Abady Law Firm, P.C. – Customs and Import/Export Attorney Blog
Learn the Basics of Customs and International Trade Policy and Procedure
Archive for the "Intellectual Property" Category
In the past we wrote an article about importing remanufactured or refurbished cellular phones here. Based on frequent phone calls pertaining to this issue there is some additional information for importers of such products to know. Best to explain with the following fact pattern:
A U.S. company exports broken Apple and Samsung phones to a China factory for repairs. The phones may have various issues including failed battery, cracked screens, scratched or damaged housing i.e. backplate and front plate of the phone, or defective camera. These phones are then repaired to working condition and then imported back into the U.S. where they are intended to be sold in the secondary cell phone market. Unfortunately, U.S. Customs and Border Protection (“CBP”) detained the shipment based on reviewing the Intellectual Property Rights (“IPR”) of the cell phones. After thirty (30) days, if the importer does not provide sufficient evidence proving the authenticity of such cell phones CBP seizes said cell phones for violating Apple and Samsung’s IPR; specifically their trademarks. The importer is left confused as to why this happened with the understanding that these are used cell phones.
The most common reason for CBP’s seizure is the authenticity of the cell phones housing. When phones with housing issues are sent to China for repair the factories in China do not repair the same housing (e.g. buff the scratches out, fix cracks to the plastic, etc) or replace the housing with housing from another phone that was manufactured under a Samsung or Apple license. Rather, these factories manufacture their own housing without a trademark license or purchase the housing from factories who do not have a trademark license from the trademark holder. Consequently, all trademarks on the these housings are considered counterfeit by CBP. Here are examples of such trademarks:
Thus, for a company to legally import remanufactured or refurbished phones (1) read Part I; and (2a) the housing must come from an phone that was originally licensed by the trademark holder; or (2b) a factory that is licensed to manufacture housing parts to be used for repair. Alternatively, the housing must be generic i.e. contains none of the trademarks noted above like so:
For more information about this blog post, please contact Abady Law Firm, P.C. and speak with our customs attorney at (800) 549-5099 or (212) 202-0542. Also visit www.customsesq.com to chat with a customs lawyer — who has insight into CBP seizures — about your company’s import situation and to schedule a consultation. To chat with us, click the bottom right corner tab of our homepage.
This past holiday season hoverboards have been one of the most popular items this past holiday season. As a result, we have received numerous phone calls regarding U.S. Customs and Border Protection (“CBP” or “Customs”) intense examinations of these products. The reason being is that there have been cases where these hoverboards burst into flames due to counterfeit batteries being used to power them. See here http://nypost.com/2015/12/30/hoverboard-bursts-into-flames-inside-a-brooklyn-apartment/. This led to intervention by the Consumer Product Safety Commission (“CPSC”), the federal agency regulating the safety of consumer products nationwide.
Customs and CPSC work closely to ensure the safety of products that are imported in the U.S. Customs is the “enforcer at the border” and enforces not only their own regulations but the regulations of all third party federal agencies. Here, importers must ensure the quality of these hoverboards before importation. Make sure the factory you purchase from has a licensing agreement with the trademark holder of the battery inside. If you are dealing with an agent in a foreign country make sure you get a paper trail leading to the trademark holder. Once these goods arrive at the port of entry there is generally no turning back. The trademark holder is unlikely to offer any assistance if the batteries are counterfeit and Customs will detain, seize, forfeit and destroy these goods. Meaning the importer is out the money spent to their supplier for the purchase of the goods and Customs may come after the importer for penalties (if you receive a penalty contact a Customs and International Trade expert immediately).
How can this mistake be avoided? Make sure you get a full understanding of what you are buying, the components (and packaging) comprising a product are just as important as the product as a whole. A minor mistake will cost you, and seizure will not be remitted because of ignorance. Further, Customs will have you flagged as a potential violator and you may see an increase is examinations (and delays) at ports of entry. Thus, if there are any trademarks on the goods, seek documentation supporting their legitimacy. If you need help with identifying issues or verifying documentation contact an attorney experienced in Customs and International Trade law.
For more information about this blog post, please contact Abady Law Firm, P.C. and speak with our customs attorney at (800) 549-5099. Also visit www.customsesq.com to chat with a customs and international trade attorney — about your company’s import/export situation and to schedule a consultation. To chat with us, click the bottom right corner tab of our homepage.
As a Customs attorney I find it surprising that intellectual property holders do not take advantage of Customs and Border Protection’s (“CBP”) ability to protect their intellectual property (“IP”). CBP is authorized to search all imports/exports and exclude, detain, and/or seize products that are counterfeit or otherwise infringing on the intellectual property of the IP holder. The way to gain the assistance of CBP is to utilize their Intellectual Property Rights Recordation System
CBP’s record system is separate and apart from the U.S. Patent and Trademark Office and Copyright office filing. In order to maximize the IP holder’s rights at the border they should record with CBP via the e-Recordation system. CBP has provided some benefits of e-Recording:
- Making intellectual property rights information available at the ports to help CBP personnel with infringement determinations.
- Eliminating paper applications and the need for supporting documents.
- Allowing rights owners to upload images of their protected rights.
Additonally, IP holders can work with Customs in order to help them identify infringers. Businesses and rights owners are encouraged to submit allegations of infringing shipments or conduct to CBP. CBP then uses this information to locate such activity. Further, IP holders can provide CBP with e-guides for detecting infringing goods. Lastly, IP holders can initiate training sessions to actual CBP inspectors at troublesome ports of entry.
To find trademark and copyright records one can access http://iprs.cbp.gov/. I urge IP holders to take advantage of these enforcement opportunities to ensure quality control of their IP rights. One can contact a Customs attorney who can guide an IP holder in maximizing the enforcement of their IP rights with CBP.
You may call us at 347-512-9007 for more information on your international trade and customs issues.
Enforcing intellectual property (ip) rights has become the hallmark area to which a majority of seizures stem from. It is vital that companies go through the procedures for registering their trademarks, copyrights, etc with Customs. There is a balancing act that must be accounted for, the rights of the owner protecting its exclusive property interest versus any user (whether innocent or not) who is subject to intellectual property infringement. However, if Customs is unaware as to the “marks” (i.e. they are not registered) goods may come in that violate a true owners ip rights. Thereafter it is too late; the damage has bee done, and consumer attitude towards a product becomes compromised.
Once an ip right is registered with Customs, all ports are given notice as to detain merchandise that is believed to be infringing. Customs will then give the ip holder with the opportunity to confirm or deny that a violation has occurred. Further, Customs will allow the potential infringer with the opportunity to remedy the situation by getting permission from the ip holder to import the goods. Absent this permission the violator will be fined and the merchandise subject to forfeiture actions. Further, the ip holder will know the identity of the violator who may sue them individually or keep tabs on their importing activity.
It is recommended that you be careful as to any product you import. Failure to take precautions will leave the importer subject to liability and severely tarnish your business.
Happy Importing 🙂