International Markets

CBP recently released statistics regarding the volume and value of its seizures of intellectual property rights infringing articles during fiscal year 2011 (October 2010 through September 2011). The total number of IPR seizures increased by 24 percent from 19,959 in FY 2010 to their highest level in recent history at 24,792 in FY 2011. However, the total domestic value of those seizures fell five percent from US$188.1 million in FY 2010 to US$178.9 million in FY 2011, due in part to an increase in the number of high-volume/low-value express courier and consolidated shipment seizures. As a result, the average value of IPR seizures dropped from US$9,425 in FY 2010 to a ten-year low of US$7,193 in FY 2011.

Express and mail seizures accounted for 74.4 percent of all seizures but only 25.1 percent of the domestic value of all seized merchandise in FY 2011. Cargo seizures represented 11.8 percent of all seizures and 54.1 percent of total domestic value in FY 2011. CBP indicates that the growth in the number of Web sites selling counterfeit merchandise directly to consumers is one of the reasons for the substantial increase in the number of seizures at mail and express courier facilities.

Footwear had topped the list of goods seized for IPR violations for five straight years but was replaced atop the FY 2011 rankings by consumer electronics, which saw a 16.1 percent to US$39.0 million in total value and accounted for 21.9 percent of all seizures. Footwear ranked second with a 14.2 percent share of all seizures and a 44.8 percent decline in total value to US$25.3 million, while pharmaceuticals ranked third with a 9.4 percent share of the total and growth of 197.6 percent to US$16.8 million. Optical media represented 8.7 percent of the total value of seized merchandise and experienced a 22.8 percent increase to US$15.6 million, while wearing apparel accounted for 8.3 percent of all seizures and saw a 21.0 percent decline to US$14.8 million.

Wearing apparel ranked first in terms of the total number of seizures with 24.8 percent of the total and growth of 70.4 percent to 7,392. Optical media ranked second with a 14.7 percent share and growth of 0.4 percent to 4,390. Apparel also ranked first in terms of the total estimated manufacturer’s suggested retail price for all seizures with an 11.4 percent share (US$126.3 million) of total MSRP value in FY 2011, while watches and parts ranked second with a 10.1 percent share (US$112.7 million) and consumer electronics ranked third with a 9.1 percent share (US$101.2 million).

Mainland China again topped the list of IPR infringers in FY 2011, accounting for 61.7 percent or US$110.0 million of the total value of seized goods. Hong Kong ranked second with an 18.0 percent share or US$32.2 million while India (2.5 percent share or US$4.5 million), Pakistan (2.2 percent share or US$4.0 million), Taiwan (1.3 percent share or US$2.3 million), Switzerland (0.8 percent or US$1.4 million) and Malaysia (0.7 percent or US$1.3 million) followed at a distance. The total value of seized merchandise from mainland China declined for the third straight fiscal year, however, down 11.8 percent to US$110.0 million after falling 39.1 percent to US$124.7 million in FY 2010 and 7.7 percent to US$204.7 in FY 2009. Notably, the total value of seized merchandise from mainland China in FY 2011 was 50 percent lower than in FY 2008. On the other hand, the total number of seizures of mainland Chinese merchandise rose 11.4 percent to 13,592 in FY 2011 after growing 18.6 percent to 12,200 in FY 2010. The total value of seized merchandise from Hong Kong rose 22.9 percent to US$32.2 million in FY 2011 while the total number of seizures surged 84.5 percent to 7,658.

These statistics suggest that IPR infringing merchandise from Hong Kong and mainland China is increasingly being shipped to the United States as lower-volume express courier and international mail consignments rather than in cargo containers. CBP indicates that one of the factors contributing to the increased use of mail and express courier services to transport counterfeit goods is the continued growth of Web sites selling counterfeit and piratical merchandise directly to consumers. CBP and U.S. Immigration and Customs Enforcement have stepped up enforcement efforts at mail and express courier facilities and remain engaged with right holders to provide training and information about their products. CBP notes that despite the surge in counterfeit goods shipped via mail and express courier directly to consumers, analysis by CBP officials indicates that the majority of express courier/mail seizures are commercial in nature (i.e., medium to large shipments not intended for personal use).

The top seized goods by value for mainland China and Hong Kong are shown in the table below. Consumer electronics represented 21.3 percent or US$23.5 million of the total value of seized mainland Chinese merchandise, followed by footwear with a  20.1 percent share or US$22.1 million, apparel with a 9.2 percent share or US$10.1 million and perfume/cologne with a 7.6 percent share or US$8.4 million. Apparel topped the list of seized goods from the Chinese mainland in terms of the total number of seizures with 4,466 seizures, followed by optical media with 2,349 seizures, consumer electronics with 1,383 seizures and handbags/wallets/backpacks with 1,288 seizures. Consumer electronics accounted for 37.3 percent or US$12.0 million of the value of all seized merchandise from Hong Kong, followed by computers/hardware with a 10.2 percent share or US$3.3 million and handbags/wallets/backpacks with an 8.6 percent share or US$2.8 million.

The data show substantial declines in seized footwear, wearing apparel, computers/hardware and handbags/wallets/backpacks from mainland China and a brisk increase in seized toys and electronic games, perfume/cologne, pharmaceuticals, cigarettes and watches/parts. Products from Hong Kong with large increases in total seized value in FY 2011 include consumer electronics, computers/hardware, optical media, pharmaceuticals, wearing apparel and health/personal care products. Mainland China in FY11 accounted for 90.6 percent of the total value of seized toys and electronic games, 88.5 percent of the total value of seized perfume/cologne, 87.4 percent of the total value of seized footwear, 78.7 percent of the total value of seized cigarettes, 68.4 percent of the total value of seized apparel and 60.2 percent of the total value of seized consumer electronics.

Hong Kong is the second largest source of seized consumer electronics after mainland China with a 30.9 percent share of total seizures in value terms in FY11. It also accounted for 42.0 percent of the total value of seized computers/hardware (mainland China held a 43.2 percent share) and 16.1 percent of the total value of seized pharmaceuticals.

n/a: not available.