Introduction 

Many companies mistakenly believe that registering a trademark or copyright with the U.S. Government provides sufficient protection and remedies. However, there is an additional step that can significantly enhance protection—recording trademarks or copyrights with U.S. Customs and Border Protection (U.S. Customs).  

This blog explores the distinct goals of these processes and the advantages of recording intellectual property with the U.S. Customs. 

I. Registering with USPTO and Recording with U.S. Customs: Different Goals

  • Registering with the U.S. Patent and Trademark Office (USPTO) or U.S. Copyright Office gives public notice of ownership. 
  • Recording with U.S. Customs aims to prevent unauthorized importation of merchandise bearing the registered intellectual property. 
  • U.S. Customs serves as a critical partner in halting counterfeit and infringing products from entering or leaving the United States.

II. Benefits of Recording Trademarks or Copyrights with U.S. Customs

Seizure and Monitoring: 

  • U.S. Customs monitors and seizes infringing merchandise at ports of entry, alleviating the burden on trademark or copyright holders. 
  • This proactive approach eliminates the need to individually locate and prosecute every unauthorized importer, distributor, or retailer, safeguarding intellectual property rights.

Impressive Results in IP Protection: 

  • In 2021, U.S. Customs seized over 27,000 shipments with an estimated manufacturer’s suggested retail price (MSRP) of $3.3 billion. 
  • Collaboration with the Intellectual Property Rights (IPR) Center led to 388 arrests, 155 indictments, and 100 convictions related to IP crimes. 
  • Apparel/accessories accounted for 30% of seized merchandise, with watches and jewelry valued at over $1.18 billion. 
  • Notably, U.S. Customs seized counterfeit and unapproved COVID-19 products, reflecting their adaptability to emerging challenges. 
  • Approximately 57% of counterfeited goods seized in 2021 were manufactured in China, amounting to an estimated MSRP value of $1.9 billion.

Authority to Issue Fines and Prosecute: 

  • U.S. Customs possesses the authority to impose monetary fines on individuals involved in facilitating the introduction of seized and forfeited counterfeit merchandise into the United States. 
  • U.S. Customs can request the U.S. Attorney’s Office to criminally prosecute those engaged in illegal activities under the Trademark Counterfeiting Act of 1984. 
  • Penalties for first-time violators include up to ten years imprisonment and/or a $2 million fine, while repeat offenders face up to 20 years imprisonment and/or a fine of up to $5 million. 

International Raids and Cooperation: 

  • U.S. Customs collaborates with foreign law enforcement agencies and coordinates raids on counterfeit production facilities globally. 
  • Customs officers stationed at American embassies worldwide regularly share information for the criminal prosecution of manufacturers and exporters of counterfeit goods. 

 

III. Customs e-Recordation System and Gray Market Protection
 

Trademark and copyright recordations are filed online through the U.S. Customs’ IPR e-Recordation system, adhering to the regulations outlined in 19 C.F.R. Part 133. 

The following is a checklist of the information necessary to submit an trademark or copyright recordation with CBP: 

  • Description of trademark or copyright registered with the USPTO 
  • USPTO Registration Number 
  • Country of manufacture of protected goods bearing the trademark or country of manufacture of genuine copies or phonorecords of the protected copyright work 
  • Names of any parent companies, subsidiaries, or other entities that are under common control with, or share any type of ownership interest or relationship with, the U.S. trademark owner, or names of all parties authorized to use or reproduce the copyrighted work 

For those eligible, it is worthwhile to pursue “gray market” protection, which pertains to genuine products bearing a trademark or brand name approved for use in a country other than the U.S. Gray market goods are different from goods bearing counterfeit markets because goods bearing counterfeit marks are never genuine. According to CBP guidance, CBP provides limited protection to trademark owners against importations of certain gray market goods. Only trademarks and trade names that are recorded with CBP are entitled to gray market protection, and gray market status is determined at the time of recordation with CBP. Gray market protection is only offered if you have the following in place: 

  • The U.S. and foreign trademarks are not owned by the same person 
  • The U.S. and foreign trademark owners are not a parent or subsidiary, or otherwise subject to common ownership or control 

Currently, Phillip Morris is an example of a company that has been able to meet this stringent burden and CBP offers its trademarks gray market protections. The image below is a search result from the CBP IPRS database. 

As a final thought, it is extremely beneficial for a company to record its registered trademark or copyright with CBP, as CBP may be a company’s greatest, and most cost effective ally, when it comes to trademark and copyright enforcement. For help with any pre-compliance matters such as the CBP recordation process or for assistance with enforcement actions such as seizures and penalties, please contact info@diaztradelaw.com and visit our website www.diaztradelaw.com.

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