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Jul 10, 2022
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EU Intellectual Property Office: 'Counterfeiting is not a victimless crime'

Jul 10, 2022

The latest report from the European Union Intellectual Property Office (EUIPO), which surveyed more than 20,000 young people between the ages of 15 and 24, shows a worrying increase in the number of intentional purchases of counterfeit products over the past three years. Julio Laporta, spokesperson and head of communication at the European organization, unpacks the findings of this report, and looks at the causes and consequences of the phenomenon, while offering some keys for fighting this dangerous rising tide. 

The EUIPO has just published a study* suggesting there is currently a boom in the purchase of fake goods, particularly among the younger generation. What are the factors contributing to this phenomenon?

There are certainly several factors involved, but the main reason mentioned by those respondents who bought fakes intentionally was that they were cheaper. So, price, but also availability, remain the main factors for buying counterfeits as well as for digital piracy. Peer and social influence, such as the behavior of family, friends or acquaintances, is also increasingly important for young people. There has been an increase in the proportion of respondents indicating that their friends or other people they know buy fakes. There is also a large share of respondents who simply do not care whether a product is counterfeit or genuine.

AFP: What types of products are subject to counterfeiting?

Julio Laporta: The counterfeit products that young people most commonly buy intentionally are clothes and accessories (17%), footwear (14%), electronic devices (13%), and hygiene, cosmetics, personal care products and perfumes (12%).

AFP: Where do counterfeit products come from?

JL: According to our studies, the main provenance economy of counterfeit goods remains China. Other major sources of fakes include Turkey, the United Arab Emirates and Singapore. Counterfeit products enter the EU via container ships through the biggest ports in Europe, and increasingly via e-commerce and small parcels (counterfeits related to e-commerce are shipped to the EU by mail/post in over 90% of cases). Moreover, when buying a fake product or accessing pirated content we may be contributing to fund organized crime activities. Evidence has confirmed the involvement of organized crime groups in the infringement of IP rights and the link between IP crime and other crimes, such as drug trafficking, forced labor, cybercrime, terrorism, fraud and money laundering.

AFP: At the European level, what kind of legislation is in place to fight counterfeiting?

JL: Several pieces of legislation are in place to fight against counterfeiting and piracy, at national and EU level, but they need to be enforced. Sanctions and penalties for crime involving IP rights should also be dissuasive, should we wish to curb this type of crime. Last year, intellectual property (IP) crime was reinstated as one of the top 10 priorities in the fight against serious and organized crime (EMPACT), published by the Council of the EU. This was a major achievement. IP rights can only be properly exercised when they are properly enforced, and we have seen worrying increases in levels of IP-related crimes in recent years. 

Sustainability is now a central issue in fashion. In this regard, isn't counterfeiting kind of doubly disastrous?

JL: Yes, counterfeit products pose serious risks to the environment as well as to our health. These products usually do not comply with quality and safety standards and they can contain dangerous ingredients or components. From fake medicines and cosmetics, to counterfeit toys, illicit pesticides and even fake food and drinks, these products can certainly damage our health, our safety and the environment. With regard to the environment, we have observed that young respondents mentioned more widely (compared to previous reports) a better understanding of the negative impact on the environment as a deterrent or reason that would curb their behavior.

AFP: Young people are not the only ones turning to counterfeiting. On social networks, we are witnessing the emergence of private groups that also allow wealthy people to buy counterfeit luxury bags. How can such a phenomenon be explained, and how can it be remedied?

JL: We are aware of this phenomenon, as well as the fact that some influencers are actively promoting fake products. Raising awareness on the damage and dangers of counterfeiting and piracy is part of our mission, and we believe that awareness campaigns, research and evidence-based reports in this field continue to be key nowadays. Counterfeiting and piracy is a plague where businesses, creators and consumers are equally losing. The only winners are the criminals. Damages are social and commercial, but also reputational. Consumers usually distance themselves from brands which are vulnerable to counterfeiting or, in this case, will distance themselves from the genuine products: a vicious circle will be created at the detriment of legitimate creators and entrepreneurs -- major brands and luxury brands as well as smaller ones and individual creators.

AFP: You mentioned that some influencers are promoting counterfeit products. How does that amplify the problem?

JL: This is a serious concern. Social media platforms provide users with a vehicle through which to engage in IP-infringing activities without easily being tracked, and they have also created an opportunity for influencers and other public figures to exert significant influence as "trusted others" when it comes to purchasing behaviors, including illegal behavior.

According to our study, influencers are indirectly driving young people towards fakes as they promote and advertise products and goods which youngsters cannot afford. Slightly over one in ten respondents (11%) mentioned recommendations from influencers and/or famous people as a factor motivating their intentional purchase of counterfeits.

AFP: Can NFTs, and more generally the metaverse, offer a solution to counterfeiting?

JL: Yes, we believe NFTs and the metaverse can bring new opportunities in the fight against counterfeiting and piracy. By leveraging blockchain capabilities and derivatives such as NFTs the potential benefits to IP offices are considerable. Blockchain technology has several features that make it unique. It is digitally distributed, decentralized, secure, immutable and trustworthy and makes data on IP rights easily tracked.

Many are already actively exploring possibilities through different initiatives, some of them in close partnership with the EUIPO. Since last year, TMview and DESIGNview, the EUIPO's two flagship search services, use blockchain to bring super-fast, reliable, and secure delivery of IP rights information. And we're also planning an open blockchain-based infrastructure to help fight against product counterfeits in supply chains.

AFP: What advice would you give to young and not so young consumers who might consider buying counterfeit goods in order to acquire "luxury" at a lower cost?

Counterfeiting is not a victimless crime. As I said earlier, some people might not be aware of it, but when buying fakes we help finance organized crime activities. Everyone has a role to play. This problem affects society and we must continue raising awareness in order to support young citizens and consumers in making informed choices when buying products. When purchasing online, consumers should always use trusted sellers, buy on secure sites, check for recent and authentic reviews, look for reliable payment methods, and stay vigilant regarding anything that looks suspicious. Finally if the price is too good to be true, it probably is too good to be true

* The study was conducted among 22,021 people aged 15 to 24 across the European Union.

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