# Copyright/Trademark/Trade Name Protection; Disclosure of Information

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URL: https://www.frixlaw.com/law-library/documents/fr%3A95-17065

## Record

- **Collection:** Federal Register
- **Document type:** Proposed Rule
- **Published:** July 14, 1995
- **Citation:** 60 FR 36249

## Text

DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Part 133

RIN 1515-AB28

Copyright/Trademark/Trade Name Protection; Disclosure of
Information

AGENCY: Customs Service, Department of the Treasury.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: This document proposes to revise a previous proposal to amend
the Customs Regulations to allow Customs to disclose to intellectual
property rights owners sample merchandise and certain information
regarding the identity of persons involved with importing merchandise
that is detained or seized for suspected infringement of registered
copyright, trademark, or trade name rights. The initial proposal is
revised in response to comments received and to make the proposed
regulatory amendments consistent with provisions of the North American
Free-Trade Agreement (NAFTA) and the Uruguay Round Agreements Act
relating to the disclosure of information to intellectual property
rights owners. This document solicits comments regarding the revised
proposal.

DATES: Comments must be received on or before September 12, 1995.

ADDRESSES: Written comments (preferably in triplicate) may be addressed
to the Regulations Branch, U.S. Customs Service, Franklin Court, 1301
Constitution Avenue NW., Washington, DC 20229. Comments submitted may
be inspected at Franklin Court, 1099 14th Street NW--Suite 4000,
Washington, DC.

FOR FURTHER INFORMATION CONTACT: Karl Wm. Means, Intellectual Property
Rights Branch, (202) 482-6957.

SUPPLEMENTARY INFORMATION:

Background

On August 23, 1993, the Customs Service published a Notice of
Proposed Rulemaking in the Federal Register (58 FR 44476) regarding the
disclosure to intellectual property rights (IPR) owners of sample
merchandise and certain identifying information regarding the persons
involved with importing merchandise that is either detained or seized
for suspected infringement of registered copyright, trademark, or trade
name rights. Thereafter, the United States, Canada, and Mexico entered
into the North American Free-Trade Agreement (NAFTA) and, on December
8, 1994, the President signed the Uruguay Round Agreements Act (URAA)
(Pub. L. 103-465, 108 Stat. 4809), both of which contain provisions
pertaining to the protection of IPR.
Chapter 17, Article 1718 of the NAFTA provides for the enforcement
of IPR at the border and contains a provision concerning notification
of trademark or copyright owners when Customs suspends the release of
merchandise for suspected infringement. The provisions of Article 1718
were not addressed by the North American Free Trade Implementation Act
(NAFTA Implementation Act) (December 8, 1993) (Pub. L. 103-182, 107
Stat. 2057) because, as stated in the Statement of Administrative
Action (House Document 103-159, vol. 1, pp. 637-638, 103d Cong., 1st
Sess.), the United States was obligated to make changes in statute or
regulation in only five limited areas. The notification provision of
Article 1718 was not one of those areas. Accordingly, while the Customs
Service does not consider the regulatory changes proposed in this
document to be specifically mandated by Article 1718 of the NAFTA or by
the NAFTA Implementation Act, their inclusion in this proposal supports
the enforcement principles reflected in Chapter 17 of the NAFTA.
The URAA implements the Uruguay Round multilateral trade agreements

[[Page 36250]]
negotiated under the General Agreement on Tariffs and Trade (GATT)--now
the World Trade Organization (WTO). The GATT Agreement on Trade-Related
Aspects of Intellectual Property Rights, as adopted by Congress
(section 101(d)(15) of the URAA, 19 U.S.C. 3511), establishes
comprehensive standards for the protection of intellectual property and
the enforcement of IPR in signatory countries; article 57 of this
Agreement confers a right of inspection and information on IPR holders.
Because the proposed rule of August 23, 1993, did not consider the
expanded IPR owners notification requirements contained in article 1718
of the NAFTA and article 57 of the GATT Agreement on Trade-Related
Aspects of Intellectual Property Rights, Customs is publishing a
revised notice of proposed rulemaking and solicits public comments. As
the background information previously published in the August 23, 1993,
proposed rule continues to be applicable to this revised proposed rule,
it is incorporated herein by reference. In summary, the background
stated that certain changes to part 133 of the Customs Regulations (19
CFR part 133) were being proposed to codify the rules for disclosure of
information to certain parties at interest in import transactions
involving infringement of trademarks and copyrights. Among the reasons
stated for the proposed rule were the current haphazard availability of
such information to parties at interest through the lengthy and
cumbersome Freedom of Information Act (FOIA) process; Customs interest
in facilitating the parties' private remedies for trademark and
copyright infringement; and, the disparity among the current
regulations for notification in situations of detention or seizure of
trademark and copyright infringing merchandise.
In addition to the changes required because of provisions contained
in the NAFTA and GATT Agreement, Customs has revised the language of
the proposed regulations in an effort to improve their clarity.

Analysis of Comments

In response to the August 23, 1993 rulemaking proposal, Customs
received 65 comments: 53 in favor of the proposal, 5 against the
proposal, 5 in favor with a specific qualification or suggestion, and 2
suggested changes to the proposal without taking a position either for
or against it.
Each of the 53 responses in favor of the proposal had several
elements in common. Most commenters noted the losses to private
business each year due to the importation of infringing merchandise,
and the private litigation required to deter such infringement. These
commenters further noted the lack of information which is provided to
IPR owners under the current regulations, and were in favor of
additional information being disclosed to facilitate private
enforcement actions. Commenters also noted that the proposal would
facilitate communication between IPR owners and Customs personnel when
the assistance of the IPR owner is required to determine whether or not
an imported article is genuine.
Specific qualifications, suggestions and/or concerns are addressed
below.
Comment: One commenter requested that in addition to information
provided when importers deny piracy of a recorded copyright (19 CFR
133.43), Customs disclose information when an importer does not deny
piracy.
Response: In those cases where an importer does not deny
infringement under the procedures provided for in Sec. 133.43 of the
Customs Regulations (19 CFR 133.43) the merchandise is seized. As set
forth in this revised proposal, Sec. 133.42 would be amended to make
mandatory the disclosure of the requested information to the IPR owner
in such a seizure circumstance.
Comment: One commenter was in favor of disclosure only when a
seizure action is indicated, and opposed to disclosure when merchandise
is merely ``suspected'' of infringement. In contrast, another commenter
requested that an importer's identity be released when goods are
detained as well as seized.
Response: Customs only detains that merchandise for which there are
reasonable grounds to believe that an infringement of IPR has occurred,
or when in the words of the commenter ``firm evidence'' is present to
suspect infringement. At the time of detention, Customs tries to
determine whether sufficient grounds exist to believe that a
substantive violation has occurred such that further action is
warranted. In many cases Customs cannot without the assistance of the
IPR owner determine whether or not the imported article in fact bears
genuine or infringing marks. Customs expects that the proposed
regulations will provide Customs personnel with the authority to
consult IPR owners, thereby resulting in more accurate decisions
regarding infringement. Further, given that, at the time of detention,
Customs has not yet determined whether a violation has occurred,
Customs believes that the premature release of an importer's identity
would be inappropriate. In addition, the constraints of the disclosure
laws suggest that the importer's rights against the release of such
information make disclosure inappropriate. The proposal is structured
to limit the disclosure of information in instances of detention in
order to protect the rights of importers.
Comment: Several commenters suggested that more information should
be released than was proposed. Specifically, various commenters
requested that information pertaining to the country of origin, the
identity of the shipper, the means of transport, the identity of the
broker (if any), dates of export/import, the port(s) of entry, and a
description of the goods all be made available.
Response: Regarding country of origin information, Customs agrees
that this information, when available, should be disclosed to IPR
owners. Accordingly, to the extent that country of origin information
is available from the documents submitted to Customs in the normal
course of business, that information will be disclosed. For the
purposes of the proposed regulation, country of origin is defined at 19
CFR 134.1(b). Also, the latter three types of information (dates of
importation, the port of entry, and a description of the merchandise)
will be included in every detention and seizure notification as a
matter of course.
However, regarding the other types of information (the identity of
the shipper, the means of transport, and the date of export), in
balancing the desires of the IPR owner against the disclosure
limitations of the Freedom of Information Act (5 U.S.C. 552) and the
Trade Secrets Act (18 U.S.C. 1905) and the potential workload of
Customs personnel in providing such additional information, Customs
considers such disclosure inappropriate.
Regarding disclosure of the identity of the broker (if any),
Customs response is set forth below in the response regarding the use
of the term ``importer.''
Comment: One commenter requested clarification on the timing of
notices; i.e., when during the entry-detention-and-seizure process the
notice would be provided.
Response: Although the IPR provisions contained in the NAFTA and
the GATT do not specify a minimum time frame for notification to IPR
owners, Customs believes that notification within a 30-day time period
provides notice in a manner consistent with the purpose of these
commitments.
Comment: Several commenters addressed the condition of sample
merchandise provided under the proposed regulations.

[[Page 36251]]

Response: The condition of samples sent to IPR owners will be as
allowed under applicable disclosure laws. Thus, where no part of seized
or detained merchandise comes within an exemption from disclosure, the
sample provided the IPR owner will be as received by Customs.
Comment: Comments were received with regard to the use of the term
``importer'' and the concern that an importer may in fact be a broker
rather than ``the party who actually caused the importation.'' As a
result, rights holders could be notified of the identity of a broker
acting as importer rather than ``the party who actually caused the
importation.''
Response: Customs recognizes that the term ``importer'' may include
a broker under certain circumstances. However, Customs does not intend
that nominal consignees should be included for the purposes of this
regulation.
Comment: One commenter suggested that the term ``mark'' should be
defined by specific reference to section 5 of the Lanham Act (15 U.S.C.
1127).
Response: While this comment is not relevant to the proposed
regulations, Customs notes that Sec. 133.1 of the Customs Regulations
(19 CFR 133.1) provides for the recordation of trademarks registered
under ``the Trademark Act of March 3, 1881, the Trademark Act of
February 20, 1905, or the Trademark Act of 1946 (15 U.S.C. 1501, et
seq.) except those registered on the supplemental register,'' and
further provides that a ``status copy of the certificate of
registration'' shall be provided to Customs at the time of recordation.
Because these various Acts incorporate the definition of ``mark'' found
at 15 U.S.C. 1127, which is referenced in provisions in Part 133 of the
Customs Regulations, Customs believes that no further change to the
proposed regulations is required.
Comment: One commenter opposed to the regulations suggested that
the proposal would delay Customs in the clearing of shipments.
Response: Customs disagrees that the proposed regulations will
result in extended periods of detention, given the revised operating
requirements mandated by the Customs Modernization provisions (Title VI
of the Act, the Mod Act). Because of the Mod Act, Customs must now
provide for a formal decision and notice of detention, and for either
the subsequent seizure or release of those goods within a specified
time frame. In the event that Customs does not act in accordance with
the statute, the goods are treated as excluded from entry, and
importers acquire by operation of law certain rights of action with
regard to protest against the exclusion.
Comment: Most of the comments in opposition suggested that the
information released by Customs will be used by rights owners to
obstruct or otherwise interfere with legitimate shipments, initiate
spurious litigation, restrict legitimate parallel imports, and
constitute the release of protected business confidential information.
Response: Customs does not intend to provide domestic rights owners
open access to the Customs and/or shipping documents associated with
either detained or seized merchandise. To the contrary, the proposed
regulation is intended to define clearly the scope of permissible
disclosure and to provide guidelines for the timely and necessary
release of information. Customs sees no prolonged delays associated
with such disclosure. One of Customs purposes in making such
information available is to facilitate rights owners' pursuit of legal
remedies for infringement. However, rights owners are not expected to
institute frivolous litigation, nor does Customs expect that legitimate
trade, in parallel goods or otherwise, would be restricted under the
current statutes and regulations which clearly make provision for such
legitimate goods.
Several commenters state that the effect of the regulatory change
would be to ``hand over'' importers of parallel goods, thereby
emasculating the regulatory provisions for such goods. To the contrary,
Customs expects that limited, direct contact with IPR owners regarding
detained goods will allow the more timely and accurate identification
of parallel imports, and that where the importation of such goods is
allowed, the goods will be released more rapidly without additional
disclosure. All parties with an interest in the parallel goods issue
should be aware that Customs has no intention of allowing disclosure
beyond that which is legally allowed, and no objective other than the
quick and accurate identification of legitimate goods. When rights
owners can assist Customs in that task, every effort will be made to
avail Customs of the opportunity.

Conclusion

Based on the comments received and the subsequent entry into force
of the NAFTA and GATT provisions regarding the notification rights of
IPR owners (article 1718 of the NAFTA and section 101(d)(15) of the
URAA), Customs has decided to revise the amendments to part 133 of the
Customs Regulations that were initially proposed on August 23, 1993, as
follows: to make mandatory the disclosure of certain information
concerning detained and seized merchandise; to make specific a thirty-
day time frame within which Customs will notify IPR owners of detention
and seizure activities; and, to allow for the disclosure of country of
origin information and other items enumerated.

Comments

Before adopting this proposal as a final rule, consideration will
be given to any written comments timely submitted to Customs. Comments
submitted will be available for public inspection in accordance with
the Freedom of Information Act (5 U.S.C. 552), Sec. 1.4 of the Treasury
Department Regulations (31 CFR 1.4), and Sec. 103.11(b) of the Customs
Regulations (19 CFR 103.11(b)), on regular business days between the
hours of 9 a.m. and 4:30 p.m. at the Regulations Branch, U.S. Customs
Service, 1099 14th Street, NW--Suite 4000, Washington, DC.

The Regulatory Flexibility Act

Pursuant to the provisions of the Regulatory Flexibility Act (5
U.S.C. 601 et seq.), it is certified that, if adopted, the proposed
amendments will not have a significant economic impact on a substantial
number of small entities. The amendments more fully carry out the
intent of the law and confer a benefit on IPR owners in the enforcement
of such rights. Accordingly, the proposed amendments are not subject to
the regulatory analysis or other requirements of 5 U.S.C. 603 and 604.
Executive Order 12866

This document does not meet the criteria for a ``significant
regulatory action'' as defined in E.O. 12866.

Drafting Information

The principal author of this document was Gregory R. Vilders,
Attorney, Regulations Branch. However, personnel from other offices
participated in its development.

List of Subjects in 19 CFR Part 133

Copyright, Counterfeit goods, Customs duties and inspection,
Imports, Reporting and recordkeeping requirements, Restricted
merchandise, Trademarks, Trade names.

Proposed Amendments to the Regulations

For the reasons stated above, it is proposed to amend part 133,
Customs Regulations (19 CFR part 133), as set forth below:

[[Page 36252]]

PART 133--TRADEMARKS, TRADE NAMES, AND COPYRIGHTS

1. The general authority citation for part 133 would continue to
read as follows:

Authority: 17 U.S.C. 101, 601, 602, 603; 19 U.S.C. 66, 1624; 31
U.S.C. 9701.

2. It is proposed to amend Sec. 133.22 by revising the section
heading; adding a new paragraph (b); redesignating current paragraphs
(b) and (c) as paragraphs (c) and (d); and revising the heading of new
paragraph (c). The addition and revision to read as follows:

Sec. 133.22 Procedure on detention of articles subject to restriction.

* * * * *
(b) Notice of detention and disclosure of information. When
merchandise is detained, in order to obtain assistance in determining
whether the item bears an infringing mark, Customs officers shall
disclose to the owner of the trademark that merchandise has been
detained and provide the following information regarding the detained
merchandise, if available, within thirty days, excluding weekends and
holidays, of the date of detention:
(1) a sample of the item bearing a suspected mark;
(2) the quantity involved;
(3) the name and address of the manufacturer; and
(4) the country of origin of the merchandise if known.
(c) Form of notice. * * *
* * * * *
3. It is proposed to amend Sec. 133.23a by adding a new paragraph
(c); redesignating current paragraph (c) as paragraph (d); and revising
the section heading of and removing the first sentence in newly
designated paragraph (d). The addition and revision to read as follows:

Sec. 133.23a Articles bearing counterfeit trademarks.

* * * * *
(c) Notice to trademark owner. When merchandise is seized, Customs
officers shall disclose to the owner of the trademark that merchandise
has been seized and provide the following information regarding the
seized merchandise within thirty days, excluding weekends and holidays,
of the date of seizure:
(1) a sample of the item bearing the counterfeit mark;
(2) the quantity involved;
(3) the name and address of the manufacturer;
(4) the country of origin of the merchandise if known;
(5) the name and address of the exporter; and
(6) the name and address of the importer.
(d) Failure to make appropriate disposition. * * *
* * * * *
4. It is proposed to amend Sec. 133.42 by adding a new paragraph
(d); and by redesignating current paragraph (d) as new paragraph (e).
The revision to read as follows:

Sec. 133.42 Infringing copies or phonorecords.

* * * * *
(d) Disclosure. When merchandise is seized under this section,
Customs officers shall disclose to the owner of the copyright that
merchandise has been seized and provide the following information
within thirty days, excluding weekends and holidays, of the date of
seizure:
(1) a sample of the piratical copy;
(2) the quantity involved;
(3) the name and address of the manufacturer;
(4) the country of origin of the merchandise if known;
(5) the name and address of the exporter; and
(6) the name and address of the importer.
* * * * *
5. It is proposed to amend paragraph (b) of Sec. 133.43 by revising
the introductory text of paragraph (b); by adding new subparagraphs
(b)(1) through (b)(4); and by redesignating current subparagraphs
(b)(1) and (b)(2) as (b)(4)(i) and (b)(4)(ii). The addition and
revision to read as follows:

Sec. 133.43 Procedure on suspicion of infringing copies.

* * * * *
(b) Notice to copyright owner. If the importer of the suspected
infringing copies or phonorecords files a denial as provided in
paragraph (a) of this section, the district director shall furnish to
the copyright owner within thirty days, excluding weekends and
holidays, of the receipt of the importer's denial:
(1) a sample of the suspected piratical item;
(2) the quantity involved;
(3) the name and address of the importer; and
(4) notice that the imported article will be released to the
importer unless, within thirty days from the date of the notice, the
copyright owner files with the district director: * * *
* * * * *
George J. Weise,
Commissioner of Customs.
Approved: June 20, 1995.
John P. Simpson,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 95-17065 Filed 7-13-95; 8:45 am]
BILLING CODE 4820-02-P

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A95-17065. Public record. Not legal advice.