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The Challenges from Social Media for Intellectual Property Rights

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The Challenges from Social Media for Intellectual Property Rights Share and Share Alike The Challenges from Social Media for Intellectual Property Rights Research commissioned by the Intellectual Property Office and carried out by: Dennis Collopy and Dr. Tim Drye with contributions from Florian Koempel, Peter Jenner and Chris Carey Submitted version: 20/07/2017 This is an independent report commissioned by the Intellectual Property Office (IPO). Findings and opinions are those of the researchers, not necessarily the views of the IPO or the Government. © Crown copyright 2017 Intellectual Property Office is an operating name of the Patent Office 2017/05 A study conducted by a unique team of academic and industry based ISBN: 978-1-910790-30-4 researchers Share and Share Alike The Challenges from Social Media for Intellectual Property Rights UNIVERSITY OF HERTFORDSHIRE Published by The Intellectual Property Office August 2017 The University of Hertfordshire (UH), the UK’s leading business-facing University, is among the most successful new universities in the UK, with 1 2 3 4 5 6 7 8 9 10 a flourishing student community of over 27,700, including more than © Crown Copyright 2017 2,900 international students from over 85 different countries. You may re-use this information (excluding logos) free of charge in any format or medium, under the UH’s Music and Entertainment Industry Research Group focuses on UK terms of the Open Government Licence. To view and international creative industries-relevant research. this licence, visit http://www.nationalarchives.gov. uk/doc/open-government-licence/ www.herts.ac.uk/research/ssahri/research-areas/music/meirg or email: [email protected] Where we have identified any third party copyright information you will need to obtain permission from AUDIENCENET the copyright holders concerned. Any enquiries regarding this publication should be Audiencenet (AN) -a fully accredited market research agency uses state- sent to: of-the-art technology to derive deep and meaningful consumer insights. The Intellectual Property Office Concept House AudienceNet measures and segments audiences/markets statistically Cardiff Road (across territories), then builds bespoke online communities that are a Newport NP10 8QQ microcosm of the target market. Tel: 0300 300 2000 Fax: 01633 817 777 www.audiencenet.co.uk e-mail: [email protected] This publication is available from our website at www.ipo.gov.uk Contents Executive Summary ............................................................................................................................. 4 Background and objectives ................................................................................................................ 8 Background ............................................................................................................................................ 8 Aims and objectives ................................................................................................................................ 8 Methods used and structure of research ........................................................................................... 9 Methods ................................................................................................................................................. 9 Research structure .................................................................................................................................. 9 Research Outcomes Phase 1 ............................................................................................................ 13 Scale of infringement ............................................................................................................................ 13 Impact of Infringement .......................................................................................................................... 21 Characteristics of Infringement .............................................................................................................. 23 Opportunities for IP ............................................................................................................................... 27 Phase 2: Consumer tracker and survey results ............................................................................... 34 Phase 3 Assessing the harm of purchasing counterfeit products using social media ................. 51 Summary, Recommendations and Conclusions .............................................................................. 55 Appendices ......................................................................................................................................... 59 Industry Survey Responses ................................................................................................................... 60 Enforcement Agency Survey Responses ............................................................................................... 83 Technology Firms’ Survey Responses.................................................................................................... 87 Consumer Tracker and Survey Results and Analysis .............................................................................. 95 Other Economic Models and Approaches .......................................................................................... 118 Bibliography ........................................................................................................................................ 126 Executive Summary 1.1 Motivation for the study The reliance on social media has increased in recent years, with the British Population Survey showing that over 50% of consumers used social media in 2015. Whilst social media has allowed creative content businesses to be able to engage directly with their audience on a commercial and non-commercial basis, there are challenges. Social media provides an avenue and route for would be consumers to be diverted to on-line sites selling infringing content, and evidence from Trading Standards indicates that social media sites were the second most common ‘location’ for investigations into counterfeiting. It is clear therefore, that the impact of social media on Intellectual Property (IP) has grown, as information and websites on counterfeit goods are accessed and shared; yet there is little, if any, research or dependable data on this issue. Against this backdrop, the Intellectual Property Office (IPO), responsible for supporting and understanding IP Enforcement, has wanted to gain an accurate picture on the impact that social media is having on IP rights holders and consumers of IP. 1.2 Objectives The main objectives of this research were: • to assess the role that social media plays in the sale and distribution of counterfeited and pirated physical goods from six representative sectors: alcohol, cigarettes, clothing, footwear, perfume and watches.; • to estimate recent levels of counterfeiting within the UK; • to understand the extent to which this is moving online; and • to gauge how it is helped to do so by online social media platforms. • The study specifically aimed to assess the scale, impact and characteristics of infringements, as well as opportunities for IP infringement. The Challenges from Social Media for Intellectual Property Rights 1 1.3 Method The project was divided into three distinct phases: Phase 1: Review of literature, government and industry data This phase involved a review of literature; the collation of recent industry and government seizure statistics; interviews with key representatives from industry and government enforcement agencies; structured surveys with executives from the six key sectors identified as being most impacted by social media; and finally interviews with the three main social media platforms: Google, Twitter and Facebook. Phase 2: Tracker method and consumer survey a) Tracker An online tracker of 12 products, two from six chosen sectors (alcohol, cigarettes, clothing, footwear, perfume and watches), followed links to determine and assess what proportion were directed towards either legitimate or infringing resources. The team designed and developed monitoring tools to locate, track and trace the possible infringement of physical items on Facebook, Twitter and Google. b) Consumer survey A 3,000-respondent online survey, complemented by an offline survey focused on the proportion of social media-triggered purchases ‘at risk’ of being infringing. The survey identified the proportion of those actively engaging with social media; and asked whether their last purchase had been prompted by a recommendation on social media and how confident they were that the purchase was legitimate. Phase 3: Assessing the harm of purchasing counterfeit products using social media. The industry surveys were designed to: • look at the levels of harm from social media-facilitated counterfeiting; • assess the damage to high and mid-range products; • examine the direct and indirect damage from counterfeiting to industry, government and consumers; and • assess the impact of social media and online platforms on the reputations of the brand owners; As part of this work we also considered the models available for estimating the impact of social media on counterfeiting, particularly in relation to complicit and deceived consumers who typically purchase obvious and non-obvious copies respectively. 2 The Challenges from Social Media for Intellectual Property Rights 1.4 Research Findings 1.4.1 Phase 1 Research Outcomes The literature review, and responses to our
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