Counterfeits: Fakes news concerns us all
This year, two reports on IP rights violations and their economic impacts worldwide have been published. The content of both the Organisation for Economic Co-operation and Development and EU Intellectual Property Office (EUIPO) “Trends in Trade in Counterfeit and Pirated Goods”1 and EUIPO’s “2019 Status Report on IPR Infringement”2, is particularly alarming.
The first observation is that, despite stable or even recessionary economic growth, the volume of counterfeiting increased between 2014 and 2016 compared to the previous analysis (2011/2013). In the EU, counterfeit goods now represent 6.8% of imports or €121 billion ($135 billion) per year. In 2013, they represented 5% of imports, or €85 billion.
The second observation is that criminal networks take advantage of the lack of enforcement by certain states and adapt their product distribution by utilising new means of communication (internet, social networks, etc), distribution channels (transit, free zones, small parcel shipments) and consumer requests. In addition, the return on investment is high, and the penalties imposed are low and provide no deterrent effects on counterfeiters, fences and sellers.
The consequences of counterfeiting are dramatic, particularly in terms of an estimated 468,000 jobs lost in the EU and lost sales due to counterfeiting equalling €92 billion per year from 2012 to 2016. The fight against counterfeiting is also a financial burden for companies that protect and defend their rights. These costs include the protection of creations and innovations, hiring dedicated enforcement staff, procedural fees, storage costs and more.
Time for action
These detailed reports dive into the extent of the phenomenon, its persistence and growth despite the legislative measures taken and the effective tools made available to right owners, particularly in the EU.
Faced with such a situation, some operators, particularly small and medium-sized enterprises (SMEs), may be tempted to give up or even not protect their creations and innovations and not implement an anti-counterfeiting strategy. Allowing this to happen is not the solution because counterfeiters benefit from the negligence of right holders and national authorities.
