Forghany Featured on Effect of De Minimis Loophole Closure for US Brands

The previous de minimis rule, which allowed shipments valued at $800 or less enter the United States without formal customs procedures, “has allowed foreign companies to circumvent any court orders barring products found to infringe US design patents and other intellectual property rights from entering into the United States,” Ehsun said.

“This has been particularly detrimental to American manufacturers in the cosmetics and personal care industry because Chinese ecommerce giants have used this loophole to dominate the American market by shipping millions of small parcels daily,” Ehsun said, “all while circumventing trade and intellectual property laws that US businesses must follow…. Closing the de minimis loophole prevents foreign companies from bypassing trade enforcement measures and intellectual property laws through de minimis shipments.”

Ehsun anticipates that stronger border rules will motivate US brands to enforce their IP rights.

So, what should companies do now?

“American companies should revisit their IP procurement strategy to ensure that their most innovative designs are adequately protected so that, upon detecting infringement, they can strategically and effectively enforce their design patent and other IP rights against foreign companies,” he said.

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