Commission acts against counterfeiting and piracy, January 2003

Europe is a lucrative market for counterfeiters. More than €2 billion worth of counterfeit or pirated articles - some 95 million items - were intercepted at the European Union's external borders in 2001.

It is no longer just luxury goods which are targeted. Copies of ordinary consumer goods are less likely to arouse suspicion, and nearly half of those intercepted in 2001 were basic consumer items such as CDs, DVDs, clothes, condoms, kitchen appliances, shampoo, skin creams, toothpaste and washing powder. Counterfeiters can also endanger consumers' health and safety by producing copies of spare parts for cars, medicines and food (including sweets, champagne, chocolates and coffee).

Health and safety are not the only considerations: according to Commissioner Frits Bolkestein, counterfeiting and piracy can stifle innovation and creativity and have already cost the EU about 200,000 jobs.

On 20 January 2003, in response to growing concerns about the problem, the Commission published a proposal for a Regulation to combat counterfeiting and piracy. There are two main aspects to the proposal: it sets out the conditions under which national customs authorities can intervene when goods are suspected (by the authorities or by the rights holder) to contravene intellectual property rights, and it also says what steps should be taken by the appropriate authorities in cases where goods are found to contravene those rights.

The new Regulation - if adopted - will replace Regulation 3295/94/EC and will, according to the Commission:

• extend the scope of the Regulation to new intellectual property rights (plant variety rights, geographical indications and designations of origin)
• improve the quality of information provided to customs by right holders applying for action
• abolish fees and securities to allow smaller companies cost-free access to the regulation
• extend the scope of the 'ex officio' (own-initiative) procedure to allow customs to act without a prior application for action
• require customs to provide right holders with more detailed and ample information
• allow right holders to be provided with samples for analysis in order to enable the procedure to continue
• reduce costs by giving right holders the option of having fraudulent goods destroyed with the agreement of the person holding or declaring the goods, without having to await the outcome of substantive legal proceedings
• no longer exclude from the scope of the Regulation counterfeit or pirated goods in a traveller's personal baggage within the limits of the duty-free allowance where such goods are suspected to be part of larger-scale trafficking

The BBC reported a Commission official saying that 'the problem of counterfeiting ha[s] been underestimated for years' and that it is 'increasingly ... small and medium-sized firms who [are] losing business to the counterfeiters.' Commissioner Bolkestein said the new Regulation would 'offer a powerful new legal arsenal against the growing problem of counterfeiting and piracy.'

Both the BBC and the Financial Times reported that the Commission's action is driven in part by fears that the Union's forthcoming enlargement will make things worse. The FT quoted Frances Moore of the International Federation of the Phonographic Industry: 'This is a much-needed revision of an existing EU regulation which will step up the fight against piracy and counterfeiting ... [it] is particularly important in view of the EU's forthcoming enlargement where the future external borders will touch some of the leading pirate countries in the world.'

Further initiatives are expected, including a Directive intended to harmonise Member States' laws on intellectual property rights.

Links:
European Commission:
	20.01.03:	Commission proposes to make it easier for customs to act against counterfeiting [IP/03/75]
	Taxation and Customs website
	The fight against counterfeits and piracy
	Text of the proposed Regulation
BBC News Online:
	20.01.03:	EU crackdown on counterfeit goods

Eric Davies
Researcher
Compiled: Tuesday, 21 January 2003

On 20 January 2003, in response to growing concerns about counterfeit goods entering Europe's single market, the European Commission published a proposal for a Regulation to combat counterfeiting and piracy