Review: Food Fraud Application of GAO Report on Intellectual Property-Related Customs Exclusion Orders (19 US Code 1337)

Written by: John Spink

Primary Source: Food Fraud Initiative

cbp gao exclusionThe Food Industry could benefit from utilizing the US Customs and Border Protection (CBP) Exclusion Order rules. At minimum, it is critical that ALL companies register their brands with CBP. If you don’t register your brands then you’re missing out on the possible help of CBP.

In November 2015 the US Government Accountability Office (GAO) released a report titled “Intellectual Property: US Customs and Border Protection Could Better Manage Its Process to Enforce Exclusion Orders .” The Exclusion Orders are the application of Section 337 of the Tariff Act of 1930 (19 US Code 1337) . “The [US International Trade Commission] investigates allegations of unfair import practices, including unlicensed use of intellectual property rights such as patents, copyrights, and trademarks. If ITC finds a violation of this law, it generally issues an exclusion order that directs CBP to deny entry of infringing products into U.S. commerce. CBP must determine, without inhibiting legitimate trade, whether products arriving at 328 U.S. ports are covered by exclusion orders.” Gray market or diverted product is technically covered but there are only very specific situations where they are able to be addressed by this Act.

The Exclusion Order

The Exclusion Order is a unique action that bars import of specific products or shipment of product by specific companies. This is a countermeasure that is complimentary to other import laws and regulations. “There are two types of exclusion orders: general and limited. General exclusion orders direct CBP to exclude all infringing products without regard to source; limited exclusion orders direct CBP to exclude infringing products from a specified company or companies. For example, a general exclusion order on infringing printer cartridges may affect all importers of printer cartridges, whereas a limited exclusion order directs CBP to exclude covered products from named respondents.”

Review of the Exclusion Data

To review, “violations” are reported to CBP for review. Once the claim is substantiated the result is an “exclusion order.” The execution of an “exclusion order” is a “seizure.”

Of the 604 violations (lawsuits initiated by the brand owners) from January 2010 to December 2015, 95% were patent, trademark, and unfair competition. Trademark violations were 2% of the total while patents violations were 52% and unfair competition were 43%. There was only one “Gray Market” violation – which happened to be the only food case – that appears to have been completed as a copyright infringement case. It shouldn’t be a surprise that trademark violations, or “counterfeit product,” are so low since they are usually addressed under other more direct laws such as 18 US Code 2320 “Trafficking in Counterfeit Goods or Services.”

Table: Review of Types of Infringements (Source: ITC, 2014)

Infringement Total Food Products Percent of Total
Copyright infringement 8 1
False designation of origin 0
Gray market trademark 1 0*
Other 1
Patent infringement 311 1 51.5%
Trade dress 1
Trade secret 10
Trademark infringement(logo or brand “counterfeiting”) 11 1.8%
Unfair competition 261 43.2%

Note: “*” The Gray Market infringement was a duplicate since already included in the food copyright infringement case.

The GAO report noted 158 excluded or seizured products (actions conducted or product caught by CBP) from 2010 to 2014 and one included a food product.

Table: Number of Shipments and Examples of Products Excluded or Seized as a Result of US Customs and Border Protection’s Enforcement of Exclusion Orders, Fiscal Year 2010 through Fiscal Year 2014 (Source: GAO, 2014)

Year Number of Shipments Excluded or Seized Examples of Products in Excluded Shipments
2010 4 Magic cube puzzles, ink cartridges, coaxial cable connectors
2011 22 Plastic plates and lids, ink cartridges, cigarettes, coaxial cable connectors, transceivers, energy drinks
2012 64 Plastic storage containers and lids, ink cartridges, footwear, sucralose, cigarettes, coaxial cable connectors, phones, toner cartridges
2013 34 Ink sticks, ink cartridges, footwear, cigarettes, cell phone cases
2014 34 Laminate flooring, footwear, digital multi-meters, cigarettes, cell phone cases, massagers
TOTAL 158 Average 31 per year


It is important to review the wide range of government activities and reports such as this GAO report. Reviewing this type of government report is important to understand how and where we can expect the government to participate in Food Fraud prevention. Whether or not the Exclusion Order will help protect your brand, the most important point is to contact US Customs. They can help determine the best way to protect your product. Don’t be afraid to contact Customs. We have seen many companies create very strong and valuable relationships that started with a simple introduction. As a start, here is the URL for the US National Intellectual Property Rights Center JWS.

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John Spink
Dr. Spink has been focused on product fraud since the Michigan State University’s Food Safety Program and the School of Packaging began research on the topic in 2006. This work expanded to the behavioral sciences and criminology and led to the establishment of the Anti-Counterfeiting and Product Protection Initiative in 2008. In 2009 the work shifted to the School of Criminal Justice where the Initiative evolved into a Program.