Counterfeiting and IP infringements in non-EU countries remain a major problem for European companies, according to the European Commission’s new Third Country Report. The commission staff working paper again assigns three priorities to countries with intellectual property rights (IPR) issues, based on the extent of their problems.
In many of the countries listed, there is also the problem that seized counterfeits may not be reliably destroyed and can thus find their way back onto the markets. In addition, the report complains that customs authorities in various countries cannot act ex officio, which renders them not effective enough in reliably stopping the cross-border trade in counterfeits.
The EU paper considers the situation in China as particularly difficult; it is the only country listed as top priority. This is due to the alleged large scale and persistence of its issues in protecting IP rights. Another decisive factor is China’s role as the dominant country of origin of counterfeits, with around 80 percent of the fakes seized in the EU reportedly hailing from China. Forced technology transfer also remains a systematic problem in the People’s Republic.
Second priority is given to India, Indonesia, Russia, Turkey, and the Ukraine. These countries have serious, systematic IPR problems, with EU companies suffering significant economic damage, the report states. There also seems to have been little or no progress in the two years since the previous EU report.
The countries with the third highest priority are Argentina, Brazil, Ecuador, Malaysia, Nigeria, Saudi Arabia, and Thailand. They also show serious problems, although less so than the countries with higher priority. Nigeria and Saudi Arabia are newly included in this category; both are becoming increasingly relevant as transit countries for the trade in counterfeits. In Saudi Arabia, the situation is further aggravated by extensive copyright infringements and inadequate law enforcement on this.
No longer mentioned as a priority are the Philippines and the USA. While the situation in the Philippines has not improved in recent years, other countries have become more relevant for EU rights holders. For the USA, the report points to good cooperation in international forums.
The report also includes information on a number of countries with which the EU has concluded or is about to conclude free trade agreements; such as Canada, South Korea, Mexico, and Vietnam. In addition, the Commission says it is planning to closely monitor a number of further countries that may lack adequate IP protection, including Israel, Morocco, Paraguay, the Philippines, South Africa, Switzerland, and the United Arab Emirates (UAE). In case of the UAE, the report points to its important role in the transit of counterfeit goods, as well as to local free trade zones that could foster illegal trade.