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Ninth Circuit Orders Release of Information on Counterfeit Seizures

Back in 2008, Seattle IP attorney Samuel Watkins wanted information about the seizure of counterfeit goods at various ports around the country. He asked the U.S. Bureau of Customs and Border Protection (CBP) for the date seized merchandise was imported, the port of entry, the description of the merchandise, the quantity of the merchandise, the country of origin, and the names and addresses of the exporter, importer, and manufacturer.

CBP denied his request, so Mr. Watkins sued under the Freedom of Information Act (FOIA). In October 2009, Western District Judge James Robart granted CBP’s motion for summary judgment and denied Mr. Watkins’ cross-motion. (STL post here.)

Mr. Watkins appealed. On May 4, the Ninth Circuit affirmed the decision in part and reversed it in part.

The reversal is the more interesting part of the decision, at least for trademark practitioners. The court found the information Mr. Watkins requested was subject to Exemption 4, which protects against the release of information containing confidential commercial information.

“Watkins argues that the information contained in Notices of Seizure cannot be commercial because it pertains to “the unlawful importation of counterfeit goods, and not any sort of legitimate commercial activity.” The district correctly rejected this argument because Notices of Seizure are not final determinations that goods seized are counterfeit. Instead, the issuance of a Notice is akin to a finding of probable cause. As the Agency’s declarations demonstrate, an importer whose merchandise is seized can challenge the seizure both administratively and in court. Further, importers sometimes acquiesce in the Agency’s seizure and forfeiture of legitimate goods. As a result, we cannot conclude that information contained in a Notice of Seizure is non-commercial just because it’s likely—perhaps even very likely—that the merchandise seized is counterfeit.”

However, the court also found that CBP had waived its right to withhold the documents because it previously had disclosed them to trademark owners without assuring that the documents remain confidential.

“Here, disclosure of the Notices of Seizure to an aggrieved trademark owner is mandated by statute. When disclosure is made to a trademark owner, the government imposes no restrictions on the owner’s use of the information in the Notice. He can freely disseminate the Notice to his attorneys, business affiliates, trade organizations, the importer’s competitors, or the media in a way that would compromise the purportedly sensitive information about an offending importer’s trade operations. This no-strings-attached disclosure thus voids any claim to confidentiality and constitutes a waiver of Exemption 4. FOIA accordingly creates an obligation for the government to disclose the requested documents.”

The case cite is Watkins v. U.S. Bureau of Customs and Border Protection, __ F.3d __, 2011 WL 1709852, No. 09–35996 (9th Cir. May 6, 2011).

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