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Survey on Counterfeit Packaging Material OBSERVATORY Survey on counterfeit labels and packaging materials - Asurvey SURVEY ON COUNTERFEIT LABELS AND PACKAGING MATERIALS Analysis and Results 1/10/2020 DIN: 0094895743 Page 1 of 15 Survey on counterfeit labels and packaging materials Survey on Counterfeit Labels and Packaging Materials – Analysis and Results Background Counterfeiting of labels and packaging materials is an emerging threat in intellectual property rights infringements, as it is the indicator of delocalised, multiphase and well-organised supply chains of illegal products. Moreover, the importation of packaging might reveal the national manufacture of fake products that are finally assembled with their labels on local premises. The import of fake packaging seriously affects the EU. In 2018 this category of products appeared as the largest in terms of number of detained articles in the statistics of seizures at the borders, with packaging materials constituting 9 % of all the detained articles together with a further 9 % of labels, tags, and stickers (1). Europol and the EUIPO confirmed this trend in their joint threat assessment on intellectual property crime that was published in 2019 (2). Despite the high number of cases reported, serious information gaps still exist on the modus operandi, enforcement reaction and criminal market for counterfeit packaging materials. The present paper contains the analysis of the results of a survey aimed at filling those gaps, carried out by the EUIPO’s European Observatory on Infringements of Intellectual Property (the Observatory) in collaboration with Europol for the Council of the European Union’s Customs Cooperation Working Party (CCWP). Framework of the survey As one of the Council’s preparatory bodies, the CCWP deals with operational cooperation between national customs administrations, with a view to increasing their enforcement capabilities. In the framework of police cooperation as established by Article 87 of the TFEU3, it focuses on seeking results in terms of seizures, identification of new threats and disruption of criminal gangs. (1) European Commission (2019). Report on the EU customs enforcement of intellectual property rights: Results at the EU border, 2018. Available at: https://ec.europa.eu/taxation_customs/business/customs- controls/counterfeit-piracy-other-ipr-violations/ipr-infringements-facts-figures_en (2) Europol-EUIPO (2019). Intellectual Property Crime Threat Assessment 2019. Available at: https://euipo.europa.eu/tunnel-web/secure/webdav/guest/document_library/observatory/documents/ reports/2019_IP_Crime_Threat_Assessment_Report/2019_IP_Crime_Threat_Assessment_Report.pdf (3) The Treaty on the Functioning of the European Union, OJ C n. 203 of 7.6.2016 (consolidated version; http://data.europa.eu/eli/treaty/euratom_2016/2019-05-01). DIN: 0094895743 Page 2 of 15 Survey on counterfeit labels and packaging materials The CCWP works under biannual action plans built, amongst others, on the inputs provided by different institutions and agencies which closely cooperate with it, such as Europol, the European Anti-Fraud Office (OLAF), Frontex and the EUIPO as regards IPR related matters. The CCWP 9th Action Plan (2018-2019) included an action focusing on the counterfeiting of labels and packaging materials for which the collaboration of the Observatory was sought. The action’s mandate included a comprehensive analysis and assessment of data on detentions of counterfeit packaging items carried out by customs at the EU border and by other law enforcement authorities within the internal market. On the Observatory’s proposal, the survey was extended to the private sector in order to have the rights holders’ viewpoint. Methodology The survey covered the period from 1 July 2016 to 1 July 2018. For the data collection, the Observatory, in collaboration with the CCWP project leader from the Bulgarian Customs authority, prepared two questionnaires: one for law enforcement authorities (LEAs) and the other for rights holders. For the private sector questionnaire, advice was sought from representatives of rights holders associations in the Observatory’s network, aimed at pinpointing relevant aspects that could not be addressed through the EU authorities (non-EU border seizures, market seizures in non-EU territories, etc.). Regarding the LEAs, data was also collected from police and market surveillance authorities, in order to gain wider knowledge about the itineraries and follow-up of illegal shipments. In addition, far from being a mere repetition of the customs statistics already available in the COPIS database (4), the questionnaire for enforcers focused on aspects such as the handling of unbranded products, combined shipments or lots of labels and products, local activities detected, follow-up investigations on local criminal actions, collaboration with rights holders, etc. The questionnaires, approved by the CCWP, were circulated in January 2019 for online completion via the EUIPO’s systems. All EU Member States’ Customs administrations (4) The Anti-Counterfeiting and Anti-Piracy System (or ‘COPIS’) is the central database established by Regulation (EU) No 608/2013 of the European Parliament and of the Council of 12 June 2013 concerning customs enforcement of intellectual property rights, to collect data from customs detentions of goods suspected of infringing an IP right. DIN: 0094895743 Page 3 of 15 Survey on counterfeit labels and packaging materials received the questionnaire through the CCWP, while Europol circulated it through its network of national contact points. The Observatory compiled the results of the questionnaire. Based on those results, the CCWP, together with Europol, drafted a final report that was approved by the CCWP in March 2020. Although the CCWP acknowledged that there was room for following up, on that occasion no further action was decided by Customs due to organisational reasons and the scarcity of resources reported by Member States. Building on the data collected and the overall contributions of all the participants in the project, and Europol in particular, this paper aims to provide the Observatory’s stakeholders with an overview of the results of the survey. The respondents Regarding the LEAs, as expected Customs reacted more than other authorities. Of the 35 questionnaires returned, 25 were from Customs, 9 from police authorities and 1 from a consumer rights protection authority. They represented almost all of the EU Member States. Fig. 1 – Respondent law enforcement authorities DIN: 0094895743 Page 4 of 15 Survey on counterfeit labels and packaging materials From the private sector, a total of 72 questionnaires were returned by IP rights holders active in different product sectors, as represented in the chart below. Fig. 2 – Respondent rights holders’ field of work The scale of the problem To facilitate the reading, in this report the generic term ‘packaging materials’ is used for all of the relevant items: labels, logos, bags, tags and other packaging materials. It can be said that the detection of fake packaging materials is equally frequent among EU LEAs and rights holders. As regards the former, 77 % of the authorities that returned the questionnaire reported that they had made a detention of these items during the period concerned. Among the LEAs, Customs reported more cases than market authorities: 22 out of 25 Customs respondents, compared with only 5 out of 9 police authorities. Among the rights holders the rate was 65 % of respondents. It should be noted, however, that the answers of the two groups of respondents are not directly comparable, as rights holders were asked about both EU and non-EU cases. DIN: 0094895743 Page 5 of 15 Survey on counterfeit labels and packaging materials In terms of the number of detentions, as well as the number of items detained, the figures are significantly high in both groups. The LEAs reported 181 480 (5) detentions of packaging materials comprising more than 27.5 million items, while the private sector reported an even higher number: 32 369 360 detained items. The difference is due to the wider scope of the survey for rights holders, which were asked to respond about EU and non-EU cases, as mentioned. Fig. 3 – Items seized reported by LEAs Packaging types Almost all types of packaging materials were seized in both groups. However, for the LEAs, counterfeiters are far more interested in labels, followed by emblems and logos, boxes, plastic bags and paper bags. Fig. 4 – Types of packaging detained by LEAs (6) (5) This figure should be interpreted with caution as, due to a possible error, one MS may have reported each item as a separate seizure. Unfortunately, it was not possible to verify the numbers with the respondent. (6) It should be noted that more than half of the detained counterfeit items do not appear in this graph as they were classified as ‘others’ by the respondents. DIN: 0094895743 Page 6 of 15 Survey on counterfeit labels and packaging materials Affected products In order to prevent the product sector with most respondents automatically counting for the highest number of cases, for this analysis the average number of detentions in a product sector was divided by the number of respondents from that sector. In terms of cases, most of the detentions reported by brand owners appeared to occur in clothing and accessories and in shoes, followed by foodstuffs. The packaging of medicines and tobacco products is also widely counterfeited. Fig. 5 - Total number of detentions reported by rights holders In terms of items detained, labels for tobacco products appear at number one, with almost 18 million items seized in the period studied, as reported by brand owners. Shoes are also widely affected with almost 7 million items, followed by labels for clothing and accessories with 3.6 million. DIN: 0094895743 Page 7 of 15 Survey on counterfeit labels and packaging materials Fig. 6 - Number of detained items reported by rights holders Key detention places and routes One of the key questions concerned where the seizures took place. This was intended to measure the incidence of detections at borders and in the internal markets and, in both cases, from an EU and non-EU perspective.
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