US IPR Center director Bruce Foucart reviews the progress that his agency and its partners have made in the fight against intellectual property infringement
The National Intellectual Property Rights Coordination Center, known as the IPR Center, stands at the forefront of the US government’s response to global IP theft and enforcement of its international trade laws. Since its foundation in 2000 under the former US Customs Service, the mission of the IPR Center has been to ensure national security by protecting the public’s health and safety, the US economy and service members, and to stop predatory and unfair trade practices that threaten the global economy.
The IPR Center brings together 23 partner agencies, consisting of 19 key federal agencies, the International Criminal Police Organization (INTERPOL), the European Police Office (EUROPOL), and the governments of Canada and Mexico.
This unique task force model combines the best aspects of all partner agencies, both foreign and domestic, to ensure that our mission of service to the American people is upheld by employees of the highest calibre. Using these resources, the IPR Center has developed comprehensive operations and works with internal and external agencies to conduct effective IP enforcement, defend the economy, protect consumers, and expose criminal organisations.
In the last year, the IPR Center has worked tirelessly to uphold these founding goals, achieving numerous successes both at home and abroad. Reflecting our commitment to public safety and security, we have continued to emphasise Operation Chain Reaction, a strategy of enforcement aimed at ensuring that our military’s supply chains are secure and that the highest standards are upheld at every step of the manufacturing process. The intrusion of counterfeit goods into areas critical for national defence has been an increasing concern, as these products are relied upon by our service members to ensure both their safety and our own. We are pleased to report that our efforts have been met with massive successes, leading to 28 indictments, 23 convictions, and over $14 million in seizures, ensuring our troops receive the tools they need to keep America safe.
Our efforts are not only focused on matters of national security, however. The IPR Center considers public health and safety a top priority. Counterfeit pharmaceuticals and cosmetics can cause serious side effects, as they often contain toxins or chemicals not approved for use in the US. For the past 10 years, Operation Apothecary has been at the forefront of this effort. The operation targets and interdicts suspect shipments of counterfeit pharmaceuticals arriving at various ports of entry. In 2015, we reinforced our commitment to ensuring consumer safety through Operation Plastic Beauty, targeting counterfeit cosmetics. In the last year alone, over $22 million worth of counterfeit personal care products and medicines were seized, leading to 212 arrests, 235 indictments, and 201 convictions. In individual cases, restitution in excess of $900,000 was ordered in addition to significant prison sentences, sending a firm message to those who would jeopardise the health of Americans.
Our successes in these areas, while significant, have only been possible due to our focus on cooperation with industry leaders and international authorities. By utilising the knowledge of experts at the tops of their fields, organisations such as the Automotive Anti-Counterfeiting Council (A2C2) have enabled us to keep pace with the latest threats in automotive and industrial counterfeiting. These have included such dangerous materials as counterfeit car airbags and wheels, both of which can cause severe injury or death if failure results.
Through our cooperation with industry leaders, we have been able to intercept many of these counterfeit materials before they enter the supply chain, ensuring consumer safety.
The IPR Center has also expanded its efforts to work with our partners overseas. In addition to the 63 locations around the world where Homeland Security Investigations agents are stationed, the IPR Center has been working directly with governments to strike at counterfeiting operations at their source. In 2015, programme managers sent to Thailand helped conduct 10 operations, seizing $18 million worth of goods and making 16 arrests. This is just one of the many countries with whom we work closely and our efforts are complemented by the direct support we receive from INTERPOL, EUROPOL, and the governments of Canada and Mexico.
Through these connections and our developing network of operations, we have seen dramatic successes. In 2015, the number of IPR seizures increased nearly 25 percent to 28,865 from 23,140 in 2014. The total estimated manufacturer’s suggested retail price (MSRP) of the seized goods, had they been genuine, increased 10 percent to more than $1.35 million. Tactical interagency collaboration with the IPR Center resulted in 538 arrests, with 339 indictments, and 357 convictions.
Our successes come at a time when they are needed the most. New challenges in the world of counterfeiting and IP theft are always appearing, as criminal networks use the latest forms of technology to conceal their actions and money supplies. The rise of internet businesses and express consignment have also provided opportunities for criminals to target average consumers with counterfeits, many of which prove to be dangerous due to inclusion of faulty parts or toxic materials. In addition to these examples of direct marketing, we have seen an expansion of counterfeiting overseas, with more than 85 percent of counterfeited goods imported through China or Hong Kong. To combat these threats, we have expanded our pre-existing networks of international cooperation to focus on these new transport vectors.
In addition to our prior work with nations such as Canada, Mexico, and Thailand, the IPR Center has been working directly with Hong Kong and China to attack counterfeiters at the source: their production facilities. In 2015, we collaborated with China’s Ministry of Public Security to dismantle a counterfeit airbag distribution network, leading to the arrests of three suspects and the seizure of more than 2,100 airbags produced using parts salvaged from Chinese junkyards.
Building upon our recent successes and moving forward into the coming year, the IPR Center has implemented several new programmes, each designed to increase our impact and efficiency in key areas. First is the implementation of our new ‘Report IP Theft’ button. Initially featured on the IPR Center website, it is now featured in numerous industry materials and displayed prominently on sites such as the National Crime Prevention Council, the STOPfakes Initiative, the National Alliance for Jobs and Innovation, the National Football League, and many others.
Using the button allows consumers to access a comprehensive report form in which they are able to detail the violation they have observed and provide any information they have. This measure enables us to directly address one of the main sources of counterfeit goods—online retailers—by leveraging the knowledge of American consumers, reversing the tactics of the counterfeiters themselves. The Report IP Theft button places power back in the hands of American consumers, giving them recourse when they experience counterfeiting or IP theft. Forms submitted in this way are transmitted directly to the IPR Center intelligence section and are investigated thoroughly by our agents, alongside those of our 23 partner agencies. Through this new system of crowdsourced intelligence, we have dramatically increased the quality of our leads, producing actionable intelligence in 98 percent of cases. With this new measure, alongside information provided through the IPR Center tip line at 1-866-IPR-2060, we feel confident in our efforts to combat new and more complex forms of counterfeiting, piracy, and infringement.
We are not alone in these endeavours. With the passage of the Trade Facilitation and Trade Enforcement Act at the beginning of this year, the IPR Center and our affiliates have received the firm support of Congress in addressing the new challenges presented by IP theft. The act establishes the IPR Center by statute and provides it with broad powers to coordinate our nation’s response to IP threats across the country, as well as providing a framework for training our domestic and international law enforcement agencies in the newest and most effective strategies.
By investing the IPR Center with its duties over coordination, Congress has established a clear chain of command and a method of allocating resources which will reduce waste and increase the speed of our reactions. The legislation thus ensures that the research and training techniques developed at the IPR Center or at any of its affiliated agencies will have the maximum impact, as well as enabling our agents to keep pace with the rapidly shifting criminal enterprises that threaten our nation’s economic and public security.
Although there are many challenges ahead, the IPR Center is confident that we possess the tools and the talent to fight the battle against IP theft.
With our highly trained and dedicated staff, the center has seen greater successes in the last several months than ever before. We possess new strategies, tools, and partners to take on criminals, wherever they may strike. We stand firm in our mission to ensure national security by protecting the public’s health and safety, the US economy and service members, and to stop once and for all the predatory and unfair trade practices that threaten the global economy.