[Federal Register Volume 82, Number 240 (Friday, December 15, 2017)]
[Rules and Regulations]
[Pages 59511-59514]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-27065]



U.S. Customs and Border Protection


19 CFR Part 133

[USCBP-2016-0076; CBP Dec. 17-21]
RIN 1515-AE21

Donations of Technology and Related Support Services To Enforce 
Intellectual Property Rights

AGENCY: U.S. Customs and Border Protection, Department of Homeland 
Security; Department of the Treasury.

ACTION: Final rule.


SUMMARY: This document amends the U.S. Customs and Border Protection 
(CBP) regulations relating to the enforcement of intellectual property 
rights. This final rule implements section 308(d) of the Trade 
Facilitation and Trade Enforcement Act of 2015 (TFTEA), which requires 
CBP to prescribe regulatory procedures for the donation of 
technologies, training, or other related services for the purpose of 
assisting CBP in intellectual property enforcement.

DATES: Effective January 16, 2018.

FOR FURTHER INFORMATION CONTACT: Garrett D. Wright, Chief, Donations 
Acceptance Program, Office of Field Operations, U.S. Customs and Border 
Protection, telephone (202) 344-2344.



    The Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA), 
Public Law 114-125, 130 Stat. 122 (19 U.S.C. 4301 note), was enacted on 
February 24, 2016, and includes several provisions regarding trade 
facilitation and trade enforcement, some of which deal with improving 
U.S. Customs and Border Protection's (CBP's) intellectual property 
rights (IPR) enforcement at the border. Section 308(d) of the TFTEA 
requires the Commissioner of CBP to prescribe regulations to enable CBP 
to receive donations of hardware, software, equipment, and similar 
technologies, and to accept training and other support services, from 
private sector entities, for the purpose of enforcing IPR.
    Acceptance of such donations must also be consistent with either 
section 482 of the Homeland Security Act of 2002, as amended by section 
2 of the Cross-Border Trade Enhancement Act of 2016 (Pub. L. 114-279), 
or section 507 of the Department of Homeland Security (DHS) 
Appropriations Act of 2004 (Pub. L. 108-90).
    Section 482 of the Homeland Security Act replaced section 559 of 
Title V of Division F of the Consolidated Appropriations Act, 2014 
(Pub. L. 113-76) and permits CBP, in consultation with the General 
Services Administration (GSA), to ``enter into an agreement with any 
entity to accept a donation of personal property, money or nonpersonal 
services'' to be used for certain CBP activities at most ports of entry 
where CBP performs inspection services. Pursuant to section 482(c)(3), 
CBP in consultation with GSA will establish criteria for evaluating 
donation proposals under section 482 and make such criteria publicly 
    If donations cannot be accepted under section 482, they may be 
accepted under section 507 of the DHS Appropriations Act of 2004. 
Section 507 made the DHS Gifts and Donations account ``available to the 
Department of Homeland Security . . . for the Secretary of Homeland 
Security to accept, hold, administer and utilize gifts and bequests, 
including property to facilitate the work of the Department of Homeland 
Security.'' Title V, Public Law 108-90, 117 Stat. 1153-1154. DHS policy 
on the acceptance of gifts pursuant to section 507 is contained in DHS 
Directive 112-02 and DHS Instruction 112-02-001. The Secretary of DHS 
delegated the authority to accept and utilize gifts to the heads of 
certain DHS components, including the Commissioner of CBP, in DHS 
Delegation 0006.
    This document implements section 308(d) of the TFTEA by 
promulgating a new subpart H to part 133 of title 19 of the Code of 
Federal Regulations (CFR) which provides for the receipt and acceptance 
by CBP of donations of hardware, software, equipment, and similar 
technologies, as well as training and related support services, for the 
purpose of assisting CBP in enforcing IPR. New subpart H, as set forth 
in Sec.  133.61, prescribes the methods by which donations of IPR 
technology and related support services may be made. Specifically, 19 
CFR 133.61(a) sets forth the scope of this section and identifies the 
authority to accept donations, Sec.  133.61(b) describes the donation 
process, and Sec.  133.61(c) lays out the elements of the written 
donation agreement.
    On January 17, 2017, CBP published a Notice of Proposed Rulemaking 
(NPRM) in the Federal Register (82 FR 4800) proposing to amend its 
regulations pertaining to the enforcement of intellectual property 
rights in order to enhance CBP's intellectual property rights 

[[Page 59512]]

capabilities. The NPRM solicited for public comments on the proposed 
rulemaking. The public comment period closed on March 3, 2017.

Discussion of Comments

    Three commenters responded to the solicitation of comments to the 
proposed rule. A description of the comments received, together with 
CBP's analysis, is set forth below.
    Comment: One commenter, an association dedicated to serving the 
needs of the video game industry, commended CBP's efforts to enhance 
its engagement with intellectual property-intensive industries and 
border enforcement needs, but also voiced several concerns.
    The first concern is related to proposed Sec.  133.61(b). The 
commenter expressed concern with the procedure laid out in paragraph 
(b) because this ``formalized'' process might interrupt the dynamic 
nature of the relationship between CBP and the video game industry in 
providing training, as well as the tools CBP needs in order to 
accurately confirm the illegality of suspected infringing imports.
    CBP Response: CBP seeks to maintain the dynamic relationship it has 
with the video game industry and other industries. The donation process 
that CBP is creating is intended to be streamlined, non-invasive, and 
flexible. For example, in certain circumstances, CBP and the industry 
partner may only need to enter into one written partnership agreement 
whereby any IPR donation proposal made pursuant to that agreement could 
be evaluated and, if viable, accepted at the local level. In addition, 
as explained below, the donation process does not apply to ``sample'' 
products or stand-alone training or educational seminars.
    Comment: The commenter asked for clarification on whether a single 
donation offer, as envisioned by Sec.  133.61(b), would cover a 
quantity or a range of items, or whether a donation offer must be 
submitted for each item contemplated for donation.
    CBP Response: In general, a single donation offer could cover more 
than one item and/or a range of items assuming such items serve a 
similar IPR enforcement purpose. Each donation offer and each item, 
however, will be considered on a case-by-case basis.
    Comment: The commenter also requested clarification on whether a 
single, written donation offer would encompass anticipated intermittent 
donations of samples of infringing products and circumvention devices. 
The commenter explained that current practice allows for video game 
companies to donate hardware, software, samples of infringing products, 
circumvention devices that violate 17 U.S.C. 1201, and training 
materials along with a request that CBP seize like goods using a simple 
transmittal letter to CBP's Office of Trade, Regulations and Rulings, 
IPR Branch. Typically, these donations comprise numerous identical or 
comparable items, such as game copiers, other circumvention devices, or 
memory cards filled with pre-loaded games.
    CBP Response: The process described in the public comment with 
regard to submissions of samples of genuine and infringing articles 
will not be changed with the new regulation. A distinction needs to be 
made between ``donations'' covered under section 308(d) of the TFTEA 
which are provided for the regular use by CBP personnel assisting with 
the enforcement of IPR, such as an x-ray machine or a high 
magnification microscope, and ``samples'' of merchandise provided to 
the IPR Branch for purposes of determining admissibility. The 
furnishing of samples of genuine and infringing articles is not covered 
by the intended scope of the Donations Acceptance Program under Sec.  
133.61. Rights owners, including the video game industry, will be able 
to continue to communicate and provide samples to the IPR Branch and 
field offices as the need for enforcement arises. Accordingly, based on 
this comment, CBP has amended the regulatory text in Sec.  133.61(a) to 
clarify that articles provided to CBP as ``samples,'' as referenced in 
19 CFR 151.10 and 177.2, are not included within the scope of this 
    Comment: The commenter also seeks clarification on whether the 
proposed donation offer requirements and process would hinder the 
ability of CBP or other DHS personnel, such as those of Immigration and 
Customs Enforcement (ICE), to request hardware or software samples from 
private companies for the purpose of conducting investigations.
    CBP Response: The donation requirements will not hinder the current 
process of cooperation and information-sharing that regularly occurs 
between rights holders and DHS personnel. The regulations are not 
intended to affect the processing of criminal investigations into 
potential IPR violations within other DHS agencies, such as DHS/
Homeland Security Investigations (HSI) under DHS/ICE.
    With regard to CBP's civil administrative enforcement authority of 
IPR, if CBP makes a request to a rights holder for information, 
software and/or hardware, such request would not fall in the 
``donation'' category as contemplated by the regulations, but would be 
considered a request for a ``sample'' of merchandise to be used by CBP 
for authentication purposes with regard to a specific matter. The 
current process with CBP will continue unaffected by the donation 
regulations put in place.
    Comment: The commenter is further concerned with regard to the 
waiver language in proposed Sec.  133.61(c) (``. . . the service 
provider expressly waives any future claims against the government.''). 
The commenter stated that the proposed language is overbroad and 
potentially captures all instances where a donor of technology and 
services pursues unrelated claims against the U.S. government. The 
commenter suggested that the waiver be reasonably tailored to the 
donation in question and not include ``any claims against the 
government.'' Entering into a donation agreement with CBP should not 
foreclose any remedies against the government in cases unrelated to the 
donation agreement.
    CBP Response: CBP agrees that a clarification is appropriate and 
has amended the regulatory text in 19 CFR 133.61(c) to address this 
    Comment: Another commenter expressed a concern with the proposed 
rule. The commenter stated that it appears that the proposed rule would 
favor companies with more well-known intellectual property and a larger 
market share, undercutting the fundamental purposes of intellectual 
property rights, namely those which promote the availability of new 
technologies and competition in the market. The commenter asked for 
clarification how the proposed rule would benefit entities other than 
those with a market incentive to make donations.
    CBP Response: The intent of the Act is to enhance IPR enforcement. 
Although enforcement of a particular IPR right clearly benefits the 
right-holder, other parties also benefit from IPR enforcement, in 
    Comment: The third commenter commended CBP for its focus on the 
implementation of section 308(d) of the TFTEA and appreciated the 
opportunity for CBP to accept technology to enrich inspection activity 
at all U.S. ports of entry. The commenter stated that the equipment and 
technology that may be used by agents will improve CBP's ability to 
identify counterfeits at even earlier stages in the detection stage 
    The commenter further stated that under the TFTEA, CBP will now be 
able to provide samples of counterfeits to rights holders, and hopes 
that CBP will share details, such as container number,

[[Page 59513]]

customs broker, freight forwarders, associated telephone numbers and 
email addresses once the goods have been deemed counterfeit. The 
sharing of this additional information would enable rights holders to 
analyze the data and provide CBP with additional information to 
identify illicit trade patterns.
    CBP Response: This comment falls outside of the scope of 19 CFR 
133.61. The proposed regulation deals with establishing a donation 
process so CBP can receive donations of technologies, equipment and 
other support services for the purpose of detecting potentially 
infringing articles and does not address CBP sharing information or 
samples to rights holders.
    Other changes: CBP is adding the word ``related'' before the words 
``support services'' throughout the regulatory text in order to clarify 
that only training and support services associated with a donation of 
hardware, software, equipment or technology fall within the scope of 
this regulation. Training services that may be donated pursuant to 
Sec.  133.61 will be in the context of donated technology or equipment, 
in contrast to training services provided to assist with CBP's general 
trade facilitation and trade enforcement pursuant to section 104 of the 
    CBP is also adding a reference to ``hardware, software, equipment, 
technologies'' to Sec.  133.61(c) to clarify that a donation agreement 
may also cover hardware, software, equipment, and technologies, as well 
as training and other related support services.
    The email address in proposed Sec.  133.61(b) to which donation 
offers should be submitted has been updated to dap@cbp.dhs.gov to 
reflect the program's current email address.


    After review of the comments, CBP has decided to adopt as final the 
proposed rule published in the Federal Register on January 17, 2017, 
with the changes described above.

Executive Orders 12866, 13563 and 13771

    Executive Orders 13563 and 12866 direct agencies to assess the 
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. Executive Order 13771 (``Reducing Regulation and 
Controlling Regulatory Costs'') directs agencies to reduce regulation 
and control regulatory costs and provides that ``for every one new 
regulation issued, at least two prior regulations be identified for 
elimination, and that the cost of planned regulations be prudently 
managed and controlled through a budgeting process.''
    This final rule is not a ``significant regulatory action,'' under 
section 3(f) of Executive Order 12866. Accordingly, the Office of 
Management and Budget has not reviewed this regulation. As this rule is 
not a significant regulatory action, this rule is exempt from the 
requirements of Executive Order 13771. See OMB's Memorandum titled 
``Guidance Implementing Executive Order 13771, Titled `Reducing 
Regulation and Controlling Regulatory Costs' '' (April 5, 2017).

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).
    This rule will allow private sector entities to voluntarily donate 
technology, training, and other related support services to improve 
CBP's ability to enforce intellectual property rights potentially 
related to their goods. As any entity with intellectual property could 
make these donations, this rule affects a substantial number of small 
entities. However, this rule imposes no new obligations on entities, 
including those considered small. Any small entity that chooses to make 
these donations will presumably do so because it believes the benefits 
of donating exceed the costs. Therefore, this rule will not have a 
significant economic impact on small entities. Given these reasons, CBP 
certifies that this rule, will not have a significant economic impact 
on a substantial number of small entities.

Paperwork Reduction Act

    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.
    OMB approved collection 1651-0123 has been revised to reflect this 
new collection of information in this final rule for written offers of 
donations to CBP of technology, training, and other related support 
services in accordance with 19 CFR 133.61(b). The information 
collection reflects the additional burden hours for each written offer 
of donation provided to CBP as follows:
    Estimated number of annual respondents: 50.
    Estimated number of annual responses: 50.
    Estimated time burden per response: 2 hours.
    Estimated total annual time burden: 100 hours.

Signing Authority

    This document is being issued in accordance with 19 CFR 0.1(a)(1) 
pertaining to the Secretary of the Treasury's authority (or that of his 
delegate) to approve regulations related to certain customs revenue 

List of Subjects in 19 CFR Part 133

    Circumvention devices, Copying or simulating trademarks, 
Copyrights, Counterfeit goods, Customs duties and inspection, 
Detentions, Donations, Reporting and recordkeeping requirements, 
Restricted merchandise, Seizures and forfeitures, Technology, 
Trademarks, Trade names, Support services.

Amendments to Part 133 of the CBP Regulations

    For the reasons set forth above, part 133 of title 19 of the Code 
of Federal Regulations (19 CFR part 133) is amended as set forth below.


1. The general authority citation for part 133 continues, and the 
specific authority for new subpart H 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.
* * * * *
    Section 133.61 also issued under Sec. 308(d), Pub. L. 114-125; 
Sec. 507, Pub. L. 108-90; Sec. 2, Pub. L. 114-279.

Subpart G--[Reserved]

2. Reserved subpart G is added.

3. Subpart H, consisting of Sec.  133.61, is added to read as follows:

[[Page 59514]]

Subpart H--Donations of Intellectual Property Rights Technology and 
Related Support Services

Sec.  133.61  Donations of intellectual property rights technology and 
related support services.

    (a) Scope. The Commissioner of U.S. Customs and Border Protection 
(CBP) is authorized to accept donations of hardware, software, 
equipment, and similar technologies, as well as related support 
services and training, from private sector entities, for the purpose of 
assisting CBP in enforcing intellectual property rights. Such 
acceptance must be consistent with the conditions set forth in this 
section and section 308(d) of the Trade Facilitation and Trade 
Enforcement Act of 2015 (19 U.S.C. 4301 note), as well as either 
section 482 of the Homeland Security Act of 2002, as amended by section 
2 of the Cross-Border Trade Enhancement Act of 2016 (6 U.S.C. 301a), or 
section 507 of the Department of Homeland Security Appropriations Act 
of 2004 (Pub. L. 108-90). However, this section does not apply to 
merchandise provided to CBP as samples, e.g., as referenced in 
Sec. Sec.  151.10 and 177.2 of this chapter.
    (b) Donation offer. A donation offer must be submitted to CBP 
either via email, to dap@cbp.dhs.gov, or mailed to the attention of the 
Executive Assistant Commissioner, Office of Field Operations, or his/
her designee. The donation offer must describe the proposed donation in 
sufficient detail to enable CBP to determine its compatibility with 
existing CBP technologies, networks, and facilities (e.g. operating 
system or similar requirements, power supply requirements, item size 
and weight, etc.). The donation offer must also include information 
pertaining to the donation's scope, purpose, expected benefits, 
intended use, costs, and attached conditions, as applicable, that is 
sufficient to enable CBP to evaluate the donation and make a 
determination as to whether to accept it. CBP will notify the donor, in 
writing, if additional information is requested or if CBP has 
determined that it will not accept the donation.
    (c) Agreement to accept donation. If CBP accepts a donation of 
hardware, software, equipment, technologies, or related support 
services and training, for the purpose of enforcing intellectual 
property rights, CBP will enter into a signed, written agreement with 
an authorized representative of the donor. The agreement must contain 
all applicable terms and conditions of the donation. An agreement to 
accept a donation must provide that the hardware, software, equipment, 
technologies, or related support services and training are offered 
without the expectation of payment, and that the donor expressly waives 
any future claims, except those expressly reserved in the agreement, 
against the government related to the donation.

Kevin K. McAleenan,
Acting Commissioner, U.S. Customs and Border Protection.
    Approved: December 12, 2017.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 2017-27065 Filed 12-14-17; 8:45 am]