Counterfeiting is one of the largest industries in the world

The U.S. Patent and Trademark Office (USPTO) leads the federal government’s efforts to develop and strengthen domestic intellectual property policies, protections, and enforcement measures. It promotes the use of stronger and more effective intellectual property initiatives internationally as well. Among these projects, which include granting U.S. patents and registering U.S. trademarks, is a focus on understanding the scope of illicit trades of counterfeit goods, along with tracking the movements and impacts of such products.

As of 2018, counterfeiting is the largest criminal enterprise in the world, with domestic and international sales of counterfeit and pirated goods totaling between an estimated $1.7 trillion and $4.5 trillion a year—a higher amount than either drugs or human trafficking.2 Around 80 percent of these goods are produced in China, and 60 percent to 80 percent of those products are purchased by Americans.3 Both statistics provide a general sense of the significant impacts such illicit trade has on the U.S. economy, U.S. business interests, and U.S. innovations.

In the summer of 2019, the USPTO partnered with the Federal Research Division (FRD) within the Library of Congress for research and analytical support examining various aspects of domestic and international counterfeit trade: the overall magnitude of the markets, the impacts on the U.S. economy, the role of the private sector in limiting exploitations, trends in trade via small parcels, risks to public health and safety, consumer attitudes toward such products, and the use of social media to facilitate the sale of counterfeit goods.

The analysis in this report is based on documents published and produced by governmental, intergovernmental, and nongovernmental agencies, as well as studies published in current periodicals and scholarly journals. Articles from reputable news outlets also were utilized for additional background information and context.

FRD’s Commitment to Unbiased Research: FRD provides customized research and analytical services on domestic and international topics to agencies of the U.S. government, the District of Columbia, and authorized federal contractors on a cost-recovery basis. This report represents an independent analysis by FRD and the authors, who sought to adhere to accepted standards of scholarly objectivity. It should not be considered an expression of an official U.S. government position, policy, or decision.

As part of its commitment to unbiased research, FRD solicited the input of several outside reviewers. The project team thanks Timothy Hamilton, PhD; Justin Lloyd, PhD; and Carson Sievert, PhD, who were very generous with both their time and feedback