Flaw in the system
But this story is not about VisionTech. It’s about how the VisionTech case exposed a flaw in the U.S. government’s tactics for catching counterfeit components at the border. Specifically, it’s about an interpretation of the U.S. Trade Secrets Act by U.S. Customs and Border Protection (CBP) that prevents the agency from sharing detailed information about a counterfeit part with the semiconductor company whose name is on the component. CBP is one of the Department of Homeland Security’s (DHS’) largest agencies.
Customs agents at U.S. borders are allowed to hold a shipment of suspected counterfeit parts for 30 days—the so-called detention phase—to determine whether they are indeed counterfeits. After 30 days, agents either have to “seize” the shipment formally or release it to the intended recipient. During the detention phase, CBP must disclose “to the owner of a trademark the following information, if available: (1) the date of importation; (2) the port of entry; (3) a description of the merchandise; (4) the quantity involved; and (5) the country of origin of the merchandise,” according to a written statement that CBP provided to EE Times on Oct. 5.
The problem is that CBP’s so-called redaction policy limits the information that can be shared with trademark owners. In accordance with that policy, Customs agents since mid-2008 have been taking photos of chips, blacking out the markings on the package and sending the touched-up images to chip manufacturers, according to the Semiconductor Industry Association.
The CBP statement explains that its position is “founded on the view that information protected by the Trade Secrets Act cannot be provided to a third party until after seizure.
In furtherance of CBP’s position that no Trade Secrets Act-protected information is to be released until after seizure, CBP ... determined that any indicators, such as bar codes and serial numbers, that might inadvertently disclose such information were to be removed or obliterated before providing a sample to a trademark owner.”
Of course, it’s the very bar codes and serial numbers obliterated by CBP agents that chip companies would normally use to determine whether a detained chip is real or fake. Before 2008, when CBP was still providing unaltered photos, chip companies estimate they were able to resolve almost 85 percent of CBP requests for confirmation of whether a detained chip was legit or counterfeit.
So how are chip makers expected to help CBP agents catch counterfeit parts if they can’t see the markings on the chips? And how does CBP reconcile its requirement to provide “a description of the merchandise” to the trademark holder with its policy of obliterating information on a photo?
“I don’t understand what’s behind this,” said Jim Burger, a longtime Washington-based intellectual property attorney who represents semiconductor companies. “There’s zero threat to CBP in disclosing the information on the surface of a chip to the trademark owner. The information is not confidential and is not covered under the Trade Secrets Act. They are just hands-down wrong.”
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