Homeland Security's Over Obsession With Counterfeits Now Harming Innocent Buyers Of Counterfeit Goods Online

from the this-is-not-theft dept

Wed, Jan 17th 2018 1:29pm — Mike Masnick

For many years we've talked about the kind of derangement that happens among many -- especially among those working for Homeland Security's Customs and ICE divisions -- considering the supposed "dangers" of counterfeit goods. Over and over again we've pointed to studies that have shown that the "harm" of counterfeits is massively overblown. And these are not just random studies picked out of a hat. Both the Government Accountability Office (GAO) and the OECD have put out studies on this. When you look at the details, you quickly learn that while there are a few cases of people tricked by counterfeit goods -- and a vanishingly small number of cases where people are put at risk due to counterfeits -- in many, many cases, no one is actually losing out due to counterfeits. They are frequently an aspirational buy. That is, the buyer knows they're buying a counterfeit good, but are doing so because they so appreciate the real version, but can't afford it. And studies show that buyers of counterfeits quite frequently buy the real deal later when they're able to afford it. Thus, counterfeits often act as marketing for the original.

But, for whatever reason, Homeland Security likes to play up the "threats" of counterfeits and makes lots of noise about how many counterfeit things it seizes at the border every year (or... not at the border -- such as the time it raided a lingerie store to get "counterfeit" panties advertising sports teams). And sure, Homeland Security really really wants you to believe it's protecting the public with this kind of thing.

But if that's the goal, explain this story. Harper Reed tried to buy a fancy Rimowa luggage on Amazon last year. There was no indication that it was counterfeit -- it was priced the same as actual Rimowa luggage. But customs intercepted the shipment and wouldn't let it in. That's fair enough, I guess, but it's the next part that's shocking. Because of this Customs refused to renew Reed's Global Entry membership. Global Entry, for those who don't know, is a process by which fliers who frequently travel internationally can fill out a form, go for an interview, pay some money... and be able to speed through customs upon re-entering the US. While some grumble about paying for access, it's actually a more reasonable security program than most -- in that it actually involves effectively pre-clearing people less likely to need scrutiny at the border.

But Reed's status was not renewed because he was listed as trying to "import counterfeit goods." Again, you can see the intent behind this rule. If someone is actually "importing" a bunch of counterfeit goods to sell, you can see how that might be a good reason to deny someone Global Entry. But Reed wasn't trying to import a bunch of counterfeit goods. He was trying to buy a suitcase. He didn't get it from Amazon (he bought one later from a store) and that's fair enough under the law -- but why hold that against him.

Apparently the geniuses at Homeland Security have little desire to distinguish a counterfeiting operation from a dude buying something on Amazon he thought was legit.

When CBP intercepts a shipment, says Mark Schonfeld, an intellectual property lawyer at Burns & Levinson LLP, in Boston, Massachusetts, it sends a seizure notice to the trademark holder (in this case, Rimowa), which includes the names of the importer and exporter. The brand can then decide what action it wants to take, if any. Going after the latter party can be difficult and costly, since the vast majority of counterfeits come from Asia (in 2016, nearly 90 percent of products seized by CBP originated in China and Hong Kong). The importer, however, is by definition domestic, making them the easier target.

Schonfeld says this is the first instance he’s heard of in which a consumer has been flagged for importing a single item, but that legally, the principle is the same. “It definitely can happen to a consumer,” he says. “You know, you can go to Tijuana, just right over the San Diego border and you can easily buy counterfeits there, but no consumer should think that coming back into the United States with the item is risk free.” Much more common are cases in which Amazon itself is named as the importer, particularly since it began courting Chinese sellers with favorable shipping terms in 2015, and as its Fulfillment By Amazon program expands by leaps and bounds each year, offering third-party merchants the chance to take advantage of the e-commerce giant’s logistics infrastructure, customer service, and even Prime two-day shipping by sending goods directly to its warehouses.

Again, at the very least, it seems that intent should be taken into account here. Buying something on Amazon, with no indication (not even price) that the luggage was counterfeit, should not lead one to being accused of being a counterfeiter. But, of course, with DHS feeling so damn strongly about the "evils" of counterfeiting, it's only to be expected that they'll overreact to situations like this as well.

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Filed Under: counterfeits, customs, harper reed, homeland security, ice, luggage, online shopping, trademarks
Companies: rimowa

31 Comments

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That Anonymous Coward (profile), 17 Jan 2018 @ 1:56pm

On paper it seemed like a great idea, the problem is we didn't apply any mental scenarios to it to see if it was bonkers.

Its like they learned nothing from copyright.

DL a movie face $150K!!!!
That makes sense if you are doing it for profit & making discs sold on street corners using ancient tech that is very expensive to do. No so much if a little girl uses her winnie the pooh branded netbook to dl a single song track not knowing any better.

It is nice to see how much protection for corporations our tax dollars buy.
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Anonymous Coward, 17 Jan 2018 @ 1:57pm

Re:
Just imagine what life would be like if our government spent half as many resources protecting the rights of the people as it does the rights of multinational corporations.
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Roger Strong (profile), 17 Jan 2018 @ 2:06pm

So US telcos are threatened with the loss of government contracts if they do business with Huawei. Consumers are threatened with legal problems if they innocently buy goods on Amazon that originate in China.

Begun this trade war has.

(Clone war, in the case of the counterfeit goods.)
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Anonymous Coward, 17 Jan 2018 @ 2:08pm

as usual, the law eventually moves from targeting and punishing bad actors to just being used to nail anyone that pisses them off, innocent or not.

and as others have already mentioned, it is usually only the citizens that suffer while corporate based bad actors get off scott free or with just a cheap fine that still made it profitable to break the law to begin with.
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Anonymous Coward, 17 Jan 2018 @ 2:24pm

Re: Re:
It would be at least 50 years more advances in tech and science without the resource draining middlemen taxing innovation.
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Châu, 17 Jan 2018 @ 2:46pm

IP Tax?
This is responsibility for IP owners, not governments. Why waste tax money support private monopoly? Need high IP tax pay for government time and employees. Remember IP give right, must have responsibility for balance.
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Anonymous Coward, 17 Jan 2018 @ 3:00pm

Thank you Amazon! For allowing and enabling all those counterfeits from China, Asia and other parts of the world.

The empire will rot form the inside.
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Anonymous Coward, 17 Jan 2018 @ 3:05pm

Re: IP Tax?
Cant understand, your bullshit, it is too cut.
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Anonymous Coward, 17 Jan 2018 @ 3:06pm

Re: Re:
Just imagine if that applied to the whole world, and not just to America.
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Anonymous Coward, 17 Jan 2018 @ 3:07pm

Re:
This is just bullshite propaganda to protect american companies because chinese companies are beating them up to the clock.
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Anonymous Coward, 17 Jan 2018 @ 3:13pm

Re: Re:
Considering how much manufacturing has been outsourced, is it any wonder that the manufacturers are entering the US market, bypassing the middlemen who claim to be US companies.
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Anonymous Coward, 17 Jan 2018 @ 3:38pm

Re: Re:
It's American corporations that chased that cheap deal all the way across the ocean and screwed many domestic manufacturing workers slowly, but surely.

Too late to turn back the clock on 20 years of dismantling that industry.
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Anonymous Coward, 17 Jan 2018 @ 4:20pm

Distributed Ledger Systems show potential value here. One example being the WaBi cryptocoin with accompanying sensor system. Rather than draconian whack-a-mole with painful externalities, DHS needs to get on board with support of innovative solutions.
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Anonymous Coward, 17 Jan 2018 @ 5:39pm

Pre-clearing

it's actually a more reasonable security program than most -- in that it actually involves effectively pre-clearing people less likely to need scrutiny at the border.

Except they can't predict whether someone will "need scrutiny" for security reasons, they can only say someone hasn't yet done anything bad enough to be noted. It's actually a boon for would-be criminal groups: now they know which members are likely to get less scrutiny.
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Anonymous Coward, 17 Jan 2018 @ 6:27pm

Re: Pre-clearing
And talk about stereotyping and generalizing, which is useless, more so specifically for this purpose.
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Anonymous Coward, 17 Jan 2018 @ 6:56pm

Re: Re: Pre-clearing
Just try to get pre-cleared if your first name is Mohammad.
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carlb, 17 Jan 2018 @ 7:36pm

Re: Pre-clearing
On Sep 24, 622 the prophet Muhammad (pbuh) completed his flight from Mecca to Medina.

This Hegira was the last flight in history to be completed by anyone named "Muhammad" without being martyred by overzealous TSA agents.
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Anonymous Coward, 17 Jan 2018 @ 7:53pm

Re: Re: Re: Pre-clearing

Just try to get pre-cleared if your first name is Mohammad.

Better yet, have 100 Mohammeds try. It would be hard to reject all of them and say there's no illegal discrimination happening.
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Anonymous Coward, 17 Jan 2018 @ 11:15pm

ooh... so, if we ship a counterfeit Louis Vuitton handbag to Trump, we can get him the same treatment when boarding Air Force 1? full pat-down and strip search! :p

this can give troll swatting a new meaning... let's call it counterturfing as it's derived from astroturfing but with counterfeit goods shipped to unsuspecting targets.

https://en.wikipedia.org/wiki/Astroturfing
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Anonymous Coward, 18 Jan 2018 @ 1:18am

Blaming the Victim
'Nuff said.
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PaulT (profile), 18 Jan 2018 @ 1:36am

Re: Re: Re: Re: Pre-clearing
Given how accurate the no-fly list tends to be for names in general, I'm sure they could just excuse it based on incompetence or bad data.
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Richard (profile), 18 Jan 2018 @ 6:42am

Re: Blaming the Victim
Not so much that as being too stupid (or maybe too lazy) to tell the difference between a victim and a perpetrator.
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Richard (profile), 18 Jan 2018 @ 6:43am

Re:
ooh... so, if we ship a counterfeit Louis Vuitton handbag to Trump, we can get him the same treatment when boarding Air Force 1? full pat-down and strip search! :p
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Richard (profile), 18 Jan 2018 @ 6:45am

Re: Re:
whoops - put in the quote and then clicked too quick - please lets have an edit button.

What I meant to say was don't get your hopes up until you've seen who's doing said search.
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JoeCool (profile), 18 Jan 2018 @ 7:01am

Re: Re: Blaming the Victim
They don't see a victim, they see an enabler, which is just as bad as a perpetrator in their eyes, and much easier to find to boot!
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Contemplating Chris, 18 Jan 2018 @ 9:22am

How is this a Homeland Security issue? I mean, I get that somebody has to handle counterfeiting, but the guys in charge of terrorism?

...Ya know, the anarcho-communists talk about the purpose of the state being to maintain the status of the elites, rather than to protect citizens.

Stuff like this makes me think they might have a point
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The Wanderer (profile), 18 Jan 2018 @ 8:00pm

Re:
The Department of Homeland Security was formed by bringing several previously-independent agencies under one roof.

One of those agencies was Immigration and Customs Enforcement, who are responsible for - among other things - customs; that is, they are responsible for making sure that import/export restrictions are adhered to.

Apparently (and, I think, intuitively), among those import/export restrictions is a restriction on bringing counterfeit merchandise into the country.

Naturally, the job of enforcing this restriction falls to Immigration and Customs Enforcement.

And because that agency is now part of the Department of Homeland Security, that means that the job falls to the Department of Homeland Security.
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Bergman (profile), 18 Jan 2018 @ 9:03pm

Re: Re: Re:
If you've ever wondered why we don't have flying cars yet, now you know.
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PaulT (profile), 19 Jan 2018 @ 1:40am

Re: Re: Re: Re:
Actually, I think the reason why we don't have flying cars is because anyone capable of that level of invention has seen how badly people drive on 2 axes and don't want to introduce a 3rd axis for them to fail at until we've perfected self-driving vehicles :)
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carlb, 19 Jan 2018 @ 6:29am

Blaming the Victim
Blaming (or even criminalising) the victim is business as usual by governments in response to any vice. Drugs are bad? Fine, let's jail some drug addicts for simple possession. Prostitution exploits women? That's easy enough to fix, just arrest and imprison all the prostitutes. That'll ensure they never complain to the police again, about anything. Heck, a well-crafted vagrancy law can do wonders in criminalising poverty itself. Aren't we clever?
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Anonymous Coward, 20 Jan 2018 @ 5:46am

Re: Re: Re: Re:
There is also the general problem that flying vehicles have to land, either under control at their destination or an alternative, or wherever they are when the power runs out.
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