INSIGHT

EU leads the way with counterfeit crackdown

Industrials Intellectual Property Patents & Trade Marks

In brief

The European Commission has recently established the world's first counterfeit and piracy watch list, which aims to crack down on counterfeiting and piracy both within the European Union and in external suspect markets. Partner Tim Golder and Vacation Clerk Scott Sidley report.

Background

A recent study by the European Intellectual Property Office estimated that 5 per cent of products imported into the European Union (EU) are counterfeited/pirated. Counterfeiting/piracy has significant impact on the pharmaceutical, tech, music and automotive industries, among others.

After extensive public consultation earlier this year, the European Commission's watch list came into effect on 7 December 2018. The watch list will be updated every two years with names of the most significant online and physical marketplaces outside the EU involved in counterfeiting/piracy.

The list aims to initiate a crackdown on the listed suspect markets, by alerting enforcement authorities, governments and consumers to the threats posed by these marketplaces, and acknowledges the shift to online IP infringement. The watch list addresses four key areas: websites providing copyrighted content, e-commerce platforms, online pharmacies and physical marketplaces.

Alongside the IP initiative, the watch list will also be used to alert European consumers to the safety risks and negative environmental impacts that can be involved in the use and production of products purchased from suspect suppliers.

Implications

The EU Commissioner for Trade, Cecilia Malmström, has been a strong supporter of the introduction of the watch list. Malmström notes that IP infringement is detrimental to the European economy, and that she expects the watch list to provide European companies with 'a level playing field' in trade outside the EU. Law-abiding EU companies are currently forced to compete with organisations and individuals that rely on counterfeiting/piracy, many of which operate unchecked by their domestic regulators. The watch list puts these individuals on notice and encourages regulators to eradicate IP infringement, so that legitimate businesses do not have their business stolen by counterfeiters/pirates.

It is hoped that this initiative will increase consumer awareness around counterfeiting/piracy, as well as encourage marketplace owners, enforcement authorities and governments to stamp out IP infringement. It is also expected to provide some of the most significant benefits to pharmaceutical, tech and car manufacturers, by combating the sale of counterfeits. Online measurers should also benefit digital content creators, with crackdowns on major digital infringers such as BitTorrent sites.

Although the watch list focuses on the EU and the interests of European companies, implementation of the watch list should produce flow-on effects that will benefit other markets around the globe.

While the EU watch list appears to be a positive step in IP protection, its ultimate effectiveness is still to be seen.