Manager, Regulatory and Legislative Affairs
FBB Federal Relations/Lindsay Hart LLP
In February of this year, U.S. Congress passed the long-awaited Trade Facilitation and Trade Enforcement Act, effectively the first Customs reauthorization bill since U.S. Customs and Border Protection (CBP) was incorporated into the Department of Homeland Security in 2003.
Entering into force on March 10, 2016, the Act was applauded by U.S. rights-holders as a much-needed vehicle to formalize programs and reprioritize CBP operations. Intellectual Property Rights are considered one of the seven top trade concerns addressed in the Act.
The Act contains provisions to help U.S. businesses combat counterfeits and intellectual property (IP) rights violations—including new enforcement tactics and heightened engagement with the private sector. This is timely considering that the Organisation for Economic Co-operation and Development found that the global imports of counterfeit goods reached $461 billion in 2013 (among total imports of roughly $17.9 trillion). In FY 2015 (October 2014-September 2015), U.S. Ports of Entry produced more than 28,000 seizures of fake products, with an estimated MSRP of $1.35 billion.
Following is an overview of the key sections of the Trade Facilitation and Trade Enforcement Act impacting brand protection professionals.
CBP Pre-Seizure Information Exchange: If CBP agents suspect imported merchandise infringes on copyright or trademark laws and believe that examination or testing of the product would confirm this, they are required to provide rights holders with unredacted photographs or samples for testing.
IMPORTANT: This program is only available to those who have registered their trademarks and copyrights with CBP already. It is critical that rights holders register with CBP’s e-Recordation system. The database is available to all CBP offices throughout the United States for reference.
Authorization of National Intellectual Property Rights (IPR) Coordination Center: The Center is reauthorized to continue its investigative work and to coordinate with 23 other U.S. government agencies on IPR protection and seizure of counterfeit goods.
Establishment of Chief Innovation and Intellectual Property Rights Negotiator: Responsible for representing U.S. IP rights interests when negotiating trade agreements with other countries, an advocate at this level within the Office of the U.S Trade Representative will be critical for U.S brands to remain competitive in future trade agreements.
Increased Intellectual Property Enforcement Personnel at the Ports: The law requires that “sufficient” personnel are made available at the Ports and at the Intellectual Property Rights Coordination Center to ensure that counterfeits are intercepted. If brands feel that staffing of CBP officers with IP expertise is not at adequate levels, they should notify CBP and their members of Congress.
New Intellectual Property Rights Enforcement Technology: CBP will work with the private sector to determine new technologies (both software and hardware) to combat IP rights violations. CBP will then accept private-sector donations and training on use of this equipment. Look for an announcement with additional details on how to get involved in September of this year.
Outreach to Travelers on Intellectual Property Rights Violations: CBP will launch a campaign to inform persons entering and exiting the United States of the risk that fraudulent merchandise poses. New Customs declaration forms will warn travelers of the civil and criminal penalties they might face if found with goods violating IP rights. The campaign hopes to crack down on the travelers who are aware of IP rights violations in the goods they choose to purchase abroad.
Potential New Risk Factor—Increased De Minimis Values: Reflecting the explosion of e-commerce, the Act increases the de minimis value of shipments entering the United States without declaring at Customs from $200 to $800 (one person may import one shipment per day). The increase in these small-scale, individual shipments also increases the risk of IPR violations slipping across the border. Commissioner Kerlikowske acknowledged at a recent Senate hearing the challenges of detecting these shipments of fake goods.
Bottom Line: The Trade Facilitation and Trade Enforcement Act is a much-needed, long anticipated authorization of critical programs to protect U.S. businesses and their intellectual property rights. Over the next year, CBP will solidify the programs above, many of which include robust private-sector involvement. Much is still left to be done to protect brands from counterfeits, including the onslaught of small-scale direct-to-consumer shipments facilitated by e-commerce over the internet.
This law formally authorizes the National Intellectual Property Rights Coordination Center.
More on the IPR Center
THE BRAND PROTECTION PROFESSIONAL | SEPTEMBER 2016 | VOLUME 1 NUMBER 1
COPYRIGHT 2016 MICHIGAN STATE UNIVERSITY BOARD OF TRUSTEES