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U.S. Launches Largest Counterfeit Components Raid
August 2, 2007 |Estimated reading time: 1 minute
WASHINGTON, D.C. U.S. Immigration and Customs Enforcement (ICE) agents, assisted by electronics industry representatives, executed a large-scale raid on businesses and residences suspected of imports, sales and distribution, and installation of illegal modification chips (mods) and other intellectual property (IP) violations. The investigation, comprising 32 federal search warrants in 16 states, and 22 ICE offices, targeted illegal chip and software manufacture for gaming consoles. This investigation marks the largest national enforcement action targeting electronics counterfeiting, ICE reports.
Subjects of the investigation allegedly facilitate foreign manufacture and smuggling of illegal components and software, which are used to circumvent IP protections and allow users to play pirated or illegally obtained video games on Sony (Playstation 2), Microsoft (XBOX and XBOX 360), and Nintendo (Wii) gaming consoles. Counterfeit component manufacturers under investigation specifically intend to subvert copyright protections, said Julie L. Myers, Assistant Secretary of Homeland Security for Immigration and Customs Enforcement. For more on counterfeit components, see our report from the American Competitiveness Institute (ACI).
This enforcement and warrant execution results from a year-long investigation conducted by ICE Office of the Assistant Special Agent in Charge, Cleveland, Ohio. It is coordinated with the U.S. Attorney's Office for the Northern District of Ohio (Cleveland) and assisted by the Department of Justice Computer Crimes and IP Section (CCIPS). Technical information and assistance came from industry associations, such as the Entertainment Software Association (ESA). Raids occurred in Calif., Fla., Hawaii, Idaho, Ill., Md., Mass., Mich., Minn., N.Y., N.C., Ohio, Penn., S.C., Texas, and Wis.
ESA estimates that gaming console designers and manufacturers, game developers, and related industries lose billions of dollars globally due to counterfeit components sales and smuggling. ICE, along with U.S. Customs and Board Protection (CBP) reports an 83% increase in IP rights (IPR) seizures in fiscal year 2006. To learn more about IP protection for the electronics industry, read Where's Your IP? in SMT's June 2007 issue.