3rd September 2020

UK ‘falling behind’ in IP protection

Once a world leader in anti-counterfeiting measures, the UK is slipping behind its US and European counterparts, according to experts.


By JTS Staff
Journal of Trading Standards' in-house team
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The UK urgently needs safeguards that will protect businesses and consumers
Too many consumers are being scammed, too many businesses face the effects of unfair competition by non-compliant products
The UK has blocked brands and designers from participating in key programmes and failed to fully acknowledge the growing threat

The UK no longer occupies a world-leading position in tackling intellectual property crime and is slipping behind other countries in preventing fake and sometimes dangerous goods from reaching consumers, according to anti-counterfeiting experts.

Organised criminals are using sophisticated counterfeiting to bring fake goods onto the market, and the UK government is failing to keep pace with current counterfeiting challenges, says Anti-Counterfeiting Group (ACG) Director General Phil Lewis. “There’s a growing call for government accountability and transparency,” he commented.

“The UK urgently needs safeguards that will protect businesses and consumers, and the only way to shape those is by engaging with all relevant stakeholders. Other countries have done this and that’s why they’re overtaking the UK.

“The UK’s number-one accolade was largely thanks to the work of the Intellectual Property Office. It put effective and strong measures in place for IP protection and enforcement.”

Across the pond

The ACG has contrasted the situation in the UK with that of the US, which has brought in tight new anti-counterfeiting controls.

In July the US introduced the Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers (INFORM) Act, which requires online platforms to authenticate the identity of third-party sellers of consumer products. The legislation has been designed to enable consumers to more easily distinguish genuine retailers from fraudsters.

US Customs and Border Protection is also introducing rules that force foreign importers to provide key information to help identify shipments of counterfeit goods.

“The INFORM Consumers Act will provide much-needed transparency of online marketplaces,” said Jeffrey Hardy, Director General of the Transnational Alliance to Combat Illicit Trade (TRACIT). “If platforms like Amazon and eBay start improving the verification of third-party sellers, then they’ll be taking a giant step in protecting consumers from fraud, counterfeiting and other forms of illicit trade.”

The OECD and European Intellectual Property Office (EUIPO) reported in 2019 that the global trade in fake goods is worth $509bn, while almost 7% of products imported into Europe are counterfeit. Fake goods imported into the UK are worth almost £14bn and result in revenue losses to the retail and wholesale sector of £4bn a year.

Continental drift

As the UK works to extricate itself from the European Union, the EU is forging ahead with its Digital Services Act, drafted by the European Commission. The Act is designed to force social media and e-commerce platforms to remove illegal content or face sanctions. E-commerce platforms will be compelled to screen sellers more stringently in order to prevent the sale of counterfeit goods. The new legislation may be introduced by the end of the year.

“The Digital Services Act is the perfect opportunity to lay out a clear legal framework so that platforms in Europe play their fair part in addressing the issue of illegal products sold online,” commented Michelle Gibbons, Director General of AIM, the European Brands Association.

“Too many consumers are being scammed, too many businesses face the effects of unfair competition by non-compliant products, too much is lost in tax revenue. It’s time for everyone to step up and take responsibility for taking these goods off the European market.”

Missed opportunities

According to Lewis, “UK government hasn’t been idle. It has introduced several policy initiatives to improve the protection of consumers, business and the economy from the impact of counterfeiting.”

“But unlike the US government, which sees integration with all business sectors as paramount, the UK has blocked brands and designers from participating in key programmes and failed to fully acknowledge the growing threat to consumers and business from unsafe counterfeit goods. For example, the Government’s delayed Online Harms Bill, which focuses on the protection, safety and well-being of individual users, has excluded the online sale of dangerous fakes.”

Concerns have also been raised that brands and designers have been excluded from the Government’s Creative Industries: Sector Deal round table initiative, which is considering new Codes of Practice for social media and online marketplaces.

“These initiatives could potentially restore the UK’s position as the top country for IP protection and enforcement, but we still need a collaborative national response to counterfeiting which is an insidious and growing threat,” said Dids Macdonald OBE, Chief Executive of ACID (Anti Copying In Design). “Now we look to be falling behind.”