Disclosure of Information for Certain Intellectual Property Rights Enforced at the Border, 56370-56381 [2015-23543]

Agencies

• DEPARTMENT OF HOMELAND SECURITY
• U.S. Customs and Border Protection
• DEPARTMENT OF THE TREASURY

[Federal Register Volume 80, Number 181 (Friday, September 18, 2015)]
[Rules and Regulations]
[Pages 56370-56381]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-23543]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection

DEPARTMENT OF THE TREASURY

19 CFR Parts 133 and 151

[Docket No. USCBP-2012-0011; CBP Dec. 15-12]
RIN 1515-AD87


Disclosure of Information for Certain Intellectual Property 
Rights Enforced at the Border

AGENCIES: U.S. Customs and Border Protection, Department of Homeland 
Security; Department of the Treasury.

ACTION: Final rule.

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SUMMARY: This document adopts as a final rule, with changes, interim 
amendments to the U.S. Customs and Border Protection (CBP) regulations 
pertaining to importations of merchandise bearing suspected counterfeit 
trademarks or trade names that are recorded with CBP. Specifically, the 
amendments allow CBP, for the purpose of obtaining assistance in 
determining whether merchandise bears a counterfeit mark, to disclose 
to a trademark or other mark owner information appearing on merchandise 
or its retail packaging that may otherwise be protected by the Trade 
Secrets Act. This final rule also amends the CBP regulations to further 
enhance information-sharing procedures by requiring CBP to release to 
the importer an unredacted sample or image of the suspect merchandise 
or its retail packaging any time after presentation of the suspect 
goods for examination. This change is to reflect that an importer may 
not have complete information about the marks appearing on imported 
goods, and release of such unredacted information will assist the 
importer in providing CBP with a meaningful response to a detention 
notice. The amendments in this final rule also require CBP to release 
limited importation information to the mark owner no later than the 
time of issuance of the detention notice to the importer, rather than 
within 30 business days from the date of detention. Finally, these 
amendments require CBP to notify the mark owner that use of any

[[Page 56371]]

information otherwise protected by the Trade Secrets Act that is 
disclosed by CBP to the mark owner is for the limited purpose of 
assisting CBP.

DATES: Effective on October 19, 2015.

FOR FURTHER INFORMATION CONTACT: Goli Gharib, Intellectual Property 
Rights Branch, Regulations and Rulings, Office of International Trade, 
(202) 325-0216.

SUPPLEMENTARY INFORMATION: 

Background

    On April 24, 2012, CBP published CBP Dec. 12-10 in the Federal 
Register (77 FR 24375), setting forth interim amendments to the CBP 
regulations that pertain to importations of merchandise bearing 
suspected counterfeit trademarks or trade names that are recorded with 
CBP. The interim regulation, which went into effect upon publication, 
made several changes to subpart C of part 133 of title 19 of the Code 
of Federal Regulations (19 CFR part 133) regarding the detention of 
suspect merchandise and the disclosure of information to mark owners 
during detention of goods bearing potentially counterfeit marks and 
after seizure of goods bearing counterfeit marks. These changes 
included a clarifying revision of the definition of ``counterfeit 
trademark'' and the addition of a 30-day detention period relative to 
goods suspected of bearing counterfeit marks.
    CBP Dec. 12-10 sets forth a detailed discussion of the statutory 
scheme pertaining to enforcement of the intellectual property laws and 
CBP's derived authority to promulgate the interim amendments whereby 
CBP officers may disclose certain information that might comprise 
otherwise confidential commercial or financial information in order to 
assist CBP in identifying merchandise bearing counterfeit marks at the 
time of detention. See National Defense Authorization Act for Fiscal 
Year 2012 (NDAA) (Public Law 112-81, 10 U.S.C. 2302); Trade Secrets Act 
(18 U.S.C. 1905); Administrative Procedures Act (5 U.S.C. 551 et seq.); 
Lanham Act (15 U.S.C. 1124, 1125, 1127); Tariff Act of 1930, as amended 
(19 U.S.C. 1526(e) and 1595a(c)). Interested parties may refer to CBP 
Dec. 12-10 for that background information.
    Although the interim regulatory amendments were promulgated without 
prior public notice and comment procedures and took effect on April 24, 
2012, CBP Dec. 12-10 provided for the submission of public comments 
which would be considered before adoption of the interim regulations as 
a final rule.

Discussion of Comments

    Twenty commenters responded to the interim rule's solicitation of 
public comment. Each submission consisted of multiple comments and 
several were submitted by or on behalf of associations. A majority of 
commenters expressed support for the interim rule's primary purpose of 
providing a procedure for the disclosure of information by CBP to mark 
owners for the purpose of determining whether imported goods bear 
counterfeit marks. Many of these commenters expressed the view that the 
interim rule does not go far enough to support CBP's enforcement 
efforts and made recommendations for improving the regulation.
    A minority of commenters opposed the rule. Some of these commenters 
expressed concern that the interim regulation may have unintended 
consequences on the flow of legitimate trade, such as by enabling mark 
owners to prevent competing legitimate goods from entering commerce, 
and may create administrative burdens for the agency. The comments, and 
CBP's analyses thereof, are set forth below.

A. Terminology

    For purposes of the comment discussion, the following terms are 
defined as set forth below:
     ``Section (b)(1) information'' refers to the specified 
information CBP is authorized to release under Sec.  133.21(b)(1) of 
the interim regulation: Information appearing on suspect goods or their 
retail packaging (including labels) and unredacted samples or images 
(photographs, etc.) of the suspect goods or their retail packaging. 
``Section (b)(1) information,'' in whatever form disclosed, may include 
manufacturer, shipper, exporter, or importer name and address when it 
appears on merchandise or its retail packaging, or serial numbers, 
dates of manufacture, lot codes, batch numbers, universal product 
codes, or other identifying marks, appearing on merchandise or its 
retail packaging in alphanumeric or other formats.
     The term ``unredacted sample'' refers to a sample 
(including its packaging) in its original condition as presented to CBP 
for examination.
     The term ``limited importation information'' refers to the 
basic information CBP releases under Sec.  133.21(b)(2) of the interim 
regulation (redesignated as Sec.  133.21(b)(4) in this final rule). 
Limited importation information consists of: Date of importation, port 
of entry, and description, quantity, and country of origin of the 
goods.
     The term ``redacted sample'' is used to describe samples 
of goods displaying information all of which or some of which has been 
removed, obscured, or obliterated. Such information may include the 
names and addresses of manufacturers, shippers, exporters, or importers 
that appear on merchandise or its retail packaging, or serial numbers, 
dates of manufacture, lot codes, batch numbers, universal product 
codes, or other identifying marks that appear on merchandise or its 
retail packaging in alphanumeric or other formats. Redacted samples may 
be photographed or otherwise reproduced for release to mark owners.
     ``Comprehensive importation information,'' released by CBP 
under Sec.  133.21(d) of the interim regulation (redesignated as Sec.  
133.21(e) in this final rule), includes limited importation information 
plus the following additional information: Name and address of the 
manufacturer, exporter, and importer.
     The terms ``goods'' and ``merchandise'' are used 
interchangeably.

B. Comments Concerning Legal Issues

1. Comments Concerning Applicability of the Trade Secrets Act (18 
U.S.C. 1905)
    Comment: One commenter contended that the Trade Secrets Act only 
prohibits unauthorized disclosures of personally identifiable 
information by a government official or employee who received the 
information in the course of his employment.
    CBP Response: CBP disagrees. The Trade Secrets Act applies to any 
information that ``. . . concerns or relates to the trade secrets, 
processes, operations, style of work, or apparatus, or to the identity, 
confidential statistical data, amount or source of any income, profits, 
losses, or expenditures of any person, firm, partnership, corporation, 
or association; . . . .'' (18 U.S.C. 1905).
    Comment: Several commenters questioned CBP's interpretation of the 
Trade Secrets Act as set forth in the interim rule, which is that 
information appearing on imported articles and their retail packaging 
is information potentially covered by the Trade Secrets Act's 
protection against disclosure.
    CBP Response: CBP's view is that while the Trade Secrets Act 
protects from disclosure information that identifies persons, or which 
may lead to the identification of persons, the Act is not limited to 
such information. The Act also covers a comprehensive array of 
business, commercial, and financial information.

[[Page 56372]]

    Comment: Several commenters were of the view that CBP had changed 
its practice in 2008 to reflect that information appearing on imported 
articles and their retail packaging is information potentially covered 
by the Trade Secrets Act's protection against disclosure, and that 
subsequently CBP required that samples provided to mark owners be 
redacted.
    CBP Response: The agency has consistently interpreted the Trade 
Secrets Act as prohibiting its employees from the unauthorized 
disclosure of protected information received in the course of their 
employment. From calendar year 2000 to publication of the interim rule 
on April 24, 2012, CBP's written policy was to provide, prior to 
seizure of goods bearing counterfeit marks, only limited importation 
information and/or redacted samples to mark owners (Customs Directive 
2310-008A, April 7, 2000).
    Comment: Several commenters stated that tracking information and 
other product coding are generally visible to the public and that any 
proprietary interest in this information belongs to the shipper and/or 
mark owner, not to the importer. These commenters contended that the 
Trade Secrets Act does not prohibit disclosure of this information to 
the mark owner.
    CBP Response: As explained in the interim rule, markings, 
alphanumeric symbols, and other coding appearing on products or their 
retail packaging may reveal information regarding an importer's supply 
chain. This information is of the kind normally subject to Trade 
Secrets Act protection regardless of who may have applied the markings/
symbols/coding to the products or packaging. The Trade Secrets Act 
permits those covered by the Act to disclose protected information when 
the disclosure is otherwise ``authorized by law,'' which includes 
properly promulgated substantive agency regulations authorizing 
disclosure based on a valid statutory interpretation. See Chrysler v. 
Brown, 441 U.S. 281, 294-316 (1979). Therefore, the ``authorized by 
law'' exception of the Trade Secrets Act allows CBP to disclose this 
protected information to the mark owner for the limited purpose of 
obtaining the mark owner's assistance in determining whether goods bear 
a counterfeit mark.
    Comment: Some commenters stated that the interim regulation fails 
to safeguard the commercial and supply chain information that it 
purports to protect, as that information will inevitably become 
available to the public when the imported goods reach the market.
    CBP Response: The Trade Secrets Act prohibits government officials 
from disclosing protected information received during the course of 
their employment or official duties, unless disclosure is exempted from 
the prohibition, regardless of whether the owner of that information 
may eventually disclose it to the public. Importers of merchandise 
detained under the provisions of the interim regulation may ultimately 
choose not to put the goods on the market or may otherwise dispose of 
the goods in a manner in which the aforementioned information appearing 
on the goods and/or packaging would never be disclosed to the public. 
Importers who choose to disclose such information are not subject to 
the Trade Secrets Act as they are not government employees who have 
received information pursuant to their employment. CBP's release of 
this information under the interim regulation's procedure is allowed 
under the ``authorized by law'' exception to the Trade Secrets Act, 
discussed above.
2. Comments Concerning the NDAA
    Comment: One commenter stated that the NDAA is the sole authority 
for promulgating the interim regulation and requested that CBP clarify 
the legal basis for the regulation.
    CBP Response: CBP disagrees with the commenter's premise. As 
explained in the interim rule, the NDAA is not the sole source of 
authority for the interim regulation's information disclosure 
procedure. In fact, several statutes, including 15 U.S.C. 1124, 1125, 
and 1127 and 19 U.S.C. 1526(e) authorize CBP to disclose to mark 
owners, for purposes of obtaining the mark owners' assistance in making 
infringement determinations, information that CBP may disclose under 
the interim regulation.
    Comment: Several commenters contended that the NDAA only applies to 
products procured by the military and/or matters involving national 
defense concerns.
    CBP Response: Several statutes authorize CBP to disclose to the 
mark owner the information set forth in the interim regulation, none of 
which, including the NDAA, is limited to military procurements and/or 
importations raising national defense concerns. The NDAA language is 
unambiguous and applies to any product CBP suspects of ``being imported 
in violation of section 42 of the Lanham Act.'' Therefore, CBP declines 
to limit the interim regulation's applicability as suggested by the 
commenters.
3. Comments Raising Other Legal Concerns
    Comment: One commenter recommended that CBP amend the interim 
regulation to clarify that goods that are properly trademarked and that 
only use an additional protected trademark in a description of the 
product are not covered within the scope of this regulation.
    CBP Response: In many cases, using a trademark in the way described 
by the commenter is permissible as a ``fair use'' of the trademark. 
``Fair use'' is a well-established doctrine in trademark law that is 
recognized and honored by the courts. See section 33(b)(4) of the 
Lanham Act, 15 U.S.C. 1115(b)(4), which provides for a ``fair use'' 
defense when ``the use of the name, term, or device charged to be an 
infringement is a use, otherwise than as a mark, . . . or [use of] a 
term or device which is descriptive of and used fairly and in good 
faith only to describe the goods or services of such party.'' CBP 
honors the ``fair use'' doctrine, but does not believe it is necessary 
to include it in this CBP regulation.
    Comment: Several commenters recommended that CBP amend the interim 
regulation to modify its definition of ``counterfeit'' based on their 
concerns that CBP officers could detain goods that are genuine, albeit 
repaired or refurbished goods, or goods bearing genuine marks that are 
unrestricted parallel imports.
    CBP Response: The interim regulation employs the definition of 
``counterfeit'' provided by the Lanham Act at 15 U.S.C. 1127.
    Comment: Several commenters stated that the interim regulation 
should apply to other forms of intellectual property, such as suspected 
piratical or copyright infringing goods, and merchandise suspected of 
violating the Digital Millennium Copyright Act (DMCA), 17 U.S.C. 1201.
    CBP Response: As the above comment concerns amendments to 
regulations concerning forms of intellectual property other than 
counterfeit marks, it falls outside the scope of this final rulemaking. 
CBP recognizes the concern that there be similar disclosure provisions 
relating to suspected piratical or copyright infringing goods and 
merchandise suspected of violating the Digital Millennium Copyright Act 
(DMCA), 17 U.S.C. 1201, and plans to address the issue through a 
separate proposed rulemaking.

C. Comments Concerning Action by Mark Owners

    Comment: Several commenters noted that the interim regulation 
provides an

[[Page 56373]]

opportunity for mark owners to potentially abuse the section (b)(1) 
information provided to them by CBP, and to disrupt or eliminate lawful 
parallel market competition. Several commenters recommended that CBP 
restrict mark owners' use of section (b)(1) information by placing 
conditions on the manner by which they may receive and use the 
information.
    CBP Response: The interim regulation allows CBP to release section 
(b)(1) information to a mark owner after an importer has been notified 
and has had the opportunity to establish that the suspect goods bear 
genuine marks. This regulation is not intended to impede the legal 
importation of parallel (gray market) goods. However, to address the 
concern of these commenters, and the concern of those suggesting that 
conditions and limitations be placed on mark owners receiving section 
(b)(1) information, CBP is amending the interim regulation at 19 CFR 
133.21(c) to include in the disclosure to the mark owner a statement 
that some or all of the information being disclosed may be information 
protected from disclosure by the Trade Secrets Act. The regulation 
provides that CBP is only disclosing the information to the owner of 
the mark for the purpose of assisting CBP in determining whether the 
merchandise bears a counterfeit mark. CBP will take into account, in 
deciding whether to make future disclosures to a mark owner, instances 
in which the mark owner has used the disclosed information for another 
purpose (i.e., other than for assisting CPB in making the infringement 
determination).
    Comment: Several commenters recommended that CBP amend the interim 
regulation to require mark owners receiving section (b)(1) information 
from CBP to provide certifications, under penalty of perjury, when 
reporting to CBP that goods are counterfeit and contain spurious 
versions of the specific marks recorded with CBP. One commenter 
contended that a certification would provide an assurance of veracity 
in a mark owner's response to CBP that the goods bear counterfeit 
marks.
    CBP Response: A certification step would add administrative 
complexity and impede CBP's ability to determine a suspect good's 
admissibility as quickly as possible. The responsibility for 
determining whether the goods bear counterfeit marks rests with CBP 
which routinely determines the admissibility of goods under numerous 
provisions of customs and other laws. In doing so, CBP considers and 
determines the veracity of information and the authenticity of 
documents presented by importers, mark owners, and others who 
participate in various procedures administered under the customs laws 
and regulations. CBP will not seize merchandise based solely on 
information provided by the mark owner when CBP deems such information 
to be insufficient or inconsistent with the facts of the case.
    Comment: One commenter expressed concern that mark owners will 
delay and/or fail to be responsive to CBP's inquiries regarding 
authenticity of marks appearing on suspect goods, thereby prejudicing 
the right of importers to an orderly and reasonably expeditious 
process.
    CBP Response: CBP believes the commenter's concern will be the 
exception, not the rule. The interim regulation's detention period 
extends for 30 days from the date goods are presented for examination, 
which CBP deems a reasonable time frame considering the potential 
urgency of the matter. Most cases will be resolved within the 30-day 
period. If detained articles are not released within the detention 
period, the articles are deemed excluded in accordance with 19 U.S.C. 
1499(c)(5) for purposes of 19 U.S.C. 1514(a)(4), which pertains to an 
importer's right to protest CBP's decisions. Therefore, delay by the 
mark owner, whatever the reason, will not deprive the importer of 
recourse to gain release of its merchandise where the facts warrant 
such release.

D. Comments Pertaining to the Interim Regulation's Procedure

1. Comments Concerning the Procedure Generally
    Comment: Some commenters noted that there could be a potential 
disruption to the flow of legitimate trade by the interim regulation's 
required procedures.
    CBP Response: CBP acknowledges that some goods initially suspected 
of bearing counterfeit marks will ultimately be determined to be 
genuine or otherwise non-violative and that the release of these 
genuine goods will be delayed to some extent. However, the interim 
regulation's procedure is structured to resolve these issues in a 
reasonably expedited manner, while giving appropriate notices to 
impacted parties. Suspect goods found to be genuine will be released 
expeditiously.
    Comment: One commenter, an importer, stated that the interim 
regulation's procedure prevents CBP from seeking assistance in 
determining whether the suspect goods bear counterfeit marks until CBP 
issues a notice of detention to the importer. The commenter contended 
that this procedure impedes CBP's enforcement effort.
    CBP Response: CBP disagrees with the commenter's characterization 
of the process. In order to seek assistance from a mark owner CBP may, 
at its discretion at any time after merchandise is presented for 
examination, disclose limited importation information and redacted 
samples (or photographs/images) to a mark owner.
    Comment: The same commenter stated that the interim regulation's 
procedure prevents CBP from seeking assistance from the mark owner 
within the seven business day period after issuance of the detention 
notice.
    CBP Response: Again, CBP disagrees with the commenter's 
characterization of the process. As stated above, CBP may, at its 
discretion at any time after merchandise is presented for examination, 
disclose limited importation information and redacted samples (or 
photographs/images) to a mark owner.
    Comment: One commenter recommended that CBP amend the regulation to 
require that a mark owner post a bond in order to receive a sample only 
when the value of the sample released to the mark owner is $500 or 
more.
    CBP Response: CBP believes that the bonding requirements set forth 
in this final rule are appropriate to indemnify the importer against 
any loss or damage resulting from the furnishing of a sample to the 
mark owner for purposes of assisting the government in making an 
infringement determination.
    Comment: Several commenters recommended that CBP provide in the 
regulation an opportunity for the importer to have a sample of the 
suspect goods tested by a qualified laboratory rather than providing a 
sample to the mark owner.
    CBP Response: CBP recognizes that laboratory analysis may, in 
certain instances, be a valuable tool in determining whether goods bear 
genuine marks. CBP will consider any information, including laboratory 
reports, provided by an importer to support the admissibility of goods 
detained under the interim regulation. While information from a 
laboratory may lead CBP to decide it is not necessary to provide a 
sample to a mark owner, that is not necessarily the case.
    Comment: One commenter, an association representing mark owners, 
stated that its members strongly oppose giving importers the principal 
role in authenticating detained products and requests that CBP provide 
right holders

[[Page 56374]]

with unredacted samples and a direct voice in determining authenticity.
    CBP Response: This final rule does not give importers the principal 
role in authenticating suspected counterfeit marks. Pursuant to 19 
U.S.C. 1499, CBP has the ultimate responsibility for determining 
whether a suspected mark is counterfeit. Moreover, this final rule 
provides the right holders with unredacted samples and photographs and 
an opportunity to provide CBP with input regarding whether the goods 
bear a counterfeit mark whenever CBP has an unresolved suspicion.
    Comment: Some commenters stated that allowing the importer an 
opportunity to establish that its imported goods are genuine invites 
fraud and questioned whether CBP would be able to determine the 
authenticity of documents and information provided by an importer.
    CBP Response: There is always a risk that CBP receives incorrect 
information, whether from an importer or another interested party. CBP, 
however, has extensive experience in determining the admissibility of 
goods under the numerous provisions of the customs laws and other laws 
it enforces and is well aware of the potential for fraud. CBP has 
developed expertise in determining the admissibility of goods presented 
for entry and routinely considers the veracity and authenticity of 
information and documents that importers (and others) present to CBP.
    Comment: One commenter recommended that CBP include a mechanism 
under the interim regulation's procedure by which mark owners may 
object to a determination by CBP that a suspected counterfeit mark is 
not counterfeit, after the mark owner receives either limited 
importation information or section (b)(1) information from CBP.
    CBP Response: As stated in CBP Dec. 12-10 and noted above, the 
objective of this rulemaking is to facilitate CBP's solicitation of 
information from both mark owners and importers to better enable CBP to 
determine a good's admissibility while safeguarding, to the greatest 
extent possible, information that is protected by the Trade Secrets 
Act. The mark owner receives more than limited importation information 
in that the right holder is provided with an unredacted sample or 
digital images containing information appearing on the suspect article. 
The disclosure of this information allows the right holder to provide 
CBP with the information necessary for making a determination relative 
to the suspect mark and for determining whether the article bears a 
counterfeit mark.
    Comment: One commenter noted with disapproval that the interim 
regulation provides for a 30-day window from the date of importation 
for CBP to make a determination of ``reasonable suspicion'' and 
requires CBP to issue a notice of detention to the importer within five 
business days of that determination.
    CBP Response: CBP disagrees with the commenter's reading of the 
regulation. Under 19 U.S.C. 1499, CBP must decide whether to release or 
detain merchandise within five business days following the date on 
which merchandise is presented for examination. Therefore, a five 
business day window exists within which CBP must make a reasonable 
suspicion determination, not a 30-day window. CBP is also required to 
issue a notice of detention to the importer no later than five business 
days after a decision to detain the merchandise is made. Therefore, the 
importer will learn of the detention within ten business days of the 
merchandise being presented for examination.
    Comment: Several commenters stated that CBP should be required to 
issue uniform notices of detention that specify the reason(s) for 
detention.
    CBP Response: CBP agrees as this requirement is mandated by 19 
U.S.C. 1499(c)(2)(B).
    Comment: One commenter, citing language from the interim rule's 
preamble, recommended that CBP amend the interim regulation to 
explicitly state that goods will be detained only when CBP ``reasonably 
suspects'' that they bear counterfeit marks.
    CBP Response: CBP believes that it is unnecessary to codify in the 
regulations factors, elements, and/or circumstances it must consider, 
on a case-by-case basis, in determining whether goods are subject to 
detention for a determination of violation of the intellectual property 
laws.
    Comment: A commenter recommended that CBP define the ``good cause'' 
an importer must show under the interim regulation to justify an 
importer's request for a 30-day extension of the detention period.
    CBP Response: CBP no longer believes that such a 30-day extension 
is warranted and has eliminated it in this final rule. In the past, 
extensions were granted to provide time to determine admissibility. CBP 
is confident that with the assistance and input of the right holder, 
admissibility determinations can be made within the 30-day period.
    Comment: One commenter stated that the interim regulation simply 
codifies in the regulations what, prior to the promulgation of the 
interim rule, had been the regulatory status quo inasmuch as mark 
owners may obtain unredacted samples only after CBP determines that the 
subject goods bear counterfeit marks and seizes them or formulates the 
intention to seize them.
    CBP Response: CBP disagrees with the commenter's reading of the 
interim regulation. CBP may, when necessary to determine whether 
suspect goods bear counterfeit marks, disclose unredacted samples to 
the owner of the mark in accordance with the interim regulation's 
notice (to the importer) provisions. This disclosure takes place after 
detention but before either seizure or the formulation of an intent to 
seize.
    Comment: One commenter objected to the interim regulation as not 
providing protection to importers against disclosure to mark owners of 
information protected by the Trade Secrets Act with respect to marks 
that are not recorded with CBP.
    CBP Response: The interim regulation does, in fact, require that a 
mark be registered with the U.S. Patent and Trademark Office and 
recorded with CBP as a prerequisite to the agency detaining goods it 
suspects bear a counterfeit version of the mark and disclosing 
information (or samples or photographs/images) to the mark owner under 
Sec.  133.21(b) of the interim regulation. CBP believes that this long-
standing requirement is warranted and will continue to impose it. 
Without it, CBP would lack information needed to enforce the 
prohibition against counterfeit marks, and the process would become 
more complex and significantly less workable.
    Comment: Several commenters stated that the interim regulation does 
not provide an objective standard for establishing the genuine nature 
of marks appearing on imported goods. These commenters recommended that 
CBP amend the interim regulation to include examples of the kind of 
information it will accept as tending to prove that marks are genuine.
    CBP Response: CBP believes that it is unnecessary to amend the 
regulation, as CBP will consider any document or information that is 
relevant to the question of the authenticity of the mark. Inevitably, 
some documents or information submitted to CBP by an importer or a mark 
owner will be less persuasive or probative. These decisions are case-
specific and depend on the circumstances involved. In this context, CBP 
finds little benefit to limiting the kinds of information it will 
consider.

[[Page 56375]]

2. Comments Concerning the Release of Information
    Comment: One commenter recommended that prior to CBP's disclosure 
of section (b)(1) information to the mark owner, the agency should 
provide the information to the importer for its consideration of the 
accuracy and veracity of that information. Several commenters 
recommended that CBP allow importers to obtain samples of suspect goods 
to assist them in responding to CBP's request for information regarding 
the goods. Some of these latter commenters also recommended that 
importers be permitted to receive samples of seized goods to enable 
them to respond to seizure and/or penalty notices.
    CBP Response: Inasmuch as an importer may not have complete 
information about the marks appearing on imported goods and/or their 
retail packaging, CBP finds merit in releasing this information to 
importers and is amending the interim regulation (see new Sec.  
133.21(d)) to provide release of an unredacted sample/packaging/image 
to the importer any time after presentation of the goods for 
examination. CBP believes that releasing this information to importers 
will assist them in providing CBP with a meaningful response before or 
within the seven business day response period. Under this amended 
provision, if an importer does not identify a need for a sample until 
after CBP seizes goods as bearing counterfeit marks the importer may 
request a sample at that time.
    Comment: Several commenters recommended that the interim 
regulation's procedure for issuing a notice of detention to the 
importer be expanded to provide, simultaneously rather than within 30 
business days of detention, the notice of the detention and limited 
importation information to the mark owner. This would eliminate 
unnecessary delay.
    CBP Response: CBP finds merit in this recommendation and is 
amending Sec.  133.21(b) of the interim regulation accordingly. The 
amended provision will no longer provide that CBP has 30 business days 
from the date of detention to release limited importation information 
to the mark owner; if available, such information will be released upon 
issuance of the detention notice to the importer (or as soon as 
possible thereafter if not immediately available). This simultaneous 
notice and release of limited importation information provision will 
apply in those instances where CBP has not already released limited 
importation information to the mark owner in accordance with its 
discretionary release authority under the same section of the interim 
regulation.
    Comment: Several commenters recommended that CBP amend the interim 
regulation to allow disclosure to another person in place of the mark 
owner, where there is an arrangement between the other person and the 
mark owner, such as an assignment, a license, or other agreement. Such 
other persons may be in a better position to assist CBP in identifying 
goods bearing counterfeit marks.
    CBP Response: CBP discloses such information to the person 
designated by the mark owner during the recordation process as the 
contact for enforcement of the mark (see Sec. Sec.  133.1 through 133.7 
of this part). However, due to the administrative difficulty in 
determining which additional persons may be entitled to receive such 
information, CBP is not amending the regulations in this regard.
    Comment: Several commenters recommended that CBP limit the 
circumstances in which unredacted samples are released to mark owners 
by first releasing a redacted sample to the mark owner. An unredacted 
sample can then be released when the redacted sample proves 
insufficient for the mark owner to assist CBP in determining whether 
the goods bear a counterfeit mark.
    CBP Response: CBP believes that the interim regulation adequately 
safeguards importers' interests and that it would be counter-productive 
and unduly burdensome administratively to impose additional procedural 
steps before releasing an unredacted sample to the mark owner. The 
result would be more instances where resolution of the matter would 
require all or nearly all of the 30-day detention period, which is 
contrary to CBP's goal to quickly resolve issues of admissibility so as 
to either enable lawful trade or to prevent violative goods from 
entering the commerce of the United States.
    Comment: Several commenters recommended that CBP make the interim 
regulation's disclosure provision mandatory rather than permissive, 
requiring CBP, in every case, to disclose section (b)(1) information, 
including unredacted samples.
    CBP Response: The interim regulation permits CBP to disclose to 
mark owners, prior to seizure, section (b)(1) information (including an 
unredacted sample) when CBP finds that obtaining a mark owner's 
assistance regarding the authenticity of a mark is warranted, subject 
to the notice and seven business day response period set forth in Sec.  
133.21(b)(2)(i). See Sec.  133.21(c). CBP will weigh the facts and 
circumstances before releasing section (b)(1) information (prior to 
seizure). CBP therefore does not agree with the commenters' 
recommendation to require the pre-seizure release of section (b)(1) 
information to the mark owner in every case. CBP believes that the 
interim regulation's procedure protects importers' interests in the 
confidentiality of their commercial and supply chain information while, 
at the same time, facilitating CBP's trademark enforcement at the 
border.
    Comment: One commenter recommended that CBP clarify that release of 
information is only authorized after detention, rather than at any time 
after importation.
    CBP Response: Although this comment is accurate regarding release 
of section (b)(1) information to the mark owner under the interim 
regulation, this final rule amends Sec.  133.21(b)(4), as explained 
above, to reflect that CBP may release limited importation information 
to the mark owner prior to issuance of a notice of detention to the 
importer and will release such information to the mark owner upon 
issuance of the notice of detention or as soon as possible after its 
issuance. This latter change removes the 30-business day window 
specified in the interim regulation and mandates that CBP will release 
this information, when available, contemporaneously with issuance of 
the detention notice to the importer.
    Comment: Some commenters recommended that the interim regulation be 
amended to permit CBP to disclose unredacted samples to the owner of 
the mark at any time after goods are presented for entry, without the 
seven business day response period. Some commenters recommended that 
this response period be eliminated, observing that applicable law does 
not require a role for the importer in the authentication process.
    CBP Response: CBP believes that the regulation strikes the 
appropriate balance between protecting importers' commercial 
information and allowing mark owners to assist CBP in enforcing 
prohibitions against counterfeit goods. Section 1499(a)(5) within 19 
U.S.C. specifies the manner in which an importer may provide 
information to CBP when information is required for the release of 
goods. Accordingly, importers have a statutorily prescribed role in 
establishing the admissibility of their goods. At any time after goods 
are presented for examination, CBP may solicit and receive information 
from the importer that may enable CBP to expeditiously release the 
goods. In cases

[[Page 56376]]

where information is not provided within five days or the information 
received is insufficient to enable CBP to release the goods, pursuant 
to 19 U.S.C. 1499, CBP may detain the goods to enable CBP to determine 
their admissibility. Should CBP require assistance from a mark owner to 
determine admissibility of the goods, it may seek assistance at various 
stages of the detention and may disclose section (b)(1) information, if 
necessary, after the seven business day response period. Under 19 
U.S.C. 1499, if CBP does not make a final determination regarding the 
admissibility of the goods within 30 days of presentation of the 
merchandise for examination, its failure to make such a determination 
is treated as a decision to exclude the merchandise for purposes of 19 
U.S.C. 1514(a)(4). CBP believes that the above process allows the mark 
owner adequate time to provide information to CBP when CBP requests 
such information while protecting importers' commercial information.
    Comment: One commenter suggested that CBP amend the interim 
regulation to require the importer to provide to the mark owner any 
information it submits to CBP within the seven business day response 
period. Another commenter suggested that CBP provide to the mark owner 
a non-proprietary version of the information the importer provided to 
CBP.
    CBP Response: It is CBP's role to determine whether, in light of 
the relevant laws and regulations, goods that are presented for 
examination are admissible. The interim regulation simply facilitates 
CBP's solicitation of information from both mark owners and importers 
to better enable CBP to determine a good's admissibility while 
safeguarding as much as possible information that is protected by the 
Trade Secrets Act.
3. Other Comments Concerning the Seven Business Day Response Period
    Comment: Several commenters recommended that CBP exempt certain 
industries from the interim regulation's seven business day response 
period, contending that some industries have special needs requiring 
information sharing with the mark owner, without delay, in every case.
    CBP Response: CBP believes that the interim regulation's procedure 
will operate effectively across all industries and sectors. Should CBP 
recognize a need to address a specific industry's circumstances in the 
future, CBP will consider amending the regulation at that time.
    Comment: One commenter expressed concern that the interim 
regulation's seven business day response period will impair a mark 
owner's ability to assist CBP in its efforts to curtail importation of 
restricted parallel imports or to assist CBP in identifying counterfeit 
goods that are commingled with unrestricted gray market goods.
    CBP Response: The interim regulation did not change the way CBP 
enforces restrictions on gray market goods. The seven business day 
response period neither impairs the mark owner's ability to make 
information available to CBP nor increases the risk of counterfeit 
goods being admitted. Unless CBP determined the goods are admissible, 
they are deemed excluded by operation of law. CBP is aware of the 
potential for these types of shipments and has developed expertise in 
identifying such activity.
    Comment: Some commenters stated that the interim regulation's seven 
business day response period makes the process for authenticating marks 
unduly burdensome and that officers charged with enforcing the 
intellectual property laws may therefore be deterred from taking 
action.
    CBP Response: CBP believes that the interim regulation's procedure 
will assist CBP officers in making determinations regarding counterfeit 
marks and is similar to various other provisions in the CBP regulations 
that require CBP to issue notice to an importer or other party of 
actions it is undertaking and/or receive information from an importer 
or other party before taking action. CBP is also confident that its 
officers will discharge their sworn duties efficiently, responsibly, 
and professionally at all times.
    Comment: Some commenters stated that the interim regulation's seven 
business day response period will result in the delayed release of 
legitimate goods. Several other commenters specified that the seven 
business day response period is too long and may result in the mark 
owner receiving information to determine authenticity of the mark(s) 
with as little as 11 days left in the 30-day detention period. These 
commenters contended that this is not enough time for mark owners to 
provide meaningful information and is prejudicial to mark owners' 
interests.
    CBP Response: CBP believes that, in the interest of due process, 
the seven business day response period is appropriate and that the 
regulation provides adequate time for both importers and mark owners to 
respond and does not prejudice their interests. CBP further notes that 
if CBP fails to make a determination within the 30-day detention period 
the merchandise is excluded by operation of law.
    Comment: Several commenters stated that the interim regulation's 
seven business day response period is too short, inasmuch as it may not 
provide enough time for an importer to provide information sufficient 
to establish to CBP's satisfaction that detained goods bear genuine 
marks.
    CBP Response: CBP disagrees. Although CBP may release section 
(b)(1) information to the mark owner after the seven business day 
response period, the importer has the option of submitting information 
to CBP up to the end of the detention period or until CBP determines 
that the goods bear counterfeit marks. CBP believes that this time 
frame is adequate to protect importers' interests.

E. Comments Concerning Information Released

    Comment: Several commenters objected to the disclosure of 
information provided in Sec.  133.21(b)(2) of the interim regulation 
whereby CBP may disclose to the mark owner, prior to CBP's seizure of 
the goods as bearing counterfeit marks, the quantity and description of 
merchandise involved in a suspect shipment.
    CBP Response: CBP can disclose the quantity and description of 
merchandise at any time after merchandise is presented for examination 
as CBP does not consider this information to be protected by the Trade 
Secrets Act. CBP articulated this position in T.D. 98-21, published in 
the Federal Register (63 FR 11996) on March 12, 1998. Nothing in the 
comments has persuaded CBP to change its view.
    Comment: Several commenters contended that the interim regulation 
is unclear as to the meaning of ``quantity'' and the manner by which 
CBP will provide the mark owner with a description of merchandise 
``from the entry.''
    CBP Response: CBP agrees that these provisions require more 
clarity. Accordingly, CBP is amending the regulation to provide that 
the quantity of merchandise involved in the detention and the 
description of detained merchandise will be drawn from CBP arrival or 
entry documents or their electronic equivalents, which could include, 
but will not be limited to, the CBP Form 3461, the CBP Form 7533, the 
CBP Form 7512 (if the detention is for merchandise moving in-bond), the 
cargo manifest (if no entry has yet been filed), or any other document 
or information, as applicable.
    Comment: One commenter requested that CBP reconsider the scope of 
information that it redacts when providing samples or photographs/

[[Page 56377]]

images to a mark owner under Sec.  133.21(b)(3) of the interim 
regulation. The commenter observed that determining whether suspect 
goods bear counterfeit marks may require a mark owner to review 
information such as product codes, packaging, and SKUs and that 
disclosing these marks and numbers does not violate the Trade Secrets 
Act as they may not necessarily identify the importer.
    CBP Response: CBP believes that in order to protect importers' 
interests, any identifying information such as serial numbers, dates of 
manufacture, lot codes, batch numbers, universal product codes, the 
name or address of the manufacturer, exporter, or importer of the 
merchandise, or any mark that could reveal the name or address of the 
manufacturer, exporter, or importer of the merchandise, in alphanumeric 
or other formats, should be redacted when CBP provides samples, 
photographs, or images prior to the running of the seven business day 
response period.
    Comment: One commenter stated that the interim regulation is 
deficient in that it provides for disclosure of only certain limited 
information appearing on the packaging of suspect merchandise. The 
commenter contended that the mark owner may need more information to 
provide meaningful assistance.
    CBP Response: CBP disagrees with the commenter's reading of the 
interim regulation. CBP is not limited to disclosing information 
appearing only on the packaging of suspect merchandise. Once the seven 
business day response period has expired without resolution of 
authenticity, CBP is authorized to disclose to the mark owner all 
information appearing on the goods as well as all information appearing 
on their retail packaging. The NDAA specifically authorizes CBP to 
disclose certain information to a mark owner, including unredacted 
samples and photographs/images of suspect merchandise (and its retail 
packaging). The interim rule is consistent with that grant of 
authority.

F. Comments Concerning Post-Seizure

    Comment: Several commenters recommend that CBP make the interim 
rule's post-seizure disclosure provision mandatory rather than 
discretionary, requiring CBP, in every case, to provide unredacted 
photographs/images or samples of the goods seized to the mark owner.
    CBP Response: CBP does not believe that post-seizure disclosure to 
mark owners needs to be made mandatory through regulations.
    Comment: One commenter recommended that CBP amend the interim 
regulation to require the retention of seized counterfeit goods for at 
least 60 days after CBP has provided the mark owner with formal notice 
of the seizure. The commenter stated that CBP often disposes of the 
goods before notice is given, depriving mark owners of the opportunity 
to request and obtain samples.
    CBP Response: The comment inaccurately reflects CBP's procedure 
regarding seizure, forfeiture, and destruction of goods bearing 
counterfeit marks. Generally, CBP retains seized merchandise for at 
least 90 days from the date of seizure, through completion of the 
forfeiture process, prior to destruction of the goods. Section 
133.21(d) of the interim regulation (redesignated in this final rule as 
Sec.  133.21(e)) requires CBP to disclose to the mark owner 
comprehensive importation information, if available, within 30 business 
days of the notice of seizure to the importer.
    Comment: Several commenters recommended that CBP commit to 
rendering determinations on 19 U.S.C. 1618 petitions (challenging the 
seizure or forfeiture or both) no later than 30 days after such 
petitions are filed.
    CBP Response: Part 171 of the CBP regulations governs the agency's 
handling of petitions for remission or mitigation of fines, penalties, 
and forfeitures filed pursuant to 19 U.S.C. 1618. CBP believes that the 
administrative procedure set forth in its existing regulations is 
adequate to protect importers' interests in matters involving seized 
merchandise and that an amendment to these regulations is unnecessary.

Conclusion and List of Changes

    Based on the foregoing analysis of the comments and CBP's further 
consideration of the matter, CBP is adopting the interim amendments to 
the CBP regulations published in the Federal Register (77 FR 24375) on 
April 24, 2012 as final with the exception of the amendments to 
Sec. Sec.  133.21 and 151.16 which are being adopted as final with the 
following modifications:
    CBP is amending Sec.  133.21 to enhance its readability and to 
reflect the clarifications, amendments and organizational changes 
discussed above. Specifically:
    1. CBP is amending Sec.  133.21(b) by eliminating the optional 30-
day extension of the detention period as CBP now believes that such an 
extension is unnecessary.
    2. CBP is reorganizing the text of Sec.  133.21(b) by redesignating 
the existing introductory text and paragraphs (b)(1), (b)(2), and 
(b)(3) as newly redesignated paragraphs (b)(1) through (b)(5). Within 
Sec.  133.21(b):
     Paragraph (b)(1) restates the 30-day detention period 
provided for in 1499(c).
     Paragraph (b)(2)(i) specifies that a notice of detention 
is issued to the importer pursuant to 19 CFR 151.16(c) and 19 U.S.C. 
1499(c), and that CBP will also inform the importer that certain 
information may already have been disclosed to the owner of the mark, 
or may be disclosed concurrent with the issuance of the notice of 
detention, and that the importer has seven business days from the date 
of the notice of detention to present information that establishes, to 
CBP's satisfaction, that the detained merchandise does not bear a 
counterfeit mark.
     New paragraph (b)(2)(ii) provides that where the importer 
does not provide information within the seven business day response 
period, or the information provided is insufficient for CBP to 
determine that the merchandise does not bear a counterfeit mark, CBP 
may proceed with the disclosure to the owner of the mark and will so 
notify the importer.
     Paragraph (b)(3) sets forth the information CBP may 
disclose to the mark owner (information appearing on goods and their 
retail packaging and unredacted samples, photographs/images, etc.).
     Redesignated paragraph (b)(4) (paragraph (b)(2) of the 
interim regulation) is amended to clarify that the ``description of the 
merchandise'' and the ``quantity involved'' that CBP releases to the 
mark owner (along with other data) prior to issuance of a detention 
notice is taken from the paper or electronic equivalent of CBP Forms 
3461, 7533, 7512, cargo manifest, advance electronic information, or 
other entry document as appropriate. After issuance of a detention 
notice, this information is taken from the notice of detention. CBP 
will release the information at the same time it issues the detention 
notice to the importer, or as soon afterward as possible.
     Paragraph (b)(5) provides for release of redacted 
photographs/images and samples to the mark owner.
    3. In Sec.  133.21(c), pertaining to release of unredacted 
photographs, images and samples to the mark owner under paragraph (b), 
CBP is:
     Clarifying the heading text to state that the provision 
pertains to conditions associated with the disclosure.
     Adding language to provide that, with the release of the 
information or the photographs, images or samples,

[[Page 56378]]

CBP will notify the mark owner that some or all of the information it 
is receiving may be subject to the protections of the Trade Secrets 
Act, and is only being provided to the mark owner to assist CBP in 
determining whether the merchandise described in the notice of 
detention bears counterfeit marks.
     Reorganizing the provision into two sub-paragraphs to 
enhance readability.
    4. Sections 133.21(b)(5), (c)(2),and (f), relating to the terms of 
the IPR sample bond, are amended to clarify that the IPR sample bond is 
posted to indemnify the importer or owner of the sample against any 
loss or damage resulting from the furnishing of the sample by CBP to 
the owner of the mark.
    5. CBP is adding a new paragraph (d) to Sec.  133.21 to provide for 
release of unredacted samples to the importer any time after 
presentation of the suspect goods to CBP for examination.
    6. Existing Sec.  133.21(d), pertaining to the seizure of goods and 
disclosure of comprehensive importation information to the mark owner, 
is re-designated as paragraph (e) in this final rule and clarified to 
reflect that the ``description'' and the ``quantity'' of the 
merchandise provided to the mark owner by CBP is taken from the notice 
of seizure (and intent to forfeit).
    7. Existing Sec.  133.21(e), pertaining to photographs/images and 
samples being made available to the mark owner after seizure, is re-
designated as paragraph (f) in this final rule.
    8. Existing Sec.  133.21(f), pertaining to consent of the mark 
owner, is re-designated as paragraph (g) in this final rule.
    This document amends the specific authority citation for Sec. Sec.  
133.21 through 133.25 to reflect 10 U.S.C. 2302.
    Lastly, this final rule amends Sec.  151.16(a) by removing the 
reference to ``imports of articles bearing counterfeit marks or 
suspected counterfeit marks.''
    CBP is adopting as final, with the clarifications and amendments 
discussed above, the interim amendments set forth in CBP Dec. 12-10 
that went into effect on April 24, 2012. The additional changes made to 
the interim regulation in this final rule include non-substantive 
editorial changes that improve readability, as well as logical-
outgrowth changes to the interim regulation's provisions, as described 
above. In an effort to provide the trade, if necessary, with the 
opportunity to make adjustments to their business practices, CBP has 
determined to delay the effective date of this final rule for a period 
of 30 days from the date of publication of this document in the Federal 
Register.

 Executive Orders 13563 and 12866

    Executive Orders 13563 and 12866 direct agencies to assess costs 
and benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributive impacts, and equity). Executive Order 13563 
emphasizes the importance of quantifying both costs and benefits, of 
reducing costs, of harmonizing rules, and of promoting flexibility. 
This rule has been designated a ``significant regulatory action'' 
although not economically significant, under section 3(f) of Executive 
Order 12866. Accordingly, the rule has been reviewed by the Office of 
Management and Budget.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.), as amended 
by the Small Business Regulatory Enforcement and Fairness Act of 1996, 
requires agencies to assess the impact of regulations on small 
entities. A small entity may be a small business (defined as any 
independently owned and operated business not dominant in its field 
that qualifies as a small business per the Small Business Act); a small 
not-for-profit organization; or a small governmental jurisdiction 
(locality with fewer than 50,000 people).
    One of CBP's primary roles is to safeguard the U.S. economy from 
the importation of counterfeit goods. Prior to the publication of the 
interim final rule, if CBP needed assistance in determining whether an 
import bears counterfeit marks, the agency was restricted to only 
sharing redacted samples of the import in question with a right holder. 
However, due to the highly technical nature of some imports and the 
continuously increasing sophistication of counterfeiters, sharing 
redacted samples with right holders is no longer sufficient in certain 
circumstances. To broaden CBP's ability to identify counterfeit goods, 
Congress included a provision to the National Defense Authorization Act 
for Fiscal Year 2012 (NDAA) (Public Law 112-81, 10 U.S.C. 2303) that 
allows CBP to share unredacted samples of imports suspected of bearing 
counterfeit marks with the right holders of the trademarks in question 
in order to aid CBP in determining whether the suspect goods are 
violative.\1\
---------------------------------------------------------------------------

    \1\ Note that this rule does not alter CBP's ability to provide 
redacted photographs/images, samples, or retail packaging (including 
labels) of suspect merchandise to the right holder of the trademark 
without prior notification to the importer.
---------------------------------------------------------------------------

    By sharing unredacted samples of imports with mark owners, however, 
mark owners may gain access to some sensitive information about the 
importer, such as its supply chain and purchase price. To mitigate the 
potential unnecessary release of an importer's trade secrets to a mark 
owner, the interim final rule established a procedure to allow an 
importer seven business days to demonstrate to CBP that suspect marks 
are not violative. If the importer is unable to do so, CBP may seek 
assistance from the mark owner by releasing unredacted samples of the 
import(s) in question. As discussed earlier, during the comment period 
for the interim final rule CBP received comments regarding the possible 
misuse of trade secret information by mark owners when viewing 
unredacted samples. In order to address such misuses, and thus any 
potential business impacts to the importation of legitimate trade, CBP 
is amending the interim regulation to provide that the disclosure to 
the mark owner must include a statement informing the mark owner that 
some or all of the information being disclosed may be information 
protected from disclosure by the Trade Secrets Act (18 U.S.C. 1905).
    As described in the ``Paperwork Reduction Act'' section of this 
document, CBP estimates that it takes an importer two hours to provide 
proof to CBP that establishes that suspect goods do not bear 
counterfeit marks. CBP estimates the average wage of an importer to be 
$28.50 per hour. Thus, CBP estimates it will cost a small entity $57.00 
to demonstrate that its import does not bear counterfeit marks. CBP 
does not believe $57.00 constitutes a significant economic impact. CBP 
does recognize, however, that such repeated inquiries could eventually 
rise to the level of a significant economic impact. CBP lacks data on 
how often a particular importer would be affected by this regulation. 
CBP subject matter experts, however, are unaware of any instances where 
a particular importer was repeatedly requested to provide information 
to CBP for the purpose of establishing that an import does not bear 
counterfeit marks. Additionally, based on CBP's experience over the 
years (including in implementing the interim rule), CBP anticipates 
that law-abiding importers will not be subject to the provisions in 
this rule on a repeated basis. Further, we note that providing this 
information to CBP is optional on the part of the importer. CBP did not

[[Page 56379]]

receive any comments on the interim final rule regarding the cost to 
importers of providing proof to CBP that establishes that suspect goods 
do not bear counterfeit marks. Due to the harm that counterfeit goods 
pose to public health and safety, this rule went into effect as an 
interim final rule on the date of its publication on April 24, 2012. As 
discussed earlier, CBP lacks data on how many importers have been 
affected by the interim rule, and on how often any particular importer 
has been affected. As a general matter, any importer may be affected by 
this rule, and that is because the rule will be applied when CBP cannot 
make a determination--without the use of these regulatory provisions--
as to whether an import(s) bears a counterfeit mark. Because this rule 
could be applied to any importer, CBP believes that this rule will 
potentially have an effect on a substantial number of small entities.
    While this rule will potentially have an effect on a substantial 
number of small entities, CBP does not believe that an estimated cost 
to an importer of $57.00 per affected import constitutes a significant 
economic impact (also, as discussed above, providing this information 
to CBP is optional on the part of the importer). Thus, CBP certifies 
this regulation will not have a significant economic impact on a 
substantial number of small entities.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507), the collections of information for this document are included in 
an existing collection for Notices of Detention (OMB control number 
1651-0073). An agency may not conduct, and a person is not required to 
respond to, a collection of information unless the collection of 
information displays a valid control number assigned by OMB.
    The burden hours related to the Notice of Detention for OMB control 
number 1651-0073 are as follows:
    Number of Respondents: 1,350.
    Number of Responses: 1,350.
    Time per Response: 2 hours.
    Total Annual Burden Hours: 2,700.
    There is no change in burden hours under this collection with this 
rule.

Signing Authority

    This rulemaking is being issued in accordance with 19 CFR 
0.1(a)(1), pertaining to the authority of the Secretary of the Treasury 
(or that of his or her delegate) to approve regulations concerning 
trademark enforcement.

List of Subjects

19 CFR Part 133

    Copying or simulating trademarks, Copyrights, Counterfeit 
trademarks, Customs duties and inspection, Detentions, Reporting and 
recordkeeping requirements, Restricted merchandise, Seizures and 
forfeitures, Trademarks, Trade names.

19 CFR Part 151

    Customs duties and inspection, Examination, Imports, Penalties, 
Reporting and recordkeeping requirements, Sampling and testing.

Amendments to the CBP Regulations

    Accordingly, the interim rule amending parts 133 and 151 of title 
19 of the Code of Federal Regulations (19 CFR parts 133 and 151), which 
was published at 77 FR 24375 on April 24, 2012, is adopted as final 
with the following changes:

PART 133--TRADEMARKS, TRADE NAMES, AND COPYRIGHTS

0
1. The general authority citation for part 133 continues, and the 
specific authority citation for Sec. Sec.  133.21 through 133.25 is 
added, to read as follows:

    Authority:  15 U.S.C. 1124, 1125, 1127; 17 U.S.C. 101, 601, 602, 
603; 19 U.S.C. 66, 1202, 1499, 1526, 1624; 31 U.S.C. 9701. Sections 
133.21 through 133.25 also issued under 18 U.S.C. 1905; Sec. 818(g), 
Pub. L. 112-81 (10 U.S.C. 2302);


0
2. In Sec.  133.21:
0
a. Paragraphs (b) and (c) are revised;
0
b. Paragraphs (d), (e), and (f) are redesignated as paragraphs (e), 
(f), and (g);
0
c. A new paragraph (d) is added; and
0
d. Redesignated paragraphs (e) and (f) are revised.
    The revisions and addition read as follows:


Sec.  133.21  Articles suspected of bearing counterfeit marks.

* * * * *
    (b) Detention, notice, and disclosure of information--(1) Detention 
period. CBP may detain any article of domestic or foreign manufacture 
imported into the United States that bears a mark suspected by CBP of 
being a counterfeit version of a mark that is registered with the U.S. 
Patent and Trademark Office and is recorded with CBP pursuant to 
subpart A of this part. The detention will be for a period of up to 30 
days from the date on which the merchandise is presented for 
examination. In accordance with 19 U.S.C. 1499(c), if, after the 
detention period, the article is not released, the article will be 
deemed excluded for the purposes of 19 U.S.C. 1514(a)(4).
    (2) Notice of detention to importer and disclosure to owner of the 
mark--(i) Notice and seven business day response period. Within five 
business days from the date of a decision to detain suspect 
merchandise, CBP will notify the importer in writing of the detention 
as set forth in Sec.  151.16(c) of this chapter and 19 U.S.C. 1499. CBP 
will also inform the importer that for purposes of assisting CBP in 
determining whether the detained merchandise bears counterfeit marks:
    (A) CBP may have previously disclosed to the owner of the mark, 
prior to issuance of the notice of detention, limited importation 
information concerning the detained merchandise, as described in 
paragraph (b)(4) of this section, and, in any event, such information 
will be released to the owner of the mark, if available, no later than 
the date of issuance of the notice of detention; and
    (B) CBP may disclose to the owner of the mark information that 
appears on the detained merchandise and/or its retail packaging, 
including unredacted photographs, images, or samples, as described in 
paragraph (b)(3) of this section, unless the importer presents 
information within seven business days of the notification establishing 
that the detained merchandise does not bear a counterfeit mark.
    (ii) Failure of importer to respond or insufficient response to 
notice. Where the importer does not provide information within the 
seven business day response period, or the information provided is 
insufficient for CBP to determine that the merchandise does not bear a 
counterfeit mark, CBP may proceed with the disclosure of information 
described in paragraph (b)(3) of this section to the owner of the mark 
and will so notify the importer.
    (3) Disclosure to owner of the mark of information appearing on 
detained merchandise and/or its retail packaging, including unredacted 
photographs, images or samples. When making a disclosure to the owner 
of the mark under paragraph (b)(2)(ii) of this section, CBP may 
disclose information appearing on the merchandise and/or its retail 
packaging (including labels), images (including photographs) of the 
merchandise and/or its retail packaging in its condition as presented 
for examination (i.e., an unredacted condition), or a sample of the 
merchandise and/or its retail packaging in its condition as presented 
for examination. The release of a sample will be in accordance with, 
and subject to, the bond and return requirements of

[[Page 56380]]

paragraph (c) of this section. The disclosure may include any serial 
numbers, dates of manufacture, lot codes, batch numbers, universal 
product codes, or other identifying marks appearing on the merchandise 
or its retail packaging (including labels), in alphanumeric or other 
formats.
    (4) Disclosure to owner of the mark of limited importation 
information. From the time merchandise is presented for examination, 
CBP may disclose to the owner of the mark limited importation 
information in order to obtain assistance in determining whether an 
imported article bears a counterfeit mark. Where CBP does not disclose 
this information to the owner of the mark prior to issuance of the 
notice of detention, it will do so concurrently with the issuance of 
the notice of detention, unless the information is unavailable, in 
which case CBP will release the information as soon as possible after 
issuance of the notice of detention. The limited importation 
information CBP will disclose to the owner of the mark consists of:
    (i) The date of importation;
    (ii) The port of entry;
    (iii) The description of the merchandise, for merchandise not yet 
detained, from the paper or electronic equivalent of the entry (as 
defined in Sec.  142.3(a)(1) or (b) of this chapter), the CBP Form 
7512, cargo manifest, advanceelectronic information or other entry 
document as appropriate, or, for detained merchandise, from the notice 
of detention;
    (iv) The quantity, for merchandise not yet detained, as declared on 
the paper or electronic equivalent of the entry (as defined in Sec.  
142.3(a)(1) or (b) of this chapter), the CBP Form 7512, cargo manifest, 
advance electronic information, or other entry document as appropriate, 
or, for detained merchandise, from the notice of detention; and
    (v) The country of origin of the merchandise.
    (5) Disclosure to owner of the mark of redacted photographs, images 
and samples. Notwithstanding the notice and seven business day response 
procedure of paragraph (b)(2) of this section, CBP may, in order to 
obtain assistance in determining whether an imported article bears a 
counterfeit mark and at any time after presentation of the merchandise 
for examination, provide to the owner of the mark photographs, images, 
or a sample of the suspect merchandise or its retail packaging 
(including labels), provided that identifying information has been 
removed, obliterated, or otherwise obscured. Identifying information 
includes, but is not limited to, serial numbers, dates of manufacture, 
lot codes, batch numbers, universal product codes, the name or address 
of the manufacturer, exporter, or importer of the merchandise, or any 
mark that could reveal the name or address of the manufacturer, 
exporter, or importer of the merchandise, in alphanumeric or other 
formats. CBP may release to the owner of the mark a sample under this 
paragraph when the owner furnishes to CBP a bond in the form and amount 
specified by CBP, conditioned to indemnify the importer or owner of the 
imported article against any loss or damage resulting from the 
furnishing of the sample by CBP to the owner of the mark. CBP may 
demand the return of the sample at any time. The owner of the mark must 
return the sample to CBP upon demand or at the conclusion of any 
examination, testing, or similar procedure performed on the sample. In 
the event that the sample is damaged, destroyed, or lost while in the 
possession of the owner of the mark, the owner must, in lieu of return 
of the sample, certify to CBP that: ``The sample described as [insert 
description] and provided pursuant to 19 CFR 133.21(b)(5) was (damaged/
destroyed/lost) during examination, testing, or other use.''
    (c) Conditions of disclosure to owner of the mark of information 
appearing on detained merchandise and/or its retail packaging, 
including unredacted photographs, images and samples--(1) Disclosure 
for limited purpose of assisting CBP in counterfeit mark 
determinations. In order to obtain assistance in determining whether an 
imported article bears a counterfeit mark, CBP may disclose to the 
owner of the mark, prior to seizure, information appearing on the 
merchandise and/or its retail packaging (including labels), unredacted 
photographs or images of the merchandise and/or its retail packaging in 
its condition as presented for examination, or an unredacted sample of 
the imported merchandise and/or its retail packaging in its condition 
as presented for examination, in accordance with paragraphs (b)(2)(ii) 
and (3) of this section. Upon release of such information, photographs, 
images, or samples, CBP will notify the owner of the mark that some or 
all of the information being released may be subject to the protections 
of the Trade Secrets Act, and that CBP is only disclosing the 
information to the owner of the mark for the purpose of assisting CBP 
in determining whether the merchandise bears a counterfeit mark.
    (2) Bond. CBP may release to the owner of the mark a sample under 
paragraphs (b)(2)(ii) and (3) of this section when the owner furnishes 
to CBP a bond in the form and amount specified by CBP, conditioned to 
indemnify the importer or owner of the imported article against any 
loss or damage resulting from the furnishing of the sample by CBP to 
the owner of the mark. CBP may demand the return of the sample at any 
time. The owner of the mark must return the sample to CBP upon demand 
or at the conclusion of any examination, testing, or similar procedure 
performed on the sample. In the event that the sample is damaged, 
destroyed, or lost while in the possession of the owner of the mark, 
the owner must, in lieu of return of the sample, certify to CBP that: 
``The sample described as [insert description] and provided pursuant to 
19 CFR 133.21(c) was (damaged/destroyed/lost) during examination, 
testing, or other use.''
    (d) Disclosure to importer of unredacted photographs, images, and 
samples. CBP will disclose to the importer unredacted photographs, 
images, or an unredacted sample of imported merchandise suspected of 
bearing a counterfeit mark at any time after the merchandise is 
presented to CBP for examination. CBP may demand the return of the 
sample at any time. The importer must return the sample to CBP upon 
demand or at the conclusion of any examination, testing, or similar 
procedure performed on the sample. In the event that the sample is 
damaged, destroyed, or lost while in the possession of the importer, 
the importer must, in lieu of return of the sample, certify to CBP 
that: ``The sample described as [insert description] and provided 
pursuant to 19 CFR 133.21(d) was (damaged/destroyed/lost) during 
examination, testing, or other use.''
    (e) Seizure and disclosure to owner of the mark of comprehensive 
importation information. Upon a determination by CBP, made any time 
after the merchandise has been presented for examination, that an 
article of domestic or foreign manufacture imported into the United 
States bears a counterfeit mark, CBP will seize such merchandise and, 
in the absence of the written consent of the owner of the mark, forfeit 
the seized merchandise in accordance with the customs laws. When 
merchandise is seized under this section, CBP will disclose to the 
owner of the mark the following comprehensive importation information, 
if available, within 30 business days from the date of the notice of 
the seizure:
    (1) The date of importation;
    (2) The port of entry;

[[Page 56381]]

    (3) The description of the merchandise from the notice of seizure;
    (4) The quantity as set forth in the notice of seizure;
    (5) The country of origin of the merchandise;
    (6) The name and address of the manufacturer;
    (7) The name and address of the exporter; and
    (8) The name and address of the importer.
    (f) Disclosure to owner of the mark, following seizure, of 
unredacted photographs, images, and samples. At any time following a 
seizure of merchandise bearing a counterfeit mark under this section, 
and upon receipt of a proper request from the owner of the mark, CBP 
may provide, if available, photographs, images, or a sample of the 
seized merchandise and its retail packaging, in its condition as 
presented for examination, to the owner of the mark. To obtain a sample 
under this paragraph, the owner of the mark must furnish to CBP a bond 
in the form and amount specified by CBP, conditioned to indemnify the 
importer or owner of the imported article against any loss or damage 
resulting from the furnishing of the sample by CBP to the owner of the 
mark. CBP may demand the return of the sample at any time. The owner of 
the mark must return the sample to CBP upon demand or at the conclusion 
of the examination, testing, or other use in pursuit of a related 
private civil remedy for infringement. In the event that the sample is 
damaged, destroyed, or lost while in the possession of the owner of the 
mark, the owner must, in lieu of return of the sample, certify to CBP 
that: ``The sample described as [insert description] and provided 
pursuant to 19 CFR 133.21(f) was (damaged/destroyed/lost) during 
examination, testing, or other use.''
* * * * *

PART 151--EXAMINATION, SAMPLING, AND TESTING OF MERCHANDISE

0
3. The general authority citation for part 151 continues to read as 
follows:

    Authority: 19 U.S.C. 66, 1202 (General Note 3(i) and (j), 
Harmonized Tariff Schedule of the United States (HTSUS), 1624;
* * * * *


Sec.  151.16  [Amended]

0
4. Section 151.16(a) is amended by removing the words, ``imports of 
articles bearing counterfeit marks or suspected counterfeit marks,''.

R. Gil Kerlikowske,
Commissioner, U.S. Customs and Border Protection.
    Approved: September 15, 2015.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 2015-23543 Filed 9-17-15; 8:45 am]
BILLING CODE 9111-14-P