U.S. Immigration and Customs Enforcement (ICE) just issued a press release announcing the roll out of “Operation Surge Protector” that will target the illegal importation and distribution of counterfeit consumer electronics in the United States. These products, which include digital media devices, power adapters and consumer technology powered by lithium ion batteries, are highly susceptible to counterfeiting and pose health and safety hazards by overheating, igniting and causing severe injuries and property damage. Operation Surge Protector is being coordinated by the National Intellectual Property Rights Coordination Center or “IPR Center,” which uses the expertise of 23 partner government agencies, including the FBI and Homeland Security Investigations (HIS) to share information, coordinate enforcement actions and conduct investigations relating to IP theft. Operation Surge Protector will also provide additional resources to ICE agents, including the ability to more effectively track arrests, indictments and convictions. Assistant Attorney General Leslie Caldwell of the DOJ’s Criminal Division stated that the Justice Department will also continue to prosecute traffickers and manufacturers of counterfeit electronics “who choose profit over public health and safety.”
ICE reports that, between 2013 and 2015, there were over 17,000 seizures of counterfeit consumer electronics. In 2016, primarily during the holiday season, there were approximately 108,000 seizures of hover boards valued at $46.4 million for trademark violations that were attempted to be imported at 54 different U.S. ports of entry. In many of those cases, the U.S. importers were unaware that the products they had purchased from foreign suppliers were counterfeit or contained counterfeit parts, components, battery packs, etc.
Given the heightened scrutiny in this area, prudent U.S. importers purchasing consumer electronic products from overseas vendors should take steps to protect themselves through the careful vetting and selection of supply chain partners, and the implementation of robust purchase order terms and conditions as well as written supplier agreements addressing the issue of IPR infringement. Frequent in-factory inspections by the importer’s own personnel or trusted agents should be conducted to verify the authenticity of all materials used in the products, as well as periodic testing of products once they arrive in the United States. In addition, U.S. importers and distributors should also ensure that they have established effective product safety compliance programs that will allow them to escalate potential safety hazards to senior management for internal review, prompt filing of any required Section 15 reports with the Consumer Product Safety Commission, and implementation of product recalls if warranted.