Intellectual Property Rights (IPR) have been established to ensure that creative and inventive efforts are rewarded and that investments in new and more efficient products are encouraged. They greatly stimulate the creation of jobs in today's knowledge-based economy.
Infringements of intellectual property rights are a widespread and worrying phenomenon. Reasons for its expansion are various, including the attractiveness of a 'look-alike product' at a cheap price, the ease of production of copies at minimal costs, the development of new forms of marketing such as e-commerce and the growth of international trade.
IPR infringements are harmful as they reduce business and government revenues, stifle investment and innovation and hinder economic growth. They result in job losses and reduced wealth creation (Gross Domestic Product or GDP). Furthermore, IPR infringing goods risk harming consumers, as they are less likely than others to be manufactured in compliance with health and safety standards.
Trade in IPR infringing goods is a serious problem for everyone and therefore dealing with it is the responsibility of everyone.
A few facts and figures
- In 2016, over 41 million articles suspected of infringing intellectual property rights were stopped by customs at the EU external border. The estimated value of the equivalent genuine products is over 670 million euro.
- The type of goods concerned differ from the more luxury brands for clothing, shoes and personal accessories to products for daily use like foodstuff, body care items (perfumes and cosmetics), electrical household goods and medicines.
- Goods infringing intellectual property rights increasingly enter the EU market in small consignments, as a result of the growing number of online purchases in Europe.
Everyone is affected
- Business. Trade in IPR infringing goods affects companies in different ways. First of all, the lower demand for legitimate goods and services resulting from illicit trade reduces business revenues and creates a competitive advantage for those enterprises that free-ride on the R&D investments to the detriment of the right-holders. Secondly, affected companies incur additional costs for conducting investigations and litigation to protect their IPR against infringement. Finally, the production and sale of counterfeit products may damage the reputation of the trademarks concerned, inasmuch as those products are defective and/or harmful. This problem is particularly acute for small and medium-sized enterprises.
- Consumers. They can be the victims of deceptive practices when they are sold a fake instead of a genuine product. The quality of the products may be inferior, making them unusable or ineffective. IPR infringing products may also be harmful to consumers, as they are often produced without due regard to the health and safety standards applicable on the EU market.
- Job holders and job seekers. The decline in the sales and profits of the companies whose products are copied finally results in job losses. Moreover, the illegal firms that produce counterfeit and pirated goods may not comply with labour legislation.
- Society at large. The generalised infringement of intellectual property rights discourages research and innovation, thus making it more difficult and economically unattractive to find a solution to some of the most pressing challenges faced by modern societies. Additionally, public revenues are affected by unpaid duties and taxes. Last but not least, IPR infringing activities are often carried out by criminal organisations using the profits to finance other illegal activities, thus threatening public security.
Get the real thing
Stealing the intellectual property of someone else is not a victimless crime. When you buy counterfeit goods you help traders who break the law and you may indirectly fund organised crime. You deprive the producers of genuine products from their legitimate profits and discourage innovation and creativity. You put at risk your own health and safety and those of your loved ones, as well as of people employed in the production and sale of IPR infringing goods.
The customs authorities of the EU Member States are in the front line in preventing IPR infringing goods from entering the EU market. Nonetheless, the trade in counterfeit and pirated goods would not exist without consumer demand. Play your part: don't buy fakes.