The Loaded Gun§

While some counterfeiting happens domestically the major concern is usually counterfeits imported from foreign trade. This brings us to Customs and Border Patrol, which you might know as the other side of the ICE/CBP border control system. You might be surprised to see them involved with this, since Border Patrol agents are fully-militarized police outfitted to combat armed drug cartels.

But among its other duties, Border Patrol takes a proactive role in enforcing intellectual property protection at ports of trade — backed by the full force of the Department of Homeland Security — by seizing goods it identifies as counterfeit and either destroying them outright or else selling them themselves at auction.¹ To get your property back, you have to sue Border Patrol — an infamously untouchable police force — and win.

Apple participates in CBP’s e-Recordation Program, a “service for trademark owners” where American rightsholders proactively re-register their US registered trademarks with CBP and pay regular fees to ensure special, stricter enforcement on the particular trademarks they request. In exchange, Apple gets to train law enforcement themselves; owners of registered marks can record webinars, and companies like Apple literally get to send their own staff to give Border Patrol in-person seminars on how to identify their products and what all they want counted as infringing.

Between the relative obscurity of the program and the continued cost of paying CBP to enforce your trademarks, only a tiny number of corporations take advantage of this program at all: CBP only reports having 20,758 registered copyrights and trademarks it enforces. Compared to the 3,114,306 active registered US trademarks and 40,116,623 active registered copyrights, that’s not just a drop in the bucket, proportionally, that’s one droplet in a 600 gallon industrial tank.

Now, this might just sound like presumption of guilt inflicted on the enemies of anyone who can afford it. A system where the police only enforce the laws they’re paid by private companies to enforce, who pay the police outright in dollars to selectively enforce the law against the payer’s business rivals might seem like a bad framework for judge-and-jury² style law enforcement agencies like the DHS.

Anyway,

In 2021 (latest data) CBP seized over $3.3 billion in allegedly counterfeit merchandise. But here’s what that looks like in practice:

Versus Third-Party Repair§

Repair shop owner Jessa Jones purchased third-party iPhone screens for use in repair, but the shipment from China was seized by CBP.

The screens that were seized are “hybrid” parts: the screens are third-party, but use a few original Apple parts like a flex cable that connects the screen to the phone. That invisible, internal part is marked with an Apple logo, which is enough to let the CBP seize the entire shipment.

The parts aren’t being seized because they’re counterfeit. In fact, they’re demonstrably not counterfeit: the only reason an Apple logo is on a piece of a “third-party” component is because that piece is original OEM Apple hardware being legally re-sold:

“The parts I buy have an original flex on it because that’s what’s best for my consumers,” [repair shop owner Jessa Jones] said. “It’s difficult and pointless to erase the existing Apple logo that’s printed on a tiny piece of flex. There’s no customer-facing Apple logo, no logo anywhere on the glass. It’s smaller than a grain of rice. We have never said online, in person, or anywhere else that these are Apple-certified screens.”

From Vice’s coverage:

Jason Koebler, DHS Seizes Aftermarket iPhone Screens From Prominent Right-to-Repair Advocate Aaron Perzanowski, a trademark, copyright, and intellectual property law professor at Case Western Reserve University’s School of Law, told me that Jones’s parts likely can’t be considered “counterfeit.”

“Assuming that: (1) the cable bearing the Apple mark is a genuine Apple product, (2) the cable used on these screens is the same as the one Apple uses in the U.S., and (3) the importer/seller clearly communicates that the screens are a non-Apple aftermarket product, then Apple’s case for treating these as ‘counterfeit’ goods is very weak,” Perzanowski said in an email. “Refurbished or repaired products are generally permissible under trademark law’s first sale doctrine, so long as they are clearly labeled as such.”

“This strikes me as an abuse of trademark law by Apple,” he added, “one clearly designed to maintain its stranglehold over the repair market and, ultimately, to force customers to buy new hardware.”

Of course, Apple has rigged it so it doesn’t matter that their case is obviously fraudulent. Apple doesn’t have to argue its case to anyone, because the CBP already seized Jessa’s property; it’s done. If victims like Jessa want to be let alone and run their own businesses, they have to sue the government to get their parts back first, just to break even.

But at least Jessa’s parts were seized at customs. Other smartphone repair shops have been raided, in person, by drug-bust style police raids. The squad? A public/private partnership slurry of armed DHS agents… and Apple representatives:

Federal agents raid smartphone repair shops “It’s a wide investigation that is multi-state. We are looking at whole industry spectrum of repair shops that are using substandard products,” said Gerard O’Neill, Assistant Special Agent in Charge of Miami Field Office for Homeland Security.

O’Neill says it’s a public safety issue and that is how Homeland Security is involved. … “There are trademark and licensing violations as well,” he added.

Apple says if a repair shop puts counterfeit parts in your phone it will void any warranty.

“Unless they are getting it from an Apple authorized manufacturer, they are most likely getting substandard parts which are counterfeit and illegal to possess,” Said Agent O’Neill

Abel Abella’s says his store was raided by agents who seized $5000 worth of parts. “When they came in it almost looked like a drug raid,” Said Abella. Abella claims there were 20 ICE agents and two people from Apple in his small Bird Road store.

According to an Apple spokesman, only Apple authorized repair centers can use Apple parts with the Apple logo.

This is an older article, and there are some minor discrepancies — Abella seems to have confused CBP with ICE, for example — but those are some ghastly direct quotes.

Apple’s snivelling little “only Apple authorized repair centers can use Apple parts with the Apple logo” may be a statement of Apple policy, but there’s absolutely no trademark excuse for stealing someone’s property! They’re not even allowed to void the warranty! Apple’s IP rights over those specific parts were exhausted after they sold them, remember?

Apple is being asked why they had the police raid someone’s business and steal their merchandise, and their response is a recitation of their business model: an incredible admission of how they view law enforcement as a simple weapon for Apple to use use to enforce their preferences.

Meanwhile assistant-in-charge Gerard O’Neill hides behind some nebulous excuses about “safety”, which is both irrelevant and false. Consumer safety is a justification for trademark enforcement in general, but it doesn’t excuse wrong judgements. But the seizure that takes place here proves that safety isn’t a concern at all. The police is seizing property customers already paid for, without compensation, instead of just labelling them with a relevant warning (like CBP does when it resells counterfeits). If customers got counterfeit goods, they would only be getting partial value, but here police ensure they’re getting no value at all. Mislabelled generic Band-Aids aren’t as good, but they’re better than bleeding. Seizure isn’t protective, it’s punitive.

But Gerard ultimately confirms that the issue stems from a trademark and licensing issue. The Apple reps confirm the raid was conducted in direct conjunction with Apple, as part of their war against independent repair: a business model decision, not a legal one. And they’re waging that war with live guns!

These aren’t isolated stories. In fact, there are some machines Apple uses the CBP to prevent from being repaired at all:

Versus Competing Accessories§

But as bad as those stories are, at least Apple is involved in the transaction. Pieces of those parts were, at some point, sold by Apple, or at least eventually touched an Apple device.

CBP@CBP

THAT'S NOT AN 🍎 —

CBP officers at JFK Airport recently seized 2,000 counterfeit Apple AirPods from Hong Kong, valued at $398K had they been genuine.

Details via @CBPNewYorkCity: bit.ly/3hivSLT

Mon Sep 14 00:21:01 +0000 2020

Well, I’ll grant them this one, that’s not an Apple or even an Apple product. Fact is, that’s a different company altogether: OnePlus, a multinational smartphone corporation that manufactures earbuds along with various accessories and even full-featured Android phones. You can tell because the boxes are clearly labelled “OnePlus Buds”, and aren’t counterfeits of anything. In fact even in that tweet, the first picture shows us an AirPod, and it’s distinctly different than the OnePlus Bud it’s being compared to.

OnePlus isn’t Apple, but of course “not being Apple” isn’t a crime. Companies other than Apple can still do business in the US, even if they compete with Apple. Right? Surely?

God, I wish.

No, Customs and Border Patrol seized shipments of entirely legal, correctly labelled, non-counterfeit products, because Apple paid CBP off. Worse still, CBP is usually tipped off by corporations who do their own investigations, so it’s highly likely Apple sicced them on OnePlus specifically.

After the original tweet saw some backlash, CBP released a public statement sticking to their guns and confirming that it wasn’t a mistake, they really did mean to confiscate Apple-competing goods because Apple told them to:

CBP statement Upon examining the shipment in question, a CBP import specialist determined that the subject earbuds appeared to violate Apple’s configuration trademark. Apple has configuration trademarks on their brand of earbuds, and has recorded those trademarks with CBP. Based on that determination, CBP officers at JFK Airport have seized the shipment....

CBP’s seizure of the earbuds in question is unrelated to the images or language on the box. A company does not have to put an ‘Apple’ wordmark or design on their products to violate these trademarks.

Woof!

These were clearly branded products from an established company, but Apple has trained CBP to take out the competition, and CBP just does it. And not just OnePlus! A bunch! With many different brands!

Josh Gerben, trademark lawyer Apple is claiming, basically, that it owns a trademark or trade dress registration around the shape of these AirPods. They’re claiming that [a product with a similar shape is] a counterfeit, or that’s an infringement on their trademark. There are certainly valid defenses to that point. [But you could also argue that] there’s certain functionality of this design that you just can’t protect. How many ways you can design something that fits in somebody’s ear?”

Apple is asserting a “configuration trademark” so broad that it covers any earbud product shaped to fit the inside of an ear. The “trademark” being objected to is just the shape of an ear, which is clearcut de jure functionality, and definitely doesn’t constitute a trademark violation! In fact, we know these wireless earbuds don’t constitute a trademark violation, because they’re sold in the US, and Apple hasn’t complained anywhere where due process would be required.

Essentially, CBP is willing to deem anything that remotely competes with Apple’s AirPods a trademark violation. And, because they’re a a militarized police force paid with tax dollars plus some extra kicked in by Apple, that’s not just an accusation of a violation, it’s an automatic seizure. No due process required; Apple wins by default.

And even if such a thing as a form factor trademark were legitimate, in the case of OnePlus, the molded plastic shapes are distinctly different. The CBP photo obscures this by placing a legitimate AirPod on the OnePlus box, but the OnePlus buds are clearly distinguishable, even if they hadn’t had clear brand labelling, which they did.

Note that the aspect being objected to here is, according to CBP, explicitly a trademark: they’re not claiming there was a patent violation, which would have been a much stronger case to make against a form-factor. …except CBP can’t make discretionary judgements on patent violations. For patents, they have to execute specific exclusion orders, which aren’t suitable for Apple’s purposes because they requires real due process, and the fraud would be found out.

The purpose of trademarks is to allow the customer to safely do business without getting a different product than they bought. Fundamentally, to claim a trademark violation is to claim impersonation. Apple is not being impersonated with these competing products, and they know it. They are lying.

Border Patrol isn’t just a rogue agency. They’re not exercising agency in these cases. They’re just the weapon Apple is using. Apple is the brain, BP is the brawn. The agency isn’t the one with the agency. I’m not letting CBP off the hook, but ultimately Apple is the one having them do this; Apple is responsible for making it happen.

Apple is exploiting a loophole in enforcement order here. Usually policy enforcement requires due process: Apple would have to show that something positively is infringing, or counterfeit, before they could have the government take action against it. Here, instead, the action comes first, before argument or evidence, and the burden of proof is shunted onto the victim instead of the aggressor. That’s why it’s CBP doing this proactively, instead of Apple suing companies or going after competitors with court-issued warrants: they know their accusations are bogus, but CBP lets Apple enforce them anyway.

Trademarks exist so that customers can safely do business, which pits the idea of trademarks against Apple. Apple doesn’t care about consumer safety nearly as much as it cares about pursuing its feudal lord dream of still owning your phone after they sell it to you. Not only is Apple directly harming consumers and making commerce more dangerous (opposing the goal of trademarks) it’s also attacking companies’ ability to do business under their own names (opposing the means of trademarks).

In fact, Apple doesn’t want you to safely do business with anyone but Apple, so much so that they’re abusing trademark law to artificially inject risk if you try to buy from their competitors. That’s why they’re siccing militarized police on its rivals: not to protect the consumer from fakes, but simply because it benefits them and Apple can get away with it. It’s simple thuggery.

These items aren’t being seized because of a trademark violation, they’re being seized despite trademark law. Apple just doesn’t want them sold, and the DHS has put Apple nebulously “in charge” of the entire mobile phone market. Apparently, between their wealth and “IP”, Apple just get to govern now.

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