HQ 115651 - Request for Binding Ruling to Exempt Mattel and Mattel’s Importing Customers from Presenting “Trademark Authorization Letters” Upon Entry - United States International Trade Commision Rulings

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HQ 115651

May 16, 2002

ENT-1-RR:IT:EC 115651 GG

CATEGORY: ENTRY

Ms. Kelly Bundy
Manager, Customs Administration
Mattel, Inc.
333 Continental Boulevard
El Segundo, California 90245-5012

RE: Request for Binding Ruling to Exempt Mattel and Mattel’s Importing Customers from Presenting “Trademark Authorization Letters” Upon Entry

Dear Ms. Bundy:

This is in response to your letters dated March 30 and October 10, 2001, requesting a binding ruling from the U.S. Customs Service which would exempt Mattel and its importing customers from having to present to Customs “trademark authorization letters” upon release of imported goods.

FACTS:

Mattel imports a variety of products bearing its own trademarks and those licensed from other companies. Mattel also sells its products to customers who then import Mattel products themselves. Mattel states that these products do not bear counterfeit trademarks, copied or simulated trademarks, and are not considered gray market goods, as described in 19 CFR §§133.21, 133.22 and 133.23, respectively. Some Customs ports have been requiring both Mattel and its customers to provide “trademark authorization letters” (also known as “letters of authorization” and “import authorization letters”) to verify that imports of goods bearing Mattel trademarks were authorized by the original trademark holder. They are reportedly doing do so because trademark authorization letters are entry records appearing on the (a)(1)(A) list, and it is apparently assumed that the inclusion of the letters on the (a)(1)(A) list requires their presentation with every entry of trademarked merchandise.

ISSUE:

Whether importers of merchandise bearing a trademark or trade name are required to present trademark authorization letters with every entry of such merchandise?

LAW AND ANALYSIS:

Imported articles bearing counterfeit or confusingly similar trademarks or trade names, or imported restricted gray market articles, are subject to detention, seizure and forfeiture in accordance with 19 U.S.C. §§1499(c), 1526(b) and 1595a(c)(2)(C). Articles seized or detained under these statutory authorities, or selected for examination for the purpose of determining the validity of the intellectual property right, may be released from Customs custody and entered into commerce if the trademark holder furnishes Customs with written consent to the importation. See sections 133.21(e), 133.22(c)(3), and 133.23(e) of the Customs Regulations (19 CFR §§133.21(e), 133.22(c)(3), and 133.23(e). This written consent is presented to Customs in the form of a trademark authorization letter.

Importers of merchandise bearing a legitimate trademark or trade name are only required to present trademark authorization letters to Customs when the intellectual property right is being questioned. The requirement to submit the written consent of the trademark holder is restricted to shipments under suspicion of containing, or confirmed to contain, articles bearing counterfeit or confusingly similar trademarks or trade names, or articles which qualify as restricted gray market goods. Thus, for example, an importer of merchandise bearing federally-registered trademarks which has been selected for examination will not have to obtain a trademark authorization letter if the sole purpose of the examination is to verify country of origin. Written consent would also be unnecessary if, as in Mattel’s described situation, merchandise bearing federally-registered trademarks are entered and Customs is satisfied with the validity of the intellectual property right.

The reported reason why some Customs ports have been requiring written consent each time merchandise bearing a trademark or trade name is entered is that the trademark authorization letter appears as a “required” entry record on Customs (a)(1)(A) list. It is evidently thought that the letter’s inclusion on this list mandates its submission with every entry of such merchandise.

Section 508 of the Tariff Act of 1930, as amended (19 U.S.C. §1508), sets forth the general recordkeeping requirements for Customs-related activities. Section 509 of the Tariff Act of 1930, as amended (19 U.S.C. 1509) specifies the procedures for the production and examination of those records. Section 509(a)(1)(A) requires the production, within a reasonable time after demand by the Customs Service is made, of such records which are required by law or regulation for the entry of the merchandise, whether or not their presentation is required at the time of entry. Section 509(e) requires Customs to identify and publish a list of the records and entry information which are required to be maintained and produced under subsection (a)(1)(A). This list is commonly referred to as the aforementioned “(a)(1)(A) list.” Recordkeepers who cannot produce entry records to Customs within a reasonable time after a demand for their production is made may be subject to recordkeeping penalties under 19 U.S.C. §1509(g).

The interim (a)(1)(A) list is in the Appendix to Part 163 of the Customs Regulations (19 CFR part 163, App.). The document relevant to Mattel’s inquiry is listed under the fourth category of records (“Documents/records or information required for entry of special categories of merchandise”) as “§133.21(b)(6) Consent from trademark or trade name holder to import otherwise restricted goods”. Regrettably, the regulatory citation is technically incorrect, and will be amended to reflect that the trademark authorization letter is now described in 19 CFR §§133.21(e), 133.22(c)(3), and 133.23(e). However, it is clear by its inclusion in the (a)(1)(A) list that this letter is a required entry document for record maintenance and production purposes.

Notwithstanding the fact that a document appears on the (a)(1)(A) list, its presence there does not necessarily mean that the listed record must be filed with every entry, or maintained as an entry document for future production. The introductory language to the fourth category of the Appendix states that “the listed documents or information is only required for merchandise entered [or required to be entered] in accordance with the provisions of the sections of 19 CFR [the Customs Regulations] listed.” As discussed above, sections 133.21(e), 133.22(c)(3), and 133.23(e) of the Customs Regulations require the written consent of the trademark or trade name holder only when the validity of the intellectual property right has been called into question. Accordingly, an importer of goods bearing a trademark or trade name is under no obligation to obtain a trademark authorization letter when the validity of the intellectual property right is not being challenged by Customs.

HOLDING:

An importer of goods bearing a trademark or trade name is required to submit the written consent of the trademark holder only when the shipment is under suspicion of containing, or confirmed to contain, articles bearing counterfeit or confusingly similar trademarks or trade names, or articles which qualify as restricted gray market goods.

Sincerely,

Larry L. Burton
Chief

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