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Counterfeit Seizures Rise to $1.4 Billion with Rapid Growth in Computer Networking Equipment

The National Intellectual Property Rights Coordination Center (IPR Center) is reviewing an annual report on the number of IPR seizures that have raised the total estimated manufacturer’s suggested retail price (MSRP) of the seized goods – had they been genuine – to $1.4 billion.

The total is based on data gathered jointly between the ICE Homeland Security Investigations (HSI)-led IPR Center and Customs and Border Protection’s (CBP) Office of Trade in a 36-page report titled Fiscal Year 2018 Seizure Statistics. The report also reveals an upward trend in all categories of HSI enforcement showing 381 individuals arrested, 296 indictments obtained, and 260 convictions related to intellectual property crimes.

Each year, more than 11 million maritime containers arrive at seaports. At land borders, another 10 million arrive by truck, and three million arrive by rail. An additional quarter billion more cargo, postal, and express consignment packages arrive through air travel.

While watches and jewelry continue to comprise the bulk of seized goods (44%) the report reveals that CBP and HSI seized 213 shipments of computer networking equipment affixed with counterfeit trademarks with a total MSRP value of nearly $15.5 million. This is a 25% increase in the number of seizures of computer networking equipment, and a 112% increase in MSRP value over FY 2017. The networking equipment seizures violated a total of seven trademarks recorded with CBP and occurred at 21 ports around the country.

The report shares the example of a New Jersey importer of counterfeit computer networking equipment who was sentenced to one year in federal prison and paid approximately $1 million in restitution to seven end-user victims, including a healthcare company, a major university, and federal and local government agencies.

“This report clearly shows the ongoing threat of counterfeit goods that makes a compelling case for stepping up efforts to inform and educate the public about the risks counterfeit goods pose to public health and safety,” said IPR Center Director Steve Francis. “In addition to potential health and safety hazards, counterfeit goods threaten the U.S. economy, and fund organizations involved in violent crime, not only here in the United States, but around the world.”

IPR Center Director Francis is taking his concerns to private industry with a request to join him and the Center’s network of 25 domestic and international partner agencies as part of a campaign designed to heighten public awareness about the dangers of counterfeit goods. He is asking industry to help raise awareness about the threat against a wide variety businesses and organizations around the world that are engaged in the fight against counterfeits.

“We are using this opportunity to team up with business and industry to send a strong message to the public that infringing on property rights is not only illegal, but also unhealthy and unsafe,” Francis added. “More importantly, we want to educate consumers about the harm associated with counterfeits to aid in our efforts to identify and investigate individuals or companies suspected of engaging in the manufacture, shipment, distribution and sale of counterfeit goods.”

The outreach efforts are part of the HSI-led IPR Center’s strategy to engage in partnerships with the public and private sectors to combat IP theft through Operation Joint Venture. This initiative is designed to increase information sharing with public and private sectors to combat the illegal importation and distribution of counterfeit, substandard and tainted goods. In FY 2018, more than 16,000 people participated in more than 300 outreach and training events. In the last two years, these efforts have reached more than 30,000 stakeholders.

Read the report at CBP

The Government Technology & Services Coalition's Homeland Security Today (HSToday) is the premier news and information resource for the homeland security community, dedicated to elevating the discussions and insights that can support a safe and secure nation. A non-profit magazine and media platform, HSToday provides readers with the whole story, placing facts and comments in context to inform debate and drive realistic solutions to some of the nation’s most vexing security challenges.

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