The recent seizure of counterfeit sneakers at Washington Dulles International Airport by U.S. Customs and Border Protection (CBP) officers shines a light on both the scope of the counterfeiting problem in the United States and what brands can do to put the full court press on manufacturers and merchants seeking to profit from misappropriated intellectual property.
The 400 pairs of sneakers were shipped from China as air cargo and were discovered during routine inspections by CBP officers. Working closely with the brand owner, officers from the agency’s Consumer Products and Mass Merchandising Centers for Excellence and Expertise were able to verify that the shoes were counterfeits and ultimately size them.
How Big Is the Problem?
In the press release announcing the seizure, the agency stated that, during fiscal year 2016 alone, it seized products with a total street value – if genuine – of roughly $1.4 billion during almost 32,000 seizures. That works out to seizing $3.8 million each day – and those are just the infringing goods CBP agents intercepted.
While it may have once been the case that counterfeiters mainly targeted luxury goods, those days are long gone. In addition to high-end products, counterfeiters frequently rip off more commonplace products, including direct response products and, in at least one case in New Jersey, ketchup.
During 2015, the top 10 categories of seized goods were apparel and accessories, consumer electronics, footwear, watches and jewelry, pharmaceuticals and personal care products, handbags and wallets, optical media, computers and peripherals, product labels and tags, and toys.
Bottom line: if you own a brand, you likely have a counterfeiting problem.
Protecting Your Brand
Although the scale and scope of the problem may seem overwhelming, the good news is that vigilance and a little elbow grease can put a dent in counterfeiting, or at least give government agents the tools they need to identify and seize infringing imports as such.
The first step is to evaluate the potential intellectual property (IP) surrounding your brand – whether it be a patent to protect the product, a trademark to protect the brand name, or trade dress to protect the look and feel of a famous brand. Once secured, you should record your brand’s trademarks with CBP electronically. There is a $190 fee to record a trademark registered with the U.S. Patent and Trademark Office (USPTO) with CBP. Once recorded, it is helpful to meet with CBP officials to discuss your products and how they can distinguish real products from counterfeit. CBP is receptive to these types of meetings and is a crucial partner in the fight against counterfeits.
Intelligence is another key tool for CBP’s enforcement efforts. Consider establishing a brand monitoring program that searches for infringing use of your brand’s IP – not only on online marketplaces, but also websites, mobile apps, pay-per-click ads, and social media. Such monitoring potentially can help identify the source of the counterfeit goods and/or help facilitate the interception of shipments entering the country.
Putting a Plan in Action
To develop and maintain a successful brand protection program, it is important to perform an internal brand protection audit to assess how well your key brands and products are secured in terms of legal protection, including an assessment of contracts for management of supply chain and distribution channels. In addition, engagement and collaboration with industry, governmental, and nongovernmental organizations, such as CBP, is essential to stopping the flow of counterfeits at the border. Finally, be sure to work with legal counsel experienced in the handling and management of intellectual property and brand enforcement programs that reduce the impact of counterfeiting, fraud, or other infringing activities.