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COVID-19: Surge in sales of counterfeit and fake goods

Posted on 28 April 2020

Europol and the EUIPO have issued a report on how counterfeiters are trying to profit during the COVID-19 pandemic. Whilst unsurprising given that counterfeit pharmaceuticals are already a significant problem in the industry (the OECD and EUIPO's recent report confirms that the international trade in counterfeit pharmaceuticals is over $4 billion), it is nevertheless a concerning development and one which brand owners and customers alike need to be alert to, particularly given the current strain on law enforcement and government agencies.

As further evidence of the scale of the challenges faced, the UK National Cyber Security Centre has also announced the removal of over 2,000 scams, including 471 fake online shops in relation to COVID-19 related services. French law enforcement authorities have identified several websites offering the sale of COVID-19 blood spot tests. The Fraud Investigation Unit of the Romanian Police seized 1,900 medical masks imported from Brazil that did not meet the required standards.

If rights holders are faced with counterfeit issues, they should aim to take swift action where possible, both from a criminal and civil perspective, which includes working with the relevant authorities and industry bodies, but also extends to assisting rights holders with any direct action they may wish to take against counterfeiters. 

In this regard, it is important to note that the English courts are still hearing cases, in spite of the COVID-19-induced restrictions, and injunctive relief is a particular remedy that rights holders may wish to pursue in these circumstances.  Additionally, victims of counterfeiting or other such scams, may also wish to consider the option of being a private criminal prosecution against the perpetrators.

It is clear that criminals are capitalising on the fears of the public and the uncertainty surrounding access to certain goods. They are trading (primarily on the internet) in counterfeit medical equipment, sanitisers and disinfectants, pharmaceuticals and sub-standard food. 

In particular, illicit pharmaceutical products now include the sale of counterfeit chloroquine medication, commonly used in the treatment of malaria. This is likely as a result of countries, such as the United States, issuing emergency use authorisations to prescribe this medicine to try and treat COVID-19 whilst a vaccine is still being developed.

To facilitate and promote this unlawful activity, criminals have also created a number of websites for the sole purpose of selling fake goods, including websites which are designed to replicate legitimate websites and accept various legitimate payment methods. Europol believes the counterfeit goods primarily derive from China and India, but are being sold in the EU and further afield. The counterfeiters are using sophisticated and illegal distribution chains and false documentation to conceal the origin of these counterfeit goods, creating significant challenges for law enforcement.

Whilst Europol has been intensively monitoring the distribution of counterfeit goods, as noted in its report, law enforcement units globally are stretched given the challenges faced in the current climate. As a result, they and other law enforcement bodies will need to rely on brands and the private industry to be proactive in taking action against the sale of such counterfeit goods due to the nature of such goods and the severe effects they may have on the health and safety of consumers.

If you would like to discuss any of the issues highlighted above, please contact Gareth Minty or Cassie Hill.

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