The U.S. Bureau of Customs and Border Protection (“CBP”) prevailed in a recent decision from the United States Court of Appeals for the Ninth Circuit, which concluded that CBP was authorized to seize watches bearing the counterfeit trademark “TOMMY”, and impose a fine as a civil penalty on the importer, even though the owner of the mark at issue did not make or sell watches at the time of the seizure. The case is entitled United States of America v. Able Time, Inc., and the decision can be found here.
As discussed in the decision, the Tariff Act authorizes the Bureau of Customs and Border Protection to seize any “merchandise bearing a counterfeit mark” and impose a fine as a civil penalty. 19 U.S.C. §1526(e) & (f). The Defendant, Able Time Inc., attempted to import watches bearing the trademark “TOMMY,” a mark owned by the Tommy Hilfiger Licensing Corp.
In the proceedings before the trial court, Able Time argued that the watches were not counterfeit, and thus any seizure or fine was improper because Tommy Hilfiger did not make or sell watches at the time of the seizure by CBP. As grounds for their argument, Able Time pointed to other trademark statutes, such as the Lanham Act, to illustrate that an “identify of goods or services” is required to establish that a mark is counterfeit.
The Court of Appeals disagreed, and concluded that, unlike related trademark statutes, the Tariff Act does not contain an “identity of goods or services” requirement, and thus CBP was entitled under the Tariff Act to seize the watches and impose a civil penalty on the Defendant, Able Time.
The CBP’s ability to seize goods bearing counterfeit marks, and impose hefty civil penalties, is another of the several benefits conferred on the owner of a federal trademark registration. Without a federal registration, it is highly unlikely, if not impossible, for the CBP to detect counterfeit marks, and prohibit their importation.