Enforcement in intellectual property rights protection: a brief reflection on European Commission’s annual report

Pietro GrecoFounding Partner, Greco Vitali Associati

Recently, the European Commission has published the annual report about the results achieved  during 2016 by European Customs Authorities in the fight against counterfeiting industry and in  intellectual property rights protection. This document represents an opportunity for a brief reflection   on this issue, almost four years after the EU Regulation 608/2013 entered into force.    Under this Regulation, right-holders need to lodge an application in order to request the  intervention of European Customs Authorities for the protection of industrial property rights. On this  regard, the report highlights that in 2016 the number of applications increased from 33.191 during   2015 to 35.815 during 2016. Nevertheless, please consider that the requests for the intervention of   European Customs Authorities have been steadily rising since 2009 (with the only exception of the   year 2014, when the EU Regulation 608/2013 entered into force).    We believe that the above mentioned data are very significant because they show, on the one hand,   an increasing attention of right-holders towards the need to protect their intellectual property rights  due to their economic value. On the other, they show an increasing confidence of the right-holders in   the action of European Customs Authorities, and such increasing confidence seems justified also in   light of the following.    In fact, the total number of cases concerning counterfeit goods is significantly lower than in the  past (63.184 cases in 2016 vs. 81.098 cases in 2015). Nevertheless, the total number of products   detained by European Customs Authorities in 2016 appears higher than in the previous four years;   anyhow, such number stands on quantities of goods significantly lower than those detained in the   past, under the EU Regulation 1383/2003 (e.g., in 2011 European Customs Authorities detained   114.722.812 of goods).    The overall decrease of the cases reported by the European Customs Authorities confirms the  growing effectiveness of their action in the fight against counterfeiting and the deterrent effect   achieved over the years.    Such deterrent effect is probably due to the sanctions provided under EU Regulation 608/2013  for counterfeit products: in fact, more than half of the goods detained in 2016 (i.e. 27.107.818 goods   upon a total of 41.387.132) has been destroyed, in accordance with the procedure set forth under   such EU Regulation.    Despite the severity of the sanctions, China is still the most active country in counterfeiting  industry, since almost all the goods suspected to infringe intellectual property rights came from there  (about 81%). China is followed by Hong Kong (7,79%), Turkey, Vietnam, Pakistan and Cambodia (with  about 1% of goods suspected of being counterfeited from each of them). Given the considerable   amount of counterfeit products came from Asia, European Customs Authorities initiated almost all the  proceedings at the time of goods’ importation within the borders of European Union (i.e. in 86% of  cases).    Even though the European Commission’s report did not emphasize the growth of the economic  value of products detained by Customs Authorities (equal to Euro 672.899.102 in 2016 vs. Euro  642.108.323 in 2015), in our opinion, this number needs to be analyzed because it does show a   progressive shift of the counterfeit market to goods with a highest unit value. In fact, despite in 2016   European Customs Authorities detained about one million products more than in 2015, the reflection   of such difference in terms of economic value is about thirty million.    Moreover, reading these numbers in light of the most seized product categories (shoes, clothing  and handbags) and in light of the most violated intellectual property rights (trademarks), we might  conclude that the counterfeiting industry is active especially in the fashion industry.    Nevertheless, the number of cases initiated due to the seizure of bags and shoes is lower than in  the past and it confirms the deterrent effect of the action of the Customs Authorities in the fight   against counterfeiting. It is probably for this reason that counterfeiting industry is moving towards   new horizons, with a significant increase in counterfeiting of food and beverages (over 50% more than   2015).    In our opinion, the numbers just mentioned show why the European Commission’s report is  useful. On the one hand, it represents a “picture” of the state of the art but, on the other hand, it is  helpful in order to intercept counterfeiting industry trends and therefore to react as effectively   as possible, having regard to the effective protection of intellectual property rights and to the  economic value they represent for right-holders.

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