CBP expands information-sharing procedures to help detect counterfeit merchandise

United States of America

Effective as of October 19 2015, US Customs and Border Protection (CBP) has implemented a final rule expanding CBP’s information-sharing procedures with importers and trademark owners with respect to merchandise suspected of bearing counterfeit trademarks. Under the final rule, CBP may disclose to trademark owners, whose marks are recorded with CBP, confidential information protected by the Trade Secrets Act that appears on seized merchandise and associated packaging, in order to assist CBP with an authenticity determination. The final rule, which was published September 18 2015, amends and adopts interim regulations that CBP issued on April 24 2012, and is codified in Title 19 of the Code of Federal Regulations, Parts 133 and 151.

CBP is responsible for examining goods imported into the United States and may detain goods that are suspected to bear a counterfeit version of a federally registered US trademark that is recorded with CBP. CBP recognises that counterfeiters are using increasingly sophisticated techniques, and goods coming through CBP are becoming increasingly technologically complex. Thus, the interim and final rules permit a more transparent exchange of information between CBP, importers and potentially affected trademark owners, which CBP believes will more meaningfully and efficiently allow CBP to determine whether goods are counterfeit or authentic.

The final rule’s expanded information sharing procedures permit CBP to share with both importers and trademark owners financial, business and commercial information that CBP considers to fall within the scope of the Trade Secrets Act (18 USC 1905). For example, the amended regulations allow CBP to disclose alphanumeric symbols and other coding appearing on imported merchandise and/or its packaging that may reveal confidential information about an importer’s supply chain. The Trade Secrets Act prohibits the unauthorised disclosure of trade secret information unless “authorized by law”, which includes agency regulations authorising disclosure based on a “valid” interpretation of the statute. CBP interprets the “authorised by law” exception to permit CBP’s disclosure of otherwise protected information to trademark owners for the limited purpose of acquiring the mark owner’s assistance in identifying counterfeit merchandise.

Under the final rule:

  • At any time after suspected counterfeit merchandise is presented to CBP for evaluation, CBP must release to the importer an unredacted sample or image of the suspect merchandise, which may contain confidential information. CBP reasons that, prior to the enactment of the final rule, importers may have had limited information about the authenticity of trademarks appearing on imported merchandise. CBP’s timely providing to an importer with unredacted information is intended to assist the importer in providing an informed response to CBP’s detention notice within the seven-day response period.

  • Prior to CBP issuing a notice of detention to an importer, CBP may release to a trademark owner limited, non-confidential importation information about the suspect goods, including date of importation, port of entry, description, quantity and country of origin of the goods. However, CBP must release such information to the mark owner at the same time a notice of detention is issued to the importer, or as soon as possible thereafter. Previously, CBP was only required to release such information to a mark owner within 30 business days of the date of detention.   

  • An importer has seven business days to respond to a notice of detention to demonstrate to CBP that the detained merchandise is not counterfeit. If, within the seven-day response period, the importer either does not respond to CBP, or does not provide CBP with enough information to make a judgment as to whether the merchandise bears a counterfeit mark, then CBP may disclose to the mark owner information found on the merchandise and/or packaging (including labels), including unredacted photographs, images or samples, that may otherwise be covered by the Trade Secrets Act, including manufacturer, shipper, exporter or importer name and address, serial numbers, dates of manufacture, lot codes, batch numbers, universal product codes or other identifying marks appearing on the merchandise or retail packaging.

  • In the event CBP discloses to a trademark owner information protected by the Trade Secrets Act, CBP must notify the mark owner that such information may be subject to the Trade Secrets Act, and must state that such information is being disclosed to the mark owner for the limited purpose of assisting CBP with identifying whether the merchandise bears a counterfeit trademark.

The final rule also eliminates the interim rule’s option for an importer to extend the detention period by 30 days. CBP believes admissibility determinations can be made within the original 30-day detention period.

If CBP cannot make an authenticity determination within the 30-day detention period, notwithstanding the expanded information sharing procedures, the goods will be excluded from entry into the United States.

Elisabeth Morgan, McDermott Will & Emery LLP, Los Angeles


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