Just a few days after U.S. Immigration and Customs Enforcement announced it had performed a “slam dunk” enforcement “surge” against counterfeit Golden State Warriors merchandise, a vendor watched over two tables of NBA championship gear on the plaza outside the 24th Street BART station in the Mission. The blue and gold T-shirts and hats were selling for $10 to $15 apiece — a fraction of the cost of “authentic” Warriors apparel — and although the shirts were screenprinted with an ostentatious Adidas logo, the generic tabs told a different story.
The vendor, who didn't share his name, said he hadn't heard about the 137 enforcement actions carried out by ICE, local law enforcement agents, and representatives of the NBA in the month leading up to the Warriors' victory in the NBA finals. Asked about the authenticity of his wares, he said, “I just sell what my boss gives me.”
ICE's counterfeit sports apparel raids are carried out under the auspices of the National Intellectual Property Rights Coordination Center, a clearinghouse organization formed in 2000 to integrate the work of 19 federal agencies, Interpol, Europol, Canada, and Mexico in combating intellectual property theft. Its mission statement — “to ensure national security by protecting the public's health and safety, the U.S. economy, and our war fighters, and to stop predatory and unfair trade practices that threaten the global economy” — emphasizes the deadly seriousness of intellectual property theft, as did Acting Special Agent in Charge of Homeland Security Investigations-San Francisco Tatum King when he spoke about the NBA gear raid with SF Weekly.
“We're not talking about a misdemeanor here,” King said. “This is a serious criminal offense.”
Although no one was arrested during the NBA finals raids, King says that charges under the federal statute outlawing trafficking in counterfeit goods carry penalties of up to $2 million or 10 years in prison. The feds did confiscate about 14,000 items, ranging from T-shirts to hats to stickers, which they value at $500,000 (that's $36 a pop thanks to the NBA's inflated pricing for a branded tee). King says the items will likely be destroyed.
“The monies that can be generated [by sports gear counterfeiting] are bigger than narcotrafficking,” said King. “We find that the funds generated can be used to support criminal enterprises.”
It all sounds very grave, but King wasn't able to point to a specific case where counterfeit sports gear was linked to more dangerous intellectual property crime — like counterfeit prescription drugs — or other types of crime that pose a threat to public safety. In an email, Matthew Bourke, a spokesperson for the IPR Center, wrote, “Over the years, HSI agents have reported seeing counterfeit products with markings used by Mexican Transnational Criminal Organizations,” but would not provide specifics due to “ongoing investigations.”
That doesn't stop ICE from going hard after bootleg sports gear vendors. Around nearly every major sporting event, ICE tends to issue an announcement touting the spoils of a counterfeit operation, whether it's $180,000 worth of Chicago Blackhawks gear during the 2015 Stanley Cup finals or $21.6 million worth of NFL goods nabbed during 2014's Operation Team Player. According to King, his unit is already working with the NFL, the Santa Clara Police Department, and the Santa Clara District Attorney in anticipation of a counterfeiting bonanza during the 2016 Super Bowl.
ICE's fixation with major league sports apparel has its critics. The feds act to enforce trademark violations, not copyright infringements. And while copyright is supposed to protect creative works, trademark is ostensibly about protecting the consumer, according to Parker Higgins, director of copyright activism at the Electronic Frontier Foundation. Trademark enforcement protects consumers from potentially dangerous counterfeit drugs, or from shelling out hundreds of dollars for a fake iPhone.
But are the people buying a $10 Warriors T-shirt from a guy with a folding table really being fooled? Or are they simply happy to sport a knockoff and keep an extra $20 in their pockets?
“I question the priorities when they're going after these branding issues,” said Higgins. “It's a lot of public money being spent for the benefit of private companies.”
Indeed, in 2014, 43 percent of the IPR Center's seizures were of apparel, handbags, wallets, and footwear, while another 24 percent were of consumer electronics. Just 9 percent of the 28,092 seizures were centered on pharmaceutical/personal care products.
Meanwhile, the raids don't just involve destroying counterfeit goods. Increasingly, the federal government targets websites that allegedly traffic in counterfeit goods and seizes their domains. Since 2010, the IPR Center's Operation In Our Sites has seized 2,713 domain names, including 163 during the 2014 Operation Team Player raids.
According to Higgins, the Department of Homeland Security is unique in its power to seize a domain name prior to going through “due process considerations.” “That sort of unilateral shutdown of a forum is a classic infringement on free speech,” Higgins said. In one such case, the government seized the domain of the hip-hop blog Dajaz1.com, which it accused of linking to songs prior to their release, in violation of copyright. A year later, the government dropped the case and returned the domain after failing to produce evidence of wrongdoing. Dajaz1's lawyer compared the secret proceedings, which he believed were brought at the behest of the Recording Industry Association of America, to a “digital Guantanamo.”
Local ICE officials were unable to quantify the amount of taxpayer money spent by the government to enforce sports leagues' trademarks, but Bourke said the IPR Center's budget is just $270,000 (a figure that doesn't include salaries for 40 employees). “We think [the budget is] low also,” Rourke said. “That's why we've had to prioritize our IP enforcement and focus on goods that endanger the public's health and safety.”
The leagues' own exorbitant pricing for branded gear creates the very market for the counterfeits they object to. “Perhaps instead of spending public money on trademark enforcement, the Warriors should consider pricing their apparel within reach of their fans,” Higgins said. After all, the vendor at 24th and Mission was doing a steady business from San Francisco residents who want to show their Warriors pride. Steph Curry and Andre Iguodala will come and go, but a trademark is forever.