[Federal Register Volume 84, Number 166 (Tuesday, August 27, 2019)]
[Proposed Rules]
[Pages 44790-44792]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-18317]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
Federal Register / Vol. 84, No. 166 / Tuesday, August 27, 2019 /
Proposed Rules
[[Page 44790]]
DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
DEPARTMENT OF THE TREASURY
19 CFR Parts 127 and 133
[USCBP-2019-0031]
RIN 1515-AE35
Disclosure of Information Regarding Abandoned Merchandise
AGENCY: U.S. Customs and Border Protection, Department of Homeland
Security; Department of the Treasury.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: This document proposes to amend the U.S. Customs and Border
Protection (CBP) regulations pertaining to disclosure of information
regarding merchandise bearing suspected counterfeit trademarks. The
proposed amendment would create a procedure for the disclosure of
information otherwise protected by the Trade Secrets Act to a trademark
owner when merchandise bearing suspected counterfeit trademarks has
been voluntarily abandoned.
DATES: Comments on the proposed rule must be received on or before
October 28, 2019.
ADDRESSES: You may submit comments, identified by docket number, by one
of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments via docket number USCBP
2019-0031.
Mail: Trade and Commercial Regulations Branch, Office of
Trade, Regulations and Rulings, U.S. Customs and Border Protection, 90
K Street NE, 10th Floor, Washington, DC 20229-1177.
Instructions: All submissions received must include the agency name
and docket number for this proposed rulemaking. All comments received
will be posted without change to http://www.regulations.gov, including
any personal information provided. For detailed instructions on
submitting comments and additional information on the proposed
rulemaking process, see the ``Public Participation'' heading of the
SUPPLEMENTARY INFORMATION section of this document.
Docket: For access to the docket to read background documents or
comments received, go to http://www.regulations.gov. Submitted comments
may also be inspected during regular business days between the hours of
9 a.m. and 4:30 p.m. at the Trade and Commercial Regulations Branch,
Regulations and Rulings, Office of Trade, U.S. Customs and Border
Protection, 90 K Street NE, 10th Floor, Washington, DC. Arrangements to
inspect submitted comments should be made in advance by calling Joseph
Clark at (202) 325-0118.
FOR FURTHER INFORMATION CONTACT: Alex Bamiagis, Intellectual Property
Rights Branch, Regulations and Rulings, Office of Trade, U.S. Customs
and Border Protection, (202) 325-0415.
SUPPLEMENTARY INFORMATION:
Public Participation
Interested persons are invited to participate in this rulemaking by
submitting written data, views, or arguments on all aspects of the
proposed rule. CBP also invites comments that relate to the economic,
environmental, or federalism effects that might result from this
proposed rule. If appropriate to a specific comment, the commenter
should reference the specific portion of the proposed rule, explain the
reason for any recommended change, and include data, information, or
authority that support such recommended change.
Background
Among other responsibilities, U.S. Customs and Border Protection
(CBP) enforces intellectual property rights (IPR) laws and regulations
at the border. The majority of the CBP regulations prescribing these
efforts are found in part 133 of title 19 of the Code of Federal
Regulations (19 CFR part 133). Part 133 provides for the recordation of
trademarks, trade names, and copyrights with CBP and prescribes the
enforcement procedures applicable to suspected infringing merchandise.
Part 133 also sets forth procedures for the detention, seizure, and
disposition of articles violating certain IPR laws and regulations,
including information disclosure to right owners in appropriate
circumstances. Consistent with Executive Order 13785, this proposed
regulatory amendment would allow the disclosure of certain information
to a trademark owner in circumstances where goods have been voluntarily
abandoned as described in 19 CFR 127.12(b), if CBP suspects that the
successful importation of the merchandise would have violated United
States trade laws prohibiting the importation of merchandise bearing
counterfeit marks.
I. The Trade Secrets Act and Disclosure of Information Pertaining to
Certain Intellectual Property Rights Enforced at the Border
The Trade Secrets Act (18 U.S.C. 1905) bars the unauthorized
disclosure by government officials of any information received in the
course of their employment or official duties when such information
``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.
Specifically, the Trade Secrets Act protects those required to
furnish confidential commercial or financial information to the
government by shielding them from the competitive disadvantage that
could result from disclosure of that information by the government. In
turn, this protection encourages those providing information to the
government to furnish accurate and reliable information that is useful
to the government.
The Trade Secrets Act, however, permits those government officials
covered by the Act to disclose protected information when the
disclosure is otherwise ``authorized by law,'' which includes both
statutes expressly authorizing disclosure and properly promulgated
substantive agency regulations authorizing disclosure based on a valid
statutory interpretation. See Chrysler v. Brown, 441 U.S. 281, 294-316
(1979).
The Secretary of the Treasury thus has authority to disclose
information otherwise protected under the Trade Secrets Act when such
disclosures are authorized by law. Disclosures meeting
[[Page 44791]]
the ``authorized by law'' standard of the Trade Secrets Act include
those made pursuant to regulations that: (1) Are in compliance with the
provisions of the Administrative Procedure Act (5 U.S.C. 551 et seq.);
and (2) implement a valid statute. Chrysler, 441 U.S. at 294-96, 301-
03.
Several provisions in titles 15 and 19 of the United States Code
give CBP authority to promulgate regulations to enforce prohibitions
against the importation of merchandise bearing infringing and
counterfeit trademarks. The Lanham Trademark Act (15 U.S.C. 1124)
authorizes the Secretary of the Treasury to promulgate regulations
regarding trademarks and to aid CBP officers in enforcing the
prohibitions against importation. Additionally, sections 526(e) and 596
of the Tariff Act of 1930, as amended (19 U.S.C. 1526(e), and 19 U.S.C.
1595a(c)), prohibit the importation of merchandise bearing a
counterfeit mark and the introduction or attempted introduction into
the United States of merchandise or packaging in which, inter alia,
trademark protection violations are involved. Moreover, section 526(e)
of the Tariff Act of 1930, as amended (19 U.S.C. 1526(e)), requires CBP
to notify the owner of the trademark when merchandise bearing a
counterfeit mark is seized. Section 624 of the Tariff Act of 1930, as
amended (19 U.S.C. 1624), authorizes the Secretary of the Treasury to
promulgate regulations to carry out the provisions of the Tariff Act of
1930, as amended. Collectively, these statutes authorize the Secretary
of the Treasury to disclose certain importation information to right
owners to assist CBP in its IPR enforcement efforts. Disclosure of this
information to right owners can help CBP prevent the importation of
infringing and counterfeit merchandise by identifying sources or
channels of violative shipments.
If CBP suspects that an article imported into the United States
bears a counterfeit mark, it may detain the article for up to 30 days
from the date on which the merchandise is presented for examination. 19
U.S.C. 1499; 19 CFR 133.21(b). During the detention period, and in
accordance with 19 CFR 133.21(b)(4), CBP may disclose to the owner of
the mark limited importation information if CBP concludes that the
disclosure would assist CBP in determining whether the imported article
bears a counterfeit mark. CBP also discloses to the owner of the mark
comprehensive importation information after CBP seizes merchandise for
bearing a counterfeit mark in accordance with 19 CFR 133.21(e).
II. Voluntary Abandonment of Merchandise Suspected of Bearing
Counterfeit Marks
As noted in a 2018 report issued by the Government Accountability
Office (GAO), ``the growth of e-commerce has provided additional
opportunities for counterfeiters to deceive consumers . . .'' and
challenged CBP's ability to prohibit the importation of counterfeit
merchandise. U.S. Gov't Accountability Office, GAO 18-216,
``Intellectual Property: Agencies Can Improve Efforts to Address Risks
Posed by Changing Counterfeits Market,'' Report to the Chairman,
Committee on Finance, U.S. Senate, p. 10-11 (2018). The report notes
that e-commerce merchandise is increasingly imported in low-value
shipments arriving via express consignment or international mail. Id.
Such shipments often are voluntarily abandoned if CBP detains the
merchandise on suspicion of an IPR violation. The cost of demonstrating
to CBP that a shipment is legitimate may outweigh the importation's
value, and importers frequently fail to respond to CBP inquiries.
Instead, some of these importations may be voluntarily abandoned (see
19 CFR 127.12(b)) after CBP has detained the merchandise on suspicion
of an IPR violation.
Section 302 of the Trade Facilitation and Trade Enforcement Act of
2015 (Pub. L. 114-125; 130 Stat. 149; Section 628a of the Tariff Act of
1930 (19 U.S.C. 1628a)) provides CBP with authority to disclose
information to right holders in certain situations when it would assist
CBP in determining if the merchandise is being imported in violation of
the copyright or trademark laws. Under the current regulations in part
133, however, when merchandise is voluntarily abandoned, trademark
owners do not receive the importation information that would be
provided if merchandise bearing a counterfeit trademark were seized. In
fact, the regulations in part 133 are silent with respect to IPR
enforcement against merchandise that has been voluntarily abandoned.
III. Explanation of Proposed Amendment to Part 133
Executive Order 13785, ``Establishing Enhanced Collection and
Enforcement of Antidumping and Countervailing Duties and Violations of
Trade and Customs Laws,'' instructs CBP to ensure that it can share
information regarding voluntarily abandoned merchandise with right
owners ``to ensure the timely and efficient enforcement of laws
protecting [IPR] holders from the importation of counterfeit goods.''
82 FR 16719 (March 31, 2017). As a result, CBP is proposing to add a
new paragraph to 19 CFR 133.21. CBP is proposing to disclose the same
comprehensive importation information provided to trademark owners when
merchandise has been seized in cases where merchandise has been
voluntarily abandoned, if CBP suspects the successful importation of
the merchandise would have violated United States trade laws
prohibiting importation of merchandise bearing counterfeit marks, and
that disclosure would assist CBP in its IPR enforcement mission.
Under those conditions, the amendment would allow CBP to disclose
the following information: The date of importation, the port of entry,
the description of the merchandise, the quantity of the merchandise,
the country of origin of the merchandise, the name and address of the
manufacturer, the name and address of the exporter, and the name and
address of the importer. As in the seizure context, trademark owners
may use this importation information to help CBP prevent IPR violations
by identifying sources or channels of violative shipments.
IV. Other Conforming Amendments
Sections 133.21 to 133.25 currently cite to section 818(g) of the
National Defense Authorization Act (NDAA) for Fiscal Year 2012 (Pub. L.
112-81; 125 Stat. 1496; 10 U.S.C. 2302 note) as specific authority.
Section 302(b) of the Trade Facilitation and Trade Enforcement Act of
2015 (Pub. L. 114-125; 130 Stat. 122; Section 628a of the Tariff Act of
1930 (19 U.S.C. 1628a), as amended) terminated and replaced the NDAA
authority. Because of these statutory changes, CBP is proposing to
revise the specific authority citation for sections 133.21 to 133.25.
CBP is also proposing to add a new paragraph (c) in 19 CFR 127.12,
cross-referencing the detention and disclosure provisions of 19 CFR
133.21(b) which may be applicable to voluntarily abandoned merchandise
suspected of bearing a counterfeit mark.
Statutory and Regulatory Requirements
I. Executive Orders 13563, 12866, 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
[[Page 44792]]
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 rule is not a ``significant regulatory action,'' under section
3(f) of Executive Order 12866. Accordingly, OMB 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).
II. 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).
Importers who voluntarily abandon merchandise consist of all types
of businesses and individuals, including small businesses, so it is
likely that a substantial number of small businesses are affected.
However, the impact is not significant, because this rule would impose
no new monetary costs to these importers. If they do not wish to have
their merchandise's information shared with the right owner, they may
choose not to voluntarily abandon these goods. Therefore, CBP certifies
that this rule will not have a significant economic impact on a
substantial number of small entities. Notwithstanding this
certification, CBP invites comments about the impact of this rule, if
adopted, on small entities.
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 127
Exports, Freight, Imports.
19 CFR Part 133
Counterfeit trademarks, Detentions, Disclosure, Restricted
merchandise, Trademarks, Trade names.
For the reasons stated above in the preamble, CBP proposes to amend
parts 127 and 133 of title 19 of the Code of Federal Regulations (19
CFR parts 127 and 133) as set forth below.
PART 127--GENERAL ORDER, UNCLAIMED, AND ABANDONED MERCHANDISE
0
1. The general authority citation for part 127 continues to read as
follows:
Authority: 19 U.S.C. 66, 1311, 1312, 1484, 1485, 1490, 1491,
1492, 1493, 1506, 1559, 1563, 1623, 16241646a; 26 U.S.C. 5753.
0
2. Section 127.12 is amended by adding paragraph (c), to read as
follows:
Sec. 127.12 Abandoned merchandise.
* * * * *
(c) If merchandise voluntarily abandoned pursuant to paragraph (b)
of this section is suspected of bearing a counterfeit mark, it also may
be subject to the detention and disclosure provisions of Sec.
133.21(b) of this chapter.
PART 133--TRADEMARKS, TRADE NAMES, AND COPYRIGHTS
0
3. The general authority citations for part 133 continue to read as
follows and the specific authority citations for Sec. Sec. 133.21
through 133.25 are revised 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 19 U.S.C.
1628a; Sec. 302, Public Law 114-125.
0
4. In Sec. 133.21, paragraph (b)(6) is added to read as follows:
Sec. 133.21 Articles suspected of bearing counterfeit marks.
* * * * *
(b) * * *
(6) Voluntary abandonment and disclosure to owner of the mark of
comprehensive importation information. When merchandise 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 recorded with
CBP pursuant to subpart A of this part has been voluntarily abandoned
under Sec. 127.12(b) of this chapter, CBP may disclose to the owner of
the mark the following comprehensive importation information, if CBP
determines the disclosure will assist in CBP's trademark enforcement:
(i) The date of importation;
(ii) The port of entry;
(iii) The description of the merchandise;
(iv) The quantity of the merchandise;
(v) The country of origin of the merchandise;
(vi) The name and address of the manufacturer;
(vii) The name and address of the exporter; and
(viii) The name and address of the importer.
* * * * *
Mark A. Morgan,
Acting Commissioner, U.S. Customs and Border Protection.
Approved: August 21, 2019.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 2019-18317 Filed 8-26-19; 8:45 am]
BILLING CODE 9111-14-P