Better coordination is tackling the rise in IP crime
The highest level of seizures of counterfeit goods by HM Revenue and Customs (HMRC) and the UK Border Force for three years, worth an estimated £70 million, spearheaded the UK’s response to the growing and complex issue of intellectual property (IP) crime, according to the annual IP Crime Report, published today.
Assessing the impact of IP crime is difficult [this is a colossal understatement, since both the scale of IP crime itself and its effect on the national legitimate and black economies are hard to pin down, even in retrospect], but figures from Business Action to Stop Counterfeiting and Piracy (BASCAP) estimate that it costs the UK around €500 million in lost tax revenue [Merpel wishes it wasn't such a neat, round sum: something like €497.83 million might be less, but it sounds so much more authentic] and welfare payments and results in around 15,000 jobs losses a year in the short term.
The production of fake goods remains the key activity of IP crime, with clothing, cigarettes, DVDs, alcohol and footwear being the most common counterfeit items [two of these five categories -- alcohol and cigarettes -- are highly taxed and therefore offer infringers the best prospect of a good return on their investment; another two -- clothing and footwear -- have both luxury and bargain basement legitimate markets, of which the former are by far the more vulnerable. Trade in fake DVDs may have been more driven by consumer demand for not-yet-released products than by price differentials alone but, with the advent of new technologies, the IPKat thinks this is one area in which trade in fakes is likely to tail off]. But with the growth in digital content and services, and the borderless nature of the internet, there has been a corresponding rise in digital crime.
The report also highlights the threat to consumers posed by potentially harmful fake products such as toys, batteries, cosmetics and electrical goods.
A more strategic approach to enforcement, through an updated IP crime strategy published last year, and more effective coordination of key bodies including local trading standards, HMRC and the UK Border Force, is yielding results. The report reveals the success of coordinated action being taken by Government, industry and enforcement agencies to tackle IP crime, for example:
- HMRC and Customs and Border Force together detained counterfeit goods arriving into the UK with a value of £70 million.
- In one operation, trading standards seized fake branded golf equipment and computer accessories worth over £1.5 million. This prevented criminals from making a £7 million profit and led to the conviction of six people for money laundering and fraud.
With the internet and social media networks increasingly being used by criminals as a route to sell their counterfeit products, the industry has responded with:
- An online trader of counterfeit and unlicensed medicines was convicted and ordered by the Crown Court to repay £14.4 million from the proceeds of his crime. Led by the Medicines and Healthcare products Regulatory Agency (MHRA) and assisted by the North West Regional Asset Recovery Team, this is the largest confiscation order for counterfeit medicines [this should be drawn to the attention of cynics who say that allegations relating to fake medicines are just scaremongering].
- The Publishers Association issuing over 200,000 takedown notices of infringing copyright content on websites [It would be good to know how many of these relate to criminal, rather than civil wrongs. Also, the ease with which consumers have been able to help themselves to content without payment is something that cuts into commercial infringers' margins as well as legitimate traders']
- The British Recorded Music Industry (BPI) identifying and removing over four million illegally hosted digital music files. ...
The Intellectual Property Office has launched a ‘Best Practice’ web page, bringing together advice for businesses, consumers and enforcement agencies on protecting and enforcing IP rights; including the IP Crime Group’s Preventing IP Right Infringement in the Workplace e-guide to aid the prevention of infringing others’ IP rights.The IPKat is pleased to see that cooperation and coordination works better than everyone going off and doing their own thing. That is why he has been arguing for some time that it's a good idea to look closely at the United States model of the Intellectual Property Enforcement Coordinator, a well-resourced and carefully-thought-out office to conduct and monitor coordination of diverse interests and agencies (see earlier posts here, here and here for some information on the IPEC).