2016 Saw Record Number Intellectual Property Rights Violations

U.S. Customs and Border Protection (CBP) and U.S. Immigration and Customs Enforcement (ICE) seized a record number of shipments containing goods that violated Intellectual Property Rights (IPR) in FY2016. The number of IPR seizures increased 9 percent in FY2016 to more than 31,560.

The total estimated manufacturer’s suggested retail price (MSRP) of the seized goods, had they been genuine, increased to more than $1.38 billion. As a result of enforcement efforts, ICE Homeland Security Investigations arrested 451 individuals, obtained 304 indictments, and received 272 convictions related to intellectual property crimes in FY2016.

“Products that infringe on U.S. trademarks, copyrights, and patents threaten the health and safety of American consumers, the U.S. economy, and our national interests,” said CBP Commissioner R. Gil Kerlikowske.

Apparel and accessories once again topped the list for number of seizures with 6,406, representing 20 percent of all IPR seizures in FY2016. Watches and jewelry continued as the top products seized by total MSRP value with seizures valued at more than $653.5 million, representing 47 percent of the total. Handbags and wallets were second with seizures estimated to be valued at more than $234 million.

The Transportation/Parts category significantly increased in FY2016 following numerous operations that led to the seizure of nearly 108,000 counterfeit hoverboards that caused safety concerns last year following reports of fires possibly caused by substandard and counterfeit lithium ion batteries.

The People’s Republic of China remained the primary source economy for counterfeit and pirated goods seized, accounting for $616 million or 45 percent of the total estimated MSRP value of all IPR seizures. Hong Kong again was the second largest source of IPR infringing shipments, accounting for nearly $600 million or 43 percent of the total MSRP value of all IPR seizures.

Eleven operations led by CBP’s Mobile Intellectual Property Enforcement Team, a special task force comprised of top IPR enforcement experts from a range of offices within the agency, resulted in 2,680 seizures of goods valued at over $85 million MSRP. Joint operations with international partners also netted significant seizures including an April 2016 operation with the General Administration of China Customs that resulted in more than 1,400 seizures of automobile parts, consumer electronics, identification tags and labels, and pharmaceuticals. Prior to Super Bowl 50, ICE, CBP, Hong Kong Customs and the Mexican Servicio de Administración Tributaria, conducted Operation Team Player to prevent the illegal importation of counterfeit sports-related merchandise.

Counterfeits are often made of inferior materials, manufactured under uncontrolled and unsanitary conditions and labeled with false information. As a result they can threaten the health and safety of the people who buy them.

“Counterfeiters can sell bogus goods through social media platforms, popular ecommerce sites, and seasonal storefronts, and will attempt to exploit consumer enthusiasm, especially during major shopping seasons, to peddle dangerous, substandard items,” said ICE Deputy Director Daniel Ragsdale. “The collaborative IP enforcement between ICE and CBP has kept dangerous counterfeit goods out of critical supply chains managed by government and business, and the IPR Center remains committed to developing and supporting effective enforcement actions going forward.”

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