Disclosure of Information for Certain Intellectual Property Rights Enforced at the Border, 24375-24380 [2012-9762]
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Federal Register / Vol. 77, No. 79 / Tuesday, April 24, 2012 / Rules and Regulations
§ 801.4
Recordingkeeping requirements.
In accordance with section 3104(b)(1)
of title 22 of the United States Code,
persons subject to the jurisdiction of the
United States shall maintain any
information which is essential for
carrying out the surveys and studies
provided for by the Act.
§ 801.5
Confidentiality.
Information collected pursuant to
3104(c) of title 22 of the United States
Code is confidential.
(a) Access to this information shall be
available only to officials and
employees (including consultants and
contractors and their employees) of
agencies designated by the President to
perform functions under the Act.
(b) Subject to paragraph (d) of this
section, the President may authorize the
exchange of information between
agencies or officials designated to
perform functions under the Act.
(c) Nothing in this part shall be
construed to require any Federal agency
to disclose information otherwise
protected by law.
(d) This information shall be used
solely for analytical or statistical
purposes or for a proceeding under
§ 801.6.
(e) No official or employee (including
consultants and contractors and their
employees) shall publish or make
available to any other person any
information collected under the Act in
such a manner that the person to whom
the information relates can be
specifically identified.
(f) Reports and copies of reports
prepared pursuant to the Act are
confidential and their submission or
disclosure shall not be compelled by
any person without the prior written
permission of the person filing the
report and the customer of such person
where the information supplied is
identifiable as being derived from the
records of such customer.
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§ 801.6
Penalties.
(a) Civil penalties. Whoever fails to
furnish any information required by the
Act or to comply with any rule,
regulation, order or instruction
promulgated under the Act shall be
subject to a civil penalty of not less than
$2,500, and not more than $25,000, and
to injunctive relief commanding such
person to comply, or both (see 22 U.S.C.
3105(a) and (b)). These civil penalties
are subject to inflationary adjustments
(15 CFR 6.4.).
(b) Criminal penalties. Whoever
willfully fails to submit any information
required by the Act or willfully violates
any rule, regulation, order or instruction
promulgated under the Act, upon
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conviction, shall be fined not more than
$10,000 and, if an individual, may be
imprisoned for not more than one year,
or both. Any officer, director, employee,
or agent of any corporation who
knowingly participates in such
violations, upon conviction, may be
punished by a like fine, imprisonment
or both (see 22 U.S.C. 3105(c)).
PART 806—[REMOVED AND
RESERVED]
2. Under the authority of 5 U.S.C. 301,
part 806 is removed and reserved.
■
PART 807—[REMOVED AND
RESERVED]
3. Under the authority of 5 U.S.C. 301,
part 806 is removed and reserved.
■
[FR Doc. 2012–9849 Filed 4–23–12; 8:45 am]
BILLING CODE P
DEPARTMENT OF HOMELAND
SECURITY
U.S. Customs and Border Protection
DEPARTMENT OF THE TREASURY
19 CFR Parts 133 and 151
[USCBP–2012–0011; CBP Dec. 12–10]
RIN 1515–AD87
Disclosure of Information for Certain
Intellectual Property Rights Enforced
at the Border
U.S. Customs and Border
Protection, Department of Homeland
Security; Department of the Treasury.
ACTION: Interim rule; solicitation of
comments.
AGENCIES:
This document amends, on an
interim basis, the U.S. Customs and
Border Protection (CBP) regulations
pertaining to importations of
merchandise bearing recorded
trademarks or recorded trade names.
The interim amendments, effective
upon publication in the Federal
Register, allow CBP, subject to
limitations, to disclose to an intellectual
property right holder information
appearing on merchandise or its retail
packaging that may comprise
information otherwise protected by the
Trade Secrets Act, for the purpose of
assisting CBP in determining whether
the merchandise bears a counterfeit
mark. Such information will be
provided to the right holder in the form
of photographs or a sample of the goods
and/or their retail packaging in their
condition as presented to CBP for
examination and alphanumeric codes
SUMMARY:
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appearing on the goods. The
information will include, but not be
limited to, serial numbers, universal
product codes, and stock keeping unit
(SKU) numbers appearing on the
imported merchandise and its retail
packaging, whether in alphanumeric or
other formats. These changes provide a
pre-seizure procedure for disclosing
information about imported
merchandise suspected of bearing a
counterfeit mark for the limited purpose
of obtaining the right holder’s assistance
in determining whether the mark is
counterfeit or not.
DATES: Effective April 24, 2012;
comments must be received on or before
June 25, 2012.
ADDRESSES: You may submit comments,
identified by docket number, by one of
the following methods:
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments
via docket number USCBP 2012–0011.
• Mail: Trade and Commercial
Regulations Branch, Office of
International Trade, Regulations and
Rulings, U.S. Customs and Border
Protection, 799 9th Street NW. (Mint
Annex), Washington, DC 20229–1179.
Instructions: All submissions received
must include the agency name and
docket number for this interim
rulemaking. All comments received will
be posted without change to https://
www.regulations.gov, including any
personal information provided. For
detailed instructions on submitting
comments and additional information
on the rulemaking process, see the
‘‘Public Participation’’ heading of the
SUPPLEMENTARY INFORMATION section of
this document.
Docket: For access to the docket to
read background documents or
comments received, go to https://
www.regulations.gov. Submitted
comments may also be inspected during
regular business days between the hours
of 9 a.m. and 4:30 p.m. at the Trade and
Commercial Regulations Branch, Office
of International Trade, Regulations and
Rulings, U.S. Customs and Border
Protection, 799 9th Street NW., 5th
Floor, Washington, DC. Arrangements to
inspect submitted comments should be
made in advance by calling Joseph Clark
at (202) 325–0118.
FOR FURTHER INFORMATION CONTACT: Paul
Pizzeck, Intellectual Property Rights
Branch, Regulations and Rulings, Office
of International Trade, (202) 325–0020.
SUPPLEMENTARY INFORMATION:
Public Participation
Interested persons are invited to
participate in this rulemaking by
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submitting written data, views, or
arguments on all aspects of the interim
rule. CBP also invites comments that
relate to the economic, environmental,
or federalism effects that might result
from this rule. If appropriate to a
specific comment, the commenter
should reference the specific portion of
the rule, explain the reason for any
recommended change, and include data,
information, or authority that support
such recommended change.
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Background
Purpose of the Interim Amendments
CBP is responsible for border
enforcement of intellectual property
rights laws and regulations. One of the
primary purposes of CBP’s efforts to
interdict counterfeit imported goods is
to protect the public from unsafe and
substandard products, which, in some
cases, can be a threat to public health
and safety, and also a threat to the
national security. In particular,
counterfeit integrated circuits and
electronic components can find their
way into critical manufacturing,
military, infrastructure, and consumer
product applications. In fact, inquiries
conducted by Congress and the
Department of Defense (DoD) have
revealed that counterfeit electronic
components, including counterfeit
integrated circuits, have entered
military and government supply chains,
posing a serious threat to our military
and government personnel and
infrastructure.
Due to the development of
sophisticated techniques of some
counterfeiters and the highly technical
nature of some imported goods, it has
become increasingly difficult for CBP to
determine whether some goods
suspected of bearing counterfeit marks
in fact bear counterfeit marks. The
current regulation pertaining to goods
bearing counterfeit marks does not
provide a procedure for disclosing
information to right holders to assist
CBP in its efforts to identify goods
bearing infringing marks, prior to CBP’s
making a determination to seize.
In this document, CBP is making
several changes to subpart C of part 133
of the CBP regulations (19 CFR part 133)
regarding the detention of suspect
merchandise and the disclosure of
information to right holders during
detention of goods bearing potentially
counterfeit marks and after seizure of
goods bearing counterfeit marks. These
changes, made on an interim basis and
effective on the date of their publication
in the Federal Register, include a
clarifying revision of the current
regulation’s definition of ‘‘counterfeit
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trademark’’ and an addition of a 30-day
detention period relative to goods
suspected of bearing counterfeit marks.
These changes will enhance CBP’s
enforcement capability against
increasingly sophisticated counterfeit
products that threaten the public health
and safety and national security.
The Trade Secrets Act and Disclosure
Under the Current Regulation
The Trade Secrets Act (18 U.S.C.
1905) bars the unauthorized disclosure
by government officials of any
information received in the course of
their employment or official duties
when such information (also referred to
collectively as ‘‘protected information’’)
‘‘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.’’ Case law interpreting the
statute states that the Act ‘‘appears to
cover practically any commercial or
financial data collected by any Federal
employee from any source’’ and that the
‘‘comprehensive catalogue of items’’
listed in the Act ‘‘accomplishes
essentially the same thing as if it had
simply referred to ‘all officially
collected commercial information’ or
‘all business and financial data
received.’ ’’ See CNA Fin. Corp. v.
Donovan, 830 F.2d 1132, 1140 (D.C. Cir.
1987).
Specifically, the Trade Secrets Act
protects those required to furnish
commercial or financial information to
the government by shielding them from
the competitive disadvantage that could
result from disclosure of that
information by the government. In turn,
this protection encourages those
providing information to the
government to furnish accurate and
reliable information that is useful to the
government.
The protection afforded by the Trade
Secrets Act, however, must be balanced
against the important and legitimate
interests of government. The Trade
Secrets Act permits those covered by the
Act to disclose confidential information
when the disclosure is otherwise
‘‘authorized by law,’’ which includes
both statutes expressly authorizing
disclosure and properly promulgated
substantive agency regulations
authorizing disclosure based on a valid
statutory interpretation. See Chrysler v.
Brown, 441 U.S. 281, 294–316 (1979).
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The National Defense Authorization Act
for Fiscal Year 2012
Section 818(g) of the National Defense
Authorization Act for Fiscal Year 2012
(NDAA) (Pub. L. 112–81) provides:
If United States Customs and Border
Protection suspects a product of being
imported in violation of section 42 of the
Lanham Act, and subject to any applicable
bonding requirements, the Secretary of the
Treasury may share information appearing
on, and unredacted samples of, products and
their packaging and labels, or photographs of
such products, packaging, and labels, with
the rightholders of the trademarks suspected
of being copied or simulated for purposes of
determining whether the products are
prohibited from importation pursuant to such
section.
The NDAA enhances CBP’s capability
to enforce laws protecting marks by
authorizing the agency to disclose
certain information to right holders to
assist CBP officers in determining
whether suspect merchandise bears
counterfeit marks.
Further Statutory Analysis Concerning
Disclosure of Commercial Information
Under the NDAA, CBP is authorized
by law to make certain disclosures. One
reading of the language of the NDAA,
however, is that disclosure is limited to
trademarks and does not include other
marks noted under the Lanham Act
(certification, collective, and service
marks). Moreover, some have suggested
that the legislative history of the Act
indicates that certain legislators
intended that the exception to the Trade
Secrets Act created by the NDAA is to
apply only to military sales.
Consequently, CBP, in publishing this
interim rule, is exercising regulatory
authority to remove any ambiguity
about CBP’s authority to disclose
information with regard to certification,
collective, and service marks, as well as
trademarks, and to further clarify that
the disclosure authority extends to all
imports and not just those associated
with military sales.
As noted above, the Secretary of the
Treasury (the Secretary) has authority to
disclose information otherwise
protected under the Trade Secrets Act
when such disclosures are authorized
by law. Disclosures meeting the
‘‘authorized by law’’ standard of the
Trade Secrets Act include those made
under regulations that are (1) in
compliance with the provisions of the
Administrative Procedure Act (5 U.S.C.
551 et seq.) and (2) based on a valid
statute. Regarding CBP’s statutory
authority to disclose certain importation
information to right holders, various
provisions in titles 15 and 19 of the
United States Code (U.S.C.) authorize
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CBP to promulgate regulations to
enforce prohibitions against the
importation of merchandise that
infringes intellectual property rights.
Section 42 of the Lanham Act
(15 U.S.C. 1124) prohibits the
importation of merchandise bearing a
mark which copies or simulates a
registered mark. In order to aid CBP in
enforcing this prohibition, section 42
provides for the recordation of
registered marks under such regulations
as the Secretary of the Treasury shall
prescribe. Sections 526(e) and 595a(c) of
the Tariff Act of 1930, as amended (19
U.S.C. 1526(e), and
19 U.S.C. 1595a(c)), prohibit the
importation of merchandise bearing a
counterfeit mark and the introduction or
attempted introduction into the United
States of merchandise or packaging in
which, inter alia, trademark or trade
name protection violations are involved,
including, but not limited to violations
of sections 1124, 1125 and 1127 of Title
15 (sections 42, 32 and 45 of the
Lanham Act). Moreover, section 526(e)
of the Tariff Act of 1930, as amended,
(19 U.S.C. 1526(e)) requires CBP to
notify the owner of the trademark when
merchandise bearing a counterfeit mark
within the meaning of section 1127 of
Title 15 and imported in violation of
section 1124 of Title 15 is seized.
Section 624 of the Tariff Act of 1930, as
amended (19 U.S.C. 1624), authorizes
the Secretary of the Treasury to
promulgate regulations to carry out the
provisions of the Tariff Act of 1930, as
amended. Collectively, these statutes
authorize the Secretary of the Treasury,
in instances where identification of
suspected violative merchandise
requires the assistance of right holders
for the specific and limited purpose of
determining whether imported
merchandise bears a counterfeit mark, to
provide for the disclosure of certain
information to right holders upon
importation.
The interim rule is intended to
support the statutory enforcement
scheme discussed above and to allow
CBP officers, without violating the
Trade Secrets Act, to disclose
information that might reveal otherwise
confidential commercial or financial
information in order to assist CBP in
identifying merchandise bearing
counterfeit marks at the time of
detention.
Notice Provision To Prevent Economic
Harm to Legitimate Importers
In addition, CBP is putting in place a
procedure that provides the importer
the opportunity to demonstrate to CBP,
within seven (7) days (exclusive of
weekends and holidays) of a notice of
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detention, that the article in question
does not bear a counterfeit mark, before
releasing information to the right
holder. Only absent such a
demonstration by the importer will
information, images, or samples be
shared with the right holder. This
procedural safeguard is intended to
achieve the policy goals of the NDAA in
a manner consistent with maintaining
the flow of information to the
government, fostering competition,
keeping prices low, and maintaining
consumer choice.
Information that is covered by the
Trade Secrets Act and obtained from an
importer, including the importer’s name
and place of business, manufacturer’s
identity, supply chain, and other
confidential commercial or financial
information, if disclosed, could provide
insights into the importer’s business
operations, processes, style of work, and
income, all inuring to the importer’s
competitive disadvantage. For example,
product coding, such as serial numbers,
and SKUs often incorporates
information about where and when a
product was manufactured, as well as
other information that could allow one
to identify information about the
manufacture of the product. It is
likewise possible that such information
could directly or indirectly reveal the
identity of wholesalers, exporters, or
other parties in the importer’s supply
chain and the timing and pricing of the
transactions involving those entities.
Such confidential commercial or
financial information, if not properly
protected, could be used by competitors
to an importer’s economic disadvantage,
potentially resulting in reduced
competition and consumer choice with
attendant increases in prices.
Interim Amendments Concerning PreSeizure Disclosure of Information
This document is amending the CBP
regulations to allow CBP to provide
right holders, for the limited purpose of
assisting CBP in making infringement
determinations, with any information
appearing on merchandise and/or its
retail packaging, or a sample of the
merchandise including its retail
packaging, when CBP reasonably
suspects that such merchandise and/or
packaging may bear a counterfeit mark
(see § 133.21(b)(1) of this rule). This
disclosure of information, which
includes images (photographs) or
samples, as appropriate, could
potentially disclose confidential
commercial or financial information
otherwise protected under the Trade
Secrets Act. The interim regulation also
includes a procedure that allows an
importer, prior to release of the
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information, the opportunity to
establish, within seven (7) days
(excluding weekends and holidays) of a
notice of detention, that the marks are
not counterfeit. Only absent such a
demonstration by the importer will the
disclosure be made to the right holder.
In conjunction with the interim rule’s
procedure outlined above, CBP is
adding to the regulation a 30-day period
(and an extension, if requested by the
importer for good cause) to commence
upon presentation of the goods for
examination, within which a
determination with respect to
admissibility will be made (see
§ 133.21(b) of this rule). Under the
interim regulation, CBP will issue the
notice of detention within five days of
its detention decision, starting the
seven-day period within which the
importer may demonstrate that the
goods do not bear a counterfeit mark.
Only if such demonstration is untimely
or insufficient will CBP release
information to the right holder.
In brief summation, this change to the
regulations concerning counterfeit
marks, in principal part, allows CBP,
prior to seizure, to release to right
holders information appearing on goods
(and/or their retail packaging), and on
images and samples, that are not
redacted, i.e., images showing the
merchandise (and/or its retail
packaging) in its condition as presented
for examination and samples (and/or its
retail packaging) in their condition as so
presented. This allows the right holder
to assist CBP in its enforcement effort to
prevent the entry of goods bearing
counterfeit marks. However, in certain
circumstances, DHS criminal
investigators may provide right holders
such information or samples without
notifying the importer, for example to
obtain from the right holder evidence
that will assist the investigators in
demonstrating probable cause when
they seek a judicial order in the course
of a criminal or national security
investigation.
Other Interim Amendments To Clarify
and Maintain Consistency With the
Current Regulations
As mentioned previously, CBP is also
making a clarifying amendment to the
definition of ‘‘counterfeit trademark.’’
The amended definition of ‘‘counterfeit
mark’’ uses the term ‘‘mark’’ instead of
‘‘trademark’’ (see § 133.21(a) of this
rule).
In addition, CBP is amending the
regulations pertaining to goods bearing
copying or simulating marks and
restricted gray market goods to correct
an inconsistency in the regulatory
scheme for such goods (19 CFR 133.22(f)
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and 133.23(f), respectively). The 30-day
detention period for these goods is set
forth in § 133.25 of the CBP regulations,
and this procedure provides for
extension of the detention period
applicable to these goods upon good
cause shown. Therefore, CBP is
removing from §§ 133.22(f) and
133.23(f) inconsistent language that
appears to restrict the respective
detention periods to only 30 days.
Lastly, CBP is amending the
provisions of 19 CFR 151.16(a)
regarding detention of merchandise to
make them consistent with the interim
regulations in this rulemaking. The
regulations pertaining to detention of
merchandise exclude from their
applicability imported articles
suspected of being infringing copies or
phonorecords, imported goods bearing
marks which are confusingly similar to
recorded trademarks, and imported
restricted gray market merchandise. The
interim amendment to section 151.16(a)
excludes imports of goods suspected of
bearing counterfeit marks from the
applicability of the regulations
pertaining to detention of merchandise.
Inapplicability of Notice and Delayed
Effective Date Requirements
As explained previously in this
document (see ‘‘Purpose of the Interim
Amendments’’ subsection in the
Background section), CBP is responsible
for enforcement of intellectual property
rights laws and regulations at the
border. An important goal of CBP efforts
to interdict counterfeit imported goods
is to protect the public from unsafe and
substandard counterfeit products. In
addition, counterfeit goods present a
threat to national security and our
critical infrastructure. Counterfeit
integrated circuits and electronic
components can be used in critical
manufacturing, military, infrastructure,
and consumer product applications.
Inquiries conducted by Congress and
the DoD have revealed that counterfeit
electronic components, including
counterfeit integrated circuits, have
entered military and government supply
chains, posing a serious threat to our
military and government personnel and
infrastructure. Moreover, interdiction of
counterfeit goods has been made
increasingly difficult due to the
development of sophisticated
techniques used by some counterfeiters
and the highly technical nature of some
imported goods.
Because this rule addresses an
immediate need to address without
delay vulnerabilities in our military and
government procurement processes, as
well as an immediate need to interdict
goods bearing counterfeit marks that
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pose health and safety risks to the
American public, CBP has determined
that it would be contrary to the public
interest to delay the effective date of this
rule. Therefore, CBP has determined
that in accordance with the sections
553(b)(B) and 553(c) of the
Administrative Procedure Act (5 U.S.C
553), good cause exists to dispense with
the prior comment requirement and
delayed effective date requirement.
Subsection 818(g) of the NDAA was
effective upon enactment, but the
authority it provides the Secretary is
discretionary and not mandatory.
Accordingly, although some may
interpret the statute to allow the
Secretary to exercise his discretionary
authority without amending CBP’s
existing regulations, CBP believes that
amending the existing, more restrictive
regulations is consistent with the
requirements of the Administrative
Procedure Act and will eliminate any
legal ambiguity. The interim regulations
also promote transparency and provide
an important opportunity to gather
feedback and input from stakeholders
regarding implementation of § 818(g) of
the NDAA.
Executive Orders 12866 and 13563
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.
Because a notice of proposed
rulemaking is not required under
section 553(b)(3)(B) of the APA for the
reasons described in the Inapplicability
of Notice and Delayed Effective Date
Requirements section of this document,
the provisions of the Regulatory
Flexibility Act, as amended (5 U.S.C.
601 et seq.), do not apply to this
rulemaking. Accordingly, this interim
rule is not subject to the regulatory
analysis or other requirements of 5
U.S.C. 603 and 604.
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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.
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
Notices 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.
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
For the reasons stated above in the
preamble, CBP is amending parts 133
and 151 of title 19 of the Code of
Federal Regulations (19 CFR parts 133
and 151) to read as follows:
PART 133—TRADEMARKS, TRADE
NAMES, AND COPYRIGHTS
Regulatory Flexibility Act
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Signing Authority
1. The general authority citation for
part 133 and the specific authority
citation for § 133.21 through 133.25 are
revised, 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.
*
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2. The heading for subpart C is revised
to read as follows:
■
Subpart C—Importations Bearing
Recorded Marks or Trade Names
3. Section 133.21 is revised to read as
follows:
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§ 133.21 Articles suspected of bearing
counterfeit marks.
(a) Counterfeit mark defined. A
‘‘counterfeit mark’’ is a spurious mark
that is identical with, or substantially
indistinguishable from, a mark
registered on the Principal Register of
the U.S. Patent and Trademark Office.
(b) Detention. CBP may detain any
article of domestic or foreign
manufacture imported into the United
States that bears a mark suspected 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 thirty days from the date on
which the merchandise is presented for
examination. The 30-day time period
may be extended for up to an additional
thirty days for good cause shown by the
importer. In accordance with 19 U.S.C.
1499, if after the detention period and
any authorized extensions the article is
not released the article will be deemed
excluded for the purposes of 19 U.S.C.
1514(a)(4).
(1) Notice to importer of detention
and possible disclosure. Within five
days (excluding weekends and holidays)
from the date of a decision to detain,
CBP will notify the importer in writing
of the detention. The notice will inform
the importer that a disclosure of
information concerning the detained
merchandise may be made to the owner
of the mark to assist CBP in determining
whether any marks are counterfeit,
unless the importer presents
information within seven days of the
notification (excluding weekends and
holidays) establishing to CBP’s
satisfaction that the detained
merchandise does not bear a counterfeit
mark. CBP may disclose information
appearing on the merchandise and/or its
retail packaging, images (including
photographs) of the merchandise and/or
its retail packaging in its condition as
presented for examination, or a sample
of the merchandise and/or its retail
packaging in its condition as presented
for examination. The release
(disclosure) of a sample is subject to the
bond and return requirements of
paragraph (c) of this section. Where the
importer does not timely provide
information or the information provided
is insufficient for CBP to determine that
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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.
Disclosure under this section 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, in
alphanumeric or other formats.
(2) Notice to owner of the mark and
disclosure of information. From the time
merchandise is presented for
examination until the time a notice of
detention is issued, CBP may disclose to
the owner of the mark any of the
following information in order to obtain
assistance in determining whether an
imported article bears a counterfeit
mark. Once a notice of detention is
issued, CBP will disclose to the owner
of the mark the following information,
if available, within thirty days
(excluding weekends and holidays)
from the date of detention:
(i) The date of importation;
(ii) The port of entry;
(iii) The description of the
merchandise from the entry;
(iv) The quantity involved; and
(v) The country of origin of the
merchandise.
(3) Redacted images and samples
made available to the owner of the
mark. Notwithstanding the notice and
seven-day response procedure of
paragraph (b)(1) of this section, CBP
may, at any time after presentation of
the merchandise for examination,
provide to the owner of the mark images
or a sample of the detained merchandise
or its retail packaging, 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 will release to the
owner of the mark a sample under this
paragraph when the owner furnishes
CBP a bond in the form and amount
specified by the port director,
conditioned to hold the United States,
its officers and employees, and the
importer or owner of the imported
article harmless from any loss or
damage to the sample resulting from the
furnishing of a 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
PO 00000
Frm 00039
Fmt 4700
Sfmt 4700
24379
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)(3) was (damaged/destroyed/
lost) during examination, testing, or
other use.’’
(c) Unredacted samples made
available to the owner of the mark prior
to seizure. A sample of the imported
merchandise may be released prior to
seizure to the owner of the mark in
accordance with paragraph (b)(1) of this
section. CBP will release to the owner
of the mark a sample under this
paragraph when the owner furnishes
CBP a bond in the form and amount
specified by the port director,
conditioned to hold the United States,
its officers and employees, and the
importer or owner of the imported
article harmless from any loss or
damage to the sample resulting from the
furnishing of a 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) Seizure. 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 information,
if available, within thirty days
(excluding weekends and holidays)
from the date of the notice of seizure:
(1) The date of importation;
(2) The port of entry;
(3) The description of the
merchandise from the entry;
(4) The quantity involved;
(5) The name and address of the
manufacturer;
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Federal Register / Vol. 77, No. 79 / Tuesday, April 24, 2012 / Rules and Regulations
(6) The country of origin of the
merchandise;
(7) The name and address of the
exporter; and
(8) The name and address of the
importer.
(e) Samples made available to the
owner of the mark after seizure. At any
time following a seizure of merchandise
bearing a counterfeit mark under this
section, CBP may provide a sample and
its retail packaging, in its condition as
presented for examination, to the owner
of the mark for examination, testing, or
other use in pursuit of a related private
civil remedy for trademark
infringement. To obtain a sample under
this paragraph, the owner of the mark
must furnish CBP a bond in the form
and amount specified by the port
director, conditioned to hold the United
States, its officers and employees, and
the importer or owner of the imported
article harmless from any loss or
damage to the sample resulting from the
furnishing of a 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(e)
was (damaged/destroyed/lost) during
examination, testing, or other use.’’
(f) Consent of the mark owner; failure
to make appropriate disposition. The
owner of the mark, within thirty days
from notification of seizure, may
provide written consent to the importer
allowing the importation of the seized
merchandise in its condition as
imported or its exportation, entry after
obliteration of the mark, or other
appropriate disposition. Otherwise, the
merchandise will be disposed of in
accordance with § 133.52 of this part,
subject to the importer’s right to petition
for relief from forfeiture under the
provisions of part 171 of this chapter.
§ 133.22
mstockstill on DSK4VPTVN1PROD with RULES
§ 133.26
[Amended]
6. Section 133.26 is amended by
removing from the first sentence the
words ‘‘subject to the restrictions of
§ 133.22 or § 133.23 of this subpart’’ and
adding in their place the words ‘‘subject
to the restrictions of § 133.21, § 133.22
or § 133.23 of this subpart’’.
■
PART 151—EXAMINATION, SAMPLING
AND TESTING OF MERCHANDISE
7. 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;
*
*
*
*
*
8. Section 151.16(a) is revised to read
as follows:
■
§ 151.16
Detention of merchandise.
(a) Exemptions from applicability.
The provisions of this section are not
applicable to detentions effected by CBP
on behalf of other agencies of the U.S.
Government in whom the determination
of admissibility is vested and to
detentions arising from possibly
piratical copies (see part 133, subpart E,
of this Chapter), imports of articles
bearing counterfeit marks or suspected
counterfeit marks, goods bearing marks
which are confusingly similar to
recorded trademarks, or restricted gray
market merchandise (see part 133,
subpart C, of this chapter.)
*
*
*
*
*
David V. Aguilar,
Acting Commissioner, U.S. Customs and
Border Protection.
Approved: April 18, 2012.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 2012–9762 Filed 4–23–12; 8:45 am]
BILLING CODE 9111–14–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
[Amended]
4. Section 133.22(f), first sentence, is
amended by removing the words
‘‘within the 30-day period of detention’’
and adding in their place the words
‘‘within the period of detention as
provided in § 133.25 of this subpart’’.
■
§ 133.23
‘‘within the 30-day period of detention’’
and adding in their place the words
‘‘within the period of detention as
provided in § 133.25 of this subpart’’.
[Amended]
5. Section 133.23(f), first sentence, is
amended by removing the words
■
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26 CFR Part 1
[TD 9585]
RIN 1545–BI41
Treatment of Gain Recognized With
Respect to Stock in Certain Foreign
Corporations Upon Distributions
Internal Revenue Service (IRS),
Treasury.
AGENCY:
PO 00000
Frm 00040
Fmt 4700
Sfmt 4700
Final regulations and removal of
temporary regulations.
ACTION:
This document contains final
regulations relating to the
characterization of gain recognized with
respect to stock in certain foreign
corporations upon distributions. The
regulations finalize proposed
regulations and remove temporary
regulations that characterize gain
recognized with respect to stock in
foreign corporations upon distributions
as a deemed dividend in certain
situations. The regulations affect certain
persons that recognize gain with respect
to stock in connection with the receipt
of a distribution of property from a
foreign corporation.
DATES: Effective Date: These regulations
are effective on April 24, 2012.
Applicability Date: These regulations
apply to distributions occurring on or
after February 10, 2009.
FOR FURTHER INFORMATION CONTACT:
Ryan A. Bowen, (202) 622–3860 (not a
toll-free number).
SUPPLEMENTARY INFORMATION:
SUMMARY:
Background
On February 11, 2009, the IRS and the
Department of the Treasury (the
Treasury Department) published
temporary and proposed regulations in
the Federal Register (REG–147636–08,
74 FR 6824; TD 9444, 2009–1 CB 603)
(the temporary or proposed regulations,
as applicable, and collectively, the 2009
regulations). The 2009 regulations, in
part, provide that for purposes of
section 1248(a), gain recognized under
section 301(c)(3) in connection with the
receipt of a distribution of property from
a foreign corporation with respect to its
stock shall be treated as gain from the
sale or exchange of the stock of such
foreign corporation (2009 section 1248
regulations).
The 2009 regulations also addressed
the application of section 367 to certain
related party stock transactions that are
recharacterized under section 304. As
described in Notice 2012–15 (2012–9
IRB 495 (February 27, 2012)) (see
§ 601.601(d)(2)(ii)(b) of this chapter), the
IRS and the Treasury Department intend
to amend the regulations under section
367 to provide that the section 351
exchange that is deemed to occur in a
section 304 transaction is subject to
section 367(a) and (b), as applicable.
Accordingly, this Treasury decision
does not finalize the portions of the
2009 regulations that address the
interaction of sections 304 and 367.
Those portions of the 2009 regulations
will be withdrawn in separate published
guidance (REG–104400–12).
E:\FR\FM\24APR1.SGM
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Agencies
[Federal Register Volume 77, Number 79 (Tuesday, April 24, 2012)]
[Rules and Regulations]
[Pages 24375-24380]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-9762]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
DEPARTMENT OF THE TREASURY
19 CFR Parts 133 and 151
[USCBP-2012-0011; CBP Dec. 12-10]
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: Interim rule; solicitation of comments.
-----------------------------------------------------------------------
SUMMARY: This document amends, on an interim basis, the U.S. Customs
and Border Protection (CBP) regulations pertaining to importations of
merchandise bearing recorded trademarks or recorded trade names. The
interim amendments, effective upon publication in the Federal Register,
allow CBP, subject to limitations, to disclose to an intellectual
property right holder information appearing on merchandise or its
retail packaging that may comprise information otherwise protected by
the Trade Secrets Act, for the purpose of assisting CBP in determining
whether the merchandise bears a counterfeit mark. Such information will
be provided to the right holder in the form of photographs or a sample
of the goods and/or their retail packaging in their condition as
presented to CBP for examination and alphanumeric codes appearing on
the goods. The information will include, but not be limited to, serial
numbers, universal product codes, and stock keeping unit (SKU) numbers
appearing on the imported merchandise and its retail packaging, whether
in alphanumeric or other formats. These changes provide a pre-seizure
procedure for disclosing information about imported merchandise
suspected of bearing a counterfeit mark for the limited purpose of
obtaining the right holder's assistance in determining whether the mark
is counterfeit or not.
DATES: Effective April 24, 2012; comments must be received on or before
June 25, 2012.
ADDRESSES: You may submit comments, identified by docket number, by one
of the following methods:
Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments via docket number USCBP
2012-0011.
Mail: Trade and Commercial Regulations Branch, Office of
International Trade, Regulations and Rulings, U.S. Customs and Border
Protection, 799 9th Street NW. (Mint Annex), Washington, DC 20229-1179.
Instructions: All submissions received must include the agency name
and docket number for this interim rulemaking. All comments received
will be posted without change to https://www.regulations.gov, including
any personal information provided. For detailed instructions on
submitting comments and additional information on the rulemaking
process, see the ``Public Participation'' heading of the SUPPLEMENTARY
INFORMATION section of this document.
Docket: For access to the docket to read background documents or
comments received, go to https://www.regulations.gov. Submitted comments
may also be inspected during regular business days between the hours of
9 a.m. and 4:30 p.m. at the Trade and Commercial Regulations Branch,
Office of International Trade, Regulations and Rulings, U.S. Customs
and Border Protection, 799 9th Street NW., 5th Floor, Washington, DC.
Arrangements to inspect submitted comments should be made in advance by
calling Joseph Clark at (202) 325-0118.
FOR FURTHER INFORMATION CONTACT: Paul Pizzeck, Intellectual Property
Rights Branch, Regulations and Rulings, Office of International Trade,
(202) 325-0020.
SUPPLEMENTARY INFORMATION:
Public Participation
Interested persons are invited to participate in this rulemaking by
[[Page 24376]]
submitting written data, views, or arguments on all aspects of the
interim rule. CBP also invites comments that relate to the economic,
environmental, or federalism effects that might result from this rule.
If appropriate to a specific comment, the commenter should reference
the specific portion of the rule, explain the reason for any
recommended change, and include data, information, or authority that
support such recommended change.
Background
Purpose of the Interim Amendments
CBP is responsible for border enforcement of intellectual property
rights laws and regulations. One of the primary purposes of CBP's
efforts to interdict counterfeit imported goods is to protect the
public from unsafe and substandard products, which, in some cases, can
be a threat to public health and safety, and also a threat to the
national security. In particular, counterfeit integrated circuits and
electronic components can find their way into critical manufacturing,
military, infrastructure, and consumer product applications. In fact,
inquiries conducted by Congress and the Department of Defense (DoD)
have revealed that counterfeit electronic components, including
counterfeit integrated circuits, have entered military and government
supply chains, posing a serious threat to our military and government
personnel and infrastructure.
Due to the development of sophisticated techniques of some
counterfeiters and the highly technical nature of some imported goods,
it has become increasingly difficult for CBP to determine whether some
goods suspected of bearing counterfeit marks in fact bear counterfeit
marks. The current regulation pertaining to goods bearing counterfeit
marks does not provide a procedure for disclosing information to right
holders to assist CBP in its efforts to identify goods bearing
infringing marks, prior to CBP's making a determination to seize.
In this document, CBP is making several changes to subpart C of
part 133 of the CBP regulations (19 CFR part 133) regarding the
detention of suspect merchandise and the disclosure of information to
right holders during detention of goods bearing potentially counterfeit
marks and after seizure of goods bearing counterfeit marks. These
changes, made on an interim basis and effective on the date of their
publication in the Federal Register, include a clarifying revision of
the current regulation's definition of ``counterfeit trademark'' and an
addition of a 30-day detention period relative to goods suspected of
bearing counterfeit marks. These changes will enhance CBP's enforcement
capability against increasingly sophisticated counterfeit products that
threaten the public health and safety and national security.
The Trade Secrets Act and Disclosure Under the Current Regulation
The Trade Secrets Act (18 U.S.C. 1905) bars the unauthorized
disclosure by government officials of any information received in the
course of their employment or official duties when such information
(also referred to collectively as ``protected information'') ``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.'' Case law
interpreting the statute states that the Act ``appears to cover
practically any commercial or financial data collected by any Federal
employee from any source'' and that the ``comprehensive catalogue of
items'' listed in the Act ``accomplishes essentially the same thing as
if it had simply referred to `all officially collected commercial
information' or `all business and financial data received.' '' See CNA
Fin. Corp. v. Donovan, 830 F.2d 1132, 1140 (D.C. Cir. 1987).
Specifically, the Trade Secrets Act protects those required to
furnish commercial or financial information to the government by
shielding them from the competitive disadvantage that could result from
disclosure of that information by the government. In turn, this
protection encourages those providing information to the government to
furnish accurate and reliable information that is useful to the
government.
The protection afforded by the Trade Secrets Act, however, must be
balanced against the important and legitimate interests of government.
The Trade Secrets Act permits those covered by the Act to disclose
confidential information when the disclosure is otherwise ``authorized
by law,'' which includes both statutes expressly authorizing disclosure
and properly promulgated substantive agency regulations authorizing
disclosure based on a valid statutory interpretation. See Chrysler v.
Brown, 441 U.S. 281, 294-316 (1979).
The National Defense Authorization Act for Fiscal Year 2012
Section 818(g) of the National Defense Authorization Act for Fiscal
Year 2012 (NDAA) (Pub. L. 112-81) provides:
If United States Customs and Border Protection suspects a
product of being imported in violation of section 42 of the Lanham
Act, and subject to any applicable bonding requirements, the
Secretary of the Treasury may share information appearing on, and
unredacted samples of, products and their packaging and labels, or
photographs of such products, packaging, and labels, with the
rightholders of the trademarks suspected of being copied or
simulated for purposes of determining whether the products are
prohibited from importation pursuant to such section.
The NDAA enhances CBP's capability to enforce laws protecting marks
by authorizing the agency to disclose certain information to right
holders to assist CBP officers in determining whether suspect
merchandise bears counterfeit marks.
Further Statutory Analysis Concerning Disclosure of Commercial
Information
Under the NDAA, CBP is authorized by law to make certain
disclosures. One reading of the language of the NDAA, however, is that
disclosure is limited to trademarks and does not include other marks
noted under the Lanham Act (certification, collective, and service
marks). Moreover, some have suggested that the legislative history of
the Act indicates that certain legislators intended that the exception
to the Trade Secrets Act created by the NDAA is to apply only to
military sales.
Consequently, CBP, in publishing this interim rule, is exercising
regulatory authority to remove any ambiguity about CBP's authority to
disclose information with regard to certification, collective, and
service marks, as well as trademarks, and to further clarify that the
disclosure authority extends to all imports and not just those
associated with military sales.
As noted above, the Secretary of the Treasury (the Secretary) has
authority to disclose information otherwise protected under the Trade
Secrets Act when such disclosures are authorized by law. Disclosures
meeting the ``authorized by law'' standard of the Trade Secrets Act
include those made under regulations that are (1) in compliance with
the provisions of the Administrative Procedure Act (5 U.S.C. 551 et
seq.) and (2) based on a valid statute. Regarding CBP's statutory
authority to disclose certain importation information to right holders,
various provisions in titles 15 and 19 of the United States Code
(U.S.C.) authorize
[[Page 24377]]
CBP to promulgate regulations to enforce prohibitions against the
importation of merchandise that infringes intellectual property rights.
Section 42 of the Lanham Act (15 U.S.C. 1124) prohibits the
importation of merchandise bearing a mark which copies or simulates a
registered mark. In order to aid CBP in enforcing this prohibition,
section 42 provides for the recordation of registered marks under such
regulations as the Secretary of the Treasury shall prescribe. Sections
526(e) and 595a(c) of the Tariff Act of 1930, as amended (19 U.S.C.
1526(e), and 19 U.S.C. 1595a(c)), prohibit the importation of
merchandise bearing a counterfeit mark and the introduction or
attempted introduction into the United States of merchandise or
packaging in which, inter alia, trademark or trade name protection
violations are involved, including, but not limited to violations of
sections 1124, 1125 and 1127 of Title 15 (sections 42, 32 and 45 of the
Lanham Act). Moreover, section 526(e) of the Tariff Act of 1930, as
amended, (19 U.S.C. 1526(e)) requires CBP to notify the owner of the
trademark when merchandise bearing a counterfeit mark within the
meaning of section 1127 of Title 15 and imported in violation of
section 1124 of Title 15 is seized. Section 624 of the Tariff Act of
1930, as amended (19 U.S.C. 1624), authorizes the Secretary of the
Treasury to promulgate regulations to carry out the provisions of the
Tariff Act of 1930, as amended. Collectively, these statutes authorize
the Secretary of the Treasury, in instances where identification of
suspected violative merchandise requires the assistance of right
holders for the specific and limited purpose of determining whether
imported merchandise bears a counterfeit mark, to provide for the
disclosure of certain information to right holders upon importation.
The interim rule is intended to support the statutory enforcement
scheme discussed above and to allow CBP officers, without violating the
Trade Secrets Act, to disclose information that might reveal otherwise
confidential commercial or financial information in order to assist CBP
in identifying merchandise bearing counterfeit marks at the time of
detention.
Notice Provision To Prevent Economic Harm to Legitimate Importers
In addition, CBP is putting in place a procedure that provides the
importer the opportunity to demonstrate to CBP, within seven (7) days
(exclusive of weekends and holidays) of a notice of detention, that the
article in question does not bear a counterfeit mark, before releasing
information to the right holder. Only absent such a demonstration by
the importer will information, images, or samples be shared with the
right holder. This procedural safeguard is intended to achieve the
policy goals of the NDAA in a manner consistent with maintaining the
flow of information to the government, fostering competition, keeping
prices low, and maintaining consumer choice.
Information that is covered by the Trade Secrets Act and obtained
from an importer, including the importer's name and place of business,
manufacturer's identity, supply chain, and other confidential
commercial or financial information, if disclosed, could provide
insights into the importer's business operations, processes, style of
work, and income, all inuring to the importer's competitive
disadvantage. For example, product coding, such as serial numbers, and
SKUs often incorporates information about where and when a product was
manufactured, as well as other information that could allow one to
identify information about the manufacture of the product. It is
likewise possible that such information could directly or indirectly
reveal the identity of wholesalers, exporters, or other parties in the
importer's supply chain and the timing and pricing of the transactions
involving those entities. Such confidential commercial or financial
information, if not properly protected, could be used by competitors to
an importer's economic disadvantage, potentially resulting in reduced
competition and consumer choice with attendant increases in prices.
Interim Amendments Concerning Pre-Seizure Disclosure of Information
This document is amending the CBP regulations to allow CBP to
provide right holders, for the limited purpose of assisting CBP in
making infringement determinations, with any information appearing on
merchandise and/or its retail packaging, or a sample of the merchandise
including its retail packaging, when CBP reasonably suspects that such
merchandise and/or packaging may bear a counterfeit mark (see Sec.
133.21(b)(1) of this rule). This disclosure of information, which
includes images (photographs) or samples, as appropriate, could
potentially disclose confidential commercial or financial information
otherwise protected under the Trade Secrets Act. The interim regulation
also includes a procedure that allows an importer, prior to release of
the information, the opportunity to establish, within seven (7) days
(excluding weekends and holidays) of a notice of detention, that the
marks are not counterfeit. Only absent such a demonstration by the
importer will the disclosure be made to the right holder.
In conjunction with the interim rule's procedure outlined above,
CBP is adding to the regulation a 30-day period (and an extension, if
requested by the importer for good cause) to commence upon presentation
of the goods for examination, within which a determination with respect
to admissibility will be made (see Sec. 133.21(b) of this rule). Under
the interim regulation, CBP will issue the notice of detention within
five days of its detention decision, starting the seven-day period
within which the importer may demonstrate that the goods do not bear a
counterfeit mark. Only if such demonstration is untimely or
insufficient will CBP release information to the right holder.
In brief summation, this change to the regulations concerning
counterfeit marks, in principal part, allows CBP, prior to seizure, to
release to right holders information appearing on goods (and/or their
retail packaging), and on images and samples, that are not redacted,
i.e., images showing the merchandise (and/or its retail packaging) in
its condition as presented for examination and samples (and/or its
retail packaging) in their condition as so presented. This allows the
right holder to assist CBP in its enforcement effort to prevent the
entry of goods bearing counterfeit marks. However, in certain
circumstances, DHS criminal investigators may provide right holders
such information or samples without notifying the importer, for example
to obtain from the right holder evidence that will assist the
investigators in demonstrating probable cause when they seek a judicial
order in the course of a criminal or national security investigation.
Other Interim Amendments To Clarify and Maintain Consistency With the
Current Regulations
As mentioned previously, CBP is also making a clarifying amendment
to the definition of ``counterfeit trademark.'' The amended definition
of ``counterfeit mark'' uses the term ``mark'' instead of ``trademark''
(see Sec. 133.21(a) of this rule).
In addition, CBP is amending the regulations pertaining to goods
bearing copying or simulating marks and restricted gray market goods to
correct an inconsistency in the regulatory scheme for such goods (19
CFR 133.22(f)
[[Page 24378]]
and 133.23(f), respectively). The 30-day detention period for these
goods is set forth in Sec. 133.25 of the CBP regulations, and this
procedure provides for extension of the detention period applicable to
these goods upon good cause shown. Therefore, CBP is removing from
Sec. Sec. 133.22(f) and 133.23(f) inconsistent language that appears
to restrict the respective detention periods to only 30 days.
Lastly, CBP is amending the provisions of 19 CFR 151.16(a)
regarding detention of merchandise to make them consistent with the
interim regulations in this rulemaking. The regulations pertaining to
detention of merchandise exclude from their applicability imported
articles suspected of being infringing copies or phonorecords, imported
goods bearing marks which are confusingly similar to recorded
trademarks, and imported restricted gray market merchandise. The
interim amendment to section 151.16(a) excludes imports of goods
suspected of bearing counterfeit marks from the applicability of the
regulations pertaining to detention of merchandise.
Inapplicability of Notice and Delayed Effective Date Requirements
As explained previously in this document (see ``Purpose of the
Interim Amendments'' subsection in the Background section), CBP is
responsible for enforcement of intellectual property rights laws and
regulations at the border. An important goal of CBP efforts to
interdict counterfeit imported goods is to protect the public from
unsafe and substandard counterfeit products. In addition, counterfeit
goods present a threat to national security and our critical
infrastructure. Counterfeit integrated circuits and electronic
components can be used in critical manufacturing, military,
infrastructure, and consumer product applications. Inquiries conducted
by Congress and the DoD have revealed that counterfeit electronic
components, including counterfeit integrated circuits, have entered
military and government supply chains, posing a serious threat to our
military and government personnel and infrastructure. Moreover,
interdiction of counterfeit goods has been made increasingly difficult
due to the development of sophisticated techniques used by some
counterfeiters and the highly technical nature of some imported goods.
Because this rule addresses an immediate need to address without
delay vulnerabilities in our military and government procurement
processes, as well as an immediate need to interdict goods bearing
counterfeit marks that pose health and safety risks to the American
public, CBP has determined that it would be contrary to the public
interest to delay the effective date of this rule. Therefore, CBP has
determined that in accordance with the sections 553(b)(B) and 553(c) of
the Administrative Procedure Act (5 U.S.C 553), good cause exists to
dispense with the prior comment requirement and delayed effective date
requirement. Subsection 818(g) of the NDAA was effective upon
enactment, but the authority it provides the Secretary is discretionary
and not mandatory. Accordingly, although some may interpret the statute
to allow the Secretary to exercise his discretionary authority without
amending CBP's existing regulations, CBP believes that amending the
existing, more restrictive regulations is consistent with the
requirements of the Administrative Procedure Act and will eliminate any
legal ambiguity. The interim regulations also promote transparency and
provide an important opportunity to gather feedback and input from
stakeholders regarding implementation of Sec. 818(g) of the NDAA.
Executive Orders 12866 and 13563
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
Because a notice of proposed rulemaking is not required under
section 553(b)(3)(B) of the APA for the reasons described in the
Inapplicability of Notice and Delayed Effective Date Requirements
section of this document, the provisions of the Regulatory Flexibility
Act, as amended (5 U.S.C. 601 et seq.), do not apply to this
rulemaking. Accordingly, this interim rule is not subject to the
regulatory analysis or other requirements of 5 U.S.C. 603 and 604.
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.
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 Notices 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.
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
For the reasons stated above in the preamble, CBP is amending parts
133 and 151 of title 19 of the Code of Federal Regulations (19 CFR
parts 133 and 151) to read as follows:
PART 133--TRADEMARKS, TRADE NAMES, AND COPYRIGHTS
0
1. The general authority citation for part 133 and the specific
authority citation for Sec. 133.21 through 133.25 are revised, 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.
* * * * *
[[Page 24379]]
0
2. The heading for subpart C is revised to read as follows:
Subpart C--Importations Bearing Recorded Marks or Trade Names
0
3. Section 133.21 is revised to read as follows:
Sec. 133.21 Articles suspected of bearing counterfeit marks.
(a) Counterfeit mark defined. A ``counterfeit mark'' is a spurious
mark that is identical with, or substantially indistinguishable from, a
mark registered on the Principal Register of the U.S. Patent and
Trademark Office.
(b) Detention. CBP may detain any article of domestic or foreign
manufacture imported into the United States that bears a mark suspected
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
thirty days from the date on which the merchandise is presented for
examination. The 30-day time period may be extended for up to an
additional thirty days for good cause shown by the importer. In
accordance with 19 U.S.C. 1499, if after the detention period and any
authorized extensions the article is not released the article will be
deemed excluded for the purposes of 19 U.S.C. 1514(a)(4).
(1) Notice to importer of detention and possible disclosure. Within
five days (excluding weekends and holidays) from the date of a decision
to detain, CBP will notify the importer in writing of the detention.
The notice will inform the importer that a disclosure of information
concerning the detained merchandise may be made to the owner of the
mark to assist CBP in determining whether any marks are counterfeit,
unless the importer presents information within seven days of the
notification (excluding weekends and holidays) establishing to CBP's
satisfaction that the detained merchandise does not bear a counterfeit
mark. CBP may disclose information appearing on the merchandise and/or
its retail packaging, images (including photographs) of the merchandise
and/or its retail packaging in its condition as presented for
examination, or a sample of the merchandise and/or its retail packaging
in its condition as presented for examination. The release (disclosure)
of a sample is subject to the bond and return requirements of paragraph
(c) of this section. Where the importer does not timely provide
information 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. Disclosure under this section 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, in alphanumeric or other formats.
(2) Notice to owner of the mark and disclosure of information. From
the time merchandise is presented for examination until the time a
notice of detention is issued, CBP may disclose to the owner of the
mark any of the following information in order to obtain assistance in
determining whether an imported article bears a counterfeit mark. Once
a notice of detention is issued, CBP will disclose to the owner of the
mark the following information, if available, within thirty days
(excluding weekends and holidays) from the date of detention:
(i) The date of importation;
(ii) The port of entry;
(iii) The description of the merchandise from the entry;
(iv) The quantity involved; and
(v) The country of origin of the merchandise.
(3) Redacted images and samples made available to the owner of the
mark. Notwithstanding the notice and seven-day response procedure of
paragraph (b)(1) of this section, CBP may, at any time after
presentation of the merchandise for examination, provide to the owner
of the mark images or a sample of the detained merchandise or its
retail packaging, 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 will release to the owner of the mark a sample under this
paragraph when the owner furnishes CBP a bond in the form and amount
specified by the port director, conditioned to hold the United States,
its officers and employees, and the importer or owner of the imported
article harmless from any loss or damage to the sample resulting from
the furnishing of a 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)(3) was (damaged/
destroyed/lost) during examination, testing, or other use.''
(c) Unredacted samples made available to the owner of the mark
prior to seizure. A sample of the imported merchandise may be released
prior to seizure to the owner of the mark in accordance with paragraph
(b)(1) of this section. CBP will release to the owner of the mark a
sample under this paragraph when the owner furnishes CBP a bond in the
form and amount specified by the port director, conditioned to hold the
United States, its officers and employees, and the importer or owner of
the imported article harmless from any loss or damage to the sample
resulting from the furnishing of a 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) Seizure. 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 information, if available, within thirty days (excluding
weekends and holidays) from the date of the notice of seizure:
(1) The date of importation;
(2) The port of entry;
(3) The description of the merchandise from the entry;
(4) The quantity involved;
(5) The name and address of the manufacturer;
[[Page 24380]]
(6) The country of origin of the merchandise;
(7) The name and address of the exporter; and
(8) The name and address of the importer.
(e) Samples made available to the owner of the mark after seizure.
At any time following a seizure of merchandise bearing a counterfeit
mark under this section, CBP may provide a sample and its retail
packaging, in its condition as presented for examination, to the owner
of the mark for examination, testing, or other use in pursuit of a
related private civil remedy for trademark infringement. To obtain a
sample under this paragraph, the owner of the mark must furnish CBP a
bond in the form and amount specified by the port director, conditioned
to hold the United States, its officers and employees, and the importer
or owner of the imported article harmless from any loss or damage to
the sample resulting from the furnishing of a 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(e) was (damaged/destroyed/lost)
during examination, testing, or other use.''
(f) Consent of the mark owner; failure to make appropriate
disposition. The owner of the mark, within thirty days from
notification of seizure, may provide written consent to the importer
allowing the importation of the seized merchandise in its condition as
imported or its exportation, entry after obliteration of the mark, or
other appropriate disposition. Otherwise, the merchandise will be
disposed of in accordance with Sec. 133.52 of this part, subject to
the importer's right to petition for relief from forfeiture under the
provisions of part 171 of this chapter.
Sec. 133.22 [Amended]
0
4. Section 133.22(f), first sentence, is amended by removing the words
``within the 30-day period of detention'' and adding in their place the
words ``within the period of detention as provided in Sec. 133.25 of
this subpart''.
Sec. 133.23 [Amended]
0
5. Section 133.23(f), first sentence, is amended by removing the words
``within the 30-day period of detention'' and adding in their place the
words ``within the period of detention as provided in Sec. 133.25 of
this subpart''.
Sec. 133.26 [Amended]
0
6. Section 133.26 is amended by removing from the first sentence the
words ``subject to the restrictions of Sec. 133.22 or Sec. 133.23 of
this subpart'' and adding in their place the words ``subject to the
restrictions of Sec. 133.21, Sec. 133.22 or Sec. 133.23 of this
subpart''.
PART 151--EXAMINATION, SAMPLING AND TESTING OF MERCHANDISE
0
7. 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;
* * * * *
0
8. Section 151.16(a) is revised to read as follows:
Sec. 151.16 Detention of merchandise.
(a) Exemptions from applicability. The provisions of this section
are not applicable to detentions effected by CBP on behalf of other
agencies of the U.S. Government in whom the determination of
admissibility is vested and to detentions arising from possibly
piratical copies (see part 133, subpart E, of this Chapter), imports of
articles bearing counterfeit marks or suspected counterfeit marks,
goods bearing marks which are confusingly similar to recorded
trademarks, or restricted gray market merchandise (see part 133,
subpart C, of this chapter.)
* * * * *
David V. Aguilar,
Acting Commissioner, U.S. Customs and Border Protection.
Approved: April 18, 2012.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 2012-9762 Filed 4-23-12; 8:45 am]
BILLING CODE 9111-14-P