Intellectual Property:

CBP Can Enhance Information Sharing with the Private Sector to Address Changes in the Counterfeits Market

GAO-18-383T: Published: Mar 6, 2018. Publicly Released: Mar 6, 2018.

Additional Materials:

Contact:

Kimberly M. Gianopoulos
(202) 512-8612
gianopoulosk@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Counterfeit goods harm the U.S. economy and can pose a threat to consumers. But these products can be hard to spot and may be offered online next to authentic goods. For example, we testified that manufacturers determined that 20 of 47 items we purchased from third-party sellers on popular sites were counterfeit.

Customs and Border Protection leads efforts to stop imported counterfeit goods at the border, and Immigration and Customs Enforcement conducts investigations. In the report on which this testimony is based, we made recommendations to improve oversight of CBP's efforts and enhance information sharing with the private sector.

Examples of counterfeit products purchased online

Three counterfeit products: a travel mug, a phone charger, and eyeshadow primer.

Three counterfeit products: a travel mug, a phone charger, and eyeshadow primer.

Additional Materials:

Contact:

Kimberly M. Gianopoulos
(202) 512-8612
gianopoulosk@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

What GAO Found

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 intellectual property rights (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 online and counterfeiters producing a wider variety of goods that may be sold on websites alongside authentic products. For example, 20 of 47 items GAO purchased from third-party sellers on popular consumer websites were counterfeit, according to testing by the products' rights holders (see table), highlighting potential risks to consumers. The changes in the market for counterfeit goods can also pose challenges to the private sector—for example, the challenge of distinguishing counterfeit from authentic goods listed for sale online—and complicate the enforcement efforts of U.S. Customs and Border Protection (CBP) and U.S. Immigration and Customs Enforcement (ICE).

Results from GAO's Purchases of Four Frequently Counterfeited Consumer Products

 

Shoes

Travel mugs 

Cosmetics

Phone chargers 

Total

Authentic

15

3

0

9

27

Counterfeit

0

6

13

1

20

Total

15

9

13

10

47

Source: GAO | GAO-18-216

CBP and ICE engage in a number of activities to enhance IPR enforcement; however, while ICE has assessed some of its efforts, CBP has taken limited steps to do so. 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 localized pilot programs or port-led initiatives. CBP and ICE have collected some performance data for each of the eight activities GAO reviewed, and ICE has taken some steps to understand the impact of its efforts. However, 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.

CBP and ICE generally collaborate on IPR enforcement, but according to private sector representatives, restrictions on CBP's information sharing limit private sector enforcement efforts. 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, sharing additional information about seized items with rights-holding companies and e-commerce websites could improve enforcement, according to private sector representatives. CBP officials said they share information to the extent allowed under current regulations, but CBP has not completed an assessment of what, if any, additional information would be beneficial to share with private sector entities. Without such an assessment, CBP will not know if sharing additional information requires regulatory or legal changes.

Why GAO Did This Study

This testimony summarizes the information contained in GAO's January 2018 report, entitled Intellectual Property: Agencies Can Improve Efforts to Address Risks Posed by Changing Counterfeits Market, (GAO-18-216).

For more information, contact Kimberly Gianopoulos at (202) 512-8612 or gianopoulosk@gao.gov.

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