No more counterfeiters! Chanel, Apple, Bayer, LVMH (and more) write to President Juncker on revision to IP Enforcement Directive

Pair enough monkeys with typewriters and you get Shakespeare.
Pair one Kat with a typewriter and you get
instructions to an assistant to purchase
copies of Shakespeare...

Last week, a group of around 80 of the world’s best known consumer brands wrote to the President of the European Commission calling for action in tackling counterfeiters. A different Cat, Catriona MacLeod (Bristows), explains what it is that is concerning mega-brands like Adidas, Apple, BASF, Bayer, Chanel, Christian Dior, Dyson, Kellogg’s, Lego, L’Oreal, LVMH, Mattel, Michelin, Nike, Philips, Reckitt Benckiser, Servier and Coca-Cola.  Cat reports:  

"The letter, which was tweeted by the European Brands Association after being sent to Jean-Claude Juncker on 31 January 2017, aims at encouraging the Commission to take advantage of the upcoming revision to the IP Rights Enforcement Directive (IPRED) to modernise existing rules and ensure that all levels of the distribution chain take an active role in addressing counterfeits. 

A summary of key points are as follows:

• The brand owners recognise the Commission’s commitment to boosting jobs, growth and investment in the EU. They refer to increasing reliance of European businesses on innovation and creativity to compete in the global market place, and the problems faced by SMEs lacking resources to combat IP infringement.

• Citing the growth of counterfeiting as a major obstacle to the creation of a safe and sustainable environment for businesses and consumers, the letter notes global trade in counterfeit and pirated goods to the value of €411 billion in 2013 (the equivalent of the GDP of Austria). €116 billion of was comprised of imports into the EU. The consequences – say the brand owners – go beyond the negative impact on brand image, the economy, jobs and tax revenues.

• Counterfeit goods remain part of an increasingly professionalised business model and are key facilitators and financers of organised crime. They pose a serious threat to public health and safety: their manufacture escapes any type of certification, norms and quality checks. Counterfeiters are now able to reach and to mislead consumers more easily than ever before online, posing as genuine companies in ways not possible without large investments in the physical world.

• The proliferation of counterfeiting has been accentuated by the emergence over the past two decades of intermediaries – a platform between the manufacturer and the final consumer. Specifically, social media, delivery companies, domain name registrars, search engines, marketplaces and payment services – have a privileged position in the online distribution value chain. Therefore, they should contribute to the fight against counterfeiting by taking proactive, proportionate and effective measures to prevent the marketing, promotion and distribution of counterfeited goods. Such an obligation should be flexible and future-proof, allowing intermediaries to choose the best way to play their part. With their collaboration and with the implementation of technical solutions at their disposal, it would be possible to find appropriate and proportionate ways to prevent those products from reaching the market in the first place, without risking the liability exemptions which underlie the rapid growth of the Internet. Indeed, under such an obligation, provided that intermediaries have put in place effective preventive measures, they would not be responsible for the presence of counterfeited products on their platform.

• The letter reminds the Commission of an announcement it made last year, that it would “assess the role intermediaries can play in the protection of intellectual property rights, including in relation to counterfeit goods, and will consider amending the specific legal framework for enforcement”, in the context of the evaluation and modernisation of the enforcement of IP rights. It goes on to cite the preliminary results of a recent public consultation on the same issues – indicating that “Member States and right holders believed that intermediaries should play an important role in enforcing IPR”.

• Then comes the call to action: that the Commission take advantage of the upcoming revision of the IPRED to modernise the existing rules and to ensure that all actors in the distribution chain take an active part in addressing this issue and join forces against the presence of illicit goods in the online and offline environments.

It is understood from some reports that IPRED reform had (at least for now) been placed on the back-burner by the Commission, but whether that status will remain in light of such clear signal of the need for change from many multi-national brand owners in the counterfeiting space remains to be seen."