Global Counterfeiting & Trademark Infringement Report, 2018

Global Counterfeiting & Trademark Infringement Report, 2018

Report Description

The advent of the internet has provided many avenues for businesses to grow in a global market. The technology has positively and negatively affected many markets across the world. The negative impact of technology is growing and many businesses are bearing the brunt of that. Brand owners invest a lot of money, time and resources on protecting their brands and trademarks. But even after all the measures, the counterfeit market is booming rapidly.

The Global Brand Counterfeiting and Trademark Infringement Report, 2018 has addressed the issue of proliferation of trademark counterfeiting in this technologically driven era.  As per the report the amount of total counterfeiting globally has reached up to 1.2 Trillion USD in 2017 and is bound to reach 1.95 Trillion USD by 2022.

The report has analysed that out of the total losses incurred due to counterfeiting approximately 500 Billion USD is from consumer goods and 8 to 10 percent of this is contributed by – Clothing & Textile, Footwear, Cosmetics and Perfumes, and Watches.

The globalization of trade and communication has offered unparalleled opportunities for organized crimes to engage in illicit trade and counterfeiting so as to increase their economic influence. The report has focused on those economies where the consumers have the highest buying power namely, France, Germany, Hong Kong, China, Italy, Japan, Singapore, UAE, UK, and the USA.

As per the report global online luxury fashion market is growing at a rate of 15% per annum and will reach up to 11 billion USD by 2020. Whereas, 1 out of 5 luxury goods sold on online platforms is a counterfeit product. In addition to that cross-border trade in counterfeit goods fuel the organized crime network which in turn affect the whole economic growth of a country.

A counterfeit trademark passes through many countries to reach its final destination. And these activities are conducted without any knowledge of the trademark owner. This sort of unawareness has been created due to the furtive and global nature of illicit trade, and also the freedom with which such trade activities are conducted in the global economy.

The report has emphasized on the fact that the growing scale of trade in counterfeiting goods can be attributed to globalization. As globalization, has turned out to be the main reason for the growth of counterfeiting activities, the customs officials have been recognized as a key component of an effective and efficient anti-counterfeiting strategy. They are updating their technologies constantly to discover counterfeited goods, and they approximately seize fake products with a value of more than 5 billion USD annually.

Customs officials in most of the countries are open to collaboration with brand owners, so as to easily identify the counterfeit goods. The brand owners have also taken a step forward by helping the customs authorities to stop counterfeiting.

Globalization has also lead to the establishment of free trade zones. These zones provide leverages to the illicit counterfeit sellers. Currently, there is an estimate of 4,200 free trade zones and special economic zones around the world.

The report has suggested that the enforcement of border measures by customs authorities especially in the FTZs should be done within the appropriate time so that the counterfeit goods are stopped from entering the legitimate distribution channel.

The methods and tools which are used by the offenders are becoming very sophisticated and varied with every passing moment. With the innovation in 3D printing technologies, this menace is scaling like never before. The report finds that more than 22% of the 3D printers are somehow linked to production of fake products and prototypes.

 The emergence of e-commerce and social media platforms is also one of the chief reasons for the constant growth in the counterfeiting. According to the report, Asia Pacific accounts for more than 50% of the total counterfeited products that are being sold online.

The report focuses on greatest challenges faced by the law enforcement agencies regarding illicit trade and intellectual property crimes. These crimes have generated serious economic challenges along with social and environmental harm. The illegitimate acts also have a bad impact on the overall growth of the businesses.

A substantial number of governments of various countries have enacted laws and legal regulations for safeguarding the rights of the brand owners. Many international laws and treaties have been signed so as to combat counterfeiting, but despite all the efforts, there is no end to this crime. In EU alone the authorities are detaining almost 115 thousand counterfeit trademarks every year and yet the amount of counterfeiting is still increasing.  Many luxury brands have suffered huge losses due to increase in trade of counterfeiting goods.

The report explicates that the problem of counterfeiting is longstanding and is growing more and more in scope and magnitude. The government and businesses are concerned because of the adverse impact of such illicit activities. Counterfeiting also poses threats to the welfare of consumers, along with that it also disrupts the whole society on various levels and harms the reputation of the businesses. Counterfeiting has amounted to great losses for the brand owners and especially the luxury brands. The report has made conscious efforts to curb this issue by providing various legal and technological recommendations which are very valuable for the brand owners in order to protect their trademarks from being infringed.

Losses incurred in 2017 due to Counterfeiting amounts to 1.2 Trillion dollars

Table of

Contents

Table of Contents

1.    Executive Summary
2.    Scope and Approach
    2.1.    Background – The Era of Global Online Shopping
    2.2.    Definitions & Terminologies

Section 1 – The Fault Lines of Trademark Silhouette
3.    Drivers of Counterfeiting
    3.1.    Technological
        3.1.1.    Borderless world
        3.1.2.    3D Printers
    3.2.    Economical Drivers
        3.2.1.    Manufacturing Outsourcing
        3.2.2.    The Price Equilibrium
    3.3.    Social Drivers 
        3.3.1.    A Customer driven by Self Actualization

Section 2 – The Demand for Counterfeited Goods 
4.    The Market Size of Counterfeit Goods
    4.1.    By Value 
    4.2.    By Industry
    4.3.    By Region
    4.4.    By geography
5.    Sales Medium of Counterfeit Goods 
    5.1.    Markets  
    5.2.    Online Medium
        5.2.1.    E-Commerce
        5.2.2.    Social Media    

Section 3 – Supplying the Counterfeits
6.    Illicit Value Chains – Shipments & Drop Shipping 
7.    Trade Routes - Borders & International Trade 
    7.1.    Clothing and Textile
    7.2.    Footwear
    7.3.    Cosmetics and Perfumes
    7.4.    Leather Articles and Handbags

Section 4 – The Buyers Psyche 
8.    Global Counterfeiting Perception Index
Section 4 – Governance for Safeguarding Creative Industry & Trademarks
9.    Analysis - Agreements on Intellectual Property Rights 
    9.1.    Trade Related Aspects of Intellectual Property Rights, (TRIPS)
    9.2.    Anti-Counterfeiting Trade Agreement
    9.3.    EU Directives and Regulations 
        9.3.1.    EU E-commerce Directive
        9.3.2.    EU Customs Regulation
10.    Analysis - Secondary Liabilities 
    10.1.    Auction Sites
    10.2.    Internet service providers
11.    Country Analysis 
    11.1.    China – Trademark & Anti-Counterfeiting laws & frameworks
    11.2.    France – Trademark & Anti-Counterfeiting laws & frameworks
    11.3.    Germany – Trademark & Anti-Counterfeiting laws & frameworks
    11.4.    Hong Kong – Trademark & Anti-Counterfeiting laws & frameworks
    11.5.    Italy – Trademark & Anti-Counterfeiting laws & frameworks
    11.6.    Japan – Trademark & Anti-Counterfeiting laws & frameworks
    11.7.    Singapore – Trademark & Anti-Counterfeiting laws & frameworks
    11.8.    United Arab Emirates – Trademark & Anti-Counterfeiting laws & frameworks
    11.9.    United Kingdom – Trademark & Anti-Counterfeiting laws & frameworks
    11.10.    United States of America – Trademark & Anti-Counterfeiting laws & frameworks

Section 5 – Strategic Insights & Recommendations
12.    Recommendations for Anti- Counterfeiting
13.    Case Studies
    13.1.    Too Big to Check & Validate
    13.2.    Under Someone else’s watch
14.    Logistics – Packages & Parcels
15.    The Fault Lines 
    15.1.    Brand - The insignia    
    15.2.    The Case of Brand Ambassadors    
    15.3.    Digital Marketing – Where you are getting it all wrong    
    15.4.    Advertisement - When You don’t sell, you provoke to buy
    15.5.    Boundless Possibilities - of Tags, Hashtags & Search    
    15.6.    Short Sightedness - Fast Fashion

List of

Graphs

List of Graphs

  1. Economic Value of Losses Suffered due to Counterfeiting (USD Billion), 2001-2020
  2. Economic Value of Losses due to Counterfeiting in Selected Sectors (USD Billion), 2002-2020
  3. Shares of seizures by IP-infringing category (Percentage), 2017
  4. Number of Internet Users Globally (Millions), 2005-2017
  5. Growth in Estimated Value of Counterfeited Goods (Billion USD), 2008-2017
  6. Global Merchandise exports and Imports (USD Trillion), 1960-2017
  7. Value of Seized Goods by Reporting Economy (USD Million), 2017
  8. Average Percentage Share of global physical counterfeiting(Percentage), 2011-2017
  9. Total Annualized Outsourcing Contract Value and its Growth From (USD million), 2013-2017
  10. Share of Companies that Outsource by Sector(Percentage), 2017
  11. Distribution of the Countries as per Income Level (Percentage), 2017
  12. Share of endorsed celebrity follower’s in Countries as per the Region (Percentage), 2017
  13. Distribution of Targeted Audience by Income Level(Percentage), 2017
  14. Average Age of Luxury Brand User by Region (Year), 2017
  15. Average Age of Luxury Brand User by Income Group (Year), 2017
  16. Budget to reach potential customer of Luxury Brands on Social Media (per Day in USD), 2017
  17. Market Size of Global E-commerce Business(USD Billion), 2012-2017
  18. Most Frequent Brand Name Used in online Counterfeiting(Percentage), 2017
  19. Top five countries involved in online sales of counterfeit items (Percentage), 2017
  20. Share of Authenticated and Illicit Post on Social Media (Percentage), 2017
  21. Share in Mode of Communication on Social Media Counterfeiting (Percentage), 2017
  22. Distribution of Leading Uses of 3D Printing(Percentage), 2015- 2017
  23. Number of 3D Printer Shipment (Million), 2013-2017
  24. Route Map of Source and Destination of Counterfeit Clothes and Textile, 2017
  25. Route Map of Source and Destination of Counterfeit Footwear, 2017
  26. Route Map of Source and Destination of Counterfeit Cosmetics and Perfumes, 2017
  27. Route Map of Source and Destination of Counterfeit Leather Articles and Handbags, 2017
  28. Heat Map of Source, Destination and Transit points of trade in illicit goods, 2017
  29. IPR Detentions by Number of Cases and Articles in EU(Thousand), 2007-2017
  30. Number of Trademark Application and Registration in China (Thousand), 2007-2017
  31. Number of Trademark Application and Registration in France (Thousand), 2007-2017
  32. Number of Requests for Intervention by Business Undertakings to Intercept Counterfeiters, 2010-2016
  33. Number of Trademark Application and Registration in Germany (Thousand), 2007-2017
  34. Number of Trademark Application and Registration in Italy (Thousand), 2007-2017
  35. Number of Trademark Application and Registration in Japan (Thousand), 2007-2017
  36. Number of Trademark Application and Registration in Singapore (Thousand), 2007-2017
  37. Number of Application and Registration in UAE (Thousand), 2007-2017
  38. Number of Trademark Application and Registration in UK (Thousand), 2007-2017
  39. Number of Trademark Application and Registration in USA (Thousand), 2007-2017
  40. Blueprint of TAG Heuer Mikrograph Caliber 560, 2017
  41. Global Market Share of Logistic Services (Percentage), 2017
  42. Evolution of the global personal goods luxury( Billion Euro), 2012-2017
  43. Penetration of Countries in online luxury sales globally (Percentage), 2017
     

Countries Analysed

China
France
Germany
Hong Kong
Italy
Japan
Singapore
United Arab Emirates 
United Kingdom 
United States of America
 

A Complete Analysis of 10 Countries

Laws

Analysed

International, National and Regional Laws

International Agreement-

  1. Trade Related Aspects of Intellectual Property Rights, (TRIPS), 1995
  2. Anti-Counterfeiting Trade Agreement, 2012
  3. EU E-commerce Directive, 2000
  4. EU Customs Regulation, 2007

USA-

  1. Lanham Act, 1946
  2. Trademark Counterfeiting Act of 1984
  3. Anti-counterfeiting Consumer Protection Act of 1996
  4. Stop Counterfeiting in Manufactured Goods Act. 2006
  5. Racketeer Influenced and Corrupt Organizations Act, 1970
  6. Tariff Act, 1930
  7. The Trade Facilitation and Trade Enforcement Act, 2015
  8. Internal Revenue Code, 1986

UK-

  1. Trade Marks Act, 1994
  2. Trade Descriptions Act 1968.
  3. Criminal Procedure (Scotland) Act, 1995

UAE-

  1. Federal Law No. (37) Of 1992 Concerning Trade Marks, 1992
  2. Anti-Commercial Fraud Law, 2014

Japan-

  1. Trademark Act, 1959
  2. Unfair Competition Prevention Act, 1993
  3. the Customs Act, 1954
  4.  the Penal Code, 1907
  5. the Civil Code, 1896
  6. the Limitation of Liability for Damages of Specified Telecommunications Service Providers and the Right to Demand Disclosure of Senders’ Identification Information Act.2001

Hong Kong-

  1. Trademark Ordinance, 2003
  2.  Trade Descriptions Ordinance, 2013

Singapore -

  1. Trademarks Act, 1998

France-

  1. Intellectual Property Code, 1992
  2. Customs Code, 2014

Italy-

  1. Italian Code of Industrial Property, 2005
  2. Criminal Code, 1930
  3. Code of Civil Procedure, 1942

Germany-

  1. Act on the Protection of Trade Marks and other Symbols Trade Mark Act, 1994
  2. Code of Civil Procedure, 1900
  3. Code of Criminal Procedure, 1998
  4. The Act Against Unfair Competition, 2010

China-

  1. Trademark Law, 1993
  2. Anti-unfair competition law, 1993
  3. Civil Code, 1986
  4. Criminal law, 1997
  5. Tort law, 2009
  6. Regulations of Customs Protection for Intellectual Property Rights and its Implementing Methods, 2003
International, National and Regional Laws

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