Background
Approximately 5 % of all imports into the EU (European Union) are counterfeit and pirated goods, corresponding to an estimated EUR 85 billion in illegal trade (link). A European Union Intellectual Property Office (EUIPO) analysis of the scope, scale and impact of intellectual property infringement in 9 sectors puts the total loss in the EU at EUR 48 billion. The negative effects of counterfeiting are not just limited to economic loss, as they also cause major risks to consumer health and safety.
The rise of e-commerce is creating new challenges when it comes to identifying genuine and fake products, in particular for the consumer. In 2017, 10 % of EU consumers (approximately 43 million citizens) were tricked into buying a fake product instead of a genuine one. This figure represents the size of the combined populations of Belgium, Bulgaria, Greece, Ireland and Portugal. Over three times more people (35 %, approximately 150 million citizens) wondered whether the product they had purchased online was real or fake.
Challenge
There are many tools and solutions currently used by businesses and public authorities to identify counterfeits but they work separately, are centralised, have little synchronisation and limited means to connect all the relevant players such as the EU, intellectual property offices, governments, customs and other enforcement authorities, manufacturers, retailers, shipping companies, ports and airports and, above all, the citizens.
The EU is at the forefront of the fight against counterfeiting. At the end of 2017, the European Commission presented a comprehensive package of measures to deliver a balanced IP enforcement system responding to today’s societal challenges. It notably announced “actions to support industry-led initiatives to combat IP infringement”, such as voluntary agreements with intermediaries and steps to protect supply chains better against counterfeiting, as well as “initiatives to strengthen the capacity of customs and other authorities to enforce IP rights”.
The EUIPO plays a key role in the overall EU strategy against counterfeiting. Among many other initiatives, it is looking into how innovative technologies can improve IP enforcement and the capacity of public authorities and all players involved in the supply chain to identify counterfeits. Blockchain has clear potential in this respect, as it is a technology that can track and trace a product throughout its supply chain. In 2018 the EUIPO, together with the European Commission, organised the first ever anti-counterfeiting blockchain event as a first step to fully explore this potential.
Needs
- Decentralisation and synchronisation of the anti-counterfeiting infrastructure.
- To be able to communicate what is true (authentic) and what has actually occurred throughout the entire supply chain: from the manufacturer through to the consumer.
- A secure, collective database for everyone who is involved would be able to help fight counterfeiting in a smarter and more effective way.
- Greater interconnectivity and the trust of all the actors involved in this process.