A complete picture of the economic impact of counterfeiting and piracy

Following the publication of several major studies on the contribution to economic performance and employment of intellectual property rights intensive industries and citizens' perceptions of IP in the European Union, the importance of intellectual property to society has become more and more apparent. The increasing importance of IP and IP rights in the modern economy also means that the opportunities for infringement and the potential damage to the economy are greater than ever. At the Observatory we are working to offer a complete picture of this phenomenon by assessing the economic impact of counterfeiting and piracy in different sectors and geographical areas.

 

Joint EUIPO/OECD report

In collaboration with the Organisation for Economic Co-operation and Development (OECD), the Observatory has developed a series of studies examining various aspects of international trade in counterfeit and pirated goods

 

Latest study

Dangerous Fakes - Trade in counterfeit goods that pose health, safety and environmental risks
Publication date: March 2022

 

This study quantitatively assesses the scope and trends of the trade in counterfeit products that pose health, safety and environmental threats. It is based on an analysis of a unique international set of customs seizure data and other enforcement data, combined with structured interviews with enforcement experts. In principle, all counterfeit goods are risky and can pose some threats to users. To take into account different degrees of risk, the study introduces two specific approaches to determine the scope of dangerous fakes.

The broad approach considers the goods that need to meet product specific safety standards. Using this approach, one finds that apparel products, automotive spare parts, optical and medical apparatuses, as well as pharmaceuticals are the most frequently occurring dangerous counterfeits.

A more focused, narrow approach looks only at foodstuffs, pharmaceuticals, cosmetics and goods’ categories that have been most frequently subject of safety alerts and recalls. This approach reveals that the most commonly traded product categories of dangerous fakes were perfumery and cosmetics, clothing, toys, automotive spare parts and pharmaceuticals.

 

A Report on Infringement of Protected Geographical Indications for Wine, Spirits, Agricultural Products and Foodstuffs in the European Union supplements the joint EUIPO/OECD report. The main objective of this study is to assess the size and value of the EU GI product market and the proportion of products in that market that infringe GIs protected in the EU. The impact of these infringements on EU consumers was also estimated, with a loss evaluated at up to EUR 2.3 billion.

Infringement of Protected Geographical Indications for wine, spirits, agricultural products and foodstuffs in the European Union

 

These studies examine the extent of online infringement of copyright in the EU. Specifically, illicit access to copyright-protected films, TV series and music is analysed.

Online copyright infringement in the European Union – Music, Films and TV (2017-2020), Trends and Drivers

Online copyright infringement in the European Union title-level study: film, music and tv 2020

Online copyright infringement in the European Union 2019

 

Impact of counterfeiting and piracy: Sectorial studies

 

Methodology

The very nature of the phenomenon of counterfeiting and piracy makes it extremely challenging to reliably quantify, as obtaining data for a secretive activity is by nature difficult. In the past, many attempts to quantify the scale of counterfeiting and its consequences for society as a whole have suffered from the absence of a consensual and consistent methodology for collecting and analysing data across various sectors. To help overcome these challenges while taking fully into account methodological constraints, the Observatory has developed a specific approach to be applied to all industry sectors.

Variations between forecast sales and actual sales by sector are analysed for each European Union country. The statistical techniques used include economic and social factors which allow the researcher to estimate the amount of sales lost by IPR holders due to counterfeiting, as well as loss of employment in the affected sector.