Trend of More IPR Infringing Goods Seizures, Lower Total Value Continued in FY 2011
U.S. Customs and Border Protection has released statistics showing that the number of intellectual property rights seizures increased significantly again in fiscal year 2011 but the domestic value of those seizures dropped for the fourth straight year. CBP adds that there was another big increase in consumer safety and critical technology seizures due to an increase in pharmaceutical and perfume seizures.
Value and Volume of Seizures. The number of IPR seizures was up 24%, from 19,959 in FY 2010 to 24,792 in FY 2011, and has soared by more than 325% over the last decade. However, the domestic value of IPR seizures fell 5.2% from $188.1 million to $178.3 million a year after a 27% decline. In addition, the average value of an IPR seizure fell from $9,425 to $7,193, the lowest that figure has been in the last decade. CBP notes that the number of low-value (under $1,000) seizures rose by 3,872 and that this increase accounted for 80% of the overall increase in seizures for FY 2011.
Commodities Seized. Consumer electronics were the top commodity seized by value in FY 2011 ($39.0 million, up from $33.6 million, 22% of total), with the value of seizures increasing by 16%. About one-third of seized goods in this category were infringing cellular phones. Footwear seizures ($25.3 million, down from $45.7 million; 14% of total) fell out of the top spot for the first time since FY 2005 and are down more than 75% from FY 2008 due to a sharp decline in the number of large footwear shipments arriving at seaports. The top five list of commodities seized by value also includes pharmaceuticals ($16.8 million, up from $5.7 million; 9% of total), optical media ($15.6 million, up from $12.7 million; 9% of total) and wearing apparel ($14.8 million, down from $18.7 million; 8% of total).
Other facts of note: seizures of counterfeit perfume and cologne jumped 471%; the handbags/wallets/backpacks category was not on the “top commodities seized list” for the first time; and there was a significant increase in the value of IPR seizures of toys and electronic games.
The top five categories of products seized by number were as follows.
• wearing apparel (7,392, up from 4,338; 25% of total)
• optical media (4,390, up from 4,371; 15% of total)
• consumer electronics (3,161, up from 2,252; 11% of total)
• handbags/wallets/backpacks (2,978, up from 2,702; 10% of total)
• footwear (1,772, down from 2,119; 6% of total)
Consumer Safety/Critical Technology. The number of consumer safety and critical technology IPR seizures increased 44% from FY 2010, a year after a 97% gain, and the value of those seizures rose by 41% following a 30% rise the year before. The FY 2011 seizure list for such goods (by value) was led by pharmaceuticals ($16.8 million, 28% of total), electrical articles ($10.3 million, 17%), perfume/cologne ($9.2 million, 15%), cigarettes ($8.2 million, 14%) and health/personal care items ($4.1 million, 7%). Pharmaceuticals also led the list of seizures by number (1,239, 28% of total), followed by health/personal care items (1,089, 24%), eyewear/parts (646, 14%), critical technology components (419, 9%) and electrical articles (284, 6%).
Source Countries. China accounted for 62% of the total domestic value of IPR seizures at $110 million, down from $124.6 million in FY 2010. While the value of footwear seized from China declined by nearly $20 million, the value of pharmaceutical seizures from China increased by more than $4.3 million and the value of perfume seizures from China increased by $7 million. Other top source countries by value include Hong Kong ($32.2 million, down from $26.2 million), India ($4.5 million, up from $1.6 million), Pakistan (4.0 million, unlisted in FY 2010) and Taiwan ($2.3 million, up from $1.1 million). Pharmaceutical seizures accounted for 86% of the value of IPR seizures from India and 85% with respect to Pakistan. The value of seizures from Jordan was less than $1 million a year after approaching $8 million.
The number of seizures from China rose from 12,200 to 13,592, or 55% of the total. China was followed by Hong Kong (6,597, up from 4,150) and Turkey (569, down from 935).
Shipping Environments. Over the past five years the trade in counterfeit and pirated goods has shown a marked shift toward using international mail and express courier services. CBP says this increase is due to the continued growth of Web sites that sell counterfeit and piratical merchandise directly to consumers, increased enforcement efforts by CBP and U.S. Immigration and Customs Enforcement, and continued engagement with right holders to provide training and information about their products to CBP and ICE.
The number of IPR seizures occurring at express consignment facilities shot up 65% in FY 2011 to 10,090 and the value of such seizures edged up 2.8% to $33.2 million. The number of seizures at mail facilities declined by 14.3% to 8,352 and their value fell by 17.1% to $11.6 million. Seizures at cargo facilities grew by 26.9% to 2,930 but their value fell as well, down 6.8% to $96.4 million.