U.S. Customs Brokers Beware – Nike May be Coming After You Next

For over a year now, Nike has been approaching licensed U.S. Customshouse brokers and requesting the broker’s assistance to provide it with information regarding a specific (or multiple shipments). In an effort to assist Nike, brokers (naively) have been handing over information, only to be later “thanked” by Nike in the form of a lawsuit whose allegations are “supported” by the very papers the broker provided it with. These lawsuits seek millions of dollars as provided for by U.S. intellectual property law, which are some (of the many) statutes under which these cases are being brought.

In an effort to crack down on imports of counterfeit merchandise, Nike has been commencing lawsuits against licensed U.S. Customs brokers across the country.

You may be asking yourself, “Why the broker and not the importer of record?” After all, not only does it not make much sense to sue an agent rather than a principal, but brokers never see or touch the cargo. I know. I get that.

Due to the increase in identity theft however, Nike claims to be without knowledge of who the actual importer of record/consignee is. It is therefore creating an allegation that the broker is in cahoots with the importer of the counterfeit merchandise, thereby creating a conspiracy if you will.

Based on this theory, it is going after the smallest and most defenseless target out there – the customs broker – in an effort to get brokers to agree to specific terms and to perform certain so- called "safe guarding" activities, which Nike believes will cut back on incidents of attempted importations of counterfeits.

Naturally, where a broker has been engaged in no (as in Z-E-R-O) wrongdoing, it will attempt to assist with any investigation as it is able to. The problem is, doing so without the advice of counsel and, certainly moving forward in a lawsuit without counsel, might only end up hurting the broker's position as inadvertent admissions will have been made on the broker’s part in an attempt to "do the right thing" and clear its reputation.

Unfortunately, due to the Court’s preference of attorneys representing litigants, representation ultimately winds up being retained and the attorney is left to deal with untimely, or unnecessary, exposure initially caused by the unrepresented litigant (i.e., the customs broker).

To find out where and against whom Nike has brought cases against, you can search publicly on the Justia Dockets & Filings website [http://dockets.justia.com] and type in Nike, Inc. in the “Party Name” box, and click “Intellectual Property” in the drop down menu called “Type.”

Given the nature of Nike’s “bait and switch” tactic, should a customs broker be contacted by Nike wherein it requests that records be provided to it, trade counsel should immediately be contacted and any response to Nike would be to "contact your attorney."

Questions/comments? Post below or email me at clark.deanna@gmail.com