International Trade:

Strengthening Trade Law Protection of Intellectual Property Rights

NSIAD-86-150: Published: Aug 13, 1986. Publicly Released: Aug 13, 1986.

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GAO recommended ways to strengthen section 337 of the Tariff Act as a means for U.S. firms to protect their intellectual property rights against counterfeit and infringing imports.

GAO believes that, in order for section 337 to be more effective, Congress needs to: (1) increase access to section 337 relief by eliminating or redefining the statutory criteria for obtaining relief; (2) direct the International Trade Commission (ITC) to speed relief when complainants need expedited government assistance and when no respondents participate in the proceedings; (3) clarify ITC authority to issue both exclusion orders and cease-and-desist orders to remedy the same unfair trade practice; and (4) strengthen the U.S. Customs Service's ability to enforce section 337 exclusion orders.

Matters for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: The Omnibus Trade and Competitiveness Act of 1988, enacted August 23, 1988, contains a provision that implements this recommendation.

    Matter: Congress should amend section 337 of the Tariff Act of 1930 for cases involving the protection of intellectual property rights to authorize ITC to direct the U.S. Customs Service to seize counterfeit or infringing goods when there is evidence that a firm or firms have on more than one occasion attempted to bring such goods into the country in knowing violation of exclusion orders.

  2. Status: Closed - Implemented

    Comments: The Omnibus Trade and Competitiveness Act of 1988, enacted August 23, 1988, contains a provision that implements this recommendation.

    Matter: Congress should amend section 337 of the Tariff Act of 1930 for cases involving protection of intellectual property rights to clearly authorize ITC to issue both exclusion orders and cease-and-desist orders to remedy the same unfair trade practice.

  3. Status: Closed - Implemented

    Comments: The Omnibus Trade and Competitiveness Act of 1988, enacted August 23, 1988, contains provisions that substantively attain the objective of this recommendation.

    Matter: In cases where no respondents participate, Congress should amend section 337 of the Tariff Act of 1930 for cases involving protection of intellectual property rights, to require ITC, at the request of the complainant, to provide interim relief if: (1) the facts, as set out in the complaint, supporting documents, and other information available to ITC, demonstrate that a violation of section 337 is likely to have occurred; and (2) the provision of interim relief is not deemed contrary to the public interest. Congress should also require ITC to make its determination on permanent relief no later than 6 months from the date all respondents are officially determined to be in default, not to exceed 12 months from the date ITC instituted the investigation.

  4. Status: Closed - Implemented

    Comments: The Omnibus Trade and Competitiveness Act of 1988, enacted August 23, 1988, contains provisions that substantively attain the objective of this recommendation.

    Matter: Congress should amend section 337 of the Tariff Act of 1930 for cases involving protection of intellectual property rights to require ITC, at the request of the complainant, to make temporary relief effective within 10 days of a judge's affirmative initial determination on temporary relief, while requiring the complainant to post bond, unless it finds that such action would be contrary to the public interest. ITC may then review the initial determination in accordance with its current procedures.

  5. Status: Closed - Implemented

    Comments: The Omnibus Trade and Competitiveness Act of 1988, enacted August 23, 1988, contains provisions that substantively implement this recommendation.

    Matter: Congress should amend section 337 of the Tariff Act of 1930 for cases involving intellectual property rights to: (1) eliminate the requirement that a complainant be efficiently and economically operated; (2) eliminate the domestic industry requirement; and (3) redefine the injury requirement so that ownership of a valid and enforceable U.S. intellectual property right and proof of infringement by imports is sufficient to meet the injury test.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: Customs officials believe that, due to the relatively small number of exclusion orders, it is more cost-effective to list the support of firms by making presentations to pertinent trade associations. As a result, Customs has decided not to publish a brochure or similar document.

    Recommendation: The Secretary of the Treasury should instruct the Commissioner of Customs to intensify Customs efforts to enlist the support of firms that have obtained exclusion orders in identifying shipments containing counterfeit or infringing products, possibly by providing an informational brochure or similar document to firms initiating section 337 proceedings.

    Agency Affected: Department of the Treasury

 

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