Op-Ed: Shielding your business against counterfeit goods

Written by  //  September 18, 2012  //  Biz Views  //  No comments

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Author Jeffrey Quiñones, J.D., is public affairs officer for U.S. Customs and Border Protection in Puerto Rico and the U.S. Virgin Islands.

Many people believe that by purchasing a fake Rolex or an uncanny similar pair of Gucci sunglasses, there’s no harm done whatsoever. Otherwise law-abiding citizens do not consider the implications of purchasing a knock-off version of a branded product.

What they do not know is that the purchase of illegitimate goods is associated with smuggling and other criminal activities, and more often funds criminal enterprises of transnational organized crime, or “TOC.”

Today TOC’s seeks to “protect their illegal activities through a transnational organizational structure and the exploitation of transnational commerce.” [1]  Although most TOC are identified as engaging such criminal activity as trafficking, smuggling, piracy, counterfeiting becomes an attractive option to an apparent “licit” business with the bypassing of the standard manufacturing, transport and distribution, R&D and marketing costs.

According to a United Nations report TOC’s pursue counterfeiting “because counterfeiters are essentially unaccountable and have no interest in building a brand reputation, costs can be additionally reduced by cutting corners in the production phase, such as employing sweatshop labor, engaging in environmentally unsound manufacturing processes and using inferior-grade materials. Profits can be further maximized by avoiding taxes: import duties are evaded through customs fraud or outright smuggling, and sales taxes are avoided though informal retailing, which itself often makes use of illegal migrants working for little compensation.” [2]

Theft of America’s intellectual property is a serious crime. Trade in counterfeit and pirated goods threatens America’s innovation economy, the competitiveness of our businesses, the livelihoods of U.S. workers, and, in some cases, national security and the health and safety of consumers.

With the intellectual property protection of a product, consumers can expect a quality product that endures a regulatory process for which the legitimate manufacturer is held accountable.  Counterfeiters do not have a brand to protect producing items of superficial quality that are frequently dangerous.

Tight enforcement program in place
As the premier border enforcement agency, U.S. Customs and Border Protection (CBP) protects businesses and consumers every day through an aggressive Intellectual Property Rights (IPR) enforcement program.

CBP targets and seizes imports of counterfeit and pirated goods, and enforces exclusion orders on patent-infringing and other IPR goods in violation. Also, CBP works with Immigration and Customs Enforcement (ICE) to step up enforcement against these dangerous products.

However, CBP requires the collaboration between other customs agencies and rights owners of patents, copyrights and trademarks, to ensure effective IPR enforcement at the border. As a conduit to IPR protection CBP makes available three venues: e-Recordation, e-Allegations and information sharing.

E-Recordation allows trademarks and copyrights registered with the U.S. Patent & Trademark Office or the U.S. Copyright Office to be recorded with CBP to maximize their protection at the border. The benefits include:

  • Making intellectual property rights information available at the port to help CBP personnel with infringement determinations.
  • Eliminating paper applications and the need for supporting documents.
  • Allowing rights owners to upload images of their protected rights.

With e-Allegations business and rights owners can submit allegations of infringing shipments or illegal conduct to CBP. CBP uses this information to target these activities and may refer cases for criminal prosecution. The information submitted can be anonymous and may include photos and other documentation, which can be disseminated to the appropriate office or port of entry for investigation. Issues that pose an immediate threat to public health and safety should also be reported to CBP’s 1-800-BE-ALERT.

Counterfeit and pirated goods are becoming much more sophisticated, meaning that they become much more difficult to distinguish fakes from legitimate goods.  To improve their detection, CBP seeks the proactive collaboration and information shared by rights owners to make infringement determinations.

Rights owners provide product identification guides, which are placed in CBP internal websites and linked to the e-Recordation system, to assist inspectors in the field in making infringement determinations. Also, many companies provide product identification training to CBP personnel at the ports of entry.

CBP has an IPR Help Desk, which provides the public, business and rights owners, CBP Officers, and import specialists with information on intellectual property rights infringement procedures and receives allegations of IPR infringements. In addition, the IPR Help Desk assists owners of recorded intellectual property rights with the development of product identification training materials.

You can contact the help desk by phone at 562-980-3119, ext. 252 or via email at ipr.helpdesk@dhs.gov. And, you can find more information regarding CBP’s IPR enforcement online at http://www.cbp.gov/ipr.

References:
1 The Threat to U.S. National Security Posed by Transnational Organized Crime. Report by the National Intelligence Council (2011)

2 The Globalization of Crime: A Transnational Organized Crime Threat Assessment.  United Nations Office of Drugs and Crime (2010), pg. 176.

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