Managing Intellectual Property Rights in the U.S. Customs Regulatory Environment
For companies that import products into the United States, U.S. Customs plays a critical role in enforcing intellectual property (IP) rights by ensuring that counterfeit goods and infringing products do not enter the country. This post explores how IP holders can navigate the U.S. Customs system to better protect their intellectual property through registration, enforcement, and monitoring. Whether you're a multinational corporation or an emerging business, understanding these protections can be the key to preserving your brand's value and reputation.
Last year, I met with the Asociación Interamericana de la Propiedad Intelectual (ASIPI) to discuss what can be done to protect trademarks, copyrights, and patents in the U.S. Customs regulatory environment. The following questions and answers are from this exchange.
Which United States governmental agencies are responsible for protecting intellectual property, and what are their respective roles?
To begin, it's important to clarify that we're talking about the federal level and in an administrative sense. Of course, remedies are available through the courts, but that is not the focus of this discussion.
First, we must think of the agencies that create the conditions for protecting intellectual property in international trade—namely, the U.S. Patent & Trademark Office (USPTO) and the U.S. Copyright Office (USCO). These federal agencies are responsible for reviewing and registering trademarks and copyrights. As will be explained later, these registrations are a prerequisite for a right holder to maximize the level of administrative protection available for trademarks and copyrights in international trade.
The protection of patents, on the other hand, falls under the jurisdiction of the U.S. International Trade Commission (ITC). The ITC investigates trade-related allegations of patent infringement, makes determinations, and, when warranted, issues exclusion orders.
Finally, no discussion of the agencies involved in protecting intellectual property in international trade would be complete without mentioning U.S. Customs & Border Protection (CBP). This agency plays the most direct role in protecting intellectual property in international trade. CBP is responsible for identifying, stopping, evaluating, excluding, seizing, penalizing, and forfeiting counterfeit merchandise, pirated works, and goods that infringe U.S. patents.
Focusing on CBP, what types of intellectual property does the agency protect? Just brands?
No, the agency is involved in protecting all forms of intellectual property. For trademarks, CBP offers protection in connection with three forms of infringement—counterfeits, goods bearing confusingly similar marks, and parallel imports. With respect to copyright, CBP addresses two levels of infringement. The first level involves clearly pirated goods, while the second deals with goods that may be pirated. As for patents, CBP enforces exclusion orders issued by the ITC to protect patent holders.
How can trademark and copyright holders take advantage of the protections provided by CBP?
First, rights holders must register their trademarks (with the USPTO) and copyrights (with the USCO) with CBP. Without this step, there is a reduced level of protection available in the U.S. customs context. Second, rights holders should establish and maintain open lines of communication with customs officials at relevant ports. Third, it's crucial for rights holders to educate CBP officers about the distinctive features of their intellectual property. This proactive approach increases the likelihood that CBP will be able to detect and detain infringing goods. These efforts, combined with robust market monitoring and violation reporting practices (e.g., using CBP's e-Allegations system), can significantly enhance protection.
What is the procedure for recording intellectual property rights with CBP?
The process is simple, fast, and inexpensive. After registering a trademark with the USPTO or a copyright with the USCO, an application is submitted through the Online Application System for the Electronic Recordation of Intellectual Property Rights (IPRR). It's important to note that only registered trademarks and copyrights can be recorded with the IPRR system; patents cannot. The corresponding registration fee is $190 per international class of goods or copyright.
The large number of U.S. ports, airports, and land crossings can make it difficult to communicate with front-line officers. How can companies manage this situation?
In addition to registering their IP and taking the other steps mentioned earlier, rights holders should ensure their contact information is properly entered and maintained in CBP's database. CBP officers will have a much harder time stopping infringing goods if they cannot communicate with rights holders in a timely and reliable manner.
What challenges do SMEs face in trying to leverage U.S. Customs to better protect their IP rights?
Smaller businesses and startups often face unique challenges in accessing these protections:
- Limited Resources: Many lack the financial or legal expertise needed to navigate CBP's processes.
- Awareness: Some SMEs are unaware of the importance of recording their IP with CBP.
- Monitoring: Proactively monitoring potential infringements is resource-intensive.
- Communication: Maintaining contact with CBP officials across multiple ports can be daunting.
- Cross-Border Complexity: SMEs may struggle to navigate differences in IP enforcement across international borders.
To overcome these challenges, SMEs should consider partnering with legal professionals or leveraging technology platforms to assist in IP management and enforcement.
What should SMEs do to better protect their IP?
Proactive monitoring and reporting are key. SMEs can:
- Use the appropriate tools and analytics platforms to monitor online marketplaces and social media for counterfeit goods.
- Develop relationships with customs officials and provide detailed information about their products.
- Educate CBP officers about the distinctive features of their IP.
- Use CBP's e-Allegations portal to report violations, providing evidence like product descriptions and shipping details.
- Collaborate with trade associations or industry groups to share best practices and resources.
Coming back to patents, what protections are available in the U.S. Customs regulatory environment?
There are two primary protections:
- A rights holder can obtain a general or limited exclusion order against imported goods that infringe a U.S. patent. Once issued by the ITC, CBP enforces the order.
- A rights holder may also obtain a cease-and-desist order from the ITC, which is executed directly by the Commission.
What are the consequences of importing merchandise that infringes intellectual property rights?
Consequences include the exclusion, detention, and seizure or forfeiture of infringing goods, as well as the imposition of penalties. Serious violations may be referred to the U.S. Department of Justice for judicial resolution. In some cases, rights holders can file an administrative petition to seek remission of seizures or mitigation of penalties, with decisions made by port-based fines, penalties, and forfeiture officers.
Conclusion
Protecting intellectual property in the global marketplace is essential for fostering innovation and maintaining trust with customers. Whether you're a small startup or an established enterprise, understanding and leveraging the U.S. Customs regulatory framework is critical. By registering your IP, educating customs officials, and actively monitoring the market, you can better safeguard your investments and ensure your products maintain their rightful place in the market.
Protecting Intellectual Property Via U.S. Customs
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.