Introduction
The United States Customs Service can be a company's best friend or worst enemy when it comes to the enforcement of intellectual property rights (IPR). If a company has taken the time and spent the money to register its trademark, trade name, or copyright with the Federal Government, that same company can prevent infringing or counterfeit products from entering the United States by using the services of the United States Customs Service (Customs). This article will provide you the information you need to engage Customs to stop infringing or counterfeit merchandise from entering into the United States, and to constructively work with Customs thereafter. These steps are critical to the development of an effective corporate intellectual property rights enforcement plan.

Intellectual property rights enforced by Customs include trademarks, trade names, and copyrights. A trademark is either a word phrase, symbol, or combination thereof which identifies and distinguishes the source of goods or services of one party from those of others. A copyright protects original creations of "authorship" such as books, music, sound recordings, and computer programs. Counterfeiting is a $100 billion dollar annual enterprise that potentially affects the health and safety of American consumers. For example, counterfeiting does not simply involve the copying of Gucci handbags and Rolex watches. Items such as birth control pills, automobile and aviation equipment, and even baby food are also subject to counterfeiting activities. New technologies make it possible to produce better quality counterfeit merchandise in greater volume and at lower prices than ever before. Although Customs physically examines less than 2% of shipments entering the United States, it has both the legal authority and ability to stop counterfeit and infringing goods from entering this country via detention, seizure, and forfeiture. These services can and should be used by the owners of any trademarks, tradenames, or copyrights.

The recordation with Customs of trademarks and tradenames registered with the U.S. Patent and Trademark Office gives the owner protection against the unauthorized importation of merchandise bearing those trademarks or trade names. "Counterfeit" merchandise is generally defined as merchandise that bears containing a false trademark which is identical or substantially indistinguishable from a registered trademark. A "confusingly similar" trademark resembles the genuine trademark so as to be likely to cause the public to associate the copy with the genuine mark.

How Do You Get Customs To Enforce Your Company's Intellectual Property Rights?
Registration of the trademark on the Principal Register of the U.S. Patent and Trademark Office (PTO), publication of the trade name in the Federal Register, or registration of the copyright with the U.S. Copyright Office, is a mandatory first step. Then, an application to record the trademark or copyright is completed and filed with the Intellectual Property Rights Branch, Office of Regulations and Rulings of the U.S. Customs Service. A fee of $190 is required for each trademark, trade name, or copyright to be recorded. Specific information is required to complete the applications, such as the places goods bearing the recorded IPR will be manufactured, the names and addresses of each foreign person or business entity authorized to use the IPR, and identity of parent or subsidiary companies which use the IPR. "Another crucial step is to provide Customs with product identification training" says John Bliss, President, International Anticounterfeiting Coalition, Inc. (IACC). "The IACC regularly conducts training seminars with Customs, other federal agencies, and local law enforcement officials, he added."

As soon as the application is received and approved by Customs, the information is distributed nationwide to over 20,000 Customs officers located at the 301 ports of entry in the United States. The information, including a computerized three dimensional picture of the IPR, sets forth the terms and conditions of appropriate import of the IPR. After recordation, whenever documentation is presented to Customs at a port of entry regarding the import of the foreign merchandise, a Customs officer or Customs computer has the information needed to identify any suspicious goods, and physically examine them.

Upon examination by an Inspector of the Trade Enforcement Team (TET), Customs may detain merchandise it believes may be counterfeit, for up to 30 days and issue the importer a detention notice. If the importer does not prove it is authorized by the IPR holder to import the merchandise, the cargo is seized. A Notice of Seizure is issued stating the reasons for the seizure, and setting forth the procedures to challenge the action. Customs' seizure rights extend to counterfeit merchandise merely transmitting the United States en route to third countries, or remaining under Customs bond in a Customs warehouse or foreign trade zone.

During the 30 day detention period, Customs will notify the IPR owner of the merchandise's date of importation, port of entry, description, quantity, and country of origin. Upon request and placement of a bond, Customs will provide a sample of the detained merchandise to the owner for examination, testing, or for the owner to pursue private civil remedies for IPR infringement.

How Do I Respond to a Notice of Detention or Notice of Seizure from Customs?
Allegations that a party is attempting to import products which may infringe the IPR of others can best be defended by providing written proof from the IPR holder that you are an authorized importer of the merchandise. As such, prudent importers should establish a system for routinely requesting and obtaining such authorizations from suppliers. In the event of a detention, the authorization is included in a letter to Customs called a "Petition" which explains the circumstances of the importation and the reasons that Customs should promptly release it. Alternatives to petitioning Customs are abandonment of the merchandise, or the filing of a claim and cost bond, which forces the local U.S. Attorney's Office to file a forfeiture complaint in Federal Court against the seized merchandise.

Responsibilities of Corporate Counsel
Typically, in a generic IPR situation, corporate counsel, or a private attorney retained by the corporation, would be notified of the importation of counterfeit goods by the IPR holder. Then, the attorney would draft complex legal documents, such as an Application for an Ex Parte Temporary Restraining Order, Ex Parte Order for Seizure of Infringing Articles and Inspection of Defendant's Business Records, with appropriate memoranda of law and affidavits, to be filed in the appropriate federal court. This effort involves a significant amount of time and expense to the corporation.

The seizure of infringing or counterfeit merchandise by Customs does not prevent the use of normal trademark infringement suits in federal court. However, the use of Customs' recordation system has several advantages to the trademark owner over a suit for trademark infringement. Once a mark or name is recorded, Customs inspectors will police all imports at ports of entry throughout the United States, which will prevent infringements or counterfeits from ever entering into U.S. commerce. This avoids the necessity for the IPR owner to locate and sue every distributor or retailer who may have purchased the imported goods for resale. Additionally, once Customs determines the mark on the imported goods is an infringement or a counterfeit, the burden shifts to the importer to prove otherwise. A lack of intent to infringe is no defense to a charge of importation of counterfeit goods.

There are three major advantages to using Customs, in addition to the obvious advantage of having counterfeit merchandise seized at the border. First is the potential imposition of a civil fine on persons involved in the import of counterfeit goods for sale or distribution in the United States. For first offenses, the fine is equal to the market value that the genuine merchandise would have according to the manufacturer's suggested retail price. For repeat offenses, the fine is double this value.

Second is that Customs, as a law enforcement agency, can go directly to the U.S. Attorney's Office to encourage the Government to charge persons or companies involved in the attempted import with a criminal offense. For example, one who willfully infringes a copyright for purposes of commercial advantage or private financial gain has committed criminal copyright infringement, in violation of 17 U.S.C. 506(a). Pursuant to 18 U.S.C. 2319, which provides penalties for criminal copyright infringement, the violator may be fined up to $250,000 and/or imprisoned for up to 5 years for a first offense, and up to 10 years for a second or subsequent offense. Under the Trademark Counterfeiting Act of 1984, a new section was added to the criminal code, 18 U.S.C. 2320, making it a federal crime to traffick in counterfeit merchandise. Section 2320 prohibits the intentional, or attempted, trafficking in goods or services while knowingly using a counterfeit mark on or in connection with such goods or services. A first offense is a $250,000 fine and/or imprisonment for up to 5 years, and a second offense is a fine of up to $1 million and 15 years imprisonment, or both.

Third, Customs officers located at American Embassies around the world can coordinate and participate in raids on overseas counterfeit production facilities. This is a significant private company's advantage over attempts to obtain the cooperation of foreign law enforcement authorities for IPR violations that occurred in the United States.

Conclusion
Responsible corporate counsel who have already registered their company's IPRs must take the extra step to record the IPR with Customs. Instead of, or in addition to, pursuing private litigation against the counterfeiter in court, utilizing Customs services can be a more effective and less expensive way to prevent the introduction, distribution, and sale of infringing or counterfeit merchandise in the United States

The only way to challenge the unilateral Customs decision would be to file a protest with Customs within 90 days of the date of liquidation. The Protest, filed on Customs Form 19, is an administrative request to Customs to reconsider its decision. If a Protest is denied, the importer then has 180 days from the date of the denial letter to file a summons and/or complaint in the U.S. Court of International Trade. All of the time, effort, and expense of attempting to right a wrong by going through the bureaucratic administrative process within Customs and the legal process at Court could have been avoided with a carefully thoughtout response by an importer to a CF 28.

An inadequate CF 28 response may result in more than just paying more duties to Customs. A response to a CF 28 to Customs may result in Customs issuing a penalty, pursuant to 19 U.S.C. 1592, for commercial fraud if it suspects that the information supplied by the importer on the original entry documents was the result of more than a clerical error. If fraud, the penalty imposed by Customs will equal the value of the imported merchandise. Finally, Import Specialists are increasingly referring suspicious CF 28 responses from importers to Customs Special Agents for criminal investigation. To attempt to avoid any negative consequence when responding to a CF 28, importers must be careful to understand the significance of a CF 28, and to respond to it accordingly. Making knowingly false statements in responding to a CF 28 is itself a criminal act.

Sometimes, when an importer receives a CF 28 from Customs, the importer realizes that the information submitted to Customs on the entry forms was incorrect, and that the consequential classification and payment of Customs duties was also incorrect. The importer may then choose to file a "prior disclosure" with Customs, pursuant to 19 CFR 162.74, to avoid being severely penalized by fully disclosing the circumstances of the violation. Common customs-related violations include making material false statements regarding the improper country of origin declarations or markings of clothing to evade antidumping duties or textile absolute quotas. Be aware, however, that it is Customs policy to refer all prior disclosures to a Customs Special Agent for action, including investigation and possible referral to the U.S. Attorney's Office for criminal prosecution.

Based on the above summary of a CF 28, utilizing the services of a knowledgeable and experienced attorney who is very familiar with the customs laws and regulations, as well as the current Customs administrative policies, practices, and procedures, is a prudent way to proceed. Customs has even defined in its regulations that exercising "reasonable care" includes utilizing the services of such an attorney, other agent or consultant.