PROFESSIONAL POINTER:

Michael Holihan
Board Certified Intellectual Property Lawyer, Holihan Law

Brand-protection professionals recognize that the production of counterfeit goods has moved largely to offshore jurisdictions outside the U.S., many locations having little to no intellectual property protection or enforcement regimes. As a result, the transportation of counterfeit goods to the U. S. by sea cargo or courier or postal service packages is now the essential component introducing counterfeit goods into the U.S. marketplace.

The Law

The Lanham Act is a strict liability statute imposing responsibility on anyone using an infringing trademark in commerce. This would arguably include those entities involved in the transportation and importation of counterfeit merchandise from other countries into the U. S. if such activities constituted “use in commerce.” The Lanham Act defines “use in commerce” to include instances when “goods are sold or transported in commerce.”¹ Courts have concluded that this interpretation applies to infringement actions as well.²

The Cast

Two categories of entities involved in the transportation of counterfeit goods warrant attention and resources from brand professionals.

First are the entities physically taking possession and transporting goods from a foreign country to the U.S. These include foreign or domestic trucking companies, vessel operating common carriers (VOCC) carrying goods from foreign ports to the U.S.; courier services (FedEx, UPS, DHL etc.) which accept and subsequently transport goods by air from foreign port to the U.S.; and U.S.-located transshipping companies physically receiving and transshipping goods from the U.S. to foreign ports.

Second are entities that arrange the transportation and importation of counterfeit goods. This group includes non-vessel operating common carriers (NVOCC), freight forwarders, licensed customs brokers, and couriers operating through third party transportation companies.

Often overlapping, these categories of services provided by these groups are interchangeable and typically advertised to the public as “seamless logistics” services. In truth, such entities are the sole means by which counterfeit products manufactured in foreign countries get purchased and delivered to U.S. customers.

The Steps

1. To identify these entities, brand professionals should first review their Customs Border Patrol (CBP) seizure notices, which should include the name and address of the importer of record (IOR).
2. Brand professionals should follow all CBP notices with a letter to the listed IOR, demanding that it cease further importation of the infringing merchandise. These letters often result in the IOR discovering its identity was stolen, at which point brand professionals should demand a copy of the CBP notice the IOR received.
3. CBP notices to the IOR should include an entry number for the seized shipment, which enables identification of the customs broker who filed the entry. Brand professionals should then demand the customs broker either refute the IOR’s claim of identity theft, or, if the customs broker was acting on a forged power of attorney, provide information on the upstream transportation companies (i.e.: VOCC, NVOCC, freight forwarders, and in some cases, trucking companies used on prior related entries) which brought the infringing goods into the U.S.

Courier Context

1. Brand professionals’ investigation of couriers also starts with the seizure notice. Each seizure notice includes a CBP case number at the top of the document. This case number starts with a four-digit port code. All CBP seizures at FedEx, DHL, or UPS courier hubs should have a port code that identifies the specific courier hub involved in transporting or importing the seized package.
2. Brand professionals should then issue a demand letter to the listed IOR and the courier, requesting full information on the source of the shipment, including tracking information (i.e.: where and from whom the courier physically received the package).
3. As the sale of merchandise has increasingly become a business of logistics, brand-protection professionals must increasingly understand how infringing product is transported to the consumer and what entities are in the responsibility chain. By using these tools, practitioners can better identify transportation and importation intermediaries who are part of the problem—and require them to be part of the solution. 

¹See 15 U.S.C. §1127; Rescuecom Corp. v. Google, Inc., 562 F.3d 123,132 (2d Cir. 2009).

²See Philip Morris USA Inc. v. Liu, 489 F. Supp. 2d 1119, 1122 (C.D. Cal. 2007)(non-willful transportation of counterfeit goods is sufficient for Lanham Act claims); Philip Morris USA Inc. v. Sun Star Trading, Inc., Case No. CV 08-0068 (KAM) (JO), 2010 U.S. Dist. LEXIS 52795, at *14 (E.D.N.Y. March 11, 2010)(arranging for transportation of counterfeit goods into the U.S. supports Lanham Act claims); Karl Storz Endoscopy-Am, Inc. v. Surgical Techs., Inc., 285 F.3d 848, 855 (9th Cir. 2002)(“use” under the Lanham Act is not limited to sales).