ICE’s  responsibilities include investigating IPR violations, building cases for  federal prosecution, and serving as the lead agency for the IPR Center. Figure 1  shows CBP’s and ICE’s roles in IPR enforcement at the U.S. border. Risks Associated with the Counterfeit Goods Market

Counterfeit goods may pose risks to the health and safety of consumers. E-Commerce Has Contributed to a Shift in the Market for Counterfeit Goods

The rise of e-commerce has contributed to a fundamental change in the  market for counterfeit goods, according to our analysis of documents from  CBP, ICE, and international organizations and our interviews with CBP  and ICE officials. Changes in the Marketplace Can Pose Challenges to U.S. Third, shifts in the mode of transportation of counterfeit goods to the  United States pose additional challenges to CBP and ICE. However, CBP has conducted limited evaluation of its IPR  enforcement, while ICE has taken some steps to evaluate the impact of  its efforts. CBP and ICE Undertake Several Types of Activities to Enhance IPR Enforcement

According to our analysis of CBP and ICE documents and interviews with  CBP and ICE officials, CBP and ICE undertake a variety of activities to  enforce IPR, including (1) detecting potentially infringing goods, (2)  conducting special operations, (3) engaging with international partners,  and (4) undertaking localized pilot programs or port-led initiatives. CBP and ICE engage  in a number of activities to detect imports of potentially IPR-infringing  goods. CBP and ICE Generally Collaborate on IPR Enforcement, but CBP Is Restricted in Sharing Information with the Private Sector

Our analysis showed that CBP and ICE collaboration on IPR enforcement  is generally consistent with selected key practices for interagency  collaboration and that the agencies collaborated to address some  challenges they have faced with the creation of the Centers. CBP and ICE Coordinate with the Private Sector in Several Ways, but Restrictions on CBP Information Sharing Limit Private Sector IPR Enforcement

			CBP and ICE Work with Various Private Sector Entities to Enforce IPR

CBP and ICE work with a variety of private sector entities—including  rights holders, industry groups, importers, and e-commerce websites,  among others—to enforce IPR and prevent the sale of counterfeit goods  on e-commerce websites, according to CBP and ICE documents and our  interviews with CBP and ICE officials and private sector representatives. CBP  officials stated that they share information about identified counterfeits  with e-commerce websites and rights holders to the extent possible under  current regulations. While CBP and ICE  have undertaken activities to enhance IPR enforcement and collected  some performance data on their activities, CBP has conducted limited  evaluation of its efforts. Until it completes an assessment of  information sharing, CBP will not know whether sharing additional  information requires regulatory or legal changes. Recommendations for Executive Action

We are making the following two recommendations to CBP:  The Commissioner of CBP should take steps to evaluate the  effectiveness of CBP’s IPR enforcement efforts, such as by improving its  metrics to track the overall effectiveness of its IPR enforcement efforts,  evaluating selected activities to enhance IPR enforcement, and  developing a process to assess and share information on port-led  initiatives to enhance IPR enforcement (Recommendation 1)
The Commissioner of CBP, in consultation with ICE, should assess what,  if any, additional information would be beneficial to share with the private  sector and, as appropriate, take action to enhance information sharing,  where possible, such as by proposing regulatory revisions or requesting  additional legal authorities from Congress. Appendix I: Objectives, Scope, and Methodology

We examined (1) what is known about counterfeit goods entering the  United States and the challenges they present, (2) efforts U.S. Customs  and Border Protection (CBP) and U.S. Immigration and Customs  Enforcement (ICE) have undertaken to enhance intellectual property  rights (IPR) enforcement and the extent to which they have assessed the  results of these efforts, and (3) the extent to which CBP and ICE  collaborate on IPR enforcement as well as ways in which they coordinate  with the private sector in enforcing IPR. In addition, in an attempt to understand the frequency with which  consumers may unknowingly encounter counterfeit products online, we  used investigative tools and techniques to conduct nongeneralizable,  undercover purchases of consumer goods from third-party sellers on  popular consumer websites and asked the rights holders to test the goods  to determine whether they were authentic or counterfeit.
Why GAO Did This Study

Infringement of IPR through the illegal importation and distribution of counterfeit goods harms the U.S. economy and can threaten the health and safety of U.S. consumers. CBP leads IPR enforcement at U.S. ports of entry by detecting and seizing counterfeit goods that enter the United States. CBP works with ICE, which investigates IPR violations and builds cases for prosecution.
GAO was asked to review CBP's and ICE's IPR enforcement at U.S. borders. In this report, GAO examines (1) what is known about counterfeit goods entering the United States and the challenges they present, (2) efforts CBP and ICE have undertaken to enhance IPR enforcement and the extent to which they have assessed the results, and (3) the extent of CBP's and ICE's collaboration on IPR enforcement and ways they coordinate with the private sector. GAO reviewed agency data and documents, interviewed agency officials, and conducted field work at port locations selected on the basis of factors such as the volume of IPR seizures and variety of modes of transportation at each location. GAO also conducted undercover purchases of commonly counterfeited consumer goods on popular consumer websites, using investigative tools and techniques.

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).
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.

What GAO Recommends

GAO is making two recommendations to CBP, recommending that it (1) evaluate its efforts to enhance IPR enforcement and (2) assess potential additional information sharing with the private sector. CBP agreed with these recommendations.