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Staying Ahead of the Counterfeiters’ Curve by Howard N. Aronson
M
ost trademark and copyright owners know that counterfeit and pirated goods—whether designer watches and handbags, electronics, or toys—may be stopped by U.S. Customs and Border Patrol (CBP) officials when the illicit products enter through ports and airports. But in order for CBP to work for you as an owner of intellectual property rights, you must take several straightforward legal steps.
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Stopped in Their Tracks
Every year more than 11 million containers arrive at American seaports; 10 million by truck at land borders; 3 million by rail; and an additional 250 million cargo, postal, and express consignment packages by air. But only about 30,000 trademarks (as well as copyrights and trade names) are recorded for border enforcement with CBP, despite the fact that federal trademark and copyright registrations number in the millions. In 2013, U.S. Customs stopped toys with a retail value of almost $9 million. In 2012, that number was almost $14 million. And what is more important than the lost profits is the fact that counterfeit toys are safety hazards and could hurt—and even kill—children. Some imports are toys with high lead content, for example. Cheap
What is more important than the lost profits is the fact that counterfeit toys are safety hazards and can hurt—and even kill—children.”
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counterfeits also could have substandard parts that break easily, and thus pose a choking hazard.
You Have to Register Although toys represent a small proportion of all the goods seized, the large dollar amounts demonstrate the damage counterfeit goods can inflict on the toy industry. In fact, the CBP is not able to stop all such illicit imports. These seized goods represent a small proportion of the actual total of counterfeit and piratical goods in the retail market. So, as part of a toy company’s anti-counterfeiting strategy, registering with CBP can be an effective tool. Trademarked products (as well as copyrighted works and some trade names) can be detained or seized by CBP. In the case of trademarks, for example, CBP applies a three-level analysis for infringement: 1. Counterfeit products that bear marks that are identical with, or substantially indistinguishable from, a federally registered trademark; 2. Products bearing “copying or simulating marks” (trademarks that are confusingly similar to a federally registered trademark); 3. “Gray market goods,” or products that carry a trademark that is authorized by the owner for use only outside U.S. borders. In practice, CBP seizes products that carry a counterfeit of a federally registered trademark that is recorded with CBP. If the brand owner has not given consent in writing for the product to be imported, the products will be seized and may ultimately be destroyed. In addition, civil fines may be imposed by CBP against those who direct, assist, or aid and abet
FEBRUARY 2015