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Screenplay-Worthy Sting Op Nets $300 Million in Counterfeit Goods & Drugs

29 charged in New Jersey in international schemes to import counterfeit goods and drugs, launder profits

NEWARK, N.J. -- Massive conspiracies to import hundreds of millions of dollars in counterfeit goods from China and illegal drugs from Taiwan to the U.S. have been disrupted. The case was investigated by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), the FBI, U.S. Customs and Border Protection (CBP), and the Department of Justice's Organized Crime and Gangs Section, Office of Enforcement Operation and Office of International Affairs.

Undercover agents and court-authorized wiretaps helped uncover two elaborate schemes to defeat federal border and port security measures at Port Newark-Elizabeth Marine Terminal in Elizabeth, N.J. Of the 29 charged in New Jersey in an indictment and three criminal complaints as a result of those investigations, 23 are currently in federal custody.

Federal agents arrested Hui Sheng Shen, aka "Charlie," and Huan Ling Chang, aka "Alice," Feb. 25, 2012, in New York. Soon Ah Kow, indicted in January 2012, was also arrested Saturday in the Philippines. Twenty defendants were arrested this morning in a coordinated, multi-agency takedown. Six of the charged defendants remain at large.

The federal investigations into the smuggling of counterfeit goods also uncovered an alleged scheme to import 50 kilograms of crystal methamphetamine. Approximately 1 kilogram of nearly pure crystal meth was purchased from the defendants as part of the operation, which stopped the importation of dozens of additional kilograms of the drug.

In addition to the arrests, federal authorities are seeking to seize and forfeit all proceeds of the counterfeiting scheme and property used to commit the counterfeiting scheme, including automobiles, U.S. currency and other valuables, and the home of one of the leaders of the counterfeiting ring.

"Thanks to the efforts of HSI and our law enforcement partners, we were able to take down a massive counterfeit smuggling enterprise - a scheme involving individuals who were stealing corporate identities and smuggling counterfeit merchandise out of China," said HSI Executive Associate Director James Dinkins. "Had they not been caught, approximately $300 million worth of illicit goods would have been smuggled into our country. The enormity of this case - and the fact that we followed the investigative leads directly to the source in China, where so many counterfeit goods originate - is a stern warning to counterfeiters and smugglers everywhere. We are vigilantly watching our ports of entry for criminal activity that undermines legitimate commerce and potentially threatens the security of the United States."

"The cost of counterfeit goods is not limited to massive financial harm to American businesses and consumers," said U.S. Attorney Paul Fishman. "Criminals can exploit the same channels to import other material that threatens our health and safety. We remain dedicated, through global, inter-agency cooperation and long-term investigations like this one, to ensuring that criminals who see the ports as a gateway to America's black market instead face American justice."

"CBP is on the front line of intellectual property rights enforcement, partnering with other federal agencies, industry and foreign governments to fight cross-border trade in counterfeit and pirated goods. We are proud to have been part of this important effort to safeguard our nation," said Robert E. Perez, CBP Director, New York Field Operations.

According to the criminal complaints and indictment unsealed today:

Patrick Siu et al. scheme

An investigation led by HSI uncovered a massive scheme to smuggle counterfeit goods manufactured in China into the United States through containers falsely associated with legitimate importers. The investigation was supported by officers from CBP, who helped target, identify and process the suspect containers. Many of the containers of goods were worth millions of dollars each and together had an estimated retail value of more than $300 million were they legitimate.

The conspirators used stolen corporate identities and false personal identification documents to compromise security at Port Newark-Elizabeth Marine Terminal to help import and attempt to import more than 135 containers of counterfeit goods - primarily Coach, Louis Vuitton and other handbags, footwear such as UGG boots and Nike sneakers, and clothing - into the United States.

The conspirators concealed the counterfeit goods, among other ways, by using generic outer lids on boxes and generic labels on products to hide the counterfeit brand name labels beneath. Once the products cleared the ports, the conspirators would remove the outer lids and cut off the generic labels. Some conspirators obtained the information of legitimate companies and used it on false shipping paperwork. They then managed the flow of false paperwork between China and the United States, and supervised the importation of counterfeit goods. Others created and used false and fraudulent personal identification documents, such as Social Security cards, to continue the scheme.

Other conspirators managed the distribution of the goods after they arrived in the United States, delivering them to warehouses and distributing them throughout New Jersey, New York and elsewhere.

Conspirators acting as wholesalers obtained counterfeit goods from the directors of the scheme and supplied the retailers who sold them to the ultimate customers in the United States. Some members of the scheme then laundered the profits by wiring millions of dollars to China without reporting the funds as required by federal law.

Many used the profits of their crimes to maintain lavish lifestyles - buying luxury automobiles and tens of thousands of dollars in jewelry. During the course of the investigation, the conspirators sought out undercover federal agents (HSI UCs), who purported to have connections at the port allowing them to release containers that were on hold and pass them through to the conspirators.

The conspirators discussed expanding into other lines of counterfeit products, without regard to whether the counterfeit products harmed the health and safety of consumers in the United States. For example, on Dec. 7, 2010, Hai Yan Jiang spoke with Lin Wu, considering the importation of counterfeit cosmetics. Yan stated that the cosmetics were "counterfeit, but of good quality." When Wu asked Yan whether these products would be harmful to the users, Yan said, "All I care about is to make money, other things do not matter." When Wu stated that "business needs to be done with a clear conscience," Yan replied, "Then go be a monk."

Ning Guo et al. scheme

Simultaneously, the FBI was conducting a parallel investigation into targets operating a smuggling scheme at the port. As the investigations developed, law enforcement discovered targets that connected the conspiracies. The FBI then joined together with HSI, CBP and the U.S. Attorney's Office for the District of New Jersey to coordinate operations.

This scheme also involved a large-scale international counterfeit goods smuggling and distribution conspiracy and falsified shipping paperwork. As part of the investigation, law enforcement set up a front company as a purported importer of goods. Through the smuggling scheme, the conspirators imported over 35 containers of counterfeit goods with a retail value of over $25 million, including counterfeit Nike sneakers and UGG boots; Burberry, Louis Vuitton, Coach and Gucci handbags; and cigarettes, among other items.

Some of the conspirators engaged in a conspiracy to launder what they believed to be the proceeds of narcotics and illegal gambling activity through banks in China, the United States and elsewhere.

Kow, Shen and Chang scheme

Soon Ah Kow - charged by indictment with drug importation, smuggling and counterfeit goods trafficking offenses by a Newark federal grand jury Jan. 6, 2012, was arrested over the weekend following an operation by law enforcement which lured Kow from his residence in Hong Kong.

In February 2012, undercover law enforcement agents lured Kow, who was unaware he was indicted, to the Philippines under the guise of paying him for past transactions and discussing future illegal activities. The Department of Justice, working closely with Philippine authorities, obtained a provisional arrest warrant for Kow, who was arrested by Philippine law enforcement agents as he stepped off his plane in Manila. Kow is in the business of brokering international transactions of illegal goods. Operating out of Southeast Asia, he has met with and introduced his co-conspirators to undercover federal agents (the "FBI UCs") on numerous occasions for the purpose of importing counterfeit goods and narcotics from Asia to the United States.

The FBI learned in August 2008 that Kow was looking for assistance in importing several containers of counterfeit cigarettes and clearing them through customs. Depending on the size, each such container is worth approximately $2.5 million to $5 million. Kow contacted FBI UCs posing as individuals who, with associates, could clear counterfeit goods through customs and have them removed from ports on both the east and west coasts of the United States. Kow and several of the conspirators charged in the Guo et al. complaint then used UCs to import several containers of counterfeit goods and counterfeit cigarettes worth millions of dollars.

In late 2010, Kow began discussions with FBI UCs about narcotics importation, meeting in February 2011 with FBI UCs in Manila where he introduced them to his associates, Hui Sheng Shen and Huan Ling Chang. In Manila, Kow told the FBI UCs that Shen and Chang represented the interests of Kow's associates, wealthy narcotics dealers who had been trafficking drugs for over 25 years. Kow and Shen arranged for the delivery of a sample of crystal methamphetamine to the FBI UCs' hotel lobby, which arrived within hours of a call Ah Kow placed to an associate in Hong Kong.

Following negotiations over recorded telephone calls and intercepted emails, the FBI UCs wired approximately $70,000 to a bank account in Taiwan to cover the price of 1 kilogram of crystal meth, shipping costs, and a broker's fee for Kow. In July 2011, the UCs received a bill of lading for the container that included the meth, which arrived at the port August 9, 2011. The drugs were discovered secreted within the container by CBP officers in the exact location described by Shen and Chang. The meth was hidden inside closed bags of Chinese tea placed within a metal tower-type computer, which was then placed within the packaging for such a computer.

During negotiations for the 1 kilogram meth deal, Shen and Chang made clear they usually did larger transactions, but agreed to do a smaller transaction to establish trust among the parties. During recorded meetings with FBI UCs in February 2012, Shen and Chang finalized the negotiations for a series of large-scale international narcotics transactions, which would result in more than 50 kilograms of methamphetamine to be imported into the United States, and hundreds more sent to Japan and elsewhere. The defendants provided the FBI UCs with information for a bank account they had opened for these transactions.

ZONE DEFENSE: Counterfeit NBA Gear Seized

I.C.E. Agents confiscate thousands of counterfeit goods at NBA All-Star Weekend

  • Agents confiscate thousands of counterfeit goods at NBA All-Star Weekend
  • Agents confiscate thousands of counterfeit goods at NBA All-Star Weekend

 More than 2,500 counterfeit items were confiscated as the result of a joint operation by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), the Orlando Police Department and the Orange County Sheriff's Office during the 2012 NBA All-Star Weekend in Orlando.

"Counterfeiters prey on sports fans at events like the NBA All-Star Game," said Susan McCormick, special agent in charge of HSI Tampa. "I urge buyers to beware. Counterfeiting is not a harmless crime. Counterfeiting costs U.S. businesses more than $200 billion each year and accounts for the loss of more than 750,000 American jobs."

During the days leading up to the NBA All-Star Game, HSI special agents operated in teams throughout the Orlando area, targeting suspicious activity that might lead them to counterfeiters. HSI special agents seized counterfeit items including t-shirts, caps and jerseys. The items are valued at more than $69,000. Ten individuals were arrested for possessing or offering to sell counterfeit NBA merchandise in violation of Florida state law.

"The NBA is committed year-round to protecting both our fans and legitimate, tax-paying retailers from being victimized by counterfeiters seeking to profit illegally from the public's enthusiasm for the NBA," said Ayala Deutsch, senior vice president and chief intellectual property counsel for the NBA. "We greatly appreciate the tireless efforts of HSI, the Orlando Police Department and the Orange County Sheriff's Office throughout All-Star Weekend and are pleased to have their support in working to address this important issue."

SOURCE: I.C.E.

SWEET SMELL OF SUCCESS - CBP Seizes $51 Million in Knock-off Perfume in 2011

U.S. Customs and Border Protection (CBP) seized imports of counterfeit perfume valued at nearly $51 million during fiscal year 2011.

Counterfeit perfumes are a form of theft from the brand owner, and protecting American intellectual property is a priority for CBP. In addition to the economic harm, counterfeit perfumes are also often contaminated with unknown chemicals that can cause serious injury.

The fake perfume that CBP most frequently intercepted was labeled "Sex in the City" perfume, which is related to the highly popular HBO movie and television series. CBP has been working with the right holder to crack down on these illegal imports.

In fiscal year 2011, CBP's Intellectual Property Rights (IPR) National Targeting and Analysis Group (NTAG) in Los Angeles targeted 138 commercial shipments of perfumes for possible trademark infringement. These shipments were examined and 52 were seized for infringing a trademark, including the "Sex and the City" trademark. The domestic value of the seized shipments, which contained more than one million pieces, was nearly $8 million. If the trademark had been genuine, the manufacturer's suggested retail price of the perfume would have been more than $45 million.

The IPR-NTAG provides a national strategic perspective on trade through risk analysis and multi-disciplined trade strategies; develops and applies risk management techniques to support trade security and trade compliance; supports national trade strategies and field enforcement operations; and monitors the effectiveness of trade criteria and the targeting process.

In the past year, the IPR-NTAG uncovered more than 30 entities involved in the importation of counterfeit perfume,

U.S. ports of entry and the IPR-NTAG continue to target for counterfeit perfumes and to work with Immigration and Customs Enforcement investigators to assist in enforcement actions and develop criminal cases. CBP also works closely with right holders in intellectual property rights enforcement.

In fiscal year 2011, 24,792 seizures of counterfeit and pirated goods with a total domestic value of $178.9 million and a manufacturer's suggested retail price of $1.1 billion were intercepted before entering the United States.

Wonder if they have WiFi in Federal Prison

A North Texas man was sentenced on Tuesday to nearly five years in federal prison, and ordered to pay $402,417 in restitution, following his June 2011 guilty plea on copyright infringement, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

U.S. District Judge Reed C. O'Connor sentenced James Clayton Baxter, 28, of Wichita Falls, Texas, to 57 months in prison. Baxter must surrender to the Bureau of Prisons by March 29.

According to documents filed in the case, from June 8, 2006 through April 9, 2007, Baxter infringed upon the copyrighted works of Adobe Systems Inc. by reproducing copies of its computer software for his financial gain. The investigation into Baxter's activities began in May 2007 when U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) was notified by investigators working for Adobe that they had purchased infringing computer software from TechKappa.com, a website that sold copies of software titles via download from the Internet. The investigation led investigators to Baxter's residence on Lou Lane in Wichita Falls.

Also in 2007, the FBI received a separate lead from the Wichita Falls Police Department (WFPD) regarding Baxter's involvement in selling pirated software. WFPD encountered Baxter selling infringing software in 2004 while investigating him for credit card abuse; he was warned that he could not sell pirated software on his websites. WFPD executed a search warrant at Baxter's residence in October 2007, and seized computers and external storage media.

The investigation revealed that Baxter owned and operated various websites, including Amerisoftware.com, Costfriendlysoftware.net, TechKappa.com, Ultrabackup.net, Superbuysoftware.net and Go-E-Soft.com. These sites, which he advertised online, offered "backup" copies of software, owned by Adobe, Microsoft and Autodesk Inc., for sale at about one-fifth of the manufacturer's retail value. Baxter also provided counterfeit product registration codes (serial numbers) that were distributed with the software so that the customer could install the software.

Between June 8, 2006, through April 9, 2007, Baxter caused more than 90 infringed copies of copyrighted software to be reproduced and distributed, for which he received more than $66,000. These included copies of the following copyrighted computer software: Adobe's Photoshop CS2, Adobe Illustrator CS2 and Adobe Photoshop 7.

Baxter admits that he knew the "backup" copies of Adobe software were illegal reproductions and that he willfully infringed on their works for his personal financial gain. Baxter and the government agree that the government can prove an actual loss of between $400,000 and $1 million.

Between 2004 and 2007, Baxter established at least 17 assumed business names with accompanying merchant bank accounts to process credit card payments for software orders. For example, during the brief time period between Aug. 7 and Aug. 18, 2006, Baxter received $18,036 in his PayPal account. Records further show that these merchant bank accounts processed 3,089 approved software orders that totaled $384,380.

The conviction and sentencing of James Clayton Baxter is the latest in a series of investigations initiated by the National IPR Coordination Center involving defendants from Wichita Falls, Texas. Six other men have also been convicted of operating websites used to sell pirated Adobe software:

Thomas C. Rushing III, William Lance Partridge and Brian C. Rue all pleaded guilty to criminal copyright infringement in U.S. District Court in Austin, Texas, on Aug. 22, 2008.
Timothy K. Dunaway pleaded guilty to criminal copyright infringement in U.S. District Court in Wichita Falls, Texas, on Oct. 20, 2008.
Robert and Todd Cook pleaded guilty to criminal copyright infringement in Alexandria, Va., on March 11, 2010.
Sentences for the seven defendants ranged from 12 months and a day to 57 months imprisonment with restitution totaling more than $2 million ordered to be paid to Adobe Systems Inc., a U.S. corporation based in San Jose, Calif. Combined, the counterfeit Adobe software sold by these individuals had a retail value of more than $15 million.

Funny - I thought "ROLEX" only had one "L" in the Name. . . .

Top Story: HSI special agents seize $825,570 worth of counterfeit goods

You never know what you'll find at a flea market - antiques, toys or even a deal of a lifetime. But special agents with U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) warn that those deals of a lifetime may be too good to be true.

Across the country, flea markets have become notorious hot spots for selling counterfeit goods. That was the case Feb. 13, when HSI special agents identified vendors peddling counterfeit purses, shoes and jewelry items at a flea market just outside Tampa, Fla.

"We had received tips that individuals were fraudulently selling trademarked items here," said Sue McCormick, special agent in charge of HSI Tampa.

That day, special agents seized more than 6,200 items with a manufacturer's suggested retail price of $825,570. The items falsely exhibited trademarks of Hello Kitty, Gucci, Rolex, Coach, Louis Vuitton, Nike and Perry Ellis.

"A good rule of thumb is for buyers to beware. When you purchase these items you're not getting a quality product from the trademark-holder. You're getting a substandard one," said McCormick. "You're also contributing to the loss of American jobs."

This seizure follows on the heels of an operation that took place earlier this month. On Feb. 1, HSI Tampa special agents seized nearly $1.2 million worth of fake designer purses, perfume, scarves and sunglasses from an individual already awaiting sentencing for trafficking in counterfeit goods.

ICE is the lead agency investigating intellectual property theft. The International Anti-Counterfeiting Coalition estimates that counterfeiting costs U.S. businesses between $200 and $500 billion each year and more than 750,000 American jobs.

Learn more about intellectual property theft at www.iprcenter.gov.

IP Infringement Can Kill - The Threat to Our Soldiers

California business owner sentenced for conspiring to sell counterfeit microelectronics to the US military

A business owner from Newport Coast, Calif., was sentenced yesterday to 30 months in prison for conspiring to sell counterfeit integrated circuits to the U.S. military, defense contractors and others.

The case was investigated by U.S. Immigration and Customs Enforcement's Homeland Security Investigations and the Naval Criminal Investigative Service.

Mustafa Abdul Aljaff, 32, pleaded guilty in January 2010 to federal charges of conspiracy to traffic in counterfeit goods and defraud the United States, and trafficking in counterfeit goods.

Upon completion of his prison term, Aljaff will be placed on three years of supervised release and be required to perform 250 hours of community service.

"Counterfeit electrical components destined for use by our military service members put those troops, and our national security, at great risk," said John P. Torres, special agent in charge, HSI Washington. "That is why HSI will continue to prioritize the investigation of companies and individuals who attempt to engage in this type of criminal act."

As part of the plea agreement, Aljaff agreed to forfeit industrial machinery which is designed to be used in the examination, testing, packaging, de-marking and marking of integrated circuits; computers and computer network servers; and his integrated circuit inventory. These items were seized from his business in connection with the execution of a search warrant on Oct. 8, 2009.

Aljaff also must pay $177,862 in restitution to the semiconductor companies whose trademarks were infringed as a result of his criminal conduct.

Co-defendant Neil Felahy, 34, the operations manager for Aljaff's company and his brother-in-law, is awaiting sentencing on Feb. 22 after pleading guilty to charges in the case.

"Today's prison sentence sends a message to the unscrupulous counterfeiters who put us all at risk by selling phony integrated circuits that end up in our military systems, medical devices and consumer products," said U.S. Attorney Ronald C. Machen, Jr., for the District of Columbia. "We will continue to prosecute, convict and seek prison sentences for the criminals who threaten our health, safety and national security with their greed."

"Counterfeit parts pose a grave threat to both the operational readiness and safety of our military forces," said John F. Wagner, special agent in charge of the Washington, D.C. office of NCIS. "These prosecution results embody the effectiveness of interagency law enforcement cooperation."

Aljaff pleaded guilty soon after his arrest and cooperated with authorities as the investigation continued. He owned MVP Micro and a host of other companies operating from the same location in Irvine, Calif. According to the government's evidence, he was the mastermind and leader of the highly sophisticated fraud scheme to import, sell, manufacture and distribute, in interstate and international commerce, counterfeit integrated circuits. The conspiracy took place between September 2007 and August 2009.

An integrated circuit is a high-tech device, incorporated into a computer board, which acts as a switch. Integrated circuits control the flow of electricity in the goods or systems into which they are incorporated. They are used in a variety of applications, including industrial, consumer electronics, transportation, infrastructure, medical devices and systems, spacecraft, and military.

Counterfeit integrated circuits can result in product or system failure or malfunction, and can lead to costly system repairs, property damage and serious bodily injury, including death. They also raise national security concerns because their history is unknown, including who has handled them and what has been done to them. In addition, the devices can be altered and certain devices can be preprogrammed. Counterfeits can contain malicious code or hidden "back doors" enabling systems disablement, communications interception and computer network intrusion.

Markings on integrated circuits indicate a part is "commercial-grade,""industrial-grade," or "military-grade." Military-grade markings signify that the part has been specially tested to withstand extreme temperature ranges and high rates of vibration.

According to the government's evidence, Aljaff and others sold the counterfeit devices, which included military-grade parts, through a cleverly designed web of corporations to unsuspecting customers in the United States and abroad. MVP and related companies sold and distributed counterfeit integrated circuits to approximately 420 buyers in the United States and abroad, including the U.S. Department of the Navy, defense contractors, other broker/distributors and numerous industry sectors, including transportation, medical services and aerospace.

During his guilty plea, Aljaff agreed that on more than 20 separate occasions, he and others imported into the United States from China and Hong Kong, approximately 13,073 integrated circuits bearing counterfeit trademarks, including military-grade markings, valued at about $140,835. Those counterfeit integrated circuits bore the purported trademarks of a number of legitimate semiconductor manufacturers.

One of the two counts to which Aljaff pleaded guilty involved a counterfeit, military-grade integrated circuit that he had purchased from a Florida-based company, Vision Tech Components, LLC. The owner of Vision Tech, Shannon Wren, was indicted in the U.S. District Court for the District of Columbia on conspiracy and other charges related to the firm's own sales of counterfeit integrated circuits. Also indicted in that case was Stephanie McCloskey, Vision Tech's administrative manager. Wren died pending trial. McCloskey pled guilty in November 2010 to charges of conspiracy to traffic in counterfeit goods and to commit mail fraud and was sentenced in October 2011 to a prison term of 38 months.

SOURCE:  ICE / CBP

BAD SPORTS: 300+ Websites Seized for Sports-Related IP Infringement

Furthering the US government's efforts to combat counterfeiting and piracy online, special agents recently seized a total of 307 websites. Sixteen of the sites illegally streamed live sporting telecasts over the Internet, including NFL games. Two hundred ninety-one website domain names were illegally selling and distributing counterfeit merchandise.

Additionally, Yonjo Quiroa, 28, of Comstock Park, Mich., was recently arrested by special agents with HSI. He is charged with one count of criminal infringement of a copyright related to his operation of websites that illegally streamed live sporting event telecasts and pay-per-view events over the Internet. Quiroa operated nine of the 16 streaming websites that were seized, and he operated them from his home in Michigan until yesterday's arrest.

The website seizures during Operation Fake Sweep represent the 10th phase of Operation In Our Sites, a sustained law enforcement initiative targeting counterfeiting and piracy on the Internet. The 307 websites have been seized by law enforcement and are now in the custody of the federal government. Visitors to these websites will then find a seizure banner that notifies them that the domain name has been seized by federal authorities and educates them that willful copyright infringement is a federal crime.

American business is threatened by those who pirate copyrighted material and produce counterfeit trademarked goods. Criminals are attempting to steal American ideas and products and sell them over the Internet, in flea markets, in legitimate retail outlets and elsewhere. Intellectual property (IP) thieves undermine the U.S. economy and jeopardize public safety. American jobs are being lost, American innovation is being diluted - and organized criminal enterprises are profiting from their increasing involvement in IP theft.

Since the launch of Operation In Our Sites in June 2010, the HSI-led National Intellectual Property Rights Coordination Center (IPR Center) has seized a total of 669 domain names.

INTERCEPTION !! ICE Seizes nearly $5 Million in fake NFL Gear

Speaking at a National Football League (NFL) news conference on Thursday (2 Feb 2012), U.S. Immigration and Customs Enforcement (ICE) Director John Morton, U.S. Customs and Border Protection (CBP) Director of Field Operations in Chicago David Murphy and NFL Vice President for Legal Affairs Anastasia Danias announced the record-breaking results of a nationwide enforcement operation targeting stores, flea markets and street vendors selling counterfeit game-related sportswear throughout the country. Special agents and officers also targeted illegal counterfeit imports into the United States, and seized hundreds of websites engaged in counterfeiting and piracy online. The initiative, dubbed Operation Fake Sweep, commenced Oct. 1, 2011.

Fake jerseys, ball caps, t-shirts, jackets and other souvenirs are among the counterfeit merchandise and clothing confiscated by teams comprised of: ICE's Homeland Security Investigations (HSI), U.S. Customs and Border Protection (CBP), U.S. Postal Inspection Service (USPIS), Indianapolis Metropolitan Police Department and the Indiana State Police - all in partnership with the NFL.

'Hard goods' seizures

Special agents from HSI and officers with CBP operated in multiple teams with the NFL and various law enforcement agencies throughout the nation to identify illegal shipments imported into the U.S., as well as stores and vendors selling counterfeit trademarked items. With three days left before Super Bowl XLVI, these teams have already seized 42,692 items of phony Super Bowl-related memorabilia along with other counterfeit items to date for a total take of more than $4.8 million - up from $3.72 million last year.

During this operation, an additional 22,570 items of counterfeit merchandise and clothing representing other sports leagues, including Major League Baseball, National Basketball Association and National Hockey League were seized by law enforcement. In total, this operation netted 65,262 counterfeit items worth $6.4 million.

"While most people are focusing on whether the Patriots or Giants will win on Sunday, we at ICE have our sights on a different type of victory: defeating the international counterfeiting rings that illegally profit off of this event, the NFL, its players and sports fans," said ICE Director Morton. "In sports, players must abide by rules of the game, and in life, individuals must follow the laws of the land. Our message is simple: abiding by intellectual property rights laws is not optional; it's the law."

"The NFL is committed to protecting fans and local businesses from being victimized by counterfeiters who are looking to profit illegally off of the public's enthusiasm for the NFL," said NFL Vice President Danias. "We are grateful for Homeland Security Investigations' tireless efforts in combating intellectual property theft and are pleased to be working along with them and the Indianapolis Metropolitan Police Department on this important issue."

Source: CBP

CUSTOMS IP ENFORCEMENT NEWS

CUSTOMS IP ENFORCEMENT NEWS


The CBP strategic approach to intellectual property rights enforcement is multi-layered and includes seizing counterfeit goods at the border, pushing the border outward through audits of infringing importers and cooperation with our international trading partners, and partnering with industry and other government agencies to enhance these efforts.  CBP officers and import specialists are aggressively working together to intercept shipments containing counterfeit and pirated items.

Recent CBP IP counterfeit seizures at the US border include:
 
- Chicago CBP Seize Counterfeit Drivers Licenses
Since the beginning of this year, Chicago Customs and Border Protection (CBP), Office of Field Operations officers working at the International Mail Facility at O'Hare Airport have seized more than 1,700 counterfeit state drivers licenses coming in to this country from China.
 
The seized licenses are high quality counterfeits of identification for the states of Illinois, Ohio, South Dakota, New Jersery, Florida, Georgia and Pennsylvania. The majority of the fake license shipments were addressed to college students throughout the United States. Federal, state and local law enforcement agencies are conducting investigations regarding some of the intended recipients.
 
"Our greatest concern is the ease at which these high quality fakes can be ordered over the internet," said David Murphy, CBP director of Field Operations in Chicago. "CBP will continue to work closely with our federal, state and local law enforcement partners to ensure the security of our nation and assist in ongoing investigations or prosecutions.
 
This year, CBP officers seized shipments ranging from two drivers licenses to 48 in various concealment methods. In some cases, the counterfeit licenses were shipped in envelopes, in others they were hidden inside shipments of various electronic and gift items.
 
Source: CBP

IP Infringement in China Costs US Companies


Despite broad success in the China market, many U.S. companies have reported that the infringement of their intellectual property rights (IPR) in China and China's indigenous innovation policies have undermined their competitive positions, reports the U.S. International Trade Commission (USITC).

In response to a USITC survey, many U.S. firms reported lost sales, profits, and license and royalty fees, as well as damaged brand names and product reputation, as a result of IPR infringement in China, according to the report. U.S. firms reported losses associated with China's indigenous innovation policies as well but noted greater concern about the future implications of these evolving policies.

The report, the second of two reports on IPR infringement and indigenous innovation policies in China and their effects on the U.S. economy and employment, was released today. The USITC, an independent, nonpartisan, factfinding federal agency, conducted the studies at the request of the U.S. Senate Committee on Finance.

As requested, the Commission report estimates the size and scope of reported Chinese IPR infringement; provides a quantitative analysis of the effect of IPR infringement in China on the U.S. economy and its sectors; and assesses the effects of China's indigenous innovation policies on the U.S. economy and employment. Highlights of the report follow.

·              Based on survey information, the USITC estimates that U.S. IP-intensive firms' losses from IPR infringement in China were approximately $48 billion in 2009. The survey was sent to over 5,000 U.S. firms in the IP-intensive part of the U.S. economy, which is the sector most likely to be affected by IPR infringement in China. Firms in this segment of the U.S. economy also spent approximately $4.8 billion in 2009 to address possible Chinese IPR infringement in 2009. These figures may be understated because they do not reflect losses incurred by firms in the rest of the economy.
 
·              Firms reported that among the losses they incurred as a result of IPR infringement in China, those associated with copyright infringement were the largest monetarily, and those associated with trademark infringement were the most widespread. The "information and other services sector" represented the segment within the U.S. IP- intensive sector with the highest amount of reported losses associated with IPR infringement in China.
 
·              U.S. firms in the IP-intensive economy reported that an improvement in China's IPR protection and enforcement to levels comparable to the United States' would likely increase employment in their U.S. operations by approximately 923,000 jobs.
 
·              To complement the survey results, the USITC used a statistical and simulation analysis to estimate the U.S. economic effects of an improvement in China's IPR protection to levels comparable to the United States'. This analysis found the following effects: (1) a $21.4 billion increase in U.S. exports of goods and services, (2) a $87.8 billion increase in sales to U.S. majority-owned affiliates in China, (3) a potential 2.1 million increase in net U.S. employment under conditions of prolonged and high unemployment, and (4) some reallocations within the U.S. workforce towards more IP-intensive services sector jobs.
 
·              Respondents to the USITC survey also expressed concerns about China's indigenous innovation policies, especially: (1) preferential support for Chinese firms in the form of tax incentives, subsidies, and preferential lending; and (2) China-specific technical standards. The USITC's case studies in the wind energy, telecommunications equipment, software, automotive, and aircraft sectors provide a fuller picture of the effects of China's indigenous innovation policies on these selected sectors.
 
China: Effects of Intellectual Property Infringement and Indigenous Innovation Policies on the U.S. Economy (Investigation No. 332-519, USITC Publication 4226, May 2011) will be available on the USITC's Internet site at http://www.usitc.gov/publications/332/pub4226.pdf.

SOURCE: USITC
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