On a surface level, the annual financial damage caused to machine and plant manufacturers by counterfeiting remained at the level of 2016, at around 7.3 billion euro (we reported). However, in the latest study by VDMA (German engineering association Verband Deutscher Maschinen- und Anlagenbau), around 39% of respondents stated that the damage and threat to their company from product and brand piracy has increased drastically in the last two years.
For example, in the industry, an estimated 33,000 jobs are destroyed each year by counterfeiting and piracy. “Also, in addition to loss of revenue and jobs, the affected companies also suffer consequences that are difficult to assess monetarily, such as loss of image, loss of market advantage or unjustified recourse claims,” explains Steffen Zimmermann, head of the VDMA Competence Center Industrial Security.
Therefore, the VDMA concludes that despite many efforts on the part of politicians, the situation has not improved. In addition, counterfeiters are increasingly adapting to current industry and market developments and producing more sophisticated counterfeits. “Up until recently purely technical replicas had been in the focus, whereas now imitations of the exterior design or even of entire brands are increasingly becoming an issue. [By doing so counterfeiters] profit from a brand’s good image”, according to the report.
But the security risk that counterfeit products entail is also a significant problem. Around 36% of respondents reported counterfeits, which posed a risk to the user or the environment through the use of inferior materials or poor workmanship. In addition, 46% of respondents found that the counterfeits they discovered affected operations and workflow.
Furthermore, there is a great deal of disappointment among German machine and plant manufacturers about the lack of support they receive in protecting their intellectual property abroad. This is a big problem for the industry especially in China, which undisputedly leads the list of countries of origin of counterfeit products, accounting for around 82%. “In spite of many announcements, nothing has really improved here in the past two years,” says Steffen Zimmermann. In total, around 85% of the companies surveyed complained of a lack of support from the respective authorities abroad.
The VDMA has been conducting its survey on product piracy in mechanical and plant engineering every other year since 2003. The current study, Product Piracy 2018 (published in German) was presented by the industry association at the Hannover Messe (Hannover Fair).