“Un” Happy Holidays for Internet Counterfeiters

After the big sales on Black Friday following Thanksgiving Day, retailers claim to have the best deals of the season available for online shoppers on Monday, also known as Cyber Monday. Online shoppers looking for bargains didn’t find them on 82 commercial websites found to be offering illegal counterfeit goods and copyrighted works. As part of Operation In Our Sites coordinated by the National Intellectual Property Rights Coordination Center (IPR Center) seizure orders were executed against these 82 domains on Cyber Monday.

The government operation targeted online retailers of counterfeit goods, which included sports equipment, footwear, handbags and athletic apparel. Illegal copies of copyrighted DVDs, music and software were also targeted. Federal agents made undercover purchases from various online retailed suspected of selling counterfeit goods. Some of the goods were shipped directly to the U.S. from other countries using international express mail. Once the goods were confirmed to be counterfeit, seizure orders were obtained. When accessing these websites now, users will see a banner notifying them that the website/domain has been seized by federal authorities.

Protection of intellectual property encourages creativity that is essential to continued growth and success of our economy. Without protection, companies and individuals may not be as willing to invest the time and money necessary to develop innovative new products that enhance, and in many cases, save our lives. Without proper enforcement, manufacturers may produce lower cost inferior goods by violating the trademark, copyright and patent laws. Some of these inferior goods such as pharmaceuticals could be hazardous to consumer’s health because they are not manufactured under the same regulations and processes as the patented or trademarked goods.

The IPR Center and the Department of Justice Task Force on Intellectual property (IP Task Force) work to eliminate the growth of intellectual property violations. They encourage involvement from the holders of IPR to assist them in the fight against this growing problem. To learn more about these efforts, visit the IPR Center at http://www.ice.gov/iprcenter/ and the IP Task Force at www.justice.gov/dag/iptaskforce/.

Focus on Fakes

Have you ever seen someone at a flea market selling Rolex watches for $70 or NFL shirts for $5? If it sounds too good to be true, then it probably is too good to be true. Intellectual property comes in many forms, from writings of an author to the new product developed by an inventor. Federal law provides rights to owners of these writings, products and processes to protect them from being misappropriated by others.

Protection of intellectual property encourages creativity that is essential to continued growth and success of our economy. Without protection, companies and individuals may not be as willing to invest the time and money necessary to develop innovative new products that enhance, and in many cases, save our lives. Unfortunately, unethical criminal behaviors have created an increase in counterfeit and pirated goods that inhibit creativity and threaten profitability of legitimate creators. Trade in counterfeit goods such as CDs, clothing and drugs cost the true owners around the world billions of dollars annually.

Today's technological advancements and the ability of foreign manufacturers to produce lower cost goods present unlimited opportunities for distribution of goods that are authorized by the IPR owner. However, this same technology and low cost production provide the same opportunities for supplying products that infringe on intellectual property rights. For example, anyone with a computer equipped with a CD and/or DVD burner and a stack of discs can illegally copy and distribute protected works, such as music and movies.

Both the domestic and international protection of intellectual property has become increasingly more difficult. While the U.S. has well-defined laws for protection of intellectual property, not all countries provide or enforce the protection of intellectual property. This lack of protection and enforcement has led to widespread unauthorized copying and use of unlicensed marks to supply the market with goods that violate intellectual property rights.

Some of the statistics provided by CBP show that footwear, clothing, purses and electronics are some of the most frequent items imported in violation of intellectual property rights. Goods such as soaps, pharmaceuticals and electronics can be safety hazards and pose dangers to consumers if not manufactured according to our standards. China was the top trading partner for IPR seizures in FY 2009 accounting for 79% of the total value of goods seized. Footwear was the top commodity seized in FY 2009, which accounted for 38% of the entire value of infringing goods.

The enforcement of intellectual property rights has become one of CBP’s top priorities. CBP is dedicated to protecting against the importation of goods, which infringe/violate Intellectual Property Rights (IPR). The aggressive enforcement program devotes substantial resources to target, intercept, detain and seize goods in that violate intellectual property laws. CBP has an online reporting system that allows the public to report potential violations, eAllegations.

Click HERE to check out this interesting shopping website, then cast your vote using the poll at the top right side of the page.

Would this website be something that CBP might have an interest in?

__Yes
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__I’m going shopping!

What's New in Counterfeit Imports?

When people mention counterfeit goods, items such as Rolex watches, Gucci handbags, Nike apparel, CDs and other software come to mind. So, what is the latest trend in counterfeiting? Exercise Equipment. Why would someone want to counterfeit exercise equipment? How would a purchaser or user know the equipment was counterfeit? CBP states that counterfeit equipment may be manufactured overseas using inferior design and construction, and may contain substandard components, which could lead to pulled muscles and various other injuries. Counterfeited fitness products range from DVDs, to gym equipment and some of the products seen on infomercials. CBP notes that the AB Circle, Bowflex and P90X are the most frequent target for infringement.

In fiscal year 2009, CBP made 26 seizures related to counterfeit exercise equipment with a domestic value of approximately 834,000. In just the first five months of FY2010, CBP made 57 seizures with a domestic value of over $2 million. CBP indicates that counterfeit goods are commonly sold on eBay and Craigslist CBP encourages consumers to take a close look before purchasing or using exercise equipment and provided the following helpful hints.

· Consider the method of sale –check the manufacturer’s website for authorized retail outlets and/or websites. New equipment sold on eBay or Craigslist at a price significantly lower than the MSRP may raise a red flag.

· Look for a warranty – most reputable manufacturers provide warranties.

· Inspect the packaging – most genuine fitness products include nutritional guides and instructional manuals. Counterfeited goods may be missing instruction manuals or the manuals are poorly written.

You can find information about various products registered for protection by CBP by searching the Intellectual Property Rights Search (IPRS) database. For example, typing in “fitness” in the keyword block yields 71 results. For additional information about protection of intellectual property and trends in counterfeit goods, check out the following resources.

Stopfakes.gov

CBP – Intellectual Property Rights

Source:
Lynn Hollinger. (2010). Dangerous New Trend in Counterfeit Imports: Inferior, Dangerous Fitness Equipment. Frontline , pp. 13-14.

IPR - Product Identification Guides

Trademark and copyright holders that have created product identification guidelines can submit them to CBP electronically instead of providing hard copies to each port. The new electronic capabilities allow CBP to disseminate the information to all CBP personnel in a more efficient timely manner. Note that only the property rights that have been registered with CBP may be included in the guidelines.

The training guides provide an effective tool to assist CBP personnel in identifying counterfeit and piratical goods. CBP posted instructions on what to include in the product identification guides. The primary topics include

· Company Information
· Registration and Recordation Information
· Product Information
· Product Manufacture and Distribution
· Violation Information

The guide should contain photos that demonstrate the differences between legitimate articles and counterfeit articles. Product catalogs and links to web sites that provide pictures should also be included. CBP suggests that the guides be dated and updated for significant events such as additions for new registrations, changes in contracts or products, etc. The information contained in the training guides will be kept confidential. The guides are required to contain a disclosure provided by CBP on the inside front cover. Click HERE to view the detailed information about information CBP requires for the product identification guides.

Brokers Breaking the Law

Now that the Customs Broker’s Exam is over, those who passed the exam will be notified and a background investigation will be performed. Will this investigation uncover anything that would prevent any of the aspiring applicants from receiving a license? Even after you receive your license, it comes with the responsibility to continue to obey Customs laws and regulations. For those who are considering taking the exam, you too must consider your actions because certain deeds could prevent you from obtaining your license.

Those of you who have studied for the exam are quite familiar with the grounds for denial or revocation of a broker’s license found in 19 CFR 111.16 and 19 CFR 111.53. The provisions of the regulations that are the focus of this article are related to criminal, dishonest or unethical conduct along with violation of any law enforced by Customs and knowingly aiding in the violation of Customs laws.

As you read this, many of you may be thinking that we're foolish to suggest that a Customs broker would commit a crime and risk losing his or her license. Are we foolish? No. Regrettably, the actions of just a few brokers created the opportunity for this discussion.

In June 2007, licensed customs brokers were among 29 people arrested for participating in a scheme to import counterfeit goods such as Nike shoes, Rolex watches and other goods. Those arrested included distributors, freight forwarders, customs brokers, owners and managers of customs-bonded warehouses, and managers of a customs exam site. These people were named in criminal complaints for conspiring to smuggle more than 950 shipments of high-quality knockoffs through New York City, Long Beach, Calif., Texas and other ports of entry. The counterfeit goods were estimated to have an approximate value of $700 million if authentic. Officials said it was one of the largest plots in recent history involving corrupt Customs brokers. The government licenses the brokers to inspect paperwork provided by importers and to clear merchandise for delivery to wholesalers. If found guilty, the defendants face prison sentences of five to 20 years. Additional information about this incident can be found on the ICE web site.

Customs and Border Protection (CBP) enforces laws relating to the protection of trademarks and copyrights. Articles that infringe on a properly registered trademark or copyright are subject to detention and/or seizure. Infringing articles may consist of articles that use a protected right without the authorization of the trademark or copyright owner or articles that copy or simulate a protected right.

Articles bearing marks that are counterfeit or that inappropriately use a federally registered trademark are subject to seizure and forfeiture. The importation of articles intended for sale or public distribution bearing counterfeit marks may subject an individual to a civil fine if the registered trademark has also been recorded with CBP. Articles bearing marks that are confusingly similar to a CBP recorded registered trademark are subject to detention and seizure. As you learned from the above incident, participants can also be arrested and charged with a crime that carries a prison sentence.

If a client or other party contacts you about importing counterfeit goods “Just Say No.” The next time a street vendor tries to tempt you to purchase a pair of Nike athletic shoes or a pair of Ray Ban sunglasses at a price that is too good to be true, think about the consequences and “Just Say No.” Obtaining that Customs Broker’s License is hard work, so don’t jeopardize your license, opportunity to make a living or reputation by participating in counterfeiting or any other illegal activity.