EUIPO Report: Counterfeits Result in EUR 60 Billion Annual Loss

In a timed announcement with World Anti-Counterfeiting Day, on June 6, 2018, the European Union Intellectual Property Office (EUIPO) released a synthesis research report highlighting that the EU is currently losing EUR 60 billion each year as a result of counterfeiting. For each EU citizen, this amounts to a cost of EUR 116 per year, and a loss of 434,000 jobs.

Counterfeiting is a global activity that has taken a leap from street market sales to international trade, largely as a result of increased use of technology and the cultural shift to online shopping. Criminals engaged in counterfeit manufacturing and sales are profiting from a digital environment where it is easier to maintain anonymity, to falsely advertise fake products, to build new websites as quickly as identified websites are shut down, and to market to online shoppers all over the world.

Due to “the high value associated with intellectual property rights (IPR),” the report said, “infringement of those rights is a lucrative criminal activity, which generates significant costs to the rights owners and to the economy in general.”

The report compiles findings of research studies carried out for the past five years by the EUIPO, through the European Observatory on the Infringement of Intellectual Property Rights. It tracks the economic cost of counterfeiting in 13 sectors known to be vulnerable to IPR infringements: cosmetics and personal care; clothing, footwear, and accessories; sports goods; toys and games; jewelry and watches; handbags and luggage; recorded music; spirits and wine; pharmaceuticals; pesticides and agrochemicals; smartphones; batteries; and tires.

In a study done in partnership with the European Patent Office, the EUIPO discovered that the total contribution of IPR-intensive industries to the EU economy amounts to approximately 42 percent of GDP (EUR 5.7 trillion) and 28 percent of employment, which includes 10 percent in indirect employment in non-IPR intensive sectors. These sectors also generate a trade surplus of EUR 96 billon with the rest of the world and pay workers 46 percent higher salaries.

“Our work has been carried out so that policymakers and citizens can be in no doubt of the value of intellectual property and the damage that arises from its infringement,” said EUIPO Executive Director António Campinos, in a press release announcing the report.

The EUIPO report builds on prior research by the EUIPO and other organizations confirming the proliferation of counterfeit and pirated goods around the world. INTA’s commissioned 2017 impact study, The Economic Impacts of Counterfeiting and Piracy, estimated that by 2020, worldwide the total value of counterfeit and pirated goods, including digital piracy, could reach as high as US $2.8 trillion and net job losses could hit 5.4 million.

INTA supports the development and passage of legislation, regulations, and trade agreements throughout the world that increase national and international enforcement against counterfeiting. In addition, on World Anti-Counterfeiting Day, it called on all trade owners and Internet-related companies to rally together and work cooperatively to implement best practices to combat this growing problem.

Learn more about counterfeiting and its effects; INTA’s guide, Addressing the Sale of Counterfeits on the Internet; and the Association’s advocacy efforts.