9 Dec Five counterfeit hotspots in Greece that brand 2019 owners should be aware of

In the latest edition of our regular series on markets around the world that reportedly engage in the trade of fake goods, we head to the historical landscapes of Greece. In an article earlier in the year, The National Herald declared that Greece is “one of the world’s gateways for counterfeit goods”. Reports indicate that fake goods are costing the Greek economy upwards of €1.3 billion annually, representing around 12% of sales for companies most at risk to IP violations, such as those in the pharmaceutical, clothing or cosmetics sectors. For that reason, we reached out to Konstantinos Logaras, founder and attorney-at-law at Logaras & Associates in Athens, who gave insights on how brand owners can effectively tackle fakes goods in Greece, and some of the market places around the country that should be on enforcement radars. In a nutshell, what should a rights holder know about enforcing against counterfeit goods in Greece? Being at the crossroad of three continents and a gateway to Europe, Greece struggles to tackle growing quantities of counterfeit products imported in or transiting the country. Implementing an anti-counterfeit strategy in Greece is an intricate and strenuous exercise which must be devised well in advance and typically involves both experienced attorneys and investigation agencies. Due to its geographical traits, seasonality and particularities of local communities, the enforcement of rights requires a high degree of flexibility and vigilance. The majority of physical counterfeiting activity in Greece is found in popular tourist destinations, notably on the islands’ local markets or trade fairs. Given that the tourist season normally lasts from April to October, this is the period when most action takes place. And as trends shift in tourism, this is also the case with counterfeit hotspots, which may change from season to season. A location with high counterfeit activity in one year may be lower on the priority list the next year. In addition, large distribution among tourist locations means that, apart from higher costs and extra logistics, brand owners often have to deal with small local communities with strong ties among their members. In certain occasions, even group messages in popular messaging platforms have been deployed to inform members/retailers on impending or ensuing actions. Full cooperation of all required parties is not always unproblematic, so maintaining good relationships with key local players always pays off and is crucial for the success of enforcement actions. Still, simultaneous raids in multiple stores in one area, albeit demanding in organising, may be the only option to maximise the effect of said actions. Enforcement actions are commonly initiated by brands owners, following investigations in physical or online markets or after seizures of the competent authorities (eg, criminal or financial police, the Special Secretariat of the Ministry of Finance for Financial and Economic Crime Unit, Coast Guard and Customs). Once fakes are identified, steps are taken to secure evidence and the most efficient way is to file a criminal complaint and raid the infringer’s premises to seize the counterfeit products. Evidence from mystery shopping in combination with witness testimonies may also be an option for evidence in civil proceedings, especially when there are budget limitations. Although damages awarded by civil courts usually cover only a fraction of the total expenses incurred, they may return a significant part of the budget if planned and targeted well. Extrajudicial settlement, especially after mediation becomes mandatory as from 2020, may also be key to a successful anti-counterfeiting strategy. A preliminary injunction is also an option to temporarily cease infringements rather than seizing fakes, because in practice defendants are always notified and heard before a preliminary order is issued. In principle, civil proceedings come to an end sooner than criminal, not only because the procedure itself is more expedite, but also because civil proceedings seldom reach second instance. Brand owners should consider allocating their budget in accordance with their available resources and specific needs. A full-scale strategy, including civil actions, criminal prosecution, custom interventions and coordination with competent authorities, is more expensive but also has the most direct impact and occasionally bigger returns. On the other hand, focusing on C&D letters or simply following up on ex officio actions of competent authorities is cost-effective and may still bring satisfactory results. It should be noted that owners of EU trademarks are entitled to bring civil actions before the EU trademarks courts in Athens or Thessaloniki even if the defendants are not domiciled there. This not only reduces costs but also ensures that the cases will be tried by an experienced panel of judges. In addition, very often this is a contributing factor to extrajudicial settlements since defendants are less eager to litigate in a location far from their domicile. Therefore, owning an EU trademark registration may be key to a quick positive outcome. Eventually, a consistent strategy through the years pays off and brand owners will notice a significant drop in numbers of counterfeits and a higher awareness among consumers, merchants and the authorities. Does landlord liability exist in Greece? Greece being a member state of the EU has transposed Article 11 of Directive 2004/48/EC (and Article 8(3) of Directive 2001/29/EC) by virtue of which an intermediary whose services are used by a third party in order to infringe an intellectual property right may be ordered to take measures aimed at bringing those infringements to an end. More particularly, Greek trademark law stipulates that brand owners can request intermediaries to remove from trade counterfeit products, including materials used for the trademark infringement. According to the CJEU’s decision in Tommy Hilfiger Licensing LLC at Al. v Delta Center A.S. (7 July 2016, C- 494/15), the above liability may be applied also to intermediaries in physical marketplaces, namely landlords. Depending on the circumstances, further liability for indemnification of damages may be established.

Counterfeit hotspots you should know in Greece:

Aghia Varvara

Location: Aghia Varvara is a suburb in the west side of Athens' metropolitan area, where a significant number of people of Roma ethnicity reside. The main market is located in El.Venizelou street, where the majority of counterfeit activity is observed (map link). Counterfeit risk factor: Very high Fakes know to be sold there: All kind of counterfeit products can be found there including footwear, apparel, leather goods, accessories (eg, bags, belts, sunglasses, watches, scarves etc). Challenges of enforcement at this marketplace: Higher crime rate in the area means that small scale actions, ie, in retail stores, will be very challenging, since it will be difficult to prompt the necessary force from police authorities. However, larger scale actions will have better chances of success. Recommendations for brand owners: No spontaneous or stand-alone actions are recommended in the area. Very often, the financial crime authorities, with the assistance of police forces, raid the area on various occasions. In one recent large-scale action in September 2019, the financial police found and seized approximately 10,000 counterfeit products together with fake coins, guns and ammunition. Coordination with state authorities and following up on their actions is the recommended course of action for this area. Aghia Varvara is located in the west side of Athens

Hersonissos, Stalida, Malia

Location: The seaside tourist villages of Hersonissos (Limenas), Stalida and Malia are located near Heraklion on the island of Crete. The area attracts large number of tourists, mainly from the United Kingdom and Scandinavian countries (map link for Hersonissos, Stalida and Malia). Counterfeit risk factor: Very high Fakes know to be sold there: Apparel, footwear, leather goods and accessories. Generally, counterfeits of luxury brands are sold at very high prices, defrauding even informed consumers. Challenges of enforcement at this marketplace: Many small stores or warehouses are located in a very large area, which results in small quantities found in each occasion. The local police department has a limited capacity, especially during high season, and might not be in position to accommodate multiple actions. Infringers are often acquainted or related and will notify each other in case of ensuing actions. Recommendations to brand owners: It is crucial for brand owners to identify the key infringers, in the area, both at retail and/or wholesale level, and organise repeated, targeted and, where possible, simultaneous actions throughout the season. Many stores are owned by the same persons so good research will unveil such connection and will make the actions more efficient. In addition, due to the large number of tourists in summer months, raids take place at days and times with least traffic, otherwise it may become difficult to monitor the raid and arrange seizure and removal of the counterfeit products. Very often warehouses are in proximity with the stores, therefore a thorough research may lead to further counterfeit quantities. Ex officio actions in stores are not common, because authorities are mostly focused on the nearby Heraklion port, aiming at larger quantities. However, commonly, evidence from such actions is linked with local whole or retailers, therefore, follow up investigation may lead to useful findings and targeted actions.

Faliraki, Rhodes

Location: Faliraki is a seaside village and popular tourist destination located on the northeast side of the island and approximately 15km south of Rhodes town (map link). Counterfeit risk factor: High Fakes know to be sold there: Apparel, leather goods and accessories (eg, bags, watches). Challenges of enforcement at this marketplace: Rhodes has seen a significant improvement over the last few years in the quantities of counterfeits found on the island, but still remains one of the hotspots in Greece. Its proximity to Turkey, where may counterfeits are manufactured, makes it very easy for wholesalers to flood the local market with fakes in no time. In addition, counterfeits follow tourist trends, which means different areas are in the spotlight at different times Recommendations to brand owners: A full package of actions, including civil actions, is recommended for action in Rhodes. Apart from well-staffed police departments Rhodes has a central court for the entire area of Dodecanese and carrying out multi-level action is easier and thus recommended. Some of the highest amounts awarded by courts have been enforced in the area, because property of infringers is easier to be traced.

Faliraki is known for its long sandy beach, lively nightlife and fake goods

Zakynthos island

Location: Two hotspots are found on the island of Zakynthos. The first is located near the airport area and stretches along the sea road from Kalamaki village to Laganas village and the second is north west of the capital town of the island, named Tsilivi. All of these villages are popular tourist resorts with small stores, bars and restaurants. (map link for Kalamaki, Laganas and Tsilivi). Counterfeit risk factor: High Fakes know to be sold there: Mostly apparel, footwear and accessories (eg, belts, bags, mobile phone cases). Challenges of enforcement at this marketplace: Strong local sentiments mean that absolute discreetness and confidentiality are key elements for the success of any action. Shops are relatively small and sparsely located, which makes simultaneous enforcement actions challenging. Understaffed police department - coupled with large tourist numbers and high criminality - mean that actions against counterfeits are relatively low on the priority list of enforcement authorities. Zakynthos is not on the spotlight of financial crime or police authorities, therefore brand owners must rely almost entirely on their initiatives. Although there is a direct flight connection with Athens, the island is relatively remote, and it may be quite demanding to organise last minute seizure. Recommendations to brand owners: Planning of actions early in the season, as soon as the first stores open, will get the message early enough to the entire market. Targeted actions throughout the season will maintain the momentum and raise awareness among traders. Due to the small size of the stores in the area, C&D letters may be the best option. In case of persistent infringers, criminal and/or civil proceedings should follow, as recidivists are usually treated stricter by courts. Commonly, store owners run the business, so intelligence must be gathered to ensure that they are found in the store when a raid takes place and not just their employees. Tsilivi is located on the west of Zakynthos island

Sidari, Corfu

Location: Sidari is a tourist village in the northwest edge of Corfu island (map link). Counterfeit risk factor: Average Fakes know to be sold there: Apparel and accessories (eg, bags, belts, scarves, watches). Challenges of enforcement at this marketplace: Sidari is located 45km from Corfu town, which is the administration centre of the island, meaning that many of the logistics of possible actions have to be arranged from a significant distance. Again, counterfeits are found in low quantities in small tourist shops, making it difficult to organise large scale operations. Therefore, a seizure to a small shop in the area may lead to the disclosure of disproportionally larger warehouses, which serve not only the local market but also the entire island. Recommendations to brand owners: Cease-and-desist letters are the optimal course of action in this area. Starting from smaller to larger premises is a good strategy in an area as remote as Sidari. Local authorities will do their best to accommodate all requests for assistance in raid actions, however, their availability in high season will not be granted. Actions at beginning and end of the tourist season will always be encouraged and generally entail the least logistics and costs. Selective actions mid-season will be more challenging but may also bring very good results.

Read previous articles from this series:

Africa and Middle East – Ethiopia, Kenya and Morocco Americas – Argentina, Brazil (part one) (part two), Canada, Chile, Colombia, Dominican Republic, Ecuador, Nicaragua, Paraguay, United States (New York) and Uruguay. Asia Pacific – Australia & New Zealand, Cambodia, Indonesia, Kazakhstan, Myanmar, Nepal, Russia, Taiwan, Thailand and Vietnam Europe – Cyprus, Czech Republic, Malta, Portugal, Scotland, Turkey and Ukraine

If you can share insights on the counterfeit hotspots in your jurisdiction, contact WTR senior reporter Tim Lince.