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IPR

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31,560 Shipments Were Seized by CBP in 2016 for ONE Reason

posted by Jennifer Diaz March 23, 2017 0 comments

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Last year, on a typical day the U.S. Customs and Border Protections (CBP) seized about $3.8 million worth of products because of Intellectual Property Rights (IPR) Violations. CBP reported that the total number of IPR seizures has increased nine (9) percent since last year, from 28,865 in 2015 to 31,560 in 2016. With the manufacturer’s suggested retail price (MSRP) exceeding $1.3 trillion.

What is Causing the Increase in Seizures?

Recordation of Trademark And Copyright With The CBP

In addition to registration of IPR with the U.S. Patent and Trademark Office (USPTO for trademarks), or the U.S. Copyright Office (for copyrights), owners can record said trademark or copyright with CBP. This additional step grants CBP additional enforcement power in both seizing counterfeit and piratical goods as well as thereafter issuing penalties for the MSRP value of the goods. In previous blog posts, we explained benefits of taking the extra step of recording your registered trademark or copyright with CBP, and CBP’s additional enforcement powers as a result of the recordations. Continue Reading

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Learn about “The ABC’S of Customs Seizures – PLUS Top 10 Tips to Ensure Import Compliance” From the Expert!

posted by Jennifer Diaz September 13, 2016 1 Comment

INTERNATIONAL TRADE COMPLIANCE:  The ABC’S of Customs Seizures – PLUS Top 10 Tips to Ensure Import Compliance 

The DTL Team wants to ensure you are a compliant with U.S. federal regulations and laws when importing your goods from abroad! Here is your chance to learn directly from our Founder, Jennifer Diaz, about the “dos” and “don’ts” of importing. compliance-image

On Wednesday, September 14th, 2016 from 1:00 pm to 2:00 pm, The Organization for Women in International Trade (OWIT) invites you to a Trade Talk Webinar Program on International Trade Compliance-Register NOW!

Did you know that In FY 2015, 28,865 seizures were for underlying Intellectual Property Rights (IPR) violations? The MSRP of the goods seized was $1,352,495,341! IPR enforcement is a priority trade initiative for U.S. Customs and Border Protection (CBP) and the detention and seizure process is a complicated one. If your merchandise is detained and/or seized, you have options. But more  Learn exactly how you should respond and more importantly how to avoid future problems with CBP.

This event is particularly important for: Continue Reading

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Yet Another Reason to Record your Trademark or Copyright with U.S. Customs and Border Protection (CBP)

posted by Jennifer Diaz April 12, 2016 3 Comments

TshirtCo-Authored by Jennifer Diaz and Kristina Hernandez-Tilson, an attorney in Miami, Florida, practices in state and federal court, litigating matters of civil and administrative law. 

Whether you are importing goods to the United States, or are a U.S. trademarks or copyright owner, there is a new law on the books that should be of interest to you, the Trade Facilitation and Trade Enforcement Act of 2015 (TFTE), which was signed into law on February 24, 2016.  TFTE, a bipartisan piece of legislation, is comprehensive in scope. In this Article, we will look specifically at Sections 302 through 311, the section on “Import-Related Protection of Intellectual Property Rights” (IPR). The TFTE highlights the fact that CBP treats IPR as a priority trade initiative.

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“Fast Track” Bill Signed Into Law: Next Up Trans-Pacific Partnership

posted by Jennifer Diaz June 30, 2015 0 comments

mapOn Monday, President Obama signed Trade Promotion Authority (TPA) into law. TPA, also known as the “fast track” bill, was seen as a crucial component in solidifying the Trans-Pacific Partnership (TPP).  Although the re-authorization of TPA grants the President greater authority in his ability to negotiate and secure a trade deal–thus speeding up the TPP negotiation process–the TPP still has some tough negotiations ahead. However, the new authority Congress granted the President will now give him the power needed to ultimately conclude negotiations on the TPP.

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CBP Pilot Program Focuses on Pre-Compliance

posted by Jennifer Diaz October 13, 2014 0 comments

IPR CBP is currently taking volunteers for a brand new Intellectual Property Rights (IPR) voluntary pre-compliance program.  The Journal of Commerce reported on the new pilot program here.

Do you agree with my comments?

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Exports from China are on the Rise – What is your IPR Plan?

posted by Jennifer Diaz July 18, 2014 0 comments

made in ChinaOn April 11, amid a high demand for soccer apparel in preparation for FIFA World Cup, U.S. Customs and Border Protection (CBP) seized counterfeit soccer apparel shipped from China to the Port of Savannah. The value of the seized goods exceeded $1 million in manufacturer’s suggested retail price (MSRP). The apparel seized contained counterfeit trademarks of the following professional soccer clubs: Arsenal, Barcelona, Celtic, Chelsea, Mexican Federation, Paris Saint-Germain, and Real Madrid.  Little did they know they should have tried to import Germany’s soccer club’s apparel.

“You look at that Chelsea patch, and it just looks off,” said Steve Sapp, a spokesman for U.S. Customs and Border Protection. “The last B is smaller than the rest, and that’s the kind of thing you often see with these counterfeit goods. Our investigators know the signs that these goods aren’t real.”  Both images are provided below for you to see for yourself – check out the extra space at the top, and the “u” in club.

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Large Seizure by CBP Highlights High Margins of Counterfeiting, and Necessity of Recordation

posted by Jennifer Diaz November 4, 2013 0 comments

Co Authored by Michael De Biase 

One of CBP’s latest news releases, dated September 27, 2013, noted that more than 16,000 counterfeit Hermes handbags were seized by Customs and Border Protection (“CBP”) because Hermes took the extra step of recording their intellectual property with CBP.   Not surprisingly, when you analyze the difference between the alleged value of the counterfeit products (reported to CBP) as compared to the suggested retail price of the genuine goods, you have a grave difference. In this case, $295,665 (value of counterfeit goods) compared to $210,785,475 (value of genuine goods).  That’s over $210 million worth of potential profits for the counterfeiters, at the expense of Hermes – a crime in every sense. Because Hermes recorded its intellectual property with CBP, CBP seized this infringing merchandise, and will also have the ability to issue a penalty for the MSRP of the merchandise. Yes, that means a penalty in the amount of $210,785,475 will be coming to the counterfeiters!

Most often, counterfeiters target large luxury brands whose goodwill and name recognition has a certain element of exclusivity.  While some may not sympathize with profitable companies, what they fail to realize is that counterfeiting hurts in a variety of other ways. Counterfeiting hurts consumers who buy products under the false impression that they are genuine, companies whose goodwill is tarnished by the inferior quality of the counterfeit products bearing their brands, and it hurts those who worked hard to build something of substantial value.  In this case, Hermes lost out on, potentially, more than $210 million dollars in revenue.  That is not only felt by Hermes the corporation, it hurts the retail stores and the malls they’re in, the shipping companies, the raw materials developers, and the families of the employees for all of these parties.

Luckily for importers and consumers, CBP recognizes the importance of intellectual property protection and provides assistance in stopping the infringing products at our borders.  CBP’s Intellectual Property Rights Recordation (“IPRR”) system allows holders of registered trademarks and copyrights to record their registration with CBP, so that CBP can police the borders for infringing goods.  Once recorded, it is entered into a online search system named IPRS. According to the news released mentioned above regarding catching counterfeiting Hermes at the border, once intellectual property is recorded with CBP,

CBP officers are trained to identify and interdict counterfeit goods, and this is a great example of how their training and expertise are employed every day in our ports of entry,” said CBP Director of Field Operations in Los Angeles Todd C. Owen

Considering the incentives for counterfeiters along with the potential losses for intellectual property rights holders, companies that import merchandise must consider recordation a necessity. Importantly, when you record your marks, you must go to an expert in this area – as this is your opportunity to train CBP on the methods of policing your mark – and only trained experts can work on this proficiently so you have the best results with CBP, like Hermes did. To learn more about the top four benefits of recording your intellectual property, review this article.

To get started on recording your intellectual property, or if you have any questions on how to best have CBP police your recorded trademarks and copyrights, please contact Michael or me

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Florida Companies Convicted and Sentenced

posted by Jennifer Diaz June 24, 2013 0 comments

Co Authored by Robert Becerra

In another example of the government’s continuing use of the criminal justice system to enforce international trade laws, three Florida companies and their management were recently convicted and sentenced for importing smuggled toys from China containing lead and containing counterfeit trademarks.

LM Import-Export, Inc., Lam’s Investment Corp., and LK Toys Corp., Hung Lam and Isabella Kit Yeung plead guilty to charges of conspiracy to traffic and smuggle toys containing hazardous substances such as lead, and one count of trafficking in counterfeit goods, in violation of 18 U.S.C. Secs. 371 and 2320, respectively. Co-defendant Yeung plead guilty to one misdemeanor count of submitting a false country of origin label, in violation of 19 U.S.C. Sec. 1304(a). The information, or charging document filed in court, against all defendants, as well as the plea agreements for each defendant can be found on the website of the District Court for the Southern District of Florida. (If you have trouble getting these documents, email me and I’d be happy to share them with you).

The facts underlying the charges, as stated in court documents, are that from April, 2000, until May 2011, a span of 11 years, the corporate defendants conspired to sell children’s products imported from China in violation of the Consumer Product Safety Act 15 U.S.C. Sec. 2068, and the Federal Hazardous Substances Act, 15 U.S.C. Sec. 1263. Some of the toys contained lead, while others presented various hazards such as choking, aspiration or ingestion. The products were imported using false statements on Customs declaration forms and with false country of origin labeling.

Hung Lam was sentenced to 22 months incarceration, 3 years of supervised release and a $10,000 fine. The corporations were sentenced to 5 years of probation. Yeung was sentenced to 1 year probation and a $1,000 fine. An order was entered mandating the forfeiture to the government of $862,500 and all products imported by the defendants that were seized by the government. The press release from the Consumer Products Safety Commission and Department of Justice discussing the case can be found here and here respectively.

This case is extremely important for importers to be familiar with and understand that:

  1. It is vital for importers to retain counsel to assist with pre-compliance before you import.
  2. When you receive any violation notice from the federal government, retain counsel immediately and be sure to address all violations with remedial action and enhanced compliance procedures in an attempt to keep administrative penalties or forfeiture cases from turning into potential criminal matters.
  3. Resolving a civil action through a consent decree with the government does not absolve you of criminal liability.
  4. Once contacted by government officials, retain counsel immediately. Any evidence you provide or any statements you make will be used against you in court.
  5. Repeated misconduct and federal regulatory law violations over a period of years will often result in criminal prosecution of both companies and their individual employees, resulting in federal prison sentences and substantial fines and forfeitures.

 

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Do You Know the Top 10 Tips When Importing?

posted by Jennifer Diaz June 18, 2013 0 comments

Do you know the top 10 tips when importing to ensure compliance?  If not, here’s why you should attend my Compliance Online webinar on June 27, 2013 at 10:00 a.m., EST. 

If you import merchandise into the U.S., you are the responsible party and must be aware your requirements and potential liability.  In this presentation, we will discuss how to comply with U.S. Customs and Border Protection’s (CBP’s) vast laws and regulations. By the end of the webinar you will know and understand the importance of:

  • Tariff classification;
  • Customs valuation;
  • Country of origin marking;
  • Intellectual Property Rights (IPR) Protection and CBP Enforcement; and
  • Free Trade Agreements (FTA)  you should be taking advantage of.

You will also learn basic customs concepts and terms like:

  • CBP Form 3461 & CBP 7501;
  • Protests;
  • Seizure cases;
  • Liquidated damage claims, Penalties/Fines;
  • Prior disclosure; and
  • FP&F Petition Process.

Learn key best practices and hear real life case studies. Learn what to do, and more importantly, what NOT to do, and what the consequences are for non compliance.

To register for this webinar on June 27, 2013 at 10:00 EST, click here.

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Export Regulations and Cloud Computing…Beware!

posted by Jennifer Diaz May 28, 2013 0 comments

Co Authored by Perry Sofferman

Forrester Research predicts that the global market for cloud computing services will have increased from $40.7 billion dollars in 2011 to approximately $241 billion dollars by 2020. You can see the ZDNet article here.  This figure includes the Platforms as a Service, Infrastructure as a Service and Business Process as a Service delivery models. What this information reveals is that while cloud computing is already a significant part of operational strategy for many businesses (as well as governmental agencies), we should expect it to not only grow as a market but to become even more intertwined with the way we conduct business and store data on a daily basis. Consequently, businesses in general and export compliance officers in particular need to be vigilant and make sure that their use of this important technology is consistent with US export regulations.

When using cloud services, the user is uploading data to available servers in the cloud provider’s server facility(ies). The type of data uploaded and the location of the server where that data is stored can potentially trigger export compliance issues for the user. In fact, the ultimate location of the particular server used to hold the user’s data may be unknown to either the user or the cloud provider. Data can be redirected to various servers in different countries in order to properly allocate server space based on fluctuations of usage in different time zones.  It should be noted that this is only one example of several possible scenarios where the actual export of restricted data could occur inadvertently by the user.

Based on Advisory Opinions issued by the Bureau of Information and Security (“BIS”), there is guidance indicating that in scenarios where exports take place through means of cloud computing:

  • (i) the cloud computing provider is not the exporter (the user is) and
  • (ii) if foreign nationals employed by the provider access restricted data there may well be a deemed export of such data to such foreign national on the part of the user. 

If, however, a cloud computing service provider is aware that the service will be used to support certain proscribed activities, then the provider will be obligated to properly acquire the necessary license.    Neither the Directorate of Defense Trade Controls (DDTC) nor the Office of Foreign Asset Controls (OFAC) have yet provided substantive guidance on the subject of export regulations in relation to cloud computing, although OFAC has provided some limited guidance related to exports to Iran involving software and services incidental to personal communications. “Cloud Computing” remains an undefined term in the EAR, ITAR and OFAC regulations.

Top 5 Tips for Export Compliance Professionals in Regard to Cloud Computing 

  1. It is critical for compliance officers and others involved in export control management, including providers of cloud computing services, to take steps to better familiarize themselves with the many complex issues at play in this area. A good start would be a detailed review of the BIS advisory opinions, which can be found here.     
  2. In addition, users of cloud services should think about how to approach this issue with their providers. Users might consider gaining a good understanding of where their provider’s servers are located and whether the providers have instituted any safeguards to address export compliance issues. Likewise, providers may want to delve more deeply into the ITAR regulations with particular emphasis placed on the relation between cloud computing services and “brokering” activities.
  3. Compliance officers should make sure that members of their organizations are aware that export regulations are applicable to cloud services and that while the storage of data in the cloud might feel virtual, the penalties for export regulation violations remain brick and mortar.
  4. While exporters remain liable for violations of export regulations, compliance officers should work with their IT departments when negotiating terms to agreements with cloud services providers. For example, require the service provider to notify you in the event servers are added in geographic locations that might be problematic for you. See if it is possible to obtain a right to terminate in such instance. In addition, try to get the provider to indemnify you in the event there is an export violation as a result of a provider’s action or inaction.
  5. Make sure a review of how your organization uses cloud services is part of your standard compliance self-audit so as to identify any possible problems or lapses before they become significant.

In a speech in 2012, Under Secretary of Industry and Security, Eric Hirschorn, noted that a future project for the Bureau might be a review of “for clarification’s sake – the rules regulating cloud computing.”    For both users and providers, such a review should be anxiously awaited.