NEWS

By Anandashankar Mazumdar

A bill introduced Nov. 8 by Sen. Deborah A. Stabenow (D-Mich.) constitutes the intellectual property leg of a three-bill plan to bolster “American competitiveness.”

The Protect American Innovation Act of 2011 (S. 1830) would impose a “three strikes” penalty on importers of counterfeit goods.

“Our country needs to be exporting our products, not our jobs. If we want to get our economy back on track we need to stand up for American businesses and workers to help them compete and win globally,” Stabenow said in an Oct. 11 speech in Lansing, Mich. “It's long-past time that Congress got tough with other countries who are violating international trade law to give their own companies an anti-competitive advantage.”

IP Enforcement by Treasury, CBP

Title I of the bill—“Strengthening Enforcement of Intellectual Property Rights”—would establish a director of IP rights enforcement in the U.S. Department of the Treasury. This enforcement official would be charged with:

• coordination of IP rights enforcement with the Bureau of Customs and Border Protection and the Bureau of Immigration and Customs Enforcement;

• coordination of any needed changes to regulations;

• representation of the Treasury Department in interdepartmental IP rights bodies; and

• evaluation of the effectiveness of the CBP in interdicting counterfeit and infringing goods.

The bill would also require the CBP and the ICE to have its own coordinators of IP rights enforcement with coordination duties similar to that of their Treasury counterpart.

The CBP's commissioner would be directed by Section 121 of the bill to report within six months using risk assessment and modeling techniques to enforce IP laws. The bill also directs the commissioner to take steps to train CBP personnel in enforcement technologies and to set up a program to provide IP rights holders with samples of goods that might violate their rights and provide them with information on detained shipments.

There is also a provision that directs the CBP to update its recordation process to ensure that illicit shipments are seized rapidly. The system would allow trademark owners and owners of copyrights in audio and video works to file registrations with the CBP to assist them in interdicting infringing goods.

Identification of Low and High Risk Importers

The bill would also set up a program to certify importers who have a record of complying with IP laws. Certified “low-risk” importers would be subject to reduced inspections by the CBP.

Conversely, a “watch list” would also be set up to list parties meriting increased scrutiny. The CBP would have six months to submit a plan to Congress to establish this program.

In Section 127, the bill would limit mitigation of civil fines imposed pursuant to Section 526(f) of the Tariff Act of 1930, 19 U.S.C. §1526(f). The CBP would be required to come up with regulations to determine when dismissal or vacation of penalties is warranted in extraordinary cases.

Another report would be demanded from the CBP, this one regarding the effectiveness of techniques of collecting civil fines imposed for importation of pirated or counterfeit goods. The range of “effective collection techniques” includes:

 

(1) confiscation of the proceeds of actions for which civil fines can be imposed;

(2) seizure of property acquired with such proceeds;

(3) imposition of liens on the real or personal property of persons upon whom civil fines are imposed;

(4) use of bonds to secure full payment of fines;

(5) [imposition of liability on officers, directors, or shareholders of defunct businesses]; and

(6) engaging private sector entities to collect civil fines imposed.

Subtitle E, “New Legal Tools for Border Enforcement,” would amend 19 U.S.C. §1526 by including copyright protected goods within a provision currently directed at prohibiting importation of goods that infringe American trademarks.

Violations would also be based on “importation, exportation, or transshipment” of illicit merchandise than “importation … for sale or public distribution” under the current language of the Trade Act. Furthermore, maximum fines would be tripled upon a finding that there was an intent to sell or publicly distribute the goods.

Circumvention Devices Added to Seizure List

Section 143 of the bill amends the penalties provision in Section 596(c)(2) of the Tariff Act, 19 U.S.C. §1595a(c)(2), by allowing for seizure or forfeiture of “devices designed to circumvent intellectual property rights protections” under the Digital Millennium Copyright Act of 1998, 17 U.S.C. §1201(a)(2).

Subtitle F establishes an Advisory Committee on Import Safety and Intellectual Property Enforcement under the Treasury and the CBP with 20 appointed members to advice on import safety and IP enforcement and to report annually to Congress.

‘Three Strikes' Provision

Title II of the bill—“Increased Penalties for Certain Unfair Trade Practices”—would amend Section 337(d) of the Tariff Act, 19 U.S.C. §1337(d), to create a “three strikes” system for exclusion orders. After the third exclusion order against a party, the International Trade Commission would be empowered to impose an “expanded exclusion order” barring further imports by that party and a visa ban.

S. 1830 has been referred to the Senate Finance Committee.

Companion Bills

The second bill introduced Nov. 8 by Stabenow as a companion to S. 1830 was the Trade Prosecutor Act of 2011 (S. 1827), which would create a trade enforcement division in the Office of the U.S. Trade Representative, headed by a deputy USTR, as well as a “chief manufacturing negotiator.” Both officials would have enforcement of trade agreement provisions within their purview. This bill is also before the Finance Committee.

The final leg of Stabenow's competitiveness agenda is represented by the Currency Exchange Rate Oversight Reform Act of 2011 (S. 1619), introduced in September by Sen. Sherrod C. Brown (D-Ohio). This legislation directs the U.S. Department of the Treasury to monitor currency exchange rates and to impose duties on imports from countries with a “fundamentally misaligned currency.” S. 1619 was approved by the Senate on Oct. 11.

According to a statement from Stabenow's office, this bill is directed at “stopping China's illegal currency manipulation” and its effects on employment and budget deficits in the United States.

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Text at http://pub.bna.com/ptcj/s1830Nov8.pdf