What Happens to the Importers Now
Seizure and destruction of the merchandise is only the beginning of the exposure. Once CBP perfects the forfeiture, the Fines, Penalties and Forfeitures office may issue separate civil fines under 19 U.S.C. § 1526(f), the provision covering those who direct, assist financially or otherwise, or aid and abet the importation of counterfeit-marked goods for sale or public distribution.
The fine is measured against MSRP, not against what the fakes are worth
Under 19 CFR § 133.27, a first seizure carries a fine of not more than the value the merchandise would have had if it were genuine, according to the manufacturer’s suggested retail price in the United States at the time of seizure. For a second and each subsequent seizure, the ceiling doubles to twice that figure. MSRP is normally higher than domestic value, because it excludes discounts and markdowns — which is precisely why the fine is calculated that way.
Applied to this case, the arithmetic is severe. The domestic value of the seized bags was roughly $295,665. The genuine-article MSRP was $210,785,475. It is the second figure that sets the statutory ceiling, and because nine separate shipments were involved across five importers, any importer whose goods were seized more than once faces the doubled ceiling on the later seizures.
Statutory ceilings are not the amounts CBP actually collects. The agency publishes mitigation guidelines for trademark, copyright and patent seizures and penalties and weighs aggravating and mitigating factors in setting a mitigated figure. That is the entire purpose of a petition, and it is why a notice quoting an eight-figure number is the start of a negotiation rather than a bill.
Beyond CBP, the trademark owner has independent civil remedies. Under 15 U.S.C. § 1117(c), a plaintiff may elect statutory damages of not less than $1,000 and not more than $200,000 per counterfeit mark per type of goods. Where a court finds the use of the mark was willful, that ceiling rises to $2,000,000 per mark per type of goods. Major luxury brands monitor CBP seizure records and pursue importers directly, so a civil suit is a distinct risk that can arrive after the CBP notice.
The seizure fits a pattern that has held for well over a decade. In fiscal year 2012, the year this enforcement action took place, CBP seized counterfeit goods with a total MSRP of roughly $1.26 billion. Handbags and wallets were the largest single category by value at approximately $511 million, up about 142 percent on the prior year, and more than $446 million of that came from China. China has remained the dominant source country since. Readers wanting current figures should consult CBP’s most recent annual intellectual property rights seizure statistics, as the totals and category rankings shift year to year.
This detail matters legally. The CBP release describes the bags only as being in violation of the Hermes protected trademark without specifying how, whether the marks were identical counterfeits, close imitations, or otherwise infringing. But concealing goods behind legitimate merchandise in the nose of a container is powerful evidence of intent. An importer who unknowingly bought counterfeit goods has no reason to hide them from inspectors.
It is worth being precise about what that does and does not mean. CBP’s own guidelines treat a lack of intent or knowledge as to the counterfeit nature of an importation as a mitigating factor in setting the amount of a fine, not as a shield against liability. An innocent importer is still liable; they simply have a stronger argument for a reduced figure. Concealment of this kind removes that argument almost entirely, which is why it matters more to the eventual number than to whether a fine issues at all.