Exports from China are on the Rise – What is your IPR Plan?

On April 11, amid a high demand for soccer apparel in preparation for FIFA World Cup, U.S. Customs and Border Protection (CBP) seized counterfeit soccer apparel shipped from China to the Port of Savannah. The value of the seized goods exceeded $1 million in manufacturer’s suggested retail price (MSRP). The apparel seized contained counterfeit trademarks of the following professional soccer clubs: Arsenal, Barcelona, Celtic, Chelsea, Mexican Federation, Paris Saint-Germain, and Real Madrid.  Little did they know they should have tried to import Germany's soccer club's apparel. “You look at that Chelsea patch, and it just looks off,” said Steve Sapp, a spokesman for U.S. Customs and Border Protection. “The last B is smaller than the rest, and that’s the kind of thing you often see with these counterfeit goods. Our investigators know the signs that these goods aren’t real.”  Both images are provided below for you to see for yourself - check out the extra space at the top, and the "u" in club.

This month, CBP again seized a shipment of counterfeit soccer apparel from China. This time, the shipment arrived in San Juan, Puerto Rico and the apparel consisted of Brazilian, Italian and Argentinian national soccer clubs’ uniforms. “The trade in these illegitimate goods is associated with smuggling and other criminal activities, and often funds criminal enterprises”, stated Area Port Director Juan Hurtado.  The apparel shipped to Puerto Rico violated the intellectual property rights (IPRs) of Puma, Adidas and Nike.

With exports from China rising, protecting intellectual property rights (IPR) remains a CBP priority trade issue. According to CBP, it is their mission to tackle counterfeit imports. “Trade in counterfeit and pirated goods threatens America’s innovation economy, the competitiveness of our businesses, the livelihoods of U.S. workers, the economic security of our country, and in some cases, the health and safety of consumers,” said Reginald Manning, CBP Director of Field Operations in Atlanta. “Together with our enforcement partners, Customs and Border Protection continues to guard the nation’s borders against counterfeit products.”

CBP reports that “China … remains the primary source economy for counterfeit and pirated goods.” CBP and Immigration and Customs Enforcement (ICE) seized a total of $1.1 billion worth of counterfeit goods shipped from China in FY 2013. This number represents 68%, by MSRP, of all seizures by CBP and ICE last fiscal year.

Luckily for importers and consumers, CBP has developed a system to allow holders of registered trademarks and copyrights to record their trademark or copyright with CBP. Once you do record your IPR, CBP will act as your personal policeman at the border, searching for infringing goods.  The best part is, you can utilize an expert and even train CBP to police your mark and easily identify your legitimate IPR from a counterfeit version.  Once recorded with CBP’s Intellectual Property Rights Recordation (“IPRR”) system, it is entered into an online search system named IPRS. It is essential to work with an expert in IPR to assure your IPR is properly protected and that CBP is properly taught and given the right tools to assist you in policing your IPR. There are four major benefits you receive when recording your IPR with CBP, discussed in more detail here.

If you do not have a compliance program in place to protect your IPR, now is a great time to start.  Remember, imitation is the sincerest form of flattery. Assure your compliance program is in place so your imitators cannot make it past the port!

Co-Authored by Melissa Rodriguez, a law clerk at Becker & Poliakoff and a student at the University of Florida Levin College of Law.