IDSA Supports The Counterfeit Goods Seizure Act of 2019

Nov 7 2022 - 3:00pm

 

On November 2, 2022 IDSA sent letters to a bipartisan group of US Senators expressing our support for the Counterfeit Goods Seizure Act of 2019 (S. 2987). This legislation was introduced to Congress by Senator Thom Tillis [R-NC], Christopher A. Coons [D-DE], Bill Cassidy [R-LA], and Mazie K. Hirono [D-HI] in late 2019 but has been slow to gain widespread support and is (as of this writing) currently awaiting review by the Committee on Finance. Our hope, by sending letters now nearly 3 years after the bill was first introduced, is to spark a renewed interest in the legislation and have it reintroduced with top priority at the next opportunity.

This bill authorizes the U.S. Customs and Border Protection (CBP) to seize goods or packaging entering the United States that involve design patent infringement. Current law authorizes the CBP to seize only goods or packaging that involve copyright, trademark, or trade name infringement. The CBP may impose a fee to cover the administrative costs of recording design patents. (Currently, rights owners may record their intellectual property with the CBP to assist with the CBP's intellectual property enforcement efforts.)

Senator Tillis summarizes the importance of this legislation:

“The inflow of counterfeit goods into the United States is an issue that affects American consumers and businesses alike and results in the American economy losing billions of dollars every year. I am proud to introduce this bipartisan legislation to give U.S. Customs and Border Protection the authority to seize merchandise that infringes on design patents so we can take steps to stem the flow of counterfeit goods and protect American interests.”

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IDSA believes that the Counterfeit Goods Seizure Act of 2019 is an important and necessary act of legislation that has a serious benefit for the industrial design profession, whether it be an individual designer creating a new business to a consultant industrial designer creating new products for their clients to a corporate industrial designer working within a large corporate design department.

Tim Fletcher, FIDSA led this effort for IDSA with support from members of our Design Protection Section. Our letter follows similar statements from the American Bar Association, the Intellectual Property Owners Association jointly with American Intellectual Property Law Association and The International Trademark Association. IDSA's Board of Directors approved our position of support for the The Counterfeit Goods Seizure Act of 2019 during our September 2022 meeting.

 

An excerpt of our letter:

 

The Impact of Counterfeiting on Industrial Design

Currently the global estimate for the value of counterfeit goods is roughly $1.3 trillion (or approximately 3.3% of all trade). The US market is the most affected by counterfeiting on a monetary basis. The largest product markets for counterfeit goods are (based on largest to smallest):

Footwear, Clothing, Leather Goods, Electrical Equipment, Watches, Medical Equipment, Perfumes & Cosmetics, Toys, Jewelry, Pharmaceuticals

In all of the above markets, industrial designers play a central role in the development of new and unique ornamental appearances of the goods that are sold to consumers.

The Tariff Act of 1930 has had provisions that allow US Customs and Border Protection (CBP) to seize products that infringe upon registered trademark (trade dress, for industrial design) and copyright (for useful articles, for industrial design) for several decades. The CBP database is built by trademark/copyright owners who have registered their intellectual property. This system has been in effect since 2005 and has worked well. The Counterfeit Goods Seizure Act of 2019 would, in the simplest terms, add “design patents” to trademarks and copyright in the Tariff Act of 1930.

Currently Design Patents can only be enforced through the CBP after an exclusion order issued by the US International Trade Commission (ITC) after an extensive investigation concludes in favor of the patent owner. This is time-consuming and expensive for design patent owners, especially ones that are individuals. If the exclusion order is partial, then only the respondents named would have their infringing products stopped at the border. A general exclusion order, which would stop any manufacturer of infringing products to be halted, is very rare to obtain. Therefore, Design Patents are the only one of the three visual intellectual property protections that do not have strong anti-counterfeiting measures at the US border.

If the Counterfeit Goods Seizure Act of 2019 were enacted into law, the U.S. would be joining other countries and governmental entities that already enforce design rights at their borders, such as the European Union, Japan, South Korea, China, India, Mexico, Turkey, Argentina, South Africa, Switzerland, and Panama.

Industrial Design relies on the three visual intellectual properties to protect our work and add value to what we do. Counterfeiting brings damage to our profession and lowers its value in the eyes of our clients/employers. That said, the IDSA believes the Counterfeit Goods Seizure Act of 2019 is good for Industrial Design as a whole and industrial designers specifically.

We ask that the Counterfeit Goods Seizure Act of 2019 be reintroduced to Congress. As a profession, IDSA supports this legislation for our members. IDSA stands ready to work with you and your colleagues in the Senate to advance this important legislation.