Over the past five years, several studies by the EUIPO have assessed the damage caused by trade in counterfeits in the EU, separately for different economic sectors that are particularly vulnerable when it comes to counterfeiting. For the first time, a new analysis now gives comprehensive insights into the many years of research, combing the results from industries such as cosmetics, clothing, sporting goods, toys, jewelry, spirits and wine, pharmaceuticals, or smartphones.
According to the EUIPO’s results, counterfeiting costs these sectors a total of around 60 billion euros a year or 7.5% of their annual turnover. In addition, an estimated 434,000 jobs are lost every year.
The experts of the EUIPO are concerned about the diversification of counterfeiting and the increasingly mature business models that the fraudsters employ. For example, counterfeiting is no longer focusing on high-priced goods alone; increasingly often, even inexpensive everyday products are faked, such as detergents or shampoo. In addition, the challenge remains that fraudsters are frequently copying highly profitable components and spare parts instead of entire products.
Another worrying trend is that counterfeits are increasingly often manufactured or completed within the EU. Accordingly, customs at EU borders are again and again intercepting shipments of suspicious goods that do not yet bear any trademarks. With this, counterfeiters hope to get their imports through customs controls without any problems. Furthermore, counterfeit packaging is also imported increasingly often – for example empty bottles with labels of high-priced wines. Within the EU, counterfeiters then assemble the finished fake goods by applying the brand names to alleged no-name products; or by filling the empty packaging ready for sale. For the EUIPO, this indicates that the number of counterfeit workshops within the EU is significantly higher than previously assumed.
Last but not least, the report mentions the internet and the anonymity and legal grey areas it provides as a continued boost for the trade in counterfeit goods. Online sales of illegal imitations are booming, especially on online trading platforms and via social media. Business representatives react with concern: Christian Köhler, CEO of the German industry association Markenverband, calls for clear guidelines for middlemen on the internet. “Introducing due diligence obligations, which are everyday practice for stationary merchants, is something that could be implemented immediately by online marketplace operators. This would protect consumers and jobs,” said Köhler.
Due to the high margins and low risks associated with counterfeiting, a further increase is to be expected. The EUIPO report also warns against the spread of new production technologies that make the manufacturing for counterfeiters easier and cheaper; as well as new transport and sales channels, such as the clandestine import of counterfeit goods by rail.
With its report, the EUIPO aims to give a coherent picture of IP infringements in the EU and to point out possible countermeasures. For the first time, a comprehensive picture of the economic consequences of counterfeiting for the economy has emerged, explains António Campinos, Executive Director of the EUIPO. The results should make it clear that there can be no doubt about the “damage caused by the infringement of intellectual property rights.”