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UK IP Enforcement 2020 – IP Crime and infringement: The scale and the challenge

There are strong emerging trends that continue to pose a major threat to IP rights, including increased sales of high-value counterfeit items such as handbags, watches and electrical appliances, and strong growth in the use of social media to facilitate access to counterfeit goods. More and more consumers are also turning to the internet to source both legal and pirated copyright content, legal and illegal audio-visual streams and genuine goods as well as counterfeited items. As demand for faster and cheaper access to content and goods grows, criminals are finding newer and more innovative ways to meet that demand. Additionally, changes in consumer behaviour make it difficult to fully measure the scope and scale of IP crime in the UK, or to know whether or not we are seeing a genuine reduction in criminal activity. Similarly, the global nature of the internet increases the challenges and complexities involved in measuring and addressing IP infringement and counterfeiting.

IP crime takes place locally, national and globally, but its consequences are more often felt close to home. Trading Standards authorities deal with the consequences of IP crime every day; four out of five of them have found IP infringing activities taking place in ordinary high street shops, and over half have caught IP criminals operating out of private residences. Car boot sales, street stalls, markets, pubs and clubs also continue to be IP crime hotspots. The evidence from Trading Standards indicates that there are strong links between IP crime and benefit fraud, organised crime, drug dealing and violence – and this has a real impact on the safety of individuals and communities. Criminal trade also drives out legitimate traders, leading to reduced levels of investment and prosperity in local areas and reduced opportunities for local employment.

Other types of harm caused by IP crime include:

  • Harm to consumers – directly through dangerous goods, and indirectly through the consequences of sub-standard products;
  • Disruption of community wellbeing by the domination of criminal activity;
  • Economic harm to rights-holders and allied industries supporting legitimate trade, plus unfair competition to legal traders and loss of revenue to Government in terms of tax and duty payments;
  • The involvement of serious and organised crime that benefits from substantial profits; and
  • The use of IP crime to fundraise for terrorist activity.

Evidence supporting the true scale and scope of civil IP infringement and IP crime in the UK is relatively limited, thus making it more difficult to identify trends and target them accordingly. Statistics published by the Ministry Of Justice, show that in 2014, 456 people were found guilty of offences under the Trade Mark Act (TMA) and 61 under the CDPA, compared with 469 and 100 in the previous year. Twenty people were cautioned for TMA offences in 2014 and nine for CDPA offences, compared to 39 and 14 in 2013. But whether these figures point to a real reduction in IP crime is difficult to tell. Data relating to IP Enterprise Court (IPEC) cases is very limited. At the local level, the number of regional authorities supplying data to the annual IP Crime Survey of Trading Standards varies year to year, depending on priorities. Without a statutory obligation for reporting IP crime this situation is likely to continue.

The IPO is committed to increasing the evidence base on the level of IP crime and has commissioned a number of studies looking at online copyright infringement and the level of design infringement. The IPO already facilitates the publication of an annual IP Crime report, looking at trends in IP crime and enforcement activity. There is however a need for a broader overview, giving an annual snapshot of the situation with regard to civil infringement and criminal activity, as well as successes in tackling both and the best available estimates of the economic impact.