INTA 2019 President David Lossignol (Novartis, Switzerland) provides the ‘Industry’s perspective’ on IP enforcement at the EUIPO-OECD IP Enforcement Forum in Paris on June 12.
Intellectual property (IP) professionals and government officials gathered in Paris, France to discuss solutions related to global counterfeiting and ways to bolster collaborative IP enforcement strategies at the International Forum on IP Enforcement 2019, on June 12–13.
This high-level IP forum brought together key European and international decision makers, enforcement agencies, multinational companies, and other private actors (brand owners and online platforms), as well as relevant stakeholders to discuss trends and alternative enforcement techniques for IP both at the EU and global levels. Key speakers included Vishal Amin (IP Enforcement Coordinator, White House, USA), Christian Archambeau (Executive Director, EUIPO), and Sławomir Tokarski (Director, DG GROW, EU Commission).
INTA 2019 President David Lossignol (Novartis AG, Switzerland) provided an industry perspective at the beginning of the forum’s first day. Mr. Lossignol emphasized two key messages to combat the proliferation of counterfeiting: collaboration and changing perceptions. On the first point, he said, “We need a team effort—in all countries, with all stakeholders, with all generations. The issue is too large for any one brand or one government authority to tackle alone.” Secondly, he called for raising awareness and educating consumers, especially youth, to change perceptions, noting “We must educate early and educate often.”
Mr. Lossignol provided an overview of the key findings of INTA’s “Gen Z Insights: Brand and Counterfeit Products” study, which highlights the attitudes of Gen Z consumers in 10 countries toward purchasing counterfeit products and the factors that might change their behaviors. Among education solutions, he pointed to INTA’s Unreal Campaign, which raises awareness among young consumers about the dangers of counterfeits and emphasizes the importance of trademarks and brands.
Also at the event, the European Intellectual Property Office and EUROPOL unveiled their 2019 Intellectual Property Crime Threat Assessment, an update to previous editions released in 2015 and 2017. The report assesses the threat posed by counterfeiting and piracy in the EU in several product sectors, as well as cross-cutting factors that influence or impact the criminal environment.
The report stresses that counterfeit and pirated goods are increasing, amounting to as much as 6.8 percent of EU imports, or €121 billion. It also notes a decrease in customs’ detention of counterfeits since 2013, “even if the number of items seized and their estimated value has decreased at a lower pace, with a temporary recuperation in 2015 and 2016,” though this decline is mainly due to the effectiveness of customs’ operations. In addition, it points out that most counterfeit items still come from China.
The forum included sessions focused on the role of intermediaries in the fight against counterfeiting. Brand owners asked online platforms to intervene more proactively, and online intermediaries showcased the measures they are already taking, including reactive measures and take downs.
Government officials, notably the European Commission, defended, on its end, voluntary measures, such as its own Memorandum of Understanding with Internet platforms, rights owners, and associations to prevent offers of counterfeit goods from appearing in online marketplaces. On this front, INTA Vice President Zeeger Vink (Maus Frères, France) raised a possible solution, namely traders’ identification when they sell online, since “all the enforcement tools in the world are useless” if you cannot identify the counterfeiters.
“The fight against IPR infringement needs to be strengthened,” emphasizes a new report by the European Union Intellectual Property Office (EUIPO). The report cites substantial loss of sales in the EU and growing health and safety concerns as a result of counterfeiting, and highlights the challenges in tackling this problem.
EUIPO published its 2019 Status Report on IPR Infringement: the importance of intellectual property rights, the infringement of intellectual property rights and the actions taken to combat it, on World Anticounterfeiting Day, June 6.
The report, published annually, acts as a synthesis of the findings of the research carried out in recent years by the EUIPO, through the European Observatory on the Infringement of Intellectual Property Rights (Observatory), on the extent, scope, and economic consequences of Intellectual Property Rights (IPR) infringement in the EU.
- Contribution of IPR to the economy: The total contribution of IPR-intensive industries to the EU economy accounts for approximately 42 percent of gross domestic product (€5.7 trillion) and 28 percent of employment (plus another 10% in indirect employment effects in non-IPR intensive sectors).
- Negative impact on trade: IPR infringement in international trade in 2016 could reach as much as 3.3 percent of world trade. Up to 6.8 percent of EU imports, amounting to €121 billion per year, consist of fake goods.
- Losses in sales: Estimated lost sales in 11 sectors in the EU (directly in the industries being analyzed and across their associated supply chain), as a result of counterfeiting, went beyond €92 billion per year from 2012 to 2016.
- Incentives for counterfeiters: The main incentives for counterfeiters are the conjunction of abundant value, lenient sentences, and high returns on investment while making significant use of the Internet to distribute their products and to promote the distribution and consumption of illegal digital content.
- Incentives for consumers to purchases counterfeits: The incentives for consumers to purchase counterfeit goods lie in lower prices, easy accessibility, and a low degree of social stigma associated with such activities.
- Health and safety: These concerns are increasing as counterfeiting of everyday consumables such as cosmetics or medicines becomes more prevalent.
- Coordination of cross-border investigations and tackling new technologies that criminals are using to hide their locations and activities. In that regard, the evolution of the role of intermediaries to fight counterfeiting themselves appears of upmost importance. Indeed, the report says, “the rapid growth in e-commerce and the improvements in the speed and availability of high-bandwidth connections mean that intermediaries such as online retail platforms and video sharing sites are increasingly misused by infringers to market and distribute both counterfeit goods and copyright-infringing digital content.” The EUIPO is of the opinion that “those and other intermediaries, including providers of payment and logistics services, need to play a constructive role in the efforts to curb infringement of IP rights.”
- Closer coordination among EU institutions and bodies involved in the fight against IPR infringement; and
- Closer collaboration at the enforcement level and a simplified data exchange within the possibilities of data protection are essential elements in the effort to curtail this problem.
Responses and actions by the EUIPO, and the public and private sectors:
- Information: Providing rights owners with information on the changing infringement landscape. EUIPO’s support in that matter needs to be “reviewed and adapted to the complex and changing IPR infringement landscape,” the report says.
- Concrete enforcement actions: Working with Europol on wider responses to IP crime, including participating in the funding of a specialized IP crime unit.
- Action in third countries: Supporting the European Commission’s efforts to address the supply of counterfeit goods in non-EUcountries and to help small and medium-sized enterprises (SMEs) protect their IPRs.
- Public awareness: Providing citizens with information on the availability of legally accessible digital content and on the economic and social impact of purchasing counterfeit goods or accessing digital content illegally.
INTA advocates at the national and international levels to strengthen anticounterfeiting laws and enforcement, and to increase governments’ cooperation to eliminate linkages between counterfeiting and organized crime, as well as serious threats posed by counterfeiting to the health and safety of consumers, economies, and national security.
In addition, the Association supports the development and passage of legislation, regulations, and trade agreements throughout the world that increase national and international enforcement mechanisms against counterfeiting. Through the organization’s Anticounterfeiting Committee, the Unreal Campaign
Committee, and partnerships with governments and other associations, INTA emphasizes the importance of strong anticounterfeiting measures and increased awareness of the harms of counterfeiting.
European citizens voted on May 23–26 to elect the members of the European Parliament (MEPs) for the 2019–2024 term.
the election is over, there is still much to be determined. First, results are
not final at this stage (results, abstentions, and reshuffling and allocation
of seats may still change. In addition, the repartition per political group—a political
group consists of at least 25 members elected in at least seven member states—is
provisional (based on the 2014–2019 structure) since each national party has
until June 24 to decide in which political group they will sit.
General Overview: A Divided and Renewed Parliament with No Clear Majority
- A historic turnout: More than half (50.94%) of EU citizens cast ballots. The turnout marks the highest in 20 years, and reverses the steady decline in voter participation since the first EU elections were held in 1979.
- Important reshuffle: New members of the EU Parliament account for more than 50 percent of those elected (the exact number is not yet known).
- A vote throughout 28 EU Member States (including the UK) that put forward three main trends: a strong opposition between pro- and anti-EU sentiments; a strong call in favor of putting the environment as a top priority; and increased mobilization of youth.
- A more divided Parliament with no clear majority.
- What it means:
- Any majority in the new Parliament will have to go beyond the traditional left-right divide (which was already the case under the last term with the coalition between the European People’s Party, and the Progressive Alliance of Socialists and Democrats), and will need to include at least three groups, making it necessary to compromise and therefore harder to define a clear and strong political line.
- The anti-EU (Europe of Nations and Freedom, and Europe of Freedom and Direct Democracy) and Eurosceptic parties (European Conservatives and Reformists, Non-Inscrits) account for 175 seats, an increasing number though still far from a majority. Nonetheless, their solid representation offers them a strong voice and makes them a force to consider on any political and legislative issue.
- What to expect:
- A more polarized Parliament, given the lack of clear majority, which will be structured along three main lines: 1) political (the traditional divide right, left, far left, far right); 2) national (division per member state); and 3) pro-/anti-EU (the latter being new—and probably the prominent one for this term with the surge of anti-EU and Eurosceptic parties).
- A more “political” Parliament: The surge of anti-EU and Eurosceptic parties, though not with a majority, is expected. This will translate into a polarization of Parliament between pro- and anti-EU lines to the detriment of the policy and technical sides of issues.
- A “beginners” Parliament: The important reshuffle implies that more than half of the MEPs are newcomers with little to no expertise in Parliament.
- An expected mobilization and exposure on big policy issues, such as the future of the EU, budget, migration, and climate change, to the detriment of technical ones, including intellectual property (IP).
Changing EU Political Landscape Infiltrated by Eurosceptics?
The election of the new European Parliament—whose President will be elected on July 2–5—is only the beginning.
This year will also feature major changes in the other main EU institutions—the EU Commission, EU Council, and European Central Bank.
- Uncertainty as to the next President of the EU Commission. The process gets underway June 20–21, when a qualified majority of the EU Council (28 EU heads of state and government) will designate a candidate. The EU Parliament must then confirm the designee by a simple majority, which can prove difficult given the division in Parliament and the absence of a clear majority among groups.
- An EU Commission with a significant portion of anti-EU Commissioners? Each member state has to submit a candidate to serve as commissioner. Given the number of Eurosceptic governments in the EU (Italy, Poland, Hungary, Czech Republic, Romania, Bulgaria, etc.), the next Commission will most likely include a strong anti-EU contingent of Commissioners. The Commissioners will also then be subject to an individual parliamentary hearing in September–October followed by a vote of consent by Parliament on October 21–24. This could lead to the first fight between pro- and anti-EU MEPs who will try to vote down their respective opponents, with the hearings’ emphasis put more on politics than on policy issues.
- In December, a new President of the Council to succeed Donald Tusk (European People’s Party Poland) will be elected by the EU heads of state and government for a two-and-a-half-year term. The President of the Council is mainly tasked with representing the EU to the outside world and largely tackles big political and institutional issues.
- Finally, also in December, the EU heads of state and government, with the consent of Parliament, will designate a new President of the European Central Bank to succeed Mario Draghi (EPP, Italy) for an eight-year mandate.
The selection of these top positions will result from careful and significant political negotiations and compromises between EU heads of state and government, based on political lines national lines (Germany and France are the front runners), and gender (to increase the presence of women).
Intellectual Property: A Technical or Political Issue?
IP per se is not expected to be a priority during the new term. IP was not at the center of the political campaign for the EU elections, nor was it a priority under the last parliamentary term, with copyright being a notable exception. How IP will fare in the next term will depend on the commissioner’s profile (e.g., anti- or pro-EU? heavyweight or lightweight?), and whether IP is central in the next commissioner’s portfolio.
Which concrete IP issues could develop during the 2019–2024 term?
- The EU Designs legislative framework, following the public consultation that took place in early 2019.
- Among the other possible initiatives that could develop: the EU Directive on the enforcement of intellectual property rights (IPRED); an initiative on non-agricultural GIs; a review of the e-commerce directive; and future initiatives on artificial intelligence and blockchain.
Calendar and Next Steps
- June 20–21: European Council’s Summit designates its candidate for the President of the EU Commission
- June 24: Political groups notify their composition
- July 2–5: Inaugural plenary session of the 2019–2024 legislature
- Election of Parliament’s President by MEPs, the 14 Vice-Presidents, and the five Quaestors; and MEPs will vote on the number and composition of parliamentary committees
- July 15- 19: First parliamentary vote to elect the President of the European Commission
- Early September: 27 Commissioner-designates appointed by new President of the Commission and approved by Council
- Second half of September–October: Hearings of Commissioners-elect (in Brussels).
- October 21–24: Plenary session to vote on the confirmation of Commissioner-designate as a whole and President of the Commission provides inaugural address
- November 1: Start of the new Commission’s mandate (until October 31, 2024)
- December 1: Designation of the President of the European Council
- Appointment of the European Central Bank’s President
INTA Chief Representative Officer Europe Hélène Nicora moderated a panel during a summit on “Industrial Property and Climate Change, What Opportunities Now?” on March 25 in Paris, France. The event was organized by the French Association for Industrial Property Counsel (CNCPI) with the support of Fabrice Mattei, Climate Change and IP Group Head of Rouse, Myanmar.
Michael Haddad, a United Nations climate change champion who will be the keynote speaker at INTA’s 2019 Annual Meeting, kicked off the event with an inspiring speech to the 150 intellectual property (IP) professionals, entrepreneurs, French Parliamentarians, economists, environmental experts, and academics.
Speakers explored the integration of climate change into IP strategies and the contribution of IP rights (IPRs) to a sustainable economy transition.
IPRs’ Influence on Climate Change
Speakers discussed how some developing countries have been criticizing IPRs for allowing monopolies and thus limiting imports of new technologies and innovations, while developed countries have been defending IPRs as allowing for a fair return on investment which has helped trigger business’s interest in researching innovative solutions. Guillaume Henry, (SZLEPER | HENRY Avocats, France) concluded that IPRs are now more and more acknowledged as part of the solution, rather than as an obstacle to innovation. This can also be explained by recent research demonstrating that IPRs have a positive impact on foreign investments, but do not affect international trade of capital goods.
Charlotte Beaumatin, IP Attaché in Washington D.C., French National Industrial Property Institute (INPI), explained that all IPRs can contribute to the fight against global warning. She acknowledged that the link between IP and climate change might not be so obvious at first glance, but that there is growing recognition that patents help provide a return on investment on green innovative solutions, while brands and designs also play a crucial role in marketing and developing these solutions. Ms. Beaumatin noted that IP will be featured in the “1planet lab,” an initiative launched by French President Emmanuel Macron, which consists of a group of 30 experts dedicated to identifying clear objectives to help save the planet.
This initiative is particularly important as it will involve IPRs, finally and officially, in the fight against climate change. Indeed, IPRs did not feature neither in the 1992 United Nations Framework Convention on Climate Change nor any subsequent climate agreements. Only references to technology transfers were included.
A Focus on Patents
When considering IPRs with an impact on climate change, there is a tendency to focus on patents and technology transfers. Speakers at several sessions referred to them as tools to promote innovation, enabling the diffusion of known technologies and the multiplication of innovations—aspects considered key in the fight against climate change.
Matthieu Glachant, Professor of Economy, MINES Paristech, PSL Research University, explained that 90 percent of of increased carbon emissions comes from developing countries. But while 90 percent of the need comes from developing countries, 80 percent of the needed technologies can be found in already developed countries, which highlights the importance of securing fair transfer of technologies.
However, Mr. Glachant condemned the perspective that patents are always the solution to trigger innovation. “Much depends on the conjuncture,” he said. For instance, Chinese companies managed to perfect existing photovoltaic technology (“learning by doing” instead of “learning by researching”) and took the lead in the market without using patents.
Right Patent Policy
Yann Ménière, Chief Economist at the European Patent Office (EPO), emphasized that the economic value of innovation depends on how attractive environmental policies make these innovations. Patents are only “the start of the adventure,” he said, in the sense that they allow the necessary research and investment into the technology, which will later be brought to life on the market. Mr. Ménière also explained that more needs to be done to facilitate access to patents for innovative companies. The EPO signed validation agreements with certain countries, whereby a European patent applicant can submit a request for extension or validation, and, with a fee, enjoy the same protection in those countries as if the applicant had filed a national application or obtained a patent. The EPO has also established a new classification scheme for technical attributes of technologies that can be loosely referred to as climate change mitigation. This makes it easier to retrieve patent documents that cover these technologies, and helps in creating an “economic intelligence” at the service of climate change.
In terms of best practices for patents, Christian Chun (Chun & Partners, Korea) presented the “accelerated procedure” to obtain a patent for green technologies introduced in China, Korea, and Japan.
Michael Levy, VP, Research and Innovation (AAQIUS Research Center, France) and Andréas Schuster, Co-founder (Orcan Energy, Germany) illustrated how they were able to use a portfolio of patents to develop their green technologies, and the various challenges they faced on the way to bringing their products to market. They both rejected the concept of compulsory licenses because they believed it would prevent inventors from receiving a fair return on investment and would discourage future investment in green technologies.
Norms and Green Certifications
A representative from the Association Française de Normalisation (AFNOR), the French Association for norms and certification, explained how norms have helped to set different environmental standards for the production and marketing of products. Nevertheless, it seems that controls on the compliance of these products with the established norms remains problematic, since controls differ in frequency and depth depending on the norm itself. Consumers need to be educated about these differences.
Certification labels and certification marks are another tool to promote green products, such as the EU “Eco Label.” Certification marks in the EU provide a recognizable sign certified by an independent and impartial third party, thereby also fostering consumer trust.
Brands and Their Role
In light of INTA’s mission to promote trademarks to foster consumer trust, economic growth, and innovation, the Association is interested in the way brands react to climate change.
Consumers are more and more keen to purchase brands that are environmentally-friendly. Climate change is particularly important to millennials, as stressed by recent studies, so brands must adapt to sustainable development, if they want to remain successful and respond to their consumers’ needs. Some brands have even gone further and engaged politically in the fight against climate change.
INTA’s 2019 Presidential Task Force on “Brands for a Better Society” will explore these issues, and whether there are strategic best practices for brands responding to climate change.
Rights holders can opt for a mitigation strategy (i.e., take action to reduce their environmental impact) and/or adaptation strategy (i.e., take action to adapt to climate change). Identifying the right strategy to fight climate change ultimately poses a challenge for Geographical Indications (GI) producers, who are bound by strict specifications and cannot relocate.
Charles Goemaere, Economic and Legal Director of the French Committee of Wine of Champagne, gave a presentation on how climate change has forced champagne producers to adapt, such as by banning pesticides by 2025, finding new grape varieties that would adapt to higher temperatures and resist insects without pesticides, or reducing the amount of glass in their bottles. This resulted in a change of their specifications.
It is expected that more and more GI rights holders for agricultural products, wine, and spirits will have to modify their geographical territory or adapt their production, processing or storage methods to evolving climate conditions, with potential consequences to their reputation, quality, price, and location.
David Desforges (Desforges Law, France), a lawyer who specializes in environment litigation, discussed the evolution of environment-related litigation. “It is important to note that we have evolved from an environmental law to a climate change law, with new rights and duties,” he noted.
There are currently more than 880 lawsuits in the world dealing with disputes over action or inaction related to climate change. Governments were the first to be targeted. The Netherlands, for instance, was condemned to reinforce its action against climate change in 2015. Four NGOs have also initiated a dispute against the French government over missed climate targets in December 2018.
However, more and more litigations are now instituted against companies and their technologies, such as petrol companies for their impact on carbon dioxide (CO2) emissions. For example, an Australian court decided to order the prohibition of the exploitation of a mine purely on environment grounds.
It seems that companies will be more and more exposed to litigation if they do not consider a sustainable strategy.
Impact of Emissions Trading
Emissions trading allows countries with higher carbon emissions to purchase the right to release more CO2 into the atmosphere from countries with lower carbon emissions. As such, carbon emissions trading is described as a tool that gives polluters an incentive to reduce their emissions.
However, Emilie Alberola (EcoAct, France) explained that there are different emission trading markets, so there are also different carbon prices. Unfortunately, the price of carbon in Europe is insufficient to promote innovation and allocating permits on the basis of past emissions can result in companies having an incentive to maintain emissions, instead of innovating to get greener.
The EU will be creating two funds, the so-called Innovation Fund (with revenues from the auctioning of 450 million allowances from 2020 to 2030) to finance green projects and the Modernization Fund to finance low carbon emitting energies.
Carbon Footprint Calculation Tool
Mr. Mattei, who was recently interviewed about climate change on INTA’s Brand & New podcast, spoke about a new tool that can calculate the carbon footprint of IPRs. The goal is for IPR holders to become aware of their carbon footprint, reduce it, and to compensate so as to achieve carbon emissions neutrality.
“The IP Carbon Footprint focuses on the CO2 emissions resulting from the acquisition, exploitation, or lack of exploitation of IPRs, expressed as CO2 equivalent. The calculation method captures the full life cycle of all IPRs ranging from their creation to enforcement. Internal and external, positive and negative CC effects are calculated,” he explained.
The summit concluded with the announcement of the creation of a new association focused on the ecological analysis of law, Association pour l’Analyse Ecologique du Droit (AED) on July 4, 2019, led by Guillaume Henry (SZLEPER | HENRY Avocats, France), co-author of the INPI report “Sustainable development & IP” and “Intellectual Property Rights and Green Technologies.”
AED will promote a green accountability model, and the analysis of the most efficient rule of law from the perspective of limiting its negative effects on the environment.
For more information on the summit, please contact Hélène Nicora, Chief Representative Officer – Europe at firstname.lastname@example.org.
Will Brexit still happen and what does it mean for IP Professionals? Uncertainty remains as the intial Brexit day has passed.
On March 21, the 27 EU heads of States and governments granted UK Prime Minister Theresa May an extension of the Brexit date beyond March 29, but with a condition. Read the Brexit Update in the April 1 INTA Bulletin for the details.
Will Brexit happen?
On March 27, the UK Parliament held a series of votes on a possible way forward. These votes on the eight possible alternative scenarios (including a new referendum, the UK remaining in the Customs Union, etc.) generated significant confusion since no alternative option reached a majority. On March 29, Prime Minister May, who offered her resignation if the deal was adopted, failed to get Parliament approval on the deal for a third time. This leaves heightened uncertainty while the EU is planning to hold an Extraordinary Summit on April 10 to discuss the issue.
When will Brexit happen?
The UK Parliament passed legislation postponing the Brexit date from March 29 to at least April 12. The third rejection of the deal by the UK Parliament would hint towards a Brexit date on April 12, as per the conditions set by the EU. But the EU Summit on April 10 could grant a longer extension. Moreover, UK snap elections cannot be ruled out, which could lead to the formation of a new government and parliamentary majority that could end the Brexit process altogether.
What does it mean for IP professionals?
While uncertainty remains, both the UK and the EU have tried to prepare for the following options.
Option One: ‘No-Fault Divorce’
If Brexit happens, and the UK Parliament ultimately adopts the draft deal on the withdrawal agreement, the ‘divorce’ will be governed by the provisions foreseen in the agreement, with a transition period set to end on December 31, 2020.
IP issues will be governed by Title IV (articles 54 to 61) of the draft agreement:
- The main principle put forward is “continued protection in the United Kingdom of registered or granted rights.”
- The regional exhaustion principle is maintained in the draft agreement, stating, “intellectual property rights which were exhausted both in the Union and in the United Kingdom before the end of the transition period under the conditions provided for by Union law shall remain exhausted both in the Union and in the United Kingdom.”
- For GIs, the UK will grant automatic rights to EU GIs “as from the end of the transition period,” until a future relationship is established.
- Registration of trademarks and designs will be carried out free of charge and IP right-holders will “not be required to introduce an application or to undertake any particular administrative procedure,” or be required to “have a correspondence address in the United Kingdom in the 3 years following the end of the transition period.”
Option Two: Divorce “with Fault”
If Brexit happens but the UK Parliament does not adopt the draft deal, the UK will exit without a deal. This scenario, known as the “cliff-edge,” means that from the date of Brexit, the UK will become a third-party overnight. Though, this scenario raises concerns over legal continuity and certainty on various issues, the EU and UK authorities respectively tried to prepare for this ‘no deal’ scenario.
The UK has developed several ‘no deal’ instruments. Check out the resources below.
For a comprehensive and detailed analysis of INTA’s actions and positions on Brexit, please visit INTA Brexit topic portal online. For any additional queries, please contact INTA Europe Office Chief Representative Officer, Hélène Nicora, at email@example.com
Fake goods are becoming more prevalent, with counterfeits and pirated products accounting for 3.3 percent of world trade and 6.8 percent of European Union (EU) imports, according to a new study, Trends in Trade in Counterfeit and Pirated Goods published by the European Union Intellectual Property Office (EUIPO) and the Organization for Economic Co-operation and Development (OECD).
The study, released on March 18, with data updated from its initial publication in 2016, provides a quantitative analysis of the value, scope, and magnitude of world trade in counterfeit and pirated products.
According to the study’s main findings:
- Globally, counterfeit and pirated goods are now estimated to account for as much as 3.3 percent of world trade, compared to 2.5 percent in the 2016 study. This amounts to EUR 460 billion (US $509 billion) per year.
- From an EU perspective, 6.8 percent of imports from the rest of the world consist of fakes, compared to 5 percent in the earlier study. This amounts to EUR 121 billion per year (US $134 billion).
The results rely on customs seizure observations and do not include domestically produced and consumed counterfeit and pirated products; nor do they include pirated digital content on the Internet. This hints that the actual phenomenon is much larger.
Among the other notable findings, the study shows:
- Small shipments are on the rise: The use of small shipments, sent by post or the most used express services, for trade in fakes also keeps growing, accounting for 69 percent of customs seizures of intellectual property-infringing products for the 2014–2016 period, versus 63 percent for the 2011–2013 period.
- Top eight “most-counterfeit” product categories remains the same: The top eight product categories most subject to counterfeiting and piracy have not changed from the previous study—1) footwear; 2) clothing; 3) articles of leather; 4) electrical machinery and equipment; 5) watches; 6) sunglasses; 7) perfumes and cosmetics; and 8) toys and games.
- OECD countries remain main targets, but non-OECD economies are increasingly being hit: The companies suffering from counterfeiting and piracy continue to be primarily registered in OECD countries; mainly in the United States, France, Italy, Switzerland, Germany, Japan, Korea, and the United Kingdom. However, a growing number of companies registered in high-income non-member economies, such as Singapore and Hong Kong, SAR, China, are becoming targets. In addition, a rising number of rights holders threatened by counterfeiting are registered in Brazil, China, and other emerging economies.
- Free Trade Zones (FTZs) garner more fakes: The share of fake goods from economies hosting the 20 biggest FTZs is twice as big as from economies that do not host any FTZs. Moreover, an additional FTZ within an economy is associated with a 5.9 percent increase in the value of these problematic exports on average.
- Link established between counterfeiting and health safety: The reports highlights the link between counterfeiting and health safety, stressing that “a growing scope of counterfeit products can pose significant threats to the environment or to consumer health and safety” and that “the intensity of trade in fake goods that can lead to environmental or consumer health and safety risks keeps growing in almost all sectors impacted by counterfeiting.”
It is important to note that the study provides a quantitative analysis of the global trade in counterfeit and pirated products in order to inform and raise awareness among policy makers and the general public, but it does not include any policy recommendations. It is, therefore, ultimately up to policy makers to build such recommendations and follow-up actions based upon these findings.
INTA advocates at the national and international levels to strengthen anticounterfeiting laws and enforcement, and to increase governments’ cooperation to eliminate linkages between counterfeiting and organized crime, as well as serious threats posed by counterfeiting to the health and safety of consumers, economies, and national security.
In addition, the Association supports the development and passage of legislation, regulations, and trade agreements throughout the world that increase national and international enforcement mechanisms against counterfeiting. Through the organization’s Anticounterfeiting Committee and Unreal Campaign Committee , and, partnerships with governments and associations, INTA emphasizes the importance of strong anticounterfeiting measures and increased awareness of the harms of counterfeiting.
As the end of the year draws closer and consumers are busy purchasing gifts for their loved ones, many people rely on the Internet to find the perfect gift, often to be delivered (preferably before the holidays) in small parcels.
In that context, a report released on December 12 by the European Union Intellectual Property Office (EUIPO) and the Organisation for Economic Cooperation and Development (OECD) on Misuse of Small Parcels for Trade in Counterfeit Goods is timely.
The report is the latest in a series of joint EUIPO-OECD studies that analyze the impact on the economy of the global trade in counterfeit and pirated products, as well as their share of international trade. It covers global trade from 2011 to 2013 and uses data obtained from several sources.
The main—and concerning—findings include:
- Two-thirds of all customs seizures involve small parcels. Between 2011 and 2013, nearly 63 percent of customs seizures of counterfeit and pirated goods involved small parcels. This trend is even more concerning in the European Union: according to the European Commission, 76 percent of fake goods intercepted in the European Union in 2017 had been sent via small courier and postal shipments.
- Very small parcels are the majority. The size of these shipments tends to be very small, with packages of 10 items or less accounting for the majority of all seizures.
- Several sectors are most common. Of the postal parcels and express courier shipments seized by customs, 84 percent were counterfeit footwear; 77 percent were fake optical, photographic and medical equipment (mostly sunglasses); 66 percent were counterfeit information and communications technology devices; and 63 percent, were counterfeit watches, leather articles and handbags, and jewelry.
Given these findings, the report notes: “Policy makers and the private sector should be concerned about the significant scope of counterfeit trade using small parcels to harm legitimate businesses and economic activity, and to cause damage to the health, safety and security of citizens.”
While the study does not include detailed recommendations, it does offer some general suggestions that are worth exploring: develop more effective cooperation between customs authorities, postal and express couriers, e-commerce platforms, and right holders, in particular by improving mechanisms for collecting and sharing quality information, and improve risk assessment techniques to help customs authorities determine which packages should be checked.
It is now in the hands of rights holders, postal operators, and public authorities to define and implement solutions—a welcome gift for the holiday season.
Congressional briefing panelists provide insight about the direct health and safety challenges presented by counterfeit goods.
On December 6, INTA, in collaboration with the Congressional Trademark Caucus (CTC) and the Global Innovation Policy Center (GIPC), hosted a Congressional briefing entitled “What You Need to Know about Counterfeit Products during the Holiday Shopping Season.” The briefing was held in the United States House of Representatives’ Rayburn House Office Building.
Debbie Cohn, INTA’s Senior Director of Government Relations based in Washington, D.C., provided opening remarks about the importance of education and outreach to consumers about the dangers presented by counterfeit products. Additionally, Ms. Cohn shared information about INTA’s museum exhibit, about trademarks and counterfeiting, at the National Inventor’s Hall of Fame Museum (NIHF) at the United States Patent and Trademark Office (USPTO) in Alexandria, Virginia. The exhibit includes useful tips for consumers on how to avoid purchasing counterfeit goods. Ms. Cohn noted that the museum is free and open to the public, and encouraged attendees to visit the museum and see the exhibit for themselves.
The briefing featured a special address from White House Intellectual Property Enforcement Coordinator (IPEC) Vishal Amin, as well as a panel featuring U.S. Federal government speakers and representatives from the business and nonprofit community. The discussion focused on intellectual property (IP) enforcement, consumer education, and awareness outreach.
With the IPEC office celebrating the 10th anniversary of its formation, Mr. Amin focused on his Office’s Joint Strategic Plan on IP Enforcement. The plan defines a roadmap for government coordination and stakeholder outreach for addressing the issues and challenges presented by counterfeiting.
The panel included IP experts from the U.S. Consumer Product Safety Commission (CPSC), the National Intellectual Property Rights Coordination Center (IPR Center), U.S. Customs and Border Protection (CBP), the U.S. Department of Justice (DOJ), and the National Crime Prevention Council (NCPC). It was moderated by Michael Castellano, Vice President of Government Relations from The Walt Disney Company. The speakers covered a wide range of government coordination efforts including:
- interdiction of counterfeits at U.S. ports of entry;
- addressing challenges presented by shipping processes; and
- strategies for outreach to consumers, including young consumers, about the health and safety dangers presented by counterfeit goods.
The panel highlighted the need for consumers to be ‘smart shoppers’ on all fronts. Specifically, consumers should be encouraged to research and examine online purchasing processes before determining where to purchase goods in order to ensure that they are indeed buying the authentic goods from sources they know and trust.
A full report about the Congressional briefing and other recent events in Washington, D.C. will be published in the INTA Bulletin early in the new year.
Featured in the above photo from left to right: Moderator: Michael Castellano Vice President, Government Relations The Walt Disney Company and panelists: Jim Joholske Director, Office of Import Surveillance U.S. Consumer Product Safety Commission, Dawn Nelson Chief, Intellectual Property Unit, National Intellectual Property Rights Coordination Center, Homeland Security Investigations, Bradley Hayes Executive Director, Office of Trade Relations U.S. Customs and Border Protection, Ann Harkins CEO, National Crime Prevention Council and Brian Levine Senior Counsel and National CHIP Coordinator, U.S. Department of Justice .
INTA’s committees are at the core of the Association, with volunteers contributing to advocacy, resources, communication, and the planning of educational events that drive INTA—and the trademark community—forward.
With that in mind, INTA’s Board of Directors on November 6 adopted a formal process to add new committees and sunset others. The new process is now included in the INTA Code of Policies.
The Board acted on a proposal submitted by the Planning Committee, which was charged with developing a formal and transparent framework for receiving and reviewing suggested changes to INTA’s committee structure.
For the next committee term, 2020‒2021, members and staff must submit proposals to add or sunset committees by December 15, 2018, for consideration by the Planning Committee in the selection process that takes place in 2019.
The process spells out who is eligible to propose a change and what must be included in the proposal. For example, suggestions for a new committee must state, in part, how the mission of the committee supports the objectives of the Association and/or the Strategic Plan, while suggestions to sunset a committee must explain why the committee is no longer needed and whether the goals or tasks should be incorporated elsewhere.
The action carries out the Implementation Plan of INTA’s 2018‒2021 Strategic Plan. The Implementation Plan calls for the creation of committee management tools and standardized processes and procedures to improve the efficiency of the committee structure, enhance the overall committee experience, and enable the Association to adapt to members’ evolving needs.
Details on who is eligible to put forth a proposed change and on the information required are available on INTA’s Committee Participation page.
* The following blog post is by Michael Tschupp (Bosch, USA) and Mandar Chandrachud (Godrej Consumer Products Ltd., India), members of the In-House Practitioners Committee. - GM
INTA’s In-House Practitioners Committee hosted two Idea Exchange sessions on Tips and Tricks on Trademark Management on October 30. Idea Exchanges are moderated benchmarking teleconferences—exclusive to in-house practitioners—to share insights, experiences, and issues on a specific topic.
Jocelyn Belloni, Corporate Counsel at Yardi (USA); Raphael “Rafa” Gutierrez, Legal Director at Uber Technologies, Inc. (USA); and Helen Omapas, Director, Senior Counsel—IP at Harman International Industries, Inc. (USA), led the discussion among in-house practitioners from various industries and countries. Participants shared experiences of trademark management at their organizations, providing colleagues with food for thought on issues that affect their daily responsibilities and roles, including ways to demonstrate value within a company.
Portfolio and Team Compositions
Among the participants, their trademark portfolios ranged in size from 1,000 to 10,000 marks, and their team composition varied widely. Centralized global trademark portfolio management at corporate headquarters is the norm; however, some companies manage the marks at a regional level. The participants recommend good and frequent communication among the regional teams and headquarters for regionally managed portfolios.
Depending upon team structure, work generally gets divided either by geography, brand, or product category, or a combination of these. In-house counsel work closely with marketing and other cross-functional teams and have regular interactions and calls; in-house practitioners also educate teams on the central policies and brand use and stay current on business developments.
In-house lawyers and paralegals work in close partnership. Outside counsel will usually be brought in only selectively, primarily on disputed matters.
Trademark Watch Services
For key marks, participants often use worldwide watch service tools. The analysis of results by the in-house team adds accuracy and business context.
Participants reported a preference for web/cloud-based trademark docketing systems, with extensive use of electronic records and minimal physical files.
In-house trademark teams usually prefer to handle enforcement matters themselves, but bandwidth and headcount limits often require them to involve outside counsel. It is common for a brand owner to send dozens of cease-and-desist letters or takedown notices in a year; however, court litigation is rare. Uniform Domain Name Dispute-Resolution Policy (UDRP) proceedings, on the other hand, are more common, primarily because cybersquatters often ignore demand letters, leaving UDRP the most effective means of recovering or shutting down squatted domains.
Filing strategies differ based upon business scope and needs. Generally, core marks are filed nearly worldwide, with the filing of secondary trademarks limited to strategic markets.
In general, in-house practitioners directly reach out to their outside counsel around the globe instead of routing their actions through a central firm, which saves them money and time. Participants agreed that it is advantageous to use INTA events such as the Annual Meeting to meet with their outside counsel.
Non-Trademark Matters and Other Challenges
Teams are doing more than trademark work; they are also working in the areas of copyright, design, patents, social media matters, claim monitoring, agreements, advertisement reviews, data privacy, mergers and acquisitions, and domain names.
The participants stressed the importance of demonstrating the value of in-house counsel to their company. The perceptions of being a “cost center” must be broken; one means of doing this is through licensing revenue.
Tools for Success
Brand and style guidelines—as well as intellectual property (IP) policies—are useful in fostering consistency. A strong relationship with marketing is key. It is helpful to have brand guidelines enforced by the marketing team.
In-house professionals need to be mindful of international treaties and local taxation laws while dealing with overseas subsidiaries, crafting a brand royalty structure with those subsidiaries, and coordinating with finance teams and others within the organization for determining optimal IP licensing policies.
In-house counsel should work closely with local customs and other law enforcement authorities to get results. They should maintain good images, documentation, and press coverage of anticounterfeiting success, and record the seizure/destruction of counterfeit goods. This helps demonstrate value internally within the company and with licensees that pay for the authorized use of the brand. Good press coverage can also burnish the public image of local authorities.