Rule2024-13329
Enforcement of Copyrights and the Digital Millennium Copyright Act
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
June 24, 2024
Effective
August 23, 2024
Issuing agencies
Homeland Security DepartmentU.S. Customs and Border ProtectionTreasury Department
Abstract
This document adopts as final, with some changes, proposed amendments to the U.S. Customs and Border Protection (CBP) regulations pertaining to importations of merchandise that violate or are suspected of violating the copyright laws, including the Digital Millennium Copyright Act (DMCA), in accordance with title III of the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA). The amendments set forth in this document clarify the definition of "piratical articles," simplify the detention process involving goods suspected of violating the copyright laws, and prescribe new regulations enforcing the DMCA.
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<title>Federal Register, Volume 89 Issue 121 (Monday, June 24, 2024)</title>
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[Federal Register Volume 89, Number 121 (Monday, June 24, 2024)]
[Rules and Regulations]
[Pages 52364-52379]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-13329]
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DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
DEPARTMENT OF THE TREASURY
19 CFR Parts 113, 133, 148, 151, and 177
[CBP Dec. 24-03; USCBP-2019-0037]
RIN 1515-AE26
Enforcement of Copyrights and the Digital Millennium Copyright
Act
AGENCY: U.S. Customs and Border Protection, Department of Homeland
Security; Department of the Treasury.
ACTION: Final rule.
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SUMMARY: This document adopts as final, with some changes, proposed
amendments to the U.S. Customs and Border Protection (CBP) regulations
pertaining to importations of merchandise that violate or are suspected
of violating the copyright laws, including the Digital Millennium
Copyright Act (DMCA), in accordance with title III of the Trade
Facilitation and Trade Enforcement Act of 2015 (TFTEA). The amendments
set forth in this document clarify the definition of ``piratical
articles,'' simplify the detention process involving goods suspected of
violating the copyright laws, and prescribe new regulations enforcing
the DMCA.
DATES: This final rule is effective on August 23, 2024.
FOR FURTHER INFORMATION CONTACT: Alaina van Horn, Chief, Intellectual
Property Enforcement Branch, Regulations and Rulings, Office of Trade,
U.S. Customs and Border Protection, (202) 325-0083,
<a href="/cdn-cgi/l/email-protection#87c6ebe6eee9e6a9d1e6e9cfe8f5e9c7e4e5f7a9e3eff4a9e0e8f1"><span class="__cf_email__" data-cfemail="73321f121a1d125d25121d3b1c011d331011035d171b005d141c05">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
A. Digital Millennium Copyright Act and the Trade Facilitation
and Trade Enforcement Act of 2015
B. Notice of Proposed Rulemaking
C. Changes From the Proposed Rule for Applying to CBP for DMCA
Protections
II. Discussion of Comments
A. Bond Requirements for Right Holders To Obtain Samples From
CBP
1. Type of Bond
2. Bond Conditions
3. Amount of the Bond
4. Bond Return Requirements
B. Definitions
1. Piratical Articles
2. Copyright Protection Measure
C. Pre-Seizure Disclosures to Right Holders
1. Limited Importation Information Disclosures
2. Unredacted Disclosures
3. Conditions of Unredacted Disclosures
D. Notice of Detention and Importer Response Process
[[Page 52365]]
E. Post-Seizure Disclosures to Persons Injured by Violations of
the DMCA
III. Technical Corrections
IV. Conclusion
V. Statutory and Regulatory Authority
A. Executive Orders 12866 and 13563
B. Regulatory Flexibility Act
C. Paperwork Reduction Act
Signing Authority
I. Background
A. Digital Millennium Copyright Act and the Trade Facilitation and
Trade Enforcement Act of 2015
Title III of the Trade Facilitation and Trade Enforcement Act of
2015 (Pub. L. 114-125; 130 Stat. 122; Section 628A of the Tariff Act of
1930 (19 U.S.C. 1628a), as amended) (TFTEA), made several significant
changes to the U.S. Customs and Border Protection (CBP) procedures
related to the importation of merchandise that violates or is suspected
of violating intellectual property rights (IPR). Among the changes made
by TFTEA are certain provisions regarding enforcement of the Digital
Millennium Copyright Act (Pub. L. 105-304, 112 Stat. 2860, as amended
by Pub. L. 106-113, 113 Stat. 1536, (codified at 17 U.S.C. 1201))
(DMCA). The DMCA prohibits the importation of devices used to
circumvent the technological measures employed by certain copyright
owners to protect their works (``copyright protection measures'').
Section 303(a) of TFTEA amended section 596(c)(2) of the Tariff Act
of 1930 (19 U.S.C. 1595a(c)(2)) by adding subparagraph (G) (19 U.S.C.
1595a(c)(2)(G)), which provides that CBP may seize merchandise
containing a circumvention device violating the DMCA. Section 303(b) of
TFTEA states that, when merchandise containing a circumvention device
is seized pursuant to 19 U.S.C. 1595a(c)(2)(G), CBP must disclose to
persons injured by that circumvention device information regarding the
seized merchandise that is equivalent to the information disclosed to
copyright owners when merchandise is seized for violation of the
copyright laws.
Section 302 of TFTEA amended the Tariff Act of 1930 by inserting a
new section 628A (19 U.S.C. 1628a) authorizing CBP to make certain pre-
seizure information disclosures to owners of properly recorded
trademarks or copyrights that may comprise information otherwise
protected by the Trade Secrets Act (18 U.S.C. 1905). CBP is authorized
to disclose information when CBP determines that these disclosures
would assist CBP in determining whether the imported merchandise
suspected of violating the IPR laws actually violates 17 U.S.C. 602
(copyright), 17 U.S.C. 1201 (circumvention devices), or 19 U.S.C. 1526
(trademark), as long as the disclosures would not compromise an ongoing
law enforcement investigation or national security. Specifically,
section 302(a) of TFTEA (19 U.S.C. 1628a(a)) permits CBP to disclose to
the right holder information that appears on the imported merchandise
and its packaging and labels, including unredacted images of the
merchandise and its packaging and labels. CBP also may, subject to any
applicable bonding requirements, release unredacted samples of the
merchandise to the right holder.
B. Notice of Proposed Rulemaking
On October 16, 2019, the Enforcement of Copyrights and the Digital
Millennium Copyright Act notice of proposed rulemaking (NPRM) was
published in the Federal Register (84 FR 55251). The NPRM proposed
changes to 19 CFR part 133 necessary to implement the applicable
provisions of title III of TFTEA, clarify the definition of ``piratical
articles,'' provide for procedural safeguards to limit the release of
information concerning non-violative shipments, simplify the detention
process related to merchandise suspected of violating the copyright
laws, and clarify the existing CBP procedures for post-seizure
disclosures.
C. Changes From the Proposed Rule for Applying to CBP for DMCA
Protections
Section 133.47 provides for post-seizure disclosures to persons
injured by a circumvention device, as defined in Sec. 133.47(a)(4),
who have successfully applied for and been approved by CBP for DMCA
protections as provided in Sec. 133.47(b)(2)(iii). Section
133.47(b)(2)(iii) announces the establishment of a list of persons
approved by CBP to receive such post-seizure disclosures. In response
to the public comments received, as discussed in more detail below,
this final rule expands the ways that an eligible person, as defined in
Sec. 133.47(a)(3), may apply to CBP for these DMCA protections.
Eligible persons may apply for such DMCA protections when this final
rule becomes effective by attaching a letter requesting such
disclosures to an application to record or renew a copyright. Owners of
existing recorded copyrights may apply for these DMCA protections by
submitting a letter requesting such disclosures to the Intellectual
Property Enforcement Branch of Regulations and Rulings at
<a href="/cdn-cgi/l/email-protection#96dec7dfc6c4d4e4f7f8f5fed6f5f4e6b8f2fee5b8f1f9e0"><span class="__cf_email__" data-cfemail="246c756d74766656454a474c644746540a404c570a434b52">[email protected]</span></a>. Pursuant to section 303(b)(2) of TFTEA, CBP
will publish a notice, signed by the Executive Director, Regulations
and Rulings, in the Federal Register when the list is established. CBP
will also publish the necessary revisions to the list in a notice
signed by the Executive Director, Regulations and Rulings, in the
Federal Register on, at minimum, an annual basis, every September.
II. Discussion of Comments
CBP received six public submissions in response to the NPRM. One
submission was unresponsive and contained no specifics about the NPRM,
copyrights, or IPR. The remaining five submissions supported the
proposed rule's intent but sought clarifications, raised concerns, and/
or made recommendations for improvements. The five submissions each
contained multiple comments. The comments have been grouped together
below based on the general topic.
A. Bond Requirements for Right Holders To Obtain Samples From CBP
Prior to CBP's releasing a sample of imported merchandise pursuant
to Sec. 133.21, Sec. 133.25, Sec. 133.42, or Sec. 133.47, for
suspected infringement of a recorded mark or recorded copyright or
suspected circumvention of a copyright protection measure, proposed 19
CFR 113.70 required the owner of the recorded mark or the recorded
copyright to furnish a single transaction bond to CBP. The bond was
required in the amount specified by CBP and was required to contain the
bond conditions set forth in proposed Sec. 113.70, including an
agreement to only use the sample for the limited purpose of assisting
CBP in enforcing IPR and an agreement to indemnify the importer or
owner for any improper use of the sample.
1. Type of Bond
Comment: Two commenters requested that CBP also permit the right
holder to furnish a continuous bond. The commenters stated that
continuous bonds are more efficient in terms of simplified tracking and
administration, more economical, ease the burden of underwriting,
reduce the administrative burden on CBP, and further CBP's overall
strategy to facilitate trade. One of the commenters further noted that
CBP has in the past allowed continuous bonds when samples of
merchandise were sought for examination or testing.
Response: CBP agrees with the commenters and recognizes that some
owners of a recorded mark or recorded copyright may prefer a continuous
bond for reasons of efficiency, economy, or underwriting. Thus, CBP is
amending
[[Page 52366]]
the language in proposed Sec. 113.70 to permit the owner of the
recorded mark or the recorded copyright to furnish to CBP either a
single transaction bond or a continuous bond, in the amount specified
by CBP and containing the conditions listed, when obtaining a sample of
the merchandise.
2. Bond Conditions
Comment: One commenter requested that CBP amend Sec. 113.70 to
remove references to post-seizure disclosures or procedures. The
commenter noted that the use of the term ``suspected'' in the heading
and text of proposed 19 CFR 113.70, which specifically states that the
bond conditions apply when a right holder obtains a sample of imported
merchandise ``suspected of infringing recorded marks or recorded
copyrights, or circumventing copyright protection measures,''
demonstrates that the bond conditions in Sec. 113.70 are only intended
to apply in a pre-seizure context. Since proposed Sec. 113.70 contains
general citations to Sec. Sec. 133.21, 133.42, and 133.47, the
commenter noted that the bond requirement and conditions apply in a
both pre-seizure and post-seizure context because Sec. Sec. 133.21(f),
133.42(f), and 133.47(f) address post-seizure disclosures and
procedures. The commenter further asserted that TFTEA does not provide
statutory authority for imposing the Sec. 113.70 bond conditions,
including an agreement to use the sample for the limited purpose of
assisting CBP, in a post-seizure context because TFTEA only addresses
CBP's authority to provide samples to right holders when doing so would
assist CBP in determining whether the merchandise is being imported in
violation of the IPR laws. The commenter pointed out that imported
merchandise is only seized after this determination has been made and
that this post-seizure context is not addressed in title III of TFTEA.
Response: The proposed amendments to 19 CFR 113.70 were intended to
consolidate the IPR sample bond language and conditions, currently
contained throughout 19 CFR part 133, in one centralized location. As
set forth in existing 19 CFR 133.21(f) and 133.42(e), CBP already
requires an IPR sample bond in the post-seizure context, conditioned on
indemnifying the importer or owner of the imported merchandise against
any loss or damage resulting from the furnishing of the sample by CBP
to the right holder. CBP endeavored to incorporate these existing post-
seizure bond requirements and conditions in proposed Sec. 113.70.
However, CBP agrees with the commenter that, as drafted, the bond
conditions proposed in Sec. 113.70 conflate pre-seizure and post-
seizure contexts. To avoid confusion and to clarify the bond conditions
in a post-seizure context, CBP is amending proposed Sec. 113.70 to
revise its heading and to add a new paragraph (b) setting forth the
bond requirements and conditions for when CBP provides the owner of a
recorded mark or recorded copyright a sample of imported merchandise
seized for infringing the recorded mark or copyright, or circumventing
a copyright protection measure, including samples provided pursuant to
Sec. 133.21(f), Sec. 133.42(f), or Sec. 133.47(f). For additional
clarity, CBP is also specifying in any cross-references made to Sec.
113.70 throughout part 133 whether Sec. 113.70(a), containing the bond
conditions for merchandise suspected of IPR violations, or Sec.
113.70(b), containing the bond conditions for merchandise seized for
IPR violations, is applicable.
Comment: Two commenters expressed concern that proposed Sec.
113.70 does not describe the types of actions that would violate the
bond conditions, including what activities are permissible in service
of ``providing assistance to CBP in enforcing intellectual property
rights,'' and what actions may be deemed an ``improper use'' of the
sample.
Response: CBP does not believe it is necessary to amend or expand
on the bond conditions language in Sec. 113.70(a). The specificity of
the bond conditions in Sec. 113.70(a) is consistent with the
specificity of the conditions for other types of CBP bonds set forth
throughout title 19 of the CFR. Furthermore, section 302(a) of TFTEA
states, in part, that CBP may provide the right holder with a sample of
the merchandise suspected of violating the IPR laws if CBP determines
that the ``examination or testing'' of the merchandise by the right
holder would assist CBP in determining if the merchandise is being
imported in violation of the IPR laws. In the pre-seizure context, any
activity performed by the owner of the recorded mark or recorded
copyright that falls outside the scope of determining the authenticity
of the sample would constitute an improper use of the sample and would
violate the Sec. 113.70(a) bond conditions.
Comment: One commenter stated that the bond conditions in proposed
Sec. 113.70, which limit the sample's use, could be construed as
prohibiting a right holder from providing relevant information gleaned
from its examination to law enforcement agencies other than CBP, or
from pursuing civil enforcement of the right holder's legitimate rights
authorized elsewhere under Federal or State law. The commenter sought
clarification on this issue. This commenter also objected to CBP's not
including in proposed Sec. Sec. 133.21(f), 133.42(f), and 133.47(f),
language specifying that another use that the sample may be utilized
for is ``in pursuit of a related private civil remedy for
infringement,'' particularly given that this specific language is
included in existing Sec. Sec. 133.21(f) and 133.42(e).
Response: The bond conditions that limit the sample's use, as set
forth in proposed Sec. 113.70, only apply in a pre-seizure context.
Pursuant to CBP's statutory authority in section 302 of TFTEA, for
merchandise suspected of being imported in violation of the IPR laws,
the sample may only be used by the right holder for the limited purpose
of providing assistance to CBP in enforcing IPR. Thus, as explained
above, in the pre-seizure context, any activity performed or disclosure
made by the right holder that falls outside the scope of determining
the authenticity of the sample would constitute an improper use of the
sample and violate the Sec. 113.70(a) bond conditions. This
restriction is necessary since, at the time that CBP is furnishing the
sample to the right holder, the imported merchandise is only suspected
of IPR infringement or circumvention and therefore, it would be
inappropriate for the right holder to provide information gleaned from
its examination of the sample to law enforcement agencies other than
CBP, or from pursuing civil enforcement under Federal or State law.
However, a right holder may use a sample obtained after the
merchandise is seized for violations of the IPR laws for purposes other
than assisting CBP. To provide clarification on this issue, CBP is
adding a new paragraph (b) to Sec. 113.70 to provide less restrictive
bond conditions in the post-seizure context, including those related to
other uses such as a civil remedy for infringement. CBP is also
amending the post-seizure disclosure provisions in Sec. Sec.
133.21(f), 133.42(f), and 133.47(f), as requested by the commenter, to
explicitly state that samples released by CBP post-seizure may be used
in pursuit of a related private civil remedy for infringement.
3. Amount of the Bond
Comment: Two commenters asserted that there is a lack of clarity
regarding the amount of the bond because the proposed language in Sec.
113.70 and part 133 states that the bond will be in the ``amount
specified by CBP.'' One of the commenters stated that this broad
language appears to allow bond valuations based on highly speculative
claims of loss or damage, which the
[[Page 52367]]
commenter believes would discourage right holders from requesting
samples. This commenter recommended that the bond be formulated only on
provable harm that may arise from the importer's loss of the physical
sample and that, for any indirect injury because of misuse of the
sample, the importer should seek recourse in the courts, not with CBP.
The other commenter sought clarity on the amount of the bond and
whether the bond amounts would remain at the current levels, which the
commenter stated are set at the value of the sample (typically $100),
to secure the importer from any damage to the sample while in
possession of the right holder, or if the bond amounts would
dramatically increase due to the bond's now securing against any loss
or damage resulting from improper use of the sample. This commenter
also requested information on the range of criteria appropriate for
setting bond amounts.
Response: CBP disagrees that there is a lack of clarity regarding
the amount of the bond. CBP will specify the amount of the bond based
on the same standard CBP bond requirements and parameters that CBP uses
to determine the amount of its other bonds, as set forth in Sec.
113.13. Section 113.13 governs the amount of any CBP bond, unless
expressly exempt by law or other regulation, including setting the
minimum amount of the bond, providing guidelines for determining the
amount of the bond, requiring periodic review of the bond sufficiency,
and providing CBP authority to require additional security if CBP
determines the bond is not sufficient. In accordance with Sec.
113.13(a), while the minimum amount of an IPR sample bond is $100, as
noted by the commenter, the bond amount assessment is based on the
domestic value of the sample, or $100, whichever is greater. This
determination has been the long-standing policy of CBP when setting
bond amounts in the post-seizure context. Regarding the criteria for
setting pre-seizure bond amounts, CBP takes the particular
circumstances of each situation into account when making its
determination using the guidelines set forth in Sec. 113.13(b).
Numerous factors, including but not limited to, the nature of the
merchandise at issue, the value of the merchandise, including the size
of the shipment, and CBP's prior dealings with the principal will
inform CBP's decision in setting the bond amount. It is essential to
CBP's operations that CBP be able to retain flexibility in establishing
the appropriate bond amount.
4. Bond Return Requirements
Comment: One commenter requested that CBP revise proposed Sec.
113.70 to clarify that the bond will be returned when the imported
merchandise at issue is determined to violate the right holder's IPR.
This commenter stated that while the existing Sec. 113.70 makes clear
that the right holder's bond will be returned where the goods at issue
are ultimately determined to violate the right holder's IPR, the
proposed Sec. 113.70 does not contain similar language. The commenter
stated that, as drafted, the proposed regulations could lead to the
forfeiture of the bond even when CBP determines that the goods were
counterfeit or piratical.
Response: CBP disagrees with this commenter's suggestion. The
commenter's bond description and stated concerns are addressing a bond
required to pursue a disputed determination of copyright infringement
that is in the existing regulations in Sec. Sec. 113.70, 133.43, and
133.44, not the IPR sample bond that is contained in proposed Sec.
113.70. The existing regulations require the right holder to furnish a
bond under Sec. 133.43(d)(1) to pursue a copyright infringement
determination. Existing Sec. 113.70 is currently a bond to indemnify
the United States if CBP detains any articles alleged by the principal
to be a piratical copy of material covered by the principal's copyright
pending a final determination and to hold the United States harmless
from any material depreciation, loss, or damage to the articles if it
is determined that the goods are not piratical. Section 133.44(a)
states that this bond will be returned to the right holder if the
articles at issue are ultimately determined to violate the right
holder's IPR. However, as explained in the NPRM, CBP believes that
these procedures, including the bond, are an outdated and inefficient
mechanism to address situations where CBP has a suspicion that certain
goods may be piratical, therefore, CBP is removing Sec. Sec. 133.43
and 133.44 in their entirety from title 19 of the CFR. Additionally, as
noted in the NPRM, because CBP is removing Sec. Sec. 133.43 and
133.44, CBP is revising the related provision in Sec. 113.70, which
currently sets forth the bond conditions for detention of copyrighted
material. CBP is revising Sec. 113.70, as proposed in the NPRM and
finalized in this rule, to set forth, in one centralized location, the
bond conditions for a right holder to obtain samples of imported
merchandise suspected of infringing the right holder's IPR.
If the conditions of the IPR sample bond, as provided for in
revised Sec. 113.70(a)(1), are violated, CBP may make a demand on the
bond, even if CBP ultimately determines that the imported merchandise
violates the right holder's IPR. To clarify the IPR sample bond
conditions, particularly with regard to the timing of the sample return
requirements and to ensure that a bond is not incorrectly forfeited,
CBP is amending the language proposed in Sec. 113.70. As discussed
above, proposed Sec. 113.70 is being revised to address the pre-
seizure context in paragraph (a) and the post-seizure context in
paragraph (b). In the pre-seizure context, CBP is revising the language
proposed to state that the sample must be returned upon demand by CBP
or at the conclusion of any examination, testing, or similar procedure
performed on the sample, whichever occurs sooner. In the post-seizure
context, CBP is adding language to state that the sample must be
returned upon demand by CBP or at the conclusion of any examination,
testing, or other use, whichever occurs sooner.
If the sample, in either a pre-seizure or post-seizure context, is
not returned to CBP by the right holder, the IPR sample bond is
forfeited regardless of whether the merchandise is determined to
violate IPR.
B. Definitions
1. Piratical Articles
Comment: One commenter stated that the proposed language added to
the definition of ``piratical article'' in Sec. 133.42(a), which
states that the copy or phonorecord must be ``of a recorded copyright
work, importation of which is prohibited by the Copyright Act of
1976,'' is too narrowly tailored. The commenter asserted that CBP
enforces copyrights at the border so long as the work is registered
with the U.S. Copyright Office and that the proposed definition seems
to exclude works not recorded with CBP.
Response: CBP disagrees that ``piratical articles'' is too narrowly
defined. Section 302 of TFTEA (19 U.S.C. 1628a(c)) explicitly limits
its authority to apply only to merchandise suspected of infringing a
trademark or copyright that is recorded with CBP. Accordingly, works
not recorded with CBP are excluded from the procedures set forth in
Sec. 133.42.
2. Copyright Protection Measure
Comment: Two commenters requested that CBP revise the definition of
``copyright protection measure'' in proposed Sec. 133.47(a)(1) to
include copy controls. Copy controls, as set forth in
[[Page 52368]]
17 U.S.C. 1201(b)(1), prohibit the importation of technologies,
products, or services that circumvent a technological protection
measure that effectively protects the exclusive rights of a copyright
owner. The commenters asserted that the proposed definition, as
drafted, only applies to the seizure and forfeiture of imported
merchandise that circumvents access controls, as set forth in 17 U.S.C.
1201(a)(2), prohibiting the importation of technologies, products, or
services that circumvent a technological protection measure that
effectively controls access to a copyrighted work. They stated that to
ensure that CBP fully implements TFTEA and to ensure effective border
enforcement against all unlawfully imported circumvention devices, the
definition of ``copyright protection measure'' in Sec. 133.47(a)(1)
must also include copy controls. The commenters noted that Congress
enacted section 303 of TFTEA to explicitly authorize CBP to seize and
forfeit merchandise that is prohibited under both 17 U.S.C. 1201(a)(2)
and 1201(b)(1). Both commenters provided language that they requested
CBP use to amend the definition of ``copyright protection measure.''
Response: CBP agrees that the definition of ``copyright protection
measure'' in Sec. 133.47(a)(1) should include copy controls. Section
303(a) of TFTEA amended section 596(c)(2) of the Tariff Act of 1930 (19
U.S.C. 1595a(c)(2)) by adding a new subparagraph (G), which states that
the merchandise may be seized and forfeited if CBP determines it is a
technology, product, service, device, component, or part whose
importation is prohibited under 17 U.S.C. 1201(a)(2) or (b)(1). Since
copy controls are set forth in 17 U.S.C. 1201(b)(1), CBP is amending
the definition of ``copyright protection measure'' to include copy
controls. While the language the two commenters suggested differs in
form, it is substantially similar, therefore, CBP is adopting the more
concise language suggested and is adding ``or effectively protects a
right of a copyright owner in,'' to the definition of ``copyright
protection measure'' in Sec. 133.47(a)(1).
C. Pre-Seizure Disclosures to Right Holders
1. Limited Importation Information Disclosures
From the time merchandise is presented for examination, CBP may
disclose to the right holder certain limited importation information,
as listed in proposed Sec. Sec. 133.21(b)(4), 133.42(b)(4), and
133.47(b)(4), to obtain assistance in determining whether the
merchandise is being imported in violation of the IPR laws.
Comment: One commenter noted that the proposed amendments to
Sec. Sec. 133.21(b)(4), 133.42(b)(4), and 133.47(b)(4) shifted CBP's
disclosure of limited importation information to the right holder from
a mandatory disclosure (``CBP will release the information'') to a
permissive disclosure (``CBP may release the information''). The
commenter requested that CBP revert to a mandatory disclosure using the
language ``CBP will release the information,'' as required in the
existing CBP regulations at 19 CFR 133.21(b)(4).
Response: CBP disagrees with the commenter's suggestion. CBP
believes that the limited information disclosures provided for in
Sec. Sec. 133.21(b)(4), 133.42(b)(4), and 133.47(b)(4) should remain,
as proposed, permissive. Based on CBP's experience and right holders'
feedback, the disclosure of limited importation information at this
stage of the determination process does not provide a significant
benefit. The limited importation information that CBP may disclose only
includes the date of importation, the port of entry, description and
quantity of the imported merchandise, and the country of origin. While
this data may have been beneficial in the past when supply chains were
less complex, the current reality of multi-faceted and global supply
chains limits the value of this limited importation information. In
today's trade environment, supply chains often involve multiple
countries of origin, possible transshipment, as well as used,
refurbished, or gray market merchandise. The comprehensive importation
information disclosure provided to the right holder post-seizure in
Sec. Sec. 133.21(e), 133.42(e), and 133.47(e) is of significantly
greater value and benefit. As such, CBP has determined that it is a
better use of CBP resources, and of greater value to right holders, to
provide more information later in the process, when appropriate, as
opposed to less information sooner in the process, when it may not be
as useful to the right holder and when the information disclosure
requires significant expenditure of CBP resources.
Comment: A commenter stated that, as drafted, proposed Sec.
133.21(b)(4) is silent regarding CBP's ability to disclose the limited
importation information in a scenario where the information was not
disclosed prior to the issuance of the notice of detention and the
information is available at the time the notice of detention is issued.
In the existing CBP regulations, Sec. 133.21(b)(4) describes this
scenario and states that where CBP does not disclose this information
to the right holder prior to issuance of the notice of detention, CBP
will do so concurrently with the issuance of the notice of detention.
However, the commenter pointed out that proposed Sec. 133.21(b)(4)
only describes a scenario where the information is unavailable at the
time the notice of detention is issued.
Response: CBP agrees that proposed Sec. 133.21(b)(4), as well as
proposed Sec. Sec. 133.42(b)(4), and 133.47(b)(4), do not contain all
the scenarios under which CBP may choose to disclose the limited
importation information to the right holder. Please note that while
Sec. Sec. 133.21(b)(2)(i)(A), 133.42(b)(2)(i)(A), and
133.47(b)(2)(i)(A) address the scenario where CBP may have previously
disclosed the information prior to the issuance of the notice of
detention or where CBP may disclose the information no later than the
date of issuance of the notice of detention, these regulatory sections'
intended purpose is to provide notice to the importer of the possible
disclosure of its information and not to provide CBP authority to
disclose this information to the right holders. Accordingly, CBP is
amending the language proposed in Sec. Sec. 133.21(b)(4),
133.42(b)(4), and 133.47(b)(4) to address all the circumstances where
CBP may permissively disclose the limited importation information,
including that CBP may release such information prior to the issuance
of the notice of detention, concurrently with the notice of detention,
or, if the information is unavailable at the time the notice of
detention is issued, CBP may release the information after issuance of
the notice of detention.
CBP also notes that there is an inadvertent inconsistency between
the third sentence in proposed Sec. 133.21(b)(4) and the third
sentence in proposed Sec. Sec. 133.42(b)(4) and 133.47(b)(4).
Specifically, CBP inadvertently did not propose to amend the third
sentence of Sec. 133.21(b)(4) in the NPRM, thereby leaving the
regulatory language unchanged, which provides for a mandatory
disclosure. To correct this error, CBP is amending the third sentence
of Sec. 133.21(b)(4) to state that CBP may permissively disclose the
listed information. This amendment will correct the inadvertent error,
align the third sentence of this paragraph with the permissive
information disclosure proposed in the NPRM for the remainder of
proposed Sec. 133.21(b)(4), and ensure that the same permissive
information disclosure is used for disclosures to owners of a recorded
mark (Sec. 133.21), owners of a
[[Page 52369]]
recorded copyright (Sec. 133.42), and owners of a recorded copyright,
who employ a copyright protection measure that may have been
circumvented or attempted to be circumvented by articles that violate
the importation prohibitions of the DMCA (eligible persons in Sec.
133.47).
Comment: A commenter also pointed out that there is a conflict
between proposed Sec. 133.21(b)(4), which contains a permissive
information disclosure, and existing Sec. 133.21(b)(2)(i)(A), which
CBP did not propose to amend in the NPRM and contains a mandatory
information disclosure.
Response: CBP agrees with the commenter. The commenter has
correctly pointed out an inconsistency between proposed Sec.
133.21(b)(4) and existing Sec. 133.21(b)(2)(i)(A). Without a
regulatory amendment, Sec. 133.21(b)(2)(i)(A) would require CBP to
provide notice to the importer that CBP has, or will, perform a
mandatory information disclosure to the right holder of the same
limited importation information that CBP has the authority to choose to
disclose or to not disclose as needed, per proposed Sec. 133.21(b)(4).
This inconsistency was inadvertent and also created an inconsistency
between existing Sec. 133.21(b)(2)(i)(A) and the proposed Sec. Sec.
133.42(b)(2)(i)(A) and 133.47(b)(2)(i)(A), which were intended to be
parallel provisions to ensure the same treatment. Accordingly, CBP is
amending Sec. 133.21(b)(2)(i)(A) to reflect the language used in
Sec. Sec. 133.42(b)(2)(i)(A) and 133.47(b)(2)(i)(A) and changing Sec.
133.21(b)(2)(i)(A) from an unintended mandatory disclosure to an
intended permissive disclosure. This amendment makes the CBP
regulations consistent across contexts and provides clarity on the
issue raised by the commenter.
Comment: A commenter requested that CBP amend Sec. 133.42(b)(4) to
add additional disclosures to the limited importation information that
CBP may disclose to the owner of the recorded copyright to obtain
assistance in determining whether an imported article is a piratical
article. The commenter suggested that CBP also provide the owner of the
recorded copyright with the origin of the shipment, including the
sender and the owner of the merchandise, and the destination of the
shipment, in order to assist the owner in identifying entities engaged
in counterfeiting and trace the origin of the infringing goods.
Response: CBP disagrees with the commenter's suggestion. CBP may
disclose limited importation information when CBP believes that the
right holder may assist CBP in determining whether the article is a
piratical article. When CBP seeks authentication assistance from the
right holder under Sec. 133.42(b)(4), CBP is seeking information about
the article itself, namely, whether the physical characteristics of the
article indicate authenticity or inauthenticity. Given the complexity
of supply chains and the legitimate trade of gray market and used
goods, CBP notes that information concerning the sender and the
recipient of the shipment should not form the basis of an authenticity
determination by the right holder. Also, as explained above, in today's
current global supply chain environment, this importation information
is of limited value to the right holder. Additionally, the information
that the commenter requested is disclosed to the owner of the recorded
copyright post-seizure pursuant to Sec. 133.42(e).
2. Unredacted Disclosures
Comment: One commenter stated that the language ``if CBP concludes
that the disclosure would assist CBP in its determination'' in proposed
Sec. Sec. 133.21(b)(2)(ii) and (b)(3), 133.42(b)(2)(ii) and (b)(3),
and 133.47(b)(2)(ii) and (b)(3) is ambiguous and recommended that CBP
amend the regulatory language to create a presumption that the
disclosure would assist CBP in its IPR enforcement mission. The
commenter stated that after CBP provides notice of detention to the
importer of CBP's suspicion that the goods are counterfeit or
piratical, there are only two possible scenarios: the importer either
fails to respond entirely or the importer provides additional
information to CBP that might be considered when CBP makes its
determination. The commenter asserted that, under both possible
scenarios, the right holder's examination of the merchandise would
greatly assist CBP in its determination and that a presumption that the
information disclosure would assist CBP in its determination is
warranted.
Response: CBP disagrees. CBP does not have the statutory authority
for such a presumption, which would require CBP to abdicate its role in
making a determination as to the information disclosure's utility, in
direct conflict with title III of TFTEA. Section 302(a) of TFTEA
explicitly restricts CBP's ability to provide unredacted information
disclosures and samples to situations in which CBP determines that the
examination or testing of the merchandise by the right holder would
assist CBP in determining whether the imported merchandise is in
violation of the IPR laws. The language in Sec. Sec. 133.21(b)(2)(ii)
and (b)(3), 133.42(b)(2)(ii) and (b)(3), and 133.47(b)(2)(ii) and
(b)(3) mirrors this statutory language.
3. Conditions of Unredacted Disclosures
Pursuant to existing Sec. 133.21(c)(1), proposed Sec.
133.42(c)(1), and proposed Sec. 133.47(c)(1), when CBP discloses
information prior to seizure, CBP will notify the right holder that
some or all of the information being released may be subject to the
protections of the Trade Secrets Act, and that CBP is only disclosing
the information for the purpose of assisting CBP in determining whether
the merchandise bears a counterfeit mark for purposes of existing Sec.
133.21(c)(1), in determining whether the merchandise is a piratical
article for purposes of proposed Sec. 133.42(c)(1), or in determining
whether the merchandise violates the DMCA for purposes of proposed
Sec. 133.47(c)(1).
Comment: One commenter requested that CBP remove the references to
the Trade Secrets Act in existing Sec. 133.21(c)(1), proposed Sec.
133.42(c)(1), and proposed Sec. 133.47(c)(1), which set forth the
conditions of disclosure for unredacted information and samples. The
commenter provided two reasons for the requested removal of references
to the Trade Secrets Act. Firstly, the commenter noted that the Trade
Secrets Act only prohibits the unauthorized disclosure of information
and the inclusion of the reference to the Trade Secrets Act is
unnecessary because TFTEA specifically authorizes the disclosure of
this information. Secondly, the commenter stated that the inclusion of
the Trade Secrets Act reference could be construed as implying a threat
of legal liability if the right holder uses the information disclosed
for any purpose other than assisting CBP in the stated purpose, and the
commenter asserted that the Trade Secrets Act does not restrict the
subsequent use of the disclosed information by a third party.
Response: CBP disagrees and does not believe that the references to
the Trade Secrets Act should be removed from Sec. Sec. 133.21(c)(1),
133.42(c)(1), and 133.47(c)(1). Title III of TFTEA only authorizes
disclosures in a pre-seizure context for a specific purpose, which is
assisting CBP in making the relevant determination of whether the
imported merchandise violates the IPR laws. Using the disclosed
information in the pre-seizure context beyond the scope of what is
authorized by TFTEA is impermissible and the references to the Trade
Secrets Act in these sections provide notice to the right holder of the
limited permissible use.
[[Page 52370]]
D. Notice of Detention and Importer Response Process
Pursuant to existing and proposed Sec. Sec. 133.21(b), 133.42(b),
and 133.47(b), CBP must notify the importer via a notice of detention
that the importer's merchandise was detained and that the importer has
seven business days from the notification to establish that the
merchandise does not violate the IPR laws. Prior to and during those
seven business days, CBP may only provide the limited importation
information set forth in Sec. Sec. 133.21(b)(4), 133.42(b)(4), and
133.47(b)(4) or the redacted photographs, images, or samples described
in Sec. Sec. 133.21(b)(5), 133.42(b)(5), and 133.47(b)(5) to the right
holder. In accordance with Sec. Sec. 133.21(b)(2)(ii),
133.42(b)(2)(ii), and 133.47(b)(2)(ii), CBP may disclose to the right
holder information that appears on the detained merchandise and/or its
retail packaging, including unredacted photographs, images, or samples,
if the importer fails to respond within those seven business days or
provides insufficient information to demonstrate that the merchandise
does not violate the IPR laws.
Comment: One commenter recommended that CBP reassess the current
bifurcated disclosure process in 19 CFR part 133. The commenter
requested that CBP remove the seven-business-day response period
process throughout 19 CFR part 133 because the commenter believes that
this process has been overturned by the passage of title III of TFTEA
and other actions taken by the government and that this process serves
to impede efficient enforcement while failing to advance any legitimate
interests of importers.
Response: CBP disagrees with the commenter. CBP has not observed
any impediment to its enforcement efforts. The process of providing the
importer with a notice of detention and a seven-business-day response
period safeguards the importer's information from unnecessary
disclosures. The Trade Secrets Act protects those required to furnish
commercial or financial information to the government by shielding them
from the competitive disadvantage that could result from disclosure of
that information by the government, including importers whose
merchandise is suspected of violating the IPR laws. These importers
must be afforded due process to dispute this suspicion and provide
information within the seven-business-day response period to prove that
their detained merchandise is not violative before CBP discloses
unredacted information and samples to the right holder. The Trade
Secrets Act permits those covered by the Act to disclose protected
information when the disclosure is otherwise ``authorized by law''
which includes both statutes expressly authorizing disclosure and
properly promulgated regulations authorizing disclosure based on a
valid statutory interpretation. See Chrysler v. Brown, 441 U.S. 281,
294-316 (1979). Section 302 of TFTEA expressly authorizes disclosure of
unredacted images and samples of the merchandise in a pre-seizure
context only when such a disclosure would assist CBP in making a
determination of the authenticity of the merchandise. To make such a
determination, CBP requires the seven-business-day response period to
appropriately assess the information available to CBP and decide
whether an unredacted disclosure to the right holder would assist CBP
in its authenticity determination.
E. Post-Seizure Disclosures to Persons Injured by Violations of the
DMCA
Comment: Two commenters noted that proposed Sec. 133.47(b)(2)(iii)
states that eligible persons may apply to receive post-seizure
disclosures from CBP when injured by violations of the DMCA by
attaching a letter requesting such disclosures to an application to
record a copyright. The commenters expressed concern that, as drafted,
the proposed regulatory language appears to apply only prospectively.
They stated that this raises concerns about the status of copyright
registrations previously recorded with CBP and questioned whether CBP
intended for copyrights to be recorded again in order for the right
holder to qualify as an eligible person (and therefore, an injured
person) for purposes of post-seizure disclosures. One commenter
requested that CBP add language to Sec. 133.47(b)(2)(iii) allowing
owners of previously recorded copyrights to similarly apply for
protection by submitting a letter requesting such disclosures and also
requested that CBP permit a letter to be submitted during a request for
renewal of an existing recordation.
Response: CBP agrees that Sec. 133.47(b)(2)(iii) should not be
restricted to those right holders recording new copyrights and that
owners of current copyright recordations should not be required to re-
record their works in order to receive such post-seizure disclosures
and be placed on the injured persons list. CBP is amending the language
proposed in Sec. 133.47(b)(2)(iii) to allow owners of currently
recorded copyrights to apply for protection by submitting a letter to
CBP requesting post-seizure disclosures at any time, as long as there
is a current relevant recordation with CBP. The application process is
described further in section I.C. of the Background discussion above.
CBP is also amending Sec. 133.47(b)(2)(iii) by allowing owners of
recorded copyrights to apply for DMCA protections by attaching the
letter to a request to renew the copyright recordation. CBP reiterates
that to qualify as an eligible person, as defined in Sec.
133.47(a)(3), who may apply to CBP to receive DMCA protections, as set
forth in Sec. 133.47(b)(2)(iii), that person must have a recorded
copyright with CBP upon which the person can claim a harm that the
injured status might redress.
III. Technical Corrections
In addition to the modifications explained above, CBP is amending
Sec. Sec. 133.21(c)(2), 133.42(c)(2), and 133.47(c)(2) to remove the
corresponding cross-references to paragraph (b)(2)(ii). Paragraph
(b)(2)(ii) provides the importer notice that its information may be
disclosed to the right holder if the importer fails to respond to the
notice of detention in paragraph (b)(2)(i) within the seven-business-
day response period or if the importer provides an insufficient
response to the notice. Thus, it is inaccurate to cite to paragraph
(b)(2)(ii) in paragraph (c)(2) as authority for CBP's releasing the
unredacted sample. CBP is releasing the unredacted sample pursuant to
the regulatory authority in paragraph (b)(3) only. Accordingly, CBP is
removing the citation to paragraph (b)(2)(ii) in paragraph (c)(2) and
is only citing to the appropriate cross-reference of paragraph (b)(3).
Additionally, CBP is adding the language ``if practicable'' after
``entry after obliteration of the recorded copyright'' in Sec.
133.42(g) to clarify that a recorded copyright may only be obliterated
in some circumstances. It may not be possible for the importer to
obliterate or remove a recorded copyright from the seized merchandise
in all circumstances, for example, when the article itself consists of
a piratical copy. In Sec. 133.47(g), CBP is removing ``entry after
obliteration of the recorded copyright'' as an option entirely since
obliterating the recorded copyright is not an appropriate disposition
for articles that violate the DMCA because the article itself consists
of the article that violates the DMCA.
In this document, CBP is also correcting the authority section for
part 113, adding additional cross-references for clarification
purposes, and correcting several cross-references in Sec. 133.47 that
inadvertently cited to the
[[Page 52371]]
definition for ``copyright protection measure'' (Sec. 133.47(a)(1))
instead of the definition of ``articles that violate the DMCA'' (Sec.
133.47(a)(2)) when referencing articles that are suspected of violating
the DMCA.
IV. Conclusion
After careful consideration of the public comments received, for
the reasons stated above, as well as the reasons outlined in the NPRM,
CBP is adopting as final the NPRM published in the Federal Register on
October 16, 2019 (84 FR 55251), with the changes described above.
V. Statutory and Regulatory Requirements
A. Executive Orders 12866 and 13563
Executive Orders 12866 (``Regulatory Planning and Review'') and
13563 (``Improving Regulation and Regulatory Review'') direct agencies
to assess the costs and benefits of available regulatory alternatives
and, if regulation is necessary, to select regulatory approaches that
maximize net benefits (including potential economic, environmental,
public health and safety effects, distributive impacts, and equity).
Executive Order 13563 emphasizes the importance of quantifying both
costs and benefits, of reducing costs, of harmonizing rules, and of
promoting flexibility. This rule is a significant regulatory action
under section 3(f) of Executive Order 12866. Accordingly, OMB has
reviewed this regulation.
One of CBP's roles is to safeguard the U.S. economy from the
importation of goods that violate intellectual property rights. Under
existing regulations, if CBP suspects that a shipment may be violative,
it can share redacted information and samples of the suspect imported
merchandise with a right holder.\1\ To implement title III of TFTEA's
IPR provisions, this final rule will, among other things, allow CBP to
disclose unredacted information and share unredacted images and samples
of suspect imports with right holders, if examination by right holders
would assist CBP's determination and provided that these disclosures
would not compromise an ongoing law enforcement investigation or
national security.
---------------------------------------------------------------------------
\1\ Note that this rule does not alter CBP's ability to provide
redacted samples of an import to a right holder without prior
notification to the importer.
---------------------------------------------------------------------------
Disclosing this unredacted information and sharing these unredacted
samples and images with right holders may provide access to information
about the importer protected by the Trade Secrets Act (18 U.S.C. 1905).
This final rule establishes a procedure under which, following notice
to the importer, the importer has seven business days to establish to
CBP that the suspect imports are not violative of the IPR laws, and are
instead admissible. If the importer is unable to demonstrate the
admissibility of its imports within this timeframe, CBP will share
information with the right holder by disclosing the information or
releasing unredacted samples of the imports in question.
As CBP is establishing a new process for copyrights, it does not
have data on the number of times CBP suspects shipments are violative
of the copyright laws or piratical articles. However, on September 24,
2012, CBP published an interim final rule in the Federal Register (77
FR 24375) that established similar procedures for trademarks. For
analytical purposes, CBP can assume that this final rule has similar
effects after adjusting for the differing volumes. CBP subject matter
experts estimate that CBP sends out an average of 824 detention letters
every fiscal year for suspected trademark infringements. Based on the
proportion of live trademark recordations \2\ available to support the
agency's IPR seizures every fiscal year, relative to the copyright
recordations, CBP estimates an average of approximately 21,423 seizures
based on trademark, 8,881 based on copyright, and 116 DMCA seizures. If
the number of detention letters is proportional to the number of
seizures, CBP estimates that this final rule will result in 345 more
detention letters for possible copyright-infringing importations.
Similarly, by using the number of seizures related to DMCA as a
proportion of total trademark seizures, CBP estimates that this final
rule will result in four detention letters for possible DMCA-infringing
importations.
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\2\ Source: CBP's IPRiS database. Sampling methodology averaged
five equally spaced dates in every fiscal year to estimate the IPRiS
live recordations available for IPR seizures (95% CI, p = 0.05)
annually. CBP took several sample counts per year as opposed to a
single annual count to ensure a representative measure as IPRiS
recordations enter and expire throughout the year.
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CBP estimates that the procedure to demonstrate that the imports
are not piratical will take two hours per affected importer at a cost
of $34.81 per hour.\3\ \4\ This is based on the existing information
collection for the Notice of Detention (OMB Control Number 1651-0073),
which is being updated for this rulemaking. CBP estimates that
importers will bear an opportunity cost as a result of the higher
number of detention notices caused by this rule. CBP estimates that
this opportunity cost will total $24,019 (345 * 2 * $34.81) for
copyright detentions and $278 (4 * 2 * $34.81) for DMCA detentions for
a total monetized cost of $24,297. CBP received no comments from the
public regarding the estimated time cost to importers of two hours to
respond.
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\3\ Sources: U.S. Bureau of Labor Statistics. Occupational
Employment Statistics, ``May 2021 National Occupational Employment
and Wage Estimates United States.'' Updated March 31, 2022.
Available at <a href="https://www.bls.gov/oes/current/oes_nat.htm">https://www.bls.gov/oes/current/oes_nat.htm</a>. Accessed
May 25, 2022; U.S. Bureau of Labor Statistics. Employer Costs for
Employee Compensation. ``ECEC Civilian Workers--2004 to Present.''
March 2022. Available at <a href="https://www.bls.gov/web/ecec.supp.toc.htm">https://www.bls.gov/web/ecec.supp.toc.htm</a>.
Accessed May 25, 2022. CBP assumes an annual growth rate of 4.15%
based on the prior year's change in the implicit price deflator,
published by the Bureau of Economic Analysis.
\4\ Source of median wage rate: U.S. Bureau of Labor Statistics.
Occupational Employment Statistics, ``May 2021 National Occupational
Employment and Wage Estimates United States.'' Updated March 31,
2022. Available at <a href="https://www.bls.gov/oes/current/oes_nat.htm">https://www.bls.gov/oes/current/oes_nat.htm</a>.
Accessed May 25, 2022; U.S. Bureau of Labor Statistics. Employer
Costs for Employee Compensation. ``ECEC Civilian Workers--2004 to
Present.'' March 2022. Available at <a href="https://www.bls.gov/web/ecec.supp.toc.htm">https://www.bls.gov/web/ecec.supp.toc.htm</a>. Accessed May 25, 2022. Because median hourly wage
information was not available for this respondent, CBP adjusted the
annual median wage for this respondent to an hourly estimate using
the standard 2,080 hours worked per year. CBP assumes an annual
growth rate of 4.15% based on the prior year's change in the
implicit price deflator, published by the Bureau of Economic
Analysis.
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This final rule will also formalize the existing practices used to
enforce the DMCA. In 1998, Congress enacted the DMCA. The DMCA
prohibits the importation of devices used to circumvent the copyright
protection measures copyright owners use to protect their works.
Although current regulations do not specifically provide for detention
and seizure of articles that constitute violations of the DMCA, CBP has
enforced the DMCA by providing CBP personnel with internal enforcement
guidelines and advice on how to enforce DMCA violations. CBP subject
matter experts estimate that there are approximately 116 DMCA seizures.
It is possible that this final rule will result in a small increase in
DMCA seizures. TFTEA requires CBP to formalize the foregoing processes
with respect to the DMCA. The formalization of these existing practices
in regulations does not change current practice, so this provision will
not have additional impacts if this rule is finalized.
In addition to the release of unredacted samples, this final rule
will amend the detention procedures applicable to imported articles
that are suspected of being a piratical copy or phonorecord of a
copyrighted work. The current detention procedures in the
[[Page 52372]]
regulations allow up to 120 days for an importer or right holder of a
suspect article to provide CBP with evidence, briefs, or other
pertinent information to substantiate a claim or denial of
infringement, prior to CBP's issuance of an admissibility
determination. To expedite this process, this final rule will amend the
regulations to require the agency to render an admissibility decision
within 30 days from the date the articles are presented to CBP for
examination. As the current detention procedures are seldom used,
according to CBP subject matter experts, CBP does not believe this
final rule will impose a significant effect on the public. During the
public comment period, no comments were received regarding this
statement.
B. The Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et. seq.) (RFA), as
amended by the Small Business Regulatory Enforcement and Fairness Act
of 1996, requires agencies to assess the impact of regulations on small
entities. A small entity may be a small business (defined as any
independently owned and operated business not dominant in its field
that qualifies as a small business per the Small Business Act); a small
not-for-profit organization; or a small governmental jurisdiction
(locality with fewer than 50,000 people). Section 604 of the RFA
requires an agency to perform a regulatory flexibility analysis for a
rule unless the agency certifies under section 605(b) that the
regulatory action would not have a significant economic impact on a
substantial number of small entities.
As described in the Executive Orders 12866 and 13563 analysis
above, CBP estimates that this final rule will result in the issuance
of 345 additional notices of detention. CBP's current examination
policies, use of shared enforcement systems, and targeting criteria
that take into account previous examinations when determining risk make
it unlikely that an importer who receives a notice of detention with
this rule will be required to repeatedly prove the admissibility of its
imports.\5\ As such, CBP assumes for the purposes of this analysis that
the number of affected importers from this final rule will be equal to
the number of additional detention notices resulting from this final
rule--345--with each importer receiving only one detention notice. To
the extent that an importer must prove the admissibility of its imports
more than once as a result of this rule, the number of importers
affected by this final rule would be lower and the cost of this final
rule per affected importer would be higher. During the public comment
period, no comments were received regarding this assumption.
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\5\ CBP reserves the right to detain any imported merchandise,
even if an importer has previously shown that its merchandise is
admissible. This will depend on the particulars of the importation.
Previous importations are taken into account in the risk profile, so
having proven the authenticity of an importation in the past makes
it less likely that an importer will receive a Notice of Detention
for subsequent importations.
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These importers are not centered in any particular industry; any
importer of goods covered by a recorded copyright may be affected by
this rule if CBP has a reason to believe the importer's merchandise may
constitute a piratical copy and CBP cannot determine if an import is a
piratical copy or prohibited circumvention device without the use of
the provisions of this rule. CBP has conducted a study of importers to
determine how many are small entities and has concluded that the vast
majority (about 91 percent) of importers are small entities.\6\
Therefore, CBP believes this final rule may affect a substantial number
of small entities.
---------------------------------------------------------------------------
\6\ See ``CBP Analysis of Small Importers,'' April 2022.
Available in the docket of this rulemaking.
---------------------------------------------------------------------------
Although the final rule may affect a substantial number of small
entities, CBP believes the economic impact would not be significant. As
described in the Executive Orders 12866 and 13563 section of this
document, CBP estimates that it takes an importer two hours to provide
proof of the admissibility of an import to CBP. CBP estimates the
average wage of an importer is $34.81 per hour. Thus, CBP estimates it
will cost a small entity $69.62 to prove the admissibility of its
import with this final rule. CBP does not believe $69.62 constitutes a
significant economic impact.
CBP recognizes that repeated inquiries into the admissibility of an
importer's imports could eventually rise to the level of a significant
economic impact. However, it is unlikely that importers will be
repeatedly required to prove the admissibility of their imports, as
previously mentioned. Additionally, CBP does not anticipate law-abiding
importers to be subject to the provisions in this rule on a repeated
basis. Once CBP has determined the admissibility of an importation, it
will record that information in the system so it can be viewed by CBP
import specialists on future importations and successful previous
importations are a favorable factor in the importation's risk profile.
Further, CBP notes that providing this information to CBP is optional
on the part of the importer, although not providing admissibility
information to CBP may result in the goods being seized. Therefore, CBP
believes there will not be a significant economic impact on small
entities.
Accordingly, although this final rule may have an effect on a
substantial number of small entities, as discussed above, CBP believes
that an estimated cost of $69.62 to an importer does not constitute a
significant economic impact. Thus, CBP certifies this regulation would
not have a significant economic impact on a substantial number of small
entities.
C. Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3507), the collections of information for this document are included in
an existing collection for Notices of Detention (OMB control number
1651-0073). An agency may not conduct, and a person is not required to
respond to, a collection of information unless the collection of
information displays a valid control number assigned by OMB. The burden
hours related to the Notice of Detention for OMB control number 1651-
0073 are as follows:
Number of Respondents: 1,695.
Number of Responses: 1.
Time per Response: 2 hours.
Total Annual Burden Hours: 3,390.
Because CBP estimates that the availability of the procedures in
this final rule will increase the number of Notices of Detention issued
for IPR violations, there is an increase in burden hours under this
collection with this final rule.
Signing Authority
This rulemaking is being issued in accordance with 19 CFR
0.1(a)(1), pertaining to the authority of the Secretary of the Treasury
(or that of his or her delegate) to approve regulations concerning
copyright enforcement.
Troy A. Miller, Senior Official Performing the Duties of the
Commissioner, having reviewed and approved this document, has delegated
the authority to electronically sign the document to the Director (or
Acting Director, if applicable) of the Regulations and Disclosure Law
Division of CBP, for purposes of publication in the Federal Register.
List of Subjects
19 CFR Part 113
Bonds, Common carriers, Customs duties and inspection, Exports,
Freight, Imports, Laboratories, Reporting and recordkeeping
requirements, Surety bonds.
[[Page 52373]]
19 CFR Part 133
Copyright, Reporting and recordkeeping requirements, Trade names,
Trademarks.
19 CFR Part 148
Airmen, Copyright, Customs duties and inspection, Foreign
officials, Government contracts, International organizations, Reporting
and recordkeeping requirements, Seamen, Taxes, Trademarks.
19 CFR Part 151
Cigars and cigarettes, Cotton, Fruit juices, Laboratories, Metals,
Oil imports, Reporting and recordkeeping requirements, Sugar, Wool.
19 CFR Part 177
Administrative practice and procedure, Government procurement,
Reporting and recordkeeping requirements.
Amendments to the CBP Regulations
For the reasons stated above, U.S. Customs and Border Protection
and the Department of the Treasury amends 19 CFR parts 113, 133, 148,
151, and 177 as set forth below:
PART 113--CBP BONDS
0
1. The general and specific authority citation for part 113 continues
to read as follows:
Authority: 19 U.S.C. 66, 1623, 1624.
Subpart E also issued under 19 U.S.C. 1484, 1551, 1565.
* * * * *
0
2. Revise Sec. 113.42 to read as follows:
Sec. 113.42 Time period for production of documents.
Except when another period is fixed by law or regulations, any
document for the production of which a bond or stipulation is given
must be delivered within 120 days from the date of notice from CBP
requesting such document. If the period ends on a Saturday, Sunday, or
holiday, delivery on the next business day will be accepted as timely.
0
3. Revise Sec. 113.70 to read as follows:
Sec. 113.70 Bond conditions for owners of recorded marks or recorded
copyrights to obtain samples from CBP relating to importation of
merchandise suspected of, or seized for, infringing recorded marks or
recorded copyrights, or circumventing copyright protection measures.
(a) Prior to obtaining samples of imported merchandise pursuant to
Sec. 133.21(b)(3) or (5), Sec. 133.25(c), Sec. 133.42(b)(3) or (5),
or Sec. 133.47(b)(3) or (5) of this chapter, for suspected
infringement of a recorded mark or recorded copyright, or suspected
circumvention of a protection measure safeguarding a recorded
copyright, the owner of the recorded mark or the recorded copyright
must furnish to CBP either a single transaction bond or a continuous
bond in the amount specified by CBP containing the conditions listed in
this paragraph (a).
(1) Bond conditions for owners of recorded marks or recorded
copyrights to obtain samples from CBP relating to importation of
merchandise suspected of infringing such recorded marks or recorded
copyrights, or circumventing copyright protection measures--(i)
Agreement to use sample for limited purpose of assisting CBP. If CBP
provides to an owner of a recorded mark or a recorded copyright a
sample of imported merchandise suspected of infringing the recorded
mark or copyright, or suspected of circumventing a copyright protection
measure, including samples provided pursuant to Sec. 133.21(b)(3) or
(5), Sec. 133.25(c), Sec. 133.42(b)(3) or (5), or Sec. 133.47(b)(3)
or (5) of this chapter, the obligors (principal and surety) agree that
such samples may only be used for the limited purpose of providing
assistance to CBP in enforcing intellectual property rights.
(ii) Agreement to indemnify--(A) Improper use of sample. If the
sample identified in paragraph (a)(1)(i) of this section is used by the
owner of the recorded mark or the recorded copyright for any purpose
other than to provide assistance to CBP in enforcing intellectual
property rights, the obligors (principal and surety) agree to indemnify
the importer or owner of the imported merchandise, in the amount
specified by CBP, against any loss or damage resulting from the
improper use.
(B) Physical loss, damage, or destruction of disclosed sample. The
owner of a recorded mark or a recorded copyright must return any sample
identified in paragraph (a)(1)(i) of this section upon demand by CBP or
at the conclusion of any examination, testing, or similar procedure
performed on the sample, whichever occurs sooner. If the sample
identified in paragraph (a)(1)(i) of this section is lost, damaged, or
destroyed as a result of CBP's furnishing it to such owner, the
obligors (principal and surety) agree to indemnify the importer or
owner of the imported merchandise, in the amount specified by CBP,
against any resulting loss or damage.
(2) [Reserved]
(b) Prior to obtaining samples of imported merchandise pursuant to
Sec. 133.21(f), Sec. 133.42(f), or Sec. 133.47(f) of this chapter,
seized for infringement of a recorded mark or recorded copyright, or
circumvention of a protection measure safeguarding a recorded
copyright, the owner of the recorded mark or recorded copyright must
furnish to CBP either a single transaction bond or continuous bond in
the amount specified by CBP containing the conditions listed in this
paragraph (b).
(1) Bond conditions for owners of recorded marks or recorded
copyrights to obtain samples from CBP relating to importation of
merchandise seized for infringing such recorded marks or recorded
copyrights, or circumventing copyright protection measures. If CBP
provides to an owner of a recorded mark or a recorded copyright a
sample of imported merchandise seized for infringing the recorded mark
or recorded copyright, or circumventing a copyright protection measure,
including samples provided pursuant to Sec. 133.21(f), Sec.
133.42(f), or Sec. 133.47(f) of this chapter, the owner of the
recorded mark or recorded copyright must return the sample upon demand
by CBP or at the conclusion of any examination, testing, or other use,
such as pursuit of a related civil remedy for infringement, whichever
occurs sooner. If the sample is lost, damaged, or destroyed as a result
of CBP's furnishing it to such owner, the obligors (principal and
surety) agree to indemnify the importer or owner of the imported
merchandise, in the amount specified by CBP, against any resulting loss
or damage.
(2) [Reserved]
PART 133--TRADEMARKS, TRADE NAMES, AND COPYRIGHTS
0
4. The general authority citation for part 133 is revised to read as
follows, the specific authority for Sec. Sec. 133.21 through 133.25 is
removed, and a specific authority citation for Sec. 133.47 is added to
read as follows:
Authority: 15 U.S.C. 1124, 1125, 1127; 17 U.S.C. 101, 104, 106,
601, 602, 603; 18 U.S.C. 1905; 19 U.S.C. 66, 1202, 1499, 1526,
1595a, 1623, 1624, 1628a; 31 U.S.C. 9701.
Section 133.47 also issued under 17 U.S.C. 1201.
* * * * *
0
5. Amend Sec. 133.0 by revising the last sentence to read as follows:
Sec. 133.0 Scope.
* * * It also sets forth the procedures for the disposition,
including release to the importer in appropriate circumstances, of
articles bearing prohibited marks or names, piratical articles, and
prohibited circumvention devices, as well as the disclosure of
information concerning such articles
[[Page 52374]]
when such disclosure would not compromise an ongoing law enforcement
investigation or national security.
0
6. Amend Sec. 133.21 by:
0
a. Revising paragraphs (b)(2)(i)(A), (b)(2)(ii), and (b)(3);
0
b. In paragraph (b)(4) introductory text, revising the second and third
sentence;
0
c. In paragraph (b)(5), removing the word ``mark'' and adding in its
place the word ``markings'' in the second sentence, and revising the
third sentence;
0
d. In paragraph (c)(2), revising the first sentence; and
0
e. Revising paragraph (f).
0
f. Removing the words ``owner of the mark'' wherever they appear and
adding in their place the words ``owner of the recorded mark'';
The revisions read as follows:
Sec. 133.21 Articles suspected of bearing counterfeit marks.
* * * * *
(b) * * *
(2) * * *
(i) * * *
(A) CBP may have previously disclosed to the owner of the recorded
mark, prior to issuance of the notice of detention, limited importation
information concerning the detained merchandise, as described in
paragraph (b)(4) of this section, and, in any event, such information
may be released to the owner of the recorded mark, if available, no
later than the date of issuance of the notice of detention; and
* * * * *
(ii) Failure of importer to respond or insufficient response to
notice. Where the importer does not provide information within the
seven business day response period, or the information is insufficient
for CBP to determine that the merchandise does not bear a counterfeit
mark, CBP will proceed with the disclosure of information as described
in paragraph (b)(3) of this section to the owner of the recorded mark
if CBP concludes that the disclosure would assist CBP in its
determination, and provided that the disclosure would not compromise an
ongoing law enforcement investigation or national security. CBP will
notify the importer in case of any such disclosure.
(3) Disclosure to owner of the recorded mark of information
appearing on detained merchandise and/or its retail packaging,
including unredacted photographs, images or samples. CBP will disclose
information appearing on the merchandise and/or its retail packaging
(including labels) and images (including photographs) of the
merchandise and/or its retail packaging in its condition as presented
for examination (i.e., an unredacted condition) if CBP concludes that
the disclosure of information to the owner of the recorded mark as
described in paragraph (b)(2)(ii) of this section would assist CBP in
its determination, and provided that disclosure would not compromise an
ongoing law enforcement investigation or national security. CBP may
also provide a sample of the merchandise and/or its retail packaging in
its condition as presented for examination to the owner of the recorded
mark. The release of a sample will be in accordance with, and subject
to, the bond and return requirements of paragraph (c) of this section.
The disclosure may include any serial numbers, dates of manufacture,
lot codes, batch numbers, universal product codes, or other identifying
markings appearing on the merchandise or its retail packaging
(including labels), in alphanumeric or other formats.
(4) * * * CBP may release the information prior to the issuance of
the notice of detention, concurrently with the notice of detention, or,
if the information is unavailable at the time the notice of detention
is issued, CBP may release the information after issuance of the notice
of detention. The limited importation information CBP may disclose to
the owner of the recorded mark consists of:
* * * * *
(5) * * * CBP may release a sample under this paragraph (b)(5) when
the owner of the recorded mark furnishes to CBP a bond in an amount
specified by CBP and containing the conditions set forth in Sec.
113.70(a) of this chapter. * * *
(c) * * *
(2) * * * CBP may release a sample under paragraph (b)(3) of this
section when the owner of the recorded mark furnishes to CBP a bond in
an amount specified by CBP and containing the conditions set forth in
Sec. 113.70(a) of this chapter. * * *
* * * * *
(f) Disclosure to owner of the recorded mark, following seizure, of
unredacted photographs, images, and samples. At any time following a
seizure of merchandise bearing a counterfeit mark under this section,
and upon receipt of a proper request from the owner of the recorded
mark, CBP may provide, if available, photographs, images, or a sample
of the seized merchandise and its retail packaging, in its condition as
presented for examination, to the owner of the recorded mark. CBP may
release a sample under this paragraph (f) when the owner of the
recorded mark furnishes to CBP a bond in an amount specified by CBP and
containing the conditions set forth in Sec. 113.70(b) of this chapter.
CBP may demand the return of the sample at any time. The owner of the
recorded mark must return the sample to CBP upon demand or at the
conclusion of the examination, testing, or other use, such as pursuit
of a related civil remedy for infringement, whichever occurs sooner. In
the event that the sample is damaged, destroyed, or lost while in the
possession of the owner of the recorded mark, the owner must, in lieu
of return of the sample, certify to CBP that: ``The sample described as
[insert description] and provided pursuant to 19 CFR 133.21(f) was
(damaged/destroyed/lost) during examination, testing, or other use.''
* * * * *
0
7. Amend Sec. 133.25 by:
0
a. In paragraph (b), removing the words ``owner of the trademark''
wherever it appears, and adding in their place the words ``owner of the
recorded mark''; and
0
b. Revise and republish paragraph (c).
0
c. Removing the word ``Customs'' wherever it appears, and in its place
adding the term ``CBP''.
The revision reads as follows:
Sec. 133.25 Procedure on detention of articles subject to
restriction.
* * * * *
(c) Disclosure to the owner of the recorded mark or trade name. At
any time following presentation of the merchandise for CBP's
examination, but prior to seizure, CBP may release a sample of the
suspect merchandise to the owner of the recorded mark or trade name for
examination or testing to assist in determining whether the article
imported bears an infringing trademark or trade name. CBP may release a
sample under this paragraph (c) when the owner of the recorded mark or
trade name furnishes to CBP a bond in an amount specified by CBP and
containing the conditions set forth in Sec. 113.70(a) of this chapter.
CBP may demand the return of the sample at any time. The owner must
return the sample to CBP upon demand or at the conclusion of the
examination or testing, whichever occurs sooner. In the event that the
sample is damaged, destroyed, or lost while in the possession of the
owner of the recorded mark or tradename, the owner must, in lieu of
returning the sample, certify to CBP that: ``The sample described as
[insert description] and provided pursuant to 19 CFR 133.25(c) was
(damaged/destroyed/lost) during
[[Page 52375]]
examination or testing for trademark infringement.''
* * * * *
0
8. Revise Sec. 133.42 to read as follows:
Sec. 133.42 Piratical articles; Unlawful copies or phonorecords of
recorded copyrighted works.
(a) Definition. A ``piratical article,'' for purposes of this part,
is an unlawfully made (without the authorization of the copyright
owner) copy or phonorecord of a recorded copyrighted work, importation
of which is prohibited by the Copyright Act of 1976, as amended.
(b) Detention, notice, and disclosure of information--(1) Detention
period. CBP may detain any article of domestic or foreign manufacture
imported into the United States that is suspected of constituting a
piratical article in violation of a copyright recorded with CBP. The
detention will be for a period of up to 30 days from the date on which
the merchandise is presented for examination. In accordance with 19
U.S.C. 1499(c), if, after the detention period, the article is not
released, the article will be deemed excluded for purposes of 19 U.S.C.
1514(a)(4).
(2) Notice of detention to importer and disclosure to owner of the
recorded copyrighted work--(i) Notice and seven business day response
period. Within five business days from the date of a decision to detain
suspect merchandise, CBP will notify the importer in writing of the
detention as set forth in Sec. 151.16(c) of this chapter and 19 U.S.C.
1499. CBP will also inform the importer that for purposes of assisting
CBP in determining whether the detained merchandise is a piratical
article:
(A) CBP may have previously disclosed to the owner of the recorded
copyright, prior to issuance of the notice of detention, limited
importation information concerning the detained merchandise, as
described in paragraph (b)(4) of this section, and, in any event, such
information may be released to the owner of the recorded copyright, if
available, no later than the date of issuance of the notice of
detention; and
(B) CBP may disclose to the owner of the recorded copyright
information that appears on the detained merchandise and/or its retail
packaging, including unredacted photographs, images, or samples, as
described in paragraph (b)(3) of this section, unless the importer
provides information within seven business days of the notification
establishing that the detained merchandise is not piratical.
(ii) Failure of importer to respond or insufficient response to
notice. Where the importer does not provide information within the
seven business day response period, or the information provided is
insufficient for CBP to determine that the merchandise is not
piratical, CBP will proceed with the disclosure of information as
described in paragraph (b)(3) of this section to the owner of the
recorded copyright, if CBP concludes that the disclosure would assist
CBP in its determination, and provided that disclosure would not
compromise an ongoing law enforcement investigation or national
security. CBP will notify the importer in case of any such disclosure.
(3) Disclosure to owner of the recorded copyright of information
appearing on detained merchandise and/or its retail packaging,
including unredacted photographs, images, or samples. CBP will disclose
information appearing on the merchandise and/or its retail packaging
(including labels), and images (including photographs) of the
merchandise and/or its retail packaging in its condition as presented
for examination (i.e., an unredacted condition) if CBP concludes that
the disclosure of information to the owner of the recorded copyright as
described in paragraph (b)(2)(ii) of this section would assist CBP in
its determination, and provided that disclosure would not compromise an
ongoing law enforcement investigation or national security. CBP may
also provide a sample of the merchandise and/or its retail packaging in
its condition as presented for examination to the owner of the recorded
copyright. The release of a sample will be in accordance with, and
subject to, the bond and return requirements of paragraph (c) of this
section. The disclosure may include any serial numbers, dates of
manufacture, lot codes, batch numbers, universal product codes, or
other identifying markings appearing on the merchandise or its retail
packaging (including labels), in alphanumeric or other formats.
(4) Disclosure to owner of recorded copyright of limited
importation information. From the time merchandise is presented for
examination, CBP may disclose to the owner of the recorded copyright
limited importation information to obtain assistance in determining
whether an imported article is a piratical article. CBP may release the
information prior to the issuance of the notice of detention,
concurrently with the notice of detention, or, if the information is
unavailable at the time the notice of detention is issued, CBP may
release the information after issuance of the notice of detention. The
limited importation information CBP may disclose to the owner of the
recorded copyright consists of:
(i) The date of importation;
(ii) The port of entry;
(iii) The description of the merchandise, for merchandise not yet
detained, from the paper or electronic equivalent of the entry (as
defined in Sec. 142.3(a)(1) or (b) of this chapter), the CBP Form
7512, cargo manifest, advance electronic information or other entry
document as appropriate, or, for detained merchandise, from the notice
of detention;
(iv) The quantity, for merchandise not yet detained, as declared on
the paper or electronic equivalent of the entry (as defined in Sec.
142.3(a)(1) or (b) of this chapter), the CBP Form 7512, cargo manifest,
advance electronic information, or other entry document as appropriate,
or, for detained merchandise, from the notice of detention; and
(v) The country of origin of the merchandise.
(5) Disclosure to owner of recorded copyright of redacted
photographs, images and samples. Notwithstanding the notice and seven
business day response procedure of paragraph (b)(2) of this section,
CBP may, in order to obtain assistance in determining whether an
imported article is a piratical article and at any time after
presentation of the merchandise for examination, provide to the owner
of the recorded copyright photographs, images, or a sample of the
suspect merchandise or its retail packaging (including labels),
provided that identifying information has been removed, obliterated, or
otherwise obscured. Identifying information includes, but is not
limited to, serial numbers, dates of manufacture, lot codes, batch
numbers, universal product codes, the name or address of the
manufacturer, exporter, or importer of the merchandise, or any markings
that could reveal the name or address of the manufacturer, exporter, or
importer of the merchandise, in alphanumeric or other formats. CBP may
release a sample under this paragraph (b)(5) when the owner of the
recorded copyright furnishes to CBP a bond in an amount specified by
CBP and containing the conditions set forth in Sec. 113.70(a) of this
chapter. CBP may demand the return of the sample at any time. The owner
of the recorded copyright must return the sample to CBP upon demand or
at the conclusion of any examination, testing, or similar procedure
performed on the sample, whichever occurs sooner. In the event that the
sample is damaged, destroyed, or lost while in the possession of the
owner of the recorded copyright, the owner must, in lieu of return of
the sample, certify to CBP that:
[[Page 52376]]
``The sample described as [insert description] and provided pursuant to
19 CFR 133.42(b)(5) was (damaged/destroyed/lost) during examination,
testing, or other use.''
(c) Conditions of disclosure to owner of recorded copyright of
information appearing on detained merchandise and/or its retail
packaging, including unredacted photographs, images and samples--(1)
Disclosure for limited purpose of assisting CBP in piratical
merchandise determinations. In accordance with paragraphs (b)(2)(ii)
and (b)(3) of this section, when CBP discloses information to the owner
of the recorded copyright prior to seizure, CBP will notify the owner
of the recorded copyright that some or all of the information being
released may be subject to the protections of the Trade Secrets Act,
and that CBP is only disclosing the information to the owner of the
recorded copyright for the purpose of assisting CBP in determining
whether the merchandise is a piratical article.
(2) Bond. CBP may release a sample under paragraph (b)(3) of this
section when the owner of the recorded copyright furnishes to CBP a
bond in an amount specified by CBP and containing the conditions set
forth in Sec. 113.70(a) of this chapter. CBP may demand the return of
the sample at any time. The owner of the recorded copyright must return
the sample to CBP upon demand or at the conclusion of any examination,
testing, or similar procedure performed on the sample, whichever occurs
sooner. In the event that the sample is damaged, destroyed, or lost
while in the possession of the owner of the recorded copyright, the
owner must, in lieu of return of the sample, certify to CBP that: ``The
sample described as [insert description] and provided pursuant to 19
CFR 133.42(c) was (damaged/destroyed/lost) during examination, testing,
or other use.''
(d) Disclosure to importer of unredacted photographs, images, and
samples. CBP will disclose to the importer unredacted photographs,
images, or an unredacted sample of imported merchandise suspected of
being a piratical article at any time after the merchandise is
presented to CBP for examination. CBP may demand the return of the
sample at any time. The importer must return the sample to CBP upon
demand or at the conclusion of any examination, testing, or similar
procedure performed on the sample, whichever occurs sooner. In the
event that the sample is damaged, destroyed, or lost while in the
possession of the importer, the importer must, in lieu of return of the
sample, certify to CBP that: ``The sample described as [insert
description] and provided pursuant to 19 CFR 133.42(d) was (damaged/
destroyed/lost) during examination, testing, or other use.''
(e) Seizure and disclosure to owner of the recorded copyright of
comprehensive importation information. Upon a determination by CBP,
made any time after the merchandise has been presented for examination,
that an article of domestic or foreign manufacture imported into the
United States is a piratical article, CBP will seize such merchandise
and, in the absence of the written consent of the owner of the recorded
copyright (see paragraph (g) of this section), forfeit the seized
merchandise in accordance with the customs laws. When merchandise is
seized under this section, CBP will disclose to the owner of the
recorded copyright the following comprehensive importation information,
if available, within 30 business days from the date of the notice of
the seizure:
(1) The date of importation;
(2) The port of entry;
(3) The description of the merchandise from the notice of seizure;
(4) The quantity as set forth in the notice of seizure;
(5) The country of origin of the merchandise;
(6) The name and address of the manufacturer;
(7) The name and address of the exporter; and
(8) The name and address of the importer.
(f) Disclosure to owner of recorded copyright, following seizure,
of unredacted photographs, images, and samples. At any time following a
seizure of a piratical article under this section, and upon receipt of
a proper request from the owner of the recorded copyright, CBP may
provide, if available, photographs, images, or a sample of the seized
merchandise and its retail packaging, in its condition as presented for
examination, to the owner of the recorded copyright. CBP may release a
sample under this paragraph (f) when the owner of the recorded
copyright furnishes to CBP a bond in the amount specified by CBP and
containing the conditions set forth in Sec. 113.70(b) of this chapter.
CBP may demand the return of the sample at any time. The owner of the
recorded copyright must return the sample to CBP upon demand or at the
conclusion of the examination, testing, or other use, such as pursuit
of a related civil remedy for infringement, whichever occurs sooner. In
the event that the sample is damaged, destroyed, or lost while in the
possession of the owner of the recorded copyright, the owner must, in
lieu of return of the sample, certify to CBP that: ``The sample
described as [insert description] and provided pursuant to 19 CFR
133.42(f) was (damaged/destroyed/lost) during examination, testing, or
other use.''
(g) Consent of the owner of the recorded copyright; failure to make
appropriate disposition. The owner of the recorded copyright, within 30
days from notification of seizure, may provide written consent to the
importer allowing the importation of the seized merchandise in its
condition as imported or its exportation, entry after obliteration of
the recorded copyright, if practicable, or other appropriate
disposition. Otherwise, the merchandise will be disposed of in
accordance with Sec. 133.52, subject to the importer's right to
petition for relief from forfeiture under the provisions of part 171 of
this chapter.
Sec. Sec. 133.43 and 133.44 [Removed and Reserved]
0
9. Remove and reserve Sec. Sec. 133.43 and 133.44.
0
10. Redesignate subpart F as subpart G and add new subpart F,
consisting of Sec. Sec. 133.47 and 133.48, to read as follows:
Subpart F--Enforcement of the Prohibition on Importation of
Merchandise Capable of Circumventing Technological Measures for
Protection of Copyright
Sec. 133.47 Articles suspected of violating the Digital Millennium
Copyright Act
(a) Definitions--(1) Copyright protection measure. A technological
measure that effectively controls access to, or effectively protects a
right of a copyright owner in, a copyrighted work for which the
copyright has been recorded with CBP.
(2) Articles that violate the DMCA. Articles that violate the
importation prohibitions of the Digital Millennium Copyright Act
(DMCA), 17 U.S.C. 1201, consist of products, devices, components, or
parts thereof primarily designed or produced for the purpose of
circumventing a copyright protection measure, or which have only a
limited commercially significant purpose or use other than such
circumvention, or which are knowingly marketed by the manufacturer,
importer, consignee, or other trafficker in such articles, or another
acting in concert with the manufacturer importer, consignee, or
trafficker for use in such circumvention.
(3) Eligible person. The owner of a recorded copyright, who employs
a copyright protection measure that may have been circumvented or
attempted to
[[Page 52377]]
be circumvented by articles that violate the importation prohibitions
of the DMCA.
(4) Injured person. The owner of a recorded copyright, who employs
a copyright protection measure that has been circumvented or attempted
to be circumvented by articles seized for violation of the importation
prohibitions of the DMCA, and who has successfully applied to CBP for
DMCA protections pursuant to paragraph (b)(2)(iii) of this section.
(b) Detention, notice, and disclosure of information--(1) Detention
period. CBP may detain any article of domestic or foreign manufacture
imported into the United States that it suspects is in violation of the
DMCA, as described in paragraph (a)(2) of this section. The detention
will be for a period of up to 30 days from the date on which the
merchandise is presented for examination. In accordance with 19 U.S.C.
1499(c), if, after the detention period, the article is not released,
the article will be deemed excluded for the purposes of 19 U.S.C.
1514(a)(4).
(2) Notice of detention to importer and disclosure to eligible
persons--(i) Notice and seven business day response period. Within five
business days from the date of a decision to detain suspect
merchandise, CBP will notify the importer in writing of the detention
as set forth in Sec. 151.16(c) of this chapter and 19 U.S.C. 1499. CBP
will also inform the importer that for purposes of assisting CBP in
determining whether the detained merchandise violates the DMCA:
(A) CBP may have previously disclosed to the eligible person, prior
to issuance of the notice of detention, limited importation information
concerning the detained merchandise, as described in paragraph (b)(4)
of this section, and, in any event, such information may be released to
the eligible person, if available, no later than the date of issuance
of the notice of detention; and
(B) CBP may disclose to the eligible person information that
appears on the detained merchandise and/or its retail packaging,
including unredacted photographs, images, or samples, as described in
paragraph (b)(3) of this section, unless the importer provides
information within seven business days of the notification establishing
that the detained merchandise does not violate the DMCA.
(ii) Failure of importer to respond or insufficient response to
notice. Where the importer does not provide information within the
seven business day response period, or the information provided is
insufficient for CBP to determine that the merchandise does not violate
the DMCA, CBP will proceed with the disclosure of information, as
described in paragraph (b)(3) of this section, to the eligible person
if CBP concludes that the disclosure would assist CBP in its
determination, and provided that the disclosure would not compromise an
ongoing law enforcement investigation or national security. CBP will
notify the importer in case of any such disclosure.
(iii) Request for DMCA protections and establishment of a list of
persons approved for post-seizure disclosures. Eligible persons may
apply to receive post-seizure disclosures from CBP by attaching a
letter requesting such disclosures to an application to record or renew
a copyright. Owners of existing copyright recordations may similarly
apply for protection by submitting a letter requesting such disclosures
to CBP. CBP will add those persons CBP approves for such disclosures to
a list that CBP will maintain. CBP will provide the post-seizure
disclosures described in this section to injured persons, as defined in
this part, appearing on the list. CBP will publish a notice, signed by
the Executive Director, Regulations and Rulings, of the establishment
of the list in the Federal Register. After the list has been
established, CBP will publish a notice of revisions to the list, signed
by the Executive Director, Regulations and Rulings, in the Federal
Register.
(3) Disclosure to eligible persons of information appearing on
detained merchandise and/or its retail packaging, including unredacted
photographs, images or samples. CBP will disclose information appearing
on the merchandise and/or its retail packaging (including labels) and
images (including photographs) of the merchandise and/or its retail
packaging in its condition as presented for examination (i.e., an
unredacted condition) if CBP concludes that the disclosure of
information to the eligible person as described in paragraph (b)(2)(ii)
of this section would assist CBP in its determination, and provided
that the disclosure would not compromise an ongoing law enforcement
investigation or national security. CBP may also provide a sample of
the merchandise and/or its retail packaging in its condition as
presented for examination to the eligible person. The release of a
sample will be in accordance with, and subject to, the bond and return
requirements of paragraph (c) of this section. The disclosure may
include any serial numbers, dates of manufacture, lot codes, batch
numbers, universal product codes, or other identifying markings
appearing on the merchandise or its retail packaging (including
labels), in alphanumeric or other formats.
(4) Disclosure to eligible person of limited importation
information. From the time merchandise is presented for examination,
CBP may disclose to the eligible person limited importation information
in order to obtain assistance in determining whether an imported
article violates the DMCA. CBP may release the information prior to the
issuance of the notice of detention, concurrently with the notice of
detention, or, if the information is unavailable at the time the notice
of detention is issued, CBP may release the information after issuance
of the notice of detention. The limited importation information CBP may
disclose to the eligible person consists of:
(i) The date of importation;
(ii) The port of entry;
(iii) The description of the merchandise, for merchandise not yet
detained, from the paper or electronic equivalent of the entry (as
defined in Sec. 142.3(a)(1) or (b) of this chapter), the CBP Form
7512, cargo manifest, advance electronic information or other entry
document as appropriate, or, for detained merchandise, from the notice
of detention;
(iv) The quantity, for merchandise not yet detained, as declared on
the paper or electronic equivalent of the entry (as defined in Sec.
142.3(a)(1) or (b) of this chapter), the CBP Form 7512, cargo manifest,
advance electronic information, or other entry document as appropriate,
or, for detained merchandise, from the notice of detention; and
(v) The country of origin of the merchandise.
(5) Disclosure to eligible person of redacted photographs, images
and samples. Notwithstanding the notice and seven business day response
procedure of paragraph (b)(2) of this section, CBP may, in order to
obtain assistance in determining whether an imported article violates
the DMCA and at any time after presentation of the merchandise for
examination, provide to the eligible person photographs, images, or a
sample of the suspect merchandise or its retail packaging (including
labels), provided that identifying information has been removed,
obliterated, or otherwise obscured. Identifying information includes,
but is not limited to, serial numbers, dates of manufacture, lot codes,
batch numbers, universal product codes, the name or address of the
manufacturer, exporter, or importer of the merchandise, or any markings
that could reveal the name or address of the
[[Page 52378]]
manufacturer, exporter, or importer of the merchandise, in alphanumeric
or other formats. CBP may release a sample under this paragraph (b)(5)
when the eligible person furnishes to CBP a bond in an amount specified
by CBP and containing the conditions set forth in Sec. 113.70(a) of
this chapter. CBP may demand the return of the sample at any time. The
eligible person must return the sample to CBP upon demand or at the
conclusion of any examination, testing, or similar procedure performed
on the sample, whichever occurs sooner. In the event that the sample is
damaged, destroyed, or lost while in the possession of the eligible
person, the eligible person must, in lieu of return of the sample,
certify to CBP that: ``The sample described as [insert description] and
provided pursuant to 19 CFR 133.47(b)(5) was (damaged/destroyed/lost)
during examination, testing, or other use.''
(c) Conditions of disclosure to eligible person of information
appearing on detained merchandise and/or its retail packaging,
including unredacted photographs, images and samples--(1) Disclosure
for limited purpose of assisting CBP in DMCA determinations. In
accordance with paragraphs (b)(2)(ii) and (b)(3) of this section, when
CBP discloses information to an eligible person prior to seizure, CBP
will notify the eligible person that some or all of the information
being released may be subject to the protections of the Trade Secrets
Act, and that CBP is only disclosing the information to the eligible
person for the purpose of assisting CBP in determining whether the
merchandise violates the DMCA.
(2) Bond. CBP may release a sample under paragraph (b)(3) of this
section when the eligible person furnishes to CBP a bond in an amount
specified by CBP and containing the conditions set forth in Sec.
113.70(a) of this chapter. CBP may demand the return of the sample at
any time. The eligible person must return the sample to CBP upon demand
or at the conclusion of any examination, testing, or similar procedure
performed on the sample, whichever occurs sooner. In the event that the
sample is damaged, destroyed, or lost while in the possession of the
eligible person, the eligible person must, in lieu of return of the
sample, certify to CBP that: ``The sample described as [insert
description] and provided pursuant to 19 CFR 133.47(c) was (damaged/
destroyed/lost) during examination, testing, or other use.''
(d) Disclosure to importer of unredacted photographs, images or
samples. CBP will disclose to the importer unredacted photographs,
images, or an unredacted sample of imported merchandise suspected of
violating the DMCA at any time after the merchandise is presented to
CBP for examination. CBP may demand the return of the sample at any
time. The importer must return the sample to CBP upon demand or at the
conclusion of any examination, testing, or similar procedure performed
on the sample, whichever occurs sooner. In the event that the sample is
damaged, destroyed, or lost while in the possession of the importer,
the importer must, in lieu of return of the sample, certify to CBP
that: ``The sample described as [insert description] and provided
pursuant to 19 CFR 133.47(d) was (damaged/destroyed/lost) during
examination, testing, or other use.''
(e) Seizure and disclosure to injured person of comprehensive
importation information. Upon a determination by CBP, made any time
after the merchandise has been presented for examination, that an
article of domestic or foreign manufacture imported into the United
States violates the DMCA as described in paragraph (a)(2) of this
section, CBP will seize such merchandise and, in the absence of written
consent of the injured person (see paragraph (g) of this section),
forfeit the seized merchandise in accordance with the customs laws.
When merchandise is seized under this section, CBP will disclose to the
injured person the following comprehensive importation information, if
available, within 30 business days from the date of the notice of the
seizure:
(1) The date of importation;
(2) The port of entry;
(3) The description of the merchandise from the notice of seizure;
(4) The quantity as set forth in the notice of seizure;
(5) The country of origin of the merchandise;
(6) The name and address of the manufacturer;
(7) The name and address of the exporter; and
(8) The name and address of the importer.
(f) Disclosure to injured person, following seizure, of unredacted
photographs, images and samples. At any time following a seizure of
DMCA-violative merchandise under this section, and upon receipt of a
proper request from the injured person, CBP may provide, if available,
photographs, images, or a sample of the seized merchandise and its
retail packaging or labels, in its condition as presented for
examination, to the injured person. CBP may release a sample under this
paragraph (f) when the injured party furnishes to CBP a bond in an
amount specified by CBP and containing the conditions set forth in
Sec. 113.70(b) of this chapter. CBP may demand the return of the
sample at any time. The injured person must return the sample to CBP
upon demand or at the conclusion of the examination, testing, or other
use, such as pursuit of a related civil remedy for infringement,
whichever occurs sooner. In the event that the sample is damaged,
destroyed, or lost while in the possession of the injured person, the
injured person must, in lieu of return of the sample, certify to CBP
that: ``The sample described as [insert description] and provided
pursuant to 19 CFR 133.47(f) was (damaged/destroyed/lost) during
examination, testing, or other use.''
(g) Consent of the owner of the recorded copyright; failure to make
appropriate disposition. The owner of the recorded copyright, within 30
days from notification of seizure, may provide written consent to the
importer allowing the importation of the seized merchandise in its
condition as imported or its exportation, or other appropriate
disposition. Otherwise, the merchandise will be disposed of in
accordance with Sec. 133.52, subject to the importer's right to
petition for relief from forfeiture under the provisions of part 171 of
this chapter.
Sec. 133.48 Demand for redelivery of released articles
If it is determined that articles which have been released from CBP
custody are subject to the prohibitions or restrictions of this
subpart, an authorized CBP official will promptly make demand for
redelivery of the articles in accordance with Sec. 141.113 of this
chapter. If the articles are not redelivered to CBP custody under the
terms of the bond on CBP Form 301, containing the bond conditions set
forth in Sec. 113.62 of this chapter, a claim for liquidated damages
will be made in accordance with Sec. 141.113 of this chapter.
Sec. 133.51 [Amended]
0
11. Amend Sec. 133.51, in paragraph (a), by:
0
a. Adding the words '' including the DMCA,'' after the words
``trademark or copyright laws,''; and
0
b. Removing the citations ``Sec. 133.24 or Sec. 133.46'' and adding
in their place the citations ``Sec. 133.24, Sec. 133.46, or Sec.
133.48''
Sec. 133.52 [Amended]
0
12. Amend Sec. 133.52, in paragraph (b), by adding the phrase ``except
as
[[Page 52379]]
provided in Sec. Sec. 133.42(g) and 133.47(g)'' after the word
``destroyed''.
PART 148--PERSONAL DECLARATIONS AND EXEMPTIONS
0
13. The general authority citation for part 148 continues and new
specific authority is added for Sec. 148.55 to read as follows:
Authority: 19 U.S.C. 66, 1496, 1498, 1624. The provisions of
this part, except for subpart C, are also issued under 19 U.S.C.
1202 (General Note 3(i), Harmonized Tariff Schedule of the United
States).
* * * * *
Section 148.55 also issued under 17 U.S.C. 602 and 19 U.S.C.
1526;
* * * * *
0
14. Amend Sec. 148.55 by revising the section heading and paragraphs
(a) and (c) to read as follows:
Sec. 148.55 Exemption for articles embodying American trademark or
copyright.
(a) Application of exemption. An exemption is provided for articles
bearing a counterfeit mark (as defined in Sec. 133.21(a) of this
chapter) or piratical articles (as defined in Sec. 133.42(a) of this
chapter) accompanying any person arriving in the United States which
would be prohibited entry under 19 U.S.C. 1526, 15 U.S.C. 1124, or 17
U.S.C. 602. The exemption may be applied either to those piratical
articles or to those articles bearing a counterfeit mark that are of
foreign manufacture and bear a recorded mark owned by a citizen of, or
a corporation or association created or organized within, the United
States, when imported for the arriving person's personal use in the
quantities provided in paragraph (c) of this section.
* * * * *
(c) Quantities. Generally, every 30 days, persons arriving in the
United States may apply the exemption to the following: one piratical
article of each type, or one article of each type bearing a counterfeit
mark, and/or one piratical article of each type that is also an article
bearing a counterfeit mark. The Commissioner shall determine if more
than one article may be entered and, with the approval of the Secretary
of the Treasury, publish in the Federal Register a list of types of
articles and the quantities of each entitled to the exemption. If the
owner of a recorded mark or recorded copyright allows importation of
more than one article normally prohibited entry under 19 U.S.C. 1526,
15 U.S.C. 1124, or 17 U.S.C. 602, the total of those articles
authorized by the owner may be entered without penalty.
PART 151--EXAMINATION, SAMPLING, AND TESTING OF MERCHANDISE
0
15. The general authority citation for part 151 continues to read as
follows:
Authority: 19 U.S.C. 66, 1202 (General Note 3(i) and (j),
Harmonized Tariff Schedule of the United States (HTSUS), 1624;
* * * * *
Sec. 151.16 [Amended]
0
16. Amend Sec. 151.16 by:
0
a. Revising paragraphs (a) through (c);
0
b. In paragraph (d), removing the word ``Customs'' wherever it appears
and adding in its place the term ``CBP'', and removing the word
``shall'' wherever it appears and adding in its place the word
``will'';
0
c. In paragraph (e), removing the word ``Customs'' and adding in its
place the term ``CBP'';
0
d. In paragraph (f), removing the word ``Customs'' wherever it appears
and adding in its place the term ``CBP'', and removing the word
``shall'' and adding in its place the word ``will'';
0
e. In paragraph (g), removing the word ``shall'' and adding in its
place the word ``will'';
0
f. In paragraph (h), removing the word ``Customs'' and adding in its
place the term ``CBP'';
0
g. In paragraph (i), removing the word ``Customs'' and adding in its
place the term ``CBP'', and removing the word ``shall'' and adding in
its place the word ``will''; and
0
h. In paragraph (j), removing the word ``Customs'' and adding in its
place the term ``CBP''.
The revisions read as follows:
Sec. 151.16 Detention of merchandise.
(a) Exemptions from applicability. The provisions of this section
are not applicable to detentions effected by CBP on behalf of other
agencies of the U.S. Government in whom the determination of
admissibility is vested.
(b) Decision to detain or release. Within five business days from
the date on which merchandise is presented for CBP examination, CBP
will decide whether to release or detain merchandise. Merchandise that
is not released within the five business day period will be considered
to be detained merchandise under 19 U.S.C. 1499(c)(1). For purposes of
this section, merchandise will be considered to be presented for CBP
examination when it is in a condition to be viewed and examined by a
CBP officer. Mere presentation to the examining officer of a cargo van,
container, or instrument of international traffic in which the
merchandise to be examined is contained will not be considered to be
presentation of merchandise for CBP examination for purposes of this
section. Except when merchandise is examined at the public stores, the
importer must pay all costs relating to the preparation and
transportation of merchandise for CBP examination.
(c) Notice of detention. If a decision to detain merchandise is
made, or the merchandise is not released within the five business day
period described in paragraph (b) of this section, CBP will issue a
notice to the importer or other party having an interest in such
merchandise within five business days from such decision or failure to
release. Issuance of a notice of detention is not to be construed as a
final determination as to admissibility of the merchandise. The notice
will be prepared by the CBP officer detaining the merchandise and will
advise the importer or other interested party of the:
(1) Initiation of the detention, including the date the merchandise
was presented for examination;
(2) Specific reason for the detention;
(3) Anticipated length of the detention;
(4) Nature of the tests or inquiries to be conducted; and
(5) Nature of any information which, if supplied to CBP, may
accelerate the disposition of the detention.
* * * * *
PART 177--ADMINISTRATIVE RULINGS
0
17. The authority citation for part 177 continues to read as follows:
Authority: 5 U.S.C. 301, 19 U.S.C. 66, 1202 (General Note 3(i),
Harmonized Tariff Schedule of the United States), 1502, 1624, 1625.
Sec. 177.0 [Amended]
0
18. In Sec. 177.0 remove the words ``part 133 (relating to disputed
claims of piratical copying of copyrighted matter),''.
Emily K. Rick,
Acting Director, Regulations & Disclosure Law Division Regulations &
Rulings, Office of Trade, U.S. Customs and Border Protection.
Approved:
Aviva R. Aron-Dine,
Acting Assistant Secretary of the Treasury for Tax Policy.
[FR Doc. 2024-13329 Filed 6-21-24; 8:45 am]
BILLING CODE 9111-14-P
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</html>Indexed from Federal Register on June 24, 2024.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.