COAC IPR Enforcement Subcommittee Conference Call

Thursday July 31, 2008

2:00-3:30PM

Roll Call:

**Trade Attendees/Organizations Reps present**:

Tony Barone -- Pfizer/COAC --subcommittee co-chair

Barry O'Brien -- Hasbro, Inc/COAC --subcommittee co-chair

Bruce Leeds, The Boeing Company/COAC Trade Chair

Dean Brocious -- Limited Brands

Diane Darvey -- National Association of Chain Drug Stores (NACDS)

Brad Huther -- U.S. Chamber of Commerce

Rubie Mages -- representing Pfizer

Sandy Merber, General Electric

Mark Mutterperl - representing International Trademark Association
(INTA)

Jon Kent -- representing International Trademark Association (INTA)

Rick Nelson -- Counsel representing Cisco/Micro Sun Systems

Fred Paliani, Quality King Distributors/ QK Healthcare, Inc.

Lauren Perez -- representing Sandler Travis Rosenberg

Norm Schenk, UPS

DeeJay Smith, Proctor & Gamble

Phil Spayd, Global Trade Policy

Maria Strong, International Intellectual Property Alliance (IIPA)

Evelyn Suarez, Williams Mullen

John Sullivan, Costco Wholesale Group

**Members/Organizations not present:**

William Cook, Chrysler Corporation/COAC member

Brian Monks, Underwriters Laboratories

Hall Northcott, American Association of Exporters and Importers (AAEI)

Renee Stein, Microsoft Corporation

Joe Gavin -- U.S. Council for International Business

David Simpson, Nike, Inc.

**Government Attendees**:

Kim Marsho -- Designated Federal Officer

Tim Skud -- COAC Co-Chair

Alexander Amdur - sitting in for Therese Randazzo

Chris Jackson -- sitting in for Therese Randazzo

Michael Schreffler

Elizabeth Williamson

Michael Maricich

Proposed IPR Project List:

As part of the goals and objectives of this meeting, the subcommittee
was tasked to present individual ideas concerning IPR enforcement,
encourage others to expand on those ideas, provide feedback, suggest new
ideas, and identify duplication or similar concepts to their own ideas.
A primary outcome for these discussions is to consolidate all ideas into
categories. Although not discussed during the meeting, in these meeting
notes, CBP has taken the liberty to propose categories, which the ideas
could be grouped in, for the subcommittees consideration. These
categories are notated at the bottom of each idea. In some cases there
is more than one category suggested under an idea. The subcommittee may
want to determine which category is best suited for the idea.

Discussions:

1.  Custom Recordation

-   Trade: We should examine the current recordation process to make it
    timelier and financially feasible and explore electronic mechanisms
    to share data on legitimate merchandise with CBP. We could look at
    this process keeping in mind that a new process would be acceptable
    or compatible to the WCO standards on IPR.

-   Proposed category: Technology/Processes

2\. Communications

-   Trade: Evaluate the IPR process within CBP and external to CBP
    including other government IPR organizations.

    -   CBP input: National Intellectual Property Rights Coordination
        Center (IPR Center), headed by Immigration and Customs
        Enforcement (ICE) and Strategy Targeting Organized Piracy
        (STOP!) in which CBP participates and has a role but does not
        direct these initiatives.

    -   Proposed category: Processes/Communications

3\. Evaluate CBP manpower at Ports of Entry for IPR inspections.

-   Trade observation: IPR enforcement should not only be focused at
    major ports like Los Angeles/Long Beach. Second Tier Ports should
    also have resources devoted to IPR enforcement. There is concern
    that the other 320 ports are not adequately staffed to conduct IPR
    enforcement.

-   *CBP input:* CBP IPR enforcement involves personnel throughout the
    agency, not just CBP officers in ports of entry. Personnel
    throughout CBP work in an integrated IPR enforcement process that
    includes targeting and examining high risk shipments, determining
    whether suspect products are infringing, seizing infringing
    products, issuing fines and making referrals for criminal
    investigations. A variety of personnel, including international
    trade specialists, auditors, attorneys, and scientists as well as
    port of entry staff, play key roles in CBP's IPR enforcement
    process. In looking at resources across ports, the diversity in the
    composition and amount of trade, and varying IPR threat level, must
    be taken into account

-   *There is a uniform IPR threat at every port.* CBP Input: This fails
    to take into account the diversity in the composition and amount of
    trade, and varying IPR threat level, among the ports.

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-   Proposed category: Resources

4\. Re-evaluate the in-bond movement of material for IPR infringements.

-   In 2004, IPR related seizures from the in -- bond system represented
    30% of all seizures that year. In 2005, only 15% of the total
    seizures were from the in-bond system. CBP needs to evaluate the
    in-bond system and assign additional manpower to stop IPR material
    from entering into the interior of our country. Various IPR
    associations are pointing to the in-bond system as a major source of
    counterfeiters to operate in our country.

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-   Proposed category: Operations/Processes

5\. Data access

-   Trade: Establish and maintain a comprehensive, centralized database,
    to which all CBP personnel have ready access, which provides data
    relevant to the identification of infringing goods, including but
    not limited to:

    -   Recordations and contacts information for rights holders

    -   Exclusion orders

    -   "Watch list" for infringers and known transshipment routes

    -   Identification by rights holders of known infringers of their
        products

    -   Identification by rights holders of authorized exporters,
        importers and routes for their products

-   CBP input: The CBP e-Recordation system (IPRR) already hs the
    ability to capture much of this information in a centralized
    database. We are looking at the idea of further incorporating
    information on legitimate trade into our targeting.

-   Proposed category: Technology

6\. Detention / seizure protocols

-   Trade: Rights holders are frustrated at times when the amount of
    information they are given by CBP makes it difficult to determine if
    merchandise is infringing on their goods. The trade notes that some
    ports provide more information than other ports, hence a lack of
    uniformity amongst CBP ports in providing information.

-   This idea was deemed similar to idea \# 8: Brand Owners Ability to
    Further Inspect Suspect Products.

-   CBP input: While there are avenues in place for trade to inspect
    suspect goods, CBP is looking at this issue.

-   Proposed category: Operations/Processes

7\. Knowledge sharing

-   Trade: Leverage the capabilities of the National Intellectual
    Property Rights Coordination Center.

-   Similarity to idea #2.

-   CBP input: IPR Center is an initiative lead by ICE in which CBP is
    participating.

-   Proposed category: Communications/Knowledge Sharing

8\. Brand Owners Ability to further inspect suspect products

-   Subcommittee agreed that this was similar to idea #6 which was
    previously discussed.

9\. Domestic Value

-   Topic discussion postponed until Brian Monks formally presents idea.

10\. Communications with Brand Holders

-   Trade: Seeking more information from CBP, a mechanism for faster
    communications with CBP and suggest reviewing privacy issues
    involved so that perhaps more information can be shared with rights
    holders.

-   The subcommittee was made aware of the Anti-Counterfeiting Trade
    Agreement (ACTA) negotiations that were taking place the week of
    July 29^th^ here in Washington.

-   The following website for the information about the ACTA
    Negotiations was brought to the subcommittee attention by Dean
    Brocious.  Who made reference to 1, 2, and 4 under \"Recommendations
    for Border Measures\" during the presentation of his
    recommendations.

<http://file.sunshinepress.org:54445/acta-brief-enforcement-2008.pdf>

-   CBP input: These provisions are still under negotiation, and have
    not been finalized. Since ACTA is currently under negotiations, CBP
    cannot comment. The Trade Secrets Act strictly limits the release of
    proprietary information and CBP personnel can be personally liable
    for disclosure of any proprietary information not allowed under CBP
    regulations. CBP likes the general idea of broadening disclosure
    information allowed under its regulations, and wants to work with
    the trade on this.

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-   Proposed category: Communications

11\. Bonds/Communications:

-   Topic discussion postponed until Dave Simpson formally presents
    idea.

12\. Regulations:

-   Topic discussion postponed until Dave Simpson formally presents
    idea.

13\. Bonding Process

-   Trade: Instead of CBP requiring single transaction bonds (STBs) when
    samples are removed from an importer's shipment and sent to rights
    holders, there should be an annual continuous bond available so that
    rights holders can obtain suspect products faster and expedite
    testing. The faster suspect products are obtained, the less of a
    chance an importer has to tamper with the product. Obtaining a STB
    is a time consuming/wasting process for rights holders.

-   CBP input: CBP is still examining what would actually be needed to
    make this change.

-   Proposed category: Operations/Processes

14\. Product Identification

-   Trade: Again, the more information a rights holder can obtain from a
    suspect shipment, the better to determine authenticity.

-   Identified that this idea is similar to #6 & #8 which were merged
    and discussed earlier in the meeting.

15\. Rights Holder Notification

-   Trade: Trade community wants to know how to obtain information
    regarding counterfeit items that were seized under some other
    statute than an IPR violation.  Right holders are not notified if
    counterfeit items are seized under smuggling or other importation
    violations. The trade contends that having information about
    counterfeit shipments that were seized because an attempt was made
    to smuggle them into the US, would give them valuable intelligence
    about the type of products being counterfeited and the means used to
    bring these counterfeited products to the US.

-   CBP response: Disclosure of IPR seizure information is made under
    IPR disclosure regulations. There are other laws/regulations that
    govern the information that can be shared when goods are seized for
    reasons other than IPR violations. CBP will look into what can be
    disclosed about goods seized for other violations.

16. Ideas on how non-rights holders could assist IP enforcement. 

> CBP: Tell the government when you receive goods that are in fact
> counterfeit when you fully expected legitimate goods to be shipped to
> you from a foreign manufacturer.

New ideas introduced during conference call:

> Trade suggests that they can give CBP additional ideas on constructing
> IPR enforcement algorithms to be used in IPR enforcement targeting.
> They request to have direct conversations with Therese Randazzo
> concerning IPR targeting.

Questions/Suggestions:

-   A subcommittee member suggested that CBP share statistics on
    countries with most IPR violations.

-   CBP input: Mid-Year FY 2008 IPR Seizure currently available on
    CBP.gov

    -   <http://www.cbp.gov/xp/cgov/trade/priority_trade/ipr/seizure/>

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-   Subcommittee member suggested having Office of Field Operations
    personnel participate at future subcommittee meeting to explain
    their perspective of how IPR is handled at the POE.

-   Subcommittee member asked about call in number for when out of the
    country.

-   CBP response: CBP voice communications ensured that the
    "1-800"number provided is a universal number and can be used by
    those outside the U.S. by following international calling
    guidelines.

Action Items:

-   CBP to check into room availability in the DC area for a
    subcommittee face to face meeting sometime during the week of
    September 22, 2008.

-   CBP to ensure conference call line is not overbooked by FEMA
    conference center so that no disruptions will occur on conference
    calls in the future.