As part of its ongoing efforts to combat counterfeiting of trademarks, Customs and Border Protection (CBP) is expanding its ability to enforce violations of trademark and copyright protection laws. The agency has issued a set of interim regulations allowing it to disclose certain information on suspected counterfeit goods to the intellectual property (IP) rights holder.

On April 24, CBP published amended regulations in the Federal Register relating to importations of merchandise that have recorded trademarks or recorded trade names. These regulations allow CBP, within stated limitations, to inform the intellectual property rights holder of the trademarks, or trade names details, appearing on the merchandise or its retail packaging in order to determine if the merchandise is indeed a counterfeit good. CBP also institutes a 30-day detention period for the suspected goods. The amendments stem from concerns over the increasingly sophisticated methods being used to counterfeit products. Counterfeit goods threaten public health and safety as well as national security. The counterfeit goods could be unsafe and substandard products, as they would not be regulated. Also, counterfeit technology and components could find their way into critical manufacturing, military and consumer product applications and create a weakness from a national security standpoint. Finally, techniques for counterfeiting goods are becoming so advanced that customs officers are finding it harder to determine whether a product is actually legitimate.

The Trade Secrets Act prohibits government officials from disclosing, without authorization, any information received in the course of their official duties. A trade secret is generally exclusive information of commercial value that is not publicly known, and has been produced solely by the efforts of the person producing the information, who therefore has an interest in protecting its value. The act includes such an exhaustive list of the types of information barred from disclosure, that case law generally interprets it as prohibiting the government employee from dispersing any financial and business data received in the course of their employment. The act specifically shelters those required to provide business or financial information to the government by shielding them from a competitive advantage that could result from a disclosure of such information. However, the act does allow this confidential information to be disclosed when otherwise required by law.

Under the amended regulations, CBP would be disclosing such business information of the importer to the intellectual property rights holder of the product, which would otherwise be protected. CBP would either send a photograph of the suspicious item, or would ask the rights holder to come see the detained product to evaluate if it truly contains their trademark. Items including serial numbers, product numbers, or stock keeping units (SKU) numbers, could reveal confidential information such as place of production or the importer's supply chain process to the rights holder. These items could also directly or indirectly reveal the identity of wholesalers or exporters, and allow motivated persons to unfairly compete against the importer by determining the pricing and sales timing of the product. However, given the concern about increasing counterfeits, CBP by authority granted it through various laws has decided to expand its role in verifying trademarks.

The act gives CBP five days (not including holidays or weekends) to notify the importer that the suspected counterfeit product has been detained. The importer then has seven days to prove to CBP the product is not counterfeit. If the veracity of the product is not shown, the IP rights holder will be contacted. Should the product be determined to have a counterfeit mark, CBP will seize it, and the product will be forfeited under customs regulations.