Counterfeiting still on the rise says European Commission

Statistics published at the end of October 2015 by the European Commission (EC) show a continued increase in the number of shipments suspected of violating IP rights. In its ‘Report on EU customs enforcement of IPR‘, the EC identified internet shopping as a major source of counterfeit goods in the EU in the previous year. Cigarettes were at the top of the list of detained articles, followed by toys and medicines, and electrical household goods.

The EC’s latest report shows that customs authorities detained 35.5 million individual items of fake or counterfeit goods in 2014, with an overall total value of more than €617 million. According to its findings, the increase in detentions can be linked to the large amount of small parcels in express and postal traffic due to the rise of internet sales. The report also points to “the pivotal role of EU customs administrations in the fight against counterfeit goods” (click here for more information on how to work with customs to identify and seize infringing goods).

All types of products are at risk Counterfeiting affects a broad a variety of goods; from t-shirts to handbags, machinery and automotive parts, toys, batteries, pharmaceuticals, perfumes and electrical goods. As a general rule, if a company has a product or a brand that is popular and in demand, then it’s likely that it is or will become a target for counterfeiters.

In its analysis, the EC found that cigarettes were the most counterfeited goods in 2014 (35% of articles detained), followed by everyday products “which are potentially dangerous to the health and safety of consumers”, such as food and beverages, toiletries, medicines, toys and household electrical goods (collectively 28.6% of the total). As in previous years, China was the primary originating country (80%) of counterfeit goods, followed by Hong Kong, the United Arab Emirates, Turkey and India. Panama was the top source of counterfeit alcoholic beverages.

What happens after seizure? Once a suspected counterfeit product has been seized and a brand owner alerted, the trademark owner will typically have three options, namely:

• To request the destruction of the goods;
• To commence court proceedings to seek legal redress;
• To decide not to pursue any action, in which case the detained goods will be released.

However, even if the quantities involved in the seizure are small, it is generally not advisable to choose to overlook the infringement and allow the items to be released. Not only will taking action indicate to customs and infringers that a company is serious about fighting counterfeits, but it will also ensure that the seized goods are permanently removed from the market. In more than 90% of the detentions assessed for the report, goods were either destroyed or a court case was initiated to determine an infringement.

Support for brand owners On 1 January 2015, a new Regulation on IP enforcement at customs came into force in the EU, strengthening customs authorities’ ability to protect brand owner rights by widening the list of possible IP infringements. For example, the new regulation allows for infringements based on confusingly similar trademarks in addition to identical marks. It also extends the list of protected rights to trade names, topographies of semiconductor products, utility models, devices to circumvent technological measures and non-agricultural geographical indications.

The procedure for destroying goods suspected of infringed IP was also amended. Such goods can now be destroyed by customs control when they are suspected of infringing IP, and without the need to initiate a legal proceeding to determine the existence of an infringement. A new procedure for the simplified destruction of small consignments was also introduced to facilitate the destruction of goods shipped by post or express courier.

EU customs notices are administered through an online database – the anti-Counterfeit and anti-Piracy Information System (COPIS). This database is used by customs authorities to register applications for actions from IP right holders, as well as all infringements according to the category of goods and right-holder.

To find out more about counterfeiting or for assistance developing an anti-counterfeiting strategy, read our anti-counterfeiting FAQs.