Brussels, 19 March 2024
The Commission has today adopted a Recommendation to combat counterfeiting, both offline and online, and enhance the enforcement of intellectual property rights (IPR). The Recommendation, also known as the EU toolbox against counterfeiting, aims to foster collaboration between rights holders, service providers, and law enforcement, while encouraging best practices and the use of modern tools and technologies. It consists of strategic initiatives to combat counterfeiting and strengthen the enforcement of intellectual property rights, setting out dedicated tools to increase companies’ resilience and ability to better protect their intangible assets, including against cyber-theft.
Key actions proposed by the Commission in its Recommendation include:
- Designating a single contact point for IP enforcement matters and extending the use of existing tools, such as the IP Enforcement Portal made available by the EU Intellectual Property Office (EUIPO).
- Encouraging signatories to the Memorandum of Understanding on the sale of counterfeit goods on the internet to seek ‘trusted flagger status’ under the Digital Services Act, thereby ensuring that they are given priority when submitting any notices of illegal content. Signatories and other intermediaries’ services providers are encouraged to participate in the modernisation of the Memorandum of Understanding.
- Adapting procedures to counter new counterfeiting practices, addressing issues like mirror websites with dynamic injunctions, optimising information sharing in court proceedings, and ensuring appropriate compensation for damages, including both material and moral damages.
- Promoting the use of alternative dispute resolution for all IP disputes, offering a cost-effective and efficient option, especially for cross-border disputes and SMEs.
- Reassess and potentially increase the maximum sanctions on serious criminal IP offences.
- Empower market surveillance authorities to further detect and combat counterfeiting.
- Develop practices aiming at faster, cheaper, and more ecological storage and disposal of counterfeits.
- Adapting IP practices to AI and virtual worlds, using blockchain for supply chain traceability and content recognition systems to detect counterfeiting and pirated goods.
- Integrating IP content in national training and education curricula, especially for law enforcement and business studies.
Key tools proposed by the Commission in its Recommendation, especially addressed to SMEs:
- Under the SME Fund, a Commission initiative implemented by the EUIPO, a new service called “IP scan enforcement voucher” reimburses the costs incurred by SMEs that seek initial advice by experts on how to enforce their rights in case of an IP infringement or how to avoid infringing another company’s IP rights.
- A Cybertheft Prevention Toolkit, providing awareness-raising materials and trainings, will be developed by the Commission. This will help SMEs prevent or react to cyber-attacks (e.g. hacking) against trade secrets.
- A checklist with guidance on how SMEs can use AI without compromising their intangible assets will be developed by the Commission in close cooperation with the industry and Member States.
Next Steps
The Commission, together with the EUIPO, will closely monitor the effects and implementation of this Recommendation. On this basis, the Commission will assess the effects of the Recommendation within three years from the adoption. The Commission will then decide whether additional measures are needed at EU level, in view of technological developments and of the outcome of the ongoing enforcement study that the Commission is carrying out. The assessment will also look at any impact the implementation of the Digital Services Act and Recommendation on combating online piracy of sports and other live events may have had on the enforcement of IPR.
Background
The Recommendation follows up on the 2020 Intellectual Property Action Plan, where the Commission undertook to enhance IP enforcement, by adopting the Digital Services Act and by establishing a toolbox against counterfeiting, which will be adopted with this Recommendation.
The Recommendation published today builds on the results of a broad consultation exercise partly facilitated by the EUIPO through the EU Observatory on Infringements of IP Rights, which included several stakeholder workshops in 2021 and 2022, a Call for Evidence, a high-level roundtable hosted by Commissioner Thierry Breton in June 2022 and expert group meetings as well as the International IP Enforcement Summit held in June 2023.
IP rights play a significant role in the EU’s economy, with activities involving IP constituting almost 50% of the EU GDP and providing nearly 40% of employment. Unfortunately, counterfeiting and piracy have become pressing concerns, undermining investments and innovation for EU companies and posing risks to consumers and the environment. SMEs are particularly vulnerable in this landscape and are far more likely to fail as a result of IPR violations than larger companies.
Counterfeiting is an issue that goes beyond luxury goods and has impacted products ranging from everyday goods such as food, cosmetics, and textiles to essential spare parts for wind turbines, trains and aeroplanes. In 2019, counterfeit products represented nearly 6% of all EU imports, reaching EUR 119 billion in value and leading to an estimated loss of 670.000 direct jobs and EUR 15 billion in lost tax revenue.
For More Information
Quote(s)
The fight against counterfeiting is a crucial element in safeguarding our innovative landscape. The only way forward is for Member States to coordinate and cooperate at the same time for this to work.
Effective tools against counterfeiting are essential for the protection of intellectual property, consumer safety and innovation. With the Digital Services Act, we are keeping online platforms accountable for playing their part in tackling counterfeit goods. Today’s recommendation contains a range of additional tools to combat counterfeiting, supporting the competitiveness of SMEs and businesses across Europe.
Source – EU Commission
Questions and Answers on the Recommendation on measures to combat counterfeiting and enhance enforcement of IPR
Brussels, 19 March 2024
Why is this Recommendation necessary?
The Commission is taking action in response to the growing threats of counterfeiting and piracy, which pose significant risks to innovation, investment, and the green transition in the Single Market. With counterfeit products accounting for nearly 6% of all EU imports in 2019, amounting to EUR 119 billion, the impact on the economy is substantial, causing disruption to businesses, job instability, and economic losses for European enterprises, especially SMEs, in the EU.
Beyond economic consequences, counterfeiting also jeopardises consumer safety, public health, and the environment. The Recommendation aims to address these multifaceted challenges by strengthening the enforcement of IPR and the fight against counterfeit and piracy in the EU, enhancing efforts among all relevant players, including public authorities, rightsholders and providers of intermediaries’ services.
What does the Recommendation consist of?
The Recommendation, also known as the Toolbox against counterfeiting, consists of strategic initiatives to combat counterfeiting and strengthen the enforcement of intellectual property rights. It addresses the challenges of counterfeiting and piracy through tools and recommendations in five key areas:
- Fostering cooperation, coordination and information sharing.
- Advancing IP enforcement procedures.
- Adapting IP practices to AI and virtual worlds.
- Providing SMEs with tools to better protect their intangible assets.
- Fostering IP awareness, training, and education among all relevant stakeholders.
Who is the Recommendation addressed to?
The Recommendation is addressed to Member States, including market surveillance authorities, customs, police and public prosecution services. It also concerns economic operators in the EU, in particular rightsholders and providers of intermediary services, such as marketplaces, social media providers, transport and logistic service providers, payment service providers, and domain name providers. The Recommendation also addresses SMEs. Finally, the Recommendation calls on EU bodies and agencies, in particular the EUIPO, to raise awareness and take actions aiming at supporting the implementation and further monitoring of the Recommendation.
How does the Recommendation address online counterfeiting and piracy?
The Recommendation underlines the novelties brought by the Digital Services Act against illegal content such as counterfeiting and piracy. It also calls on all interested stakeholders to join the modernisation process of the Memorandum of Understanding (MoU) on the sale of counterfeit products on the internet in line with the Digital Services Act.
It encourages rightsholders that are signatories of the MoU and comply with the criteria in the DSA to apply for the trusted flagger status, enhancing their role in identifying illegal content online. It also encourages economic operators, especially intermediary service providers, to use AI systems, such as automated content-recognition systems, to detect counterfeit and pirated goods and content online.
How will the recommendation enhance the cooperation and information sharing between the relevant stakeholders?
The Recommendation encourages all relevant stakeholders to improve their cooperation and information sharing by e.g. designating a single contact point for topics related to intellectual property enforcement and using available communication tools such as the Intellectual Property Enforcement Portal (IPEP) developed by the EUIPO.
On the private site the signatories of the MoU on the sales of counterfeit goods and other economic operators, including rightsholders, online marketplaces, social media, transport and logistic, or payment services are encouraged to actively participate in the modernisation of the MoU on the sales of counterfeit goods to make it fit for purpose in a new digital and legal landscape. In addition, social media, transport, payment, and domain name service providers are encouraged to enhance cooperation and follow identified best practices to prevent the misuse of their services and reinforce the fight against counterfeit and piracy.
On the public side, there is a need to include all relevant players in the fight against counterfeiting, which also means providing market surveillance authorities with the right skills and resources to cooperate in this task by identifying IP-infringing products in their investigations and sharing information of alleged counterfeits.
How will the Recommendation enhance IP enforcement?
The Recommendation focuses on multiple fronts, including addressing differences in criminal penalties for serious criminal IP offences among Member States, streamlining enforcement procedures by broadening the use of alternative dispute resolution and dynamic injunctions to make them more efficient.
The Recommendation encourages Member States to ensure that in the context of proceedings on IP enforcement, rightsholders can receive relevant information related to IP infringers and appropriate damages to compensate for the actual prejudice caused including punitive damages. It also enhances cooperation and information sharing between all relevant enforcement authorities. This also entails looking into ways to ensure a faster, cheaper, and more ecological storage and destruction of infringing goods.
How will the Recommendation adapt IP practices to AI and virtual worlds?
The Recommendation aims to enhance awareness of new technologies, promote good practices, and highlight opportunities presented by these technologies. This means recommending the use of blockchain and the digital product passport to increase traceability of the supply chains for authentic products. The Recommendation proposes the use of content recognition systems and machine learning to detect counterfeit and pirated products online. Focusing on protecting and respecting IP rights in virtual worlds and other online environments, the Commission will launch a stakeholder dialogue to monitor and address possible challenges for the protection of trademarks and designs in virtual worlds.
Acknowledging the challenges faced by SMEs when navigating the complexities of AI systems, the Recommendation calls on industry and experts to support the roll-out of a checklist for SMEs, offering insights and guidance on the use of AI systems without compromising their intangible assets.
How will SMEs benefit from the Recommendation?
The Recommendation calls on SMEs and Member States to engage on the new IP scan enforcement voucher under the SME Fund, implemented by the EUIPO. This new enforcement voucher allows SMEs to receive initial expert advice on how to enforce their IP rights and avoid infringing others’ IP rights.
The Recommendation also encourages SMEs to make use of the upcoming Cybertheft Prevention Toolkit that will contain training and awareness materials, equipping SMEs with tools to defend themselves against cyber-attacks. The toolkit is expected to be published in the first half of 2024.
Additionally, it calls on industry and experts to further support the Commission in its efforts to provide SMEs with an AI checklist to equip them with valuable insights, guidance, and strategies to protect their intangible assets and ensure a responsible use of AI systems in the EU business landscape.
How does the Recommendation aim to improve the fight against IP crime committed by criminal organisations?
In the absence of an EU harmonised approach for criminal sanctions in this field, the Recommendation encourages Member States to re-assess whether the available criminal penalties for the most serious forms of wilful counterfeiting and piracy, committed on a commercial scale by criminal organisations, are set at an appropriate level. This means checking if the existing penalties foreseen at national level are sufficiently severe to provide deterrent effects.
Member States are also encouraged to carry out, in accordance with the applicable rules, financial investigations into criminal offences relating to IP rights and to apply the ‘follow the money’ investigative strategy, whenever possible and appropriate. Member States are also encouraged to ensure full or partial specialisation of units responsible for investigating and prosecuting crime relating to IP rights in their competent enforcement authorities and prosecutor offices.
How does the Recommendation aim to foster IP awareness and education?
The Recommendation advocates for IPR education in national curriculums in schools and universities, making sure that current and future innovators are aware of how to protect and enforce their IP rights. Additionally, it is encouraged to provide professional training on IP to all national authorities that deal with counterfeiting to empower them to identify and combat IP infringing activities.
How will the Commission monitor the impact of this Recommendation?
The Commission will closely monitor, together with the EUIPO Observatory, the impact, and effects of this Recommendation. Member States are invited to report to the Commission upon request on actions taken to address the recommendations. In addition, the EUIPO Observatory is invited to take concrete actions to help further implement the recommendations in close coordination with the Commission and relevant stakeholders, including through their established networks.
No later than three years after the adoption of the Recommendation, the Commission will assess whether additional measures are needed at EU level taking account of: (i) technological developments; (ii) the outcome of the ongoing follow-up study on the application of the Directive 2004/48/EC; and (iii) any impact that the implementation of Regulation (EU) 2022/2065 and Recommendation 2023/1018 may have had on the enforcement of IP rights and the fight against counterfeiting and piracy.
More Information
- Recommendation to combat counterfeiting
- Press release on the Recommendation to combat counterfeiting
- Factsheet on the Recommendation to combat counterfeiting