WORLD TRADE  
ORGANIZATION  IP/C/W/488 
30 January 2007 
 
 (07-0416) 
Council for Trade-Related Aspects 
of Intellectual Property Rights Original:  English 
 
 
 
ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS 
(PART III OF THE TRIPS AGREEMENT ): 
EXPERIENCES OF BORDER ENFORCEMENT 
 
Communication from the United States  
   The following communication, dated 26 January 2 007, is being circulated at the request of the 
Delegation of the United States. 
 
_______________ 
  
I. INTRODUCTION 
1. The United States offers this submission on border  enforcement of intellectual property rights 
as a contribution to a constructive exchange of information, within the TRIPS Council, on the 
experiences of Members in implementing Part III of the TRIPS Agreement.  The United States reiterates its view that enforcement-related ch allenges surrounding infringement of intellectual 
property are of concern to all Members, with  negative consequences for both developing and 
developed economies.  In this light, the TRIPS C ouncil can make a positive contribution to addressing 
these problems through a constructive exchange of views and experiences. 
2. This paper briefly discusses recent data on the gr owing scale of IPR infringement detected in 
the United States, as measured by seizures of infri nging imported goods by US customs authorities.  It 
also introduces basic information regarding:  
• Efforts by US customs authorities to employ risk modelling methods  as a tool to enhance the 
ability to achieve effective border en forcement against IPR-infringing goods. 
 
• Efforts by US customs authorities to employ post-entry verification audits  of importers to 
identify and penalize importations of IPR-infringi ng goods after the goods have been released 
into commerce. 
 3. The United States notes that, consistent with Ar ticle 1.1 of the TRIPS Agreement, Members 
have flexibility to determine the appropriate mean s of implementing enforcement measures, including 
border enforcement measures as discussed in Articles 51-60, provided that those means are consistent 
with the TRIPS Agreement.  Accordingly, the US offers this information simply as an example of 
certain tools that the United States has found helpful in its own efforts to address the growing scale of 
IPR infringement, with a view to furthering the in ternational cooperation and information exchange 
called for in Article 69 of the TRIPS Agreement. IP/C/W/488 
Page 2  
 
  II. RECENT DATA ON CUSTOMS SEIZ URES OF IPR INFRINGING GOODS 
4. In the United States, US Customs and Border Protection (CBP) devotes substantial resources 
to targeting, intercepting, detaining, and seizing shipments at the border containing IPR infringing goods.  As part of these efforts, seizure data is coll ected and researched, and this data is used as a tool 
for future interdictions and for gui ding efforts to improve internati onal cooperation in the area of 
border enforcement. 
5. The Annex to this document includes a selection of  recent statistics and graphs available from 
CBP.  Additional information and statistic s can be found on the CBP website at 
http://www.cbp.gov/xp/cgov/import/co mmercial_enforcement/ipr/seizure/
. 
6. As demonstrated in the annexed materials,  the United States continues to confront 
IPR-infringing products at the border, on a massive  and increasing scale.  The following points, drawn 
from data for Fiscal Year (FY) 2006 (October 2005-September 2006), are particularly notable:  
• The value of infringing goods seized by CBP in FY2006 reached US$155.4 million, and 
the number of seizures reached 14,675.  The FY2006 value and number of seizures are the highest in the history of CBP. 
 
• This represents an increase of two-thirds by value, and 83 per cent in the number of 
seizures, compared to the previous fiscal year. 
 
• Footwear accounted for a significant proportion of goods seized in FY2006, at 41 per cent 
of total value.  This was a major increase ove r the previous year, when footwear accounted 
for only 10 per cent of total seizures, by value. 
 
• Wearing apparel, handbags, computers, and c onsumer electronics (including power strips, 
DVD players, and cell phones) also figured prominently in the seizures made by CBP 
during the past fiscal year.  Consumer electronics seizures represent a particular concern as these fake products may pose health and safety risks. 
 7. The significant increase in seizures recorded in  FY2006 means that the expanding scope of 
global piracy and counterfeiting activity will remain an important preoccupation for the United States 
Administration, Congress, business community, and consumer groups. 
III. TOOLS FOR ENHANCING BORDER ENFORCEMENT ACTIVITIES 
8. The steady increase in overall imports into th e United States market, combined with an 
increasing incidence of IPR-infringing imports, have made it necessary for CBP to develop and 
implement new methodologies as a means of enhanc ing border enforcement, and maximizing 
resources, with respect to identifying and interdic ting IPR infringing goods.  This paper will briefly 
introduce two such methods currently being deployed by CBP. 
A. R
ISK MODELLING  
9. Given the enormous quantity of goods processed at US ports of entry on a daily basis, and 
limitations on resources available to inspect sh ipments for possible IPR infringements, CBP has 
adopted new risk analysis methods which are intended to: 
 
• sharpen focus on high-risk ship ments to increase interdictions; 
 
• reduce unproductive examinations of low-risk shipments;  and  IP/C/W/488 
 Page 3 
 
 
  • use IPR border enforcement resources more efficiently. 
 10. As one part of this risk analysis approach , CBP has developed an IPR Risk Model, which 
expands the agency's current portfolio of IPR ta rgeting methods.  The Risk Model represents an 
innovative, technology-based targeting tool that cal culates risk "scores" as a means of indicating 
relative IPR infringement risk for imports into the US market.   
11. CBP's IPR Risk Model is a computer-based pr ogram that applies statistical analysis 
techniques to create a data-driven model of IPR risk .  The model is built on the basis of risk factors 
that are characteristic of IPR infringing imports.  These factors are drawn primarily from information provided to CBP when an importer presents goods for entry into the US  The factors, which include 
data such as country of origin, port of entry, tariff number, and past import history related to these, are 
statistically weighted based on known risk.  For ex ample, each country, port and tariff classification is 
assigned its own statistically determined weight.  Th e model then applies a mathematical formula to 
combine these factors and generate risk scores for imports.  CBP officers subsequently rely on this 
output to assist in the identification of inbound ship ments which may merit particular attention, or 
which may represent a low risk and can consequen tly be processed for entry without physical 
inspection. 
12. The output of the Risk Model is used to enhance current, more traditional tools used by CBP 
to identify and interdict co unterfeit and pirated goods at  US borders.  These include: 
 
• visual review of packaging; 
 
• manual review of entry and manifest information; 
 
• computerized targeting based on a small numbe r of equally weighted elements such as 
importer, country, and/or tariff number; 
 
• leads provided by industry and other US agencies. 
 13. The CBP Risk Model will be implemented nationally in the first quarter of 2007. 
14. CBP can share the methodology used to create the IPR Risk Model with other Members, 
although the model itself cannot be shared because th e risk factors are specific to the United States. 
B. P
OST-ENTRY VERIFICATION (IPR  AUDITS ) 
15. Post-entry verification audits are a long-standing feature of CBP's enforcement work, but such 
audits have only recently (since 2005) been app lied with respect to IPR-related enforcement. 
16. CBP has trained a group of its regulatory audit employees in IPR subject-matter, enabling 
them to apply their auditing skills to the enforcemen t of intellectual property rights.  In addition to 
receiving training from CBP's own IPR specialists, the auditors also attend training offered by trademark and copyright owners in the private sector. 
17. IPR-based post-entry audits have been pe rformed or are in progress on 35 importing 
companies at high-risk for IPR violations based on their importing history. 
18. In post-entry verifications, CBP auditors revi ew documentation such as a company's purchase 
records, product specifications, gene ral and subsidiary ledgers, and pa yment records.  These financial 
records hold key information that allows auditors to  identify potential IPR violations.  CBP auditors 
also review the business practices, or system of controls, that a company uses to prevent it from IP/C/W/488 
Page 4  
 
  importing counterfeit and pira ted products.  These reviews determin e if there are weaknesses in the 
company’s practices or systems that may lead to IPR violations.  Based on the findings of these reviews, CBP works with businesses  to establish stronger systems of procedures to prevent IPR 
violations.  Findings from these audits have identif ied violations among importers in several areas, 
including electronics, toys, textiles, and recreational motor vehicles.  CBP is issuing penalties on 
counterfeit goods uncovered in  post-entry IPR audits. 
19. CBP is finding that applying post-entry verifi cation audits to IPR subject-matter increases the 
effectiveness of IPR enforcement by addressing count erfeiting and piracy at the level of individual 
business organizations.  This enables an expansi on of enforcement effectiveness beyond examination 
and seizure at the border, shifting CBP's focus from individual shipments to businesses engaged in 
trade in IPR-infringing goods. 
IV. CONCLUSION 
20. The United States has found that the techniques di scussed in this paper have been helpful in 
addressing the growing scale of IPR-infringing trad e encountered in the United States.  These 
measures are summarized here for the informati on of Members of the TRIPS Council, with the 
understanding that there are a wide variety of appr oaches that may be applied to border enforcement. 
 
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   IP/C/W/488
 Page 5Department of Homeland Security 
US Customs and Border Protection and US Immigration and Customs Enforcement 
FY 2006 Top IPR Commodities Seized 
41 %
16 %9%9%5%4%2%2%2%1%8%
Footwear Wearing Apparel Handbags/Wallets/Backpacks
Computers/Hardware Consumer Electronics Me di a
Headwear Health Care Watches/Parts
Pharmaceuticals All Other Commodities
 
Commodity  Domestic 
Value Percent of Total 
       
Footwear $ 63,445,619 41% 
Wearing Apparel $ 24,320,976 16% Handbags/Wallets/Backpacks $ 14,750,201 9% 
Computers/Hardware $ 14,287,989 9% 
Consumer Electronics $ 7,057,034 5% Media $ 6,965,156 4% 
Headwear $ 3,257,963 2% 
Health Care $ 3,092,919 2% Watches/Parts $ 2,832,364 2% 
Pharmaceuticals $ 2,298,694 1% 
All Other Commodities $ 13,060,321 8% 
Total FY 06 Domestic Value $ 155,369,236   
Number of Seizures   14,675   
 
Note: Media  includes motion pictures on tape, laser disc, and DVD;  interac tive and computer software on CD-ROM, and floppy discs;  and mu sic on CD or tape.  Consumer Electronics  includes cell phones and 
accessories, radios, power strips, electrical tools and appliances. 
 
Source : US Customs and Border Protection, Office of International Trade.  
  IP/C/W/488 
Page 6 Department of Homeland Security 
US Customs and Border Protection and US Immigration and Customs Enforcement 
FY 2005 and FY 2006 Top IPR Commodities Seized 
FY 2005 
Commodity   Domestic 
Value % of Total 
Value 
Wearing Apparel $ 16,099,540 17%
Handbags/Wallets/Backpacks $ 14,954,525 16%
Cigarettes $ 9,648,876 10%Footwear $ 8,941,185 10%
Consumer Electronics $ 8,793,700 9%
Toys/Electronic Games $ 8,568,925 9%Computers/Hardware $ 4,798,852 5%
Watches/Parts $ 3,070,832 3%
Perfumes $ 2,713,695 3%Pharmaceuticals $ 2,094,352 2%
All Other Commodities $ 13,550,028 15%
Total FY 05 Domestic Value $ 93,234,510   
Number of Seizures   8,022   17%
16 %
10 %10 %9%9%5%3%3%2%15 %
Wearing Apparel Handbags/Wallets/Backpacks
Cig arettes Footw ear
Consumer Electronics Toys/Electronic G ames
Computers/Hardware Watches/Parts
Perfumes Pharmaceuticals
All Other Commodities
 
 
FY 2006 
Commodity   Domestic 
Value % of Total 
Value 
Footwear  $ 63,445,619 41%
Wearing Apparel $ 24,320,976 16%
Handbags/Wallets/Backpacks $ 14,750,201 9%
Computers/Hardware $ 14,287,989 9%
Consumer Electronics $ 7,057,034 5%
Media $ 6,965,156 4%Headwear $ 3,257,963 2%
Health Care $ 3,092,919 2%
Watches/Parts $ 2,832,364 2%Pharmaceuticals $ 2,298,694 1%
All Other Commodities $ 13,060,321 8%
Total FY 06 Domestic Value $ 155,369,236   
Number of Seizures   8,022   41 %
16 %9%9%5%4% 2% 2% 2% 1 %8%
Footw ear Wearing Apparel
Handbags/Wallets/Backpacks Computers/Hardware
Consumer Electronics Media
Headwear Health Care
Watches/Parts Pharmaceuticals
All Other Commodities
 
 
Source : US Customs and Border Protection, Office of International Trade.  
   IP/C/W/488
 Page 7Department of Homeland Security 
US Customs and Border Protection and US Immigration and Customs Enforcement 
Comparison of Yearly Domestic Values of IPR Seizures  
The value of IPR seizures in FY 2006 increased by 67% 
from the value in FY 2005.  The FY 2006 domestic value 
is the highest in the history of Customs/Department of Homeland Security.  
Fiscal 
Year  Overall Total 
Values (IPR) 
2002 $ 98,990,341 
2003 $ 94,019,227 
2004 $ 138,767,885 2005 $ 93,234,510 
2006 $ 155,369,236 
Total  580,381,199  
$0
$20,000,000
$40,000,000$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
$160,000,000 2002
 2003
 2004 2005
 2006
 
Comparison of Yearly Seizure Totals  
The number of seizures in FY  2006 reflects an increase of 
almost 83% over the number of seizures in FY 2005, and is the highest number of seizures in the history of 
Customs/Department of Homeland Security. 
Fiscal 
Year  Number of Seizures
2002 $ 5,793 
2003 $ 6,500 
2004 $ 7,255 
2005 $ 8,022 2006 $ 14,675 
Total  42,245  
0
1,0002,0003,0004,0005,0006,0007,0008,000
9,000
10,00011,00012,00013,00014,000
15,000 2002
 2003
 2004 2005 2006
 
Source : US Customs and Border Protection,  Office of International Trade. 
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