Most businesses know that their most valuable assets are their intellectual property -- their trademarks, service marks, trade names, patents, copyrights and trade secrets. It is wise to invest in the registration of trademarks and service marks, the registration of copyrights, and in obtaining patents, because when intellectual property owners do so, they obtain legal benefits which can significantly increase the overall value of their business' assets.
Many products sold in the United States are imported. Imported goods pass into the stream of commerce in the United States via a port of entry where the goods are subject to inspection by the United States Customs Service ("Customs"). U.S. businesses constantly face the problem of counterfeit or piratical imports coming into the country being sold at lower prices, and thereby eroding profits, and perhaps also damaging the reputation of their products in the marketplace. U.S. law protects intellectual property owners from such imports.
Owners of trademarks, trade names and copyrights are legally entitled to "record" their marks, trade names and copyrights with Customs, provided they first take certain steps. Upon the recordation of a trademark, copyright or trade name with Customs, Customs can, and will, detain, seize and forfeit counterfeit, piratical and infringing merchandise, and notify the owner of record of the detention or seizure. Civil fines may also be imposed on importers of seized and forfeited goods.
The test for a Customs detention of suspect violative trademarked goods is only a "reasonable suspicion" that the goods bear a mark that violates a federally registered trademark. Such goods may even be detained for a few days to enable Customs to determine if a "reasonable suspicion" exists.
The recordation process is simple and relatively inexpensive. With respect to copyrights, there must be a registered copyright with the United States Copyright Office or a foreign copyright protected under the Berne Convention. With respect to trademarks, there must be a registered trademark on the Principal Register of the United States Patent and Trademark Office ("USPTO"). Trademarks registered on the USPTO's Supplemental Register, and state trade or service mark registrations, may not be recorded with Customs.
To obtain a recordation of a federally registered trademark or service mark with Customs, the owner obtains a certified copy of the trademark registration, writes a letter to Customs setting forth the information required by regulations, including who, if any, are the authorized users of the mark, and encloses a recordation fee (currently $190)* for each class of trademarked goods to be recorded. The recordation of a trademark registered on the Principal Register of the USPTO with Customs will be effective for ten years and may be timely renewed for a lower recordation fee.
U.S. registered trademark owners who desire protection against certain gray market articles, a.k.a. parallel imports, that are physically and materially different from the article authorized for the U.S., may apply to record their trademark(s) and specifically request such protection, known as "Lever-Rule" protection. Parallel imports are generally articles manufactured by, or under licence to, the trademark owner, bearing a valid trademark, and then imported, or imported after the having first been exported, into the United States without the authorization or consent of the trademark owner for importation or domestic sale. Notice of the application is published in the Customs Bulletin. Customs will make a determination whether gray market protection is granted. If "Lever-Rule" protection is granted, Customs will publish a notice in the Customs Bulletin that a trademark will receive "Lever-Rule" protection with regard to a specific product. Where "Lever-Rule" protection has been granted to a trademark or specific article, such article may be imported if the product or its packaging bears a conspicuous and legible label that states: "This product is not a product authorized by the United States trademark owner for importation and is physically and materially different from the authorized product," otherwise, the "Lever-Rule" protected mark or article will be detained.
The recordation process for U.S. registered copyrights is virtually the same as for registered trademarks, with the recordation being effective for 20 years, unless the copyright registration expires in the interim. Foreign copyrights protected under the Berne Convention not registered with the U.S. Copyright Office may also be recorded with Customs, where the letter application includes a statement explaining how the Berne Convention applies.
Trade names not registered at the USPTO may also be recorded with Customs. The trade name must have been used to identify a trader or manufacturer for at least six months. Generally, the complete business name will be recorded. The process is similar to recording a registered trademark or copyright. The recordation fee is also currently $190.* The recordation of trade names takes longer than the recordation of registered trademarks or copyrights, because a notice of tentative recordation of a trade name must first be published and an opportunity given to interested parties to oppose recordation of the trade name. The recordation will remain in force for as long as the trade name is used.
The recordation process with Customs needs to be done carefully, because if inaccurate or insufficient information is given to Customs, it can result in either the client's own goods, or goods consigned to the client's own consignee, licensee or distributor being unnecessarily detained at the port of entry. While the owner of record can authorize the release of the goods, some detentions could cause breaches of contracts, or ill-will between supplier and distributor. Your BNFY intellectual property professional is available to help clients with the recordation of their trademarks, trade names and copyrights with the United States Customs Service, and we can obtain Exclusion Orders from the ITC to stop imports of articles that infringe U.S. issued patents.
*This is the current cost and may be subject to change.