Intellectual Property Rights at the Border: A US Importer's Guide to CBP Enforcement

The global supply chain is a complex web of opportunity and risk. For US importers, one of the most significant and often overlooked risks is the enforcement of Intellectual Property Rights (IPR) by U.S. Customs and Border Protection (CBP). The seizure of counterfeit and pirated goods at the border is not just a problem for brand owners; it is a critical compliance issue that can lead to significant financial penalties, delays, and the destruction of merchandise for the importer. Understanding CBP's enforcement mechanisms and adopting a proactive compliance strategy is essential for any business engaged in international trade.

CBP is the primary agency responsible for preventing the entry of goods that infringe upon federally registered trademarks, copyrights, and certain patents. This authority stems from domestic law and international agreements, such as the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) [1]. The goal is twofold: to protect American businesses and innovation, and to safeguard the public from potentially dangerous or substandard counterfeit products.

The Scope of CBP's IPR Enforcement: A Growing Threat

The scale of IPR infringement at the border is staggering and continues to grow, making it a priority trade issue for CBP. The agency’s enforcement efforts are a clear indicator of the risks faced by importers who fail to conduct proper due diligence.

In Fiscal Year (FY) 2024, CBP reported a massive surge in IPR enforcement actions [2]. The total Manufacturer’s Suggested Retail Price (MSRP) of seized goods reached an astonishing $5.42 billion, a nearly 95% increase from the previous fiscal year. The sheer volume of seizures also climbed, with CBP intercepting 32.363 million pieces of violative merchandise. This dramatic increase underscores the heightened scrutiny and effectiveness of CBP’s border enforcement programs.

The vast majority of these infringing goods originate from just a few key regions. In FY 2024, China and Hong Kong accounted for the overwhelming majority of the MSRP of seized goods, totaling approximately $4.9 billion [2]. This concentration of risk means that importers sourcing from these regions must exercise the highest level of caution and scrutiny in their supply chains.

Top Threats: What is CBP Seizing?

While IPR infringement spans nearly every product category, CBP statistics reveal clear trends in the types of goods most frequently targeted. Understanding these trends allows importers to focus their compliance efforts where the risk is highest.

The top commodities seized, measured by MSRP, are dominated by luxury and high-value consumer goods [2]:

1. Jewelry ($1.65 Billion)
2. Watches ($1.44 Billion)
3. Handbags/Wallets ($1.08 Billion)
4. Sunglasses ($414 Million)
5. Wearing Apparel/Accessories ($179 Million)

However, when measured by the sheer quantity of items seized, the list shifts to include high-volume, low-cost goods that often pose significant health and safety risks: Handbags/Wallets, Pharmaceuticals (3.7 million items), and Wearing Apparel [2]. The seizure of pharmaceuticals is particularly alarming, as these items directly threaten public health.

"IPR violative commodities pose risks to American citizens due to health and safety concerns." - U.S. Customs and Border Protection [2]

Actionable Strategies for US Importers

For US importers, compliance is not merely about avoiding penalties; it is about protecting your business reputation and ensuring the integrity of your supply chain. Here are practical, actionable steps to mitigate the risk of IPR seizures.

1. Proactive Protection: The e-Recordation Program

The most effective way to leverage CBP's enforcement power is to ensure your own intellectual property is protected. CBP maintains an e-Recordation Program that allows trademark and copyright owners to register their IPR with the agency [3].

• Action: If you own the brand, record your federally registered trademarks and copyrights with CBP. This provides CBP personnel at the ports of entry with the necessary information to identify and seize infringing goods.
• Benefit: Once recorded, CBP can proactively enforce your rights, often without a formal complaint, acting as a powerful deterrent and a first line of defense against counterfeits.

2. Due Diligence in the Supply Chain

The importer of record is ultimately responsible for the goods entering the country. Ignorance is not a defense against IPR violations.

• Action: Implement a robust due diligence program [4]. This includes:
  • Contractual Safeguards: Ensure all supplier contracts explicitly state that the goods must not infringe on any third-party IPR and include strong indemnification clauses.
  • Supplier Vetting: Conduct thorough background checks on new suppliers, especially those in high-risk countries like China.
  • Product Testing: For high-risk items (e.g., electronics, pharmaceuticals), conduct independent testing to verify authenticity and compliance.
  • Audit Trails: Maintain detailed records of all licensing agreements, purchase orders, and communications with suppliers to demonstrate reasonable care.

3. Understanding the Detention and Seizure Process

If CBP detains your shipment on suspicion of an IPR violation, a swift and informed response is critical.

• Detention: CBP will issue a Notice of Detention, giving the importer a limited time (usually 30 days) to respond and provide evidence that the goods are legitimate.
• Response: You must provide documentation, such as proof of a valid license or a letter from the trademark owner, to refute the claim.
• Seizure: If the response is inadequate or if the goods are confirmed to be counterfeit, CBP will issue a Notice of Seizure. At this point, the goods are forfeited, and the importer may face penalties.

4. Leveraging CBP Resources

CBP provides numerous resources to help the trade community stay compliant [5].

• Action: Regularly consult the CBP IPR Resource Center and subscribe to their trade updates. Pay close attention to new enforcement initiatives and "hot spot" product categories.
• Tip: If you are unsure about the IPR status of a product, you can request a binding ruling from CBP, which provides a definitive determination on the classification and admissibility of your merchandise.

Conclusion: The Cost of Compliance vs. The Cost of Infringement

The financial and reputational costs of an IPR seizure far outweigh the cost of implementing a comprehensive compliance program. A single seizure can result in the loss of the entire shipment, significant fines, and the irreparable damage to your business's reputation.

By proactively recording your IPR, conducting rigorous supply chain due diligence, and staying informed about CBP's enforcement priorities, US importers can navigate the complexities of border enforcement with confidence. In the current environment of escalating IPR seizures, a strong compliance posture is not optional—it is a fundamental requirement for sustainable international trade.