Customs made another high value seizure of counterfeit merchandise being imported into the United States with infringing trademarks under 19 USC 1526. Customs seized 377 cartons of “Ron-Bei” sunglasses that they allege infringe the “Ray-Ban” trademark. This would be a good seizure and penalty case for our customs lawyer to defend, because it’s arguable whether the goods are counterfeit. The manufacturer’s suggest retail price, if the counterfeits were genuine, is $1,619.550. That is what the penalty amount will be calculated from.
We previously discussed, in a two article series, the dangers of importing counterfeit trademark merchandise into the United States, how it can result in seizure, monetary penalties, and how the importer can defend it. This story underscores the importance of everything we discussed in those articles: Importing Counterfeit Trademarks – Customs Seizures & Penalties; Part 1 and Part 2  (click to read).Â
Counterfeit sunglasses with an estimated manufacturer’s suggested retail price (MSRP) of $1,619,550 seized by U.S. Customs and Border Protection officers at the Port of Savannah.
CBP officers discovered the shipment of sunglasses in a container that was selected for examination. During the inspection, officers discovered that the items bore a similar trademark to the Ray Ban Sunglasses logo. The items contained logos and similarities on the hang tags and the sunglasses that infringes Ray Ban’s trademark.
Ray Ban is an international company owned by Luxottica Group S.P.A. Luxottica Group is a manufacturer of eyewear with more than 7,100 optical and sun retail stores in North America, Asia-Pacific, China, South Africa, Latin America and Europe. In addition to a global wholesale network involving 130 different countries, the Group manages leading retail chains in major markets in North America, Asia, China, and Latin America.
CBP protects businesses and consumers every day through an aggressive Intellectual Property Rights enforcement program. CBP targets and seizes imports of counterfeit and pirated goods, and enforces exclusion orders on patent-infringing and other IPR violative goods. Detailed information about recording intellectual property rights and reporting intellectual property infringement to CBP can be found on the CBP website.
Whoever wrote up this news release for customs should get a little money from Ray Ban for the free product pitch in the middle paragraph. Importing counterfeit items into the United States is a very serious matter. First, it is very likely that after seizure the property will be forfeited and destroyed by the U.S. government if, in fact, they are violative of the trademark laws.
Once forfeiture is perfected, the person who caused the importation will probably get a notice of penalty from U.S. Custom & Border Protection in the mail for the equivalent of the value of the products if they were real. The importer will have a chance to respond to customs’ notice of penalty with the Fines, Penalties, and Forfeitures office by filing a petition for mitigation and ask customs to reduce the penalty based on the presence of certain mitigating factors that customs particularly looks for. Great Lakes Customs Law has been very successful in getting these kinds of penalties reduced and, sometimes, even eliminated entirely. If the person fails to pay the penalty, the government can bring a lawsuit in federal district court to recover the penalty in the form of a judgment, after which point the government can lien property, garnish bank accounts, and seize property.
If you have had money or merchandise seized by customs because they allege it is counterfeit and contains trademark violations, call our office at (734) 855-4999 to speak to a customs lawyer, or e-mail us through our contact page. We are able to assist petitions for customs seizures nationwide.
U.S. Customs & Border Protection (“Customs”) enforces its laws through the imposition of fines, penalties, and forfeitures. This article looks specifically at penalties imposed by Customs under 19 USC § 1592, which is the penalty statute for commercial fraud and negligence.
In essence, § 1592 is a law that penalizes any person that does or attempts to enter or introduce merchandise into the United States by means of any 1) material omission or 2) material and false document, written or oral statement, or act that has the potential to alter the classification, appraisement, or admissibility of merchandise. § 1592(a)(1)(A). It is also a violation to aid or abet anyone in violating this law. § 1592(a)(1)(B) This law is violated even if the government does not lose duties or other revenue.
Penalties can be assessed at three different levels of culpability, with more severe penalties for offenses committed with greater culpability. These levels of culpability are:
Negligence: defined by Customs as failure to exercise reasonable care;
Gross Negligence: defined by Customs as “actual knowledge or wanton disregard”; and,
Fraud: defined by Customs as “voluntarily and intentionally.”
For an alleged violation of § 1592, Customs may issue a penalty on (sometimes on form 5955A) against the violator — which may be any person or people involved, including the importer of record, an employee, agent, consignee, etc. You are not immune just because a corporation, limited liability company, or someone else is the importer of record.
Before Customs issues the penalty, however, they must first issue a pre-penalty notice that typically gives the alleged violator 30 days to respond and provide reasons why they should not be penalized. § 1592(b)(1). Although somewhat rare, Customs can then decide against penalty; however, in most circumstances Customs goes forward and issues penalty notice to the alleged violator. If your company receives a pre-penalty notice Customs may still, in the future, go after certain individuals without issuing another pre-penalty notice to them. This often catches people by surprise and some will ignore a penalty notice thinking it will not be applied to them personally, but such is not the case.
If you or your company receives a pre-penalty or penalty notice it should be taken very seriously. Typically, a penalty notice requires a response within 60 days by either paying the alleged penalty, or as we typically recommend to clients, by making an offer in compromise or filing a petition for remission and/or mitigation. These responses – responses to both pre-penalty notices and penalty notices – should be drafted by an attorney experienced in the customs laws and should argue, where the facts and law allow, against imposition of a penalty or reduction in the level of culpability, along with a request to make an oral presentation to Customs.
After Customs first decision on any petition, there is an additional opportunity to file a second or supplemental petitions to argue for a more favorable decision. If you are faced with a penalty, or have recently discovered violations of  § 1592 and are considering a prior disclosure to avoid harsh penalties then please contact our office immediately by filling out our contact form or by calling (734) 855-499 and speaking with a customs lawyer directly.
