Customs Broker Agrees to POA Verification Requirements in Settlement of Trademark Case With Nike
A New York-based customs brokerage reached a settlement with Nike in a trademark infringement case, agreeing to strict requirements for validation of powers of attorney as a condition of the settlement. Alto Customhouse Brokers agreed to pay $25,000 to Nike, and validate all future powers of attorney it receives from importers, including by way of notarization, phone calls and checking government-issued IDs. Under the settlement, filed Feb. 10 but still subject to approval by the New Jersey U.S. District Court, Alto agreed to not willfully import or assist in the importation of any goods bearing counterfeit Nike trademarks, and to investigate and confirm the power of attorney before conducting customs business on a client’s behalf.
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The settlement outlines three procedures Alto can follow to validate the power of attorney. First, Alto can require the power of attorney be notarized, with the notary checking the importer’s government-issued ID to confirm its identity. Alto would then have to call the importer to confirm the person listed on the power of attorney works for the importer, holds the position with the importer indicated on the power of attorney and has the authority to bind the importer. Alto would also have to confirm the importer is aware of the shipment for which Alto is filing the entry, and would have to keep records of the call.
Alternatively, Alto could require a notarized power of attorney and receive payment for its customs brokerage services in full before filing the entry, with the check or wire transfer identifying the same importer detailed on the power of attorney. Finally, Alto could also get a non-notarized power of attorney, call the importer to verify the person who signed the power of attorney, and get a copy of the government-issued ID of that person. For all three alternatives, Alto would have to keep records of all verification activities.
If Alto gets a new client via a referral from a forwarder, it would have to verify the individual who issued the original power of attorney to the forwarder. If receiving a referral from another customs broker, the referring broker has to provide written assurance that it verified the importer’s identity according to the terms of the settlement agreement.
Nike filed the lawsuit in 2013 in New Jersey U.S. District Court. In its original complaint, Nike had claimed Alto filed entry documentation for a shipment of “blower wheels” that actually turned out to be counterfeit Nike shoes. The importer of record listed on the entry was McLean Midwest, which had actually been the victim of identity theft and had nothing to do with the shipment, Nike said. Alto would have realized the discrepancy had it used reasonable care and verified the power of attorney, Nike said.
For its part, Alto claimed the error should have been discovered by any of the carriers and forwarders involved in transportation in the shipment, as well as CBP itself. Unlike Alto, these companies actually had the opportunity to inspect the goods, yet still listed them as blower wheels on bills of lading, despite a “significant discrepancy” between the weight of the container and the weight listing on shipping documentation. CBP failed to investigate the shipment despite its own concerns, Alto said.
Email ITTNews@warren-news.com for a copy of the settlement.
(Nike, Inc. v. Alto Customhouse Brokers, Inc. et al., D.N.J. 2:13-cv-03435)