Thoughts on the U.S. Customs and Border Protection IPR Interim Final Rule

On Tuesday 24 April 2012, U.S. Customs and Border Protection published in the Federal Register an Intellectual Property Rights Interim Final Rule (IFR) which amends regulations to allow CBP to disclose to an intellectual property rights holder, information appearing on merchandise or its retail packaging that may comprise information otherwise protected by the Trade Secrets Act, for the purpose of assisting CBP in determining whether the merchandise bears a counterfeit mark (docket ID USCBP 2012-0011). This IFR is in direct response to Section 818(g) of the FY2012 NDAA.

This amendment also establishes a procedure intended to protect importers by requiring that before any information or sample is sent to the right holder, the importer will be provided notice, and an opportunity to show that the merchandise is authentic. I believe it appropriate that the importer be provided notice, but I don’t see the wisdom of providing the importer an opportunity to show evidence that the merchandise is authentic.

Prominent industry organizations acting on the behalf of Independent Distributors of electronic parts have long recognized that the most effective way to determine whether not product is authentic is to seek support from the Original Component Manufacturer (OCM). Independent Distributors have complained that OCMs won’t help them authenticate parts acquired through the open market. Given this long standing complaint, I see no need for CBP to give importers of open market electronic parts a grace period to convince CBP that suspected merchandise is not counterfeit before markings are disclosed to rightsholders for authentication. This disclosure of markings to right holders is in effect positioning CBP as the go-between to execute what Independant Distributors have been wanting to do on their own. So what is the purpose of giving the importer a grace period to authenticate its import through another, less reliable means?


UPDATE 6/26/2012:

H.R.6012 recently proposed by McKeon & McCaul is specific to semiconductor products where the IFR applies to imports in general. H.R.6012 does not include the seven day wait period.

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