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BY THE LAW


Protecting Against Counterfeiting T


DAVE RESSER, WEGMAN, HESSLER & VANDERBURG, CLEVELAND


he Department of Homeland Security (DHS) reports more than 11 million maritime con-


tainers arrived at American seaports during the DHS 2015 fiscal year. Another 10 million containers crossed land borders via truck, while an ad- ditional 3 million containers arrived via train. Add to those another 250 million consigned express packages shipped through the air that entered the U.S. Tese high numbers of imports provide a daunting task for government officials to stop imitation and counterfeit goods from cross- ing international borders. According to U.S. govern- ment reports, pirated and counterfeit products cost U.S. companies up to $250 billion annually. Imitation and counterfeit


goods attempt to piggy-back upon the customer goodwill that has been built by your company. Counterfeiters can do this in several different ways: copying the structure claimed by a patented casting or cast- ing machine; copying the manufactur- ing method claimed in a patent; or copying a trademark or trade dress to convince customers the counterfeited good is actually your product. Metalcasters can use several


strategies to stop potential imitation and counterfeit goods from entering American markets. If you believe your patented casting or process is being infringed by products being imported into the U.S., it is most helpful to have an issued patent covering the particu- lar product or process that is being counterfeited. Similarly, a registered trademark will help you and your com- pany prevent others from copying your logos, company names, brand names, etc. that you use to promote your castings. Taking the case of counter- feited trademarks first, the trademark owner may record the trademark with U.S. Customs and Border Protec- tion (CBP). After recordation of the trademark, CBP has the power to


62 | MODERN CASTING November 2016


detain and/or seize goods that bear a counterfeit trademark, goods with a confusingly similar trademark, and certain gray-market products as they are entering the U.S. Te counterfeit goods then can be


seized by authorities such as the CBP, forfeited by the importer, and then dis- posed. In some cases, the owner of the trademark may permit the goods to be


Metalcasters can use several strategies to stop potential imitation and counterfeit goods from entering American markets.


shipped back to the originator or enter the U.S. after the offending trademarks are removed. Imported goods with a confusingly similar trademark also can be detained, and the importer is given 30 days to remove the trademark. If this does not occur, the goods are subject to forfeiture. Te trademark owner also will gain the benefit of detailed information regarding the parties involved in the importation, which can aid the pursuit of legal ac- tion against those parties. In the case of imported goods


infringing patented goods and processes, a patent owner can target specific goods by filing a case with the International Trade Commission (ITC). ITC cases are meant to serve as protection for U.S. businesses from unfair practices during the importation of goods. Practices such as “dump- ing” and unlawful subsidies are not within the scope of the ITC, but most other unfair practices are. U.S. statutes require the patent owner to establish (1) that the goods are being imported, sold, or sold for importation that (2) infringe an in-force patent. Te ITC


then conducts an adjudicative inves- tigation before an administrative law judge. If the judge finds a violation has been proven, then it may issue an order directing the CBP to exclude the infringing products from enter- ing the U.S. Te exclusion order can specify products from specific sources or, in appropriate cases, to infringing products from any source anywhere in the world. Additionally, the ITC may issue cease and desist orders prohibiting American firms from importing infringing products in the U.S. Te ITC usually completes its investiga- tions within the same one-year period that the case is registered. Tis may seem like an extended period of time, but this is often a much shorter time compared to court cases conducted in other American court systems. Another benefit of the


described ITC actions is the


elimination of a need to establish juris- diction over the alleged infringers. In fact, ITC exclusion orders often reach products imported by foreign firms that were never named as parties and never had notice of the ITC investigation. It is worthy to note that filing a case with the ITC is also a viable option for the owners of trademarks that are being infringed by imported goods. Legal protection for patents and trademarks is continually harmonized around the world, and as such, many other nations, such as Canada, are implementing laws and regulations similar to those described above. Te DHS reports that in FY 2015,


$1.3 billion worth (Manufacturer’s Suggested Retail Price) of goods were seized at American borders, and more than 350 convictions were handed down. During that same fiscal year, the originating countries for these seizures included China, which originated nearly 50% of the seized goods, and Hong Kong, which originated 34% of the seized goods; no other country accounted for more than 5%.


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