CBP uses two primary methods to target IP violations:  computer-based and manual targeting. Because of differing port practices, information on IP exams has  been unevenly recorded across ports, according to officials, making it  difficult for CBP to fully analyze the effect of its targeting efforts in this  area. CBP’s process for enforcing IP concludes with ports seizing  infringing goods and, if warranted, referring cases to ICE and assessing  penalties. Seizures Have Been Concentrated among Certain Types of Products

Although the types and quantities of seized goods vary over time, seizures  over the past 6 years have been highly concentrated among certain types  of products. We analyzed CBP’s seizure and penalty data for fiscal years 2001  through 2006 and found that the bulk of enforcement activity was carried  out by 10 or fewer ports in each of four enforcement categories we  reviewed: (1) total number of seizures, (2) total seizures by domestic  value, (3) total penalty cases opened, and (4) total amount of penalties  assessed. We also found that  some of the largest IP-importing ports had very small seizure rates relative  to other IP-importing ports. For example, the majority of these top  25 ports had IP seizures that accounted for less than one hundredth of a  percent of their IP import value. Lack of Integration across Key Offices Impedes Further Improvements in IP Enforcement

CBP lacks an integrated approach across key offices for further improving  border enforcement outcomes. Recommendations for Executive Action

To develop a more effective approach to IP border enforcement, we  recommended in the law enforcement sensitive report that the CBP  Commissioner direct the Offices of International Trade and Field  Operations to work together to take the following three actions:    Clarify agencywide goals related to IP enforcement activity by working  with the Office of Management and Budget to include in its agency’s  strategic plan measures to guide and assess IP enforcement outcomes; Improve data on IP enforcement activity by:    Determining the completeness and reliability of existing IP  enforcement data and identifying aspects of the data that need to be  improved;   Ensuring uniformity in port practices to overcome any weaknesses in    Use existing data to understand and improve IP border enforcement    Analyzing IP enforcement outcomes across ports and other useful  categories, such as modes of transportation;   Reporting the results of this analysis internally to provide performance  feedback to the ports, better link port performance to performance  measures in CBP’s Strategic Plan, and inform resource allocation  decisions. Appendix I: Scope and Methodology

The Ranking Minority Member of the Senate Subcommittee on Oversight  of Government Management, the Federal Workforce and the District of  Columbia, Committee on Homeland Security and Governmental Affairs  asked us to (1) examine key aspects of the U.S. Customs and Border  Protection’s (CBP) process to carry out enforcement of intellectual  property (IP) at U.S. borders; (2) analyze CBP’s border enforcement  outcomes during fiscal years 2001 through 2006; and (3) evaluate CBP’s  approach for improving border enforcement. To examine key aspects of CBP’s border enforcement process, we  reviewed documents and interviewed officials at CBP headquarters in  Washington, D.C., and at selected port locations.
Why GAO Did This Study

U.S. government efforts to protect and enforce intellectual property rights are crucial to preventing billions of dollars in economic losses and for mitigating health and safety risks from trade in counterfeit and pirated goods. The Department of Homeland Security's Customs and Border Protection (CBP) leads intellectual property (IP) enforcement activity at the U.S. border. GAO was asked to (1) examine key aspects of CBP's process to carry out border enforcement, (2) analyze CBP's border enforcement outcomes during fiscal years 2001 to 2006, and (3) evaluate CBP's approach for improving border enforcement. GAO examined relevant documents, interviewed agency officials in Washington, D.C. and seven port locations, and analyzed CBP data on trade and IP seizure and penalty activity. This is the public version of a law enforcement sensitive report by the same title (GAO-07-350SU).

What GAO Found

CBP's Office of International Trade (OT), formed in 2006, and Office of Field Operations (OFO) carry out IP border enforcement processes, including targeting and examining suspicious shipments, seizing infringing goods, and assessing penalties as warranted. CBP uses computer-based and manual targeting to determine which shipments it will examine, and both methods have strengths and limitations. Port practices for recording exam results vary, making it difficult for CBP to fully assess the effectiveness of its IP targeting efforts. Since 2001, CBP's IP enforcement outcomes have been concentrated among particular transport modes, product types, and ports. Rising numbers of low-value seizures from mail facilities have driven growth in seizure actions, but uneven seizures of high-value goods from sea containers have caused the estimated value of seizures to fluctuate. The vast majority of seizure and penalty outcomes in the last 6 years have been concentrated among 10 or fewer of CBP's 300-plus ports. For example, 10 ports account for 98 percent of the $1.1 billion in penalties assessed during fiscal years 2001 to 2006. CBP lacks agencywide performance measures in its strategic plan and an integrated approach across key offices to guide and improve IP enforcement. Narrowly focused initiatives led by offices now under OT have had limited results. CBP has not done a broader analysis to examine variances in port IP enforcement outcomes. For example, GAO found that some of the largest IP-importing ports had very small seizure rates relative to other top IP-importing ports. A lack of integration between OT and OFO impedes using this type of analysis to identify potential IP enforcement improvements.