The import of counterfeit goods into Europe continues to be a major concern for both brands and consumers. The EU Commission’s annual report on customs actions to enforce IP rights states that EU Customs detained almost 40 million products suspected of violating IP rights in 2012. The figure is lower than in 2011, but the value of the intercepted goods is still high – at nearly €1 billion.
As we explain below, Brands should actively engage with customs to take action against counterfeit goods that could damage their sales potential and reputation.
China is main source of counterfeits
The Commission’s report contains details about type, provenance and transport method of detained fake goods. Cigarettes are at the top of the list of detained articles (31%), followed by “other goods” (e.g., bottles, lamps, glue, batteries, washing powder) (11%), packaging materials (9%), clothing (8%), toys (4%) and perfumes and cosmetics (3%).
As in previous years, China remains the main source of goods infringing IP rights. However, other countries were the main source of certain product sectors – e.g. Morocco was the main source of counterfeit food items, while most counterfeit CD/DVDs and electronic cigarettes were from Hong Kong.
Most violations concern trademarks
The vast majority of articles detained by customs in 2012 were suspected of infringing a Community or national trademark (94%). A variety of products were suspected of breaching design and model rights, particularly toys, body care items (such as razor blades or brush heads), watches and shoes (2.47%). A small portion of detained items related to suspected patent breaches (2.04% – mainly medicines and audio/video equipment) or copyright infringements (1.17% – mostly toys, clothing and CD/DVDs).
Brands should get actively engaged
Fake goods, often of inferior quality, not only compromise a brand owner’s full sales potential, but can also damage a brand’s reputation. The reputational risk could be considerable, particularly if consumers face safety and health risks from counterfeit food, cosmetics, perfumes, medicines or electronics.
Although EU customs authorities have the mandate to intervene at their own initiative if they suspect an IP rights infringement, brands may also pro-actively engage in enforcing their rights at the EU borders. Brand owners can lodge an “application for action” (on a national or on a EU-wide basis), requesting that customs take action where they suspect IP is infringed. An increasing number of brand owners are making such applications – in the last decade the number of applications has risen from roughly 1,500 annually to more than 23,000 in 2012.
Collaboration with customs can be an important pillar of a right-holder’s IP rights enforcement strategy, preventing counterfeits from entering into the EU market. Brands should pay special attention to the quality of the information provided in applications for action that they submit, as customs needs complete and accurate information to easily identify fake goods at the EU’s borders. In 2012, the detained items in 90% of cases were fake goods that were eventually destroyed.