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CBP Defends Efforts to Bar IPR Infringing Imports from Entry Into U.S.

Friday, January 24, 2014
Sandler, Travis & Rosenberg Trade Report

A letter recently made available from U.S. Customs and Border Protection to Sen. Ron Wyden, D-Ore., defends CBP’s enforcement of orders issued by the International Trade Commission to exclude patent-infringing goods from entry into the U.S. The letter also notes that CBP is working to develop a more inclusive process of issuing rulings relating to exclusion orders.

CBP begins by noting that enforcement of ITC exclusion orders is a difficult task because it presents complex questions of law and issues of fact that must be decided in a short period of time, usually 30 days or less. For example, the typical exclusion order directs CBP to refuse entry to articles that infringe the relevant patent rights; i.e., not just those the ITC found to infringe, but any infringing products developed after the issuance of an exclusion order, even if they were redesigned in an attempt to avoid infringement. CBP is therefore often required to determine whether redesigned products that were not at issue before the ITC fall outside the exclusion order's scope and are therefore admissible, or whether those products have not avoided infringement and must be excluded.

CBP’s resources for dealing with these challenges include a dedicated office with a staff of attorneys who review the administrative record developed at the ITC, advise field personnel, and issue rulings and protest decisions. In addition, CBP has targeters who are responsible for researching, analyzing and identifying shipments of potentially infringing merchandise as well as import specialists who regularly meet with complainants and importers and are responsible for ongoing enforcement operations.

Nevertheless, CBP also recognizes the need to cooperate with a variety of public and private sector entities to bolster its enforcement efforts. For example, CBP works with the ITC, complainants, respondents and importers to develop an appropriate enforcement profile in each case and also coordinates with the ITC in regard to specific legal issues. Complainants regularly meet with CBP’s Centers of Excellence and Expertise and provide information concerning suspected infringers and shipments. CBP and the ITC have formed a working group to explore ways they might more closely align CBP’s enforcement role with the ITC’s post-order review and relief provisions.

CBP is also working toward the development of a procedure for adjudicating exclusion order rulings that allows both the importer/respondent and the complainant to make arguments and rebut those of the other. Under the current process CBP has to make determinations based in large measure on input from one side to the dispute, although CBP does notify the complainant and the ITC whenever it issues a ruling involving a particular exclusion order and provides them with a copy of its decision. CBP anticipates that the proposed adversarial proceeding would have tremendous benefits, including the opportunity to make stronger and more decisive determinations in a more expedited manner.

CBP also seeks to clarify an apparent misconception regarding self-certification by importers that merchandise is not subject to an exclusion order. CBP does not permit self-certification, the letter states, and the use of certifications is rare and subject to stringent conditions. While exclusion orders typically provide that CBP may, at its discretion, allow persons seeking to import merchandise potentially subject to an order to certify that under the terms of the order their goods are not excluded from entry into the U.S., certifications may not be initiated, accepted or otherwise acted upon without specific approval from the Office of International Trade. Accordingly, importers do not have the right to certify on their own initiative to obtain an article's release. In addition, acceptance of a certification at any time by CBP does not establish any precedent as to the future acceptance of a certification. Moreover, CBP will not accept a certification absent its determination that an article falls outside the scope of an exclusion order because it has been successfully redesigned to avoid infringement of the underlying right that was at issue before the ITC.

Finally, the letter provides some statistics regarding CBP’s enforcement of exclusion orders. As of Dec. 31, 2012, there were 53 patent-based exclusion orders and 39 non-patent exclusion orders in force. During that year CBP excluded from entry 33 shipments subject to an exclusion order. Based on data from CBP’s Exclusion Order Notice and Tracking System, 39% of those exclusions involved foam footwear, 36% involved Marlboro cigarettes, and the balance involved plastic food containers, ink cartridges, mobile devices and sucralose. Also in 2012 CBP issued six ruling letters, one internal advice decision and four protest review decisions in connection with exclusion orders.

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