ENFORCEMENT

Office of the Intellectual Property Enforcement Coordinator
sale or public distribution, in an amount not more than
the value that the seized merchandise would have had
if it were genuine. 23 Further, for second and subsequent
seizures against the same party, CBP is authorized to
impose penalties in an amount of up to twice the value
that the merchandise would have had if it were genuine. 24
The use of CBP-issued fines and penalties merits
further attention, including an in-depth assessment
of practical impediments to issuing or collecting
fines, as well as opportunities to utilize existing civil
penalty authorities for budgetary and law enforcement
purposes. Although CBP-issued fines and penalties may
prove difficult to collect in many circumstances, the
expanded use of appropriately scaled CBP civil penalties
may significantly increase deterrence of illicit trade
activity and could increase resources available for IPR
enforcement efforts. 25
To further deprive criminals of their illicit profits, and
to protect the Government supply chain, it is important
for all Federal Government partners to be aware of the
illicit trader’s identity. Even in cases where it would be
impractical for CBP to collect fines, CBP should consider
ways to utilize existing fine and penalty authorities to
establish which violators have had shipments seized,
and to raise flags of caution to prevent additional
illicit business from being conducted. To this end, CBP
should continue to assess penalties against violators,
while looking for opportunities to create a transparent
violators list for use by Government agencies. By
compiling and sharing information about known
violators with those outside of the traditional targeting
environment, such as Federal procurement officials,
business with illicit traders may be deterred.
ACTION NO. 3.16: Evaluate use of IPR civil
penalties. Within two years of the issuance of this
Plan, DHS, in consultation with OMB, will conduct
an assessment of civil penalties imposed under 19
U.S.C. 1526(f) to identify: (1) obstacles preventing
the routine imposition of fees on, and collection
of fees from, violators and assisting entities; and
(2) optimal penalty levels necessary to produce a
strong deterrent effect.
ACTION NO. 3.17: Identify opportunities
to notify other interested partners of known
violators. Subject to limitations on the sharing of
sensitive law enforcement data, DHS will explore
options for sharing data on known violators with
other Federal agency personnel regardless of the
imposition of fines and penalties on those entities.
10. Improve Administration of ITC Exlusion Orders.
CBP is responsible for administering exclusion orders
issued by the U.S. International Trade Commission
(ITC). The majority of ITC exclusion orders are presently
patent-based. They direct CBP to exclude from entry
articles that infringe valid patent claims.
Most exclusion order cases administered by CBP
involve articles that were not directly reviewed or found
to infringe by the ITC, namely, so-called “redesigned”
articles. Consequently, CBP’s role requires that it rule on
whether a redesigned article is subject to an ITC order
despite being different in some respect from the article
originally excluded by the ITC.
The CBP rulings process, set forth at 19 C.F.R. part
177, is ex parte. This is appropriate for the typical
customs transaction, but may be unsuited to the
exclusion order context where there are two parties in
interest: the complainant and the importer. Importers
submit most ruling requests, and because CBP’s current
rulings process is ex parte, there is no authority for CBP
officials to include the complainant in the proceeding.
Consequently, the complainant may not become aware
of the matter until CBP publishes its ruling, despite the
complainant’s potentially significant economic interest in
the outcome of the proceeding.
There are opportunities to review CBP’s
administration and enforcement of ITC exclusion
orders for enhancements by way of a possible inter
partes proceeding at CBP that would afford CBP the
opportunity to reasonably hear from both the importer
and the complainant, and allow each to make appropriate
arguments while rebutting those of the other.
ACTION NO. 3.18: Evaluate workability
and options for implementing inter partes
proceedings as part of CBP’s exclusion
order rulings process. Within one year of the
issuance of this Plan, CBP will review and report
on whether changes to the structure of the
exclusion order rulings process are warranted,
and make such recommendations for regulatory
amendments as may be appropriate.
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