CBP One-Year IPR Voluntary Disclosure Pilot Planned for Fall 2010

CBP has posted the Subcommittee’s notes on that meeting. Highlights from these notes include the following:

CBP Gave COAC Draft of IPR Pilot Notice

In early August 2010, CBP gave the IPR Subcommittee a draft document entitled “U.S. Customs and Border Protection’s Voluntary Disclosure of IPR Violations Pilot Program” and requested the subcommittee’s feedback. This draft document is not yet available to the public.

CBP Expects Pilot to Start in October or November

CBP is looking to start a one-year pilot in October or November 2010 and expects the pilot to be available to anyone who wishes to use it.

CBP states that it is preparing a Federal Register notice on the pilot program and comments will be accepted throughout the pilot program. According to CBP, there are legal requirements that must be met before it can announce the pilot program, such as a system of records notice.

CBP Wants IPR Pilot be Like Existing 1592 Prior Disclosure Program

CBP states that it wants to create a pilot for an IPR violations voluntary disclosure program similar to the prior disclosure program that exists in 19 USC 1592 (penalties for fraud, gross negligence, and negligence).

IPR Voluntary Disclosure Pilot for Goods Originally Thought Legitimate, But Not

The IPR voluntary disclosure program would be for those who believed they were importing legitimate goods that received goods infringing trademarks or copyrights. Relief from penalties/enforcement action based on the disclosure would be given to the disclosing party and CBP may use the obtained information to pursue manufacturers and other importers for potential IPR violations.

Importers and others would be eligible. In describing who would be able to use the voluntary disclosure program, CBP states that it is using language similar to that in 19 USC 1526 and 1595 -- “importers and others” and “any person involved in the importation of goods.” As examples of parties, other than importers, that may use the program, CBP listed brokers, forwarders, carriers, warehouse operators, etc.

30-day time line for accepting disclosures. According to CBP, there would be a time line for accepting or not accepting a voluntary disclosure. CBP is looking at 30 days. CBP wants to parallel the existing prior disclosure process.

Filing procedures. CBP is working on procedures for filing voluntary disclosures for IPR violations and is looking into on-line or hard copy letters.

Subcommittee Concern Over Use of Disclosures to be Covered in FAQ

According to CBP, the voluntary disclosure program would help CBP gather information on IPR violations. The Subcommittee asked CBP for clarification on how the information it receives would be used, noting that CBP’s statement that the information “may be used by CBP for other purposes” might mean various things, including that the information would be used for Consumer Product Safety Commission (CPSC) violations. CBP stated that this would be addressed in the first frequently asked question (FAQ) document.

CBP Discusses Subcommittee Concerns on “Gray Market” Goods

The Subcommittee asked CBP for an explanation regarding the “Gray Market” reference in CBP’s draft document. According to CBP, the “gray market” reference was put in the draft document because importation of gray market goods is legal with minor exceptions. CBP attorneys recommended the wording to make it clear that the program does not provide for enforcement against gray market goods.

CBP stated that it would be looking at a variety of issues related to gray market goods, such as whether the voluntary disclosure program would protect the importation of goods which are restricted gray market goods, gray market goods subject to Lever rule requirements, or subject to an ITC exclusion order, and whether referencing gray market ITC exclusions would complicate the pilot program.

Couriers Question if They Should Still Notify CBP of Potential IPR Violations

During the meeting, the courier’s perspective was discussed, and it was noted that when a courier possesses suspicious goods, especially name brand, it normally notifies CBP so CBP can take any appropriate enforcement action. CBP was questioned whether couriers should change their process and whether they should go to the importer and tell them to do a voluntary disclosure when the pilot is implemented.

(A voluntary disclosure program was one of seven recommendations made to CBP by COAC’s IPR Subcommittee in February 2009. See ITT’s Online Archives or 02/25/09 news, 09022515, for BP summary of the IPR Subcommittee’s seven recommendations to CBP.

See ITT’s Online Archives or 08/10/10 news, 10081016, for BP summary of the discussion of the pilot at the August 2010 COAC meeting.)