INTERNATIONAL TRADE LAW
CBP Intellectual Property Penalties Explained
If you import goods bearing a counterfeit trademark, CBP can seize the goods, destroy them, and assess a civil fine of up to the price the merchandise would have brought if it were genuine. Customs and Border Protection enforces intellectual property (IP) rights at the border on behalf of trademark and copyright owners, and the penalties fall on the importer — not the overseas manufacturer who is usually out of reach. For both brand owners protecting a mark and importers trying to avoid an expensive mistake, the mechanics are worth understanding precisely.
What CBP Actually Enforces at the Border
CBP enforces two main categories of IP for owners who have recorded their rights with the agency: registered trademarks and registered copyrights. It also enforces exclusion orders issued by the U.S. International Trade Commission under Section 337. CBP does not enforce patents directly at the border in the ordinary course; patent disputes generally run through the courts or the ITC.
The trigger for most border enforcement is recordation. A rights holder records a federally registered trademark or copyright through CBP’s online Intellectual Property Rights e-Recordation (IPRR) system, governed by 19 C.F.R. Part 133. Once recorded, the mark is loaded into CBP’s targeting systems, and frontline officers can detain, seize, and act on suspect shipments. CBP’s own guidance is blunt on the point: without a registered trademark on record, the agency generally cannot seize counterfeit goods bearing that mark.
The Penalty Ladder: Seizure, Forfeiture, and Civil Fines
CBP’s IP penalties escalate. They are best understood as a ladder rather than a single sanction.
| Step | What happens | Authority |
|---|---|---|
| Detention | CBP holds a suspect shipment to investigate; the importer is notified and may respond | 19 C.F.R. § 133.21 |
| Seizure | Goods bearing a counterfeit mark are seized and the importer notified | 19 U.S.C. § 1526(e) |
| Forfeiture & destruction | Counterfeit goods are forfeited and generally destroyed | 19 U.S.C. § 1526(e) |
| Civil fine | A monetary fine on those who directed, assisted, or aided the importation | 19 U.S.C. § 1526(f) / 19 C.F.R. § 133.27 |
The civil fine is what makes IP violations so costly. Under § 1526(f), for a first seizure the fine can be up to the value the merchandise would have had if it were genuine — that is, the manufacturer’s suggested retail price (MSRP) of the real article at the time of seizure. Because MSRP is typically far higher than what a counterfeit cost to buy, the fine can dwarf the value of the actual goods. For a second and each subsequent seizure, the fine can reach twice the genuine value. The fine reaches not just the importer of record but anyone who directs, assists financially, or aids and abets the importation.
Criminal Exposure Sits Behind the Civil Penalties
Knowingly trafficking in counterfeit goods is also a federal crime under 18 U.S.C. § 2320, which carries the possibility of substantial fines and imprisonment for individuals. CBP’s seizures are civil, but egregious or repeat conduct can be referred to the Department of Justice for criminal prosecution. The distinction that matters is intent: civil seizure and fines can apply even to an importer who was careless, while criminal liability requires knowing conduct.
How CBP Handles the Rights Holder’s Side
When CBP seizes goods bearing a recorded mark, it notifies the rights holder and, under 19 C.F.R. § 133.21, shares detailed information about the importer, the manufacturer, and the goods — intelligence brand owners use to map and pursue the supply chain. The importer, in turn, receives a notice of seizure and an opportunity to petition. This is the same petition-and-mitigation track that governs other CBP seizures and penalties: the importer can file a petition for relief, and CBP’s Fines, Penalties, and Forfeitures office decides whether to mitigate.
Reducing the Risk as an Importer
The volume of enforcement is not trivial. In fiscal year 2024, CBP reported seizing more than 32 million counterfeit and infringing items with an estimated genuine retail value of roughly $5.4 billion, with handbags and wallets, apparel, and pharmaceuticals among the most-seized categories. An importer’s best protections are practical:
- Vet your suppliers and the marks on the goods. Confirm you have authorization to import branded merchandise; an authorized-dealer letter or licensing agreement matters.
- Watch for gray-market and “overrun” risk. Even genuine goods can be restricted at the border in some circumstances; counterfeit and infringing goods always are.
- Build IP checks into your compliance program. Treat trademarks like any other entry data point subject to reasonable care.
- Respond fast to a detention notice. The window to respond is short, and a prompt, documented response can prevent a detention from ripening into a seizure and fine.
Frequently Asked Questions
How is the § 1526(f) fine calculated? On the value the goods would have had if genuine (MSRP), not what the counterfeits cost. The first offense can reach that full genuine value; later offenses up to twice it.
Can CBP seize goods if the brand owner never recorded the trademark? Generally no. Recordation through CBP’s e-Recordation system is what lets the agency seize counterfeit goods bearing that mark. Unrecorded marks get far less border protection.
Is importing counterfeits a crime or just a civil matter? Both are possible. Seizure and civil fines apply broadly; knowing trafficking can be prosecuted criminally under 18 U.S.C. § 2320.
Who can be fined — only the company? No. The civil fine under § 1526(f) reaches anyone who directed, financed, assisted, or aided and abetted the importation, which can include individuals.
Facing a CBP IP detention, seizure, or penalty? Reidel Law Firm prepares flat-fee import/export compliance memos and represents importers in customs IP matters and petitions with direct attorney access. Get an import compliance memo →
