Counterfeit Goods Pose Growing IP Enforcement Challenge

Counterfeit Goods Pose Growing IP Enforcement Challenge

Counterfeit goods are most likely to come from China and India, according to a new report by the Organisation for Economic Cooperation (OECD) and Development and the European Union Intellectual Property Office. The report also highlights the role of e-commerce in fostering piracy and counterfeiting, as well as increasing the challenge of protecting intellectual property rights.

Photo courtesy of Erwan Hesry (Unsplash.com)

OECD Report on Counterfeiting

The report, entitled “Mapping the Real Routes of Trade in Fake Goods,” estimates that the total import value of counterfeit and pirated goods in 2013 was $461 billion. “Trade in counterfeit and pirated goods is a vital threat to modern, innovation-driven economies, a worldwide phenomenon that grows in scope and magnitude,” the OECD said in a press statement. “Counterfeiters ship infringing products via complex routes, with many intermediary points, which poses a substantial challenge to efficient enforcement.” 

According to the OECD report, China and Hong Kong were identified as the place of origin of 80 percent of the fakes seized by authorities. They are also the top producers in 9 out of the 10 top counterfeit categories: electronics, jewelry, optical/photographic/medical equipment, clothing and textiles, pharmaceuticals, footwear, foodstuff, toys and games, leather and handbags, and perfume.

The report also examined the complex routes of trade in counterfeit pirated goods. It found that 63 percent of seized counterfeit goods were transported via postal and express delivery services. As noted by the OECD, this poses a significant challenge for law enforcement.

Role of Customs and Border Protection in Protecting IP

Many small businesses are unaware that U.S. Customs and Border Protection plays a vital role in enforcing intellectual property rights. In addition, registering your trademarks and copyrights is one of the most cost-effective ways to protect your brand from counterfeiting.

In policing U.S. borders, CBP is authorized to exclude, detain and/or seize imported merchandise that infringes federally registered and recorded trademarks and copyrights and/or is covered by an exclusion order issued by the U.S. International Trade Commission. It is also the legal authority to make substantive determinations regarding infringement of trademarks and copyrights, pursuant to the Tariff Act of 1930, the Lanham Act of 1946, the Copyright Act of 1976, and the Digital Millennium Copyright Act of 1998.

Earlier this year, the CBP announced that it seized a record number of shipments containing goods that violated Intellectual Property Rights (IPR) in FY2016. Seizures of counterfeit and pirated goods rose nine percent in FY2016. The CBP reported that the total estimated manufacturer’s suggested retail price (MSRP) of the 31,560 seized goods, had they been genuine, was more than $1.38 billion. 

To help prevent imports or exports of infringing goods, businesses should record their trademarks and copyrights with CBP. The process is fairly straightforward and may be done online via the Intellectual Property Rights e-Recordation (IPRR) application. The recordation fee for copyrights is $190. The recordation fee for trademarks is $190 per International Class of goods. The benefit of recordation is that information, including photographs of your genuine products, is readily available to CBP personnel at the borders.

The CBP also encourages IP owners to submit allegations of infringing shipments or conduct to CBP via its e-Allegations website. The agency then uses the information, which can be submitted anonymously, to target counterfeiting activities and may refer cases for criminal investigations.

Do you have any questions? Would you like to discuss the matter further? If so, please contact me, Adrian Lee, at 201-806-3364.