™ ™ Current Issues Copyright © 2009,  AFTA™ - American Free Trade Association  YOUR RIGHT TO IMPORT AND DISTRIBUTE GENUINE GOODS IS IN JEOPARDY AND YOUR ABILITY TO SELL DISCOUNTED BRAND NAME PRODUCTS IS UNDER ATTACK. U.S. SUPREME COURT TO DECIDE WHETHER FOREIGN MANUFACTURED PRODUCTS CAN ENTER THE U.S. WITHOUT AUTHORIZATION FROM THE U.S. COPYRIGHT OWNER:  The Supreme Court has agreed to hear the case of Omega v. Costco Wholesale (541 F3d 982) which will determine, once and for all, whether the first sale doctrine protects unauthorized importation of genuine consumer goods manufactured outside of the United States. DECODING CONSTITUTES TRADEMARK INFRINGEMENT: Removing UPC codes from genuine products which do nothing other than enable manufacturers to track downstream distribution has been determined to constitute trademark infringement by the 2nd Circuit Court of Appeals (Zino Davidoff SA v. CVS Corporation 07-Civ 2872 (2nd Cir 2009)) LEGISLATION FAVORS DISCLOSURE OF PROPRIETARY BUSINESS INFORMATION TO BRAND OWNERS: Senate Bill 1466 introduced by Senator Stabinow (D-MI) and HR 496 introduced by Congressman Charles Rangle (D-NY) include provisions that will allow trademark and copyright owners to receive samples of your products and proprietary information about your entire supply chain, before the goods enter U.S. commerce and even before any violation or possible violation of U.S. law has been charged. PRODUCT RESALE PRICE MAINTENANCE IS NO LONGER ILLEGAL: The Supreme Court (Leegin Creative Leather Products, Inc. v. PSKS, Inc. (2007)) has determined that manufacturers can control product resale prices.  There are currently bills in both the House and the Senate hoping to overturn this decision claiming that any type of resale price control violates U.S. antitrust protections.   CBP AND BRAND OWNERS ARE ENTICING YOUR  SUPPLY CHAIN PARTICIPANTS TO VOLUNTARILY DISCLOSE IPR “VIOLATIONS”: Programs are being established to invite anyone in your supply chain to voluntarily “disclose” possible IPR violations about your shipment, without your knowledge, and  in which case your shipment will be destroyed. FOOD AND BEVERAGES CANNOT BE IMPORTED WITHOUT INFORMATION KNOWN ONLY BY THE MANUFACTURERS: The FDA’s Prior Notice Final Regulations require that site specific manufacturing site facility registration numbers or contact information be included in the Prior Notices submitted to the Agency before arrival of shipments at U.S. Ports of Entry.  These registration numbers are not publicly available and  are closely guarded by manufacturers for selective dissemination to only “authorized” distributors.  PRODUCT SAFETY REGULATIONS:  Legislation is likely to be passed this year requiring importers, manufacturers, shippers and exporters and to pay a registration fee to import food and beverages into the United States and holding importers responsible for verifying the safety of the original manufacturer’s product processes. In addition, manufacturers insist that the only way to protect the U.S. product supply is to ensure that imported products are sourced directly from the manufacturer.   SELLING GOODS WITH DISTRIBUTOR WARRANTIES CAN MEAN YOU’RE GUILTY OF TRADEMARK INFRINGEMENT:   As Courts continue to lower the threshold of what constitutes a “material difference” sufficient to  constitute trademark infringement meriting prohibition against distribution of even genuine goods by any party other than the original product manufacturer or its authorized licensee, recent cases have held that relatively minor packaging differences and even third party warranties offered post-sale merit a charge of trademark infringement because such differences render the products “materially” different from the identical product authorized by the trademark owner for sale within the U.S. AFTA is currently monitoring and actively engaged in the following matters of immediate import to the Industry: