Customs Recordations of Trademarks and Copyrights

The U.S. Customs and Border Protection (“CBP”) agency can provide IP rights owners with powerful tools to stop infringing articles from entering the United States. According to CBP statistics, in fiscal year 2015, for example, the CBP accounted for over 28,000 intellectual property rights seizures, with a total retail value estimated at $1.4 billion.^[1] The top seized commodities included apparel, electronics, footwear, watches/jewelry, and pharmaceuticals.^[2]

Although the CBP’s authority includes enforcement of orders of exclusion issued by the U.S. International Trade Commission, this article will focus on the CBP’s enforcement of federally registered trademarks and copyrights.^[3] As discussed below, enforcement begins with federal registration of these rights, and recordation of those federal registrations with the CBP.^[4] Once recorded with the CBP, the CBP can examine and detain suspicious goods, and subject those goods to seizure and forfeiture.^[5]

An Overview of Trademarks and Copyrights Protected by the CBP

Trademarks

Trademarks are words, phrases, symbols, or designs that serve to designate the origin of a product or service. Importantly, trademarks serve to distinguish the goods or services of one party from another. The standard for trademark infringement is a “likelihood of confusion,” or whether another’s use of a mark is likely to cause confusion in the minds of relevant consumers about the source or sponsorship of goods bearing that mark.

Trademark rights can derive simply from use of a mark in U.S. commerce. Rights are strongest, however, when trademarks are registered on the Principal Register at the U.S. Patent and Trademark Office (“USPTO”). A major benefit of federal registration is that it allows a mark owner to record its mark with the CBP for customs enforcement of infringing goods.^[6]

Copyrights

Copyrights protect original works of authorship, which can include literary works; pictorial, graphic, and sculptural works; musical works; motion pictures and other audio visual works; sound recordings; and architectural works. Although copyright protection exists as soon as a work is fixed in a tangible medium, enforcement of a copyright requires registration with the U.S. Copyright Office. To show infringement, a copyright holder must show (1) that an alleged infringer had access to the protected work and (2) substantial similarity between an accused work and the protected work.

CBP copyright enforcement focuses on registered copyrights that have been recorded with the CBP. A pending copyright application, however, can be temporarily recorded with the CBP while awaiting registration by the U.S. Copyright Office. The CBP is authorized to enforce such pending copyrights to the same extent as registered copyrights.

Initiating CBP Enforcement of Rights

Recordation of Trademarks

Trademark registrations can be recorded online for a fee of $190 per International Class of goods. Some of the information required is basic, including the registration number, identification of the owner, and identification of the owner’s representative or attorney.

Some of the required information may need to be investigated and obtained, as needed, such as:

• the International Class(es) of goods to be recorded with the CBP;
• the country or countries of manufacture of genuine goods sold under the mark; and
• the names and addresses of parties authorized to apply the mark to goods, and a description of that party’s relationship with the mark owner (licensee, subsidiary, manufacturer, etc.);
• the names and addresses of all authorized users of the mark anywhere, a description of such use and whether any related company has such rights to use; and
• information regarding any other entities claiming rights to the mark outside of the United States.

Recordation can also include optional information to assist with enforcement, such as:

• an identification of all foreign and domestic entities related to the mark owner;
• information on expected infringement, such as channels of distribution and potential suppliers; and
• images of the mark.

Recordation of Copyrights

Copyright registrations can also be recorded online for a fee of $190 per recordation. The basic information required includes the registration number, identification of the owner, and identification of the owner’s representative or attorney.

Other information may need to be obtained, as needed, from the copyright registrant, such as:

• the country or countries of manufacture of genuine copies of the protected work; and
• the names and addresses of parties authorized to use or reproduce the copyrighted work, and a description of that party’s relationship with the owner of the work (licensee, subsidiary, manufacturer, etc.).

As with recordation of trademarks, recordation of copyrights can also include optional information to assist with enforcement, such as:

• the foreign title of the work, if any;
• for sound recordings, information setting forth the name(s) of the performing artist(s) and other names associated with the sound recording or packaging;
• information on expected infringement, such as channels of distribution and potential suppliers; and
• images of the protected work.

The CBP will now also record and enforce copyrights that are “pending” at the U.S. Copyright Office to the same extent as registered copyrights. Such recordations are valid for a period of six months (extendable by 90 days). If copyright registration is granted within that time, the recordation will be amended with registration information. If not, the applicant can re-file for another temporary six-month recordation.

Submission of Product Identification Training Guides

For best results, rights owners should submit a product identification guide to help the CBP make infringement determinations. Although the CBP advises that such a guide should be brief, we recommend that it include information such as:

• an identification of the IP right to be enforced, information about the owner of the right, and contact information for the owner’s representative or attorney;
• the CBP recordation number;
• information on both the genuine and suspect products, including:
  • physical description,
  • product name/model number,
  • photographs of the product and product packaging, and
  • images of logos on the products and packaging;
• for both the genuine and suspect products, the location of manufacturing and ports of entry (if known); and
• the required disclaimer language provided by the CBP.

Once complete and submitted to the CBP, the guide will be accessible by agents in the field and will be used to assist with infringement determinations.

In-Person Product Training Sessions

For important or more complex identifications, companies may also provide in-person product identification training sessions at ports of entry. Companies can request training sessions with officers and import specialists who are responsible for conducting the infringement inspections at a port of entry.

Procedures for CBP Enforcement

Trademarks

The CBP categorizes potential trademark infringement into three levels: “counterfeit marks,” “copying or simulating marks,” and “restricted gray market goods” (parallel imports).

Counterfeit Marks:

A “counterfeit” mark “is a spurious mark which is identical with, or substantially indistinguishable from, a registered mark.”^[7] Upon identification of a suspected registered and recorded counterfeit mark, the CBP will:

• detain the suspected goods for not more than 30 days;^[8]
• within five business days of detention, provide written notice to the importer of the detention;^[9]
• prior to issuance of the notice of detention, or concurrently with the issuance of the notice of detention, provide limited information to the trademark owner to assist with determining whether the goods include or consist of a counterfeit mark;^[10]
• within seven business days of the notice of detention, allow the importer to present information establishing that the detained merchandise does not bear a counterfeit mark;^[11] and
• if the importer fails to so establish, provide to the trademark owner a sample (which requires a bond) or information from the merchandise or retail packaging, to further assist with determining whether the goods include or consist of a counterfeit mark.^[12]

At any point after examination and detention of detained articles, the CBP may determine that the imported material bears a counterfeit mark.^[13] Upon this determination, the CBP will seize such material and, absent written consent of the mark owner, forfeit the seized merchandise in accordance with the customs laws.^[14] Such forfeiture generally leads to destruction of the seized materials (although in some cases the CBP may “obliterate” the mark and deliver the goods to a government agency or donate the merchandise to charity).

Copying or Simulating Marks

A “copying or simulating” trademark or trade name is “one which may so resemble a recorded mark or name as to be likely to cause the public to associate the copying or simulating mark or name with the recorded mark or name.”^[15] In cases of “copying or simulating” marks, suspect merchandise is subject to detention and potential seizure.

In particular, the CBP will deny entry to merchandise bearing such a mark and will detain such merchandise for 30 days.^[16] Within five business days, the CBP will provide a notice of detention to the importer, who then has a chance to show why such goods should not be seized, by, for example, obliterating the offending mark or obtaining consent from the mark owner.^[17]

From the time merchandise is presented for customs examination until the time the CBP issues a notice of detention, the CBP may disclose to the mark owner limited information to assist with determining whether the imported article infringes.^[18] Once it issues the notice of detention, the CBP must disclose such information to the mark owner.^[19] The CBP may further, as needed, issue to the mark owner (upon issuance of a bond by the mark owner) a sample of the detained merchandise.^[20]

If, after 30 days, the importer has not met its burden to show that the goods should not be seized, the CBP will seize the merchandise and start forfeiture proceedings.^[21]

Gray Market Goods

“Gray market goods” or “parallel imports” are generally considered to be genuine goods bearing a trademark owned by a U.S. citizen or corporation, but which (i) were manufactured for use in another country and (ii) were imported into the United States without authorization.^[22] In other words, a trademark owner has authorized the use of a trademark with these goods (unlike with counterfeit goods), but not the importation of these goods into the United States.^[23]

If the CBP affords a rights holder protection over such gray market goods, they would be detained under 19 C.F.R. § 133.23 and 19 C.F.R. § 133.25 (except as provided in 19 C.F.R. §133.23(b)), and would potentially be subject to seizure and forfeiture.^[24]

Copyrights

Similar to trademark enforcement, the CBP categorizes the level of copyright infringement, although at only two levels: “clearly piratical” and “possibly piratical” of the protected work. The CBP uses the following definitions of these terms:^[25]

• “piratical copies” are considered “identical or substantially similar copies of a registered copyrighted work,” produced and imported without authorization;
• “clearly piratical” copies are defined as having “overwhelming and substantial similarity between the copyrighted elements of the protected work and the suspect item so as to clearly indicate that one work was based upon the other;” and
• “possibly piratical” copies encompass “situations in which CBP has ‘reasonable suspicion’ to believe that imported merchandise is piratical of copyrighted works recorded with CBP.”

Clearly Piratical Copies:

“Clearly piratical” copies of a copyrighted work recorded with the CBP are subject to seizure and forfeiture under 19 U.S.C. § 1595a(c)(2)(C) for a violation of 17 U.S.C. § 602, as implemented by 19 C.F.R. § 133.42. Under 19 C.F.R. § 133.42, the CBP will seize “clearly piratical” copies and start forfeiture proceedings under 19 C.F.R. § 162. The CBP will also disclose information on the importation, and potentially provide samples of the imported goods, to the rights holder, for potential civil proceedings against the importer.^[26]

Possibly Piratical Copies

The CBP will detain “possibly piratical” copies and will follow the process outlined in 19 C.F.R. § 133.43. If the CBP determines such merchandise to be “piratical,” the CBP may seize such goods after which the goods may be subject to forfeiture under 19 U.S.C. § 1595a(c)(2)(C) for a violation of 17 U.S.C. § 602.

Under 19 C.F.R. § 133.43, when the CBP suspects that an imported article may be a copy, the CBP starts an administrative process that seeks to determine whether the article infringes. As a first step, the CBP detains the article and provides notice to the importer.^[27] The importer then has 30 days to file a denial of infringement (otherwise, the article is subject to seizure and forfeiture).^[28]

If the importer files a denial, the CBP provides notice of the denial to the copyright owner.^[29] The copyright owner then has 30 days to file a demand for exclusion and pay a bond set by the CBP (generally around 120% the value of the shipment plus duties, fees, and taxes).^[30] Otherwise, the article is released.

If the copyright owner files the demand and pays the bond, the CBP will provide notice to the importer and the copyright owner that each may provide evidence and briefing on infringement.^[31] Generally the CBP allows the parties 30 days within which to submit such evidence and briefing, and then another 30 days in which to submit rebuttal evidence and briefing.^[32]

Based on this information, the CBP then decides whether the article infringes.^[33] If it infringes, CBP will destroy the article and return the bond to the copyright owner; if it does not infringe, CBP will release the article and give the bond to the importer (and allow further imports of the same article). Under this process, the burden is on the copyright owner to prove infringement.^[34]

Conclusion

Federal registration and customs recordations are two important tools for rights holders. We advise that clients consider the proactive use of each, and record trademark and copyright registrations, and potentially copyright applications, to stop importation of unauthorized infringing goods into the United States, thereby protecting brand value and market share.

© 2018 McDonnell Boehnen Hulbert & Berghoff LLP

snippets is a trademark of McDonnell Boehnen Hulbert & Berghoff LLP. All rights reserved. The information contained in this newsletter reflects the understanding and opinions of the author(s) and is provided to you for informational purposes only. It is not intended to and does not represent legal advice. MBHB LLP does not intend to create an attorney–client relationship by providing this information to you. The information in this publication is not a substitute for obtaining legal advice from an attorney licensed in your particular state. snippets may be considered attorney advertising in some states.

[1] Fact Sheet, U.S. Customs and Border Protection (2016), available at https://www.cbp.gov/sites/default/files/assets/documents/2016-Dec/2015%20IPR%20Fact%20Sheet%20Update%20Final.pdf.

[2] Id.

[3] The CBP makes substantive decisions on trademark and copyright infringement under the Tariff Act of 1930, the Lanham Act of 1946, the Copyright Act of 1976, and the Digital Millennium Copyright Act of 1998.

[4] The CBP maintains an online recordation system, currently available at https://iprr.cbp.gov, which allows rights owners to record registered trademarks and copyrights online with the CBP. This Intellectual Property Rights e-Recordation system also facilitates intellectual property detentions and seizures by making information on recorded rights readily available to CBP personnel.

[5] Patent rights, even if granted by the U.S. Patent and Trademark Office, cannot be recorded with the CBP. Rather, the CBP can only enforce patent rights by enforcing an exclusion order issued by the U.S. International Trade Commission (“ITC”) pursuant to a Section 337 action under the Tariff Act of 1930. Such an exclusion order would issue at the conclusion of what is essentially a patent litigation and trial occurring before the ITC.

[6] “Trade names” not registerable with the USPTO may, under certain conditions, be recorded with the CBP for customs enforcement. The name must be used for at least six months to identify a producer or provider of goods. And recordation is subject to publication in the Federal Register and the Customs Bulletin and Decisions (Customs Bulletin) to provide third-party notice and an opportunity to oppose recordation.

[7] 15 U.S.C. § 1127; see also 19 C.F.R. § 133.21.

[8] 19 C.F.R. § 133.21(b)(1).

[9] Id. § 133.21(b)(2).

[10] Id. § 133.21(b)(4).

[11] Id. § 133.21(b)(2).

[12] Id. § 133.21(b)(2)-(3).

[13] Id. § 133.21(e).

[14] Id.

[15] Id. § 133.22(a).

[16] Id. §§ 133.22; 133.25.

[17] See id. § 133.22(c).

[18] Id. § 133.25(b).

[19] Id.

[20] Id. § 133.25(c).

[21] See 19 U.S.C. § 1595a(c)(2)(C); 19 C.F.R. § 133.22(f).

[22] See, e.g., 19 C.F.R. § 133.23(a).

[23] According to guidance from the CBP:

Gray market protection is conferred where (1) the U.S. and foreign trademarks are not owned by the same person, and (2) the U.S. and foreign trademark owners are not a parent or subsidiary, or otherwise subject to common ownership or control.

What Every Member of the Trade Community Should Know About: CBP Enforcement of Intellectual Property Rights, U.S. Customs and Border Protection (Aug. 2012), available at https://www.cbp.gov/sites/default/files/assets/documents/2017-Feb/enforce_ipr_3_0.pdf [hereinafter “CBP Guide”].

[24] See 19 U.S.C. § 1526(b); see also 19 C.F.R. § 133.23(f).

[25] CBP Guide, supra note 23.

[26] See 19 C.F.R. § 133.42(c)-(e).

[27] Id. § 133.43(a).

[28] See id.

[29] Id. § 133.43(b).

[30] See id.

[31] Id. § 133.43(d).

[32] Id.

[33] Id.

[34] Id.