2019 Report of the European Observatory on Infringements of Intellectual Property Rights

The European Union for Intellectual Property Office (EUIPO) released its report on the state of intellectual property infringement: “2019 Status report on IPR infringement. Why IPR are important, IPR infringement and the fight against counterfeiting and piracy (euipo.europa.eu). This report presents the results of the research constantly carried out by the European Observatory on IPR infringements (the Observatory).

According to the Observatory, the losses could represent 56 billion euros for the economy of the European Union and, at the very least, 700,000 jobs. The report states: “Adding in knock-on effects on other sectors, total sales losses amount to €92 billion. Finally, governments across the EU lose more than €16 billion in taxes and social security contributions“. These are the result of research on the following eleven sectors: smartphones, pesticides and agrochemicals, pharmaceuticals, wines and spirits, music, jewelery (including watches), leather goods, games and toys, sporting goods, clothing and cosmetics. Lastly, the report states that counterfeit companies spend an average of € 115,317 a year to combat counterfeiting (reference is made to human resources, storage and destruction costs). In addition, this contrasts with, in many cases, the absence of dissuasive sanctions (administrative or judicial).

The report of the EUIPO confirms, unsurprisingly, the importance of counterfeiting on the Internet by producing numbers related to digital advertising. More than 1400 Web pages and 180000 advertisements of 280 sites suspected of IPR infringement were analyzed. The study reveals that 46% of the world’s largest companies have at least one brand advertised on a malicious site. In doing so, the EUIPO endorses the European Commission’s “Follow the Money” initiative to engage online advertising professionals in the fight against counterfeiting (ec.europa.eu, Memorandum of Understanding on online advertising and IPR, June 25, 2018).

The industries most affected by counterfeiting in the European Union are the following (click on the image):

Figure 6: Industries affected by counterfeit imports into the EU - 2019 Status report on IPR infringement and the fight against counterfeiting and piracy, June 6, 2019, p. 19.

Figure 6: Industries affected by counterfeit imports into the EU – 2019 Status report on IPR infringement and the fight against counterfeiting and piracy, June 6, 2019, p. 19.

Factors that explain the existence of a demand for counterfeit goods, particularly the price and young age of consumers, corroborate a recent IFOP study commissioned by UNIFAB (iptwins.com, June 5, 2019). Among the other factors favoring counterfeiting, the EUIPO confirms the increasingly frequent use of small parcels (which reflects the increase in electronic commerce), incentives for counterfeiting (high profits, non-dissuasive limited social stigma associated with the purchase of counterfeits), the ingenuity of counterfeiters who, not content to distribute counterfeits, even manage to generate additional revenue through advertising.

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