China is confirmed to be by far the largest source of counterfeit goods, accounting for 85% of seizures related to online sales and 51% of global offline sales seizures, according to the study by the European Union Intellectual Property Office (EUIPO). and the Organization for Economic Co-operation and Development (OECD) on the impact of Intellectual Property infringement on small and medium-sized enterprises (SMEs).
According to the study, copycats target all types of goods produced by SMEs.
The most common "monkey" products
The products most frequently targeted are electrical machinery and electronics (30% of seizures), clothing (18%), perfumery and cosmetics (10%), and toys and electronic games (also 10 %).
In addition, many of these counterfeit products do not meet standards, often posing threats to the health and safety of consumers.
In terms of the method they use, around half of the counterfeit products seized at EU borders infringing the Intellectual Property rights of SMEs were bought online.
Lower chances of survival at 5 years
The study entitled "Risks of Illicit Trade in Counterfeits to Small and Medium-Sized Firms" points out that SMEs whose Intellectual Property is infringed are less likely (34 %) to survive after 5 years.
This is a particular issue for independent SMEs that are not part of a large conglomerate, as well as for SMEs that suffer from the infringement of their patents.
Patents are Intellectual Property rights that more directly protect innovations. Therefore, attacks against DEs are particularly dangerous for the economy in general, but also for SMEs in particular.
According to the latest SME Scoreboard, 15% of SMEs that hold a registered IP right have been infringed. This percentage is higher among SMEs that have introduced innovations (19,4 % in the case of SMEs that have introduced innovations very new to the world).
Therefore, infringement is a particular problem for small businesses that innovate and create jobs and growth.
The Study published today also examines the countries of origin of counterfeit products that infringe small businesses' Intellectual Property.
What is the treatment of IPR infringement
According to the EUIPO's latest SME Scoreboard, published in September 2022, SMEs that have suffered an IPR infringement find that this has created a negative impact on their business with loss of turnover, loss of reputation and image, as well as loss of competitive advantage.
However, 40% of small and medium-sized businesses admit that they do not monitor their purchases for possible infringement of their IP rights or rely only on random information about the infringement, such as customer comments or information from business partners.
SMEs make up the majority of businesses in the EU (99%) and account for around two thirds of jobs.
To support them, the EUIPO, together with the European Commission and the EU's National and Regional IP Offices, launched a series of initiatives in the field of Intellectual Property, including an SME Fund that provides financial support to small businesses to protect their Intellectual Property rights.
It is worth noting that more than 32.000 SMEs in the EU have already benefited from this Fund.
IP Scan service
As part of the 2023 SME Fund, EUIPO also offers a service, IP Scan (not available in all EU countries).
Based on this service, SMEs are provided with initial guidance on what to do if their Intellectual Property rights are infringed or if they are at risk of being harmed by a competitor.
These initiatives are part of the European Commission's wider action plan on Intellectual Property, which also focuses on fighting counterfeiting and strengthening the enforcement of IP rights.
In this area, the EUIPO supports the development of an EU anti-counterfeiting toolkit, with the aim of improving cooperation and data exchange between rights holders, lawyers and public authorities.
Businesses can also access EUIPO's 'IP Enforcement Portal' tool free of charge. This tool helps businesses manage the enforcement of their IP rights across EU Member States by enabling the secure exchange of information between rights holders and Law Enforcement Authorities, with the aim of seizing counterfeit products.
SOURCE: OT