U.S. Auto Parts Network, an online seller of aftermarket auto parts and accessories, has sued the federal government to stop the seizure of international grille shipments and related “ruinous” bond requirements.
U.S. Customs & Border Protection (CBP), an agency of the Department of Homeland Security, began seizing import shipments by the Carson, CA-based company last June, alleging that grilles in the containers were counterfeit and infringed OE trademarks. There have been at least 46 seizures so far in Norfolk, VA and Long Beach, CA, constituting more than 150 different grille and front designs and thousands of grilles.
In late March, citing the number of alleged violations, the CBP increased the company’s single bond to three times the value of all future shipments “to adequately ensure compliance with applicable intellectual property rights laws and the prohibition on importation of counterfeit or copyrighted goods.”
U.S. Auto Parts argued that the parts in question represent only about 1 percent of the shipments’ contents and that such a high bond would put it out of business.
Since then, the presiding judge in the U.S. Court of International Trade approved a temporary restraining order, ruling that the larger bond should apply only to the parts in question, thus dropping the bond from three times the entire shipment value to 3 percent. She also ordered the government to expeditiously process all of U.S. Auto’s shipping containers and immediately release all imports not implicated by trademark infringement allegations.
The larger issues of seizures and counterfeit status/trademark infringement, however, are still pending.
U.S. Auto Parts denies any wrongdoing and plans to “vigorously fight” to continue importing and selling grilles.
“We will defend our right to sell these products, as we believe U.S. Auto Parts has a responsibility to our stockholders and customers to continue providing an affordable means to buy aftermarket automotive grilles,” CEO Aaron Coleman said in a news statement.
The company’s lawsuit argues that the replacement grilles are authorized under the trademark doctrine of functionality, that the grilles are not likely to cause customer confusion as to their source, and that U.S. Auto Parts has secured sublicensing rights to certain of the design patents held by the automakers covering the designs of some of the seized grilles.
U.S. Auto Parts has been importing replacement auto parts — including grilles, fenders and bumpers — for more than two decades. The company has distribution facilities in Illinois and Virginia.
It’s unclear whether the seizures resulted from a specific OE complaint.
A spokesman for CBP declined to provide further information on the case, saying: “As a matter of policy, CBP does not comment on pending litigation.” — Sarah Hollander