be seized and forfeited if— (A) its importation or entry is subject to any restriction or prohibition which is imposed by law relating to health, safety, or conservation and the merchandise is not in compliance with the applicable rule, regulation, or statute; (B) its importation or entry requires a license, permit or other authorization of an agency of the United States Government and the merchandise is not accompanied by such license, permit, or authorization; (C) it is merchandise or packaging in which copyright, trademark, or trade name protection violations are involved (including, but not limited to, violations of section 1124, 1125, or 1127 of title 15, section 506 or 509 of title 17, or section 2318 or 2320 of title 18); (D) it is trade dress merchandise involved in the violation of a court order citing section 1125 of title 15; (E) it is merchandise which is marked intentionally in violation of section 1304 of this title; or (F) it is merchandise for which the importer has received written notices that previous importations of identical merchandise from the same supplier were found to have been marked in violation of section 1304 of this title. (3) If the importation or entry of the merchandise is subject to quantitative restrictions requiring a visa, permit, license, or other similar document, or stamp from the United States Government or from a foreign government or issuing authority pursuant to a bilateral or multilateral agreement, the merchandise shall be subject to detention in accordance with section 1499 of this title unless the appropriate visa, license, permit, or similar document or stamp is presented to the Customs Service; but if the visa, permit, license, or similar document or stamp which is presented in connection with the importation or entry of the merchandise is counterfeit, the merchandise may be seized and forfeited. (4) If the merchandise is imported or introduced contrary to a provision of law which governs the classification or value of merchandise and there are no issues as to the admissibility of the merchandise into the United States, it shall not be seized except in accordance with section 1592 of this title. (5) In any case where the seizure and forfeiture of merchandise are required or authorized by this section, the Secretary may— (A) remit the forfeiture under section 1618 of this title, or (B) permit the exportation of the merchandise, unless its release would adversely affect health, safety, or conservation or be in contravention of a bilateral or multilateral agreement or treaty. (d) Merchandise exported contrary to law Merchandise exported or sent from the United States or attempted to be exported or sent from the United States contrary to law, or the proceeds or value thereof, and property used to facilitate the exporting or sending of such merchandise, the attempted exporting or sending of such merchandise, or the receipt, purchase, transportation, concealment, or sale of such merchandise prior to exportation shall be seized and forfeited to the United States. 48 48
  • 49. Smuggling 18 USC 545 Whoever knowingly and willfully, with intent to defraud the United States, smuggles, or clandestinely introduces or attempts to smuggle or clandestinely introduce into the United States any merchandise which should have been invoiced, or makes out or passes, or attempts to pass, through the customhouse any false, forged, or fraudulent invoice, or other document or paper; or Whoever fraudulently or knowingly imports or brings into the United States, any merchandise contrary to law, or receives, conceals, buys, sells, or in any manner facilitates the transportation, concealment, or sale of such merchandise after importation, knowing the same to have been imported or brought into the United States contrary to law-- Shall be fined under this title or imprisoned not more than 20 years, or both. Proof of defendant's possession of such goods, unless explained to the satisfaction of the jury, shall be deemed evidence sufficient to authorize conviction for violation of this section. Merchandise introduced into the United States in violation of this section, or the value thereof, to be recovered from any person described in the first or second paragraph of this section, shall be forfeited to the United States. The term “United States”, as used in this section, shall not include the Virgin Islands, American Samoa, Wake Island, Midway Islands, Kingman Reef, Johnston Island, or Guam. 49 49
  • 50. Trafficking in counterfeit goods or services 18 USC 2320 (a) Offense.-- (1) In general.--Whoever; [FN1] intentionally traffics or attempts to traffic in goods or services and knowingly uses a counterfeit mark on or in connection with such goods or services, or intentionally traffics or attempts to traffic in labels, patches, stickers, wrappers, badges, emblems, medallions, charms, boxes, containers, cans, cases, hangtags, documentation, or packaging of any type or nature, knowing that a counterfeit mark has been applied thereto, the use of which is likely to cause confusion, to cause mistake, or to deceive, shall, if an individual, be fined not more than $2,000,000 or imprisoned not more than 10 years, or both, and, if a person other than an individual, be fined not more than $5,000,000. In the case of an offense by a person under this section that occurs after that person is convicted of another offense under this section, the person convicted, if an individual, shall be fined not more than $5,000,000 or imprisoned not more than 20 years, or both, and if other than an individual, shall be fined not more than $15,000,000. (e) For the purposes of this section-- (1) the term “counterfeit mark” means-- (A) a spurious mark-- (i) that is used in connection with trafficking in any goods, services, labels, patches, stickers, wrappers, badges, emblems, medallions, charms, boxes, containers, cans, cases, hangtags, documentation, or packaging of any type or nature; (ii) that is identical with, or substantially indistinguishable from, a mark registered on the principal register in the United States Patent and Trademark Office and in use, whether or not the defendant knew such mark was so registered; (iii) that is applied to or used in connection with the goods or services for which the mark is registered with the United States Patent and Trademark Office, or is applied to or consists of a label, patch, sticker, wrapper, badge, emblem, medallion, charm, box, container, can, case, hangtag, documentation, or packaging of any type or nature that is designed, marketed, or otherwise intended to be used on or in connection with the goods or services for which the mark is registered in the United States Patent and Trademark Office; and (iv) the use of which is likely to cause confusion, to cause mistake, or to deceive; or (B) a spurious designation that is identical with, or substantially indistinguishable from, a designation as to which the remedies of the Lanham Act are made available by reason of section 220506 of title 36; but such term does not include any mark or designation used in connection with goods or services, or a mark or designation applied to labels, patches, stickers, wrappers, badges, emblems, medallions, charms, boxes, containers, cans, cases, hangtags, documentation, or packaging of any type or nature used in connection with such goods or services, of which the manufacturer or producer was, at the time of the manufacture or production in question, authorized to use the mark or designation for the type of goods or services so manufactured or produced, by the holder of the right to use such mark or designation. (2) the term “traffic” means to transport, transfer, or otherwise dispose of, to another, for purposes of commercial advantage or private financial gain, or to make, import, export, obtain control of, or possess, with intent to so transport, transfer, or otherwise dispose of; 50 50
  • 51. Patents 19 USC 331 Exclusion Orders 51 51
  • 52. When importers challenge CBP 52 52
  • 53. Importer Red Flags The company has insufficiently documented, poorly defined, or no internal control for prevention of importation of IPR protected merchandise. • The company does not monitor or interact with the broker on IPR issues. • The company relies on one employee to handle transactions where IPR issues could occur, and there are poor or no management checks or balances over this employee. • The company does not exercise adequate control over their agents (buying/selling) regarding IPR. • The company’s import staff lacks knowledge of IPR issues. • Company offers unreasonable explanations to CBP. • Company fails to cooperate with or respond to CBP. • Company has high turnover of people in key positions. • CBP (e.g., import specialist, account manager, compliance measurements, prior audit, other CBP information) shows a history of problems with IPR merchandise. • Company imports merchandise that has a readily recognizable trade name, i.e. Disney, • Coca Cola, Tommy Hilfiger, Nike, but the importer does not have a royalty agreement or a license agreement with the trademark’s owner. • The company’s records, i.e. purchase orders, invoices, have an IPR identifier in the merchandise description but the company does not maintain a license agreement or a royalty agreement with the IPR’s owner or pays no royalties. • Company is not aware of dutiability of royalty fees • Profile indicates specific exporters known to have produced counterfeit merchandise in the past are vendors for the importer. • Importer has a history of enforcement actions for IPR violations. • Merchandise shipped in small quantities on informal entries. • Shipment originates from a source country with known IPR problems. • Unusually vague invoices or invoices lacking model or catalogue numbers. • Merchandise missing lot numbers, factory codes, expiration dates, dates of manufacture, or other national requirements. • Merchandise is shipped c.o.d. rather than by letter of credit. (the risk of seizure of the good is borne by the exporter not the importer). • Shipment is described in vague or unusual terms, such as articles of plastic, metal discs, samples, parts, molds, dies, etc. • Shipment is declared at an unusually low or high value for the merchandise. • Merchandise under-insured for goods of that type. • Merchandise imported from a country not identified by the rights holder as a country where genuine goods are manufactured. 53 53
  • 54. Importer Red Flags (continued) Red Flags for Importers that may Manufacturer Goods of IPR Restricted Merchandise • Merchandise shipped in small quantities on informal entries. • Designer or brand merchandise shipped in bulk or component parts rather than in consumer packaging, such as designer perfumes or watches that are not generally shipped in bulk or in parts. • Shipments of merchandise described as labels, patches, tags, imprinted boxes, or dies. • Merchandise imported from a country not identified by the rights holder as a country where genuine goods are manufactured. • Merchandise missing copyright or trademarks or well-known trademarks. Red Flags for Importers that are Distributors/Wholesalers/Mass Marketers of IPR Merchandise • Merchandise is of a commodity commonly counterfeited or pirated such as CDs and other media, sunglasses, watches, wearing apparel, handbags, toys, etc. • Invoices with descriptions related to current “fad” items such as “alien doll”, “Mermaid”, or popular designers such as “Duck Logo”. • Unusual product combinations such as collections of computer programs, video games, sound recordings when each component is a product of a different manufacturer, studio, or artist. • Compact discs shipped on spindles and compact discs or cassettes not marked with the artist’s name or title of work. • Compact discs, audiocassettes, or videocassettes, shipped as “blank” or “unfinished”. • Merchandise fails to conform to country of origin marking requirements, weight designations, ingredient listings, electrical standards, consumer safety standards or other national requirements. • Merchandise missing copyright or trademark notice, especially on well-known copyright works or well-known trademarks. • Merchandise shipped in nonstandard packaging (watches in plastic bags rather than boxes, shoes in bags rather than boxes). • Textile articles not labeled with fiber content or cleaning instructions. • Clothing or other merchandise of non-standard sizing or sized to the standards of a different country. • Merchandise is of a commodity commonly counterfeited or pirated such as computer parts. • International mail shipments (especially of high technology goods). 54 54
  • 55. Importer Best Practices 55 55
  • 56. Importer Best Practices Internal controls over IPR are in writing. • Internal controls over IPR include procedures for monitoring and feedback, and • Internal controls over IPR are monitored by management. • One manager is ultimately responsible for control of the Import Department, including ensuring the adherence to IPR laws and guidelines. That manager has knowledge of Customs matters and the authority to assure internal control procedures for imports are established and followed by all company departments. • Written internal control procedures assign duties and tasks to a position rather than a specific person. • Company has good interdepartmental communication about Customs matters, including IPR issues. • Company and import department has access to IPR laws, guidelines, and procedures governing imported merchandise subject to IPR analysis. • Company conducts and documents periodic reviews of its imported merchandise, having IPR implications, and uses the results to make corrections to entries and changes to their import operations as appropriate. • Company receives authorization of the merchandise subject to IPR by appropriate agreements with the owner of the trademark, trade name, copyright or patent prior to the importation. • Royalties, proceeds, and indirect payments related to the use of the IPR are accounted for, and where applicable included in the price actually paid or payable. • Import department has access to, and can readily produce: • Documentation indicating that the IPR has been properly recorded with CBP, • Detailed description of imported merchandise identifying type of IPR and its specific requirements and issues, • Listing of all imported merchandise having IPR implications, • Contract(s) and/or other formal documentation indicating agreed to IPR importation practices and activities between the company and its foreign supplier(s). 56 56
  • 57. Oscar Gonzalez, Attorney International Trade Center GRVR, Attorneys, LLC 501 W. Durango Blvd, 4th Fl. www.exportimportlaw.com San Antonio, Texas 78207 oscarg@exportimportlaw.com (210) 458-2470 (214) 720-7720 www.texastrade.org CBP’s IPR Help Desk (562) 980-3119 ext. 252 ipr.helpdesk@dhs.gov 57 57