A complete picture of the economic impact of counterfeiting and piracy

Following the publication of two major studies on the contribution to economic performance and employment of intellectual property rights intensive industries and citizens' perceptions of IP in the European Union, the importance of intellectual property to society has become more and more apparent. The increasing importance of IP and IP rights in the modern economy also means that the opportunities for infringement and the potential damage to the economy both are greater. At the Observatory we are working to offer a complete picture of this phenomenon by assessing the economic impact of counterfeiting and piracy in different sectors and geographical areas.

 

Joint EUIPO/OECD report

In collaboration with the Organisation for Economic Co-operation and Development (OECD), the Observatory has developed a study on trade in counterfeit and pirated goods.

   

Trade in Counterfeit and Pirated Goods: Mapping the Economic Impact is based on data supplied by the World Customs Organization, the European Commission's Taxation and Customs Union Directorate General and the United States Customs and Border Protection to give an accurate picture of the global economic impact of counterfeiting and goods piracy in international trade. This joint study uses data from almost half a million customs seizures across the world over the period 2011-2013.

A Report on Infringement of Protected Geographical Indications for Wine, Spirits, Agricultural Products and Foodstuffs in the European Union supplements the joint EUIPO/OECD report. The main objective of this study is to assess the size and value of the EU GI product market and the proportion of products in that market that infringe GIs protected in the EU. The impact of these infringements on EU consumers was also estimated, with a loss evaluated at up to EUR 2.3 billion.

 

Impact of counterfeiting and piracy: Sectorial studies

 

Methodology

The very nature of the phenomenon of counterfeiting and piracy makes it extremely challenging to reliably quantify, as obtaining data for a secretive activity is by nature difficult. In the past, many attempts to quantify the scale of counterfeiting and its consequences for society as a whole have suffered from the absence of a consensual and consistent methodology for collecting and analysing data across various sectors. To help overcome these challenges while taking fully into account methodological constraints, the Observatory has developed a specific approach to be applied to all industry sectors.

Variations between forecast sales and actual sales by sector are analysed for each European Union country. The statistical techniques used include economic and social factors which allow the researcher to estimate the amount of sales lost by IPR holders due to counterfeiting, as well as loss of employment in the affected sector.