Counterfeiting and piracy on the rise

7 key findings from EUIPO’s IP Crime Threat Assessment 2022

Counterfeiting and piracy remain a fast-growing problem for businesses and consumers in Europe, according to the latest EUIPO IP Crime Threat Assessment report. 

Released jointly by the EU Intellectual Property Office (EUIPO) and EU Agency for Law Enforcement Cooperation (Europol), the 2022 IP Crime Threat Assessment report consolidates Customs seizures at EU borders and within internal markets to track the threat posed by online counterfeiting, offline counterfeiting and piracy across the EU. Here are 7 key findings from this research:

1. No industry is exempt

The report highlights how counterfeits impact every sector, from food and drink and tobacco products to pharmaceuticals and pesticides. While each industry may exploit different channels, the impact on legitimate businesses and national economies and the danger posed to the end consumer are sadly all too familiar.

2. Online counterfeiting: digital channels are making making counterfeit sales easier

Counterfeiters are using the digital domain—online platforms, social media, instant messaging—not only to distribute products to consumers but also to source components and coordinate activities. Digital piracy is frequently a front for other cybercrime activities, with the illegal distribution of pirated audio-visual content, such as movies and TV shows, linked to the growth of cybercrime in general, including malware attacks.

3. IP crime rose during the Covid-19 pandemic
 

The switch to digital channels during the Covid-19 pandemic entrenched the number of lucrative business opportunities available to counterfeiters leading to a marked rise in online counterfeiting. This included the distribution of counterfeit and substandard goods targeted at the market for personal protective equipment (PPE) and sanitary products, as well as illicit drugs, fake vaccines, fraudulent prescriptions, and counterfeit Covid-19 home-test kits.

4. Consumers continue to fall for misleading discounts
 

Discounts on branded products are tempting and deceiving consumers online in greater numbers. Online counterfeiting is particularly rampant for clothes and accessories, as well as perfumes and cosmetics, which are all heavily promoted via live-streaming sales and sponsored advertising on social media.

5. It’s not only consumers who are falling for fakes

Counterfeiters are exploiting shortages in legitimate supply chains too, such as the global market for semiconductor chips. Mobile phones, components, and accessories are among the most affected commodities. A similar picture can be seen in the trade in illicit pesticides, which remains “a low-risk and high-profit crime.”

6. Fake food and drink is a booming sector

The report found the production of illicit food and beverages to be increasingly professional and sophisticated, with some counterfeiters operating “an end-to-end business model, covering the whole supply and distribution chain.” Food and drink fraud typically entails falsifying origin, transit, and administrative documents, with many fake products even making their way into legitimate supply chains.

7. Counterfeits produced in the EU are also on the rise
 

Although most counterfeits and pirate goods seized in the EU are produced outside Europe, the frequent seizures of counterfeit packaging and semi-finished products at EU borders clearly point to the presence of manufacturing facilities in the EU for both partial assembly and complete production. Examples of materials seized include large volumes of branded buttons and zips (for use in fake fashion); aroma compounds and solvents (for use in fake perfumes and cosmetics); and packaging, labels, tags, and stickers for use on pharmaceutical products.

Is your anti-counterfeiting and online brand protection strategy up to the fight?

The continued rise in counterfeits and pirated goods is a battle that businesses, governments, and border control agencies are yet to win. But that is not to say that nothing can be done. To protect themselves from counterfeiters, companies need to harness the latest brand protection tools and strategies to protect their products, reputation, and consumers both online and off.

“As is pointed out by the report, a significant portion of counterfeits across a wide range of product categories are marketed to consumers and businesses on the internet and on otherwise legitimate marketplaces and social media platforms,” explains Markus Rouvinen, a Trademark Attorney and IP Lawyer at brand protection specialist Thomsen Trampedach, part of the Questel group. “Virtually all such marketplaces and social media platforms provide mechanisms for the removal of counterfeit goods upon notification of the unauthorized or infringing listing by the IP rights holder or their agent.” 

He advises companies to work together with an experienced team of online brand protection experts to:

• Make efficient use of available takedown mechanisms: By developing a monitoring and enforcement strategy in combination with the right online brand protection tools to make the most of bulk takedown, tracking, and other time-saving enforcement opportunities.
• Identify repeat offenders: Where counterfeit sales are taking place at a larger scale on a given marketplace, it is often possible to collaborate directly with the marketplace to reveal the true identities of the infringers in question, as well as secure the proactive blocking of repeat infringement in well-defined categories. Through a balanced mix of online monitoring (including analysis of patterns), test purchases and on the ground investigation, brand owners, platforms and law enforcement may jointly succeed in stopping illegal counterfeiting activities. However, such enforcement work cannot stand alone, and must be combined with educating consumers of the risks of buying counterfeit goods.
• Ensure IP protection at the origin of counterfeit goods: Counterfeits are marketed to EU audiences from a variety of jurisdictions, and platforms/hosting providers located in these jurisdictions may require registered IP rights in each specific jurisdiction. A comprehensive trademark/design right portfolio and registration strategy informed by insights on the countries of origin of IP infringements is thus essential.
• Include domain name monitoring in your anti-counterfeiting strategy: Counterfeits in the clothing and luxury goods categories are often marketed through web stores hosted at domains incorporating the trademark in question and displaying content impersonating the targeted brand (e.g. prominently displaying the brand’s logo and using elements taken from the brand’s official website). These web stores are often detected in clusters, meaning that a successful enforcement strategy must seek to find information on the true identity of the domain registrant via WHOIS disclosure requests, which can then form the basis for an offline investigation. Similar strategies are vital in other product categories where the trade in counterfeits takes place predominantly through individual websites (e.g., pharmaceuticals).

For dedicated advice on creating the right online brand protection strategy for your business, contact our specialist team.