EU to tackle growing counterfeit problem

Food products are now among the most frequently pirated consumer products in the EU, according to the Commission, a marked shift in practice by counterfeiters who had previously focused their efforts almost exclusively on luxury items.

Figures just published by the European Commission show that customs seized almost 85 million counterfeit or pirated articles at the EU's external border in 2002 and 50 million in the first half of 2003. As well as food, other consumer goods popular with the counterfeiters were medicines, mobile phones and batteries.

Since these counterfeit products are not subject to safety checks, they represent a danger to the health and safety of consumers, according to the Commission, prompting the decision to tighten the rules.

"The latest figures speak volumes: all everyday consumer products are now potential targets for counterfeiting and pirating,"​ said EU customs commissioner Frits Bolkestein. "We are increasingly finding ourselves seizing everyday products, from tea to spinning tops and mobile phones. These products are dangerous because there is no guarantee that they meet safety standards. We must therefore be vigilant, and we are doing everything we can to this end."​

Most of the counterfeit goods (66 per cent) seized in 2002 came from Asia (Thailand and China in particular), the same as in 2001, the Commission data showed.

As counterfeiters become more sophisticated, changing their approach to target new products and using an increasing number of media to transport their pirated products, so does the legislation designed to help customs officials stop these goods from reaching European consumers have to become more rigorous.

Some 1600 applications for action (lodged by right holders empowering customs to act against counterfeiters) were made in 2002, almost twice as many as in 2000. This, the Commission argues, shows how successful the customs authorities have been in their efforts to inform right holders of the part they can play in tackling such fraud.

The overall figure is nevertheless marginal when compared with the number of rights registered each year, especially since counterfeiters are increasingly infringing rights held by SMEs. Almost 60 per cent of counterfeit goods seized in 2002 bore brands other than the seven big ones named in each product sector. This shows that the counterfeiters have moved away from big-name brands towards anything that will sell.

But the new legislation, agreed in July and due to come into force on 1 July 2004, should allow customs officials for the first time to pre-empt the counterfeiters rather than react to the growing number of pirated products.

The new law builds on existing legislation, extending it to cover new property rights (including plant varieties, geographical indications and designations of origin - very important for the food and drink industry) with a view to increasing consumer protection. It also improves the quality of information to be provided by right holders to customs when applying for action. Lastly, it facilitates SMEs' recourse to the protection of the regulation (in particular by requiring no fees or guarantees).

But with the EU set to become 25 countries in 2004, more work is also needed to harmonise the detection of counterfeit goods in the 10 new Member States. Russia is increasingly becoming a source of counterfeit products, and there is clearly a fear that goods from there will pass more easily into the EU once its borders have been extended. There is also concern that the accession countries are not as adept at spotting counterfeit goods from other countries as the existing EU nations.

The Commission has also presented a proposal for a Directive on enforcement of intellectual property rights, aimed at harmonising national legislation on enforcement and establishing a broad framework for the exchange of information between the competent national authorities. If adopted, the Directive would guarantee equal rights for all right holders in the EU, reinforce measures against offenders and so, hopefully, deter counterfeiters and pirates.