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Watchdog Group Says CBP Could Improve Efforts to Address Counterfeits

CBP plans to evaluate its efforts to enhance intellectual property rights enforcement and assess potential additional information sharing with the private sector, in accordance with recommendations in a recent Government Accountability Office report. According to the report, changes in the market for counterfeit goods entering the United States pose new challenges for consumers, the private sector and U.S. agencies that enforce IPR. Specifically, growth in e-commerce has contributed to a shift in the sale of counterfeit goods in the United States, with consumers increasingly purchasing goods on-line and counterfeiters producing a wider variety of goods that may be sold on websites alongside authentic products.

For example, 20 of 47 items the GAO purchased as part of its review from third-party sellers on popular consumer websites were counterfeit, according to testing by the products’ rights holders, highlighting potential risks to consumers. The changes in the market for counterfeit goods can also pose challenges to the private sector, such as the challenge of distinguishing counterfeit from authentic goods listed for sale online, and complicate the enforcement efforts of CBP and U.S. Immigration and Customs Enforcement.

While CBP and ICE engage in a number of activities to enhance IPR enforcement, CBP has taken limited steps to assess its efforts. CBP’s and ICE’s IPR enforcement activities broadly include detecting imports of potentially IPR-infringing goods, conducting special operations at U.S. ports, engaging with international partners, and undertaking localised pilot programmes or port-led initiatives. The two agencies have collected some performance data for each of the eight activities reviewed by the GAO, but while ICE has taken some steps to understand the impact of its efforts CBP has conducted limited evaluation of its efforts to enhance IPR enforcement. Consequently, CBP may lack information needed to ensure it is investing its resources in the most efficient and effective activities.

Moreover, while CBP and ICE also generally collaborate on IPR enforcement, private sector representatives indicate that restrictions on CBP’s information sharing limit their enforcement efforts. The GAO found that CBP and ICE have undertaken efforts that align with selected key practices for interagency collaboration, such as participating in developing a national IPR enforcement strategy and agreeing on roles and responsibilities. However, private sector representatives believe that sharing additional information about seized items with rights-holding companies and e-commerce websites could improve enforcement.

CBP officials indicated that they share information to the extent allowed under current regulations, but the agency has not completed an assessment of what, if any, additional information would be beneficial to share with private sector entities. The GAO observed that, without such an assessment, CBP will not know if sharing additional information requires regulatory or legal changes.

In light of these findings, the GAO is advising CBP to (i) take steps to evaluate the effectiveness of its IPR enforcement efforts, such as by improving its metrics to track the overall effectiveness of those efforts, evaluating selected activities to enhance IPR enforcement, and developing a process to assess and share information on port-led initiatives to enhance IPR enforcement; and (ii) assess in consultation with ICE what, if any, additional information would be beneficial to share with the private sector and, as appropriate, take action to enhance information sharing where possible, such as by proposing regulatory revisions or requesting additional legal authorities from Congress. CBP has said it agrees with both recommendations.

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