The Office of the United States Trade Representatives releases special 301 report on Intellectual Property Rights.

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On April 27th, The Office of the United States Trade Representative (USTR) today released their 2018 Special 301 report listing trading partners that do not “adequately or effectively protect and enforce intellectual property (IP) rights or otherwise deny market access to U.S. innovators and creators that rely on protection of their IP rights”.

The Report singles out several US trading partners to address IP-related issues and places certain countries on a “Watch List” and “Priority Watch List”.

As you may be aware, Section 301 of the U.S. Trade Act of 1974 authorizes the President to take all appropriate action, including retaliation, to obtain the removal of any act, policy, or practice of a foreign government that violates an international trade agreement or is unjustified, unreasonable, or discriminatory, and that burdens or restricts US commerce. Section 301 actions are unique in that they do not require authorization from the World Trade Organization (TWO) to take enforcement action.

The US Government estimates the Intellectual Property industries directly and indirectly support 30% of all employment in the United States (or about 45.5 million American jobs).

Some highlights of the 2018 Special 301 Report include:

1. The following 12 countries are on the “Priority Watch List” – Algeria, Argentina, Canada, Chile, China, Colombia, India, Indonesia, Kuwait, Russia, Ukraine, and Venezuela.

2. China is included on the “Priority Watch List” for the 14th year in a row and claims China’s technology transfer practices, trade secret theft, counterfeit manufacturing etc.

3. India is also included on the “Priority Watch List” for “longstanding challenges in its IP framework and lack of sufficient measurable improvements, particularly with respect to patents, copyrights, trade secrets, and enforcement, as well as for new issues that have negatively affected U.S. right holders over the past year.”

4. Canada was surprisingly indicated on the “Priority Watch List” instead of their usual “Watch List” status. The USTR cited Customs inability to inspect or detained counterfeit or pirated good shipped through Canada and IP protections for pharmaceuticals among others.

The full Spectial 301 Report can be read here.

If you have any questions about this report, feel free to contact David Hsu at 832.896.6288 or by email at dhsu@givensjohnston.com.

US proposes tariffs impacting $50 billion worth of Chinese imports.

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The current administration announced tariffs on an additional 1,300 technological and transport products from China. Imports of these 1,300 goods are worth an an estimated $50 billion and could be subject to an additional 25-percent tariff.

The list posted on US Trade Representative’s (USTR) office covers nonconsumer products, ranging from chemicals to electronic components and excludes some common consumer products such as cellphones and laptops assembled in China. However, the list also includes consumer products such as flat-panel televisions, LED’s, motorcycles and electric cars.

Part of the justification for tariffs is an effort by the administration to cut the trade surplus – in which China has a $375 biillion trade surplus on goods from the US in 2017. Throughout his campaign, President Trump promised reducing the trade surplus by $100 billion during his presidency.

After the proposals were announced, the USTR has a public comment period from now until May 11th. A hearing will follow on May 15th. During this comment period, companies and consumers will be able to ask the government to remove or add certain products to the list.

If you have any question about these potential tariffs or want to know more about how to get your good off the list, contact trade and customs attorney David Hsu at 832.896.6288 or by email at dhsu@givensjohnston.com.

U.S. Customs and Border Protection Seize Over 6 Million Counterfeit Cigarettes.

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In mid March of 2018, U.S. Customs and Border Protection (CBP) officers along with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) commercial fraud agents seized six million counterfeit cigarettes during a warehouse inspection.

The estimated retail price is $1.1 million. CBP import specialists with the Agriculture and Prepared Products Center of Excellence and Expertise (CEE) in Miami reviewed 600 boxes of counterfeit cigarettes and found multiple trade name protection and trafficking counterfeit goods violations.

CBP cites many dangers to these counterfeit cigarettes – first criminal organizations profit from the sale of counterfeit goods and second, counterfeit cigarettes pose a greater public health risk. CBP also indicates that trademark owners are also hurt and the government also is deprived of tax revenue.

If you or someone you know has had counterfeit cigarettes or any other goods seized by Customs for suspected IP violations or trademark violations – contact experienced Customs attorney David Hsu. Customs holds importers liable for both civil penalties and criminal prosecution. Call 832-896-6288 or e-mail dhsu@givensjohnston.com for immediate assistance.

Trump Announces Tariffs on at Least $50 billion in Chinese Goods.

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On March 22nd, President Donald Trump signed a memorandum instructing the U.S. Trade Representative to prepare a list of goods imported from China that will be subject to tariffs.

The tariffs are in response to China’s policies of forced technology transfers, forced joint ventures, intellectual property theft and technology licensing restrictions for U.S. companies doing business in China.

Check back here for the list when it is published. It is is estimated the list will include approximately 1,300 tariff lines and the public will have 30 days to submit comments.

If you have any questions how this may affect your imports, call experienced trade and customs attorney David Hsu at 832-896-6288 or email dhsu@givensjohnston.com.

Customs and Border Protection’s 2018 E-Commerce Strategy.

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According to a U.S. Customs and Border Protection (CBP) media release on March 8th, 2018 – CBP released their new strategy to deal with the increase in volume of e-commerce packages into the United States.

The media release is wordy and you are already to go back to Facebook – so here’s a quick cliff notes version of the media release:

1. More people are using the internet to buy direct from China, leading to more small packages entering the US.

2. The large increase in volume of small packages (commonly indicated as “e-packet delivery”) means there is a greater likelihood of things entering the country that should not enter.

3. CBP is worried about a greater entry of items that violate intellectual property rights (fake watches, counterfeit purfume, fake iphones, etc) will make it into the US.

Some highlights of the CBP e-commerce strategy:

1. Educate people to be aware of customs regulations. Not sure how easy it will be to make people aware of customs regulations when people can’t even follow traffic regulations!

2. Partnership with foreign governments

3. Improve data collection from CBP targeting systems and field personnel.

4. The media release includes a lot of buzzwords: “more agile, dynamic workforce that utilizes state-of-art techniques and technology to better target high-risk shipments, improving data collection from CBP targeting systems, and leveraging enforcement partnerships.”

My thoughts:

Personally, I do not believe methods 1-4 will be able to adequately address the increased flow of these small packages from China. I believe CBP has other methods that they are not publicizing, and rightly so. Notifying the public how CBP searches for items that violate IPR, are counterfeit or not allowed for entry into the US would be counter-intuitive and could only lead to foreign manufacturers creating work arounds.

If you are a manufacturer overseas and ship many small package items to the US and want to know how this can effect your business, call experienced trade and customs attorney, David Hsu, 832.896.6288 or email at dhsu@givensjohnston.com

$233,000 Worth of Counterfeit Watches Seized by Customs.

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According to a U.S. Customs and Border Protection (CBP) media release on March 1st; CBP officers in Philadelphia seized 54 counterfeit designer brand watches.

CBP officers examined the parcel on January 23rd that was shipped from Hong Kong. The packing list indicated the shipment as containing “watch samples” and upon further inspection, CBP found watches bearing name brands such as Armani, Hublot, Omega,
Rado, Rolex and others. If authentic, the MSRP for the watches totaled $233,209.

As you may or may not know, CBP is tasked with enforcing the intellectual property laws of companies who register their brand with Customs. In this instance, CBP officers with the Consumer Products and Mass Merchandising Centers for Excellence and Expertise (CEE) inspected the watches, worked with the trademark holders and confirmed the watches were counterfeit.

Some of the tell-tale signs of counterfeit watches include but are not limited to: poor quality packaging of the watch, watch construction (weight, dial movement) and the origin of shipment (from Hong Kong).

CBP frequently seizes counterfeit goods and on a typical day in 2017, CBP seized $3.3 million worth of products for intellectual property rights violations.

If you or someone you know has had your import seized due to counterfeit or trademark violations, contact experienced Customs attorney, David Hsu. Customs can penalize importers civil and criminal penalties, and time there are certain time limitations – call  832.896.6288 or email at dhsu@givensjohnston.com today.

CBP seizes fake perfume valued over $31 million.

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In the past few months, U.S. Customs and Border Protection (CBP) officers and import specialists in the seaport at Los Angeles have seized over 475,000 bottles of imported perfume bearing counterfeit trademarks. While the cost of the counterfeit perfumes may be low, if genuine, CBP estimates the MSRP of the seized perfumes to retail over $31 million.

CBP’s fiscal year starts October 1, 2017 and since then, CBP officials in Los Angeles have seized 11 shipments with suspected counterfeit marks along with confusingly similar fragrances. As you are aware, CBP enforces the trademarks for companies registered with CBP. The seizues included violations of trademarks belonging to over 34 perfume brands.

According to the CBP news release, the “counterfeit brands included Giorgio Armani, Burberry, Calvin Klein, Chanel, Coach, Dior, Dolce & Gabbana, Gucci, Guess, Hugo Boss, Lacoste, Michael Kors, Ralph Lauren, Versace, Victoria Secret, and Perry Ellis among others.”

As a general rule, if you purchase perfume at prices “too good to be true”, it is likely the item is counterfeit. The news release indicates the counterfeit perfumes were packaged in boxes and colors resembling the genuine items with fake country of origin markings (“Made in France”) even though the port of origin was China.

CBP is especially vigilent in seizing suspected counterfeit perfumes as these items are placed on the skin and absorbed by the body – counterfeit perfumes may be composed of chemicals harmful to the body and may be made and sold without any product testing.

In FY 2016, CBP seized over $1.4 billion worth of counterfeit goods – if you have had your imports seized and want to speak to an experienced attorney, call David Hsu at 832-896-6288 or email at dhsu@givensjohnston.com for immediate assistance.

Importing Refurbished Cell Phones and Customs Seizures.

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Today’s blog post is in response to our firm seeing an increase in the number of importers having their Samsung or Apple phones seized by Customs.

Typically, our client is a company in the United States that purchases used Apple iPhones or Samsung Galaxy phones from the US. The used phones vary anywhere from A to C stock and may have broken screens, defective home buttons, scratched, dented or damaged housing or cracked camera lens. Some phones are store demos with burn-in on the screens, customer returns or old, new stock. The phones are packaged and then sent to China for repair and refurbishing. The fixed phones are then sent back to the US for sale through wholesalers and distributors.

However, as the phones are shipped back to the company in the US, U.S. Customs and Border Protection (CBP) detains shipments to review whether or not the cell phones violate any intellectual property rights (IPR).

CBP will first detain the phones and has 30-days to speak to the trademark or IPR holder to determine the authenticity of the trademark or IPR. The trademark could be the “Samsung” logo, the “Apple” logo or even the “iPhone” trademark printed in text on the back of the phones. More often than not, the shipped phones change from being “detained” to being “seized”.

The majority of the seizures are due to trademarks found on the rear housing of the phones. As most importers cannot provide authorization by the trademark or IPR holder the right to use the mark, CBP considers the importer phones to be counterfeit and are then subsequently seized.

If you have had your refurbished iPhone or Samsung phone seized by Customs, call experienced cell phone seizure attorney David Hsu at 832.896.6288 or by email at dhsu@givensjohnston.com. There are certain time limitations after a seizure has occurred so contact David Hsu today.

Baltimore CBP Seizes $1 Million in Counterfeit Stainless Steel Sinks.

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On Wednesday, January 17th, U.S. Customs and Border Protection (CBP) in Baltimore seized over 2,900 stainless sinks for displaying a counterfeit UPC shield design on the 17th.

CBP initially detained the shipment for anti-dumping and countervailing duties enforcement and during their examination found the UPC shield logo. In addition to looking for shipments subject to ADD/CVD duties, CBP also enforces the intellectual property rights of trademark holders, among others.

CBP and Intellectual Property Rights (IPR) specialists sent the UPC shield logo to the registered trademark holder, the International Association of Plumbing and Mechanical Officials, the registered trademark holder, who determined the use of the logo to be unauthorized.

As the marks were unauthorized, CBP seized the entire shipment for containing markings without trademark holder’s authorization (19 CFR 133.21).

The full release can be found here: https://www.cbp.gov/newsroom/local-media-release/baltimore-cbp-seizes-1m-counterfeit-stainless-steel-sinks

If you or anyone you know has had any property seized by customs for suspected intellectual property rights violations, please contact your trade and customs law attorney, David Hsu at 832.896.6288 or dhsu@givensjohnston.com.