Contributing Lawyers

Canada

Cyndee Todgham Cherniak

United States

Susan Kohn Ross

Australia

Andrew Hudson



Are You Responsible for Counterfeit Goods?

Did you realize you could have your identity stolen and still be liable for the importation or distribution of counterfeit goods? Trademark holders generally are getting much more aggressive against importers of counterfeit goods, even importers whose good names may have been misappropriated by “bad guys” looking to import counterfeit products. If the importer cannot establish he did not order the goods and was otherwise not involved with the particular shipment, the trademark holder will seek damages. Similarly, when the customs broker handling a shipment could not show that due diligence was conducted in vetting the customer, one very aggressive trademark holder filed suit seeking damages from the customs broker separately and in addition to damages sought from the importer. The basis for the claim against both the importer and the customs broker is importing and/or distributing counterfeit goods.

Customs brokers, in particular, need to be aware their insurance policies (errors and omissions and general liability) may not cover such lawsuits, leaving them personally responsible to pay the considerable costs of defense and any judgment out of their own pockets.

From our research, we conclude these actions by trademark holders may not be well-founded, but why risk exposure to such potential liability and costs of defense? What are you doing to properly vet your business partners? Exporters and forwarders pay attention: 18 U.S.C. §554 makes it a criminal offense to export goods that violate U.S. law or regulation. Counterfeit goods offered for export is just such a violation.

 

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