Commission recommends actions to combat counterfeiting and better protect intellectual property rights

The Commission has 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.