IACC Files Submission to Office Of US IP Coordinator

In late February, Victoria Espinel, the United States Intellectual Property Enforcement Coordinator, published a request in the Federal Register seeking comments regarding the development of a Federal Joint Strategies Pan. The idea is to improve the ability of the US Federal government to fight against piracy across the many agencies that may have juristiction.
The International AntiCounterfeiting Coaltion filed its response to the request yesterday. Among the statements made by the IACC is a request seeking improvements in the manner in which the Customs Service, known as the US Customs and Border Protection, imparts information to IP owners. The IACC submission said in part:

“At present, the single greatest policy priority for the IACC and its members concerns the availability of information regarding shipments of goods detained by US Customs and Border Protection (“CBP”) which are suspected of being counterfeit, or otherwise violating the rights of intellectual property owners in trademarks registered in the United States and recorded with CBP.

As the manufacturing capabilities of counterfeiters have increased in recent years, with the more widespread availability of tools which facilitate the replication of products and packaging, Customs’ ability to detect counterfeit goods has grown exponentially more difficult. Rights-holders have adopted a variety of technologies, both overt and covert, which are commonly used to aid in identifying illicit product or verifying the legitimacy of goods. The volume, and variety, of goods entering the domestic stream of commerce at US ports obviously makes it unfeasible for Customs personnel to receive the extensive training or level of familiarity necessary to verify the legitimacy of every trademark that comes before them. Traditionally, private sector rights-holders have been consulted by CBP, and have offered assistance in making such verifications. Regrettably, CBP has adopted a policy – citing the Trade Secrets Act – which has significantly reduced the ability of CBP to ask for, or for rights-holders to provide, such assistance.

By way of example, many legitimate manufacturers and rights-holders have adopted verification procedures which involve the marking of product containers and packaging with unique serial identification markings at the time of manufacture. Current CBP policy precludes the disclosure of such markings to a rights-holder either through the provision of samples or photographic evidence. In practice, CBP has provided redacted photographs or digital images of the goods; or when physical samples have been provided, Customs personnel have physically removing or obliterated the markings prior to providing the sample to the rights-holder. Unfortunately, absent those identifying codes, in many cases, the trademark owner has been unable to make a positive determination regarding the products’ authenticity. The implication of the Trade Secrets Act (and the potential for criminal prosecution for violations of that statute), has, according to reports from IACC member companies, resulted in Customs’ reluctance to share information which might allow rights-holders to provide the type of assistance necessary to verify whether a suspected shipment is, in fact, counterfeit. The clear result of this policy is an increased likelihood that greater volumes of counterfeit product will enter through the borders, posing greater threats to consumers, and greater economic harm to legitimate businesses.

Information is arguably the most powerful weapon available to law enforcement and rights-holders in addressing the problem of counterfeiting. IACC members continue to report however that current policies in place are hindering their ability to identify individuals involved in the trafficking of counterfeit goods. Rights-holders noted that they frequently encounter cases of fraud when conducting follow-up investigations, subsequent to their receipt of Customs Seizure Notices from the Office of Fines, Penalties, and Forfeiture. In some cases, the individual named as the importer of record has been the victim of identity theft (and is in no way connected to the importation); while in other cases, a fictitious name has been provided by the importer to a customs broker, and in turn, to CBP.

Customs and Border Protection has the authority to regulate customs brokers, and to conduct audits of customs brokers’ records. Even a relatively minor step such as a due diligence requirement similar to that set forth in other areas of federal law (e.g., the Bank Secrecy Act, 31 USC 5318), or a requirement that customs brokers require an importer to provide two valid forms of government identification (and copies of corporate papers, in the case of a business), would help to deter such fraud. The ability to accurately identify and locate importers could also be useful in the enforcement of fines assessed against importers for violations (whether related to the importation of counterfeit products or other provisions of the Customs laws).

The PRO-IP Act was grounded in the idea that improving IP enforcement required improving the communication and coordination among all of those tasked with the job. That idea applies equally within the government, in the private sector, and between the two. To that end, the IACC supports a comprehensive review of these and other Executive Branch policies to ensure that open communication and cooperation between rights-holders and government personnel tasked with enforcement is not unduly burdened.”

More information can be found out about the IACC at http://www.iacc.org.