The 2018 issue of the “Synthesis Report on Intellectual Property Right Infringement” recently released by the European Union Intellectual Property Office (EUIPO) indicates that every year Europe loses about 59 billion euros(*) and 435 thousand jobs(*) due to counterfeiting in 13 economic sectors – from the supply chains throughout their respective industries.
The sectors indicated in the report are: Tires; Batteries; Smartphones; Pesticides and Agrochemicals; Pharmaceutical products; Spirits & Wine; Recorded Music; Jewelry & Watches; Handbags & Luggage; Toys & Games; Sports Goods; Clothing, Footwear and Accessories; and Cosmetics & Personal Care.
The research also ascertained that luxury and branded goods are not the only products targeted for counterfeit. Given technological advancement and production at relatively low costs, counterfeiters now cover everyday goods as well, such as pharmaceutical products, shampoo, toothpaste, cosmetics, food and cellphone components. This increases the exposure of consumers to the risks arising from the use of manufactured products without due sanitary and safety inspections.
The EUIPO conducted two IP Perception studies, in 2015 and 2017, in order to understand the incentives for consumers to purchase counterfeit goods. Citizens in all 28 EU Member States were interviewed, and the conclusion was that there are three main reasons behind the willingness to engage in illicit consumption: lower prices, easy accessibility and a low degree of social stigma associated with such purchases.
What most people don’t understand or believe or are even aware of is that the counterfeit trade operation elicits tax evasion and is associated with wider criminal acts, such as human and drug trafficking.
The Report concludes that “Because of the high value associated with IPR, infringement of those rights is a lucrative criminal activity, which generates significant costs to the rights owners and to the economy in general.”
While this comes as no surprise to most IP practitioners, the EUIPO’s research demonstrates – once again – that the infringement of Intellectual Property Rights is not only a private issue, but a social one as well.
(*)The full Report and additional information, has been made available by EUIPO on the Observatory website: https://euipo.europa.eu/ohimportal/en/web/observatory/synthesis-report.