Recent Trade & Tariff Perspectives

February 2, 2022  |  Monica DeMars  Senior Compliance Manager

aerial view of the front end of a container ship at sea 

What You Need to Know About Intellectual Property Rights

Imagine you’re looking to buy an expensive new handbag for your daughter, new shoes for your son, or the latest tech gadget. You shop around looking for the best price, and you finally find it. But how do you know the item is the real thing?

As a consumer, we want to know we’re getting what we pay for and that it’s the genuine article. In some cases, for health and safety reasons, we need to be sure it’s the real thing—whether it’s a generic pharmaceutical, toothpaste, or the latest home-safety item.

Intellectual Property Rights: An overview

Our country was built on innovation, ingenuity, and technological designs that led to businesses small and large, creating some of the best models, products, and breakthroughs in the world. Protecting intellectual property rights holders keeps our businesses competitive, protects our health and safety, and helps to preserve our national security. No one likes to hear that their product is counterfeit.

U.S. Customs and Border Protection (CBP) and U.S. Immigration and Customs Enforcement (ICE) seized 26,503 shipments containing goods that violated Intellectual Property Rights (IPR) in the last Fiscal Year (FY) 2020. The total estimated manufacturer’s suggested retail price (MSRP) of the seized goods, had they been genuine, was more than $1.3 billion.

Intellectual Property Rights is a priority trade issue for CBP, as this is a high-risk area which can cause significant revenue loss and also harm the U.S. economy. Therefore, through enforcement and facilitation efforts, CBP targets and seizes imports of counterfeit and pirated goods and enforces exclusion orders on patent infringing and other IPR violative goods.

Seizures by product and mode of transportation

CBP’s Intellectual Property Rights Seizures dashboard identifies the top trading partners of the United States and their seizure rates over time. This dashboard shows the fiscal year to date for 2021. China tops the origin of goods seized, with shipments coming largely through mail, express consignment, and small parcel as de minimis shipments. CBP reports in their trade statistics that in FY 2020, 90 percent of IPR seizures were found in express and international mail shipments.

De minimis entry allows goods to enter the commerce of the United States duty free and without many customs formalities. De minimis shipments to the United States are at an all-time high of 771.5 million in FY 2021. The Trade Facilitation and Trade Enforcement Act of 2015 significantly increased the de minimis value from $200 to $800.

Congress is reviewing significant new legislation under the Import Security and Fairness Act, which will change how de minimis shipments are treated and may even change the value levels again. These updates will help CBP to combat violative intellectual property theft with the requirement of additional information on de minimis shipments. Explore a more in-depth look into this new legislation.

Seizures by Product and Mode of Transportation

Graph depicting seizures by product and mode of transportation

*Each seizure consists of one or more line items, similar to an invoice, and the line items may originate from multiple countries. A line item represents one type of seized product that is differentiated by either product or brand name.

For example, two different line items can be Brand Y Shirt or Brand X Shirt. Another example of two different line items is Brand A Pants and Brand A Shoes. The line item is not equal to the piece count of products in a seizure. For example, one line item of Brand A Pants could have a corresponding piece count of eight pairs of pants. Source: Annual IPR Seizure Data for FY2019–FY2020, quarterly IPR Seizure Data for FY2021. Data is current as of 10/14/2021.

Work directly with CBP to protect yourself

CBP identifies trademarks in their investigations of suspect goods, concentrating its IPR border enforcement on federally registered trademarks and copyrights that have been recorded in the Intellectual Property Rights e-Recordation (IPRR) system.

When importers and property rights holders identify their products through the IPRR application, they provide CBP with the information necessary to determine when a company infringes on their intellectual property (IP) rights. The IP owner can then share product information and training on their product that CBP can use in their investigations, thus helping CBP to combat bad actors.

Information regarding suspect shipments or parties importing infringing merchandise should not be submitted through the e-Recordation program—but instead, should be directed to e-Allegations Online Trade Violation Reporting System. Additional guidance for businesses in the trade, including enforcement and rights of rights holders, can be found on the CBP’s website.

CBP encourages importers to follow its Best Practices in Working with U.S. Customs and Border Protection, including reviewing its FAQ on recordation. This includes submitting a product guide to CBP, educating CBP about a product through a live webinar, engaging CBP through the IPR Help desk branch, and responding to its inquiries in a timely manner.

One additional way IP owners can protect themselves is to register their trademarks with online marketplaces. Each online marketplace will provide the IP owner with legal resources and solutions on how to navigate selling on its platform and registering their trademark or copyright.

Next steps

Remaining proactively informed in a rapidly changing customs and trade environment can be overwhelming. Fortunately, IP owners do not need to navigate these changes alone. Connect with one of our trade policy experts to learn more.


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