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Report Shows Counterfeit Trade Increase in 2019

Report Shows Counterfeit Trade Increase in 2019

A report released by OECD and the EU’s Intellectual Property Office confirmed that counterfeit and pirated goods in trade reached 3.3 percent this year. With the majority of the counterfeit goods being picked up in China and Hong Kong, the spotlight is focused on concerns surrounding consumer health and safety with fake goods such as medical supplies, car parts, toys, food and cosmetics brands and electrical goods.

Excluding domestic produced and consumed fake goods, the customs data seizure reports state the overall value of global fake goods at $509 billion, with the European Union representing 6.8 percent of counterfeit trade from non EU countries. Items such as footwear, clothing, leather goods, electrical equipment, watches, medical equipment, perfumes, toys, jewelry and pharmaceuticals were the top goods that made the list.

“Counterfeit trade takes away revenues from firms and governments and feeds other criminal activities. It can also jeopardize consumers’ health and safety,” said OECD Public Governance Director Marcos Bonturi, launching the report with the Director of the EU Observatory on IPR infringements at the EUIPO, Paul Maier, and the EU Ambassador to the OECD Rupert Schlegelmilch. “Counterfeiters thrive where there is poor governance. It is vital that we do more to protect intellectual property and address corruption.”

Other countries impacted the most in 2016 include the United States, France, Italy, Switzerland, and Germany.

To read the full report, please visit: OECD.org

Anti-Counterfeit Efforts Finally Go Global

Washington, DC – It’s no longer just the US and the European Union that are concerned with the festering issue of counterfeit products, say Michael Czinkota and Ilkka Ronkainen of Georgetown University.

“Globally, companies reportedly lose a total of $657 billion every year because of product counterfeiting and other infringement on intellectual property,” they say. “Today’s key problems are with high-visibility and strong brand name consumer goods.”

Intellectual property enforcement “ensures that new ideas can blossom into economic opportunity,” they’ve written in a recently published paper addressing the topic of counterfeit goods.

“Intellectual Property Rights (IPRs) have become a core issue in the global economic debate. No longer confined to cheap knockoffs of luxury goods, IP theft is placing industry and the public at risk of highly adverse economic, safety, and health consequences,” they added.

Earlier, the only concern was whether a company’s product was being counterfeited; now, the raw materials and components purchased for production may be counterfeited.  In general, countries with lower per capita incomes, higher levels of corruption in government, and lower levels of involvement in international trade tend to have more intellectual property violations.

Ronkainen teaches marketing and international business at Georgetown University, while Czinkota researches international business and policy issues at the school.

According to the writers, China, long seen as the focal production point of global counterfeiting operations, has taken significant steps to counter what has plagued the country’s e-commerce market particularly hard.

Alibaba “spends more than $16 million yearly fighting counterfeit goods,” they say. Another example is “Hong Kong’s commitment to the protection” of intellectual property.

“With the goal of enhancing consumer confidence in Hong Kong, and to strengthen the city’s reputation as a ‘Shopping Paradise’ for genuine products, the Intellectual Property Department has launched the ‘No Fakes Pledge’ scheme,” Czinkota and Ronkainen said.

The issuing bodies of the scheme are the Hong Kong & Kowloon Electrical Appliances Merchants’ Association Limited and the Hong Kong Coalition for Intellectual Property Rights of the Federation of Hong Kong Industries.

“The international marketer must act to enforce intellectual property rights.  No industry or country is immune from infringement, nor can they address the threat alone. There is also need for better education regarding the risks IPR violations pose and how to defend against them,” they said.

For example, the pharmaceutical industry lobbied to make sure that provisions for patent protection in the NAFTA agreement were meticulously spelled out.

Pharmaceutical Research and Manufacturers (PhRMA) addressed the issue of international IP protection by responding to the Special 301 Report issued by the US Trade Representative in May 2012.

The PhRMA statement cited the need for IP protections in spurring innovation, research and development, as well as the need for fair international market conditions to ensure that patients have access to medications.

One research firm estimated the global market for counterfeit pharmaceuticals to generate revenues between $75 billion and $200 billion a year.

The Pharmaceutical Security Institute (PSI), a trade association created to address illegal pharmaceutical incidents, collects data on the number of counterfeiting, illegal diversion, and theft incidents. These incidents increased seventy-eight percent from 2005 to 2009.

Pfizer reports that between 2004 and 2010 it seized more than 62 million doses of counterfeit medicines worldwide.  More than 200 million counterfeit Eli Lilly medicines have been seized in 800 raids around the world.

“A number of other governments are drafting similar policies, which have served as a catalyst for enhancing protection in both the public and private sectors in those nations,” said Czinkota and Ronkainen.

Efforts to protect intellectual property, and modernize the patent and trademark system are crucial, they added.

“The power of creativity and innovation applied to the solving of practical problems is not the exclusive province of any country or people. A victory over fakes and counterfeits will protect the quality and reliability of products and services, and lets customers be more informed and secure in their usage decisions.”

10/21/2014

Tips On Stemming the Flood Of Counterfeit Goods

Los Angeles, CA – Despite significant government efforts, China remains the world’s primary source of counterfeit goods, constituting 84 percent of shipment seizures in the US in 2012.

Experts, in fact, predict that the online trade of counterfeit goods in China will surpass the physical trade of such goods in the next two to three years.

The problem seems too vast and overwhelming to surmount, however, says Bob Youill, senior managing director in the Global Risk and Investigations practice of New York-based FTI Consulting, “doing so will never be easy, but it can be done” if companies take the appropriate steps.

In an article published this week in the FTI Journal, Youill, an acknowledged authority on product piracy, makes several suggestions on what US-based exporters, importers, retailers and manufacturers can do to stop the production, distribution and sale of counterfeit goods.

First, he says, declare your intellectual property. An effective anti-counterfeiting strategy for China, he says, “begins with begins with registering the relevant intellectual property rights in China, as Beijing doesn’t automatically recognize IP rights registered overseas.”

That done, writes Youill, “quantify the risk to your brand with in-house counsel working directly with key stakeholders to review the company’s markets inside and outside China and organize those markets into those that must be protected and those that are less important to focus on.”

Next, it needs to be understood that the primary responsibility for managing counterfeiting will rest mostly with in-house counsel and will involve representatives from different corporate functions, including a PR lead, external consultants, and internal stakeholders. To achieve that goal, “build your anti-counterfeit team.”

When considering tackling organized counterfeiting operations, a “best course of action” should be strategized that carefully analyzes various tactics that could include ‘street sweeps,’ Customs watches, administrative action, and civil or criminal proceedings.

Lastly, says Youill, “There are a number of risks to manage when dealing with Chinese authorities, such as controlling sensitive corporate information, fulfilling government requests for documents, overseeing internal reporting and complying with reporting rules. So, learn how to work with them.”

08/15/2014