March 28, 081

Policing and ProtectingUS Intellectual Property Rights

at the Border

J. F. (Jim) ChesterJD, LL.M, CCS, CHB

Chester/Associates, PLLCDallas, Texas

March 28, 082

Table of ContentsTable of Contents• Generally, IPR owners must Self-police IPR• U.S. Trade Law Provides Protections for

certain IPR against infringing imports– Trademarks– Gray Market Goods– Trade Names– Copyrights– Patent Surveys– Cybersmuggling and IPR Protection

March 28, 083

IntroductionIntroduction

• The International Trade Commissionestimates that American companies losemore than $60 billion a year becauseforeign companies do not always exerciseadequate protection of IP rights.

• Much of the foreign merchandise thatinfringes upon American intellectualproperty rights eventually finds its way tothe United States.

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IntroductionIntroduction (cont (cont’’d)d)• Because of its border control

responsibilities, the U.S. Customs &Border Protection (“Customs”) isuniquely positioned to prevent theseillegal importations.

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TrademarksTrademarks• A word, name, symbol, or device, or any

combination thereof adopted and used by aperson to identify goods (or services, forservice marks) made or sold by him/her andto distinguish them from goods made orsold by others

• To engage Customs protection of TMrights, TM’s must be recorded withCustoms

March 28, 086

How to Record TrademarksHow to Record Trademarks• Applications to record trademarks should

also be in letter form.• A separate letter of application is not

required for each trademark; however, thefollowing information must be accurate forall trademarks included in the letter. Also,you must calculate fees per class of goodsfor each trademark.

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How to Record TrademarksHow to Record Trademarks(cont(cont’’d)d)

1. Enclose a status copy of the certificate of registration(Principal Register), certified by the USPTO, which showsthat the title is currently in the applicant’s name. Include fivephotocopies of the status copy.

2. Provide the name and complete business address of eachtrademark owner. Also, include the citizenship of each livingtrademark owner.

3. Include the state(s), country(ies), or other politicaljurisdiction(s) in which each association or corporation listedas a trademark owner was organized, incorporated, or created.

4. Provide the identity of each parent or subsidiary company orother foreign company under common ownership or controlthat uses or owns the trademark abroad.

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How to Record TrademarksHow to Record Trademarks(cont(cont’’d)d)

5. Provide the name and principal business address ofeach foreign person or business entity that the applicanthas authorized or licensed to use the trademark, alongwith a statement of what uses have been authorized orlicensed.

6. Provide the name(s) and principal business address(es)if not identified earlier in the letter, of manufacturer(s)of goods bearing the trademark, where thismanufacturing is done with the applicant’s consent.

7. For each manufacturer identified in item number fiveabove, describe the manner by which the applicantconsented to the trademark’s use, e.g., by contract,corporate affiliation, or by some other arrangement.

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How to Record TrademarksHow to Record Trademarks(cont(cont’’d)d)

8. Identify the places, including principal businessaddresses, where goods bearing the trademark arelegally manufactured without the applicant’s consent

9. Enclose a check or money order for $190, madepayable to “U.S. Customs Service,” for each class ofgoods first stated on each certificate of registration forwhich the applicant wishes to record the trademark.

10. Identify what information, if any, you are claiming asconfidential or privileged.

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Exemption for Articles of Personal UseExemption for Articles of Personal Use• Any person reentering the United States may bring

back items bearing trademarks that wouldotherwise be restricted from entry, i.e., thosebearing counterfeit marks or restricted gray-marketgoods.

• This exemption allows each person to bring in oneitem of each type.

• The personal-use exemption can be used onceevery 30 days.

• Items brought in under this exemption must be forpersonal use (i.e., for use by the person bringing itor as a gift) and cannot be sold within one year ofentry.

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Gray Market GoodsGray Market Goods• The “gray market” refers to the flow of goods throughdistribution channels other than those authorized or intended bythe manufacturer or producer.

• Gray Market Imports (or Parallel Imports ) - Goods offoreign manufacturer, legally acquired abroad, bearing a legallyaffixed foreign trademark identical to a mark registered in theUnited States, and then imported without consent of the U.S.trademark holder.

• Unlike those on the “black market,” gray market goods are notillegal. Instead, they are being sold outside of normal distributionchannels by companies which may have no relationship with theproducer of the goods.

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Gray Market GoodsGray Market Goods•If © or TM is recorded, Customs can detain for up to30 days.

•However, generally can’t prohibit Gray MarketImports.

•The first sale doctrine entitles the owner of a particularcopy to sell or dispose of that copy without thepermission of the copyright owner.

March 28, 0813

How to Stop/Hinder Gray Market SalesHow to Stop/Hinder Gray Market Sales•Rigorous prosecution of trademark laws to restrictadvertisements for the product• Refusal to honor warranties• Refusal to deal with distributors and retailers (and withcommercial products, customers) that trade in gray-marketgoods.• Local laws (or customer demand) concerning distributionand packaging (for example, the language on labels, units ofmeasurement, and nutritional disclosure of foodstuffs) can bebrought into play, as can national standards certifications forcertain goods (e.g., FCC)

March 28, 0814

Gray Market GoodsGray Market Goods• U.S. trademark owners and distributors attempted tocease the importation of gray goods through trademarkinfringement actions.•In these lawsuits, plaintiffs successfully argued:

•although the goods bear a genuine trademark, and• were legally and innocently obtained by the defendant,• the foreign goods are "materially different" than the productssold in the United States,•such that sale of the gray goods could cause consumerconfusion and could damage the U.S. party's independentgood will

March 28, 0815

““Lever-RuleLever-Rule”” Protection from Grey Market Imports Protection from Grey Market Imports

• In light of the decision in Lever Bros. Co. v. UnitedStates the owner of a recorded trademark can applyto Customs to restrict the importation of genuinegoods that are materially and physically differentfrom those authorized for entry into the UnitedStates.

• A request for Lever-Rule protection must be inwriting that sets out the precise nature of thephysical and material differences that form thebasis for the request.

March 28, 0816

How to Obtain How to Obtain ““Lever-RuleLever-Rule”” Protection Protection

• Physical and material differences include,but are not limited to:• the specific composition of the products,

product construction or structure,• performance or operational characteristics,• differences resulting from legal or regulatory

requirements, or• other distinguishing and explicitly defined

factors that may cause consumer confusion.

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How to Obtain How to Obtain ““Lever-RuleLever-Rule”” Protection Protection (cont(cont’’d)d)

• Where Lever-Rule protection has been grantedto a trademark or a specific article, such articlemay be imported if the product or its packagingbears a conspicuous and legible label that states:

• “This product is not a product authorized bythe United States trademark owner forimportation and is physically and materiallydifferent from the authorized product.”

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Trade NamesTrade Names

• A word, name, symbol, or device, or anycombination thereof used by a person to identifyhis business, vocation, or occupation, anddistinguish it from the business, vocation, oroccupation of others.

• To engage Customs protection of Trade Name,Trade Name must be recorded with Customs

March 28, 0819

How to Record Trade NamesHow to Record Trade Names

• Application letters to record trade namesshould include the following:

1. The trade name to be recorded.2. Whether the trade name has been used for at least

six months.3. If the trade name to be recorded is other than a

complete business name, provide convincing proofto establish that only part of the complete name iscustomarily used.

4. The name, complete business address, andcitizenship of the trade name owner(s).

March 28, 0820

How to Record Trade Names (contHow to Record Trade Names (cont’’d)d)

5. For partnerships, each partner’s citizenship. Forassociations and corporations, the state(s), country (ies),or other political jurisdiction(s) in which the associationsor corporations were organized, incorporated, or created.

• A description of the merchandise associated with thetrade name.

• Identify what information, if any, you are claiming asconfidential or privileged.

• A check or money order for $190, made payable to “U.S.Customs & Border Protection,” for each trade name to berecorded.

March 28, 0821

CopyrightsCopyrights

• Copyright is a form of protection providedby the laws of the United States (title 17,U.S. Code) to the authors of “originalworks of authorship,” including literary,dramatic, musical, artistic, and certainother intellectual works

• To engage Customs protection of ©, ©must be recorded with Customs

March 28, 0822

How to Record CopyrightsHow to Record Copyrights

• Application letters to record copyrightsshould include the following:

1. The name(s) and complete business address(es) ofthe copyright owner(s).

2. Name of the country(ies) in which genuine copiesof the protected work or sound recordings aremanufactured.

3. A statement describing the circumstances of anyactual or potential injury that has occurred or willoccur as a result of the actual or contemplatedimportation of the sound recordings or otherprotected work identified in item number two.

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How to Record Copyrights (contHow to Record Copyrights (cont’’d)d)4. The name of each parent or subsidiary company or other related

foreign company that manufactures abroad genuine copies of theprotected work, and the foreign title of the work if different fromthe United States title.

5. The name and principal business address of each foreign personor business entity which the applicant has authorized or licensedto manufacture abroad genuine copies of the protected work.Include the foreign title of the work if it is different from theUnited States title.

6. The names and principal business addresses of people orcompanies not previously identified in your application whomanufacture genuine copies of the protected work, where thismanufacturing is done with the applicant’s consent.

7. For each manufacturer listed above in item number six, themanner in which the applicant consented to the manufacture --for example, by contract, by corporate affiliation, or by someother arrangement (in this case, please identify).

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How to Record Copyrights (contHow to Record Copyrights (cont’’d)d)8. The place(s), including the principal business address(es), where

genuine copies of the protected work are legally manufacturedwithout the applicant’s consent -- for example, countries inwhich another party also owns a copyright in the work. Providethe name of each foreign person or business entity engaged insuch manufacturing abroad, as well as the foreign title of thework if it is different from the American title.

9. For applications covering a copyright claim in a soundrecording, provide the name(s) of the recording artist(s) and anyother identifying names appearing on the sound recording itselfor its label or container.

10. If you are claiming rights under the Berne Convention for theProtection of Literary and Artistic Works (Paris Text, 1971)instead of by registration with the U.S. Copyright Office of theLibrary of Congress, provide a statement explaining how theBerne Convention applies.

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How to Record Copyrights (contHow to Record Copyrights (cont’’d)d)11. If you are not claiming rights under the Berne Convention,

enclose an “additional certificate” of copyright registration thathas been issued by the U.S. Copyright Office.• If the name of the applicant differs from the name of the copyright

owner identified in the certificate, include a certified copy of anyassignment, exclusive license, or other document recorded in theU.S. Copyright Office which shows that the applicant has acquiredownership of the copyright.

12. Five photographic or other likenesses of the copyright work.13. A check or money order for $190, made payable to “U.S.

Customs & Border Protection,” for each trade name to berecorded.

14. Identify what information, if any, you are claiming asconfidential or privileged.

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Trademarks, Trade Names andTrademarks, Trade Names andCopyrightsCopyrights

• To be eligible for recordation with Customs,• trademarks must first be registered with the

Principal Register in the U.S. Patent andTrademark Office (USPTO),

• copyrights with the U.S. Copyright Office of theLibrary of Congress.

• Recordation with Customs normally takesthree weeks.

March 28, 0827

Trademarks, Trade Names and CopyrightsTrademarks, Trade Names and Copyrights(cont(cont’’d)d)

• Trade names, which cannot be registered atthe Patent and Trademark Office, takelonger to be recorded with Customs.

• Notice of tentative recordation must first bepublished in the Federal Register and in theCustoms Bulletin, after which interestedparties have the opportunity to oppose therecordation.

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Trademarks, Trade Names and CopyrightsTrademarks, Trade Names and Copyrights(cont(cont’’d)d)

• Notice of final approval or disapproval is publishedafter all claims, rebuttals, and relevant evidencebearing on the recordation have been considered.

• Once a trademark, trade name, or copyright hasbeen recorded, Customs has the authority to denyentry to or seize goods that infringe upon therecorded right.

• Customs does not provide application forms toeffect recordation. A letter containing the requiredinformation accomplishes this procedure.

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PatentsPatents

• Novel, useful, obscure or complexinventions are protected under UnitedStates patent laws.

• The USPTO, which is part of theDepartment of Commerce, registerspatents.

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PatentsPatents• Customs’ authority to help patent owners protect their rights

is limited by law.

• Customs does enforce exclusion orders issued by theInternational Trade Commission under Section 337 of theTariff Act of 1930.• Exclusion orders are issued where the Commission determines

that Section 337 has been violated through unlawful, unfairmethods of competition or unfair acts involving the importationof goods.

• Customs enforces ITC exclusion orders in accordance withtheir specific terms.

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PatentsPatents

• An amendment to the Tariff Act, Section 337(i),gives the ITC authority to issue seizure-and-forfeiture orders when an importer has previouslyattempted to import specific goods that violate anexclusion order.

• Once the Customs Service receives a seizure-and-forfeiture order from the ITC, the goods would besubject to seizure.

March 28, 0832

Surveys of Patent InfringingSurveys of Patent InfringingImportersImporters• In the absence of an ITC order directing exclusion or seizure

and forfeiture, Customs can still help private parties sufferingfrom patent infringement.

• Under Section 12.39a of the Customs Regulations, a patentowner can request a survey that will provide the name andaddress of an importer of merchandise that appears to infringeupon a registered patent.

• The fee for a patent survey is• $1,000 for two months• $1,500 for four months, and• $2,000 for six months.

March 28, 0833

How to Apply for Patent SurveysHow to Apply for Patent Surveys• Letters to apply for patent surveys should

include:1. Name and address of the patent owner.2. A certified copy of the patent issued by the U.S. Patent

and Trademark Office showing the applicant as owner,and three photocopies of the certified copy.

3. Whether you are applying for a two-, four-, or six-month survey.

4. A list of all merchandise believed to infringe upon thepatent, and where and by whom the potentiallyinfringing merchandise is believed to be manufactured.

5. Appropriate Harmonized Tariff System classificationnumber, or what you think this number may be.

March 28, 0834

How to Apply for Patent SurveysHow to Apply for Patent Surveys(cont(cont’’d)d)

6. HTS number under which the legitimate, non-infringing merchandise is being exported orimported by or for the applicant.

7. Name of the final product.8. For surveys of a chemically-based patent, the

Chemical Abstracts Service Registry number.9. The names, trade names where applicable, and, for

chemically-based patents, the proprietary andchemical names used for the product.

10. For chemically-based patents where the chemical isan active ingredient, identify the final products inwhich the chemical can be found.

March 28, 0835

Cybersmuggling Cybersmuggling and IPR Protectionand IPR Protection

• Internet technology has allowedcriminal elements to by-pass someCustoms and other lawenforcement.

• Customs’ CyberSmuggling Centerof has identified use of theInternet to assist IPR infringement

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CybersmugglingCybersmuggling and IPR Protection and IPR Protection(cont(cont’’d)d)• The CyberSmuggling Center can be reached on the web

at Cybersmuggling@customs.treas.gov or at thefollowing address:

U.S. Customs Service CyberSmuggling Center11320 Random Hills Road, Suite 400

Fairfax, Virginia 220301-800-BE-ALERT (1-800-232-5378)

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Other Information and AgenciesOther Information and Agencies• Additional information about Customs IPR protection is available from the

applicable Customs Regulations (19 C.F.R. 133) or at the Customs web site:www.customs.gov.

• For more information, contact:U.S. Copyright OfficeLibrary of CongressWashington, DC 20559(202) 707-3000www.loc.gov/copyright

• U.S. Patent and Trademark OfficeCommissioner of Patents and TrademarksWashington, DC 20231(703) 308-4357www.uspto.gov

• U.S. International Trade CommissionOffice of Trade Remedy AssistanceWashington, DC 20436(202) 205-2000www.usitc.gov