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The enforcement of Intellectual Property Rights outside the EU matters because the sale of fake goods around the world erodes the sales of EU exporters and in the case of faulty products, can erode brand value. The holders of intellectual property rights need access to effective international remedies and a solid and predictable legal framework.

Enforcement issues in a nutshell

  • Counterfeit and pirated trade is a significant economic risk that undermines innovation and hampers economic growth. The Organisation for Economic Co-operation and Development (OECD) and the European Union Intellectual Property Office (EUIPO) have published a report on trade in counterfeit goods on the 18 April 2016. Data from half a million customs seizures around the world were analysed to produce the joint report entitled Trade in Counterfeit and Pirated Goods: Mapping the Economic Impact". The findings of the report highlight emerging trends, both globally and at country level, and the key industries affected by this illegal activity. Counterfeit and pirated products come from many economies, with China appearing as the single largest producing market. These illegal products are frequently found in a range of industries, from luxury items (e.g. fashion apparel or deluxe watches), via intermediary products (such as machines, spare parts or chemicals) to consumer goods that have an impact on personal health and safety (such as pharmaceuticals, food and drink, medical equipment, or toys). This report assesses the quantitative value, scope and trends of this illegal trade.
  • The OECD estimates international trade in counterfeit and pirated products was worth up to US$ 250 billion in 2007 (excluding domestic market and internet sales). Other sources claim the losses are closer to $ 650 billion a year and that 2.5 million jobs are lost due to counterfeiting and piracy in G20 countries.
  • There is a rise of counterfeit goods coming into the EU. In 2011, more than 91,000 detention cases were registered by Customs: an increase of 15% compared to 2010. This increase totally comes from air, express and postal traffic, as a result of the growth of the e-commerce market.
  • Counterfeit goods can also lead to a loss of customs revenues. A Frontier Economics study estimated that counterfeiting and piracy may cost G20 governments and consumers over $120 billion every year, with $77.5 billion of this from tax revenue losses, $25 billion in increased costs of crime, $18.1 billion in the economic cost of deaths resulting from counterfeiting and $125 million for the additional cost of health services caused by dangerous counterfeit products.

EU trade policy and enforcement of intellectual property rights

The EU's 2014 Strategy for the Enforcement of Intellectual Property Rights in Third Countries examines the changes and challenges in the international IP environment since the original Strategy was published in 2005, and offers ways forward to improve the Commission's current tool box in tackling challenges that have arisen. The key objective is still to promote enhanced IPR standards in third countries and stem the trade in IPR-infringing goods, thereby ultimately enhancing EU competitiveness, growth and jobs.

The way forward on EU enforcement

The Commission regularly conducts surveys on the enforcement of intellectual property rights. The latest survey was conducted in 2014 following similar surveys in 2010, 2008 and 2006. The report of this survey is set forth in a Commission Staff Working Document.

  • The report provides valuable information for EU rights’ holders on the effectiveness of IPR regimes in countries outside the EU.  It will also enable right holders – in particular small and medium-sized firms – to improve their business strategies and operations to protect their corporate value in intangibles based on intellectual property they own.  In particular, they will be able to better manage risk around their IPR when doing business in or with certain third countries.
  • This assessment also helps the EU define certain countries where the protection and/or enforcement of intellectual property are detrimental to EU interests.
  • The report will also benefit third country authorities' understanding of the perception of EU users of their IPR systems, particularly in regard to potential areas for improvement.

The priority countries for the EU to strengthen its cooperation on intellectual property are:

  1. China
  2. Argentina, India, Russia, Turkey
  3. Brazil, Canada, Ecuador, Indonesia, Korea, Malaysia, Mexico, Philippines, Thailand, Ukraine, USA, Vietnam.

Compared to the last report, Philippines and Indonesia have moved from category 2 to 3, and Argentina and Russia have moved from category 3 to 2. Ecuador has been newly added to the list.

A separate category of countries exists for which the Commission will monitor developments, with a view to reassessing the status of these countries on the basis of the continuation of their progress: Chile, Colombia, Israel, Paraguay, Peru, South Africa, UAE, Uruguay.