[Federal Register Volume 80, Number 181 (Friday, September 18, 2015)]
[Rules and Regulations]
[Pages 56370-56381]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-23543]
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DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
DEPARTMENT OF THE TREASURY
19 CFR Parts 133 and 151
[Docket No. USCBP-2012-0011; CBP Dec. 15-12]
RIN 1515-AD87
Disclosure of Information for Certain Intellectual Property
Rights Enforced at the Border
AGENCIES: U.S. Customs and Border Protection, Department of Homeland
Security; Department of the Treasury.
ACTION: Final rule.
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SUMMARY: This document adopts as a final rule, with changes, interim
amendments to the U.S. Customs and Border Protection (CBP) regulations
pertaining to importations of merchandise bearing suspected counterfeit
trademarks or trade names that are recorded with CBP. Specifically, the
amendments allow CBP, for the purpose of obtaining assistance in
determining whether merchandise bears a counterfeit mark, to disclose
to a trademark or other mark owner information appearing on merchandise
or its retail packaging that may otherwise be protected by the Trade
Secrets Act. This final rule also amends the CBP regulations to further
enhance information-sharing procedures by requiring CBP to release to
the importer an unredacted sample or image of the suspect merchandise
or its retail packaging any time after presentation of the suspect
goods for examination. This change is to reflect that an importer may
not have complete information about the marks appearing on imported
goods, and release of such unredacted information will assist the
importer in providing CBP with a meaningful response to a detention
notice. The amendments in this final rule also require CBP to release
limited importation information to the mark owner no later than the
time of issuance of the detention notice to the importer, rather than
within 30 business days from the date of detention. Finally, these
amendments require CBP to notify the mark owner that use of any
[[Page 56371]]
information otherwise protected by the Trade Secrets Act that is
disclosed by CBP to the mark owner is for the limited purpose of
assisting CBP.
DATES: Effective on October 19, 2015.
FOR FURTHER INFORMATION CONTACT: Goli Gharib, Intellectual Property
Rights Branch, Regulations and Rulings, Office of International Trade,
(202) 325-0216.
SUPPLEMENTARY INFORMATION:
Background
On April 24, 2012, CBP published CBP Dec. 12-10 in the Federal
Register (77 FR 24375), setting forth interim amendments to the CBP
regulations that pertain to importations of merchandise bearing
suspected counterfeit trademarks or trade names that are recorded with
CBP. The interim regulation, which went into effect upon publication,
made several changes to subpart C of part 133 of title 19 of the Code
of Federal Regulations (19 CFR part 133) regarding the detention of
suspect merchandise and the disclosure of information to mark owners
during detention of goods bearing potentially counterfeit marks and
after seizure of goods bearing counterfeit marks. These changes
included a clarifying revision of the definition of ``counterfeit
trademark'' and the addition of a 30-day detention period relative to
goods suspected of bearing counterfeit marks.
CBP Dec. 12-10 sets forth a detailed discussion of the statutory
scheme pertaining to enforcement of the intellectual property laws and
CBP's derived authority to promulgate the interim amendments whereby
CBP officers may disclose certain information that might comprise
otherwise confidential commercial or financial information in order to
assist CBP in identifying merchandise bearing counterfeit marks at the
time of detention. See National Defense Authorization Act for Fiscal
Year 2012 (NDAA) (Public Law 112-81, 10 U.S.C. 2302); Trade Secrets Act
(18 U.S.C. 1905); Administrative Procedures Act (5 U.S.C. 551 et seq.);
Lanham Act (15 U.S.C. 1124, 1125, 1127); Tariff Act of 1930, as amended
(19 U.S.C. 1526(e) and 1595a(c)). Interested parties may refer to CBP
Dec. 12-10 for that background information.
Although the interim regulatory amendments were promulgated without
prior public notice and comment procedures and took effect on April 24,
2012, CBP Dec. 12-10 provided for the submission of public comments
which would be considered before adoption of the interim regulations as
a final rule.
Discussion of Comments
Twenty commenters responded to the interim rule's solicitation of
public comment. Each submission consisted of multiple comments and
several were submitted by or on behalf of associations. A majority of
commenters expressed support for the interim rule's primary purpose of
providing a procedure for the disclosure of information by CBP to mark
owners for the purpose of determining whether imported goods bear
counterfeit marks. Many of these commenters expressed the view that the
interim rule does not go far enough to support CBP's enforcement
efforts and made recommendations for improving the regulation.
A minority of commenters opposed the rule. Some of these commenters
expressed concern that the interim regulation may have unintended
consequences on the flow of legitimate trade, such as by enabling mark
owners to prevent competing legitimate goods from entering commerce,
and may create administrative burdens for the agency. The comments, and
CBP's analyses thereof, are set forth below.
A. Terminology
For purposes of the comment discussion, the following terms are
defined as set forth below:
``Section (b)(1) information'' refers to the specified
information CBP is authorized to release under Sec. 133.21(b)(1) of
the interim regulation: Information appearing on suspect goods or their
retail packaging (including labels) and unredacted samples or images
(photographs, etc.) of the suspect goods or their retail packaging.
``Section (b)(1) information,'' in whatever form disclosed, may include
manufacturer, shipper, exporter, or importer name and address when it
appears on merchandise or its retail packaging, or serial numbers,
dates of manufacture, lot codes, batch numbers, universal product
codes, or other identifying marks, appearing on merchandise or its
retail packaging in alphanumeric or other formats.
The term ``unredacted sample'' refers to a sample
(including its packaging) in its original condition as presented to CBP
for examination.
The term ``limited importation information'' refers to the
basic information CBP releases under Sec. 133.21(b)(2) of the interim
regulation (redesignated as Sec. 133.21(b)(4) in this final rule).
Limited importation information consists of: Date of importation, port
of entry, and description, quantity, and country of origin of the
goods.
The term ``redacted sample'' is used to describe samples
of goods displaying information all of which or some of which has been
removed, obscured, or obliterated. Such information may include the
names and addresses of manufacturers, shippers, exporters, or importers
that appear on merchandise or its retail packaging, or serial numbers,
dates of manufacture, lot codes, batch numbers, universal product
codes, or other identifying marks that appear on merchandise or its
retail packaging in alphanumeric or other formats. Redacted samples may
be photographed or otherwise reproduced for release to mark owners.
``Comprehensive importation information,'' released by CBP
under Sec. 133.21(d) of the interim regulation (redesignated as Sec.
133.21(e) in this final rule), includes limited importation information
plus the following additional information: Name and address of the
manufacturer, exporter, and importer.
The terms ``goods'' and ``merchandise'' are used
interchangeably.
B. Comments Concerning Legal Issues
1. Comments Concerning Applicability of the Trade Secrets Act (18
U.S.C. 1905)
Comment: One commenter contended that the Trade Secrets Act only
prohibits unauthorized disclosures of personally identifiable
information by a government official or employee who received the
information in the course of his employment.
CBP Response: CBP disagrees. The Trade Secrets Act applies to any
information that ``. . . concerns or relates to the trade secrets,
processes, operations, style of work, or apparatus, or to the identity,
confidential statistical data, amount or source of any income, profits,
losses, or expenditures of any person, firm, partnership, corporation,
or association; . . . .'' (18 U.S.C. 1905).
Comment: Several commenters questioned CBP's interpretation of the
Trade Secrets Act as set forth in the interim rule, which is that
information appearing on imported articles and their retail packaging
is information potentially covered by the Trade Secrets Act's
protection against disclosure.
CBP Response: CBP's view is that while the Trade Secrets Act
protects from disclosure information that identifies persons, or which
may lead to the identification of persons, the Act is not limited to
such information. The Act also covers a comprehensive array of
business, commercial, and financial information.
[[Page 56372]]
Comment: Several commenters were of the view that CBP had changed
its practice in 2008 to reflect that information appearing on imported
articles and their retail packaging is information potentially covered
by the Trade Secrets Act's protection against disclosure, and that
subsequently CBP required that samples provided to mark owners be
redacted.
CBP Response: The agency has consistently interpreted the Trade
Secrets Act as prohibiting its employees from the unauthorized
disclosure of protected information received in the course of their
employment. From calendar year 2000 to publication of the interim rule
on April 24, 2012, CBP's written policy was to provide, prior to
seizure of goods bearing counterfeit marks, only limited importation
information and/or redacted samples to mark owners (Customs Directive
2310-008A, April 7, 2000).
Comment: Several commenters stated that tracking information and
other product coding are generally visible to the public and that any
proprietary interest in this information belongs to the shipper and/or
mark owner, not to the importer. These commenters contended that the
Trade Secrets Act does not prohibit disclosure of this information to
the mark owner.
CBP Response: As explained in the interim rule, markings,
alphanumeric symbols, and other coding appearing on products or their
retail packaging may reveal information regarding an importer's supply
chain. This information is of the kind normally subject to Trade
Secrets Act protection regardless of who may have applied the markings/
symbols/coding to the products or packaging. The Trade Secrets Act
permits those covered by the Act to disclose protected information when
the disclosure is otherwise ``authorized by law,'' which includes
properly promulgated substantive agency regulations authorizing
disclosure based on a valid statutory interpretation. See Chrysler v.
Brown, 441 U.S. 281, 294-316 (1979). Therefore, the ``authorized by
law'' exception of the Trade Secrets Act allows CBP to disclose this
protected information to the mark owner for the limited purpose of
obtaining the mark owner's assistance in determining whether goods bear
a counterfeit mark.
Comment: Some commenters stated that the interim regulation fails
to safeguard the commercial and supply chain information that it
purports to protect, as that information will inevitably become
available to the public when the imported goods reach the market.
CBP Response: The Trade Secrets Act prohibits government officials
from disclosing protected information received during the course of
their employment or official duties, unless disclosure is exempted from
the prohibition, regardless of whether the owner of that information
may eventually disclose it to the public. Importers of merchandise
detained under the provisions of the interim regulation may ultimately
choose not to put the goods on the market or may otherwise dispose of
the goods in a manner in which the aforementioned information appearing
on the goods and/or packaging would never be disclosed to the public.
Importers who choose to disclose such information are not subject to
the Trade Secrets Act as they are not government employees who have
received information pursuant to their employment. CBP's release of
this information under the interim regulation's procedure is allowed
under the ``authorized by law'' exception to the Trade Secrets Act,
discussed above.
2. Comments Concerning the NDAA
Comment: One commenter stated that the NDAA is the sole authority
for promulgating the interim regulation and requested that CBP clarify
the legal basis for the regulation.
CBP Response: CBP disagrees with the commenter's premise. As
explained in the interim rule, the NDAA is not the sole source of
authority for the interim regulation's information disclosure
procedure. In fact, several statutes, including 15 U.S.C. 1124, 1125,
and 1127 and 19 U.S.C. 1526(e) authorize CBP to disclose to mark
owners, for purposes of obtaining the mark owners' assistance in making
infringement determinations, information that CBP may disclose under
the interim regulation.
Comment: Several commenters contended that the NDAA only applies to
products procured by the military and/or matters involving national
defense concerns.
CBP Response: Several statutes authorize CBP to disclose to the
mark owner the information set forth in the interim regulation, none of
which, including the NDAA, is limited to military procurements and/or
importations raising national defense concerns. The NDAA language is
unambiguous and applies to any product CBP suspects of ``being imported
in violation of section 42 of the Lanham Act.'' Therefore, CBP declines
to limit the interim regulation's applicability as suggested by the
commenters.
3. Comments Raising Other Legal Concerns
Comment: One commenter recommended that CBP amend the interim
regulation to clarify that goods that are properly trademarked and that
only use an additional protected trademark in a description of the
product are not covered within the scope of this regulation.
CBP Response: In many cases, using a trademark in the way described
by the commenter is permissible as a ``fair use'' of the trademark.
``Fair use'' is a well-established doctrine in trademark law that is
recognized and honored by the courts. See section 33(b)(4) of the
Lanham Act, 15 U.S.C. 1115(b)(4), which provides for a ``fair use''
defense when ``the use of the name, term, or device charged to be an
infringement is a use, otherwise than as a mark, . . . or [use of] a
term or device which is descriptive of and used fairly and in good
faith only to describe the goods or services of such party.'' CBP
honors the ``fair use'' doctrine, but does not believe it is necessary
to include it in this CBP regulation.
Comment: Several commenters recommended that CBP amend the interim
regulation to modify its definition of ``counterfeit'' based on their
concerns that CBP officers could detain goods that are genuine, albeit
repaired or refurbished goods, or goods bearing genuine marks that are
unrestricted parallel imports.
CBP Response: The interim regulation employs the definition of
``counterfeit'' provided by the Lanham Act at 15 U.S.C. 1127.
Comment: Several commenters stated that the interim regulation
should apply to other forms of intellectual property, such as suspected
piratical or copyright infringing goods, and merchandise suspected of
violating the Digital Millennium Copyright Act (DMCA), 17 U.S.C. 1201.
CBP Response: As the above comment concerns amendments to
regulations concerning forms of intellectual property other than
counterfeit marks, it falls outside the scope of this final rulemaking.
CBP recognizes the concern that there be similar disclosure provisions
relating to suspected piratical or copyright infringing goods and
merchandise suspected of violating the Digital Millennium Copyright Act
(DMCA), 17 U.S.C. 1201, and plans to address the issue through a
separate proposed rulemaking.
C. Comments Concerning Action by Mark Owners
Comment: Several commenters noted that the interim regulation
provides an
[[Page 56373]]
opportunity for mark owners to potentially abuse the section (b)(1)
information provided to them by CBP, and to disrupt or eliminate lawful
parallel market competition. Several commenters recommended that CBP
restrict mark owners' use of section (b)(1) information by placing
conditions on the manner by which they may receive and use the
information.
CBP Response: The interim regulation allows CBP to release section
(b)(1) information to a mark owner after an importer has been notified
and has had the opportunity to establish that the suspect goods bear
genuine marks. This regulation is not intended to impede the legal
importation of parallel (gray market) goods. However, to address the
concern of these commenters, and the concern of those suggesting that
conditions and limitations be placed on mark owners receiving section
(b)(1) information, CBP is amending the interim regulation at 19 CFR
133.21(c) to include in the disclosure to the mark owner a statement
that some or all of the information being disclosed may be information
protected from disclosure by the Trade Secrets Act. The regulation
provides that CBP is only disclosing the information to the owner of
the mark for the purpose of assisting CBP in determining whether the
merchandise bears a counterfeit mark. CBP will take into account, in
deciding whether to make future disclosures to a mark owner, instances
in which the mark owner has used the disclosed information for another
purpose (i.e., other than for assisting CPB in making the infringement
determination).
Comment: Several commenters recommended that CBP amend the interim
regulation to require mark owners receiving section (b)(1) information
from CBP to provide certifications, under penalty of perjury, when
reporting to CBP that goods are counterfeit and contain spurious
versions of the specific marks recorded with CBP. One commenter
contended that a certification would provide an assurance of veracity
in a mark owner's response to CBP that the goods bear counterfeit
marks.
CBP Response: A certification step would add administrative
complexity and impede CBP's ability to determine a suspect good's
admissibility as quickly as possible. The responsibility for
determining whether the goods bear counterfeit marks rests with CBP
which routinely determines the admissibility of goods under numerous
provisions of customs and other laws. In doing so, CBP considers and
determines the veracity of information and the authenticity of
documents presented by importers, mark owners, and others who
participate in various procedures administered under the customs laws
and regulations. CBP will not seize merchandise based solely on
information provided by the mark owner when CBP deems such information
to be insufficient or inconsistent with the facts of the case.
Comment: One commenter expressed concern that mark owners will
delay and/or fail to be responsive to CBP's inquiries regarding
authenticity of marks appearing on suspect goods, thereby prejudicing
the right of importers to an orderly and reasonably expeditious
process.
CBP Response: CBP believes the commenter's concern will be the
exception, not the rule. The interim regulation's detention period
extends for 30 days from the date goods are presented for examination,
which CBP deems a reasonable time frame considering the potential
urgency of the matter. Most cases will be resolved within the 30-day
period. If detained articles are not released within the detention
period, the articles are deemed excluded in accordance with 19 U.S.C.
1499(c)(5) for purposes of 19 U.S.C. 1514(a)(4), which pertains to an
importer's right to protest CBP's decisions. Therefore, delay by the
mark owner, whatever the reason, will not deprive the importer of
recourse to gain release of its merchandise where the facts warrant
such release.
D. Comments Pertaining to the Interim Regulation's Procedure
1. Comments Concerning the Procedure Generally
Comment: Some commenters noted that there could be a potential
disruption to the flow of legitimate trade by the interim regulation's
required procedures.
CBP Response: CBP acknowledges that some goods initially suspected
of bearing counterfeit marks will ultimately be determined to be
genuine or otherwise non-violative and that the release of these
genuine goods will be delayed to some extent. However, the interim
regulation's procedure is structured to resolve these issues in a
reasonably expedited manner, while giving appropriate notices to
impacted parties. Suspect goods found to be genuine will be released
expeditiously.
Comment: One commenter, an importer, stated that the interim
regulation's procedure prevents CBP from seeking assistance in
determining whether the suspect goods bear counterfeit marks until CBP
issues a notice of detention to the importer. The commenter contended
that this procedure impedes CBP's enforcement effort.
CBP Response: CBP disagrees with the commenter's characterization
of the process. In order to seek assistance from a mark owner CBP may,
at its discretion at any time after merchandise is presented for
examination, disclose limited importation information and redacted
samples (or photographs/images) to a mark owner.
Comment: The same commenter stated that the interim regulation's
procedure prevents CBP from seeking assistance from the mark owner
within the seven business day period after issuance of the detention
notice.
CBP Response: Again, CBP disagrees with the commenter's
characterization of the process. As stated above, CBP may, at its
discretion at any time after merchandise is presented for examination,
disclose limited importation information and redacted samples (or
photographs/images) to a mark owner.
Comment: One commenter recommended that CBP amend the regulation to
require that a mark owner post a bond in order to receive a sample only
when the value of the sample released to the mark owner is $500 or
more.
CBP Response: CBP believes that the bonding requirements set forth
in this final rule are appropriate to indemnify the importer against
any loss or damage resulting from the furnishing of a sample to the
mark owner for purposes of assisting the government in making an
infringement determination.
Comment: Several commenters recommended that CBP provide in the
regulation an opportunity for the importer to have a sample of the
suspect goods tested by a qualified laboratory rather than providing a
sample to the mark owner.
CBP Response: CBP recognizes that laboratory analysis may, in
certain instances, be a valuable tool in determining whether goods bear
genuine marks. CBP will consider any information, including laboratory
reports, provided by an importer to support the admissibility of goods
detained under the interim regulation. While information from a
laboratory may lead CBP to decide it is not necessary to provide a
sample to a mark owner, that is not necessarily the case.
Comment: One commenter, an association representing mark owners,
stated that its members strongly oppose giving importers the principal
role in authenticating detained products and requests that CBP provide
right holders
[[Page 56374]]
with unredacted samples and a direct voice in determining authenticity.
CBP Response: This final rule does not give importers the principal
role in authenticating suspected counterfeit marks. Pursuant to 19
U.S.C. 1499, CBP has the ultimate responsibility for determining
whether a suspected mark is counterfeit. Moreover, this final rule
provides the right holders with unredacted samples and photographs and
an opportunity to provide CBP with input regarding whether the goods
bear a counterfeit mark whenever CBP has an unresolved suspicion.
Comment: Some commenters stated that allowing the importer an
opportunity to establish that its imported goods are genuine invites
fraud and questioned whether CBP would be able to determine the
authenticity of documents and information provided by an importer.
CBP Response: There is always a risk that CBP receives incorrect
information, whether from an importer or another interested party. CBP,
however, has extensive experience in determining the admissibility of
goods under the numerous provisions of the customs laws and other laws
it enforces and is well aware of the potential for fraud. CBP has
developed expertise in determining the admissibility of goods presented
for entry and routinely considers the veracity and authenticity of
information and documents that importers (and others) present to CBP.
Comment: One commenter recommended that CBP include a mechanism
under the interim regulation's procedure by which mark owners may
object to a determination by CBP that a suspected counterfeit mark is
not counterfeit, after the mark owner receives either limited
importation information or section (b)(1) information from CBP.
CBP Response: As stated in CBP Dec. 12-10 and noted above, the
objective of this rulemaking is to facilitate CBP's solicitation of
information from both mark owners and importers to better enable CBP to
determine a good's admissibility while safeguarding, to the greatest
extent possible, information that is protected by the Trade Secrets
Act. The mark owner receives more than limited importation information
in that the right holder is provided with an unredacted sample or
digital images containing information appearing on the suspect article.
The disclosure of this information allows the right holder to provide
CBP with the information necessary for making a determination relative
to the suspect mark and for determining whether the article bears a
counterfeit mark.
Comment: One commenter noted with disapproval that the interim
regulation provides for a 30-day window from the date of importation
for CBP to make a determination of ``reasonable suspicion'' and
requires CBP to issue a notice of detention to the importer within five
business days of that determination.
CBP Response: CBP disagrees with the commenter's reading of the
regulation. Under 19 U.S.C. 1499, CBP must decide whether to release or
detain merchandise within five business days following the date on
which merchandise is presented for examination. Therefore, a five
business day window exists within which CBP must make a reasonable
suspicion determination, not a 30-day window. CBP is also required to
issue a notice of detention to the importer no later than five business
days after a decision to detain the merchandise is made. Therefore, the
importer will learn of the detention within ten business days of the
merchandise being presented for examination.
Comment: Several commenters stated that CBP should be required to
issue uniform notices of detention that specify the reason(s) for
detention.
CBP Response: CBP agrees as this requirement is mandated by 19
U.S.C. 1499(c)(2)(B).
Comment: One commenter, citing language from the interim rule's
preamble, recommended that CBP amend the interim regulation to
explicitly state that goods will be detained only when CBP ``reasonably
suspects'' that they bear counterfeit marks.
CBP Response: CBP believes that it is unnecessary to codify in the
regulations factors, elements, and/or circumstances it must consider,
on a case-by-case basis, in determining whether goods are subject to
detention for a determination of violation of the intellectual property
laws.
Comment: A commenter recommended that CBP define the ``good cause''
an importer must show under the interim regulation to justify an
importer's request for a 30-day extension of the detention period.
CBP Response: CBP no longer believes that such a 30-day extension
is warranted and has eliminated it in this final rule. In the past,
extensions were granted to provide time to determine admissibility. CBP
is confident that with the assistance and input of the right holder,
admissibility determinations can be made within the 30-day period.
Comment: One commenter stated that the interim regulation simply
codifies in the regulations what, prior to the promulgation of the
interim rule, had been the regulatory status quo inasmuch as mark
owners may obtain unredacted samples only after CBP determines that the
subject goods bear counterfeit marks and seizes them or formulates the
intention to seize them.
CBP Response: CBP disagrees with the commenter's reading of the
interim regulation. CBP may, when necessary to determine whether
suspect goods bear counterfeit marks, disclose unredacted samples to
the owner of the mark in accordance with the interim regulation's
notice (to the importer) provisions. This disclosure takes place after
detention but before either seizure or the formulation of an intent to
seize.
Comment: One commenter objected to the interim regulation as not
providing protection to importers against disclosure to mark owners of
information protected by the Trade Secrets Act with respect to marks
that are not recorded with CBP.
CBP Response: The interim regulation does, in fact, require that a
mark be registered with the U.S. Patent and Trademark Office and
recorded with CBP as a prerequisite to the agency detaining goods it
suspects bear a counterfeit version of the mark and disclosing
information (or samples or photographs/images) to the mark owner under
Sec. 133.21(b) of the interim regulation. CBP believes that this long-
standing requirement is warranted and will continue to impose it.
Without it, CBP would lack information needed to enforce the
prohibition against counterfeit marks, and the process would become
more complex and significantly less workable.
Comment: Several commenters stated that the interim regulation does
not provide an objective standard for establishing the genuine nature
of marks appearing on imported goods. These commenters recommended that
CBP amend the interim regulation to include examples of the kind of
information it will accept as tending to prove that marks are genuine.
CBP Response: CBP believes that it is unnecessary to amend the
regulation, as CBP will consider any document or information that is
relevant to the question of the authenticity of the mark. Inevitably,
some documents or information submitted to CBP by an importer or a mark
owner will be less persuasive or probative. These decisions are case-
specific and depend on the circumstances involved. In this context, CBP
finds little benefit to limiting the kinds of information it will
consider.
[[Page 56375]]
2. Comments Concerning the Release of Information
Comment: One commenter recommended that prior to CBP's disclosure
of section (b)(1) information to the mark owner, the agency should
provide the information to the importer for its consideration of the
accuracy and veracity of that information. Several commenters
recommended that CBP allow importers to obtain samples of suspect goods
to assist them in responding to CBP's request for information regarding
the goods. Some of these latter commenters also recommended that
importers be permitted to receive samples of seized goods to enable
them to respond to seizure and/or penalty notices.
CBP Response: Inasmuch as an importer may not have complete
information about the marks appearing on imported goods and/or their
retail packaging, CBP finds merit in releasing this information to
importers and is amending the interim regulation (see new Sec.
133.21(d)) to provide release of an unredacted sample/packaging/image
to the importer any time after presentation of the goods for
examination. CBP believes that releasing this information to importers
will assist them in providing CBP with a meaningful response before or
within the seven business day response period. Under this amended
provision, if an importer does not identify a need for a sample until
after CBP seizes goods as bearing counterfeit marks the importer may
request a sample at that time.
Comment: Several commenters recommended that the interim
regulation's procedure for issuing a notice of detention to the
importer be expanded to provide, simultaneously rather than within 30
business days of detention, the notice of the detention and limited
importation information to the mark owner. This would eliminate
unnecessary delay.
CBP Response: CBP finds merit in this recommendation and is
amending Sec. 133.21(b) of the interim regulation accordingly. The
amended provision will no longer provide that CBP has 30 business days
from the date of detention to release limited importation information
to the mark owner; if available, such information will be released upon
issuance of the detention notice to the importer (or as soon as
possible thereafter if not immediately available). This simultaneous
notice and release of limited importation information provision will
apply in those instances where CBP has not already released limited
importation information to the mark owner in accordance with its
discretionary release authority under the same section of the interim
regulation.
Comment: Several commenters recommended that CBP amend the interim
regulation to allow disclosure to another person in place of the mark
owner, where there is an arrangement between the other person and the
mark owner, such as an assignment, a license, or other agreement. Such
other persons may be in a better position to assist CBP in identifying
goods bearing counterfeit marks.
CBP Response: CBP discloses such information to the person
designated by the mark owner during the recordation process as the
contact for enforcement of the mark (see Sec. Sec. 133.1 through 133.7
of this part). However, due to the administrative difficulty in
determining which additional persons may be entitled to receive such
information, CBP is not amending the regulations in this regard.
Comment: Several commenters recommended that CBP limit the
circumstances in which unredacted samples are released to mark owners
by first releasing a redacted sample to the mark owner. An unredacted
sample can then be released when the redacted sample proves
insufficient for the mark owner to assist CBP in determining whether
the goods bear a counterfeit mark.
CBP Response: CBP believes that the interim regulation adequately
safeguards importers' interests and that it would be counter-productive
and unduly burdensome administratively to impose additional procedural
steps before releasing an unredacted sample to the mark owner. The
result would be more instances where resolution of the matter would
require all or nearly all of the 30-day detention period, which is
contrary to CBP's goal to quickly resolve issues of admissibility so as
to either enable lawful trade or to prevent violative goods from
entering the commerce of the United States.
Comment: Several commenters recommended that CBP make the interim
regulation's disclosure provision mandatory rather than permissive,
requiring CBP, in every case, to disclose section (b)(1) information,
including unredacted samples.
CBP Response: The interim regulation permits CBP to disclose to
mark owners, prior to seizure, section (b)(1) information (including an
unredacted sample) when CBP finds that obtaining a mark owner's
assistance regarding the authenticity of a mark is warranted, subject
to the notice and seven business day response period set forth in Sec.
133.21(b)(2)(i). See Sec. 133.21(c). CBP will weigh the facts and
circumstances before releasing section (b)(1) information (prior to
seizure). CBP therefore does not agree with the commenters'
recommendation to require the pre-seizure release of section (b)(1)
information to the mark owner in every case. CBP believes that the
interim regulation's procedure protects importers' interests in the
confidentiality of their commercial and supply chain information while,
at the same time, facilitating CBP's trademark enforcement at the
border.
Comment: One commenter recommended that CBP clarify that release of
information is only authorized after detention, rather than at any time
after importation.
CBP Response: Although this comment is accurate regarding release
of section (b)(1) information to the mark owner under the interim
regulation, this final rule amends Sec. 133.21(b)(4), as explained
above, to reflect that CBP may release limited importation information
to the mark owner prior to issuance of a notice of detention to the
importer and will release such information to the mark owner upon
issuance of the notice of detention or as soon as possible after its
issuance. This latter change removes the 30-business day window
specified in the interim regulation and mandates that CBP will release
this information, when available, contemporaneously with issuance of
the detention notice to the importer.
Comment: Some commenters recommended that the interim regulation be
amended to permit CBP to disclose unredacted samples to the owner of
the mark at any time after goods are presented for entry, without the
seven business day response period. Some commenters recommended that
this response period be eliminated, observing that applicable law does
not require a role for the importer in the authentication process.
CBP Response: CBP believes that the regulation strikes the
appropriate balance between protecting importers' commercial
information and allowing mark owners to assist CBP in enforcing
prohibitions against counterfeit goods. Section 1499(a)(5) within 19
U.S.C. specifies the manner in which an importer may provide
information to CBP when information is required for the release of
goods. Accordingly, importers have a statutorily prescribed role in
establishing the admissibility of their goods. At any time after goods
are presented for examination, CBP may solicit and receive information
from the importer that may enable CBP to expeditiously release the
goods. In cases
[[Page 56376]]
where information is not provided within five days or the information
received is insufficient to enable CBP to release the goods, pursuant
to 19 U.S.C. 1499, CBP may detain the goods to enable CBP to determine
their admissibility. Should CBP require assistance from a mark owner to
determine admissibility of the goods, it may seek assistance at various
stages of the detention and may disclose section (b)(1) information, if
necessary, after the seven business day response period. Under 19
U.S.C. 1499, if CBP does not make a final determination regarding the
admissibility of the goods within 30 days of presentation of the
merchandise for examination, its failure to make such a determination
is treated as a decision to exclude the merchandise for purposes of 19
U.S.C. 1514(a)(4). CBP believes that the above process allows the mark
owner adequate time to provide information to CBP when CBP requests
such information while protecting importers' commercial information.
Comment: One commenter suggested that CBP amend the interim
regulation to require the importer to provide to the mark owner any
information it submits to CBP within the seven business day response
period. Another commenter suggested that CBP provide to the mark owner
a non-proprietary version of the information the importer provided to
CBP.
CBP Response: It is CBP's role to determine whether, in light of
the relevant laws and regulations, goods that are presented for
examination are admissible. The interim regulation simply facilitates
CBP's solicitation of information from both mark owners and importers
to better enable CBP to determine a good's admissibility while
safeguarding as much as possible information that is protected by the
Trade Secrets Act.
3. Other Comments Concerning the Seven Business Day Response Period
Comment: Several commenters recommended that CBP exempt certain
industries from the interim regulation's seven business day response
period, contending that some industries have special needs requiring
information sharing with the mark owner, without delay, in every case.
CBP Response: CBP believes that the interim regulation's procedure
will operate effectively across all industries and sectors. Should CBP
recognize a need to address a specific industry's circumstances in the
future, CBP will consider amending the regulation at that time.
Comment: One commenter expressed concern that the interim
regulation's seven business day response period will impair a mark
owner's ability to assist CBP in its efforts to curtail importation of
restricted parallel imports or to assist CBP in identifying counterfeit
goods that are commingled with unrestricted gray market goods.
CBP Response: The interim regulation did not change the way CBP
enforces restrictions on gray market goods. The seven business day
response period neither impairs the mark owner's ability to make
information available to CBP nor increases the risk of counterfeit
goods being admitted. Unless CBP determined the goods are admissible,
they are deemed excluded by operation of law. CBP is aware of the
potential for these types of shipments and has developed expertise in
identifying such activity.
Comment: Some commenters stated that the interim regulation's seven
business day response period makes the process for authenticating marks
unduly burdensome and that officers charged with enforcing the
intellectual property laws may therefore be deterred from taking
action.
CBP Response: CBP believes that the interim regulation's procedure
will assist CBP officers in making determinations regarding counterfeit
marks and is similar to various other provisions in the CBP regulations
that require CBP to issue notice to an importer or other party of
actions it is undertaking and/or receive information from an importer
or other party before taking action. CBP is also confident that its
officers will discharge their sworn duties efficiently, responsibly,
and professionally at all times.
Comment: Some commenters stated that the interim regulation's seven
business day response period will result in the delayed release of
legitimate goods. Several other commenters specified that the seven
business day response period is too long and may result in the mark
owner receiving information to determine authenticity of the mark(s)
with as little as 11 days left in the 30-day detention period. These
commenters contended that this is not enough time for mark owners to
provide meaningful information and is prejudicial to mark owners'
interests.
CBP Response: CBP believes that, in the interest of due process,
the seven business day response period is appropriate and that the
regulation provides adequate time for both importers and mark owners to
respond and does not prejudice their interests. CBP further notes that
if CBP fails to make a determination within the 30-day detention period
the merchandise is excluded by operation of law.
Comment: Several commenters stated that the interim regulation's
seven business day response period is too short, inasmuch as it may not
provide enough time for an importer to provide information sufficient
to establish to CBP's satisfaction that detained goods bear genuine
marks.
CBP Response: CBP disagrees. Although CBP may release section
(b)(1) information to the mark owner after the seven business day
response period, the importer has the option of submitting information
to CBP up to the end of the detention period or until CBP determines
that the goods bear counterfeit marks. CBP believes that this time
frame is adequate to protect importers' interests.
E. Comments Concerning Information Released
Comment: Several commenters objected to the disclosure of
information provided in Sec. 133.21(b)(2) of the interim regulation
whereby CBP may disclose to the mark owner, prior to CBP's seizure of
the goods as bearing counterfeit marks, the quantity and description of
merchandise involved in a suspect shipment.
CBP Response: CBP can disclose the quantity and description of
merchandise at any time after merchandise is presented for examination
as CBP does not consider this information to be protected by the Trade
Secrets Act. CBP articulated this position in T.D. 98-21, published in
the Federal Register (63 FR 11996) on March 12, 1998. Nothing in the
comments has persuaded CBP to change its view.
Comment: Several commenters contended that the interim regulation
is unclear as to the meaning of ``quantity'' and the manner by which
CBP will provide the mark owner with a description of merchandise
``from the entry.''
CBP Response: CBP agrees that these provisions require more
clarity. Accordingly, CBP is amending the regulation to provide that
the quantity of merchandise involved in the detention and the
description of detained merchandise will be drawn from CBP arrival or
entry documents or their electronic equivalents, which could include,
but will not be limited to, the CBP Form 3461, the CBP Form 7533, the
CBP Form 7512 (if the detention is for merchandise moving in-bond), the
cargo manifest (if no entry has yet been filed), or any other document
or information, as applicable.
Comment: One commenter requested that CBP reconsider the scope of
information that it redacts when providing samples or photographs/
[[Page 56377]]
images to a mark owner under Sec. 133.21(b)(3) of the interim
regulation. The commenter observed that determining whether suspect
goods bear counterfeit marks may require a mark owner to review
information such as product codes, packaging, and SKUs and that
disclosing these marks and numbers does not violate the Trade Secrets
Act as they may not necessarily identify the importer.
CBP Response: CBP believes that in order to protect importers'
interests, any identifying information such as serial numbers, dates of
manufacture, lot codes, batch numbers, universal product codes, the
name or address of the manufacturer, exporter, or importer of the
merchandise, or any mark that could reveal the name or address of the
manufacturer, exporter, or importer of the merchandise, in alphanumeric
or other formats, should be redacted when CBP provides samples,
photographs, or images prior to the running of the seven business day
response period.
Comment: One commenter stated that the interim regulation is
deficient in that it provides for disclosure of only certain limited
information appearing on the packaging of suspect merchandise. The
commenter contended that the mark owner may need more information to
provide meaningful assistance.
CBP Response: CBP disagrees with the commenter's reading of the
interim regulation. CBP is not limited to disclosing information
appearing only on the packaging of suspect merchandise. Once the seven
business day response period has expired without resolution of
authenticity, CBP is authorized to disclose to the mark owner all
information appearing on the goods as well as all information appearing
on their retail packaging. The NDAA specifically authorizes CBP to
disclose certain information to a mark owner, including unredacted
samples and photographs/images of suspect merchandise (and its retail
packaging). The interim rule is consistent with that grant of
authority.
F. Comments Concerning Post-Seizure
Comment: Several commenters recommend that CBP make the interim
rule's post-seizure disclosure provision mandatory rather than
discretionary, requiring CBP, in every case, to provide unredacted
photographs/images or samples of the goods seized to the mark owner.
CBP Response: CBP does not believe that post-seizure disclosure to
mark owners needs to be made mandatory through regulations.
Comment: One commenter recommended that CBP amend the interim
regulation to require the retention of seized counterfeit goods for at
least 60 days after CBP has provided the mark owner with formal notice
of the seizure. The commenter stated that CBP often disposes of the
goods before notice is given, depriving mark owners of the opportunity
to request and obtain samples.
CBP Response: The comment inaccurately reflects CBP's procedure
regarding seizure, forfeiture, and destruction of goods bearing
counterfeit marks. Generally, CBP retains seized merchandise for at
least 90 days from the date of seizure, through completion of the
forfeiture process, prior to destruction of the goods. Section
133.21(d) of the interim regulation (redesignated in this final rule as
Sec. 133.21(e)) requires CBP to disclose to the mark owner
comprehensive importation information, if available, within 30 business
days of the notice of seizure to the importer.
Comment: Several commenters recommended that CBP commit to
rendering determinations on 19 U.S.C. 1618 petitions (challenging the
seizure or forfeiture or both) no later than 30 days after such
petitions are filed.
CBP Response: Part 171 of the CBP regulations governs the agency's
handling of petitions for remission or mitigation of fines, penalties,
and forfeitures filed pursuant to 19 U.S.C. 1618. CBP believes that the
administrative procedure set forth in its existing regulations is
adequate to protect importers' interests in matters involving seized
merchandise and that an amendment to these regulations is unnecessary.
Conclusion and List of Changes
Based on the foregoing analysis of the comments and CBP's further
consideration of the matter, CBP is adopting the interim amendments to
the CBP regulations published in the Federal Register (77 FR 24375) on
April 24, 2012 as final with the exception of the amendments to
Sec. Sec. 133.21 and 151.16 which are being adopted as final with the
following modifications:
CBP is amending Sec. 133.21 to enhance its readability and to
reflect the clarifications, amendments and organizational changes
discussed above. Specifically:
1. CBP is amending Sec. 133.21(b) by eliminating the optional 30-
day extension of the detention period as CBP now believes that such an
extension is unnecessary.
2. CBP is reorganizing the text of Sec. 133.21(b) by redesignating
the existing introductory text and paragraphs (b)(1), (b)(2), and
(b)(3) as newly redesignated paragraphs (b)(1) through (b)(5). Within
Sec. 133.21(b):
Paragraph (b)(1) restates the 30-day detention period
provided for in 1499(c).
Paragraph (b)(2)(i) specifies that a notice of detention
is issued to the importer pursuant to 19 CFR 151.16(c) and 19 U.S.C.
1499(c), and that CBP will also inform the importer that certain
information may already have been disclosed to the owner of the mark,
or may be disclosed concurrent with the issuance of the notice of
detention, and that the importer has seven business days from the date
of the notice of detention to present information that establishes, to
CBP's satisfaction, that the detained merchandise does not bear a
counterfeit mark.
New paragraph (b)(2)(ii) provides that where the importer
does not provide information within the seven business day response
period, or the information provided is insufficient for CBP to
determine that the merchandise does not bear a counterfeit mark, CBP
may proceed with the disclosure to the owner of the mark and will so
notify the importer.
Paragraph (b)(3) sets forth the information CBP may
disclose to the mark owner (information appearing on goods and their
retail packaging and unredacted samples, photographs/images, etc.).
Redesignated paragraph (b)(4) (paragraph (b)(2) of the
interim regulation) is amended to clarify that the ``description of the
merchandise'' and the ``quantity involved'' that CBP releases to the
mark owner (along with other data) prior to issuance of a detention
notice is taken from the paper or electronic equivalent of CBP Forms
3461, 7533, 7512, cargo manifest, advance electronic information, or
other entry document as appropriate. After issuance of a detention
notice, this information is taken from the notice of detention. CBP
will release the information at the same time it issues the detention
notice to the importer, or as soon afterward as possible.
Paragraph (b)(5) provides for release of redacted
photographs/images and samples to the mark owner.
3. In Sec. 133.21(c), pertaining to release of unredacted
photographs, images and samples to the mark owner under paragraph (b),
CBP is:
Clarifying the heading text to state that the provision
pertains to conditions associated with the disclosure.
Adding language to provide that, with the release of the
information or the photographs, images or samples,
[[Page 56378]]
CBP will notify the mark owner that some or all of the information it
is receiving may be subject to the protections of the Trade Secrets
Act, and is only being provided to the mark owner to assist CBP in
determining whether the merchandise described in the notice of
detention bears counterfeit marks.
Reorganizing the provision into two sub-paragraphs to
enhance readability.
4. Sections 133.21(b)(5), (c)(2),and (f), relating to the terms of
the IPR sample bond, are amended to clarify that the IPR sample bond is
posted to indemnify the importer or owner of the sample against any
loss or damage resulting from the furnishing of the sample by CBP to
the owner of the mark.
5. CBP is adding a new paragraph (d) to Sec. 133.21 to provide for
release of unredacted samples to the importer any time after
presentation of the suspect goods to CBP for examination.
6. Existing Sec. 133.21(d), pertaining to the seizure of goods and
disclosure of comprehensive importation information to the mark owner,
is re-designated as paragraph (e) in this final rule and clarified to
reflect that the ``description'' and the ``quantity'' of the
merchandise provided to the mark owner by CBP is taken from the notice
of seizure (and intent to forfeit).
7. Existing Sec. 133.21(e), pertaining to photographs/images and
samples being made available to the mark owner after seizure, is re-
designated as paragraph (f) in this final rule.
8. Existing Sec. 133.21(f), pertaining to consent of the mark
owner, is re-designated as paragraph (g) in this final rule.
This document amends the specific authority citation for Sec. Sec.
133.21 through 133.25 to reflect 10 U.S.C. 2302.
Lastly, this final rule amends Sec. 151.16(a) by removing the
reference to ``imports of articles bearing counterfeit marks or
suspected counterfeit marks.''
CBP is adopting as final, with the clarifications and amendments
discussed above, the interim amendments set forth in CBP Dec. 12-10
that went into effect on April 24, 2012. The additional changes made to
the interim regulation in this final rule include non-substantive
editorial changes that improve readability, as well as logical-
outgrowth changes to the interim regulation's provisions, as described
above. In an effort to provide the trade, if necessary, with the
opportunity to make adjustments to their business practices, CBP has
determined to delay the effective date of this final rule for a period
of 30 days from the date of publication of this document in the Federal
Register.
Executive Orders 13563 and 12866
Executive Orders 13563 and 12866 direct agencies to assess costs
and benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety
effects, distributive impacts, and equity). Executive Order 13563
emphasizes the importance of quantifying both costs and benefits, of
reducing costs, of harmonizing rules, and of promoting flexibility.
This rule has been designated a ``significant regulatory action''
although not economically significant, under section 3(f) of Executive
Order 12866. Accordingly, the rule has been reviewed by the Office of
Management and Budget.
Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.), as amended
by the Small Business Regulatory Enforcement and Fairness Act of 1996,
requires agencies to assess the impact of regulations on small
entities. A small entity may be a small business (defined as any
independently owned and operated business not dominant in its field
that qualifies as a small business per the Small Business Act); a small
not-for-profit organization; or a small governmental jurisdiction
(locality with fewer than 50,000 people).
One of CBP's primary roles is to safeguard the U.S. economy from
the importation of counterfeit goods. Prior to the publication of the
interim final rule, if CBP needed assistance in determining whether an
import bears counterfeit marks, the agency was restricted to only
sharing redacted samples of the import in question with a right holder.
However, due to the highly technical nature of some imports and the
continuously increasing sophistication of counterfeiters, sharing
redacted samples with right holders is no longer sufficient in certain
circumstances. To broaden CBP's ability to identify counterfeit goods,
Congress included a provision to the National Defense Authorization Act
for Fiscal Year 2012 (NDAA) (Public Law 112-81, 10 U.S.C. 2303) that
allows CBP to share unredacted samples of imports suspected of bearing
counterfeit marks with the right holders of the trademarks in question
in order to aid CBP in determining whether the suspect goods are
violative.\1\
---------------------------------------------------------------------------
\1\ Note that this rule does not alter CBP's ability to provide
redacted photographs/images, samples, or retail packaging (including
labels) of suspect merchandise to the right holder of the trademark
without prior notification to the importer.
---------------------------------------------------------------------------
By sharing unredacted samples of imports with mark owners, however,
mark owners may gain access to some sensitive information about the
importer, such as its supply chain and purchase price. To mitigate the
potential unnecessary release of an importer's trade secrets to a mark
owner, the interim final rule established a procedure to allow an
importer seven business days to demonstrate to CBP that suspect marks
are not violative. If the importer is unable to do so, CBP may seek
assistance from the mark owner by releasing unredacted samples of the
import(s) in question. As discussed earlier, during the comment period
for the interim final rule CBP received comments regarding the possible
misuse of trade secret information by mark owners when viewing
unredacted samples. In order to address such misuses, and thus any
potential business impacts to the importation of legitimate trade, CBP
is amending the interim regulation to provide that the disclosure to
the mark owner must include a statement informing the mark owner that
some or all of the information being disclosed may be information
protected from disclosure by the Trade Secrets Act (18 U.S.C. 1905).
As described in the ``Paperwork Reduction Act'' section of this
document, CBP estimates that it takes an importer two hours to provide
proof to CBP that establishes that suspect goods do not bear
counterfeit marks. CBP estimates the average wage of an importer to be
$28.50 per hour. Thus, CBP estimates it will cost a small entity $57.00
to demonstrate that its import does not bear counterfeit marks. CBP
does not believe $57.00 constitutes a significant economic impact. CBP
does recognize, however, that such repeated inquiries could eventually
rise to the level of a significant economic impact. CBP lacks data on
how often a particular importer would be affected by this regulation.
CBP subject matter experts, however, are unaware of any instances where
a particular importer was repeatedly requested to provide information
to CBP for the purpose of establishing that an import does not bear
counterfeit marks. Additionally, based on CBP's experience over the
years (including in implementing the interim rule), CBP anticipates
that law-abiding importers will not be subject to the provisions in
this rule on a repeated basis. Further, we note that providing this
information to CBP is optional on the part of the importer. CBP did not
[[Page 56379]]
receive any comments on the interim final rule regarding the cost to
importers of providing proof to CBP that establishes that suspect goods
do not bear counterfeit marks. Due to the harm that counterfeit goods
pose to public health and safety, this rule went into effect as an
interim final rule on the date of its publication on April 24, 2012. As
discussed earlier, CBP lacks data on how many importers have been
affected by the interim rule, and on how often any particular importer
has been affected. As a general matter, any importer may be affected by
this rule, and that is because the rule will be applied when CBP cannot
make a determination--without the use of these regulatory provisions--
as to whether an import(s) bears a counterfeit mark. Because this rule
could be applied to any importer, CBP believes that this rule will
potentially have an effect on a substantial number of small entities.
While this rule will potentially have an effect on a substantial
number of small entities, CBP does not believe that an estimated cost
to an importer of $57.00 per affected import constitutes a significant
economic impact (also, as discussed above, providing this information
to CBP is optional on the part of the importer). Thus, CBP certifies
this regulation will not have a significant economic impact on a
substantial number of small entities.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3507), the collections of information for this document are included in
an existing collection for Notices of Detention (OMB control number
1651-0073). An agency may not conduct, and a person is not required to
respond to, a collection of information unless the collection of
information displays a valid control number assigned by OMB.
The burden hours related to the Notice of Detention for OMB control
number 1651-0073 are as follows:
Number of Respondents: 1,350.
Number of Responses: 1,350.
Time per Response: 2 hours.
Total Annual Burden Hours: 2,700.
There is no change in burden hours under this collection with this
rule.
Signing Authority
This rulemaking is being issued in accordance with 19 CFR
0.1(a)(1), pertaining to the authority of the Secretary of the Treasury
(or that of his or her delegate) to approve regulations concerning
trademark enforcement.
List of Subjects
19 CFR Part 133
Copying or simulating trademarks, Copyrights, Counterfeit
trademarks, Customs duties and inspection, Detentions, Reporting and
recordkeeping requirements, Restricted merchandise, Seizures and
forfeitures, Trademarks, Trade names.
19 CFR Part 151
Customs duties and inspection, Examination, Imports, Penalties,
Reporting and recordkeeping requirements, Sampling and testing.
Amendments to the CBP Regulations
Accordingly, the interim rule amending parts 133 and 151 of title
19 of the Code of Federal Regulations (19 CFR parts 133 and 151), which
was published at 77 FR 24375 on April 24, 2012, is adopted as final
with the following changes:
PART 133--TRADEMARKS, TRADE NAMES, AND COPYRIGHTS
0
1. The general authority citation for part 133 continues, and the
specific authority citation for Sec. Sec. 133.21 through 133.25 is
added, to read as follows:
Authority: 15 U.S.C. 1124, 1125, 1127; 17 U.S.C. 101, 601, 602,
603; 19 U.S.C. 66, 1202, 1499, 1526, 1624; 31 U.S.C. 9701. Sections
133.21 through 133.25 also issued under 18 U.S.C. 1905; Sec. 818(g),
Pub. L. 112-81 (10 U.S.C. 2302);
0
2. In Sec. 133.21:
0
a. Paragraphs (b) and (c) are revised;
0
b. Paragraphs (d), (e), and (f) are redesignated as paragraphs (e),
(f), and (g);
0
c. A new paragraph (d) is added; and
0
d. Redesignated paragraphs (e) and (f) are revised.
The revisions and addition read as follows:
Sec. 133.21 Articles suspected of bearing counterfeit marks.
* * * * *
(b) Detention, notice, and disclosure of information--(1) Detention
period. CBP may detain any article of domestic or foreign manufacture
imported into the United States that bears a mark suspected by CBP of
being a counterfeit version of a mark that is registered with the U.S.
Patent and Trademark Office and is recorded with CBP pursuant to
subpart A of this part. The detention will be for a period of up to 30
days from the date on which the merchandise is presented for
examination. In accordance with 19 U.S.C. 1499(c), if, after the
detention period, the article is not released, the article will be
deemed excluded for the purposes of 19 U.S.C. 1514(a)(4).
(2) Notice of detention to importer and disclosure to owner of the
mark--(i) Notice and seven business day response period. Within five
business days from the date of a decision to detain suspect
merchandise, CBP will notify the importer in writing of the detention
as set forth in Sec. 151.16(c) of this chapter and 19 U.S.C. 1499. CBP
will also inform the importer that for purposes of assisting CBP in
determining whether the detained merchandise bears counterfeit marks:
(A) CBP may have previously disclosed to the owner of the mark,
prior to issuance of the notice of detention, limited importation
information concerning the detained merchandise, as described in
paragraph (b)(4) of this section, and, in any event, such information
will be released to the owner of the mark, if available, no later than
the date of issuance of the notice of detention; and
(B) CBP may disclose to the owner of the mark information that
appears on the detained merchandise and/or its retail packaging,
including unredacted photographs, images, or samples, as described in
paragraph (b)(3) of this section, unless the importer presents
information within seven business days of the notification establishing
that the detained merchandise does not bear a counterfeit mark.
(ii) Failure of importer to respond or insufficient response to
notice. Where the importer does not provide information within the
seven business day response period, or the information provided is
insufficient for CBP to determine that the merchandise does not bear a
counterfeit mark, CBP may proceed with the disclosure of information
described in paragraph (b)(3) of this section to the owner of the mark
and will so notify the importer.
(3) Disclosure to owner of the mark of information appearing on
detained merchandise and/or its retail packaging, including unredacted
photographs, images or samples. When making a disclosure to the owner
of the mark under paragraph (b)(2)(ii) of this section, CBP may
disclose information appearing on the merchandise and/or its retail
packaging (including labels), images (including photographs) of the
merchandise and/or its retail packaging in its condition as presented
for examination (i.e., an unredacted condition), or a sample of the
merchandise and/or its retail packaging in its condition as presented
for examination. The release of a sample will be in accordance with,
and subject to, the bond and return requirements of
[[Page 56380]]
paragraph (c) of this section. The disclosure may include any serial
numbers, dates of manufacture, lot codes, batch numbers, universal
product codes, or other identifying marks appearing on the merchandise
or its retail packaging (including labels), in alphanumeric or other
formats.
(4) Disclosure to owner of the mark of limited importation
information. From the time merchandise is presented for examination,
CBP may disclose to the owner of the mark limited importation
information in order to obtain assistance in determining whether an
imported article bears a counterfeit mark. Where CBP does not disclose
this information to the owner of the mark prior to issuance of the
notice of detention, it will do so concurrently with the issuance of
the notice of detention, unless the information is unavailable, in
which case CBP will release the information as soon as possible after
issuance of the notice of detention. The limited importation
information CBP will disclose to the owner of the mark consists of:
(i) The date of importation;
(ii) The port of entry;
(iii) The description of the merchandise, for merchandise not yet
detained, from the paper or electronic equivalent of the entry (as
defined in Sec. 142.3(a)(1) or (b) of this chapter), the CBP Form
7512, cargo manifest, advanceelectronic information or other entry
document as appropriate, or, for detained merchandise, from the notice
of detention;
(iv) The quantity, for merchandise not yet detained, as declared on
the paper or electronic equivalent of the entry (as defined in Sec.
142.3(a)(1) or (b) of this chapter), the CBP Form 7512, cargo manifest,
advance electronic information, or other entry document as appropriate,
or, for detained merchandise, from the notice of detention; and
(v) The country of origin of the merchandise.
(5) Disclosure to owner of the mark of redacted photographs, images
and samples. Notwithstanding the notice and seven business day response
procedure of paragraph (b)(2) of this section, CBP may, in order to
obtain assistance in determining whether an imported article bears a
counterfeit mark and at any time after presentation of the merchandise
for examination, provide to the owner of the mark photographs, images,
or a sample of the suspect merchandise or its retail packaging
(including labels), provided that identifying information has been
removed, obliterated, or otherwise obscured. Identifying information
includes, but is not limited to, serial numbers, dates of manufacture,
lot codes, batch numbers, universal product codes, the name or address
of the manufacturer, exporter, or importer of the merchandise, or any
mark that could reveal the name or address of the manufacturer,
exporter, or importer of the merchandise, in alphanumeric or other
formats. CBP may release to the owner of the mark a sample under this
paragraph when the owner furnishes to CBP a bond in the form and amount
specified by CBP, conditioned to indemnify the importer or owner of the
imported article against any loss or damage resulting from the
furnishing of the sample by CBP to the owner of the mark. CBP may
demand the return of the sample at any time. The owner of the mark must
return the sample to CBP upon demand or at the conclusion of any
examination, testing, or similar procedure performed on the sample. In
the event that the sample is damaged, destroyed, or lost while in the
possession of the owner of the mark, the owner must, in lieu of return
of the sample, certify to CBP that: ``The sample described as [insert
description] and provided pursuant to 19 CFR 133.21(b)(5) was (damaged/
destroyed/lost) during examination, testing, or other use.''
(c) Conditions of disclosure to owner of the mark of information
appearing on detained merchandise and/or its retail packaging,
including unredacted photographs, images and samples--(1) Disclosure
for limited purpose of assisting CBP in counterfeit mark
determinations. In order to obtain assistance in determining whether an
imported article bears a counterfeit mark, CBP may disclose to the
owner of the mark, prior to seizure, information appearing on the
merchandise and/or its retail packaging (including labels), unredacted
photographs or images of the merchandise and/or its retail packaging in
its condition as presented for examination, or an unredacted sample of
the imported merchandise and/or its retail packaging in its condition
as presented for examination, in accordance with paragraphs (b)(2)(ii)
and (3) of this section. Upon release of such information, photographs,
images, or samples, CBP will notify the owner of the mark that some or
all of the information being released may be subject to the protections
of the Trade Secrets Act, and that CBP is only disclosing the
information to the owner of the mark for the purpose of assisting CBP
in determining whether the merchandise bears a counterfeit mark.
(2) Bond. CBP may release to the owner of the mark a sample under
paragraphs (b)(2)(ii) and (3) of this section when the owner furnishes
to CBP a bond in the form and amount specified by CBP, conditioned to
indemnify the importer or owner of the imported article against any
loss or damage resulting from the furnishing of the sample by CBP to
the owner of the mark. CBP may demand the return of the sample at any
time. The owner of the mark must return the sample to CBP upon demand
or at the conclusion of any examination, testing, or similar procedure
performed on the sample. In the event that the sample is damaged,
destroyed, or lost while in the possession of the owner of the mark,
the owner must, in lieu of return of the sample, certify to CBP that:
``The sample described as [insert description] and provided pursuant to
19 CFR 133.21(c) was (damaged/destroyed/lost) during examination,
testing, or other use.''
(d) Disclosure to importer of unredacted photographs, images, and
samples. CBP will disclose to the importer unredacted photographs,
images, or an unredacted sample of imported merchandise suspected of
bearing a counterfeit mark at any time after the merchandise is
presented to CBP for examination. CBP may demand the return of the
sample at any time. The importer must return the sample to CBP upon
demand or at the conclusion of any examination, testing, or similar
procedure performed on the sample. In the event that the sample is
damaged, destroyed, or lost while in the possession of the importer,
the importer must, in lieu of return of the sample, certify to CBP
that: ``The sample described as [insert description] and provided
pursuant to 19 CFR 133.21(d) was (damaged/destroyed/lost) during
examination, testing, or other use.''
(e) Seizure and disclosure to owner of the mark of comprehensive
importation information. Upon a determination by CBP, made any time
after the merchandise has been presented for examination, that an
article of domestic or foreign manufacture imported into the United
States bears a counterfeit mark, CBP will seize such merchandise and,
in the absence of the written consent of the owner of the mark, forfeit
the seized merchandise in accordance with the customs laws. When
merchandise is seized under this section, CBP will disclose to the
owner of the mark the following comprehensive importation information,
if available, within 30 business days from the date of the notice of
the seizure:
(1) The date of importation;
(2) The port of entry;
[[Page 56381]]
(3) The description of the merchandise from the notice of seizure;
(4) The quantity as set forth in the notice of seizure;
(5) The country of origin of the merchandise;
(6) The name and address of the manufacturer;
(7) The name and address of the exporter; and
(8) The name and address of the importer.
(f) Disclosure to owner of the mark, following seizure, of
unredacted photographs, images, and samples. At any time following a
seizure of merchandise bearing a counterfeit mark under this section,
and upon receipt of a proper request from the owner of the mark, CBP
may provide, if available, photographs, images, or a sample of the
seized merchandise and its retail packaging, in its condition as
presented for examination, to the owner of the mark. To obtain a sample
under this paragraph, the owner of the mark must furnish to CBP a bond
in the form and amount specified by CBP, conditioned to indemnify the
importer or owner of the imported article against any loss or damage
resulting from the furnishing of the sample by CBP to the owner of the
mark. CBP may demand the return of the sample at any time. The owner of
the mark must return the sample to CBP upon demand or at the conclusion
of the examination, testing, or other use in pursuit of a related
private civil remedy for infringement. In the event that the sample is
damaged, destroyed, or lost while in the possession of the owner of the
mark, the owner must, in lieu of return of the sample, certify to CBP
that: ``The sample described as [insert description] and provided
pursuant to 19 CFR 133.21(f) was (damaged/destroyed/lost) during
examination, testing, or other use.''
* * * * *
PART 151--EXAMINATION, SAMPLING, AND TESTING OF MERCHANDISE
0
3. The general authority citation for part 151 continues to read as
follows:
Authority: 19 U.S.C. 66, 1202 (General Note 3(i) and (j),
Harmonized Tariff Schedule of the United States (HTSUS), 1624;
* * * * *
Sec. 151.16 [Amended]
0
4. Section 151.16(a) is amended by removing the words, ``imports of
articles bearing counterfeit marks or suspected counterfeit marks,''.
R. Gil Kerlikowske,
Commissioner, U.S. Customs and Border Protection.
Approved: September 15, 2015.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 2015-23543 Filed 9-17-15; 8:45 am]
BILLING CODE 9111-14-P