Administration Begins Review of CBP Enforcement of Patent Exclusion Orders

Comments on several issues related to the review are due by July 21. The interagency group will come out with recommendations from its review within six months, IPEC said.

CBP Enforces ITC Orders Banning Imports of IPR-Infringing Goods

Violations of “Section 337” (19 USC 1337) occur when foreign goods that infringe intellectual property rights protections (like patents, copyrights, and trademarks) are being sold in the U.S., and a viable domestic industry exists that is using the protected technology. If the ITC finds violations of Section 337 in an investigation, it may issue cease and desist orders and exclusion orders. Exclusion orders bar imports that infringe the intellectual property rights at issue, and may be either limited (applying to one company) or general (applying to all infringing products). CBP is tasked with enforcing the exclusion orders. Because exclusion orders don’t cover all imports of a given product -- they only bar infringing imports -- CBP must determine whether a particular product infringes the intellectual property rights and should be barred.

CBP enforcement of exclusion orders was recently at issue in a Court of International Trade case on CBP’s refusal of entry to a Corning Gilbert coaxial cable connector based on an ITC exclusion order (see 13020405). Despite CBP’s argument that it can’t undertake detailed patent infringement analyses for every product potentially subject to ITC exclusion orders, the court said CBP should have done more, and reversed the agency’s decision to refuse entry. The government subsequently withdrew an appeal of the decision (see 13052035).

Interagency Group to Review CBP Transparency, ITC Direction

According to IPEC, the interagency review of CBP exclusion order enforcement will be chaired by IPEC, a division of the Office of Management and Budget, and will include representatives from the ITC, U.S. Trade Representative, and the Departments of Homeland Security, Treasury, and Justice. The group will evaluate procedures used to determine the scope of exclusion orders, and ensure such procedures are “transparent, effective, and efficient,” IPEC said. One focus will be whether CBP uses transparent procedures when determining whether an article is subject to an ITC exclusion order. The group will also look at ways to improve ITC enforcement instructions to CBP.

IPEC is asking for comments in connection with its review on recommendations for changes to agency policies, practices, guidance, and regulation. It also asked the following specific questions in its announcement of the review:

• Describe positive or negative experiences with the exclusion order enforcement processes.
• Are the procedures, criteria, and regulations utilized by CBP when enforcing exclusion orders clear, accessible, and understood?
• Are the procedures and criteria used by CBP to evaluate the scope of an exclusion order effective and clearly understood?
• Are the processes used by CBP timely and effective in notifying interested parties like ITC litigants, importers and the general public, of determinations made regarding the scope of an exclusion order and, in turn, applicability to the imported product?
• What further procedural changes or collaborative steps could be undertaken between the ITC and CBP to improve the efficacy of exclusion order enforcement efforts?
• Do exclusion orders currently provide sufficient level of detail and direction necessary to assist CBP with the challenges of enforcement?
• Additional areas of consideration regarding improvements that could be undertaken by CBP or the ITC to further improve upon the exclusion order enforcement processes.

(Federal Register 06/20/13)