Co-authored by Michael De Biase.
With the concentration of US imports from China increasing in parallel with intellectual property rights seizures, companies rely heavily on the government, specifically on US Customs and Border Protection ("CBP") to help protect and enforce their intellectual property rights ("IPR").
According to Global Sources, a leading business-to-business media company and a primary facilitator of trade with Greater China, "US imports from China [are] more concentrated than ever".
Data from the U.S. Department of Commerce establishes that importation into the U.S. is a concentrated field, with the top 500 U.S. importers – 0.4 % of all importers – comprising roughly 68% of all imports by value in 2010. Imports from China, although somewhat less concentrated, are still dominated by larger enterprises, as companies with more than 500 employees – 4% of all importers from China – account for 60% of all imports from China. As concentration increases, the opportunity to trade in quantities that take advantage of China’s economies of scale decrease; thus, heightened concentration is not a good thing for Chinese manufacturers.
While the import concentration from China is growing, CBP is reporting a record number of IPR seizures. From 2010-2011 alone, IPR seizures increase by 24%, and have nearly doubled since 2009. Considering that China is the number one source company of imports, it should come as no surprise that it also accounts for the largest number of IPR seizures, with 62% of all IPR seizures being sourced from China.
Intellectual property rights are some of the most valuable assets of the largest importers, and they must protect these rights. Here are some of our top tips to use when seeking to protect your IPR.
- Perform a search to see if there are other companies exploiting your IPR. You cannot protect something to which you don’t own the rights.
- Register your IPR with the appropriate U.S. federal entity; whether the Copyright Office or U.S. Patent and Trademark Office, registration is an important security measure.
- Record your IPR with CBP. CBP will provide its protective services for a minimal fee of $190 for 10 years of protection at all ports of entry. There are numerous other benefits to recordation.
- Know your manufacturer or the company from which you source your products. Find out who else sources from this manufacturer, and determine whether they have had any IPR issues.
- Execute thorough distribution agreements or purchase and sale agreements, and try to use letters of credit or escrow accounts.