CBP is a Triple Threat when Dealing with Trademark Violations

Last week I blogged about what importer’s could do to protect their company’s trademarks from counterfeiters.  This week, we’re going to look at the other side of the coin.  What if CBP alleges that you are in violation of a trademark?  When CBP gets involved we are talking a “triple threat”.  

When I say “triple threat”, I’m not referring to the Neil Patrick Harris-type of “triple threat” who can sing, dance and act!  When dealing with CBP, and allegations of a violation of a trademark, we are talking about Forfeiture, Penalty and Liquidated Damages.

If CBP believes the imported goods infringe upon a trademark, CBP will place the merchandise on hold for inspection prior to formally detaining the goods.  in detention, CBP examines the goods to determine whether the goods are, in fact infringing.  During this detention period, you are provided an opportunity to proffer supporting documentation, letters of authorization to demonstrate that the goods are not in violation of any trademark laws.  However, let’s assume that your foreign supplier does not have the authorization to use the trademark that is boldly embossed on the goods you are trying to import.  Although you can try to get written authorization from the trademark holder, the chances of that happening are pretty slim.  At this point, your case is assigned a penalty number and you are now dealing with the Office of Fines, Penalty and Forfeitures (FP&F).  

When your case is assigned a penalty case number, you generally have 30 days to petition CBP to manipulate the merchandise so that the offending mark is removed from your goods and to seek mitigation of the penalty assessed.

If your goods are seized and you elect not to seek relief from the seizure or if you fail to comply with CBP’s recommendations in a timely manner, CBP will institute forfeiture proceedings in which your goods will be destroyed or exported from the commerce of the United States, at your expense.

And, after all of this, CBP can also assess liquidated damages pursuant to the importer’s entry bond.  These are another type of monetary liability assessed by CBP if the importer (or broker) fails to satisfy one or more of the legal conditions of importation.  Again, you will have the opportunity to file a petition to make your case that there were mitigating circumstances and that the liquidated damages should be mitigated or cancelled.

As we already know, CBP is serious about enforcing the trademark laws and protecting the trademarks of valid trademark holders.  If you CBP does suspect that your shipments has an offending mark (i.e., unauthorized use of a trademark), be sure to seek Customs counsel so that you fully understand what your options are, what you can expect and how best to deal with this issue.