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Inside IP: IP Crime Report 2015/2016

Posted on 12 October 2016

Inside IP: IP Crime Report 2015/2016

The UK Intellectual Property Office ("IPO") and the national IP Crime Group have published their 11th yearly review, the IP Crime Report 2015/2016. It focuses on trends in, and action taken against, intellectual property crime, namely counterfeiting and piracy.

The Report has been published against the backdrop of the Government launching its own IP enforcement strategy for the next four years – IP Enforcement 2020. This is intended to, amongst other things, protect IP rights by continuing to require internet service providers to block websites that carry large amounts of illegal content, and to build on voluntary anti-piracy projects to warn users when they are breaching copyright. An example of this is a subscriber alert programme (as part of the 'Get it Right' campaign) which will, from the end of 2016, advise ISPs' residential subscribers when their accounts are believed to have been used to infringe copyright. It also runs alongside the Government's proposal to introduce penalties of up to 10 years' imprisonment for online copyright infringement (thereby bringing the penalties for online infringement in line with physical copyright infringement), and discussions at the EU level in relation to updating the IP enforcement regime. 

The overarching theme in the Report is the threat and challenges that both advances in technology and the online marketplace pose to the prevention of IP crime and enforcement of IP rights. As technology advances, so do the infringers' methods. The Report makes clear that IP crime and infringement needs to be met head-on, stating that the "defining feature of IP crime prevention is that it protects innovation through innovation".
The Report focuses on the importance of, and successful actions taken as a result of, interconnectivity between the various law enforcement agencies, trade associations, industry bodies and brand owners. This has led to successful detection and enforcement actions in the UK, the EU and worldwide, with the US Chamber of Commerce commenting that "the UK is the highest ranked country for IP enforcement and a global leader."

Key Findings in the Report

  • The international trade in counterfeit and pirated products remains significant. In 2013, it represented up to 2.5% of world trade, up to €338 billion. In the EU meanwhile, counterfeit trade is estimated to amount to up to 5% of all EU imports, worth up to €85 billion, of which approximately €10.2 billion revenue is from the sale of counterfeit pharmaceuticals alone (as discussed in more detail in the EU IPO's recent report on the economic cost of IP infringement in the pharmaceutical industry).
  • A  UKIPO survey of IP awareness found that 96% of UK businesses had not valued their IP, so could not estimate the scale of IP crime or potential lost revenues, despite the current value to the UK economy of the UK creative industries sector being in excess of £84 billion.
  • Brexit – whilst this will change the UK's international relationship with the rest of the EU, the Report stresses that UK organisations will continue to work with their counterparts to pursue a common goal of eradicating IP crime and keeping consumers safe.
  • Fulfilment houses are a significant issue in facilitating the importation and distribution of counterfeit goods in the UK supply chain. Whilst the goods are often manufactured and distributed abroad e.g. in China, organised crime groups use UK based fulfilment houses to bypass border checks, and to hoodwink consumers into believing the goods are genuine and manufactured in the UK.
  • Search engines continue to provide millions of links to infringing content. Over 14 months, the British Phonographic Industry referred 100 million URLs to Google and Bing requesting the removal of infringing search results.
  • Social media and smart phone apps are being used to sell counterfeit goods and share pirated content. Closed groups, the speed of transactions and anonymity making it difficult to catch counterfeiters.
  • Widely available and trusted platforms such as Facebook, eBay and Amazon are being used for counterfeiting and piracy.
  • Website blocking orders have become a key part of IP holders' enforcement and protection strategy, especially in an environment where there is an increased shift towards online streaming of content (as discussed in our recent Inside IP bulletin, website blocking orders may also be sought to block access to sites selling counterfeit products).
  • Whilst streaming has had a positive impact (because legal content is more accessible and affordable), similar sites to e.g. Spotify or Netflix are emerging which offer 'all you can eat' content for a certain price per month, but which are not genuine and provide illegal content. It is difficult for consumers to tell whether or not such streaming sites are genuine.
  • Set top boxes and Internet Protocol TV ("IPTV") boxes are an emerging threat to the audio-visual industry. In their original form, they are legitimate but with the use of apps and add-ons, once configured, the IPTV boxes are illegal as they give users access to copyright infringing material e.g. live TV and sports, premium pay channels and newly released films. 
  • There has been an increase in unauthorised and 'mod' versions of mobile games apps as the popularity for such gaming apps has increased, where the user no longer has the ability to make purchases within the app which results in lost revenue for the app developer.
  • The availability, reduced cost and further development of 3D printing represents both legitimate growth for the creative sector but a significant challenge for anti-piracy strategies and the law will need to develop to address this innovation.
  • The report also details statistical data and successful initiatives and enforcement activities from UK law enforcement agencies and other bodies.
  • Several educational campaigns have been launched, targeted particularly at 16-24 year olds, as part of a behaviour change initiative on legitimate online content sources, as well as to educate on what constitutes IP crime and how to look out for it, avoid it and report it.
  • If you would like more information on the IP Crime Report, anti-counterfeiting methods or IP enforcement (including through the use of both civil and criminal remedies), please get in touch.

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