WASHINGTON — U.S. Customs & Border Protection has implemented an interim rule that will allow the agency to share more detailed information with apparel brands and other trademark holders when inspections of cargo turn up suspect counterfeit merchandise.
The fashion industry has spent millions of dollars pursuing counterfeiters and trying to protect their trademarks at home and abroad. Until now, Customs has been prohibited under the Trade Secrets Act from disclosing valuable information to trademark holders, including unredacted information, samples or photos of suspect counterfeit merchandise prior to seizures. The new rule aims to fix that loophole.
“The interim final rule enables CBP to provide more effective IPR [intellectual property rights] enforcement, including against counterfeit fashion apparel, while providing safeguards for legitimate importers,” said Sarah Price, international trade specialist at CBP.
Kevin Burke, president and chief executive officer of the American Apparel & Footwear Association, said, “Finally, we see the fact that the government is working cooperatively with the private sector to be able to provide avenues where we can capture counterfeit products before they get onto the streets.”
Burke said the lack of information that Customs was allowed to share with trademark holders likely led to counterfeits getting by Customs and into the U.S. marketplace.
“Some counterfeits are very sophisticated and look very much like the real thing,” Burke said. “Now the government will have the opportunity to review with trademark holders photos of what the real thing looks like versus what is coming in.…My guess is that will get a lot of counterfeit products off of the street.”
Price said Customs officials have routinely shared certain limited information with brands about a suspect shipment, such as date of import and port of entry, and worked with companies to “the greatest extent possible” under the law, “but we were prevented from sending the right holder an actual unredacted sample or photo when suspect counterfeit merchandise was detained. This process hampered determinations as to whether merchandise was counterfeit because, as the quality of counterfeit goods continued to rise, it became increasingly difficult for CBP to determine whether certain goods bore counterfeit marks.”
The rule also provides some protection for importers by giving them seven business days from the date the goods are detained to present evidence that the merchandise is authentic before CBP shares the new information with trademark holders, according to Price. If the importer fails to provide “adequate” evidence within the seven-day period, CBP can then send the unredacted information to brands.
The public has until June 25 to submit comments to Customs on the interim rule before the agency issues a final rule.