Best PracticesCBPCPSCSeizures

Ongoing Hoverboard Concerns

posted by Jennifer Diaz January 27, 2016 1 Comment

The U.S. Consumer Product Safety Commission (CPSC) and U.S. Customs and Border Protection (CBP) Address Ongoing Litigation & Seizure of one of the hottest toys, the Hoverboard.

Hoverboards, as they are commonly known, are self-balancing two-wheeled electric scooters.  They are powered by controversial rechargeable batteries that have recently garnered attention for malfunctioning, causing devices to catch fire and destroy homes.  The lithium-ion batteries have been known to overheat, catch fire, and explode without warning.

Several airlines have begun to prohibit transportation of the boards aboard aircraft, due to safety concerns.  Amazon.com is placing safety first and offering consumers that have purchased a hoverboard from Amazon a full refund.  Hoverboards are also facing additional litigation from Mark Cuban, who potentially has a patent infringement claim against Walmart for selling the devices.

According to the United States Consumer Product Safety Commission, “The federal government continues to work in close coordination on this serious issue.  Officials from CPSC, U.S. Customs and Border Protection, the U.S. Department of Transportation and the Federal Aviation Administration are regularly sharing information and insights with a common goal of taking whatever steps are necessary to prevent injuries and property damage from fires and falls.”  They recommend having a fire extinguisher handy and keeping the device far away from combustible materials while charging.  There are not currently any safety standards in place for hoverboards, which would require proof of sound design, manufacturing, and quality control processes.  This lack of regulation adds to the danger of using hoverboards.

U.S. Customs and Border Protection (CBP) has been seizing hoverboards right and left, for intellectual property rights (IPR) violations. A recent seizure of over 200 hoverboards at PortMiami was highlighted in this Miami Herald article. In this case, the LG batteries were allegedly counterfeit. When the goods are detained, CBP makes an IPR determination. Often times, CBP discusses the merchandise with the trademark owner to assess whether or not goods are counterfeit. At this stage, it is important to get legal counsel involved to attempt to avoid a seizure case. This is especially true when you have a more complicated supply chain and don’t purchase goods directly from the manufacturer. Often times, you may not know who made what portion of the merchandise.

If the goods are seized, it’s a complicated seizure process (discussed more here). The link has a picture of the process – doesn’t it look intense? That’s because it is. You need an expert that understands it and will fight for you correctly. Depending on the case, I personally recommend filing a Petition or a claim and cost bond. Filing a Petition gives you a few bites of the apple (if you lose, you can file a Supplemental Petition, and thereafter, still file a claim and cost bond). Every case is different and must be evaluated on its own merit.

At www.diaztradelaw.com, we have a TOP 10 TIPS WHEN IMPORTING cheat sheet you can download for FREE. The Top 10 Tips discusses the importance of IPR compliance, and knowing who you are doing business with, as well as additional Customs requirements importers must be aware of. Diaz Trade Law can assist if you are dealing with a seizure by CBP – or if you want to avoid them with a robust pre-compliance program. Contact us today at info@diaztradelaw.com.

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1 Comment

WilliammoM May 6, 2016 at 6:44 pm

I cannot thank you enough for the forum post.Much thanks again. Great.

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