Seattle Trademark Lawyer

Following is STL’s perhaps first-ever guest post, by Larry Friedman, who is a partner in Barnes, Richardson & Colburn and blogs on customs and trade related matters at the Customs Law Blog.

In fiscal 2009 (October 1, 2008 to Oct 1, 2009), U.S. Customs and Border Protection made 14,841 seizures to protect U.S. intellectual property rights. The domestic value of the seized merchandise was over $260 million. Of that value, nearly 80% originated in China. Footwear was the most seized commodity accounting for almost $100 million.

Based on these statistics, it is clear that Customs plays an important role in the protection of U.S. intellectual property rights. Customs has identified stopping the importation of infringing products as a priority objective. To do this, Customs relies on its legal authority to examine, detain, and seize infringing merchandise. That authority is derived from the Tariff Act of 1930, the Lanham Act, the Copyright Act, and the Digital Millennium Copyright Act. In some cases, importing infringing merchandise can lead to criminal prosecution.

With respect to trademarks, Customs deals with three categories of merchandise: counterfeits, products bearing confusingly similar marks, and gray market goods. Counterfeits are products bearing marks that are identical with or substantially indistinguishable from federally registered trademarks. When Customs encounters counterfeit marks, it can seize the merchandise, which will then be forfeited. Forfeited merchandise is destroyed or, under some circumstances, donated to governmental agencies or charities after the offending mark is removed.

For confusingly similar marks, Customs will detain the merchandise for up to 30 days. During that time, the importer can seek the release of the merchandise by proving that it is not actually infringing or by removing the mark. If, following that 30-day period, the importer is unsuccessful in securing the release of the merchandise, Customs will seize and forfeit it.

For U.S. trademark holders, an important element of Customs enforcement is the recordation of trademarks. This is separate from registration with the Patent and Trademark Office. Recordation is a process of recording registered trademarks with Customs so that it can enter them into a database accessible to enforcement personnel at the various ports. Customs must seize products it discovers bearing counterfeit copies or recorded marks and will only seize counterfeits of unrecorded marks when practical. For confusing marks, Customs will not take any action to protect marks that are not recorded with the agency. 

Recordation with Customs is an easy process. Customs has established an online Intellectual Property e-Recordation (IPRR) system to facilitate recordation. Customs only accepts recordations for marks on the principal register of the PTO. To register, the applicant must submit:

• The name, complete business address and citizenship of the trademark owner;
• The place of manufacture of goods bearing the recorded trademark;
• The names and addresses of any persons or companies authorized to use the trademark;
• The identity of any parent or subsidiary company or other foreign company under common ownership or control which uses the trademark abroad; and
• A fee of $190 for each class of goods of a trademark the applicant wishes to record.

This raises particular concerns for importers of the third category of merchandise: gray market goods. Gray market goods are legitimate products purchased abroad from third parties and imported without the authorization of the U.S. trademark holder. In most cases, this type of trade is legal. There are exceptions for products that are materially different from the product sold in the U.S. and where the trademark was applies abroad by a company not under the control of the U.S. trademark owner.

Even when the gray market products are imported legally, it is often difficult for importers to prove that they are not counterfeit. That is because there is no documentation showing a relationship between the U.S. buyer and a legitimate manufacturer of the merchandise. Thus, importers of legitimately imported gray market goods run the risk of losing their merchandise and should, therefore, carefully consider the risks of entering into the transaction.

After recording their trademarks, U.S. rights holders should consider working with Customs officials to ensure they have the knowledge and tools necessary to identify counterfeit and infringing products. This can be done through port-level personnel or Customs Headquarters in Washington. Customs will be particularly interested in the identification of counterfeits that represent a threat to public health and safety. Because of that, Customs actively works with companies in the pharmaceutical and electrical products industries and pays particular attention to certification marks that indicate compliance with safety standards.

For U.S. companies that find themselves struggling to eliminate counterfeits and infringing products from the market, U.S. Customs and Border Protection can be an important ally. To enlist Customs in that effort, companies must record trademarks and work closely with Customs authorities. In the end, trademark holders are likely to find that the $190 recordation fee was an excellent investment.