Reference text for Trainers
FAKES
Fighting Against Brand Counterfeiting in Three Key
European Member States. Towards a More
Comprehensive Strategy
Reference Text for Trainers
June 2011
With the financial support from the Prevention of and Fight against Crime Programme of the
European Union
European Commission - Directorate-General Home Affairs
1
Reference text for Trainers
This publication reflects the views of the authors only, and the European Commission cannot be
held responsible for any use which may be made of the information contained therein
2
Reference text for Trainers
ABBREVIATIONS
(ACG)
Anti-Counterfeiting Group
(ADB/OECD)
Asian Development Bank/OECD Anti-Corruption Initiative for Asia
and the Pacific
(AEP)
Automated Entry Processing
(AFSSAPS)
Agence Française de Sécurité Sanitaire des Produits de Santé (French Agency
for Sanitary Safety of Health Products)
(APCO)
Association of Public Safety Communications Officials
(ARIPO)
African Regional Industrial Property Organization
(ASEM)
Asia-Europe Meeting
(BASCAP)
Business Action to Stop Counterfeiting and Piracy
(CBP)
Customs & Border Protection
(CCIAA)
Camera di Commercio, Industria, Artigianato ed Agricoltura (Chamber of
Commerce, Industry, Handicraft and Agriculture)
(CD)
Compact Disc
(CEIPI)
Centre d’Études Internationales de la Propriété Intellectuelle
(CEN)
Customs Enforcement Network System
(CIB)
Counterfeiting Intelligence Bureau
(DEA)
Drug Enforcement Administration
(DGLC)
Direzione Generale per la Lotta alla Contraffazione (General Directorate for
Combating Counterfeiting)
(DIIP)
INTERPOL Database on International Intellectual Property
(DNRED)
Direction Nationale du Renseignement et des Enquêtes Douanières (National
Directorate of Customs Intelligence and Investigation)
(DVD)
Digital Video Disc
(EAPO)
Eurasian Patent Office
(EC)
European Commission
(EMEA)
European Medicines Agency
(EPO)
European Patent Office
(ESPACENET)
Europe’s Network of Patent Database
(EU)
European Union
(EUCD)
EU Copyright Directive
(EUROJUST)
European Union’s Judicial Cooperation Unit
(EUROPOL)
European Police Office
(FALSTAFF)
Fully Automated Logistical System Against Forgery and Fraud
(FBI)
U.S. Federal Bureau of Investigation
(FDA)
U.S. Food and Drug Administration
(FPs)
Free Ports
3
Reference text for Trainers
(FTZs)
Free Trade Zones
(GACG)
Global Anti-Counterfeiting Group
(GATS)
General Agreement on Trade in Services
(GATT)
General Agreement on Tariffs and Trade
(GdF)
Guardia di Finanza
(GICO)
Gruppo d’Investigazione sulla Criminalità Organizzata
(GPO)
General Prosecutors Office
(HP)
Hewlett Packard
(ICAR)
International Centre for Asset Recovery
(ICC)
International Chamber of Commerce
(ICE)
U.S. Immigration and Customs Enforcement
(IFPI)
International Federation of the Phonographic Industry
(INDICAM)
Istituto di Centromarca per la lotta alla contraffazione (Institute for combating
counterfeiting)
(INTA)
International Trademark Association
(INTERPOL)
International Criminal Police Organisation
(IP)
Intellectual Property
(Ip)
Internet protocol
(IPC)
Intellectual Property Crime
(IPO)
Intellectual Property Office
(IPRs)
Intellectual Property Rights
(IPT)
Intellectual Property Theft
(ISA)
International Searching Authority
(IT)
Information Technology
(ITU)
International Telecommunications Union
(LDCs)
Less Developed Countries
(LEAs)
Law Enforcement Agencies
(LPs)
Legal Practitioners
(MDTCA)
Ministry of Domestic Trade and Consumer Affairs
(MERCE)
Monitoraggio e Rappresentazione
Representation of Foreign Trade)
(MHRA)
Medicines and Healthcare Products Regulatory Agency
(MMECC)
Mainstreaming Methodology for Estimating Costs of Crime Project
(MoJ)
Ministry of Justice
(NAC)
National Authority of Customs
(NCA)
National Copyright Administration
(NIPLECC)
United States National Intellectual Property Law Enforcement
Commercio
Estero
(Monitoring
and
Coordination Council
(OAPI)
African Intellectual Property Organization
4
Reference text for Trainers
(OECD)
Organisation for Economic Cooperation and Development
(OPOs)
Other Public Officials
(P2P)
Peer-to-Peer
(PCT)
Patent Cooperation Treaty
(POAHCCJ)
Public Ministry – Prosecutor’s Office attached to the High Court of
Cassation and Justice
(PoCA)
Proceed of Crime Act
(QA)
Quality Assurance
(R&D)
Research and Development
(RCO)
Rapport sur la Contrefaçon et la Criminalité Organisée
(RILO/WE)
Regional Intelligence Liaison Office for Western Europe
(SCICO)
Servizio Centrale Investigativo Criminalità Organizzata (Central Investigation
Service on Organized Crime)
(SCT)
Standing Committee on the Law of Trademarks, Industrial Designs
and Geographical Indications
(SDI)
Sistema di Indagine (Investigation System)
(SECI)
Southeast Cooperative Initiative
(SIRENE)
Supplementary Information Request at the National Entries
(SIRO)
Supporto Informativo Ricerche Operative
(SIS)
Schengen Information System
(SISTER)
Sistema Inter Scambio Territtorio (Interchange Territory System)
(StAR)
Stolen Asset Recovery Initiative
(TAXUD)
EU Taxation and Customs Union
(TLT)
Trademark Law Treaty
(TRANSCRIME) Joint Research Centre on Transnational Crimes
(TRIPS)
Trade-Related Aspects of Intellectual Property Rights Agreement
(TRP)
Tamper Resistant Packaging
(UAE)
United Arab Emirates
(UK)
United Kingdom
(UKBA)
UK Border Agency
(UN)
United Nations
(UNICRI)
United Nations Interregional Crime and Justice Research Institute
(UNIFAB)
Union des Fabricants
(URL)
Uniform Resource Locator
(USA)
United States of America
(USD)
United States Dollar
(VoIP)
Voice over Internet Protocol
(WCO)
World Customs Organization
(WCT)
WIPO Copyright Treaty
5
Reference text for Trainers
(WHO)
World Health Organisation
(WIPO)
World Intellectual Property Organisation
(WTO)
World Trade Organisation
(ZPAV)
Związek Producentów Audio Video (Polish Society of the Phonographic Industry)
6
Reference text for Trainers
SECTION 1
Basic Definitions of IPRs and International Treaties, Agreements,
Conventions
A. BASIC IPRS DEFINITIONS
The definitions of Intellectual Property Rights (IPRs) presented in this section will contribute to the
general understanding of the various forms in which human creation can be protected by law. Two
main categories of IPRs may also be identified within the broader notion of Intellectual Property:
Industrial Property and Copyright, the former related to the protection of innovation and trade
(through Patents, Utility Models or Trademarks for example) and the latter related to the protection
of literary and artistic work.
It is important to note that the violation of rights granted by the various forms of IPRs is not
indicated by law with different legal definitions for each of them; the only differentiation that is made
follows usually the above mentioned distinction between Industrial Property and Copyright. In the
former case the violation of the rights granted is referred to as counterfeiting and in the latter case
as piracy. These are the notions that we will also use for the purpose of this training manual.
1.1 Copyright and related rights
The copyright holder is granted exclusive rights by the Berne Convention for the Protection of
Literary and Artistic Work of 9 September 1886 and by a number of national legislations. The term
“exclusive” suggests that only the copyright holder may exercise these rights, thereby excluding all
unauthorized third parties from exercising them. The copyright holder may also decide not to use
any of the rights that are provided for, or to exercise them over a limited period of time. This is due
to the fact that this is a right which falls under the provisions of the international and national
legislative frameworks on copyright.
It is possible to distinguish between two different rights granted by copyright: economic rights,
which allow the copyright holder to obtain profits if his/her work is used by other parties; and moral
rights, which allow the copyright holder to act in order to maintain a connection with the results of
his/her creative work.
The economic framework of copyright generally allows the author to prohibit or authorize a series
of behaviours/actions in relation to his/her creative work, including: the reproduction of the work in
various forms; the distribution of copies of this work as well as its public representation;
broadcasting of the work by radio/television or through other media; translation into other
languages; and adaptations of the work.
It should be noted that the ability of the copyright holder to prevent the reproduction, distribution,
marketing and importing of copies of his/her work is the central element upon which the economic
protection granted by copyright is based. The economic protection is further reinforced by the other
rights mentioned above.
The strictly commercial element of copyright is supported by an additional element whose specific
goal is to guarantee that the origin of the work is always acknowledged. It must be considered
separately from the commercial component, in accordance with the provisions of Article 6bis of the
Berne Convention. Furthermore, moral rights cannot be transferred (unlike economic rights) and
their recognition is only granted to the individual author.
The rights analyzed thus far are generally attributed to the author of the artistic, scientific or literary
work by the Berne Convention. Although moral rights are always retained by the commercial rights’
holder, they are subject to certain exceptions.
Rights deriving from copyright are subject to limitations relative to the individual copies that are
legally produced, marketed and acquired by a third party which becomes the owner of the copy in
7
Reference text for Trainers
question. The owner is not prohibited from reselling the copy. The only exceptions are cases where
the transfer of ownership occurs between parties operating in different countries where there are
importing limits relative to such products.
The limitations mentioned above include a series of exceptions that are specified within most
national legislation and concern particular categories of goods. The Berne Convention recognizes
the free usage of certain categories of works within Article 9 (2) as long as this usage does not
interfere with the legitimate rights of the author and does not lie outside the normal usage of the
work in question. An example of free usage includes citing specific phrases of a book while
mentioning the source of the citation, the author and using a work for illustrative, educational or
informational purposes.
The determination of a copyright’s duration falls under the competence of national legislation. The
minimum guaranteed protection must, in any case and in accordance with Article 7, correspond to
the life of the author plus fifty years after his/her death within countries that are bound by the Berne
Convention. Individual national legislation differs as to when this protection should begin. In
specific cases, the initial date corresponds to the date of creation of the work while other cases
provide for the date in which the work has been officially completed. Current trends have involved
the lengthening of the period of granted protection in order for the author’s heirs to fully enjoy the
fruits of the creative work1.
Legal basis for copyright protection
Copyright and related rights have a strong social purpose which consists of protecting,
encouraging and rewarding creative work2.
The legal basis for the protection of “literally and artistic works” has been provided in the Berne
Convention for the Protection of Literary and Artistic Work. Article 2 (1) defines and outlines the
field of artistic and literary works and states:
“The expression ‘literary and artistic works’ shall include every production in the literary, scientific
and artistic domain, whatever may be the mode or form of its expression, such as books,
pamphlets and other writings; lectures, addresses, sermons and other works of the same nature;
dramatic or dramatico-musical works; choreographic works and entertainments in dumb show;
musical compositions with or without words; cinematographic works to which are assimilated works
expressed by a process analogous to cinematography; works of drawing, painting, architecture,
sculpture, engraving and lithography; photographic works to which are assimilated works
expressed by a process analogous to photography; works of applied art; illustrations, maps, plans,
sketches and three-dimensional works relative to geography, topography, architecture or science.”
The Berne Convention currently counts 164 contracting State-parties.
The World Intellectual Property Organization (WIPO) Copyright Treaty, adopted on 20 December
1996, is a complementary legal tool in the granting and protection of copyright as it applies to
categories of works not included in the Berne Convention. The aim of the WIPO Copyright Treaty is
stated in the preamble which states:
“[…] Recognizing the need to introduce new international rules and clarify the interpretation of
certain existing rules in order to provide adequate solutions to the questions raised by new
economic, social, cultural and technological developments; Recognizing the profound impact of the
development and convergence of information and communication technologies on the creation and
use of literary and artistic works […]”
Articles 4 and 5 stipulate the protection of computer programmes and compilation of data
(databases), respectively. Article 5 is related to databases and foresees that:
1
The part of General Information on Copyright Protection is based on the UNICRI report Counterfeiting: A Global
Spread, A Global Threat, pp. 15-17. Online. Available HTTP: http://counterfeiting.unicri.it/report2008.php
2
World Trade Organization (WTO), Trade-related Aspects of Intellectual Property Rights (TRIPS), What are
Intellectual Property Rights? Online. Available HTTP: http://www.wto.org/english/tratop_e/trips_e/intel1_e.htm
8
Reference text for Trainers
“Compilations of data […] constitute intellectual creations, are protected as such. This protection
does not extend to the data or the material itself and is without prejudice to any copyright subsisting
in the data or material contained in the compilation.”
The purposes and scope of the WIPO Copyright Treaty is therefore the extension of copyright
granting and protection to software. This is also included within the concept of artistic or literary
work being the result of creative scientific work and therefore falling under the scope of Article 2 of
the Berne Convention.
Currently, the WIPO Copyright Treaty counts 88 contracting State-parties.
Industrial Property
Patents, utility models, industrial designs, layout designs, trade names/firms, marks and
designation of origin and geographical indications are either industrially or commercially applicable
and they fall within the industrial property field. The rules for their grant, regulation, conditions of
application, registration and protection measures against misuse, abuse and infringement are
stipulated in the Paris Convention for the Protection of Industrial Property. It was adopted on 20
March 1883 and is the basic reference document for industrial property.3.
The substantive provisions of the Convention fall into three main categories: national treatment,
right of priority and common rules. They apply to all of the categories of industrial property defined
by the Convention.
Under the provisions on national treatment, the Convention states that each contracting State must
grant the same protection to nationals of the other contracting States. This is as it grants the
protection of industrial property to its own nationals. Nationals of non-contracting States are also
entitled to national treatment under the Convention if they are domiciled or have a real and
effective industrial or commercial establishment in a contracting State
The Convention provides for the right of priority for patents (and utility models, where they exist),
marks and industrial designs. This right implies that on the basis of a regular first application filed in
one of the contracting States, the applicant may, within a specified period of time (12 months for
patents and utility models; 6 months for industrial designs and marks) apply for protection in any of
the other contracting States. These later applications will then be regarded as if they had been filed
on the same day as the first application. These later applications will have priority (hence the
expression “right of priority”) over applications which may have been filed during the given period of
time by other individuals for the same invention, utility model, mark or industrial design.
Furthermore, these later applications based on the first application, will not be affected by any
event that may have taken place during this period. Examples include any publication of the
invention or sale of articles bearing the mark or incorporating the industrial design. One of the
practical advantages of this provision is that when an applicant requires protection in several
countries, she/he is not required to present all her/his applications at the same time but has six or
12 months at his disposal to decide the countries she/he wishes protection and organize the steps
she/he must take to secure protection.
Industrial Property and Competition Law
The exclusive rights granted by the State to IPRs holders (especially Patents) must be well
balanced to avoid a situation in which the exclusive rights may lead to the creation of a monopoly,
hampering the functioning of markets based upon the respect of competition law. At a first view, in
fact, these two important pillars of modern trade may seem to be, in principle, naturally opposite.
IPRs protecting the innovation by providing a “non-rivalrous” right to exclusive exploitation of the
content of the innovation, and competition law protecting the access to a market that has to be
granted to different competitors. However, the limit of IPRs exclusive exploitation have been
usually identified in the fact that the latter must not pose at risk the social welfare.
The
Paris
Convention
on
the
Protection
http://www.wipo.int/treaties/en/ip/paris/trtdocs_wo020.html#P232_38660
3
of
Industrial
Property,
9
Reference text for Trainers
The provisions contained in art. 7, Art. 8.2 and Art. 40 of the TRIPs Agreement are a good example
of how this balance may be achieved. The TRIPS suggests that the abuse of IPRs must be
prevented, especially if the latter may hamper the social welfare, and lead to a restriction of trade
and limit the international transfer of technology. While these indications are generally mentioned in
articles 7 and 8, article 40 is dedicated to the prevention of anti-competitive practices that may
derive from contractual licensing.
1.2 Patent (industrially applicable)
Definition
A patent is an exclusive right granted for an invention, which is a product or a process that provides
a new way of doing something, or offers a new technical solution to a problem.4 This is made in
exchange of public disclosure of the invention.
A patent provides the owner of the patent with protection for the invention. The protection is
granted for a limited period of time, generally 20 years. 5.
Patent protection means that the invention cannot be commercially made, used, distributed or sold
without the patent owner's consent. These patent rights are usually enforced in a court, which in
most systems holds the authority to stop patent infringement. A court can also declare a patent
invalid upon a successful challenge by a third party.6
In order to be patentable, the invention must fulfil specific conditions. In general, an invention must
fulfil the following conditions to be protected by a patent: it must be of practical use; it must show
an element of novelty, i.e. a new characteristic unknown to the body of existing knowledge in its
technical field. This body of existing knowledge can be referred to as "prior art". The invention must
show an inventive step which could not be deduced by a person with average knowledge of the
technical field. Finally, its subject matter must be accepted as "patentable" under law. In many
countries, scientific theories, mathematical methods, plant or animal varieties, discoveries of
natural substances, commercial methods or methods for medical treatment (as opposed to medical
products) are generally not patentable
The legal basis on patents is principally provided in the Paris Convention7 (Articles. 1§2, 4§A, I, G,
4bis, ter, quarter, 5§A, D, 5 bis (1) (2), ter, quarter) and in the TRIPS Agreement (Art. 27-34). In
particular, the Paris Convention provides a few common rules which all contracting States must
follow regarding patents. The most significant include:

patents granted in different contracting States for the same invention are independent from
one another: the granting of a patent in one contracting State does not oblige the other
contracting States to grant a patent; 8

a patent cannot be refused, annulled or terminated in any contracting State on the grounds
of it being refused or annulled or terminated in any other contracting State;

the inventor has the right to be named as such in the patent;

the grant of a patent may not be refused, and a patent may not be invalidated, on the
grounds of the sale of the patented product, or of a product obtained by means of the
patented process, is subject to restrictions or limitations resulting from the domestic law;
World
Intellectual
Property
Organization
(WIPO),
Frequently
Asked
Questions/
Patent,
http://www.wipo.int/patentscope/en/patents_faq.html#protection
5
Ibid.
6
Ibid.
7
The Paris Convention includes provisions applied on Industrial Property. The articles referred here are either
common to all the categories of Industrial Property, or concern exclusively patents. WIPO, Paris Convention on the
Protection of Industrial Property, http://www.wipo.int/treaties/en/ip/paris/trtdocs_wo020.html#P232_38660
8 World intellectual property Organization (WIPO), Summary of the Paris Convention for the Protection of Industrial
Property, http://www.wipo.int/treaties/en/ip/paris/summary_paris.html
4
10
Reference text for Trainers

each contracting State that takes legislative measures providing for the grant of compulsory
licenses to prevent the abuses which might result from the exclusive rights conferred by a
patent may do so with certain limitations. Thus, a compulsory license (license not granted
by the owner of the patent but by a public authority of the State concerned) based on failure
to work the patented invention may only be granted pursuant to a request filed after three or
four years of failure to work or insufficient working of the patented invention and it must be
refused if the patentee gives legitimate reasons to justify his inaction. Furthermore,
forfeiture of a patent may not be provided for, except in cases where the grant of a
compulsory license would not have been sufficient to prevent the abuse. In such cases,
proceedings for forfeiture of a patent may be instituted, only after the expiration of two years
from the grant of the first compulsory license.
General Information on Patents
Patents grant a series of rights that are exclusive and limited in time regarding the creation of a
product or an innovative productive process.
A patent is requested and implemented by a private citizen or an employee of a governmental
organization. Protection is only granted with the creation of an innovation, whether this innovation
is a product or a productive process.
The underlying rationale for granting protection is based on a particular type of “exchange”
between the inventor and the government. The latter grants protection in the form of a patent on
the condition that the creating party reveals the technology or the procedure underlying the
invention. The exclusive utilization of the latter will be protected for a limited period of time, typically
twenty years. As the knowledge underlying the invention is of public domain, other parties may
create improvements of the technology and request a patent on such improvements.
The theoretic justification underlying the granting of a patent has been greatly critiqued. It involves
the idea that temporary protection serves as both an incentive for research, experimentation and
innovation as well as a guarantee that the idea will be preserved within public registries, available
to the public at the end of the granted protection period.
Granting of a patent does not automatically imply the possibility of marketing the product over
which protection has been attained. The marketing of the product may only be implemented in
compliance with all laws and authorizations regulating such matters. An example includes
protection concerning the production of a new type of medicine. The patent does not correspond to
an authorization to market the medicine. Marketing the latter will require complying with all required
laws and procedures.
In accordance with the provisions of the Paris Convention (incorporated in the TRIPS Agreement),
the application procedure for a patent within a member state is coupled with a priority right relative
to the presentation of the same patent request in one or more countries which have ratified the
convention. In this case, the application procedure implemented in the second country is assigned
the same date as the date of presentation of the first application. The priority right has duration of
twelve months from the date of presentation of the first patent application in any of the member
states.
The Paris Convention and the TRIPS Agreement also stipulate limits to the sole rights deriving
from the patent, thereby reflecting the balance between private and collective interest which
characterizes regulations in this sector. Article 5, A, (2) of the Paris Convention considers the case
in which the patent holder decides to abuse his/her rights by not using the invention. In this case,
the granting of a right to a private citizen would not result in a real benefit to the community. To
prevent the occurrence of such situations, the article provides for the possibility of mandatory
licenses relative to the usage of the product or the productive process.
National laws regulating this area may also specify other cases allowing the use of a good subject
to protection without the authorization of the patent holder. These cases generally refer to
situations in which priority is given to the collective interest or to the use of the invention on the part
of the government due to the very nature of the product or productive process. This thereby results
in (rare) mandatory licenses in favour of government entities or structures.
11
Reference text for Trainers
At the end of the period of sole and exclusive rights granted by the legal system, the invention
becomes of public domain and the right to commercially exploit it becomes universal given that the
original inventor no longer retains the exclusive rights.9
1.3 Utility model (industrially applicable)
Definition
A utility model is an exclusive right granted for an invention, which allows the right holder to prevent
others from commercially using the protected invention, without his/her authorization, for a limited
period of time. Its basic definition may vary between countries (where such protection is available).
A utility model is similar to a patent. Utility models are sometimes referred to as "petty patents" or
"innovation patents."10 It shall, therefore, be understood as a new technical solution, which is
beyond the framework of mere technical skill and is industrially applicable. The utility model is
considered as a "low-cost entry point into the intellectual property system."11
Main differences between utility models and patents are the following:

The requirements for acquiring a utility model are less stringent than for patents. While the
requirement of "novelty" is always to be met, that of the "inventive step" or "nonobviousness" may be much lower or completely absent. In practice, protection for utility
models is often sought for innovations of a rather incremental character which may not
meet the patentability criteria.

The term of protection for utility models is shorter than for patents and varies from country
to country (usually between 7 and 10 years without the possibility of extension or renewal).

In most countries where utility model protection is available, patent offices do not examine
applications as substance prior to registration. This means that the registration process is
often significantly simpler and faster. It takes an average of six months.

Utility models are much cheaper to obtain and to maintain.

In some countries, utility model protection can only be obtained for specific fields of
technology and only for products, not processes.

Utility models are based on registration principle as patents. The difference is that the
granting of a patent is preceded by complete examination of patent application, whereas
utility models are preceded by formal examination only.12
Utility models are considered well suited for Small/Medium-sized Enterprises that make "minor"
improvements and adaptations to existing products. Utility models are primarily used for
mechanical innovations. Only a small number of countries and regions provide the option of utility
model protection.
Legal provisions on utility models can be found in the Paris Convention. (Articles 1§2, 4§A, 5§D,
5bis, 11). and in the TRIPS Agreement (Articles 25 and 26).13
1.4 Industrial design (industrially applicable)
Definition
9
The part of General Information on Patents is taken from the 2007 UNICRI report “Counterfeiting: A Global Spread,
A Global Threat”, pp. 17-19
10
WIPO, Protecting Inventions by Utility Models, What is a Utility model?
http://www.wipo.int/sme/en/ip_business/utility_models/utility_models.htm
11
Ibid.
12
Ibid.
13
http://www.wipo.int/treaties/en/ip/paris/trtdocs_wo020.html#P145_20374
12
Reference text for Trainers
An industrial design is the ornamental or aesthetic aspect of an article. The design may consist of
three-dimensional features, such as the shape or surface of an article or of two-dimensional
features, such as patterns, lines or colour. The design is considered to be a purely aesthetic or
ornamental element that is incorporated within an object that is mass-produced. Reference is made
to products deriving from an industrial process whose aesthetic element serves as a differentiating
function with respect to other products of the same category which are created for the same
purpose. The aesthetic element is one form of selection criteria used by the consumer. Further
examples include: quality, price and function of the marketed good. The need to protect this
distinctive element derives from this ability to influence consumer choices.
Industrial designs are applied to a wide variety of products of industry and handicraft: from
technical and medical instruments to watches, jewellery and other luxury items; from house wares
and electrical appliances to vehicles and architectural structures; from textile designs to leisure
goods.
An industrial design is primarily of an aesthetic nature and does not protect any technical features
of the article to which it is applied.14 The owner is defined as the person or entity that has registered
the design. When an industrial design is protected, the owner is assured an exclusive right against
unauthorized copying or imitation of the design by third parties.
This protection is only granted to a design relative to a good produced on an industrial scale that
possesses certain specific characteristics (novelty or originality). The originality of the design is not
exclusively imposed by the function of the products. Granting protection over the design of widely
distributed products such as a simple screw or a belt, would distort the market by creating
monopolies in which only one producer would have the possibility of manufacturing and selling
screws or belts. In contrast, it is possible to protect a particular design applied to screws or belts if
this design represents a novelty and characterizes the producer, thereby rewarding the latter for
the effort and creativeness involved in the design and stimulating further research in this area.
In most countries, an industrial design must be registered in order to be protected under industrial
design law. As a general rule, in order to be registered, the design must be "new" or "original".
Different countries have both varying definitions of such terms and variations in the registration
process. Generally, "new" means that no identical or similar design is known to have existed
before. Once a design is registered, a registration certificate is issued. The term of protection is
generally five years. The possibility of further periods of renewal in most cases is up to 15 years.15
Depending on the particular national law and the type of design, an industrial design may also be
protected as a work of art under copyright law. In some countries, industrial design and copyright
protection can exist concurrently. In other countries, they are mutually exclusive. Once the owner
chooses one form of protection, she/he can no longer invoke the other.16
Under certain circumstances an industrial design may also be protectable under unfair competition
law, although the conditions of protection and the rights and remedies ensured can be significantly
different.17
Legal provisions on industrial design can be found in the Paris Convention (art. 1§2, 4§A, 5§B, D,
5bis, quinquies, 11) and in the TRIPS Agreement (Articles 25 and 26).18
As with patents, marks, trade names and sources of indication, the Paris Convention lays down a
common rule regarding industrial designs which all contracting States must follow. This is that
industrial designs must be protected in each contracting State, and protection may not be forfeited
on the ground that the articles incorporating the design are not manufactured in that State.
General information on Industrial designs
14
15
16
17
18
http://www.wipo.int/designs/en/
Ibid.
Ibid.
Ibid.
http://www.wipo.int/treaties/en/ip/paris/trtdocs_wo020.html#P145_20374
13
Reference text for Trainers
The protection of industrial designs is provided for in the Paris Convention and the TRIPS
Agreement. Article 25.1 of TRIPS agreement states that member states must commit to granting
protection to those industrial designs which present characteristics of novelty or originality. It is
possible, however, to deny protection to products whose design has been exclusively dictated by
their designed function.
The design is considered to be a purely aesthetic or ornamental element that is incorporated within
an object that is mass-produced. Reference is made to products deriving from an industrial process
whose aesthetic element serves as a differentiating function with respect to other products of the
same category which are created for the same purpose. The aesthetic element is one form of
selection criteria used by the consumer. Further examples include: quality, price and function of the
marketed good. The need to protect this distinctive element derives from this ability to influence
consumer choices.
This protection is only granted to a design relative to a good produced on an industrial scale that
possesses certain specific characteristics (novelty or originality). The originality of the design is not
exclusively imposed by the function of the products. Granting protection over the design of widely
distributed products such as a simple screw or a belt, would distort the market by creating
monopolies in which only one producer would have the possibility of manufacturing and selling
screws or belts. In contrast, it is possible to protect a particular design applied to screws or belts if
this design represents a novelty and characterizes the producer, thereby rewarding the latter for
the effort and creativeness involved in the design and stimulating further research in this area.
The identification of the good which is subject to the protection guaranteed by industrial design
rights allows this protection to be differentiated from copyright protection. Copyright protects an
idea expressed in a particular form while in this case the idea is protected. The idea is defined as
an abstract concept incorporated within the good, however, it is not the latter that is protected but
rather the idea underlying the good.
The duration of protection varies from country to country, ranging from a minimum of ten to a
maximum of twenty five years. The rights are usually granted to the creator of the design; a
procedure for registration must be followed.
The guaranteed rights are also exclusive in this case and serve the final purpose of preventing
unauthorized third parties from commercially exploiting the registered industrial design.19
1.5 Integrated circuits and Layout-designs (topographies)
Integrated circuits and layout-designs are protected by the Treaty on Intellectual property with
respect to Integrated circuits (or “Washington Treaty”) adopted on 26 May 1989. It is not yet in
force as, currently, it has only 10 Contracting Parties.
Article 2 of the Treaty outlines the following definitions of these categories of Industrial property:
(i) “‘integrated circuit’ means a product, in its final form or an intermediate form, in which
the elements, at least one of which is an active element, and some or all of the
interconnections are integrally formed in and/or on a piece of material and which is
intended to perform an electronic function.
(ii) “‘layout-design (topography)’ means the three-dimensional disposition of the elements,
however expressed. At least one of which is an active element, and of some or all of the
interconnections of an integrated circuit or such a three-dimensional disposition prepared
for an integrated circuit intended for manufacture […]”
19
The part of General Information on Patents is taken from the 2007 UNICRI report “Counterfeiting: A Global Spread, A
Global Threat”, pp. 19-20
14
Reference text for Trainers
1.6 Trademarks (commercially applicable)
Definition
A trademark is a distinctive sign which identifies certain goods or services as those produced or
provided by a specific person or enterprise. Its origin dates back to ancient times, when craftsmen
reproduced their signatures, or "marks", on their artistic or utilitarian products. Over the years these
marks have evolved into today's system of trademark registration and protection. The system helps
consumers identify and purchase a product or service to meet their needs due to its nature and
quality, as indicated by its unique trademark.20 Article 15.1 of the TRIPS Agreement allows the
trademark to be defined as any symbol, name or combination of the latter (given the restrictions
described below) which allow the products or services of one company to be distinguished from
those of other companies.
A trademark provides protection to the owner of the mark by ensuring the exclusive right to use it to
identify goods or services or to authorize another to use it in return for payment. The period of
protection varies, but a trademark can be renewed indefinitely beyond the time limit on payment of
additional fees. Trademark protection is enforced by the courts, which in most systems have the
authority to block trademark infringement.
In a larger sense, trademarks promote initiative and enterprise worldwide by rewarding the owners
of trademarks with recognition and financial profit. Trademark protection also hinders the efforts of
unfair competitors, such as counterfeiters, to use similar distinctive signs to market inferior or
different products or services. The system enables people with skill and enterprise to produce and
market goods and services in the fairest possible conditions, thereby facilitating international
trade.21
The possibilities are almost limitless. Trademarks may be one or a combination of words, letters
and numerals. They may consist of drawings, symbols or three- dimensional signs (e.g. the shape
and packaging of goods), audible signs (e.g. music or vocal sounds), fragrances or colours used as
distinguishing features.22
In addition, several other categories of marks exist. Collective marks are owned by an association
whose members use them to identify themselves with a level of quality and other requirements set
by the association. Examples would be associations representing accountants, engineers or
architects. Certification marks are given for compliance with defined standards, however, they are
not confined to any membership. They may be granted to anyone who can certify that the products
involved meet certain established standards. The internationally accepted "ISO 9000" quality
standards are an example of such widely-recognized certifications.23
To obtain the protection of the distinguishing sign, name or mark, an application for registration of a
trademark must be filed with the appropriate national or regional trademark office. The application
must contain a clear reproduction of the sign filed for registration, including any colours, forms or
three-dimensional features. The application must also contain a list of goods or services to which
the sign would apply. The sign must fulfil certain conditions in order to be protected as a trademark
or other type of mark. It must be distinctive, so that consumers can distinguish it and identify a
particular product. It must neither mislead nor deceive customers or violate public order or
morality.24 Finally, the rights applied for cannot be the same as or similar to rights already granted
World
Intellectual
Property
Organization
(WIPO),
What
is
a
Trademark?
http://www.wipo.int/trademarks/en/trademarks.html
21
Ibid.
22
World Intellectual Property Organization (WIPO), About Trademarks, What kinds of trademarks can be registered ?
http://www.wipo.int/trademarks/en/about_trademarks.html#function
23
Ibid.
24
World Intellectual Property Organization (WIPO), About Trademarks, How is a trademark registered?
http://www.wipo.int/trademarks/en/about_trademarks.html#function
20
15
Reference text for Trainers
to another trademark owner. This may be determined through search and examination by the
national office, or by the opposition of third parties who claim similar or identical rights.25
Almost all countries register and protect trademarks. Each national or regional office maintains a
Register of Trademarks, which contains full application information on all registrations and
renewals, facilitating examination, search and potential opposition by third parties. The effects of
such a registration are limited to the country (or in the case of a regional registration, countries)
concerned.26
To avoid the need to register separately with each national or regional office, WIPO administers a
system of international registration of marks. This system is governed by two treaties, the Madrid
Agreement Concerning the International Registration of Marks and the Madrid Protocol. A person
who has a link (through nationality, domicile or establishment) with a country party to one or both of
these treaties may, on the basis of a registration or application with the trademark office of that
country, obtain an international registration having effect in some or all of the other countries of the
Madrid Union. 27
The Madrid system for the international registration of marks established in 1891 functions under
the Madrid Agreement (1891) and the Madrid Protocol (1989). It is administered by the
International Bureau of WIPO located in Geneva, Switzerland.
Thanks to the international procedural mechanism, the Madrid system offers a trademark owner
the possibility to have his/her trademark protected in several countries by simply filing one
application directly with the own national or regional trademark office. A registered international
mark is equivalent to an application or a registration of the same mark effected directly in each of
the countries designated by the applicant. If the trademark office of a designated country does not
refuse protection within a specified period, the protection of the mark is the same as if it had been
registered by that Office. The Madrid system offers a trademark owner the possibility to have
his/her trademark protected in several countries by simply filing one application directly with the
national or regional trademark office.. If the trademark office of a designated country does not
refuse protection within a specified period, the protection of the mark is the same as if it had been
registered by that Office. The Madrid system also greatly simplifies the subsequent management of
the mark, since it is possible to record subsequent changes or to renew the registration through a
single procedural step. Further countries may be designated subsequently.
Article 4 reads in its two paragraphs:
(1) “From the date of the registration so effected at the International Bureau in accordance with
the provisions of Articles 3 [Contents of Application for International Registration] and 3ter
[Request for “Territorial Extension”], the protection of the mark in each of the contracting
countries concerned shall be the same as if the mark had been filed therein direct. The
indication of classes of goods or services provided for in Article 3 shall not bind the contracting
countries with regard to the determination of the scope of the protection of the mark.”
(2) “Every mark which has been the subject of an international registration shall enjoy the right
of priority provided for by Article 4 of the Paris Convention for the Protection of Industrial
Property [A. to I. Patents, Utility Models, Industrial Designs, Marks, Inventors’ Certificates: Right
of Priority], without requiring compliance with the formalities prescribed in Section D of that
Article.”
Legal provisions on trademarks can be found in the Paris Convention (Articles 1§2, 4§A, 5§C 5bis,
6, 6bis, ter, quarter, quinquies, 6, 6bis, ter, quarter, quinquies, sexies, septies, 7, 7bis, 9-11)28, and
in the TRIPS Agreement (Articles 15-21).
25
Ibid.
World Intellectual Property Organization (WIPO), About Trademarks, How extensive is trademark protection?
http://www.wipo.int/trademarks/en/about_trademarks.html#function
27
World Intellectual Property Organization (WIPO), Madrid System for the International Registration of Marks ,
http://www.wipo.int/madrid/en/
28
World Intellectual Property Organization (WIPO), Paris Convention for the Protection of Industrial Property
http://www.wipo.int/treaties/en/ip/paris/trtdocs_wo020.html#P113_13775
26
16
Reference text for Trainers
The Paris Convention lays out a few common rules which all the contracting States must follow
regarding trademarks.29
The Paris Convention does not regulate the conditions for the filing and registration of marks which
are determined in each contracting State by the domestic law. Consequently, no application for the
registration of a mark filed by a national of a contracting State may be refused, nor may a
registration be invalidated, on the ground that filing, registration or renewal has not been made in
the country of origin. Once the registration of a mark is obtained in a contracting State, it is
independent of its possible registration in any other country, including the country of origin;
consequently, the lapse or annulment of the registration of a mark in one contracting State will not
affect the validity of registration in other contracting States.
Where a mark has been duly registered in the country of origin, it must be accepted on request for
filing and protected in its original form in the other contracting States. Registration may still be
refused in well-defined cases, such as: when the mark would infringe acquired rights of third
parties, when it is devoid of distinctive character, when it is contrary to morality or public order or
when it is of such a nature as to be liable to deceive the public.
If in any contracting State, the use of a registered mark is compulsory, the registration cannot be
cancelled until after a reasonable period and only if the owner cannot justify his inaction.
Each contracting State must refuse registration and prohibit the use of marks which constitute a
reproduction, imitation or translation liable to create confusion of an already registered by the
competent national authority and well-known in that State mark.
Each contracting State must likewise refuse registration and prohibit the use of marks which
consist of or contain without authorization, armorial bearings, State emblems and official signs and
hallmarks of contracting states, provided they have been communicated through the International
Bureau of WIPO. The same provisions apply to armorial bearings, flags, other emblems,
abbreviations and names of certain intergovernmental organizations. Collective marks must be
granted protection.
1.7 Trade names (commercially applicable)
A trade name can be defined as, “a name of a business or one of its products which, by use of the
name and public reputation, identifies the product as that of the business. A trade name belongs to
the first business to use it and the identification and reputation give it value and the right to protect
the trade name against its use by others.”30
Furthermore, “trade names are used by profit and non-profit entities, political and religious
organizations, industry and agriculture, manufacturers and producers, wholesalers and retailers,
sole proprietorships and joint ventures, partnerships and corporations, and a host of other business
associations. A trade name may be the actual name of a given business or an assumed name
under which a business operates and holds itself out to the public.”31
Legal provisions on trade names can be found in the Paris Convention (articles 1§2, 5bis, 8-10,
10ter).32
The Paris Convention lays out a specific common rule regarding trade names, which all the
contracting States must follow: “Protection must be granted to trade names in each contracting
State without the obligation of filing or registration.”33
World Intellectual Property Organization (WIPO), Summary of the Paris Convention for the Protection of Industrial
Property, http://www.wipo.int/treaties/en/ip/paris/summary_paris.html
29
30
http://legal-dictionary.thefreedictionary.com/trade+name
Ibid.
32
World Intellectual Property Organization (WIPO), Paris Convention for the Protection of Industrial Property
http://www.wipo.int/treaties/en/ip/paris/trtdocs_wo020.html#P113_13775
33
World Intellectual Property Organization (WIPO), Summary of the Paris Convention for the Protection of Industrial
Property, http://www.wipo.int/treaties/en/ip/paris/summary_paris.html
31
17
Reference text for Trainers
1.8 Geographical indications (commercially applicable)
Definition
A geographical indication is a sign used on goods that have a specific geographical origin and
possess qualities, reputation or characteristics that are essentially attributable to that place of
origin. Most commonly, a geographical indication includes the name of the place of origin of the
goods. Agricultural products typically have qualities that derive from their place of production and
are influenced by specific local factors, such as climate and soil. Whether a sign is recognized as a
geographical indication is a matter of national law. Geographical indications may be used for a
wide variety of products, whether natural, agricultural or manufactured.34
An appellation of origin is a special kind of geographical indication. It generally consists of a
geographical name or a traditional designation used on products which have specific qualities or
characteristics that are due to the geographical environment in which they are produced. The
concept of a geographical indication encompasses appellations of origin.35 The use of geographical
indications is not limited to agricultural products. They may also highlight qualities of a product
which are due to human factors associated with the place of origin of the products, such as specific
manufacturing skills and traditions. That place of origin may be a village or town, a region or a
country, for example, “Bohemia” is recognized as a geographical indication in many countries for
specific products made in the Czech Republic, in particular crystal ware. 36
A geographical indication points to a specific place, or region of production, that determines the
characteristic qualities of the product which originates from that location. It is important that the
product derives its qualities and reputation from that location. Since those qualities depend on the
place of production, a specific "link" exists between the products and their original place of
production. 37
Geographical indications are understood by consumers to denote the origin and the quality of
products. Many geographical indications have acquired valuable reputations which, if not
adequately protected, may be misrepresented by dishonest commercial operators. False use of
geographical indications by unauthorized parties is detrimental to consumers and legitimate
producers. Consumers are deceived into believing they are buying a genuine product with specific
qualities and characteristics, when they are actually purchasing an imitation. Legitimate producers
are deprived of valuable business and the established reputation of their products is damaged.38
A geographical indication tells consumers that a product is produced in a certain place and has
certain characteristics that are due to that place of production.39
Geographical indications are protected in accordance with international treaties and national laws
under a wide range of concepts, including:

special laws for the protection of geographical indications or appellations of origin

trademark laws in the form of collective marks or certification marks

laws against unfair competition

consumer protection laws, or
34
World Intellectual Property Organization (WIPO), About geographical indications, What is a Geographical
Indication? http://www.wipo.int/geo_indications/en/about.html#agri
35
Ibid.
36
World Intellectual Property Organization (WIPO), About geographical indications, Can geographical indications only
be used for agricultural products? http://www.wipo.int/geo_indications/en/about.html#agri
37
World Intellectual Property Organization (WIPO), About geographical indications, What does a geographical
indication do? http://www.wipo.int/geo_indications/en/about.html#agri
38
World Intellectual Property Organization (WIPO), About geographical indications, Why do geographical indications
need protection? http://www.wipo.int/geo_indications/en/about.html#agri
39
World Intellectual Property Organization (WIPO), About geographical indications, What is the difference between a
geographical indication and a trademark? http://www.wipo.int/geo_indications/en/about.html#agri
18
Reference text for Trainers

specific laws or decrees that recognize individual geographical indications.
Applicable sanctions range from court injunctions preventing the unauthorized use the payment of
damages and fines or, in serious cases, imprisonment.40
A number of treaties administered by WIPO provide for the protection of geographical indications,
most notably the Paris Convention for the Protection of Industrial Property of 1883, and the Lisbon
Agreement for the Protection of Appellations of Origin and Their International Registration.
Furthermore, Articles 22 to 24 of the Agreement on Trade-Related Aspects of Intellectual Property
Rights (TRIPS) deal with the international protection of geographical indications within the
framework of the World Trade Organization (WTO).41
If a geographical term is used as the common designation of a type of product, rather than an
indication of the place of origin of that product, then the term no longer functions as a geographical
indication. Where this has occurred in a certain country, then that country may refuse to recognize
or protect that term as a geographical indication. For example, the term “cologne” now denotes a
certain kind of perfumed toilet water, regardless of whether or not it was produced in the region of
Cologne.42
WIPO is responsible for the administration of a number of international agreements which deal
partially or entirely with the protection of geographical indications (see, in particular, the Paris
Convention for the Protection of Industrial Property and the Lisbon Agreement for the Protection of
Appellations of Origin and Their International Registration). Furthermore, through the work of the
Standing Committee on the Law of Trademarks, Industrial Designs and Geographical Indications
(SCT), made up of representatives of Member States and interested organizations, WIPO explores
new ways of enhancing the international protection of geographical indications.43
Legal provisions on trade names can be found in the following articles of the Paris Convention
(articles 1§2, 5bis, 10, 10bis) 44 and in the TRIPS Agreement (articles 22-24).
B. INTERNATIONAL TREATIES, AGREEMENTS AND CONVENTIONS PROTECTING IPRS
1. The WTO Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS)
The Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS) is an international
agreement administered by the World Trade Organization (WTO)45 and negotiated and achieved
during the Uruguay Round of the General Agreement on Tariffs and Trade (GATT)46 in 1986-1994.
This Agreement introduced, for the first time, intellectual property rules into the multilateral trading
system while fixing the minimum standards for many forms of intellectual property regulation. The
TRIPS Agreement is an attempt to narrow the differences in the way IP rights are protected around
the world, and to bring them under common international rules.
The TRIPS Agreement establishes how the legislation of the adhering countries must deal with the
following issues: copyright; trademarks; geographical indications, including appellations of origin;
40
World Intellectual Property Organization (WIPO), About geographical indications, How are geographical indications
protected? http://www.wipo.int/geo_indications/en/about.html#agri
41
Ibid
42
World Intellectual Property Organization (WIPO), About geographical indications, What is a "generic" geographical
indication? http://www.wipo.int/geo_indications/en/about.html#agri
43
World Intellectual Property Organization (WIPO), About geographical indications, What is a "generic" geographical
indication? What is WIPO's role in the protection of geographical indications?
http://www.wipo.int/geo_indications/en/about.html#agri
44
World Intellectual Property Organization (WIPO), Paris Convention for the Protection of Industrial Property,
http://www.wipo.int/treaties/en/ip/paris/trtdocs_wo020.html#P113_13775
45
The World Trade Organization (WTO) is an international organization, constituted by 153 members whose objective
is to supervise and liberalize international trade. It was established on 1st January 1995, under the Marrakech Agreement
and replaced the General Agreement on Tariffs and Trade (GATT) of 1947. For further details visit: www.wto.org.
46
The General Agreement on Tariffs and Trade (GATT) was signed in 1947 by 23 countries. The agreement was
designed to provide an international forum to encourage free trade between member states through the regulation and
the reduction of tariffs on traded goods, also providing a common mechanism for resolving trade disputes. For further
details visit: http://www.wto.org/english/tratop_e/gatt_e/gatt_e.htm.
19
Reference text for Trainers
industrial designs; patents; integrated circuit layout-designs; monopolies for the developers of new
plant varieties and trade dress.
The main issues considered by the Agreement include: i.) how the basic principles of the trading
system and other international intellectual property agreements should be applied; ii.) how to give
adequate protection to intellectual property rights; iii.) how countries should enforce those rights
adequately in their own territories; iv.) how to settle disputes on intellectual property between
members of the WTO and; v.) special transitional arrangements during the period when the new
system is being introduced.
Finally, TRIPS encompasses the two basic principles that also govern the GATT and General
Agreement on Trade and Services (GATS): i.) the national treatment; and ii.) the most-favourednation treatment. TRIPS went one step forward and introduced a third principle according to which
intellectual property protection should contribute to technical innovation and the transfer of
technology from which both producers and users should benefit and economic and social welfare
should be enhanced. Poland is Party to the TRIPS Agreement.
1.2 On Copyright and related rights
1.2.1 The Berne Convention
The Berne Convention for the Protection of Literary and Artistic Work of 9 September 1886 has
offered the legal basis for the protection of “literally and artistic works”. The Convention rests on
three basic principles which are: i) the principle of “national treatment”; ii) the principle of
“automatic” protection and; iii) the principle of the “independence” of protection. It contains a series
of provisions determining the minimum protection to be granted, as well as special provisions
available to developing countries which would like to use them.47
The Convention also provides for “moral rights,” these are, the right to claim authorship of the work
and the right to object to any mutilation or deformation or other modification of, or other derogatory
action in relation to the work which would be prejudicial to the author’s honour or reputation.
The Convention is open to all States. Instruments of ratification or accession must be deposited
with the Director General of WIPO. Currently, the Berne Convention counts 164 contracting Stateparties. Poland is Party to the Berne Convention.
1.2.2 The WIPO Copyright Treaty (WCT)
The WIPO Copyright Treaty, adopted on 20 December 1996, is a complementary legal tool in the
granting and protection of copyright as it applies to categories of works not included in the Berne
Convention and therefore constitutes a special agreement under the Berne Convention. The Treaty
mentions two subject matters to be protected by copyright: (i) computer programmes, (ii)
compilations of data or other material (“databases”), in any form, which by reason of the selection
or arrangement of their contents constitute intellectual creations.
The Treaty deals with three rights of authors which are: (i) the right of distribution; (ii) the right of
rental and (iii) the right of communication to the public. Each of them is an exclusive right, subject
to certain limitations and exceptions.
The Director General of WIPO is the depositary of the Treaty which is open to States members of
WIPO and to the European Community. The Assembly is constituted by the Treaty and currently
comprises 88 members. Poland is Party to the WIPO Copyright Treaty.
1.3 On Industrial Property
1.3.1 The Paris Convention
47
For further information on the Berne Convention, see http://www.wipo.int/treaties/en/ip/berne/summary_berne.html
20
Reference text for Trainers
Patents, utility models, industrial designs, lay-out designs, trade names/firms, marks and
designation of origin and geographical indications are either industrially or commercially applicable.
They fall within the industrial property field. The rules for their grant, regulation, conditions of
application, registration and protection measures against misuse, abuse and infringement are
stipulated in the Paris Convention for the Protection of Industrial Property, adopted on 20 March
1883, which is the basic reference document for what concerns industrial property.48
The substantive provisions of the Convention fall into three main categories: i) national treatment;
ii) right of priority and; ii) common rules49 which apply to all the categories of industrial property
defined by the Convention. The Paris Convention contains provisions for the repression of unfair
competition (Art. 1, §2 and Art. 10bis).
This area of intellectual property is now harmonised at an international level for the first time. On
the basis of Art.1 countries to which the convention applies form a Union for protecting industrial
property.
Focusing on Trademarks, Article 6 of the Convention establishes that the conditions for the filing
and the registration of trademarks shall be determined and regulated in each country of the Union
by its domestic legislation. Simultaneously, a trademark registered in a country of the Union
created by the Paris Convention shall be considered as independent of marks registered in the
other countries of the Union, including the country of origin. As specified by Article 6, “an
application for the registration of a mark filed by a national of a country of the Union in any country
of the Union may not be refused, nor may a registration be invalidated, on the ground that filing,
registration or renewal, has not been made in the country of origin”.
Currently, there are 173 Contracting Parties of the Paris Convention. Poland is Party to the Paris
Convention.
1.3.2 The Patent Cooperation Treaty
Apart from the Paris Convention and the TRIPS provisions on patents, there is also the Patent
Cooperation Treaty (PCT).50 The PCT, was concluded in 1970 and amended in 1979, 1984 and
2001. It is open to State parties to the Paris Convention for the Protection of Industrial Property.
The Treaty makes it possible to seek patent protection for an invention simultaneously in a large
number of countries by filing an "international" patent application. This application may be filed by
anyone who is a national or resident of a Contracting State. Generally, it may be filed with the
national patent office of the Contracting State of which the applicant is a national or resident or with
the International Bureau of WIPO in Geneva (at the applicant's option). If the applicant is a national
or resident of a Contracting State which is party to the European Patent Convention, the Harare
Protocol on Patents and Industrial Designs (Harare Protocol), the revised Bangui Agreement
Relating to the Creation of an African Intellectual Property Organization or the Eurasian Patent
Convention, the international application may also be filed with the European Patent Office (EPO),
the African Regional Industrial Property Organization (ARIPO), the African Intellectual Property
Organization (OAPI) or the Eurasian Patent Office (EAPO).
Once completed, the international application is then subjected to an "international search." This
search is carried out by one of the major patent offices appointed by the PCT Assembly as an
International Searching Authority (ISA). The search results in an "international search report,"
which is, a listing of the citations of such published documents that might affect the patentability of
the invention claimed in the international application. At the same time, the ISA prepares a written
opinion on patentability. The international search report and the written opinion are communicated
by the ISA to the applicant who may decide to withdraw his application, in particular where the said
report or opinion makes the granting of patents unlikely. If the international application is not
48
The full text of the Paris Convention can be found at http://www.wipo.int/treaties/en/ip/paris/
World Intellectual Property Organization (WIPO), Summary of the Paris Convention for the Protection of Industrial
Property, http://www.wipo.int/treaties/en/ip/paris/summary_paris.html
50
The description and information provided here on the Patent Cooperation Treaty can be found on
http://www.wipo.int/pct/en/treaty/about.html
49
21
Reference text for Trainers
withdrawn, it is published by the International Bureau together with the international search report.
The written opinion is not published.
The procedure under the PCT has the following advantages: (i) the applicant has up to 18 months
more than she/he has in a procedure outside the PCT to reflect on the desirability of seeking
protection in foreign countries, to appoint local patent agents in each foreign country, to prepare the
necessary translations and to pay the national fees etc.; (ii) the search and examination work of
patent offices can be considerably reduced or virtually eliminated thanks to the international search
report, the written opinion and, where applicable, the international preliminary examination report
that accompany the international application and; (iii) since each international application is
published together with an international search report, third parties are in a more favourable
position to formulate a well-founded opinion about the patentability of the claimed invention.
Currently there are 142 Contracting Parties of the Patent Cooperation Treaty. Poland is Party to the
PCT.
1.3.3 The Hague Agreement on Industrial Designs51
The Hague Agreement is an international registration system which offers the possibility of
obtaining protection for industrial designs in a number of States and intergovernmental
organizations by means of a single international application filed with the WIPO. Thus, under the
Hague Agreement, a single international application replaces a whole series of applications which,
otherwise, should have been effected with different national (or regional) Offices. The Hague
Agreement is currently constituted by two international treaties:

The Hague Act of 28 November 1960 (the “1960 Act”); and

The Geneva Act of 2 July 1999 (the “1999 Act”).
The Hague System for the International Registration of Industrial Designs 52 provides a mechanism
for registering a design in countries and/or intergovernmental organizations party to the Hague
Agreement. It is administered by the International Bureau of WIPO. This System gives the owner of
an industrial design the possibility to have his design protected in several countries by simply filing
one application with the International Bureau of WIPO, in one language, with one set of fees in one
currency (Swiss Francs). The Hague System simplifies the management of an industrial design
registration, since it is possible to record subsequent changes or to renew the registration through
a single procedural step with the International Bureau of WIPO.53
Advantages of the Hague System

The Hague System enables design owners from a Contracting Party to obtain protection for
their designs with a minimum of formalities and expense. In particular, they are relieved of
the need to make separate national applications in each of the Contracting Parties in which
they seek protection, thus avoiding any complications that can arise from procedures and
languages which differ between states.

The Hague system also avoids the need for constant monitoring of the deadline for renewal
of a whole series of national registrations, varying from one State to the other. Furthermore,
it avoids the need to pay a series of fees in various currencies.

Moreover, by having a single international registration with effect in several Contracting
Parties, the subsequent management of the international registration is considerably
enhanced. For instance, a change in the name or address of the holder, or a change in
ownership for only some or all of the designated Contracting Parties, can be recorded in the
51
The information on the Hague System presented here are based on the World Intellectual Property Organization
(WIPO) document, “The Hague Agreement Concerning the International Registration of Industrial Designs: Main
Features and Advantages”, http://www.wipo.int/export/sites/www/freepublications/en/designs/911/wipo_pub_911.pdf
52
The information on the Hague System presented here are based on the World Intellectual Property Organization
(WIPO) document, “The Hague Agreement Concerning the International Registration of Industrial Designs: Main
Features and Advantages”, http://www.wipo.int/export/sites/www/freepublications/en/designs/911/wipo_pub_911.pdf
53
Hague System for the International Registration of Industrial Designs, http://www.wipo.int/ hague/en/
22
Reference text for Trainers
International Register and have effect by means of one simple procedural step carried out
by the International Bureau.
The Hague Agreement has 56 Contracting parties. Poland is a Party to the Hague Agreement.
1.3.4 The Washington Treaty on Integrated circuits and Layout-designs (topographies)
Integrated circuits, and layout-designs are protected by the Treaty on intellectual property in
respect of Integrated circuits (or “Washington Treaty”) adopted on 26 May 1989. It is not yet in
force as it has only 10 Contracting Parties. The Czech Republic, Poland and Romania are so far
not contracting parties.
The aim of the treaty is to ensure the protection of Integrated circuits and layout-designs within the
territory of each of its members though the offer of a legal ground for the prevention of unlawful
actions against Integrated circuits and Layout-designs and for appropriate legal remedies in cases
of committed infringements. Art. 4 states: “Each Contracting Party shall be free to implement its
obligations under this Treaty through a special law on layout-designs (topographies) or its law on
copyright, patents, utility models, industrial designs, unfair competition or any other law or a
combination of any of those laws”.
1.3.5 The Madrid Agreement Concerning the International Registration of Marks
The Madrid Agreement concerning the International Registration of Marks was adopted in 1891
and entered into force in 1892 The agreement was revised in 1900, 1911, 1925, 1934, 1957 and
1967 and amended in 1979. Any State being a party to the Paris Convention may accede to the
Madrid Agreement.
The Protocol relating to the Madrid Agreement (Madrid Protocol) was adopted in 1989 and entered
into force on 1 December 1995. Under the Madrid Protocol the application for international
registration can be based on a trademark application filed in the country of origin. It is administered
by WIPO.
Due to the international procedural mechanism, the Madrid system offers a trademark owner the
possibility to have his trademark protected in several countries by simply filing one application
directly with his own national or regional trademark office. An international mark so registered is
equivalent to an application or a registration of the same mark effected directly in each of the
countries designated by the applicant. If the trademark office of a designated country does not
refuse protection within a specified period, the protection of the mark is the same as if it had been
registered by that Office. The Madrid system also simplifies the subsequent management of the
mark, since it is possible to record subsequent changes or to renew the registration through a
single procedural step.
In October 2004, the European Community joined the Madrid Protocol System, thus including the
possibility to use Community Trademarks as a basis for international trademark applications and
for Community Trademarks to be applied for via international route.
The Madrid Agreement has 56 members while the Madrid Protocol has 82. Poland is a member of
both.
1.3.6 The Singapore Treaty on the Law of Trademarks
The Singapore Treaty on the Law of Trademarks54 was signed in Singapore in March 2006. The
Treaty entered into force in 2009. Poland is Party to the Treaty.
The Treaty establishes common standards for procedural aspects of trademark registration and
licensing. It maintains the streamlined application formalities of the current Trademark Law Treaty
of 1994, but eliminates the provision that required national offices to accept paper applications.
This variation allows national trademark offices to progress to an entirely electronic system.
The Singapore Treaty applies to marks that can be registered under the law of a Contracting Party.
Most importantly it is the first time that non-traditional marks are explicitly recognized in an
54
The full text of the Singapore Treaty could be found on: http://www.wipo.int/treaties/en/ip/singapore/
23
Reference text for Trainers
international instrument dealing with trademark law. The Treaty is applicable to all types of marks
including non-traditional visible marks, such as holograms, three-dimensional marks, movement
marks, and non-visible marks, such as sound, olfactory or taste and feel marks. The Regulations
provide for the mode of representation of these marks in applications, which may include nongraphic or photographic reproductions. The Treaty also includes a new provision addressing relief
measures for failure to comply with time limits during the trademark application process.
Special provisions have been drawn up to provide developing and less developed countries (LDCs)
with additional technical assistance and technological support as to enable them to take full
advantage of the provisions of the Treaty. It was recognized that LDCs shall be the primary and
main beneficiaries of technical assistance by Contracting Parties of the WIPO.
1.3.7 The Lisbon Agreement for the Protection of Appellations of Origin and their International
Registration 55
The Lisbon Agreement was concluded in 1958, revised in Stockholm in 1967 and amended in
1979. The Agreement is open to States party to the Paris Convention. The aim of the Agreement is
to provide for the protection of appellations of origin. Names as such are registered by the
International Bureau of WIPO in Geneva upon the request of the competent authorities of the
interested contracting State. The International Bureau communicates the registration to the other
contracting States. A contracting State may declare that it cannot ensure the protection of a
registered appellation within one year. A registered appellation may not be declared to have
become generic in a contracting State as long as it continues to be protected in the country of
origin.
The Lisbon Agreement has 26 Contracting parties, but Poland is not a contracting party.
55
World Intellectual Property Organization (WIPO), Summary of the Lisbon Agreement for the Protection of
Appellations
of
Origin
and
their
International
Registration,
available
at:
http://www.wipo.int/treaties/en/registration/lisbon/summary_lisbon.html
24
Reference text for Trainers
SOURCES
Organization for Economic Cooperation and Development (OECD) (2007), “The Economic Impact
of
Counterfeiting
and
Piracy”,
Executive
Summary,
http://www.oecd.org/dataoecd/13/12/38707619.pdf
United Nations Interregional Crime and Justice Research Institute (UNICRI) (2007) “Counterfeiting:
A Global Spread, A Global Threat”, available at: http://www.unicri.it/news/07123_Counterfeiting_CRT_Foundation.php
World Intellectual Property Organization (WIPO) (2010) About geographical indications, What is a
Geographical Indication? http://www.wipo.int/geo_indications/en/about.html#agri
World Intellectual Property Organization (WIPO) (2010) About Industrial Designs, available at:
http://www.wipo.int/designs/en/about_id.html#protect
World Intellectual Property Organization (WIPO) (2010) About Trademarks, What kinds of
trademarks
can
be
registered?
available
at:
http://www.wipo.int/trademarks/en/about_trademarks.html#function
World Intellectual Property Organization (WIPO) (2010) Frequently Asked Questions/ Patent,
available at: http://www.wipo.int/patentscope/en/patents_faq.html#protection
World Intellectual Property Organization (WIPO) (2010) Hague System for the International
Registration of Industrial Designs, http://www.wipo.int/ hague/en/
World Intellectual Property Organization (WIPO) (2010) Industrial Designs, available at:
http://www.wipo.int/designs/en/
World Intellectual Property Organization (WIPO) (2010) Madrid Agreement concerning the
International
registration
of
Marks,
available
at:
http://www.wipo.int/madrid/en/legal_texts/trtdocs_wo015.html
World Intellectual Property Organization (WIPO) (2010) Madrid System for the International
Registration of Marks, available at: http://www.wipo.int/madrid/en/
World Intellectual Property Organization (WIPO) (2010) Patent Cooperation Treaty (PCT) (1970),
available at: http://www.wipo.int/pct/en/treaty/about.html
World Intellectual Property Organization (WIPO) (2010) Protecting Inventions by Utility Models,
What
is
a
Utility
model?
available
at:
http://www.wipo.int/sme/en/ip_business/utility_models/utility_models.htm
World Intellectual Property Organization (WIPO) (2010) Summary of the Paris Convention for the
Protection
of
Industrial
Property,
available
at:
http://www.wipo.int/treaties/en/ip/paris/summary_paris.html
World Intellectual Property Organization (WIPO) (2010) Summary of the Lisbon Agreement for the
Protection of Appellations of Origin and their International Registration, available at:
http://www.wipo.int/treaties/en/registration/lisbon/summary_lisbon.html
World Intellectual Property Organization (WIPO) (2010) The Hague Agreement Concerning the
International Registration of Industrial Designs: Main Features and Advantages, available at:
http://www.wipo.int/export/sites/www/freepublications/en/designs/911/wipo_pub_911.pdf
World Intellectual Property Organization (WIPO) (2010) What is a Trademark? available at:
http://www.wipo.int/trademarks/en/trademarks.html
World Trade Organization (WTO) (2010) PART II — Standards concerning the availability, scope
and
use
of
Intellectual
Property
Rights,
available
at:
http://www.wto.org/english/tratop_e/trips_e/t_agm3b_e.htm#4
25
Reference text for Trainers
World Trade Organization (WTO) (2010) TRIPS: Geographical indications, Background and the
Current situation, available at: http://www.wto.org/english/tratop_e/trips_e/gi_background_e.htm
The World Trade Organization (WTO), www.wto.org
26
Reference text for Trainers
SECTION 2
Definitions of Counterfeiting and Piracy and the Involvement of
Organized Crime
2.1 Definitions of Counterfeiting and Piracy
Counterfeiting and piracy are terms used to describe a range of illicit activities linked to IPR
infringement.56 In its broader sense, at the international level the term counterfeiting is often used
to indicate the infringement of any intellectual property rights, including trademarks, patents,
industrial designs, copyrights and related rights.
A distinction between the two concepts of counterfeiting and piracy can be made, where the first
term refers to the infringement of the norms ruling the use of trademarks and industrial property in
general and the latter refers to the reproduction of copyrighted material without the consent of the
right holder.
The TRIPS Agreement suggests the definitions of counterfeiting and piracy for the purposes of the
agreement. Footnote 14 of art.51 “Suspension of Release by Customs Authorities”, states:
(a) "counterfeit trademark goods" shall mean any goods, including packaging, bearing without
authorization a trademark which is identical to the trademark validly registered in respect of such
goods, or which cannot be distinguished in its essential aspects from such a trademark, and which
thereby infringes the rights of the owner of the trademark in question under the law of the country of
importation;
(b) "pirated copyright goods" shall mean any goods which are copies made without the consent of
the right holder or person duly authorized by the right holder in the country of production and which
are made directly or indirectly from an article where the making of that copy would have constituted
an infringement of a copyright or a related right under the law of the country of importation.57
The International Trademark Association (INTA) defines counterfeiting as “the practice of
producing goods, often of inferior quality, and selling them under a brand name without the brand
owner’s authorization. Generally, counterfeit goods are sold under a mark that is identical to or
substantially indistinguishable from a mark that is registered for the same goods, without the
approval or oversight of the trademark owner. Many famous brands, such as COCA-COLA®,
MARLBORO®, and MICROSOFT®, are the subject of counterfeiting, as are brands associated
with products ranging from peanut butter to aircraft parts. Counterfeiting should be distinguished
from trademark infringement or passing off, which involves the use of confusingly similar indicia.
Counterfeiting is most prevalent in developing countries with a strong manufacturing capability but
generally speaking, counterfeit goods are produced and sold around the globe.” 58
The UNESCO World Anti-Piracy Observatory states that piracy “includes the reproduction and
distribution of copies of copyright-protected material, or the communication to the public and
making available of such material on on-line communication networks, without the authorization of
the right owner(s) where such authorization is required by law. Piracy concerns different types of
works, including music, literature, films, software, videogames, broadcasting programmes and
56
Organization for Economic Cooperation and Development (OECD) (2007), “The Economic Impact of Counterfeiting
and Piracy”, Executive Summary, http://www.oecd.org/dataoecd/13/12/38707619.pdf
57
World Trade Organization (WTO), Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS),
http://www.wto.org/english/docs_e/legal_e/27-trips.pdf
58
International
Trademark
Association
website,
“What
is
counterfeiting?”,
http://www.inta.org/index.php?option=com_content&task=view&id=1534&Itemid=&getcontent=4
27
Reference text for Trainers
signals.”59 The same source also mentions an interesting debate on the compatibility between the
term of “piracy” and the absence of the commercial purpose in the activity by stating that
“[t]raditionally, piracy concerned the unauthorized reproduction and distribution of physical copies
of protected works, on a commercial scale or with a commercial purpose. However, the rapid
development of the Internet and the massive unauthorized on-line use of protected content, where
the "commercial" element is often missing, have given rise to a lively debate. The question whether
such use constitutes "piracy" and should be treated in the same way as traditional piracy is at the
heart of the current copyright debate. […]”60
Numerous definitions of counterfeiting exist in literature. Staake and Fleisch (2008) define
counterfeiting as “the unauthorized reproduction of goods, services or documents in relation to
which the state confers upon legal entities a statutory monopoly to prevent their exploitation by
others”.61 If we specifically refer to products, counterfeiting is defined by the same authors as “the
manufacture of articles which are intended to appear to be as similar to the original as to be passed
off as genuine items”.62
Different typologies of counterfeiting – or distinctions within the general definition – could be also
identified. Staake and Fleisch distinguish between deceptive counterfeiting and non-deceptive
counterfeiting: the first refers to cases in which the buyer purchases counterfeit goods in “good
faith”, i.e. without knowing that the intellectual property right inherent to the good has been
infringed; the second to cases in which the buyer fully knows that the article is the result of an IPR
infringement.63
According to Casillo, another distinction could be made between two modalities of counterfeiting:
allusion and expropriation.64 The first concept refers to goods which are very similar but
intentionally not identical to those already commercialized on the market or to goods which recall
other brands or trademarks of famous articles.65 On the contrary, cases of expropriation could be
identified when: (a) the original brand is affixed to goods which belong to product categories
different from the original one66; (b) the original product is imitated in its format or design or
functionality67; (c) goods are produced almost identical to the original articles, by copying brands,
trademarks, design, format and technical characteristics. The last case of counterfeited goods
almost identical to the original ones is alternatively defined by Casillo as total counterfeiting.68
2.2 Counterfeiting as a financial and IP crime
According to the Interpol, Intellectual Property Crime (IPC) is a generic term used to describe a
wide range of counterfeiting and piracy offences. It primarily affects the industrial and trade sector,
therefore, IPC falls under the classification of financial crimes. Counterfeiting and piracy are
undoubtedly among the most serious and widespread crimes under the IPC category and by
extension under financial crimes. Other types of financial crimes are currency counterfeiting,
money laundering, payment/credit card fraud etc.69
59
UNESCO, World Anti-Piracy Observatory, “What is Counterfeiting?”, http://portal.unesco.org/culture/en/ev.phpURL_ID=39397&URL_DO=DO_TOPIC&URL_SECTION=201.html
60
Ibid.
61
Staake, T., Fleisch, E. (2008), “Countering Counterfeit Trade”, Springer (ed.), p.17.
62
Ibid.
63
“Deceptive counterfeiting shall refer to cases where a person or an organization purchases counterfeit goods in the
belief they are buying genuine articles; non-deceptive counterfeiting shall refer to cases where a person or an
organization purchase counterfeit goods knowing of their counterfeit nature”. Ibid., p.18.
64
See Casillo, S. (1998), “L’irresistibile ascesa dell’industria del falso in Italia”, in Il Mulino, n°4, p.709.
65
Some examples could be done: famous cases of allusion are counterfeiting of perfumes such as Chanel No.5 and
Versace (respectively counterfeited as “Cannel 5” and “Versage”) or of car-stereo Pioneer (become “Pioniere”) and even
pens (Bic which has been counterfeited as “Bip”).
66
For example the brand of a perfume could be affixed to clothes or other goods which are not perfumes.
67
This is for example the case of reverse engineering or industrial espionage able to lead to the production of products
with the same level of quality or functionality.
68
Casillo, S., op. cit., p.698.
69
Information retrieved form the Interpol website, Information retrieved form the Interpol website,
http://www.interpol.int/public/FinancialCrime/default.asp
28
Reference text for Trainers
A comprehensive definition of IPC has been made by the Northern Ireland Organized Crime
Taskforce according to which IPC involves “counterfeited and pirated goods, manufactured and
sold for profit without the consent of the patent or trademark holder.”70 IPC represents one aspect
of the informal economy (black market) which operates in parallel to the formal economy.71 A
variety of activities within the informal economy involve organized crime. Examples include: drugs
trafficking, human trafficking, smuggling of migrants or counterfeit credit cards and is structured
upon practices such as corruption, extortion, blackmail, bribery etc. IPC involves a wide range of
criminal actors ranging from individuals to organized criminal groups. IPC includes the
manufacturing, transporting, storing and sale of counterfeit or pirated goods. Generally, the above
is organized and controlled by criminals or criminal organizations.72 Due to its expansion and its
significant economic importance the informal economy favours the perpetration of IPC while IPC in
turn continues to nourish informal economy’s networks.
Interpol states that IPC is a serious financial concern for producers, brand owners and various
companies73 as it contributes towards mass losses in annual turnovers, hampers the Research and
Development (R&D) sector and encourages unfair competition which cannot be sustained by
legitimate companies. In addition, counterfeiting is a serious threat against the health and safety of
consumers in many cases as the compromised quality of counterfeit products put consumers’ life in
danger, especially products of “first range” consumption such as medicines, food and beverages,
spirits and children’s toys.
2.3 Beyond IPR Infringement: the Negative Impact of Counterfeiting
Counterfeiting is generally considered to be a relatively harmless and “victimless” crime.74
Furthermore, from a consumer’s perspective this activity apparently creates some advantages as
counterfeit goods are usually low price replicas of costly, desirable goods. Consequently, this
allows the average consumer to purchase goods which would otherwise have been out of reach. It
may be for this very reason that the repression of counterfeiting has been lower than other types of
crime.75 In reality, however, counterfeiting constitutes a serious problem which causes grave
repercussions throughout the economy, the state and in many cases, among consumers.76
Adopting the mainstreaming classification of the costs of crime (e.g. the Mainstreaming
Methodology for Estimating Costs of Crime project -MMECC)77, three categories of costs can be
distinguished: costs in anticipation of crime, costs as a consequence of crime and costs in
response to crime. Costs in anticipation of crime, which follow a preventive approach, are incurred
when measures are implemented with the objective of reducing the vulnerability of goods to
counterfeiting. These costs may include specific expenses (i.e. anti-counterfeiting technologies) or
general costs to improve risk-reducing behaviour (i.e. internalization of the company’s code of
ethics and principles by employees as to ensure a higher level of confidentiality with regards
projects and goods). Costs as a consequence of crime correspond to any costs or losses incurred
by victims as a consequence crime. These may include productivity loss, property loss, long term
consequences of victimization, legal expenses, health services etc. Ultimately, costs in response of
crime are equivalent to expenses incurred for the detection of a crime and the prosecution of
offenders (e.g. police, prosecution and legal expenses).78
70
See the Organized Crime Taskforce of Northern Ireland (2002), “The Threat: Assessment 2002. Serious and
Organized
Crime
in
Northern
Ireland”,
the
Police
Service
of
Northern
Ireland,
p.8,
http://www.nio.gov.uk/organised_crime_threat_assessment_2002.pdf
71
Ibid., pp.2-3.
72
Ibid., p.3.
73
Interpol website, op. cit., http://www.interpol.int/public/FinancialCrime/default.asp
74
OECD (2008), op. cit., p.263.
75
Ibid.
76
International Anti-Counterfeiting Coalition (IACC) (2005), “The Negative Consequences of Intellectual Property
Theft: Economic Harm, Threats to the Public Health and Safety and Links to Organized Crime and Terrorism”, white
paper, Washington.
77
See the MMECC website, http://www.costsofcrime.org/CostingPrinciplesandMethodology/
78
Ibid.
29
Reference text for Trainers
2.3.1 IPR Holders
The IPR holders are usually those companies which manufacture and sell the goods for which they
hold IPRs. In general, there are two situations which may increase the risk for companies to
become victims of counterfeiting:79

when they fail to protect themselves adequately as a result of lack of knowledge regarding
the norms related to IPRs and/or they do not apply these norms because they believe them
to be a waste of money or they simply chose not to invest to protect the brand;

when they contract out or set up company branches in countries where the protection of
IPRs is inadequate and/or where countermeasures against such criminal activities are not
implemented.
To reduce this risk, numerous companies now invest in preventive measures and actions to
prevent the crime, such as R& D for the proposal of new products, the hiring of private investigators
and/or the introduction of anti-counterfeiting technologies.80 Despite these interventions,
companies are still at risk of counterfeiting.
The existence of a “counterfeiting industry”, which produces and sells products at a lower price
than the originals, has grave repercussions on the legal industry. It should also be noted that the
counterfeiting industry also benefits from the fact that it does not incur some costs which are
instead applied to a legal industry and the legal market. Examples of such costs include:

costs to guarantee high quality standards;

costs resulting from the compliance with regulations concerning safety in the workplace
and/or quality controls;

costs for the purchasing of high quality materials;

costs for marketing and R&D (these are incurred by the industry which legally produces the
original goods).
The counterfeiting industry produces goods which already include R&D value and which do not
require any type of marketing, as advertising carried out for the original good is usual enough
publicity. Taxes are generally avoided by counterfeiters as their products are usually sold on the
black market.81 Lower expenses incurred mean that the counterfeiting industry can produce and
sell counterfeit goods at a lower price.82 Consequently, the following can be expected with respect
to the legal company:

a loss in terms of market share for the company;

a reduction in revenues;

a loss in terms of job positions.
According to a classification system formulated by Bronca, two categories of costs can be
distinguished:83

Direct costs: reduction in demand as consumers opt for the cheaper version of the product,
financial damages occur due to required changes in productions, as well as investment in
R&D.

Long term indirect costs: expenses incurred for the registration of a trademark, advertising,
investigation costs and legal expenses.
79
Calovi, F., Vettori, B., Yu J. (2008), op. cit., pp.132-134.
Ghidini G. (1998), “Ricerca e Sviluppo come motore del ‘vantaggio competitivo’: il ruolo della proprietà intellettuale” in Micro&Macro Marketing, n°2, pp.229-244.
81
UNICRI (2007), op. cit., p. 41.
82
Centre d’Etudes Internationales de la Propriété Industrielle (CEIPI) (2004), “Impacts de la contrefaçon et de la
piraterie en Europe. Rapport Final”, Université Robert Schuman, Strasbourg, pp.16-17, downloadable at
http://counterfeiting.unicri.it/resources.php
83
Bronca, E. (1998), “La contraffazione del marchio” in Micro&Macro Marketing, n°2, August, pp.195-196.
80
30
Reference text for Trainers
According to the Association of Public Safety Communications Officials (APCO), the incidence of
counterfeited sporting goods is equivalent to 10-12% of the total value of the sector globally. In the
EU alone this incidence is equivalent to 11% and the estimated losses are more than 7.5 billion
Euros.84 The World Health Organisation (WHO) estimates that the problem of counterfeit medicines
is limited in developed countries in which their presence is less than 1% due to efficient regulatory
and control mechanisms. The problem is significant in developing countries (Africa, areas of Asia
and areas of Latin America) in which the incidence of counterfeit medicines ranges from 10-30%. It
is worth noting that some former Soviet republics have a proportion of counterfeit medicines which
is above 20% of market value. Finally, WHO estimates that more than 50% of medicines sold
online through sites that conceal their actual postal address are counterfeit.85
According to the Centre for Economics and Business Research, counterfeiting within the
pharmaceutical sector has led to a loss of 292 million Euros 86. According to The Motor and
Equipment Manufacturers Association, sale of counterfeited spare motor vehicle parts has caused
a total loss of 12 billion dollars and a loss of 750,000 jobs.87 According to the WIPO, total losses in
the perfume and cosmetics sector are estimated to be 3,017 million Euros.88 Furthermore,
according to the Council of Europe, every year counterfeiting causes a total loss of 100,000 jobs
within the European Union.89
2.3.2 Consumers’ Health and Safety
There are two types of consumers who purchase counterfeit goods: aware consumers and
unaware consumers. Consumers of counterfeit clothes and accessories are usually aware of what
is being purchased. In this case, the item is purchased as people aspire to move up the social
ladder through imitating members of higher social classes through buying a “status symbol”
product. Advertising and brands’ reputation amplify this desire. The average consumer, however,
does not have enough financial resources to buy such costly goods and may tend to opt for the
counterfeit version.90
Accidental consumers are people who buy counterfeit products without being aware of their illegal
nature. Deceived consumers sincerely believe to have purchased an authentic product at a
convenient price. In such case, it often results in the goods bought not meeting the consumer’s
expectations.
It is to be noted that low quality of some counterfeit products can be extremely hazardous to the
consumers’ health and safety.91 Examples include: pharmaceuticals, electronic components,
alimentary products, spare parts for motor vehicles and toys. Such counterfeit goods are usually
made from sub-standard materials which have not undergone any sort of safety control, which in
some cases may contain harmful substances. For this reason consumers of counterfeit goods tend
to be more cautious when purchasing such items and consequently counterfeiters are obliged to
produce goods even more similar to the original, making them less distinguishable from one
another. Examples of serious consequences caused by counterfeited goods include: numerous
deaths in various countries (China, Turkey, Thailand)92 caused by the consumption of counterfeit
food and/or beverages; food and/or alcohol poisoning; plane and/or car crashes as a result of
counterfeit spare parts used in aircrafts and/or motor vehicles; serious health problems caused by
the consumption of counterfeit medicines (often made without or with insufficient active ingredients)
or smoking of counterfeit cigarettes (produced by mixing plastic, soil, sand and rodent droppings
84
APCO (2003), “Global Counterfeiting”, Background Document, p.18.
WHO (2006), “Counterfeit medicines: an Update on Estimates”, International Medical Products Anti-Counterfeiting
Taskforce,
IMPACT,
15
November
available
online
http://www.who.int/medicines/services/counterfeit/impact/TheNewEstimatesCounterfeit.pdf
86
Centre for Economics and Business Research (CEBR ) (2000), “The Economic Impact of Counterfeiting in Europe”,
pp. 2-3.
87
Majid, Y. (2005), “A Deadly Faith in Fakes”, quoted in CEBR (2000), ibid., p.8.
88
World Intellectual Property Organization (WIPO) (2004), “WIPO National Seminar” ibid., p.4.
89
Council of Europe (2004), “Counterfeiting: Problems and Solutions”, Report of the Committee on Economic Affairs
and Development.
90
Curcio, A.M (1998), “Desiderio di falso, falso desiderio?” in Micro&Macro Marketing, n°2, pp.215-216.
91
UNICRI (2007), op. cit., pp. 49-50.
92
"Global Counterfeiting” (2003), background document, pp.11-15.
85
31
Reference text for Trainers
with tobacco leaf or which contain extremely high nicotine levels); eye, ear, kidney and immune
system problems caused by counterfeit batteries (often made with high levels of mercury);
inflammation caused by use of fragrant and cosmetic products containing bacteria or toxic
substances; safety problems for children who play with counterfeit toys.93
Examples of counterfeit goods considered to be hazardous which have been seized include:
counterfeit shampoos which contained bacteria or even acid in North America and in Zambia;
packages of counterfeit toothpaste which contained toxic substances in Spain; children toys
produced with flammable materials in Canada.94
Health and safety costs are not the only costs incurred by consumers. Other costs may include
emotional and physical harm (value of reductions in wellbeing experienced by an individual or
household as a result of the physical and emotional impact of victimization) and legal expenses
(only if the users decide to take legal action).95
2.3.3 National Economy and Society
The State is also a victim of the counterfeiting industry, since it has to bear the costs in response to
crime. In particular, the State must cover police costs, justice costs, costs deriving from criminal
sanctions, costs linked to the drawing-up of a legislative structure which disciplines the crime, as
well as the penalties and costs necessary to have effective controls at customs.
Further costs incurred by the State include those which derive from crime. These costs can be
divided into two categories:

Direct losses: national governments may bear losses due to a reduction in tax revenues. A
reduction in tax revenues can be caused by different factors. Primarily, it may reflect a
reduction of revenues originating from legal companies as a result of less profit earned and
thus lower taxes to be paid. A second factor is linked to the fact the counterfeit industry
often sells its products on the black market thus avoiding paying taxes.

Indirect losses: counterfeiting can lead to general loss of trust in the government’s capacity
of ensuring compliance with IPRs. Consequently, there is an ever higher reluctance to
establish company branches in countries where counterfeiting is widespread, thus, a
reduction in the amount of foreign investments made within these countries.
Furthermore, authentic products which are manufactured in countries where the counterfeit
industry is notably active tend to be perceived, even though authentic, as low quality goods. This
obviously has a negative effect on exports. As a result, the authentic product’s reputation is
defamed and the levels of exports are decreased.96
2.4 Types of Counterfeiters
Counterfeiters are individuals in various ways involved in activities linked to the unauthorized
production of copies of original products with the purpose of generating profits. The decision to
invest in the production of counterfeit goods is often based on a cost-benefit analysis.
Counterfeiters base their costs assessment on a calculation of the efforts required to produce a
particular counterfeit good. Social perceptions, legislation and the level of its enforcement97 are
also taken into account. Furthermore, the evaluation of benefits weighs up the opportunities of
earning large profit margins at low costs.98 It is to be noted that counterfeiting has until recently
been regarded as a “victimless crime” and has not been deemed socially dangerous, therefore its
repression has been limited.99
93
Ibid.
Ibid., pp.49-51 and UNICRI (2007), op. cit., pp. 49-50.
95
For further information see http://www.costsofcrime.org/CostingPrinciplesandMethodology/
96
“Global counterfeiting” (2003), ibid., p.16, and UNICRI, (2007), op. cit., p. 49.
97
Williams F.P., Mc Shane M.D. (2002), “Devianza e criminalità”, Il Mulino, Bologna, p.196.
98
OECD (2008), “The Economic Impact of Counterfeiting”, Paris, pp. 47-49, http://www.iccwbo.org/uploadedFiles/BASCAP/Pages/OECDFullReport.pdf
99
Ibid., p.87.
94
32
Reference text for Trainers
Counterfeiters are often involved in other criminal activities, such as drug and arms trafficking,
illegal workforce employment, human trafficking, illegal immigration and money laundering.
Furthermore, these individuals may resort to violence as a tool to coerce others to work and/or
cooperate with them. These coercive methods may include psychological pressure, blackmail and
intimidation.100 Characteristics which, together with the use of coercion, have led to the worldwide
involvement of numerous individuals operating alone or more often organized in groups.
3.4.1 Single Counterfeiter
Even though counterfeiting activities are often carried out at an international level and require a
complex set of skills, which individual companies do not usually possess, smaller scale
counterfeiting activities do exist. These small scale activities are carried out by small
entrepreneurial organizations constituted mainly by single counterfeiters who may cooperate
together and which produce and distribute counterfeited goods. These small scale activities can
evolve into larger scale activities if there is a significant amount of capital and the entrepreneur has
tight connections with third parties operating in and across different locations. 101 In such cases,
crimes considered to be typical of those linked to organized crime are committed. This may include
the employment of an illegal workforce, corruption of customs officers and police forces, coercive
methods such as blackmail and intimidations used to oblige legal companies to produce counterfeit
goods. Furthermore, these illegal activities may be facilitated by weak border controls, differences
across jurisdictions and a lack of severe and adequate penalties.102
Five types of counterfeiters have been detected by Staake and Fleisch:103

Disaggregators: usually produce replicas of fashion company brands. Goods produced are
easily made and are often of poor quality (the machines used during manufacturing may be
of poor quality). In order to minimize transport costs these goods are usually sent in large
quantities. Disaggregators reduce the risks of detection by choosing countries considered
to have weak border controls as places of destination for the goods in question.

Imitators: produce replicas of medium quality, thus imitators are required to have specific
knowledge regarding the production of the chosen goods. Furthermore, a large amount of
initial capital is invested in machinery used for manufacturing the goods. Imitators
counterfeit both brands and designs. Their market is mainly national.

Fraudsters: produce low quality counterfeit goods. The goods produced are similar in
appearance to the original. It is for this reason that their retail price is just slightly lower than
the original good.

Desperados: produce easily imitable goods, such as medicines and spare parts for motor
vehicles. In order to reduce the risk of being detected, desperados produce small quantities
of goods to then sell them at high retail prices.

Counterfeit smugglers: profit by avoiding tax and violating custom laws. One particular form
of ‘counterfeiting’ consists of suppliers selling factory overruns on the black market. Factory
overruns are those goods produced in excess with respect to the quantity contractually
ordered from the supplier by the retailer. This phenomenon cannot be formally considered
as counterfeiting, since neither copyright nor trademark rights are violated (after all, the
good being sold is an authentic product). The license agreement stipulated between the two
parties (supplier and retailer) is violated. It is to be noted, however, that these products are
100
Union des Fabricants (UNIFAB) (2004), “Counterfeiting & Organized Crime Report”, 2nd edition, Paris, p.
11,http://counterfeiting.unicri.it/docs/Union%20des%20Fabricants.Counterfeiting%20and%20Organised%20Crime%20R
eport.2nd%20edition2004.pdf
101
UNICRI, op. cit., p.110.
102
Savona E.U. (1999), “Trends and Causes of Cross-border (organized) Crime in Europe”, text of the report used
during the “Conference on Area of freedom, security and justice in the EU: policy development and practical
implementation of criminal law co-operation”, ERA Congress Centre, 18-19 October, Trier (Germany).
103 Staake, T., Fleisch, E. (2008), “Countering Counterfeit Trade. Illicit market insights, Best-Practice Strategies and
Management Toolbox”,Springer-Verlag (editions), Berlin Heidelberg, pp.22-54.
33
Reference text for Trainers
often included in statistics concerning counterfeit products and their dissemination through
business associations.
2.4.2 The Implication of Organized Crime
The United Nations Convention against Transnational Organized Crime104, adopted by General
Assembly resolution 55/25 of 15 November 2000, is the main international instrument in the fight
against transnational organized crime. The Convention entered into force on 29 September 2003.
Poland ratified the Palermo Convention on 12 November 2001.
The Convention represents a major step forward in the fight against transnational organized crime
and signifies the recognition by Member States of the seriousness of the problems posed by it, as
well as the need to foster and enhance close international cooperation in order to tackle those
problems. States that ratify this instrument commit themselves to taking a series of measures
against transnational organized crime, including the creation of domestic criminal offences
(participation in an organized criminal group, money laundering, corruption and obstruction of
justice); the adoption of new and sweeping frameworks for extradition, mutual legal assistance and
law enforcement cooperation; and the promotion of training and technical assistance for building or
upgrading the necessary capacity of national authorities.
Counterfeiting is a highly profitable crime and a major source of tax-free income. It is yet another
“seed corn” enabling organized criminal groups to invest the profits of crime into other illegal
activities. The Palermo Convention represents a significant advancement in the repression of the
phenomenon of counterfeiting as irrefutable links between counterfeiting and organized criminal
groups have been established.
According to Art. 5 an organized criminal group is a “structured group of three or more persons,
existing for a period of time and acting in concert with the aim of committing one or more serious
crimes or offences established in accordance with this convention, in order to obtain, directly and
indirectly, an economic or other material benefit”.105 These criminal groups are characterized by a
durable structure which commits criminal offences in order to generate profits. The globalization of
markets, together with the widespread distribution of information technologies has led an ever
greater demand for illegal goods and services. Consequently, this increase in demand has led to
new profit opportunities and the formation of alliances among various organizations.106 These
elements provide a better understanding of why a significant portion of counterfeit trafficking is
managed by organized criminal groups. There is a demand for illegal products which is satisfied by
them. Counterfeit goods may be sought by consumers if there is a lack of products along legal
distribution chains or if the prices offered are more advantageous than those of the original
products.
These counterfeit goods are often transported along the same trade routes used for drug and arms
trafficking. Consequently, such goods may be transported in collaboration with the various groups
managing other types of illegal trade.107 These relations have, with time, facilitated the evolution of
counterfeiting and transformed it into an extremely well organized transitional criminal activity.
Organized criminal groups have various economic resources and thus can invest in all types of
sectors, including the technological ones, therefore, they can be considered as real illegal mass
producers. Direct involvement of the criminal groups in the counterfeiting industry occurs if the
counterfeit activity is owned by one of these organized criminal groups.
Indirect involvement in counterfeiting occurs when one of these groups decides to endorse a preexisting legal company.108 Organized criminal groups are able to evade border controls by resorting
to corruption and/or intimidation which may further result in their products being put on the legal
104
To download the text of the United Nations Convention against Transnational Organised Crime, please visit:
http://www.unodc.org/unodc/en/treaties/CTOC/index.html
105 United Nations (2000), “United Nations Convention against Transnational Organized Crime”, Art. 2(a).
106
UNIFAB (2004), op. cit., p.7.
107
UNICRI (2007), op. cit., pp.104-109.
108
Calovi, F., Vettori, B., Yu, J. (2008), “I falsi di moda. Le vulnerabilità del mercato italiano della moda alla
contraffazione”, Franco Angeli (editions), Milano, p. 130.
34
Reference text for Trainers
distribution chain.109 Counterfeiting activities ensure a low level of detection and a high level of
profitability. Organized criminal groups consider counterfeiting as a way to generate funds which
can be then laundered by investing them in other activities, both illicit and licit.110
The Organisation for Economic Co-operation and Development (OECD) states that organized
criminal groups are actively involved in producing, smuggling and selling untaxed alcoholic
beverages and cigarettes; electronic components; clothes and accessories. This speculation is
based on the fact that the previously mentioned sectors are the most profitable and involve less
risk.111 According to the Union des Fabricants, the Italian Camorra, Albanian gangs, Asian gangs
(especially the Japanese Yakuza) and Turkish clans (in particular the Bucak clan) are the main
criminal networks operating in the counterfeiting industry.112 According to police and
investigations113, it is thought that the Camorra is specialized in counterfeiting clothes, especially
items associated with famous brands. In the Port of Naples alone, according to the Italian Customs
Agency, 60% of the goods unloaded are not checked. 1,600,000 tonnes of goods with Chinese
origin are unloaded and registered; however, another 1,000,000 tonnes of Chinese goods remain
unchecked. It has been estimated that two hundred million Euros of taxes were evaded. Cheap
counterfeit products were bought in Eastern countries, where illegal workforces are often employed
in the production process of such goods, then shipped over to Italy and unloaded at Port of Naples,
to be then loaded onto vans and distributed throughout Italian and other European cities.114 The
Camorra is also involved in the production of counterfeit CDs. These CDs are often imported from
countries such as Bulgaria and Ukraine.115 The Camorra manages all stages of production,
distribution and sales of counterfeit products by financing and controlling the companies which
produce the goods.
Albanian gangs are particularly active in the port of Antwerp in Belgium and they deal with all types
of counterfeit products. Asian gangs are more skilled in the manufacturing and distribution of
counterfeit credit cards, software and electronic entertainment devices. Asian gangs are known to
collaborate with organized criminal groups in Eastern Europe, Eastern India and Nigeria. The
Bucak clan monopolizes the sales of counterfeit clothes in Kusadasi in Turkey.116
The Link between Counterfeiting and other serious Organised Crimes
As any serious organised crime, counterfeiting poses a significant threat to the legitimate economy,
consumer safety, national values and social stability.117 Nevertheless, IP crime is still considered
very attractive to global criminal groups as it is high-profit and low-risk, with inadequate penalties often just a fine and/or a short suspended sentence.
Organized crime’s involvement in counterfeiting may be better understood by considering three
motivations: consolidating, expanding vertically, and expanding horizontally. In the first, as the
entry barrier to piracy is lowered, organized crime entrenches itself in the activity in order to fend off
amateur competitors. In the second, a criminal group expands into piracy to derive profit from
experience in related criminal activity. For instance, the methods used in human smuggling forging documents, laundering money, smuggling objects or people across borders, and the like —
can be leveraged when turning to piracy and vice-versa. The third, and most prevalent, motivation
is expanding into piracy to diversify a criminal group’s illicit revenue streams.
109
UNICRI (2007), op. cit., pp.104-109.
“Global counterfeiting” (2003), Background document, p.20.
111
OECD (2008), op. cit., pp.87-88.
112
Union des Fabricants, (2004), op. cit., pp.16-17.
113
See, Saviano R. (2006), “Gomorra. Viaggio nell’impero economico e nel sogno di dominio della camorra”,
Mondadori (editions), Milano, pp.11-47.
114
Ibid.
115
UNIFAB (2004), op. cit., pp.16-17.
116
Ibid.
117
The Anti-Counterfeiting Group, Links between counterfeiting and other serious organised crime, available at:
http://counterfeiting.unicri.it/docs/AntiCounterfeiting%20Group.Links%20between%20Counterfeiting%20and%20Other%20Serious%20Crimes.February2008.
UK.pdf
110
35
Reference text for Trainers
The profits made by counterfeiting are often used to fund other serious organized crime such as
drugs and arms smuggling, people trafficking, identity theft, money-laundering and child
pornography.118
By investigating drugs or other trafficking/corruption-related crimes, it is frequently found that
warehouses containing counterfeit products are also discovered. The opposite situation hardly
occurs. In order to make advancements in countering counterfeiting-related crimes and discovering
the criminal networks behind them, all the available investigation tools need to be used.
Some case studies and news showing the connection between counterfeiting and other organised
crimes are reported in the boxes below.
BOX 1
Operation Lund and human smuggling in Britain
On 5th February 2004, 21 Chinese illegal immigrant cockle-pickers drowned as their unlicensed gang
master forced them to work in dangerous conditions. Police found evidence that the head of the syndicate
ran an extensive human-smuggling operation at his numerous residences. In gathering evidence, police
also found more than 4,000 counterfeit DVDs, as well as computers containing counterfeit materials. This
case highlighted the “range of possible entry methods exploited by Chinese organized immigration crime
groups”.
Highlight. This case demonstrates an IPR-infringement crime connection to one of the most infamous
incidents of Chinese illegal immigration and labour abuse in England’s history.
Piracy revenue was a secondary but important part of this operation: the commercial scale of operation
showed a significant investment in equipment and blank media. There was no surveillance or intelligence
about how he entered into piracy.
Motivation for entry into piracy. This is a case of vertical expansion, as the gang master’s piracy operation
was a direct extension of the gang’s primary activity of human smuggling. By expanding into piracy, the
gang master was able to capture additional profits from the labour he had at his disposal.
Role of law enforcement. Police identified the piracy operation they uncovered; prosecutors successfully
convicted the gang master and his accomplice of 11 counts of copyright infringement.
Evidence base. The evidence base comprises the court proceedings and press accounts, which provide
vivid details of the drowning tragedy and the national response that followed.
Police discovered tens of thousands of counterfeit DVDs, disc copiers, and high-end printers in a search
of the gang master’s cousin’s residence. Counterfeit DVDs like those found at the residence were being
sold by Chinese illegal immigrants in the area. These circumstances suggest that the immigrant cocklepickers were recruited to also assist in the manufacture and sale of the counterfeit DVDs. The gang
master’s cousin was charged with both immigration and trademark offences.
Source: Rand Corporation, Safety and Justice Programme
118
RAND Corporation (2009), Film Piracy, Organised Crime
http://www.rand.org/pubs/monographs/2009/RAND_MG742.appendix.pdf
and
Terrorism,
RAND,
available
at:
36
Reference text for Trainers
BOX 2
Counterfeiting revenues to fund drug trafficking in the U.K.
In July 2009 fake goods worth around £3m were seized in one of the biggest-ever counterfeit raids in
Manchester. Customs and trading standards officers swooped on a Piccadilly warehouse after a tip-off
and found thousands of boxes of bogus gear.
Officials believe the warehouse supplied hundreds of shops and market stalls across the country. They
are treating it as a body blow to counterfeit gangsters who have plagued Manchester.
In 2007, the Manchester Evening News revealed the city was regarded as the country's fake goods capital
and officers have continued to target the illegal industry. They are now hunting for the factory's owner;
nobody was inside when the doors were smashed down at the Chapeltown Street site.
The huge stash included fake Gucci purses, Prada handbags and thousands of boxes of trainers bearing
brand names such as Nike and Lacoste. There were also polo shirts, fleeces, t-shirts and coats from
bogus top labels such as Armani and Dolce & Gabbana. One pile of boxes contained the popular
Australian Ugg boots.
Officers also found hundreds of ghd hair straighteners. The company warned that the fakes could be
`lethal'. A spokesman for the Anti-Counterfeiting Group said: "There is no doubt that some of the vast
sums raised from counterfeiting go to fund drug trafficking".
Graham Forbes, from Her Majesty's Revenue and Customs, added: "The gangs behind this form of
criminality reap huge profits from their sales which are ploughed straight back into the criminal
underworld, feeding activities like drug dealing and fraud."
Source: Manchester Evening News
BOX 3
Counterfeiting and firearms smuggling: the involvement of Camorra
U.S. authorities alleged that a band of criminals sent from Italy by the Camorra ran a counterfeiting ring in
the tri-state area (New York, New Jersey and Connecticut) that sold knock-off clothing and electronics on
street corners, at flea markets and on the Internet.
It is claimed the proceeds from the sales were funnelled back to the organized crime leadership in Italy.
The alleged leader of the ring imported items such as video cameras, MP3 players and clothing through
his company and then placed counterfeit labels on them. Authorities alleged the group working under the
leader consisted of dozens of people sent by a Naples-based organized crime family, part of the Camorra
organized crime syndicate.
After a seven-month investigation, police raided the ring leader’s house, his company warehouse,
together with another house where authorities said many Italian nationals allegedly involved in the scam
were living. Hundreds of items of counterfeit merchandise, including Apple iPod labels, were recovered
from the warehouse, and police also found a number of firearms.
Source: CIB Counterfeiting Confidential
37
Reference text for Trainers
BOX 4
The case of Ang Bin Hoey Triad in Malaysia
Malaysia became a major centre for the production and distribution of pirated films since law enforcement
in China and Hong Kong began to crack down aggressively on burning labs and began arresting
organized-crime bosses as well as low-level front men in the 1990’s. Many of the counterfeiting operations
in Malaysia are said to have ties to organized crime in Taiwan.
Ang Bin Hoey Triad comprises a network of more than a hundred street gangs with an estimated 11,000
members. It’s leader is alleged to have controlled more than 1,000 companies, many of them illicit,
including several piracy factories.
Highlight. This case demonstrates how counterfeiting and piracy operations fit easily into a traditional,
hierarchical organized-crime structure.
Piracy revenue. The triad profited from counterfeiting and piracy primarily through the extortion of vendors
in Kuala Lumpur.
Motivation for entry into piracy. This is a case of both consolidation and horizontal expansion. At the street
level, the triad’s gangs consolidated its power over territory, in part including profitable counterfeiting and
piracy markets among its rackets. The horizontal expansion was made thorough the 1,000 companies the
leader is alleged to have controlled across both licit and illicit markets.
Role of law enforcement. The Ministry of Domestic Trade and Consumer Affairs handles the enforcement
of anti-piracy laws. Over the years enforcement has been met with violence and intimidation from pirates,
cumulated with death threats against the MDTCA.
Evidence base. Information on ‘Operation Copperhead’ was compiled from numerous press reports and
verified by interviews with law enforcement.
Source: Rand Corporation, Safety and Justice Programme
38
Reference text for Trainers
Sources
APCO (2003), “Global Counterfeiting”, Background Document, p.18.
Bronca, E. (1998), “La contraffazione del marchio” in Micro&Macro Marketing, n°2, August, pp.195196.
Calovi, F., Vettori, B., Yu, J. (2008), “I falsi di moda. Le vulnerabilità del mercato italiano della moda
alla contraffazione”, Franco Angeli (editions), Milano, p. 130.
Casillo, S. (1998), “L’irresistibile ascesa dell’industria del falso in Italia”, in Il Mulino, n°4, p.709.
Centre d’Etudes Internationales de la Propriété Industrielle (CEIPI) (2004), “Impacts de la
contrefaçon et de la piraterie en Europe. Rapport Final”, Université Robert Schuman, Strasbourg,
pp.16-17, downloaded at http://counterfeiting.unicri.it/resources.php
Centre for Economics and Business Research (CEBR) (2000), “The Economic Impact of
Counterfeiting in Europe”, pp.2-3.
CIB Counterfeiting Confidential, (August 2008) available at: http://www.iccccs.org/index.php?option=com_content&view=article&id=29&Itemid=3
Council of Europe (2004), “Counterfeiting: Problems and Solutions”, Report of the Committee on
Economic Affairs and Development available at
http://assembly.coe.int/Documents/AdoptedText/ta04/EREC1673.htm
Curcio, A.M. (1998), “Desiderio di falso, falso desiderio?”, in Micro&Macro Marketing, n°2, pp.215216.
International Anti-Counterfeiting Coalition (IACC) (2005), “The Negative Consequences of
Intellectual Property Theft: Economic Harm, Threats to the Public Health and Safety, and Links to
Organized Crime and Terrorism”, white paper, Washington.
International Anti-Counterfeiting Coalition (IACC) (2005), “The Negative Consequences of
Intellectual Property Theft: Economic Harm, Threats to the Public Health and Safety, and Links to
Organized Crime and Terrorism”, white paper, Washington.
International Trademark Association, “What is counterfeiting?”, available at:
http://www.inta.org/index.php?option=com_content&task=view&id=1534&Itemid=&getcontent=4
Interpol, http://www.interpol.int/Public/FinancialCrime/IntellectualProperty/Default.asp
Manchester Evening News, £ 3m in fake goods seized, available at:
http://menmedia.co.uk/manchestereveningnews/news/s/1127317_3m_in_fake_goods_seized
Noble, K.R. (2003), “The links between intellectual property crime and terrorist financing”, Text of
public testimony of the Secretary General of Interpol, p.2, available at:
http://www.iccwbo.org/uploadedFiles/BASCAP/Pages/links.pdf
Organization for Economic Cooperation and Development (OECD) (2007), “The Economic Impact
of Counterfeiting and Piracy”, Executive Summary, available at:
http://www.oecd.org/dataoecd/13/12/38707619.pdf
Organized Crime Taskforce of Northern Ireland (2002), “The Threat: Assessment 2002. Serious
and Organized Crime in Northern Ireland”, the Police Service of Northern Ireland, p.8, available at:
http://www.nio.gov.uk/organised_crime_threat_assessment_2002.pdf
RAND Corporation (2009), “Film Piracy, Organised Crime and Terrorism”
Saviano, R. (2006), “Gomorra. Viaggio nell’impero economico e nel sogno di dominio della
camorra”, Mondadori (editions), Milano, pp.11-47.
Savona E.U. (1999), “Trends and Causes of Cross-border (organized) Crime in Europe”, text of the
report used during the “Conference on Area of freedom, security and justice in the EU: policy
39
Reference text for Trainers
development and practical implementation of criminal law co-operation”, ERA Congress Centre,
18-19 October, Trier (Germany).
Staake, T., Fleisch, E. (2008), “Countering Counterfeit Trade”, Springer (ed.), p.17.
The Anti-Counterfeiting Group, Links between counterfeiting and other serious organised crime,
available at: http://counterfeiting.unicri.it/docs/AntiCounterfeiting%20Group.Links%20between%20Counterfeiting%20and%20Other%20Serious%20
Crimes.February2008
UNESCO, World Anti-Piracy Observatory, “What is Counterfeiting?”, available at:
http://portal.unesco.org/culture/en/ev.phpURL_ID=39397&URL_DO=DO_TOPIC&URL_SECTION=201.html
United Nations Convention against Transnational Organised Crime, available at:
http://www.unodc.org/unodc/en/treaties/CTOC/index.html
Williams F.P., Mc Shane M.D. (2002), “Devianza e criminalità”, Il Mulino, Bologna
World Trade Organization (WTO), Agreement on Trade-related Aspects of Intellectual Property
Rights (TRIPS), available at: http://www.wto.org/english/docs_e/legal_e/27-trips.pdf
40
Reference text for Trainers
SECTION 3
Counterfeiting at the European Union Level
3.1 The Normative Framework
The Green Paper of 15 October 1998 stated the European Commission’s efforts to define the
objectives of the Community strategy against counterfeiting and piracy and identified the areas
where improvement was required. The main objectives of the Green Paper are: (a) to assess the
economic impact of counterfeiting and piracy in the Single Market; (b) to review the existing
legislation in this field, while identifying the problems and the improvements required on the legal
front; (c) to examine the need for Community action in this area with reference to the objectives of
the Single Market.
Furthermore, the document identified four key areas in which improvements could be made in the
measures to combat counterfeiting within the EU Single Market:

monitoring by the private sector;

the use of technical devices;

sanctions and other means of enforcing IPRs

administrative cooperation between the competent authorities.
Intellectual property is protected by a series of international normative instruments of which the
Member States of the European Union are also a Party. In 2001 the European Union adopted
Directive 2001/29 /EC on the harmonization of specific aspects of copyright and related rights in
the information society (a.k.a. EU Copyright Directive, EUCD), whose aim was to keep the legal
framework of the EU Member States in line with the international conventions on the subject. The
EUCD aims to maintain a high level of protection for copyright and related rights, considering also
the needs arising from the diffusion of digital technology and providing a harmonized protection at
the community level. This harmonized protection should grant all the rights holders, the exclusive
right to make their works protected by copyright accessible to the public as well as the materials
that are protected by other rights.
The EU Legislator intervenes to identify the content of specific exclusive rights of economic use as
well as the extent of the related exceptions. Furthermore, it provides new forms of protection
regarding technological measures designed and used by right holders to prevent any unauthorized
act involving their work. Similar protection is also accorded to rights management information. This
term can be defined as information provided by the right holder that identifies the work, the author
or any other right holder, information regarding the terms and conditions of use of the work, or
numbers and codes that represent such information. The Copyright Directive specifies the content
of the rights of reproduction, communication to the public and of distribution.
Art. 2 confers to authors, performers, phonogram producers, producers and broadcasting
organizations the right of reproduction. It outlines the “exclusive right to authorize or prohibit direct
or indirect, temporary or permanent reproduction by any means and in any form of”, their works,
fixations of their performances, their phonograms, the first fixations of films in respect to the original
and copies of their films and fixation of their broadcast.
The EUCD confers right holders the exclusive right to authorize or prohibit any communication or
transmission to the public, by wire or wireless, of their work, copy of their work and of performances
of performers regarding the right of communication to the public (Art. 3) and the right of distribution
(Art. 4). Moreover, the authors enjoy the exclusive right to authorize or prohibit the distribution of
the original of their works or of copies in any form. The exceptions to the previously mentioned
rights are stated in Art. 5. The main principle is to avoid any prejudice to the technological
41
Reference text for Trainers
development and to adapt the concepts of use and reproduction to the specificities of digital
communication.
The Directive excludes the prohibition of temporary acts of reproduction which are transient or
incidental and that constitute an essential and integral part of a technological process. These
reproduction acts should, for instance, be performed with the sole purpose of enabling a lawful use
of a work or other protected material and should not have independent economic significance.
Member States retain the right to provide for further exceptions or limitations to the right of
reproduction, the right of communication to the public, and the right of distribution. Articles 6 and 7
are directly related to the implementation of the WIPO Copyright Treaty. They are aimed at
ensuring adequate legal protection against the circumvention of the technological measures that
are implemented by the right holders to prevent unauthorized acts on their works protected by
copyright, and to provide for adequate legal protection for rights management information. The
term “technological measures” (art. 6.3) indicates any technology, component or device that, in the
normal course of its operation, is designed to prevent acts, with reference to a work, not authorized
by the right holder of any copyright or related right. The protection accorded by the EUCD relates to
the necessity for the ratifying countries of providing adequate legal measures against the
manufacture, import, distribution or sale of devices, products or components which: a) are
promoted, advertised or marketed for the purpose of circumvention of the specific technological
measures; b) have only a limited commercially significant purpose or are used other than to
circumvent the technological measures; c) are primarily designed, produced adapted or performed
for the purpose of enabling or facilitating the circumvention of the technological measures (art. 6.2).
The concept of rights management information is defined by Art. 7 as any information provided by
the right holders which identifies the work or other protected materials under the Directive, the
author or any other right holder, or information about the terms and conditions of use of the work or
of other protected materials, or any number or codes representing such information.
The EUCD calls Member States for the provision of adequate legal protection against anyone who
a) removes or modifies, without the authorization of the right holder, any rights management
information; b) distributes, imports for distribution, broadcasts, communicates or makes available to
the public, protected works from which the rights management information has been removed or
altered without authorization with the aim of ensuring an effective implementation of the WIPO
Copyright Treaty. The individual must, however, know or have reasonable ground to know that by
so doing she/he is inducing, enabling, facilitating or concealing any infringement of any copyright or
any related right.
The EU legislative framework on customs cooperation relies on Council Regulation 1383/2003. Its
aim is to improve customs cooperation for the identification of goods infringing an IPR. Art. 2 of the
Regulation proposes a distinction between “counterfeit” and “pirated” products. The term
“counterfeit goods” is used by the Regulation to identify those goods unlawfully bearing a
trademark identical or very similar to the registered one, while the term “pirated goods” indicates
goods which are or contain unauthorized copies of a work protected by copyright. The provisions of
the regulation, and especially those articles regarding customs actions, are also applicable to those
products infringing: a) a patent registered in one of the EU Member States, and b) an indication of
origin. Customs actions may be performed upon goods intended for export, import and transit (Art.
1).
Customs actions may be initiated by the national customs officers when there is the suspicion that
the goods may infringe an IPR and may also be initiated after the presentation of an application for
action by the right holder. In the latter case, the request should be sufficiently detailed, describing
the goods and indicating the type of alleged infringement. Other information, if available, should
concern: the final destination of the identified goods, the scheduled time for their arrival or
departure, the means of transport used, the interested countries, and the differences between the
original and the infringing products. Furthermore, the applicant has to present a declaration of
assumption of responsibility for the damages eventually suffered by the party against whom the
customs action is requested. This declaration represents an assurance for the alleged infringer
when the measures taken by the customs are revoked in consequence of an act or an omission on
the part of the requesting party or in the case in which it is later found that no infringement occurred
42
Reference text for Trainers
(Art. 5 and Art. 6). Art. 13 affirms that the competent customs office must receive communication
on the initiation of judicial proceedings for the decision on the merits of the case. This must occur
within 10 working days from the day in which the notification was received regarding the
suspension of the goods from the channels of commerce or of the seizure of the goods. In the case
of inaction on the part of the requesting party the alleged infringing goods are released. The
suspension from commerce and the seizure are provided for by Art. 9. In such cases where
suspicion arises after a customs control, Art. 11 states that, with the consent of the right holder, the
alleged infringing goods suspended or seized may be destroyed. In this case, a decision on the
merits of the case has yet to be taken as there is only suspicion that the goods are infringing an
IPR. For this reason the provision of Art. 11 could only be applied if the customs authorities receive
a written declaration, on the part of the owner or of the proprietor of the alleged infringing goods,
indicating her/his favourable opinion for the destruction of the said goods. This declaration is
presumed if the owner or proprietor does not oppose the request of the destruction of the goods
within the established time limits. Art. 16 indicates the measures to which these goods are
subjected that have been recognized to infringe an IPR following the end of judicial proceedings. In
this situation, the identified goods cannot enter the EU channels of commerce, cannot be exported
and must be suspended in case in which they were already traded.
Commission Regulation (EC) No 1891/2004 of 21 October 2004 set provisions for the
implementation of Council Regulation (EC) No 1383/2003. This regulation defines the natural and
legal persons who may represent the right holder or any other person authorized to use the right.
This Regulation also specifies the nature of the proof of ownership of intellectual property, while
providing a model form and the language requirements for filing a request for action, specifying the
type of information necessary in order to facilitate the work of the customs administrations in
recognizing the goods that may infringe an intellectual property right. Both the national and
customs applications and the procedures for the detention of counterfeit goods by customs have
been harmonized in all the EU member states. There is no unified EU customs entity, however, the
national customs administrations of the 27 member states:

work together;

are subject to common regulations;

exchange information through a centralized information system.
It is to be noted that EU customs practices still have different characteristics in each member state.
In addition, even if the means used to enforce IP rights have been harmonized, civil and criminal
procedures are different in each Member State.
On March 2004, the European Union Institutions adopted the Directive 2004/48/EC, also known as
the “IPR enforcement directive”, focused primarily on the protection of IPRs. The preamble to the
Directive explicitly recalls the obligations binding the EU Member States in consequence of their
participation to the TRIPs Agreement, being the European Community itself a Contracting Party of
the Agreement and not only the EU Member States individually. The intervention of the Community
Institutions is necessary to harmonize the relevant legislation and practice of the EU Member
States, which varies from one member to the other. This is the case for example for what concerns
the procedure to be followed by the competent authorities to indicate provisional measures aimed
at preserving evidence. The preamble of the Directive foresees a normative framework which
presents certain points in common with the TRIPs Agreement, but the act owns, in this case, all the
strength that Community legislation has towards the EU Member States. Art. 1 defines the object
and scope of the IPR Enforcement Directive: the protection of IPRs, including also industrial
property rights. The extent of its application is specified by the following article which states that the
Directive has to be applied in any case of infringement of an IPR in a Member State or in the
Community, without any prejudice to the application of a more stringent protection in the case in
which protection should be provided by other national or Community means.
Art. 3 (1) calls Member States for the adoption of remedies and procedures applicable to enforce
IPRs. The remedies and procedures should be effective, proportionate and dissuasive, they should
not be applied in a manner to create barriers to commerce, and they should not be unnecessary
complicated or costly, or entail unreasonable time-limits or unwarranted delays. The Directive
43
Reference text for Trainers
adopts the presumption of paternity of the work to the advantage of the person who placed her/his
name on the said work. Norms concerning the acquisition and protection of proofs are very similar
to the ones contained in the TRIPs. Thus, Articles 6 and 7 provide for: the power, held by the
judicial authorities, to order the resistant to present the element of proof at her/his disposal; the
possibility to order provisional measures to protect the elements of proof inaudita altera parte,
when there is the possibility that the proofs could be compromised or destroyed; the possibility to
subordinate the order of such measures to the lodging, on behalf of the requesting party, of a sum
of money as an assurance towards the party against which the measures should be ordered; the
payment on behalf of the requesting parties to the alleged infringer of compensation for the
damages suffered, in the case in which the ordered measures are revoked for any act or omission
of the requesting party or in cases where it is subsequently found that there has been no
infringement.
The Directive, similarly to the TRIPs Agreement, indicates the possibility for the judicial authorities,
(upon request of the claimant) to order the release of information to: a) the infringer or to any
person b) found in possession of goods infringing an IPR, or c) commercially distributing such
goods, or d) providing services used in infringing activities or e) to any other person indicated by
the before mentioned subjects. The Directive presents a more detailed description of the subjects,
who bear the obligation to provide information. The same obligation is better defined with regard to
its object and it must contain the names and addresses of the producers and of distributors of
infringing goods as well as of all the subjects which participated towards the illicit activity. It must
also contain an indication regarding the units produced and distributed and the average sale price
(art.8).
Article 9 provides the power, held by the judicial authorities, to order provisional measures also to
prevent an alleged infringement of an IPR or to forbid the continuation of an alleged infringing
activity. To achieve this aim the competent authorities may order the subjects to maintain a certain
behaviour or may seize the alleged infringing goods. In the case where the alleged infringing
activity is an activity conducted on a large scale, the competent authorities may also order the
precautional seizure of movable and immovable property of the alleged infringer, including the
blocking of her/his bank accounts and other assets. Ordering of such measures is subordinated to
the demonstration on the part of the injured party of circumstances likely to endanger the possible
recovery of damages. The measure could be ordered inaudita altera parte and could be revoked.
The latter could be the consequence of inaction on the part of the requesting party with regard to
the initiation of proceedings to decide on the merit of the case, or could also be subsequent to the
finding by the competent authorities that no infringement has occurred. In this case, the requesting
party could be ordered to pay the damages eventually suffered by the alleged infringer. In the case
where the judicial authorities find that an infringement occurred, the Directive, similarly to the
TRIPS Agreement, foresees the possibility to suspend, retire from the channels of commerce, or
destroy the infringing goods at the expenses of the infringer (art. 10). For what concerns the
compensation for damages, art. 13 provides for two calculation standards. The first (art. 13, 1, (a))
assesses the economic consequences suffered by the damaged party while the second (art. 13, 1
(b)) assesses the economic value of the IPR and of the licenses. The last articles of the Directive
call Member States to improve their cooperation and exchange of information also by publishing
the relevant Court sentences and informing the Community Institutions about any problem
encountered in the implementation of the Directive.
Declaration 2005/295/CE of the Commission specifies article 2 of the Directive 2004/48/CE of the
European Parliament and of the Council on the observance of intellectual property rights. This
declaration of the Commission regards the following intellectual property rights falling within the
enforcement of the mentioned directive: royalties; rights in connection with the royalties; rights of
makers of topographies; rights of trademarks; rights on designs and models; registered
trademarks; rights coming from complementary, protective certifications; geographical indications;
rights of public utility; sole right for vegetal inventions; commercial names if protected by sole right
of the domestic legislation.
The IP Criminal Enforcement Directive (CED) is still at the stage of discussion within the European
Institutions. The absolute novelty for the legislative framework put in place by the European
Institutions will be that the CED will, for the first time, specifically address criminal law provisions to
44
Reference text for Trainers
which Member States will have to conform to enhance the fight against counterfeiting and piracy.
Apart from the criticism119 that surrounded the CED since its first appearance as a draft, it is
nonetheless very interesting that the EC recognizes that counterfeiting and piracy are supporting
the activities of organized crime (and also of terrorist groups) and that specific typologies of
counterfeit products – in particular medicines – are a real threat for consumers’ health and safety.
This is the starting point that leads the Directive to propose criminal measure to reduce
counterfeiting and piracy. The CED, thus, contains provisions on the penalties that have to be
inflicted for committing the crime and also on the confiscation of goods of the offender. Patents and
Plants Varieties Rights are excluded from the sphere of application of the CED 120 that is also
applicable only to those activities that are: 1) committed on a commercial scale and 2) intentional.
Interesting provisions also relate to the creation of joint investigation teams between Member
States that could improve cooperation in these matters. Time will tell the real effectiveness of the
CED and which form and scope will have the provisions contained in its final version.
3.2 The Dimensions of Counterfeiting
Three estimates, formulated by different institutions and using various data, have been taken into
consideration, namely the estimates provided by: 1) TAXUD; 2) WCO; and 3) OECD. Some other
measures which have been calculated by other organizations will also be presented.
Estimations by the EU Taxation and Customs Union (TAXUD)
Statistics provided by the EU Taxation and Customs Union (TAXUD) refer to the number of
seizures which take place at the EU border in relation to goods suspected of infringing an IPR.
According to Commission Regulation No 1891/2004, national customs across the EU are obliged
to provide the EU TAXUD with statistics related to the number of cases involving the seizure of
goods suspected of infringing IPRs that, once elaborated, will then be published by TAXUD in an
annual report. It must be noted that the statistics provided by TAXUD only take account of: goods
which are imported into the EU, goods which are exported out of the EU, re-exports, transshipments and goods in transits. Consequently, all potentially counterfeited goods which may have
been produced and consumed within the same country, or the EU, are excluded from the data
provided. The result is that any assessment on the extent of counterfeiting which has been carried
out using these statistics may underestimate the real magnitude of the phenomenon. In addition,
the general accuracy of statistics based on seizures needs to be properly weighed, as many factors
(i.e. new legislation, customs performance, effectiveness of customs risk assessment methods)
may influence the interception of counterfeit products. Thus an increase or decrease of seizures
may not exactly represent the actual trend of the traffic of counterfeit goods and should generally
not lead to generalizations.
Considering the number of cases involving the seizure of goods suspected of infringing an IPR, in
2009, 43,572 cases were registered on EU borders (a decrease from the 49,381 cases registered
in 2008). This phenomenon has been on the increase since 1999, a year in which only one tenth of
the amount of these cases were registered (see Image 1) The actual amount of items confiscated
in 2009, is approximately 118 millions items (Image 2). It must be noted that these statistics do not
refer only to cases of brand counterfeiting, as they include cases of piracy.
Image 1
119
Criticism related to several aspects of the CED. The fact itself that the European Institutions owned the competence
to propose measure falling within the criminal sphere was not clear to many commentators. Other criticized elements
related to the contents of the CED, as for example the criminalization of abetting or inciting to commit the crime (which
could lead to the criminalization of the advice provided by a lawyer that an IPR was not infringed by acting in a certain
way).
120 Mainly because of the complexity of these rights for which it is not always clear if the infringement has been
committed.
45
Reference text for Trainers
Source: TAXUD
Image 2
Source: TAXUD
Although the 2009 statistics show a decrease in both the total amount of cases registered and the
total amount of products seized, it should be noted that the data indicates an increase in the
seizure of counterfeit products that are potentially dangerous to consumers’ health and safety.
Medicines represent 10% of the entire amount of detained goods. The TAXUD Report recognizes
that counterfeiting does not just affect luxury goods but everyday products (i.e. shampoos,
toothpaste, toys and electrical appliances). Counterfeit products intended for daily use and
products potentially dangerous for consumers’ health and safety constitute 17 million items
intercepted, or 18% of the total amount.
More detailed trends for the latter products can be obtained by examining the data of the TAXUD
Reports of recent years, both with reference to the number of articles detained (see Images 3, 4
and 5) and to the number of cases registered (see Images 6, 7 and 8). These trends are
particularly alarming as they show an increase in the trade of counterfeit goods potentially
dangerous for consumers’ health and safety.
.
Image 3
46
Reference text for Trainers
Counterfeit foodstuffs detained
Num ber of articles detained
3500000
3000000
2500000
2000000
1500000
1000000
500000
0
2006
2007
2008
2009
Source: UNICRI elaboration based on the TAXUD 2006-2009 Reports
Image 4
Counterfeit toys detained
Number of articles detained
8000000
7000000
6000000
5000000
4000000
3000000
2000000
1000000
0
2006
2007
2008
2009
Source: UNICRI elaboration based on the TAXUD 2006-2009 Reports
Image 5
47
Reference text for Trainers
Counterfeit m edical products detained
Number of articles detained
14000000
12000000
10000000
8000000
6000000
4000000
2000000
0
2006
2007
2008
2009
Source: UNICRI elaboration based on the TAXUD 2006-2009 Reports
Image 6
Counterfeit foodstuffs
Number of cases
90
80
70
60
50
40
30
20
10
0
2006
2007
2008
2009
Source: UNICRI elaboration based on the TAXUD 2006-2009 Reports
48
Reference text for Trainers
Image 7
Counterfeit toys
Number of cases
2000
1800
1600
1400
1200
1000
800
600
400
200
0
2006
2007
2008
2009
Source: UNICRI elaboration based on the TAXUD 2006-2009 Reports
Image 8
Counterfeit m edical products
Number of cases
4000
3500
3000
2500
2000
1500
1000
500
0
2006
2007
2008
2009
Source: UNICRI elaboration based on the TAXUD 2006-2009 Reports
Image 9 presents the outcome of the detention of suspected infringing goods, showing that a
significant percentage (47.44 %) were destroyed using the simplified procedure.
49
Reference text for Trainers
Image 9
Source: TAXUD
The provenance121 of counterfeit goods seized at EU borders in 2009 is illustrated by the TAXUD
report which provides a breakdown of the origin of goods, per number of products detained.
Overall, China is still the most prevalent country of provenance (more than 64% of the total amount
of products detained – see Image 10), confirming a trend that is valid since 2003.
121
The report states that the provenance of the goods is considered (from where they were sent to the EU) and not their
real origin (where they were actually produced) since this is often difficult to ascertain due to infringers practices aimed at
hiding the country of production/real origin of the goods. Refer to: Report on EU Customs Enforcement of Intellectual
Property Rights, Results at the EU Borders – 2009, TAXUD, 2010, page. 13
50
Reference text for Trainers
Image 10
Source: TAXUD
Other countries were also identified as main countries of provenance for specific products/sectors.
This is the case for Turkey for the category “Foodstuffs”, for Egypt for the category “Toys” and for
the United Arab Emirates for the category “Medicines”. Finally, the analysis of the means of
transport used in 2009 (see Image 11) confirms the trends already shown by the 2008 TAXUD
Report, showing an increase in the use of shipments through the postal service.
Image 11
Source: TAXUD
Estimations by the WCO
The World Customs Organization (WCO) provides statistics related to the number of seizures
made by customs authorities within countries which are members of the organization. These
statistics are usually collected by WCO through the Customs Enforcement Network system (CEN).
In 2009, a total number of 13,280 cases (Image 12) involving the seizure of counterfeit goods were
reported by the national customs administrations of the WCO Member States, while the total
number of products seized totalled 291 million (Image 13).
51
Reference text for Trainers
Image 12
Image 13
Source: WCO
Source: WCO
The WCO data – similarly to the TAXUD stats – also show an alarming increase in the trade of
counterfeit products potentially dangerous for consumers’ health and safety. This is the case of
counterfeit pharmaceutical products and of counterfeit spare parts. The great majority of the
seizures were performed by customs administrations and only 178 cases were the result of
cooperation between customs and police forces. These few cases totalled approximately 15% of
the entire amount of products seized, suggesting that improved inter-agency cooperation can
greatly benefit the detection activities. As shown by Images 14 and 15, countries such as China,
Italy and Mexico are in the top 10 category for what concerns both the number of cases registered
and the number of items seized in 2009. This data not only reveals the extent of the problem and
but underlines the commitment of the national authorities in the fight against IPR infringements.
.
52
Reference text for Trainers
Image 14
Image 15
Source: WCO
Source: WCO
The WCO data also identify both the country of origin – in the same way as TAXUD data – and the
actual country of departure. In both cases the top 10 list is very similar and it is interesting to note
that 99 different countries were identified in the reports as country of origin (see Image 16) and 122
as country of departure (see Image 17).
Image 16
Image 17
Source: WCO
Source: WCO
Finally, six EU Member States are in the top 10 destination countries (see Image 18) while seven
are in the top 10 transit countries (see Image 19).
53
Reference text for Trainers
Image 18
Image 19
Source: WCO
Source: WCO
3.3 Recent Cases
2010: A Joint Customs Operation (code-named Matthew II) has led to the seizure of more than 16
million cigarettes, 241 kilograms of tobacco products, 6,400 litres of alcohol, 20 tonnes of
counterfeit perfumes, 53.418 other counterfeit items such as bags, coats, scarves, wallets, and
1,515.75 kilograms of cannabis. During the operational phase, additional seizures of more than 25
million cigarettes also took place in some EU ports. The operation was organized by the Czech
Republic, in close cooperation with Poland and the European Commission (OLAF).
(Source: EUROPA Press Release IP/10/418)
2010: In Romania, over 78,000 glass containers inscribed with various brand names including
Dolce Gabbana, Clinique and Gucci were seized, on suspicion of being counterfeit goods.
(Source: Business Action to Stop Counterfeiting And Piracy (BASCAP) Digest 15-28 February
2010)
2010: Large quantities of counterfeit cigarettes were seized in a number of countries including
Ireland, the Netherlands and the UK
(Source: BASCAP Digest 15-28 February 2010)
2010: In the UK £180,000 worth of fake medicines were seized in a joint operation between police
and the UK Medicine and Healthcare products Regulatory Agency (MHRA).
(Source: BASCAP Digest 1-14 March 2010)
2009: The UK Border Agency (UKBA) seized £1,646,173 of counterfeit goods entering into the
country in just four months from 1 April. The fakes seized by UKBA officers include England
football shirts, GHD branded hair straighteners, designer watches, handbags, shoes and
cigarettes. A spokesman said the popular hair straightener and cigarettes were made with
potentially dangerous materials.
(Source: The independent (Press association))
2009: Fake goods worth around £3m were seized in one of the biggest-ever counterfeit raids in
Manchester. Customs and trading standards officers swooped on a Piccadilly warehouse after a
tip-off - and found thousands of boxes of bogus gear. Officials believe the warehouse supplied
hundreds of shops and market stalls across the country. Officers also found hundreds of hair
straighteners. The company warned that the fakes could be `lethal'.
(Source: Manchester Evening News)
54
Reference text for Trainers
2009: Hundreds of Chinese workers were kept in virtual slavery for years as part of a multimillionpound pirate DVD industry uncovered in the UK. The men and women, many of whom lived 11 to a
room, were the labour behind an organised crime syndicate that began on a market stall in
Hackney, east London, and grew into a £5m illegal industry. Detective Constable Evelyn Steeples
said the case revealed the large profits that could be made from organised crime.
(Source: The Guardian)
2009: Italian police have seized counterfeit merchandise from China worth more than Euro 20
million ($28 million) during raids on 17 warehouses in Rome. Italy's financial police say 18 Chinese
citizens are being investigated for allegedly importing counterfeit goods including clothes,
electronics and some 150,000 children's toys.
(Source: Associated Press)
2008: Drinkers in Buckinghamshire have been told to be wary of buying cheap bottles of “Glen’s”
vodka after counterfeit 70cl bottles were found on sale in Chesham, Aylesbury and Downley.
Counterfeit vodka has caused blindness and even death in past instances. Genuine “Glen’s” vodka
has an AGC (Allied Glass Containers) logo on the base of the bottle as well as a distinctive glue
pattern comprising lines of glue 2mm apart which bind the label to the bottle.
(Source: www.thisisbucks.co.uk, 22 January 2008)
2008: Health authorities in Sierra Leone seized a container filled with banned toothpaste from
China, which contained high levels of a toxic substance that could cause kidney and liver failure. In
2007, health authorities in several countries including the United States and Hong Kong warned
against brands of Chinese low-cost toothpaste that were found to contain the poisonous chemical
diethylene glycol.
(Source: Counterfeiting Intelligence Bureau (CIB) Counterfeiting Confidential November)
2008: IBM sued a company that it alleged was selling unsafe counterfeit laptop batteries. The
company was alleged to be “offering counterfeit IBM products which posed a substantial threat to
the safety of the consuming public.” The discovery of the alleged counterfeits happened after a
consumer in Ohio bought a battery for a laptop. The battery caught fire and damaged the laptop.
After conducting an examination of the faulty battery, IBM learned that it was not genuine. It then
bought 12 Thinkpad batteries from the suspect company for further analysis. All the batteries were
found to be counterfeits.
(Source: CIB Counterfeiting Confidential January)
2008: MarkMonitor’s “Spring 2008 BrandJacking Index” found airline parts on sale at popular online
consumer auction sites. They included valves, gears, flanges, gauges and radar parts.
(Source: CIB Counterfeiting Confidential July)
2008: Police in Italy arrested 12 members of an organized criminal gang involved in the distribution
of pirate CDs and DVDs. A meticulous investigation had preceded the arrests, which took place in
Naples and Milan. A series of raids uncovered six illegal pirate factories, five in Naples and one in
Milan, which contained 350 burners. More than 70,000 CDs and DVDs were seized during the
raids, alongside more than 100,000 counterfeit inlay cards. The gang members were charged with
conspiracy and copyright infringement and might face jail sentences of up to six years.
(Source: CIB Counterfeiting Confidential July)
2008: Scottish smokers have been advised to resist the temptation to buy cheaper cigarettes amid
fears of what they may actually contain. “Cheap cigarettes” usually meant those that had been
smuggled into the U.K. from outside the E.U. However the “bargain cigarette” market is more and
more dominated by counterfeit cigarettes, which are packaged to look like the real brands. The
fake cigarettes may contain up to 160% more tar, 80% more nicotine, 5.8 times more lead and
three times more arsenic, in some cases they had also been found to contain sawdust, beetles and
rat droppings. Proceeds from this illicit trade were used to fund other crimes, such as people
trafficking and prostitution.
55
Reference text for Trainers
(Source: BBC News, March 8th 2008)
2007: Counterfeit Colgate toothpaste, containing diethylene glycol, was found on sale in different
Countries: i.e. Spain, the United States of America, Panama, the Dominican Republic and
Australia. Spanish authorities seized 100,000 toothpaste tubes and, according to the Spanish
newspaper El País, 10,000 packages were distributed in the hospitals in Valencia.
(Source: http://webintel.wordpress.com and www.elpais.com)
2007: Counterfeit cigarettes from Eastern Europe and the Far East were reportedly being sold for
as little as £1 a packet by shopkeepers in Leicester. The counterfeit cigarettes contained higher
levels of tar, arsenic, nicotine and other carcinogens and were smuggled into Leicester and sold to
shopkeepers in bulk at heavily discounted prices. Customs officials issued a warning to consumers
as the packaging on the fake cigarettes was indistinguishable from the genuine variety. Organized
criminal gangs were thought to be behind the scheme for huge profits to be made from selling
counterfeit cigarettes. Officials who seized also a shipment worth millions of pounds analysed the
ingredients with alarming results. The fake cigarettes contained extremely high levels of arsenic,
cadmium, benzene and formaldehyde, a lethal mix of carcinogens.
(Source: Leicester Mercury, 31 August 2007)
2007: Couples in East London have been warned after fake Durex condoms were discovered
during raids on shops and newsagents. The investigation began when a member of the public
noticed something “not quite right” and contacted the local authorities. Durex warned consumers
that despite the packaging looking genuine, the fakes were not effective contraceptives and were
unlikely to provide effective protection against sexual diseases.
(Source: East London Advertiser, 22 October 2007)
2007: More than a year-long operation into an organized crime ring pirating DVD’s, culminated in a
massive anti-piracy operation in which 20 raids across Hong Kong were conducted. The raids took
place at a number of locations, including three storage units and three retail outlets, and yielded 14
arrests and 120,000 fake DVD’s. According to the head of the task force conducting the raids the
syndicate was one of Hong Kong’s notorious triad gangs. The gang was believed to be selling
more than $6,000 worth of DVD’s a day. The fake DVD’s originated in mainland China and then
smuggled into Hong Kong using a cross-boundary container lorry, which was also seized.
(Source: DPA news)
2007: Russian police intercepted and arrested a criminal group alleged to illegally produce aircraft
parts and sell them in Russia, as well as to other nations. The organized group was arrested after
allegedly stealing components from the Saturn plant in central Russia and producing and selling
civil aircraft parts.
(Source: CIB Counterfeiting Confidential September)
2007: The Agence Française de Sécurité Sanitaire des Produits de Santé (AFSSAPS) was
informed by the European Medicines Agency (EMEA) about a case of a counterfeit medicine
identified in Great Britain. The elements on the products’ distribution network led to the recall of the
medicine from the French territory. This was the first case of recall of counterfeit “Plavix” in France.
(Source: Emballage Digest, 14 February 2007)
2007: The Italian customs and Guardia di Finanza in Naples seized different shipments of
counterfeit products (including fake toys) whose value was estimated at 11,000,000 of Euro.
(Source: Italian Customs Agency)
2007: The Medicines and Healthcare Products Regulatory Agency (MHRA) began a criminal
investigation after a counterfeit batch of “Casodex” was discovered. The drug, which is used in the
treatment of prostate cancer, was found to contain only 75% of the active ingredient bicalutamide.
(Source: BBC News, 2 June 2007)
56
Reference text for Trainers
2007: The customs office at the port of Le Havre seized almost 410,000 counterfeit medicines
(145kg) and 11 million of medicines with a high pseudo-ephedrine content (two tonnes) for a total
estimated value of € 5,8 million. The operation was conducted by customs officers who had been
previously informed about a container originating from Syria and destined to Honduras.
(Source: Emballage Digest, 17 December 2008)
2007: The link between counterfeiting and organized crime has once again been demonstrated
after Italian police uncovered an illegal distributing network operating in Sicily. 2,000 counterfeit
CD’s and DVD’s were seized along with guns, ammunition and bomb making equipment. Police
then started investigating possible links between those arrested and organized crime, in particular
Sicily’s notorious mafia families.
(Source: IFPI)
2006: 140,000 counterfeit razor blades were seized in Italy after investigations by the Guardia di
Finanza. The products were ready to be inserted into the licit supply chain and sold to
unsuspecting buyers. The fake blades may have caused skin irritations and infections.
(Source: Confesercenti, Counterfeiting and cybercrime: damages to the economy and to
enterprises)
2006: 35,000 counterfeit electrical products were seized by the Italian Guardia di Finanza. The
products posed risks of fire and electric or thermal shock.
(Source: Confesercenti, Counterfeiting and cybercrime: damages to the economy and to
enterprises)
2006: A laboratory used for the production of fake cosmetics and perfumes was discovered in
Rome by the Guardia di Finanza who seized more than 600,000 packages.
(Source: Confesercenti, Counterfeiting and cybercrime: damages to the economy and to
enterprises)
2006: British authorities identified 18 websites selling counterfeit “Tamiflu”, the websites were
based in the UK, Canada, Switzerland, Bahrain, Cyprus, Singapore and Malta, highlighting the
worldwide nature of this illicit trade.
(Source: CIB, 3 March 2007)
2006: Officials seized in the UK, 5,000 packets of counterfeit “Tamiflu”, estimated to be worth
£500,000. US customs also seized over four dozen shipments of fake “Tamiflu” in South San
Francisco. The shipment was labelled “Generic Tamiflu”.
(Source: CIB, March 3rd, 2007)
2006: The Italian Guardia di Finanza seized 138 tonnes of counterfeit olive oil. The bottles and
cans filled with the counterfeit oil looked almost identical to those used by famous producers.
(Source: Confesercenti, Contraffazione e criminalità informatica: I danni all’economia e alle
imprese)
2006: The Italian customs and the Guardia di Finanza seized a container with 15 tonnes of
counterfeit toys originating from China.
(Source: Italian Customs Agency)
57
Reference text for Trainers
SOURCES
Business Action to Stop Counterfeiting And Piracy (BASCAP), available at:
http://www.iccwbo.org/bascap/id1127/index.html
Emballage Digest website, available at: http://www.emballagedigest.fr/
EUROPA Press Release IP/10/418, available at:
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/10/418
International Federation of the Phonographic Industry (IFPI) website, available at:
http://www.ifpi.org/
Italian Customs Agency website, available at: http://www.agenziadogane.it/wps/wcm/connect/ee/
Leicester Mercury website, available at: http://www.thisisleicestershire.co.uk/
TAXUD website, available at: http://ec.europa.eu/taxation_customs/index_en.htm
58
Reference text for Trainers
SECTION 4
Counterfeiting in Poland
4.1. National Legislation on Intellectual Property Enforcement:
Copyright and IP rights
Copyright is protected by the Copyright and Related Rights Act of 4 February 1994 (Journal of
Laws of 2006 No. 90, item 631, as amended). In addition, a number of other copyright protectionrelated laws and regulations are in force on this issue:

The Code of Civil Procedure - Act of 17 November 1964, (Journal of Laws n. 43, item 296,
as amended);

The Criminal Code Act of 6 June 1997 (Journal of Laws n. 88, item 553, as amended);

The Act on Radio and TV Broadcasting of 29 December 1992 (Journal of Laws of 2004 n.
253, item 2531, as amended);

The Act on Fighting Unfair Competition of 16 April 1993 (Journal of Laws of 2003 n. 153,
item 1503, as amended);

The Act on Industrial Property Law of 30 June 2000 (Journal of Laws of 2003 No. 119, item
1117, as amended);

The Act on the Protection of Databases of 27 July 2001 (Journal of Laws n. 128, item 1402,
as amended);

The Act on the protection of certain services provided by electronic means based on or
consisting in conditional access of 5 July 2002 (Journal of Laws n. 126, item 1068, as
amended);

The Act on providing services by electronic means of 18 July 2002 (Journal of Laws n. 144,
item 1204, as amended);

The Act on Customs Law of 19 March 2004 (Journal of Laws n. 68, item 622, as amended);

The
Ordinance
of
the
Minister
of
Justice
of
16
October
2002
on the designation of regional courts hearing cases concerning infringements of copyright
and related rights (Journal of Laws n. 180, item 1510, as amended);

The Ordinance of the Minister of Culture of 2 June 2003 on specific categories of equipment
and optical discs for recording works and payments related to the equipment and optical
discs on account of their sale by producers and importers (Journal of Laws n. 105, item 991,
as amended);

The Ordinance of the Minister of Culture of 30 April 2004 on the registration of information
about the production of optical discs and types of identification codes (Journal of Laws No.
124, item 1301) and;

The Regulation of the President of the Council of Ministers n. 83 of 9 November 2000,
establishing the Team for Counteracting Infringements of Copyright and Related Rights
(M.P n. 36, item 727).
Industrial Property
The Industrial Property Law of 30 June 2000 (published in the Journal of Laws n. 119/2003, text
1117) which, according to Art.1 §1 regulates:
59
Reference text for Trainers
(i) the relationships in the field of inventions, utility models, industrial designs, trademarks,
geographical indications and topographies of integrated circuits,
(ii) the principles on which entities may accept rationalization proposals and remunerate creators
thereof;
(iii) the responsibilities and organization of the Patent Office of the Republic of Poland […].
The Industrial Property Law was subsequently amended by the act of 23 January 2004 (Journal of
Laws of 2 March 2004, n. 33 text 286), the act of May 9, 2007 (with regard to civil enforcement) and
act of 29 June 2007 (with regard to criminal prosecution).122

the Regulation of the Minister of Finance on the Destruction of Goods under Article 11 of
the EU Customs Regulation (1383/2003) (amended version of July 27 2006).
In addition, the following acts can be applied in cases of counterfeiting or piracy:

the Pharmaceutical Law (6 September 2001);

the Copyright and Neighbouring Rights Law (4 February 1994); and

the Act on Combating Unfair Competition (16 April 1993).
The Patent Office of the Republic of Poland is sole office for granting of patents of inventions, utility
models, designs, registering of trade marks, topographies of integrated circuits and geographical
indications. Industrial property rights are granted to individuals and companies, as established by
the Industrial Property Law,
Basic tasks of the Polish Patent Office concerning grant and maintenance of legal protection are
performed according to national legislation regarding applications filed directly with the Office and
according to international agreements: for patent and utility model applications filed under the
Patent Co-operation Treaty (PCT) and for trademark applications filed under the Madrid Agreement
Concerning the International Registration of Marks.
Utility Models

Patents (Utility Models), Ordinance No. 179, 1993 issued by the Executive
Industrial Designs

Industrial Designs (applications), Regulation, amended 2005
Topography of Integrated Circuits

Integrated Circuits, Ordinance No. 20, 1993
Plant Varieties

Plant Variety (Seed Fees and Remunerations), Decree No. 217 (Extract), 1996

Plant Variety (Seed Industry Regulations), Decree No. 216 (Extract), 1996
Unfair competition

Unfair Competition, Act, 1993
4.2 Focus on Copyright infringement
The law does not specifically provide for the definition of infringement. However, it does provide for
actions considered to be infringing by their nature. The following acts are penalized (articles 115119 of the Act on Copyright and Related Rights):
122
Bartosz Krakowiak and Slawomir Mazur (POLSERVICE- Patent and Trademark Attorneys Office), “Poland” in Anti-
counterfeiting 2010 – A Global Guide, www.WorldTrademarkReview.com
60
Reference text for Trainers

usurping the authorship or misleading others as to the authorship of a whole or a part of
another person’s work or another person’s artistic performance;

disseminating, without indicating the name or the pseudonym of the author, other persons’
work in the original or derivative version, or publicly disfigures such work, artistic
performance, phonogram, videogram or broadcast;

violating other persons’ copyright or related rights, in order to gain material benefits in a
manner other than specified above;

disseminating other persons’ work, artistic performance, phonogram, videogram or
broadcast in the original or derivative version, without authorization or against its terms and
conditions;

fixing or reproducing other persons’ work in its original versions or in the form of derivative
version, artistic performance, phonogram, videogram or broadcast for the purposes of its
dissemination and gives his/her consent to its dissemination without the authorization or
against the conditions specified therein;

purchasing, assisting in the sale of, accepting or assisting in concealing objects being
carriers of a piece of work, artistic performance, phonogram, videogram disseminated or
reproduced without authorization or against the conditions specified therein, in order to gain
material benefit;

manufacturing any equipment or components thereof designated for illegal removal or
circumvention of effective technological protection measures preventing from presentation,
recording or reproducing works or objects of related rights, or trading in such equipment or
components thereof or advertising them for sale or rental;

possessing, keeping or using any equipment or components thereof as referred to above;

preventing or hindering the exercise of a right to control the use of a piece of work, artistic
performance, a phonogram or a videogram or refusing to give information on benefits
arising from use of work.
Remedies to protect copyright holders
Pre-trial measures (Article 80 of the Act on Copyright and Related Rights):

securing evidence and securing claims;

obliging infringer to provide information being material to the claims referred to above;

obliging other persons to provide information on the origin, distribution networks, volume
and price of goods or services which infringe the right holder’s economic rights.
Civil Remedies (Article 79 of the Act on Copyright and Related Rights)

to cease the infringement

to eliminate the consequences of the infringement

to pay damages

to render the acquired benefits

to publish announcements in the press or to publish the court judgment

to make payment in favour of the Fund for Promotion of Creative Activity
Article 79 para. 3 and 4 of the Act on Copyright and Related Rights stipulates the following:
“3. A person who breached the author’s economic rights may be instructed by the court, at such
person’s request and with the right holder’s consent, if the breach is non-culpable, to pay a relevant
sum to the right holder if discontinuance of the breach or elimination of the consequences of the
breach would have been excessively onerous for the offender.
61
Reference text for Trainers
4. When issuing its decision on breach of law the court may adjudge, at the right holder’s request,
on illegally produced objects and means and materials used to produce them and in particular, the
court may adjudge on their withdrawal from trading, on assigning them to the right holder as part of
damages or on their destruction. While issuing its decision the court shall take into account the
weight of the breach and third party interests.”
Criminal Penalties
Copyrights:
Articles 115 to 119 of the Act on Copyright and Related Rights

Fine

Restriction of liberty

Imprisonment up to 5 years

Damages.
Trademarks:
Articles 305,306,309,310 of the Industrial Property Law
Provisional measures
The Courts may secure a claim if an interim order is issued (Article 730 §1, §2, §3 of the Civil
Procedure Code) and may secure the evidence if there is a fear that its taking can become
impossible or excessively difficult, or if, for other reasons, a need arises to confirm the fact (Article
310 of the Civil Procedure Code).
Penalties for copyright infringement
(1) In civil cases (Articles 79 and 80 of the Act on Copyright and Related Rights)

Damages

Payment in favour of the Fund for Promotion of Creative Activity
(2) For criminal offence in copyright cases (Articles 115 to 119 of the Act on Copyright and Related
Rights)

Fine

Restriction of liberty

Imprisonment up to 5 years
(3) Seizure, confiscation, forfeiture and destruction of all infringing copies
The Court may order the seizure, confiscation, forfeiture and/ or the destruction of all infringing
copies and all equipments or devices used in the manufacture of the infringing copies(Article 121 of
the Act on Copyright and Related Rights).
Enforcement authorities
The competent law enforcement authorities are the Police, the public prosecutors’ office, the
Border Guards and the Custom Services.
a) Enforcement bodies entitles to act ex-officio in copyright infringement cases
Law enforcement authorities are entitled to act ex-officio in the following copyright infringement
cases (Article 122 of the Act on Copyright and Related Rights):

usurping the authorship or misleading others as to the authorship of a whole or a part of
another person’s work or another person’s artistic performance;

disseminating, without indicating the name or the pseudonym of the author, other persons’
work in the original or derivative version, or publicly disfigures such work, artistic
performance, phonogram, videogram or broadcast;
62
Reference text for Trainers

violating other persons’ copyright or related rights, in order to gain material benefits in a
manner other than specified above;

disseminating other persons’ work, artistic performance, phonogram, videogram or
broadcast in the original or derivative version, without authorization or against its terms and
conditions – when the offender makes it a regular source of income or organizes or
manages a criminal activity;

fixing or reproducing other persons’ work in its original versions or in the form of derivative
version, artistic performance, phonogram, videogram or broadcast for the purposes of its
dissemination and gives his/her consent to its dissemination without the authorization or
against the conditions specified therein – when the offender makes it a regular source of
income or organizes or manages a criminal activity;

purchasing, assisting in the sale of, accepting or assisting in concealing objects being
carriers of a piece of work, artistic performance, phonogram, videogram disseminated or
reproduced without authorization or against the conditions specified therein, in order to gain
material benefit – when the offender makes it a regular source of income or organizes, or

manages a criminal activity or when based on concurrent events the offender of this crime
should and might have assumed that an item was received in result of an illicit action.
b) Courts dealing with copyright cases
There are no specialized courts dealing with copyright in civil cases. In criminal cases the Minister
of Justice, by regulation, appoints district courts competent to hear cases of offences against
copyright and related rights within the area of competence of a given circuit court (Article 123 of the
Act on Copyright and Related Rights).
1. Enforcement at the border
The Customs Services are the competent authorities responsible for administering applications for
copyright infringements at borders. The Customs Authorities impose security to protect the
defendant and prevent abuse. Article 6.1 of the Council Regulation (EC) No 1383/03 of 22 July
2003 concerning customs action against goods suspected of infringing certain intellectual property
rights and the measures to be taken against goods found to have infringed such rights applies. It
states that:
“Applications for action shall be accompanied by a declaration from the right holder, which
may be submitted either in writing or electronically, in accordance with national legislation,
accepting liability towards the persons involved in a situation referred to in Article 1(1) in the
event that a procedure initiated pursuant to Article 9(1) is discontinued owing to an act or
omission by the right-holder or in the event that the goods in question are subsequently
found not to infringe an intellectual property right. In that declaration the right-holder shall
also agree to bear all costs incurred under this Regulation in keeping goods under customs
control pursuant to Article 9 and, where applicable, Article 11.”
The Customs Authorities may, according to article 4.1 of the Council Regulation 1383/03, “where
the customs authorities, in the course of action in one of the situations referred to in Article 1(1) and
before an application has been lodged by a right-holder or granted, have sufficient grounds for
suspecting that goods infringe an intellectual property right, they suspend the release of the goods
or detain them for a period of three working days from the moment of receipt of the notification by
the right-holder and by the declarant or holder of the goods, if the latter are known, in order to
enable the right-holder to submit an application for action in accordance with Article 5.”
The Customs Authorities may order the destruction or disposal of infringing good, in accordance
with Article 11.1 of the Council Regulation 1383/03. Also, the Customs Authorities are entitled to
act ex-officio in copyright infringement cases.
4.3 Relevant Legislation on Organized Crime.
63
Reference text for Trainers
Poland signed the United Nations Convention against Transnational Organized Crime (the
“Palermo Convention”) on 12 December 2000 and ratified it on 12 November 2001. Then Poland
ratified the Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women
and Children as well as the Protocol against the Smuggling of Migrants by Land, Sea and Air on 26
September 2003, while joined the Protocol against the Illicit Manufacturing of and Trafficking in
Firearms, their Parts and Components and Ammunition by accession on 4 April 2005.
Poland also adopted the Convention of Council of Europe for fighting against trafficking in human
beings, entered into force on 1st February 2008.
The most important texts concerning both organized crime and its legislation at national level
are123:

the Criminal Code, dated 6 June 1997

the Criminal Procedure Code, dated 6 June 1997

the Crown Witness Act, dated 25 June 1997

the Statute of 6 July 2001 on collecting, processing and transmitting of criminal information

the Statute 22 January 1999 on secret data protection

the Banking Act, dated 29 August 1997
“Although the new Polish Criminal Code (1997) does not contain a [legal] definition of organized
crime, it penalized participation in group formed for the criminal purposes. Article 258 of the
Criminal Code provides for criminal liability for persons involved in organized crime or participating
in an association group aiming at committing offences. The criteria used in order to define a
criminal organization are the size of the organization and aspects of its structure. Therefore, the
fact of participating in a criminal organization constitutes an offence itself. It is also to be noted that
when offences are committed in the framework of a criminal groups it is an aggravating
circumstance”.124
Changes and new institutions in the Criminal Code and the Criminal Proceedings Code came into
force as of 1 September 1998, in order to provide better legal instruments in the fight against
organized crime:
Article 258 of the Criminal Code125: as mentioned above it provides for criminal liability for persons
involved in organized crime or participating in an association or group aiming at committing
offences. The fact of belonging to a criminal organization is in itself an offence.
Other regulations from the Criminal Code126:

Obligatory extraordinary aggravation of punishment for the long term offender or offender
who commits a criminal offence being involved in organized crime or an association or
group aiming at committing offences (art. 64 §2 CC in relation with Art. 65);

General exclusion of conditional withholding of imposed sentence (art. 69 §4 CC).
Conditional withholding of imposed sentence only in a few clearly defined cases (art.69
CC);

possibility of imposing imprisonment sentence accompanied with a severe fine a long term
offender or a offender who commits a criminal offence being involved in organized crime or
an association or group aiming at committing offences (art. 309CC);

possibility of imposing a forfeiture of property and profits deriving even indirectly from a
criminal activity (Art. 45 CC);
Information based on BFU (2003), Final report. The most important texts concerning organized crime and its
legislation, September, Kassel (Germany), pp. 318-19.
123
124
125
126
Ibid., pp. 312-13.
Ibid., p.330
Ibid., pp. 330-31
64
Reference text for Trainers

Extension of periods after which file of the application for anticipatory parole shall be
possible (Art. 78 §2 CC).

The new law involve an extraordinary mitigation of punishment with regard to the
perpetrators of crime that agrees to cooperate with investigative authorities and release
information concerning persons participating in the crime and related circumstances.

The Crown witness:127 this legal act, in force since 1 September 2006, contains procedural
regulations solely for the purposes of prosecuting organized crime. The general idea is that
perpetrator shall not be penalized for the crimes in which he/she was involved if he/she
gives evidence likely to be material evidence in respect of these crimes.

The Banking Act:128 information can be released to the prosecutor before investigative
proceedings in the event of a justified suspicion of money laundering activity.

Incognito witness: this institution was introduced in 1995 (article 184 of the Code of Criminal
Procedure). If there is a justified fear for life, health, freedom or assets in a considerable
size, of a witness or his closest relative, the court and in preparatory proceeding the
prosecutor may pass a decision on keeping in secrecy personal data of the witness.
On the basis of Polish and international experience the following categories of criminal offences,
committed by organized criminal gangs, are distinguished by the Polish Police:129 drugs production
and trafficking, forgery of money, fraud connected with capital market, fraud connected with
governmental and international founds, tax offences, money laundering, illegal trade in weapons
and radioactive materials, environmental criminality, crimes connected with outskirts of society,
illegal gambling, extortion of tribute, offences of corruption.
Other the state efforts to combat organized crime include:

Establishment of an Organized Crime Department, located within the State Prosecutor’s
Office.130 In March 2007 PNB reported on an amendment bill that the Ministry of Interior
and Administration was considering to wide the authority of law enforcement agencies in
their investigation of criminal cases. The new law would permit police to use “wiretaps and
informants as evidence in criminal cases”.
In August 2007 the Minister of Justice
announced that his office was proposing to modify existing laws regarding the seizure of
assets from organized crime groups. The new laws would allow authorities to confiscate all
assets belonging to a criminal organization, and not just those involved in actual crimes.

The SOCA (UK Serious Organized Crime Agency) opened a branch in Warsaw to fight drug
and cigarettes smuggling between Poland and the UK.

The central anti-trafficking unit within the National Police Office, created in March 2006.
According to the CC (art. 204 and 253) Poland prohibits all form of trafficking.

Poland is a member state of the Task Force on Organized Crime in the Baltic Region. The
Task Force on Organized Crime in the Baltic Sea Region was established as a response to
the urgent need for direct and concerted action to combat organized crime. The purpose of
the Task Force is to strengthen the ability to prevent and combat organized crime by setting
up a close cooperation among law enforcement agencies in each country. Information on
corruption, environmental crime, foreign gangs, illegal migration, money laundering,
narcotics, and trafficking in women is available.
4.4 A recognised best practice: the Team for the Protection of Copyright and Certain Related
Rights
127
Ibid., p.331
Ibid., p.331
129 Necki J., Walendziak W. (2000), Polska Policja na drozde do Unii Europejskieij, Centrum Europejskie Uniwersytetu
Warszawskiego, Warsaw, p.182 in BFU (2003), p. 313-314.
130 PNB, Warsaw-based Polish News Bulletin, 26 September 2007.
128
65
Reference text for Trainers
The Team was established by the Decree No. 83 of the President of the Council of Ministers of 9
November 2000 (Monitor Polski – Polish Official Gazette No, 36, item 727). The Chairman of the
Team is the Minister of Culture and National Heritage and members of the Team are the
representatives of ministries and institutions engaged in the protection of intellectual properties (i.e.
Ministry of Interior and Administration, Ministry of Finance - Customs Service, Ministry of Justice,
Ministry of National Education, Ministry of Science, Police and Border Guards).
The Team is responsible for the coordination of the measures to effectively combat the
infringement of copyright and related rights. In particular, the Team is in charge of:

analysis of the implementation of the copyright and related rights law in the form of an
annual Report on the Observance of the Law on Copyright and Related Rights in Poland to
the Chairman of the Council of Ministers,

the presentation of proposed measures to prevent the infringements of copyright and
related rights and the combating of infringements in the form of an Action Strategy to
Protect Copyright and Related Rights in Poland (also prepared annually),

he development of the proposals of legislative amendments leading to more effective
enforcement of copyright and related rights law,

Periodic progress reports on the measures taken to combat infringements of copyright and
related rights.
The Team also includes the Warsaw Group in charge of monitoring and coordinate actions to
combat IPR offences in the marketplaces of the capital.
As the scale of IPR infringement through the internet is highly undefined, the Internet Working
Group was established within the Team in 2005. The members of the Working Group include:

representatives of collective copyright and related rights management organizations and
other social partners involved in the protection of copyright and related rights (experts,
specialists on engineering and architecture of ICT system and legal affairs);

a representative of a Warsaw District Prosecutor’s Office;

experts from the Criminal Office, Department for Combating Economic Crime of the Chief
Police Headquarters and Police Academy in Szczytno;

a representative of the Customs Service of the Republic of Poland;

representatives of the Ministry of Culture and National Heritage;

representatives of internet providers.
The task of the group is to analyze the threats in the field of infringement of - first of all – copyright
and related rights, development of methodology for detection and combating crime against
intellectual property in the Internet and coordination of cooperation on combating piracy between
law enforcement bodies and organizations involved in collective management of copyright and
related rights and other social partners protecting copyright and related rights supporting the
Police.
One of the primary tasks of the Internet Group was to develop effective methods of limiting internet
piracy. The work on the document „Methodology of police work on detecting and combating
Internet intellectual piracy” had begun in 2006 and was then continued in 2007. On 27 March 2007,
the Team approved the document and recommended its implementation in the Police. It was also
forwarded to the Ministry of justice to assist prosecutors and judges involved in combating piracy.
Relevant bodies have already received the „Methodology“.
4.5 Poland and the other EU Member States
Recent statistics by TAXUD provide an overview of the number of suspect counterfeit articles
intercepted in the period 2006-2009.
66
Reference text for Trainers
Source: European Commission, Taxation and Customs Union, “Report on EU Customs Enforcement of
IPRs. Results at the EU Border-2009”, p.19
67
Reference text for Trainers
Source: European Commission, Taxation and Customs Union, “Report on EU Customs Enforcement of
IPRs. Results at the EU Border-2009”, p.12i
According to official statistics of the Polish Customs Service,131 customs controls on suspect IPR
infringement cases in the first half of 2009 resulted in the confiscation of over 840,000 fake pirated
goods for a total value of over 19 millions Euros.
Goods confiscated in first half of 2009
Type of product
Quantity of Items
Clothes
263,449
Cigarettes
182,899
Shoes
93,300
Food products and drinks
70,905
Mobile phones and accessories
66,448
CDs, DVDs
54,711
Electronic equipment
34,450
Watches, jewellery and fancy goods
33,531
Cosmetics
24,748
Games, sports equipment, toys
13,782
Pharmaceuticals and medical products
Other goods
Total
131
90.
8,980
43,301
847,243
Team of Counteracting Infringement of Copyright ad Related Rights, 2009, Special Report, November, Warsaw, p.
68
Reference text for Trainers
Source: UNICRI elaboration, data from Team of Counteracting Infringement of Copyright ad Related Rights, 2009,
Special Report, p. 90.
5%
Goods confiscated in first half 2009
1%
Clothes
2%
Cigarettes
3%
Shoes
4%
29%
4%
Food products and drinks
Mobile phones and accessories
6%
CDs, DVDs
Electronic equipment
Watches, jewellery and fancy goods
7%
Cosmetics
Games, sports equipment, toys
8%
21%
10%
Pharmaceuticals and medical
products
Other goods
Source: UNICRI elaboration, data from Team of Counteracting Infringement of Copyright ad Related Rights, 2009,
Special Report, p. 90.
4.6 Cases in Poland
 2010: Polish police seized a record 250,000 fake euros, dismantled the illegal printing
operation producing counterfeit cash and were questioning three suspects in the case. The
counterfeit bills were made in a print shop in Zielona Gora, western Poland. Three men
arrested in the case are all Polish citizens and each faces up to 25 years in prison. Polish
police said they had arrested 13 suspects on allegations of the widespread circulation of
counterfeit euros within the European Union.The sting was part of a criminal investigation
begun in 2007 in conjunction with Europol. In total 81 people have been detained in the case,
primarily in April and September 2009. So far, 35 people have been indicted and jailed in
Poland, while 12 others are under European arrest warrants. Police said they believe that
among those nabbed are five gang kingpins, including its leader Radoslaw B., from Chelm,
southeastern Poland, and resident in Italy.132
 2010: Fake Coca-Cola may have flooded the Polish market. Counterfeit Coca-Cola worth
200,000PLN was found in a police raid of a bottling plant in Oleck in the WarmiñskoMazurskie province. Thousands of bottles of fake Coca-Cola produced in unsanitary
conditions may have already been retailed in Poland and may be a health risk to consumers.
“Police and officers of the Polish Border Guard received information about the illegal bottling
plant and false labels,” spokesperson for the Provincial Police Command in Olsztyn Izabela
NiedŸwiedzka said. “On Monday morning they entered a firm in Oleck. They discovered a
whole production line, from bottle production” to the ready-made product, she said. About
40,000 two litres bottles ready for retail and another 30,000 empty bottles, caps and labels
EU business (27 April 2010), Polish Police seized 250,000 fake euros, printer, available HTTP:
http://www.eubusiness.com/news-eu/poland-euro-crime.4bc
132
69
Reference text for Trainers
were seized. Police estimate the acquisition to be worth 200,000PLN. Police also seized two
tones of counterfeit laundry powder and dishwashing liquid of unknown value in the raid and
after contacting other police, officers from Bia³ystok seized a further 22,000 bottles on two
trucks which they pulled over for inspection. Police are investigating how long the operation
has been going on as well as who has been purchasing the goods, both the cola and the
household cleaning products.
 2009: Polish Police arrested members of international organized criminal group involved in
the production, in Poland, and distribution on the territory of EU Member States of CDs and
DVDs with illegally copied films and music; about 54 thousands CDs and DVDs with music
and films worth approximately PLN 5 million were secured.133
 2009: Polish Police arrested, on the premises of RTV Stock Exchange located in Krakow,
seven persons involved in the distribution and assistance in selling of optical discs with
illegally copied films, music and computer programmes. Control operations were conducted
in cooperation with officers of the Customs Chamber in Krakow About 15 thousand pirate
optical discs worth PLN 900,000 and clothes with fake trademarks were confiscated and
secured.134
 2009: Polish Police secured over 20 computers and over 800 different optical discs with
music, films and software. Students of two universities in Gdansk, operating also at the
premises of their universities, turned out to be the perpetretarors of this criminal act.135
 2009: According to WHO, Poles spend around 100 million zloty (over $31.6 Million USD) a
year on fake medicine – most often on sexual performance, weight loss and psychotropic
drugs. Cases have been regularly reported in the press, however, of Poles being taken for a
ride by unscrupulous dealers. In the first half of 2009 a teenager from Silesia took Chinese
booster drugs that turned out to contain significant quantities of lead. A resident of Elk,
northern Poland, was arrested three weeks ago for selling false sexual enhancement drugs
over the internet – made of plaster.136
 In 2008, Polish customs officials seized over 100,000 false drugs. Medications are the third
most often falsified137
 2008: Polish authorities, working in conjunction with ZPAV (Polish Society of the
Phonographic Industry) and International Federation of the Phonographic Industry (IFPI)
representatives, arrested 8 people and seized over 65,000 DVDs and CDs in a raid in the
Klodzko region. Among the seized items were also firearms, counterfeit cigarettes and a
large amount of cash, highlighting again the link between digital piracy and organized crime.
The pirate discs were believed to be produced in Russia and the Ukraine and were destined
for the German market. The haul included both German and international DVDs many of
which had not been legally released yet. (IFPI)138
 2008: In April, several tons of counterfeit and illegal plant protection products were seized in
Lubaczow, close to the Ukraine border. Of the 34 samples tested, 29 were found to be illegal
or counterfeit and covered products from many companies. Most of the products examined
were manufactured and packed in China before being flown into Europe and then on to
Warsaw. Other products appeared to have come from Ukraine. The plant protection
association in Poland (PSOR) and the special police forces responsible for the raid are
working in close cooperation and subsequent prosecution should emerge from the case.139
133
Team of Counteracting Infringement of Copyright ad Related Rights, 2009, Special Report, p. 87
bid., p.87
135 Ibid., p.87
136 Secure Pharma Chain Blog (july 2009), available HTTP:
http://securepharmachain.blogspot.com/2009_07_01_archive.html
134 I
137
138
139
Ibid.
UNICRI online database on counterfeiting cases available HTTP: http://counterfeiting.unicri.it/org_crime.php?sec_=C
ECPA (European Crop Protection Association) (2008), Counterfeit Pesticides Across Europe, Brussels, pp.16-17.
70
Reference text for Trainers
 2006: Fake memory cards were seized in France and Poland. SNB-REACT filed a
community customs application for Kingston Technology (producer of famous memory
cards). French Customs have reported a seizure at Roissy-Charles de Gaulle airport. The
goods were identified as being counterfeit and SNB-REACT's partner Contratak filed a
customs application and subsequently the release of the goods was suspended. Similar
cards were also found by the Polish customs in September this year. The Polish partner
Bartosz Zablocki successfully handled this case.140
 2005: in Germany, a small company imported, from a Polish broker, about 50 tons of a
supposed registered pesticide claiming that the product was registered for use in EU. After
detailed analysis it was proved that the product was not authentic. The parallel import was
therefore illegal and the pesticide was a fake as proved by laboratory tests and this was an
obvious case of patent infringement. Of the 50 tons, about 10 tons were seized.
Investigations discovered from which company in Poland the product was bought but not who
had manufactured or produced it. The fake products were good copies or refilled containers.
The subsequent court case was won by the company who owns the patent but only small
damage payments were made.141
 2005: a Czech company imported a counterfeit pesticide from Poland, in time for the spring
sugar beet season. It was claimed that the product was a legal parallel import of the same
registered product in Poland. Laboratory showed impurities in the imported product. The
Czech authorities decided that it was an illegal import, based on the packaging information.
But when the local company objected, the product was allowed to be distributed in time for
the growing season, pending further actions by the authorities.142
SOURCES
BFU (2003), Final report. The most important texts concerning organized crime and its legislation,
September, Kassel
ECPA (European Crop Protection Association) (2008), Counterfeit Pesticides Across Europe,
Brussels
EU business (27 April 2010), Polish Police seized 250,000 fake euros, printer, available HTTP:
http://www.eubusiness.com/news-eu/poland-euro-crime.4bc
European Anti-Counterfeiting Network, e-newsletter available HTTP: http://www.snbreact.org/snbreact/EN/newsletter_200612.htm
Necki J., Walendziak W. (2000), Polska Policja na drozde do Unii Europejskieij, Centrum
Europejskie Uniwersytetu Warszawskiego, Warsaw, in BFU (2003), Final report. The most
important texts concerning organized crime and its legislation, September, Kassel
PNB, Warsaw-based Polish News Bulletin, 26 September 2007
Secure
Pharma
Chain
Blog
(july
2009),
http://securepharmachain.blogspot.com/2009_07_01_archive.html
available
HTTP:
Team of Counteracting Infringement of Copyright ad Related Rights (2009), Special Report,
Warsaw
UNICRI
online
database
on
counterfeiting
http://counterfeiting.unicri.it/org_crime.php?sec_=C
cases
available
HTTP:
140
European
Anti-Counterfeiting
Network,
e-newsletter
available
HTTP:
http://www.snbreact.org/snbreact/EN/newsletter_200612.htm
141 ECPA (European Crop Protection Association) (2008), Counterfeit Pesticides Across Europe, Brussels, pp.16.
142 ECPA (European Crop Protection Association) (2008), Counterfeit Pesticides Across Europe, Brussels, pp.12.
71
Reference text for Trainers
72
Reference text for Trainers
SECTION 5
Main Concepts and Suggested Best Practices for Investigations
5.1. Detection of Counterfeit Goods and Initiation of the Investigation143
One of the main aims of this training manual is to provide law enforcers, and all those involved in
the detection and identification of counterfeit goods, with the operational tools to improve their
counterfeit investigations.
For this reason, the investigators should not just stop with identifying the “counterfeit sellers” as
they can be considered “the tip of the iceberg” and occasionally also victims of crime. The
investigations should aim to achieve the following two specific objectives:
1. Identification of the whole counterfeiting chain, up to and including the production sites;
2. Identification of the involvement of possible criminal organisations.144
The seized goods can also provide a variety of information. Examples include information on the
routing of counterfeit goods and evidence against the manufacturers. Furthermore, investigations
may lead to the finding of existing links between counterfeiting and organized crime.
One important weapon in the fight against counterfeiting is the clear presumption of IPR ownership,
putting the onus on the suspect to prove that goods in his/her possession are not counterfeit.
A law enforcement officer encountering a product for the first time has to consider the following
questions:

What is the product and is it illicit or licit?

Where can I obtain assistance to confirm my suspicions?

Where do I obtain evidence of rights ownership?

What evidence is available to support or disprove allegations of IPR infringement?

What evidence do I require to support prosecution?145
Investigators and law enforcers should adopt a common strategy aimed at identifying all relevant
persons involved in the manufacturing, distribution and sale of counterfeit products. The discovery
of the following information could be essential:

Companies and persons (partially or totally) involved in the production and distribution
network. This information is essential for recognising the possible involvement of an
organised crime group and the relevant internal structure146;

Money transfers that might constitute important evidence for tracking the illicit trading flows
and for obtaining the seizure and confiscation orders;

Real estate and property, especially production sites, warehousing or selling points that are
not only crucial for seizure and confiscation proceedings, but also key points of the criminal
chain.
143
The main source for the whole paragraph is UNICRI (2010), Strategies for technical-juridical training and awareness
raising on counterfeiting, (unpublished Italian version).
144 UNICRI (2010), Strategies for technical-juridical training and awareness raising on counterfeiting, (unpublished Italian
version), p. 101.
145 See, INTERPOL (2007), Guide To Intellectual Property Crime And Investigations, Lyon.
146 One of the main weak points of all criminal organizations, including those with a “satellite structure”, is represented by
the need to acquire enormous quantities of raw materials. The set up of complicated company structures is needed to
cover the significant number of purchase orders. Such companies avail themselves usually of just one or two suppliers,
easily identifiable as few are the factories producing the necessary raw materials.
73
Reference text for Trainers

Details and registrations of vehicles or other means of transport used in production
(movement of raw materials, parts or e.g. packaging) and distribution;

Details of mobile communications and IT hardware used in infringements.
The complex distribution chain of counterfeit products can complicate any exercise aimed at
tracing items back to the various parts of the illicit supply chain. This traffic is managed by veritable
transnational criminal networks, capable of progressively refining the methods to conceal and trade
products, following well established routes also used for the trafficking of other illicit goods,
especially drugs. The methods used to avoid customs controls have evolved rapidly. A common
method employed by criminal networks involves transiting the products through several countries in
order to conceal their actual origin. This technique is most used when the country of origin is
particularly “sensitive”. 147
It is particularly important to highlight that prevention and repression of counterfeiting must be
accompanied by thorough information and evidence gathering on the complex system underlying
the illegal reproduction of goods. Counterfeiting is a very complex phenomenon that cannot be
stopped just by limiting the presence of small traders both licensed and unlicensed or through
isolated actions. We need to develop proper strategies to combat counterfeiting in all its
complexity.148
It may be useful to specify the main factors that should be taken into account in the investigative
framework:

The possible origin of the investigation;

The analysis of events;

The choice of investigative methodology;

The data collection plan;

The investigative developments.
The above steps are not intended to cover all of the countless possibilities arising from different
scenarios. They suggest effective investigative activities aimed at identifying and dismantling the
criminal organizations that are responsible for managing significant levels of trafficked counterfeit
goods, and which are also responsible for causing the most harm to right holders, the State and
society as a whole. Investigations should be targeted at understanding the complete criminal
scenario, identifying the counterfeiting production-distribution chain (capital, factories, facilities,
distribution network, warehouses and equipment in general), in order to identify criminal
organizations involved. If these organizations are operating in several countries, the possible
application of those norms regarding transnational organized crime should also be verified before
adopting them.
There are a variety of methods in which investigations on counterfeiting can be initiated, for
example:
147
148

During criminal investigations for a different crime;

Receiving a complaint from the right holder, or communications from other institutions;

Instances of Customs’ protection;

During normal controls of the territory;

Other police activities;

International cooperation and mutual administrative assistance.
UNICRI (2010), “Strategies for technical-juridical training and awareness-raising on counterfeiting”, p. 31.
UNICRI (2010), “Strategies for technical-juridical training and awareness-raising on counterfeiting”, p. 34.
74
Reference text for Trainers
The scenario to be investigated will be more or less complex depending on whether investigations
will consider:

Small traders, both licensed and unlicensed, who constitute the last links of the
counterfeiting market;

Counterfeiting entrepreneurs (the producers and intermediaries trading counterfeit goods).
The following information sources can be used to acquire elements in support of the investigation:

Information available in existing national databases;

Analysis of other open sources;

Analysis of databases on trademarks, patents, designs and models, such as:
 European trademarks (http://oami.europa.eu/)
 International trademarks (http://wipo.int/portal/index.html.en)
 European
Patents
Office
(Espacenet,
http://www.espacenet.com/index.en.htm)
http://www.epo.org/
&
 Other databases on designs and model.

National and regional IP enforcement associations;

Related industry associations (such as Union des Fabricants, the pharmaceutical industry
associations, etc.)
After having collected and analyzed the information of the suspected counterfeit product, the
products’ safety and potential risks for consumers should be ascertained. The following distribution
and trade channels should be detected:

Regular distribution (mix-sale);

Mail-order and via the Internet;

Out of the regular distribution channels.
At the end of this first phase of analysis, investigative hypotheses can be carried out on the
following:

Subjects involved;

Type of infringement and/or crimes committed;

Identification of operational modalities;

Geographical locations;

Driving motives;

Time-span.
Once these pieces of information are collected, it will be possible to evaluate which of the following
investigative methods are considered most appropriate:
 Inspections at borders;

Collection of photographic evidences;

Identify people and means;

Technical investigations;

Identify the production/distribution chain, financial assets etc;

Inspections (documents inspections, verification of the information);
75
Reference text for Trainers

Surveillance;

Ambushes;

Use of informants;

Raids;

Retrieve declarations and information;

Other investigation techniques;

Undercover operations.
BOX 5
The Romanian common national database
A pre-investigative analysis should always be carried out whatever the origin of investigation activity is,
through a series of preliminary checks in order to acquire all the useful elements.
Primarily, the importance of information sharing tools should be considered. These are the national
databases developed in some countries, both in Europe and outside the EU. An outline of the Romanian
national common database is detailed below.
Information contained within databases can also help customs’ agents and policemen in detecting fake
products and preventing their trading.
Other main functions of the Romanian national common database are detailed below.
The Romanian national Common Database consists of several modules:
1. Penal Case module, which is the main functionality where information regarding infringements
and deeds can be entered into the system. The penal case must contain information about origin
institution and assignment of prosecutor and investigators. A case number has to be created
manually by the user due to the structure and nomination of the case numbers. It also provides
the opportunity to search for existing penal cases and view/edit them. Each penal case must be
attached to an Infringer. The system provides the opportunity to attach the Penal Case to either a
Natural Person or to a Legal Person.
2. Persons module, contains information on infringers, both Natural and Legal persons. The module
holds detailed information, such as address, ID and connection to penal cases etc.
3. Right Holder Registration module, provides a searchable overview of selected IPR-related
information from SOIT and RCO. The user will be able to perform searches in respective
registers.
4. Detainments module, intends to show a listing of searchable details regarding different seized
goods etc. from NCA.
5. Reports and Statistics, module allows obtaining of reports and statistics regarding criminal files in
the IPR-field, depending on various parameters.
The beneficiaries/end users of the IT database are:
 Public Ministry – Prosecutor’s Office attached to the High Court of Cassation and Justice,
(POAHCCJ)
 General Inspectorate of the Romanian Police (Fraud Investigation Division)
 General Inspectorate of Romanian Border Police (GIBP)
 National Authority of Customs (NAC)
 Romanian Copyright Office (RCO)
 State Office for Inventions and Trademarks (SOIT).
Source: Romanian Public Ministry
76
Reference text for Trainers
BOX 6
VINCI Information Exchange System
On 10 April 2008, a system for the protection of intellectual property rights “Leonardo da VINCI” (“VINCI”)
was introduced in Poland. Responding to the needs of economic environments, this system introduces
numerous simplifications for the owners of intellectual property rights.
It enables, inter alia:
- to collect and process information provided by producers on original and fake goods, necessary for
customs services to identify pirate and fake products (eg. photos, contact points for the exchange of
information),
- entering and processing data about all confiscated illegal products and
- preparing various statistical reports, including reports for the European Union.
VINCI presented in the European Commission is one of the most modern tools supporting both owners of
intellectual property rights (business) and customs services in fighting counterfeiting and piracy.
Assumptions underlying VINCI system have been used to create a Community system IT IPR “COPIS”.
It is possible that in the near future business will be able to have direct access to the system on the
Internet.
Source: The (Polish) Team for Counteracting Infringements of Copyright and Related Rights
5.1.1 Border Controls Aiming to Detect Counterfeit Products and Anti-Counterfeiting Technologies
Those involved in counterfeiting use a variety of means to introduce their products into the market.
The main distribution chains to consumers include market stalls, itinerant small traders, both
licensed and unlicensed, and sales over the internet.149
We will now start by analyzing how border controls work and how the infringers sometimes avoid
them. We shall outline some useful means already used to detect counterfeit goods before they
reach the market.
Investigations are rather complex as capital, production units, distribution and market circuits are
parcelled out. It may happen, for instance, that counterfeit products sold in Europe are destined for
another market and are thus in transit. In order to deceive customs’ authorities, counterfeiters
resort to indirect transportation systems, involving hiding the origin of the products by passing
through different countries before sending them to their final destination. There are many examples
illustrating this manoeuvre:
-
In September 2003, approximately 15,000 counterfeit glasses (whose estimated value on
the French market was 1,262,650 euros) were discovered at Roissy airport, in France. The
cargo, coming from Dubai, the most notorious seaport for world counterfeiting, was
addressed to Abidjan, Ivory Coast.
-
In December 2003, customs officials of the cargo control unit of Roissy airport seized
approximately 245,000 counterfeit labels of the following trademarks: Lacoste, Timberland,
Nike and Ecko. The labels had been shipped from Hong Kong with Morocco as the final
destination.150
Counterfeiters try to hide the origin of the products to avoid raising suspicion. For this reason, every
counterfeit product has its own circulation and distribution network. There is not a standard pattern,
a number of transit countries are chosen due to the mass trafficking of goods (making customs
work difficult) or perceived weak controls within these territories and customs units. Some areas
are nothing other than turntables: within the EU this is the case with some ports like Antwerp or
149
150
IP Crime Group (2010), Annual Report 2009-2010, p. 9.
Unions des Fabricants (2005), “Rapport sur la contrefaçon et la criminalité organisée”, p. 13.
77
Reference text for Trainers
Rotterdam, or some airports as Schipol or Roissy. Outside Europe, Dubai, and Hong Kong or some
ports in the U.S. are considered privileged transit places. Furthermore, counterfeiters make use of
every kind of transportation means (by air, land and sea) and recur to the faster transport routes
available. The European Commissioner responsible for TAXUD (Taxation and Customs Union),
László Kovács declared: "All these techniques and the indirect routes taken by many cargos are
similar to the ones used by drugs traffickers, which clearly shows which kind of organisations we
are dealing with”151.
The origin of the products can also be masked by taking advantage of the so-called Free Trade
Zones (FTZs). Goods passing through FTZs or Free Ports (FP) create opportunities for
counterfeiters to disguise the true country of origin of goods. They can also take advantage of
countries where customs control on shipped or in-transit goods is known to be weak. Over the
years quite a number of FTZs and FPs in different countries have been cited in reports as hotspots
for counterfeit goods. These include Latvia, Lithuania, Paraguay (Ciudad del Este), UAE (Abu
Dhabi and Fujairah), China (Hong Kong, Shanghai and Guangdong), Panama, Taiwan and
Mexico.152
BOX 7
Counterfeiting and Free Trade Zones (FTZs)
A recent New York Times exposé on the trade in counterfeit pharmaceuticals shows how FTZs can play
an important role in facilitating their sale. One particular case revealed a complex supply chain of fake
drugs originating in China and ran through Hong Kong, Dubai, the UK, the Bahamas and the US. It was
exposed when British customs officials intercepted a large consignment of counterfeit pharmaceuticals
at Heathrow Airport. What surprised them was that the shipment had come from the UAE and was
bound for the Bahamas - not a route normally used by legitimate pharmaceutical companies. This
seizure triggered investigations and raids all over the world.
In Dubai, customs officers raided the warehouse of a trading house called Euro Gulf, impounded a
significant cache of counterfeit drugs, and charged several people. In the Bahamas, the authorities
entered the offices of the Personal Touch Pharmacy and seized drugs worth 4 million USD. As the
investigation progressed,
in the US and other parts of the world. As well as exposing the complex supply chains counterfeiters’
use, the case revealed the role of FTZ’s in masking the origin of products. According to Ilisa Bernstein,
director of pharmacy affairs at the US Food and Drug Administration, “Free Trade Zones allow
counterfeiters to evade the laws of the country because often times the regulations are lax in these
zones.”
Source: ICC Counterfeiting Intelligence Bureau (2009), International Anti-Counterfeiting Directory,
p. 27.
Since an understanding of the counterfeit goods’ flows can help licit manufacturers, brand owners,
and law enforcement agencies to protect the licit supply or to disrupt counterfeit activities a
diagrammatic representation of the potential trade routes used by counterfeiters has been created
by Europol. This diagram also illustrates connections between criminal groups operating in various
countries.
151
Unions des Fabricants (2005), “Rapport sur la contrefaçon et la criminalité organisée”, p. 14.
ICC Counterfeiting Intelligence Bureau (2009), “International Anti-Counterfeiting Directory”, p. 27, available at
http://counterfeiting.unicri.it/docs/IACD.A%20key%20information%20resource%20to%20combat%20the%20global%20pl
ague%20of%20counterfeiting.2009.pdf
152
78
Reference text for Trainers
Unicri 2007, source: Europol
International best practices
An interesting example of a new tool that allows countries to improve how they track the source of
counterfeit goods and also monitor the ports of transit for these fake products is the database
elaborated by the United States National Intellectual Property Law Enforcement Coordination
Council (NIPLECC), in collaboration with the U.S. Chamber of Commerce, to support Interpol in the
establishment of “Interpol Intellectual Property Crime Database”.
This new database will allow countries around the world to share information on counterfeiting and
piracy to track IP crime and prevent future criminal acts. The database will act as an important new
tool for information exchange between countries. It allows countries to share information they hold
on counterfeiting and piracy, while also allowing for information to be entered into the database
from the individual companies who own the goods that have been stolen.153
Another good practice, presented in box 2 below, is the Customs & Border Protection’s (CBP)
online registration system for trademarks and copyright
.
United States National Intellectual Property Law Enforcement Coordination Council (2008), Report to the President
and Congress on Coordination of Intellectual Property Enforcement and Protection , p.35. For a more in-depth analysis of
153
this database look also p. xx, chapter 5, part C (a good practice: DIIP).
79
BOX 8
U.S. Customs & Border Protection IPR registration process: a good practice
The U.S. Customs and Border Protection (CBP) is the unified border agency within the Department of
Homeland Security responsible of the management, control and protection of national borders at and
between the official ports of entry.
“CBP’s online registration system for trademarks and copyrights allows rights owners to electronically
record their trademarks and copyrights with CBP.
CBP personnel use the system daily to make IP infringement determinations.
The IPR registration system makes IP information relating to imported merchandise (such as images of
trademarks and copyrights, contact information, countries of production, and licensees) readily available to
CBP personnel as they are inspecting shipments at the ports of entry in real time.
As of the end of 2007, over 21,000 trademarks and copyrights were recorded with CBP.
For more information on this tool or to register your trademark or copyright, visit CBP’s e-recordation
website”.
Source: U.S. Customs and Border Protection, http://www.cbp.gov/xp/cgov/trade/priority_trade/ipr/
For information on border measures as effective means of blocking counterfeit products, we see
the implementation of the EU Customs Regulation in Poland (Part 3 of this manual). In the box
below some data on detection and seizure at Polish borders are highlighted in order to quantify the
phenomenon within the country:
BOX 9
Detection and seizure at borders in Poland
The Polish Customs Service is said to be one of the most effective among Customs Services in other
Member States of the European Community as far as the protection of intellectual property rights is
concerned.
In 2009, in Poland, as a result of control activities aimed at enforcing intellectual property rights, the
Customs Service confiscated over 2.6 million pieces of fake and pirate goods worth over EUR 38 million.
Only In the 1st half of 2009 control operations aiming at the enforcement of intellectual property rights and
conducted by the Customs Service resulted in confiscating over 840,000 fake and pirate goods worth over
19 million.
In particular, there were 899 cases of confiscating pirate and fake goods. Additionally, the Customs
Chamber in Warsaw examined 114 applications for customs protection, which were filed by the
representative of intellectual property rights owners.
Source: Team for Counteracting Infringements of Copyright and Related Rights, Support to Special
Report, November 2009.
In the following boxes two good practices on customs action (in Ireland and in France respectively)
are presented as suggestion for both Poland and the rest of the EU.
80
BOX 10
Customs action against goods suspected of infringing IPR in Ireland
“1. Suspect goods identified in the course of checks carried out at the request of a right-holder
The entry of the goods should be monitored in accordance with the terms of the application in question.
To facilitate the identification of the goods, suitable arrangements should be made including the insertion
of appropriate profiles on the AEP (Automated Entry Processing) system, for the period of the application
under consideration.
Where imported goods appear to infringe an IPR covered by an application they are to be detained and
the right-holder and the person who imported the goods are to be informed. In addition, the detention
should be reported immediately to the IPR Co-ordinator. The right-holder is to be provided with a sample
of (or asked to view) the goods. Furthermore, he/she is requested to confirm in writing whether or not the
goods are counterfeit or pirated, giving reasons by reference to the characteristics of the goods or their
packaging or otherwise. The person who imported the goods should also be given the opportunity to
inspect them. This person’s name should not be divulged to the right-holder.
2. Suspect goods identified in the course of normal checks
During normal checks, if goods are discovered which appear to infringe an IPR, but are not the subject of
an application, they are to be detained. The right-holder whose IPR is suspected of being infringed and
the person who ipmorted the goods are to be informed. In addition, the detention should be reported
immediately to the IPR Co-ordinator. The detention, which can only be for a period of 3 working days, is to
allow the right-holder an opportunity to lodge an application with International and Trade Security Branch,
Customs Division.
If an application is granted, the procedure should be applied.
If an application is not lodged within the 3 working days the goods are to be released provided that all
customs formalities have been complied with.
3. Follow Up and Reporting
Where goods have been detained, a right-holder has 10 working days to confirm that the suspect goods
infringe an IPR under National law. In the absence of this confirmation the goods will be released
provided that all customs formalities have been complied with. The 10-day working period may be
extended by a maximum of 10 further working days if considered necessary. In cases involving perishable
goods suspected of infringing an IPR, this period is 3 working days and may not be extended. If the goods
are subsequently seized, a written report setting out all the facts shall be forwarded immediately to AntiFraud Unit, in accordance with standing instructions on the reporting of seizures. A copy of this report
should also be sent to the IPR Coordinator. To facilitate the requirement of quarterly reporting to the
Commission of goods seized under these provisions, the report in each case must include the following
information: the name of the right-holder, a description of the goods and the brand name of the IPR
infringed.
For each item, the quantity of goods detained or seized, their customs status, the type of IPR infringed,
the means of transport used; and whether commercial or passenger traffic was involved and whether the
procedure was initiated in the course of normal checks, or specific checks covered by an application for
action”.
Source: International & Trade Security Branch, Customs Division (2008), Intellectual Property Rights
(IPR), Manual Customs action against goods suspected of infringing certain intellectual property rights
and the measures to be taken against goods found to have infringed such rights, Ireland.
81
BOX 11
Customs action in France
“According to law 94-102 of 5th February 1994, counterfeiting is a customs-related crime (articles 38, 215
bis of Code de Douanes). The following customs penalties regarding trademarks counterfeiting include:
the seizure of counterfeit goods, means of transport and facilities used to hide the crime; a fine whose
value can be once or twice the counterfeit merchandises’ cost (art. 414 Code de Douanes) and with a
minimum of 300 Euros (art. 437 Code de Douanes). A 3 years-maximum imprisonment is also incurred.
The proceedings are then transmitted to the prosecutor according to Art. 40 of the Criminal Procedure
Code.
The customs action can become customs seizure due to the intervention request sent by a rights’ owner
to the Direction Nationale du Renseignement et des Enquêtes Douanières (DNRED). The rights’ owner,
within 10 days, has to justify to customs services both the measures decided by the TGI president and
whether a civil proceeding was started (art. L.335-10, Art. L.521-7 and Art. L.716-8 of CPI).
The law of 9th March 2004, adapting measures to the new crime evolutions, extended the customs
authorities’ prerogatives concerning intellectual property. So, regarding the trademarks counterfeiting, the
new article 67 of the Code de Douanes allows customs agents to proceed with undercover operations,
with the authorization and under the control of the Public Prosecutor.
The European Regulation n° 1383/2003 (22nd July 2003) strengthened the Customs possibilities for action
within the European Union. Since 1st July 2004 the Customs are able to act whenever a sufficient
suspicion exists, even before the call for action by the IPRs’ owner. This system is applied to all IP rights,
including the geographical indications, appellations of origin and the vegetable patents. Moreover, free
and harmonized intervention requests are foreseen by this Regulation.
The Customs administration have the right of self-directed prosecution in front of the repressive
jurisdiction for the implementation of fiscal sanctions, but only if the public action of the common right has
been engaged either by the Prosecutor or by the right’s owner. If the public action has not been activated,
the Customs will have to close a transaction. Transaction power – regarding Customs – is exerted mainly
for low levels of counterfeit products. Customs transactions have no effects over the public action in
prosecuting the infringements of common law. For this purpose, the proceeding has to be transmitted to
the Public Prosecutor according to Art. 40 of the Criminal Procedure Code.
Source: Unifab (2004), La lutte anti-contrefaçon. Manuel destiné aux officiers de police judiciaire , 2ème
édition, p. 14.
5.1.2 Anti-counterfeiting Technologies
The great volume of international commercial trade is not the only involuntary ally of organized
crime in the trafficking of counterfeit goods. Modern logistic management of international trade is
facilitated thanks to intermodal shipping. Intermediary destinations are often chosen from those
hubs which law enforcement authorities do not consider to be “high risk” thereby making the origin
of the goods appear less questionable. This creates additional practical difficulties when attempting
to detect counterfeit goods.154
The problem becomes more complex when the imported object is not a finished counterfeit
product. To avoid border controls, counterfeiters resort to a variety of techniques to disguise the
goods; examples include: mixing original and counterfeit products or using double bottomed
transportation means. In 2000, a Bulgarian ship transporting goods from Ukraine and ex-
141
UNICRI (2010), “Strategies for technical-juridical training and awareness-raising on counterfeiting”.
UNICRI, 2007, op. cit.
143 International Anti-Counterfeiting Directory (2009), “A key information resource to combat the global plague of
counterfeiting”, pp. 8-9.
142
82
Yugoslavia was inspected. A double bottom was discovered containing more than 220,000 pirated
CDs whose value was about USD 500,000.155
The practice of parcelling out the components of a product across several shipments is also very
common. Clothes and counterfeit trademarks can be sewn on to clothes that have been shipped
separately. Sometimes a product is delivered first, followed later by its packaging. In this case the
manufacturing of the product is completed only after its transport, thus subdividing the risks
involved in shipping.
Since there are many techniques to conceal counterfeit products and to make them increasingly
hard to distinguish from the original ones, a variety of detecting measures have been elaborated in
the recent years. Some of the most used are outlined below.
The report entitled “A key information resource to combat the plague of counterfeiting” published in
2009, provides a series of new anti-counterfeiting technologies available to the market in 2008:156

Two Australian chemists developed a new rapid forensic test for authenticating antique
porcelain after discovering that all porcelain has its own unique ‘fingerprint’. This ‘fingerprint’
allows its history to be traced back to the precise quarry from where the clay was mined, the
furnace in which it was fired, and the period in which it was manufactured. The technology
involves a laser sampling technique to determine the unique signature of the clay from any
porcelain object to be authenticated.

Bayer CropScience also launched its Qualidate fingerprint authentication technique, a new
patented technology based on approved food additives developed to protect crop protection
products. The system provides a quick and easy test to determine whether or not a product
is authentic and of original Bayer CropScience quality.

In 2008 a new tool in the fight against counterfeit wine was also launched. French scientists
developed a particle accelerator that can authenticate a wine bottle’s age and detect
counterfeits. As testing wine to determine its age is problematic, as such tests are often
questionable (especially for wines older than 50 years) this technique analyzes the
composition of the bottles. Glass production centres are unique, and production methods
have changed over time, leaving on each bottle specific marks. The analysis focuses on the
bottle’s glass and not its contents, thus the bottle can remain sealed, during the test. The
particle accelerator projects an ion beam at a bottle and then studies the X-rays that are
emitted from the glass using a semiconductor detector. The process does not harm the
bottle in any way. The test results are then compared with information in a database, which
contains an analysis of bottles sent directly from wineries to ensure their provenance.

Another interesting anti-counterfeiting system was launched in Ghana aiming to give
consumers first hand information on the authenticity of pharmaceutical products being sold
in the country. The system, known as mPedigree, links producers and distributors with
consumers and regulators and has been designed to eliminate the information blockage on
which counterfeiters thrive. A strategist of the mPedigree platform stated that once the
system is operational, it will be the world’s first consumer protection system of its kind.
Under the system, drug buyers and/or consumers have the opportunity to check for free
whether their purchases are genuine or not, by using their mobile phones to send special,
non-duplicable codes embossed on drugs and to receive in a few seconds a response
confirming or denying the authenticity of the product concerned.

Sanofi-aventis also inaugurated its Central Anti-Counterfeit Laboratory at the company’s
pharmaceutical plant in Tours, France. The laboratory, with its experts and state-of-the-art
83
equipment, has a three-fold remit in respect of reducing the threat of counterfeit drugs. This
involves: conducting direct examinations of packaging items and leaflets as well as
definitive chemical tests on suspect samples of commonly counterfeited products;
developing test methods and distributing them globally. This would allow any industrial plant
in the world to inspect and test, the suspect products corresponding to those manufactured
by Sanofi-aventis with the same criteria; and to centralise “Identity Cards” for the counterfeit
drugs found, in a single, central database, making it possible to compare different types of
counterfeit goods.
It should be emphasized that anti-counterfeiting technologies can be taken as example and
possibly replicated in similar contexts. Also this underlines the importance of sharing information,
both between public and private sector and between the institutions involved in the fight against
counterfeiting.
Authentication technologies are used to authenticate products. Consequently, these technologies
form a source of evidence for the courts and thus aid law enforcement agencies during procedures
related to the seizure of infringing goods. Markings are divided in four categories: overt (visible to
human eye), hidden (elements incorporated into overt features or packaging which are visible to
human eye by means of tools such as reactive pens, laser pointed tools, optical filters or UV lights),
covert (elements which can only be detected with specific detection devices), forensic (elements
which can only be detected by means of an infield kit or through a laboratory analysis which allows
for a more comprehensive analysis).
Track and trace technologies are used to follow and analyse the movement of products through
supply chains and hence can help enforcement agencies during investigations. Such technologies
can provide barcodes or radio frequency identification (i.e. an automatic identification method
which is incorporated into a product and is transmitted through radio signals). A good practice is
represented by GS1 Standards: they use RFID technology within barcodes in order to manage
shipments, inventories & assets and to reduce counterfeiting. The barcodes system enable
companies to manage the supply chain more efficiently, thus may help in finding counterfeiting
actors operating at that level.157
International Best Practices
The Italian Customs Agency own one of the international best practices on computerized customs
risk management, entitled FALSTAFF. (Fully Automated Logistical System against Forgery and Fraud).
157
Transcrime (Joint Research Centre on Transnational Crime), (2010) Anti Brand Counterfeiting in the EU: report on
best practices (unpublished version)
84
BOX 12
A best practice of computerized customs’ risk management
Fully Automated Logistical System against Forgery and Fraud (F.A.L.S.T.A.F.F.)
The project of fight against counterfeiting – the Fully Automated Logistical System against Forgery and
Fraud (FALSTAFF) – developed by the Italian Customs Agency is based on a multimedia database of
original products. It is included in the information system of the Agency.
Each producer, manufacturer or right holder applying for customs protection generates a record in the
database, which contains several data related to the products for which protection is requested –
information on routes and quantities traded, technical information for the identification of the product,
photos of the trademark and of the product itself as well as packaging information.
Customs officers can query the database obtaining real time information and in case of an application for
action, they can also refer to the support of experts of trade associations and/or quality certification bodies
for the products concerned.
The database is also integrated with the customs control circuit, thus allowing for the definition of further
risk profiles which result in corresponding actions aimed at protecting trademark rights.
The customs control circuit performs a real time analysis of all import and export declarations submitted to
custom s and automatically redirects them to the relevant control channels matching those risk profiles.
The risk profiles are elaborated also on the basis of parameters indicated in the forms submitted by right
holders to the Agency.
The implementation of the system is a positive step undertaken by the Italian Customs Agency to meet
some of the most urgent needs resulting from the First World Congress on the Fight against
Counterfeiting. These include: identifying the highest possible number of counterfeit products and
counterfeiting strategies; and taking the fastest possible actions in these respects. These tasks are
achievable only through the adoption of electronic technologies.
In 2005, FALSTAFF was awarded the Honour Mention in the eEurope Awards, European Oscar for the
better initiatives related to eGovernment, held in Manchester. This was as FALSTAFF was an innovative
and ambitious project aimed at combating the counterfeiting phenomenon within the European Union
single market. It is an excellent example to be followed by the other European customs agencies and can
improve the efficacy of cooperation among the EU member states.
Source: www.agenziadogane.it/wps/wcm/connect/ed/Servizi/F.A.L.S.T.A.F.F.
85
5.1.3 Raids at Production/Stockpiling Points or Local Markets
In the previous paragraph, we analyzed how border controls work, within the EU framework, in
cases of IPRs infringement. We also explored some technologies implemented to discover and
detect counterfeit products.
On the basis of preliminary information acquired by law enforcement and border officials, another
instrument to counter these criminal practices is the one of Raids, which literally means ‘searching
without warning, making a sudden surprise attack’.
It is crucial to mention that raids and the related activities are usually carried out with joint teams
from different law enforcement agencies including: immigration controls, vehicle standards, trading
standards, social welfare fraud investigators and other ‘organized crime’ investigators such as vice
squad, drugs, arms etc.
In Poland, especially in order to limit possibilities of smuggling fake phonograms and videograms
and distributing them on its territory, police launch raids on bazaars, market places and commodity
exchanges (electronic and car ones). They constitute one of the prevention elements within the
framework of combating this type of crime, simultaneously generating the decrease in the number
of infringements of copyright and related rights, as well as intellectual property rights.
Analyzing statistical data for 2009, it should be mentioned that the Polish Border Guard
participated in approximately 500 control activities on bazaars and market places. In most cases
these were actions undertaken in cooperation with the Police and the Customs Service158.
The so-called “surprise effect” is carried out in production/stockpiling points and local markets: it is
a key tool for acquiring every useful element to identify all the events related to the crimes. For this
reason, a prior inspection should be completed to understand the external features of the
premises. This would make it easier to safeguard the exits when entering into the buildings or into
the warehouses.
“In particular, when a search is performed, a series of activities shall be carried out, involving:
158

Examining tax records;

Examining the Customs documentation in the case of international transactions;

Examining commercial correspondence;

Looking for any documentation that may be relevant to the investigation (such as diaries,
notes, receipts, correspondence, addresses) on the premises and facilities used for the
activity, including motor vehicles used in relation to the business;

Looking for any technical documentation (such as declarations of conformity, technical
documentation, reports, etc.) or documentation relating to the production processes (in the
case of a manufacturer);

Verification of permits, notices and licenses to conduct the business (also in the case of ecommerce);

Examination of documentation proving ownership of trademarks, licenses, concessions,
supply contracts, royalties, etc;

Analysis of the quantity and composition of computer equipments (e.g. personal computers,
local networks etc.);

Acquisition of magnetic media to assist later examination for the identification of any
transactions that can be of interest. Special attention should be given to data contained in
the hard disks of personal computers used by the owner, or by others with management
responsibilities. This can be achieved through backing-up the identified hard disks;
Team for Counteracting Infringements of Copyright and Related Rights (2009), Special Report, p.12.
Reference Text for Trainers

Identification of all the personnel effectively working in the enterprise, specifying personal
identification data, the tasks performed, the date of commencement of the activities, the
type of employment responsibilities;

Performing an analytical inventory (quantity, value and provider) of the existing products
(even extending the search to any premises that may be available to the suspect)”.159
The identification of counterfeit products can be performed using two criteria:
Simple criterion:

Very low price;

Characteristics of the seller;

Lack of distinctive signs, information and labels;

Quality of packaging;
Complex criterion:

Technical advice;

Sending samples (including photos) of the product to the right holder;

Chemical or physical examination;

Analysis and laboratory tests.160
5.1.4
Evidence Gathering and Types of Evidence Presented to the Court in Counterfeiting
Cases161
An investigation is an activity aimed at gathering information and evidence and is conducted for
many different reasons. The purpose of any investigation is to determine and document facts
concerning a particular issue to ensure the law enforcement agency can make informed and sound
decisions. Investigation is a general term and can apply to a very general activity or a specific type
of information gathering process. Some specific types of investigations include: a complaint
investigation, a disaster investigation, a health fraud investigation and a product
counterfeiting/tampering investigation.162
An operative list of actions to be carried out during the investigation process is presented below. It
can be applied to different forms of fake products posing risks for consumers’ health.
Counterfeiting/Tampering Investigations
The purpose of these investigations is to determine if counterfeiting/tampering has occurred; the
seriousness of the problem; the quantity of affected products on the market; the source of the
counterfeiting/tampering; and quick removal from consumers or commerce of any contaminated
product. The office specifically assigned to criminal investigations will seek to identify and initiate
criminal prosecution of those persons responsible for criminal activity associated with
counterfeiting/tampering/threat incidents.
Counterfeiting/tampering incidents historically have occurred in unpredictable forms and products.
Some ‘standard operating procedures’, in most cases, will suffice for these investigations. As
events take place, specific instructions for some investigations may be provided by the assigned
offices. Prompt resolution is important, especially when a health hazard is involved.
The law enforcement official(s) shall attempt to answer the following questions as rapidly as
possible:
159
UNICRI (2010), “Strategies for technical-juridical training and awareness-raising on counterfeiting”
These guidelines are the one outlined by the Italian Guardia di Finanza in the UNICRI (2010) publication, but could
prove as a useful example for other European countries.
161 The main source for the whole paragraph is:
U.S. Food and Drug Administration (last update march 2010), Investigations Operation Manual, ch. 8, available at
http://www.fda.gov/downloads/ICECI/Inspections/IOM/UCM123515.pdf
160
87
Reference Text for Trainers
1. Has counterfeiting/tampering occurred, or can the condition of the product be explained by
other means?
2. Is death, injury, or illness associated with the report and, if so, does it appear to be caused
by the product counterfeiting/tampering?
3. Does the incident appear to be isolated or widespread?
4. Is it likely that other similarly affected products remain in distribution, and if so, what is the
extent and magnitude of distribution?
5. If not isolated, could the product counterfeiting/tampering have occurred at the production
facility or in the distribution chain?
6. Can specific persons or points in the distribution chain be identified as possibly causing the
problem?
Contacting rights owners is an essential step in every investigation process. They can contribute to
evidence and information gathering due to their past experiences and knowledge on the original
products.
Interviews with informants and/or suspects:
1. Conduct interviews in a location which reduces unnecessary interruptions or distractions.
2. Establish rapport with the person or persons being interviewed to put them at ease.
3. Listen to the person. Let them first tell the story in their own way. Listen carefully to each
side.
4. Be genuine and at ease.
5. After hearing the entire story, ask them for more information to fill in details.
6. Ask for clarification of key points. Obtaining details and requesting clarification of key points
allows you to obtain an idea of the validity of the person's story through comparison of the
accuracy of the details with previous information supplied.
7. Note-taking may put the person being interviewed on edge. If this appears to be the case,
do not take notes until you request clarification of key points. Video / audio recording should
also be considered.
8. For cases of counterfeiting/tampering, ask who was with the person, what happened in the
store, any problems noted with the product at the store, and other questions which will
provide you with more information on when, where, or why events took place, who was
present, etc. If two investigators are involved in the interview, one should take notes while
the other asks the questions.
9. During interviews, watch for changes in attitudes, body language, hesitation in speech, etc.,
as you observe and listen to the person being interviewed. Describe your observations of
body language and personal characteristics in your report.
Sampling:
1. Whenever a sample is collected for suspected tampering/counterfeiting, you must collect an
authentic sample of the same product. It should be from the same lot and code, if at all
possible.
2. Collect any containers a suspect may have handled as they placed the tampered product
on the shelf.
3. When
handling
product
containers
or
other
evidence
associated
with
tampering/counterfeiting, take care to avoid adding or smearing fingerprints by wearing
cotton gloves, using tongs, forceps, or by picking the container up by opposing corners.
4. Identify product containers carefully and in as small an area as possible.
5. Do not open outer containers to identify inner containers or inserts.
88
Reference Text for Trainers
The sampling is often related to tampering cases, however, in most counterfeiting cases,
investigators do not usually collect an authentic sample of the same product.
Retail stores:
1. Before starting any activity at the scene, protect the area to preserve any evidence on the
store shelves, floor or adjacent areas and products.
2. Discuss with the firm's management, and/or the personnel in charge of the stocking of the
shelves, how material is received and handled prior to being placed on shelves.
3. Document the area using photographs of the product shelves, surrounding area, and any
shots which would provide information on the product, its location and store layout.
4. Samples of materials in the area that may be applicable to the investigation are to be
collected.
5. Be observant of persons present in the store, as guilty parties are thought often to return to
such location, especially when the agency or news media are present. Be alert to
statements of store personnel about activities they have observed. Obtain descriptions of
the actions, dress and physical characteristics of individuals the employees have noted
exhibiting unusual/notable behaviour in the store.
6. Determine if the firm has a closed circuit TV monitoring system and if they maintain tapes. If
so, these may be a source of leads.
7. Obtain information about employees terminated in the past year, employee problems, or
shoplifters who may wish to cause problems in the store.
The key to a successful investigation or inspection is to clearly define the objectives of the
operation and to examine each facet of the establishment in light of the objectives.
Manufacturing sites:
Aspects of the production/distribution system to inspect for leads may include:
1. Age of facility and date when production of the first batch of the product under investigation
was initiated.
2. List of other facilities which produce the product under investigation.
3. For drugs, list by strength, size of container, name, dosage form, and number of packages
per shipping case, all products manufactured or processed at the facility.
4. Obtain the names, titles, addresses, office and residence telephone numbers of
representatives of the company.
5. Contract packagers, if any, should be described by name, location and products handled.
6. For the suspect lot, give its lot number, the size of the lot, size and type of containers in
which it was packaged, its history of production and distribution beginning with the date of
weighing of the raw material, and the dates and description of steps in processing.
7. Describe any locations within the facility where an employee could have access to the
product/contaminant being investigated.
8. Describe the characteristics of the suspected product/contaminant within the facility, its
container type, its brand and generic name, its lot number, size of container, whether the
container is full or partially full and the approximate amount remaining.
9. Describe security for the suspected product/contaminant including limitations of access,
where it is stored, and responsibility for controlling access to the material.
10. Describe what legitimate use, if any, the facility has for the suspected product/contaminant
in each of the locations found.
11. Determine how often the material is used and whether or not a log of its use is maintained.
89
Reference Text for Trainers
12. If a log is maintained, obtain a copy showing its use and discuss with plant management
the legitimacy of each such use.
13. Determine whether the firm verifies use and use rates and has a method of determining
explanations for any discrepancies noted.
14. Have samples of the suspect product/contaminant been obtained by, for instance the FDA
in the case of medicines, or other competent agencies, and if so, what are the results of
analysis?
15. Does the firm test for the product/contaminant under investigation?
16. What method is utilized for such testing, and at what frequency?
17. List the facility's sources of raw materials for the suspect lot/product.
18. Evaluate the raw material storage conditions to determine the potential for manipulation of
materials.
19. Describe the lot numbering system, any plant identification numbers, and expiration dates
placed on retail products and cases.
20. If any product for export is processed at this plant, describe any differences from domestic
products.
21. If the product under investigation has tamper resistant packaging (TRP), determine the type
of system utilized, and if the system utilized has been evaluated to determine if breaching is
possible. If breaching is possible, describe. Describe lot numbers or code numbers placed
on TRP and security measures taken for TRP materials on hand and those sent to contract
packagers. Determine whether TRP materials are accountable.
22. If the plant process includes collection of samples for examination on the production line or
by laboratory facilities, discuss where the samples are maintained, who has access to
them, and their disposition.
23. Report dates and description of each step in processing, including identification of storage
locations between steps. Obtain estimates of flow rates and volume of materials in hoppers
and drums at key stages. Determine distances between production areas or between
processing equipment at critical points. This information can be useful for statistical
evaluation of the likelihood of contamination at various points in the process.
24. Include a description of the in-process lot numbering systems for each phase of
manufacturing, security for each process and/or product while in storage and during
processing.
25. In some types of processes, there are provisions for an individual to ensure sufficient
products are placed in each container before being filled. If this is the case in the plant
under inspection, describe the circumstances and security for this process.
26. Determine whether the facility hires part-time employees, or transfers employees from one
location to another on a temporary basis. Were any present during production of the
suspect lot?
27. Describe provisions for determining reliability of employees.
28. Determine if employees can move from area to area within the facility. Describe any
restrictions on their movements and if enforced.
29. Describe laboratory control tests and in-process tests performed on the finished packaged
product and in-process materials. Determine if reserve samples are retained of all lots.
30. Determine how rejects and reworked materials are handled.
31. Describe any unusual event which may have taken place during the period when the
suspect material was within the facility.
90
Reference Text for Trainers
32. Determine if the firm has a plan to safeguard against counterfeiting/tampering as part of its
quality assurance (Q.A.) programme. If so, determine the implementation date of this plan
and review any periodic assessment reports for potential problem areas.
Distribution facilities:
It may be necessary to obtain the following information at each level in the distribution chain:
1. Amount of suspect lot on hand at time of inspection.
2. Obtain the turnover rate for the product under investigation.
3. Amount of suspect lot received, and any variations from amount consigned to the facility.
4. Date received.
5. How received.
6. Name and type of carrier which delivered the product. Determine security of the vehicle or
container while in-transit.
7. Obtain distribution history of the suspect lots.
8. Describe the distribution area covered by the facility being inspected and the number of
accounts served, whether they are retail or wholesale.
9. Determine if the facility handles any cash and carry orders.
10. Determine if the facility will accept returns and how are they handled.
11. Describe stock rotation practices and how they can be assured.
12. Determine if lot numbers of products distributed can be traced.
13. Describe the method of packing of shipments; for instance, plastic tote bins sealed with
nylon tape, intact cartons only, cases are split, etc.
14. Describe the methods of shipment utilized by the warehouse.
15. Describe personnel practices, problems and other information on visitors, contractors, etc.
It is often advantageous to produce a pictograph or a timeline chart of the distribution system. This
would show basic information on each level in the distribution chain and distances between each
link in the chain. It is also often worthwhile to prepare a timeline chart showing the progression of
the suspect lot through the manufacturing process to the source of the complaint, including the
significant steps in the manufacture and distribution of the suspect product.
Security:
Methods used to report this information should be discussed with the supervisor, since an
inadvertent release could compromise the facilities security system.
1. General security arrangements including: the number of guards, their shifts, locations, and
whether or not they patrol the facility.
2. Describe any closed circuit TV systems, their locations, and any physical barriers to prevent
access to the plant grounds and its facility.
3. Describe who is logged in and out of the facility and whether or not employees must display
identification badges upon entry. If plant employees are issued uniforms by colour or
design, which designate their work station locations, also describe.
4. Determine whether visitors, contractor representatives, cleaning crews, etc., are subject to
movement tracking or control, and if any were present during production of the suspect
product.
5. If the suspect product was particularly vulnerable to in-plant tampering during certain stages
of handling, identify particular employees who had access to product during these stages
and interview them individually. There may be occasions when line employees may be able
91
Reference Text for Trainers
to remember suspicious activities on the part of co-workers or others working in the area
when suspect lots were being produced.
6. Describe the security measures taken for the processing area after hours, during work
breaks, and at meal times. Be alert to those periods when in-process containers are left
unattended on a packing/production line.
7. Describe any employee relations problems such as layoffs, firings, probations, adverse
actions, etc.
Reporting:
Reporting an investigation is frequently completed using a memorandum. The format is not as
defined in sections as an inspection report. A good rule of thumb to follow is to first summarize
what has been done, why or give the reason for the investigation and briefly state the findings.
After this, one can go into detail about the investigation was conducted and what was found.
Reporting the course of the investigation and relevant findings chronologically works in many
situations. For long narratives, using headings will make it easier for the reader to follow the report.
Some types of investigations have forms that need to be completed in addition to the narrative.
92
Reference Text for Trainers
BOX 13
In summary: How to operate?
The police officer getting knowledge or checking up on a counterfeiting-related fact should act
gradually by:
-
Gathering whatever information concerning the fact (that will inform the Public Prosecutor), as
charges, written documents or complaints, even interviewing, if possible, informed people and
other customers of the counterfeiters;
-
Paying close attention in acquiring the notitia criminis, by researching all information sources
considered suitable;
-
Aiming at detecting the counterfeiting chain (capital, factories, structures, distribution network,
warehouses and generic tools), by activating each informative and investigation source
whenever a criminal organization is involved, according to the Palermo Convention’s
definition;
-
Contacting another law enforcement agency or a specialized organisation (tax police,
customs, port authorities, associations or privates involved in countering counterfeiting etc.)
when his/her expertise is not adequate, in order to delve into fiscal aspects or other issues
concerning immigration or job conditions;
-
Taking care, as carefully and promptly as possible when gathering data to send to
administrative centres in order to improve the implementation of the prevention and
repression of those crimes;
-
Finally, the rights’ owner should be informed in order to initiate civil or criminal proceedings,
and ask for compensation with prejudicial consequences for the counterfeiter.
Other countering instruments
The experience in the carrying out of investigations showed that the producer is different from the
small traders both licensed and unlicensed: the unlicensed, often clandestine, can be punished
through expulsion; while the licensed trader is usually an underground entrepreneur, can be efficiently
punished by civil or criminal measures.
Sanctioning the associative bond can act as a powerful deterrent with both direct and indirect
consequences.
The main deterrent for the counterfeiter is being damaged in his/her own entrepreneurial activity. If the
seizures of the destruction of thousands of counterfeit goods may be an economic loss, the
confiscation of an apartment, a bank account or a licence, or the forfeiture of driving licence or
documents for leaving one’s country is the real deterrence.
Usually, the criminal sanctions’ effects are more preventative than repressive. The sanction creates a
deterrent effect due to its existence, by creating insecurity among the criminals. Deterrence can be
carried out by making counterfeiting less interesting and attractive. If counterfeiting is also a way of
laundering ‘dirty money’, we can assume that by increasing sanctions, using counterfeiting for this aim
would no longer appear attractive.
Source: Italian Ministry of the Interior
5.1.5 Internet Investigation
The use of the Internet for the advertisement/sale of counterfeit products has created an
independent distribution process. It directly targets final users, contributing to ordinary distribution
and sometimes overlapping it. The Internet is an important supply channel for the counterfeiters as
it allows them to simultaneously supply products at the retail and wholesale level.
The data provided by the U.S. Food and Drug Administration (FDA), indicates that 10 million
parcels enter the USA every year. This demonstrates that the use of the Internet as a distribution
channel is rapidly growing. The OECD predicts that the volume of sales over the internet will rise
by 20%-30% per year, thus, potentially increasing the distribution of infringing products.
The Internet guarantees anonymity due to the impersonal nature of online commercial exchanges.
93
Reference Text for Trainers

Auction sites and online marketplaces. The auction sites are well used routes to market,
sell and distribute counterfeit products, including digital files, CDs and DVDs. Recent years
have seen a growth in more established market places, such as Amazon and eBay.
Currently, there are over 90 UK based auction websites. The past year has seen action
being taken to try and tackle this issue, in particular through joint work with the auction
sites. The Internet Auction Working Group is led and chaired by trading standards. It is
developing ways to harmonise the approach to removing sites that sell infringing products,
with the aim of reducing the burden on enforcement and agencies brand holders. The group
is also looking to introduce a code of practice for auction sites.

Another key area is where dedicated websites have been set up to sell specific fake or
pirated content. In some instances, items are clearly advertised as fake or their price might
indicate that they are not legitimate products. In other instances the products are
represented as genuine articles.

Criminal activity through P2P file sharing sites, for example by running or hosting a site,
continues to be an area of serious risk. Much of the discussion and debate regarding P2P in
2009/10 has centred on the civil infringement issues resulting from the large volumes of
consumers who are making use of P2P technology to download unlawfully copied content.
These activities do not typically fall into the category of IP crime although civil law breaches
may be occurring (also involve criminality).

Streaming sites are a concern to the audio-visual sector as a whole. They raise particular
concerns for those involved in audiovisual rights around sporting events. It is the “live”
nature of the sporting event which provides the greatest appeal to a prospective audience.
It is at risk of piracy by means of live streaming on the Internet.
Online purchases seriously jeopardize the identifying function given to trademarks, as it is
practically impossible for the consumer to know who or what is behind an Internet site.
Furthermore, the consumer may not have physical contact with the good she/he intends to acquire,
but must trust the images that are presented on the online store. The combination of these factors,
which could be defined as conditions of non-verifiability – creates a fertile ground for the
development of illegal activities which aim to sell replicated products. Due to this level of
anonymity, the investigations implemented by the law enforcement officials have been
considerably more difficult”.163
It is necessary to take into consideration the dynamism of the Internet when regarding
investigations within the digital environment. The Internet can easily and rapidly modify itself. It
may happen that those responsible for the websites can alter the webpage contents and format
while the investigations are in progress after having realized that they are being investigated. For
this reason, while carrying out the inquiries, some information and documents need to be noted
down, so as to identify and retain evidence about websites and contents investigated. Examples
are listed below:
163

precise webpage address, through the URL (Uniform Resource Locator)

download of the webpage in a digital support. It is possible to verify its content and the
existence of any business advertisement related to the products or services offered through
the webpage (banners)

day and time periods during which the non-authorized activities are carried on

Ip (Internet protocol) addresses from which the acts have been realized

Download of products or services offered in the web

Certification made by the rights’ owner, in which is proved that the investigated portals is
not authorized for carrying out these activities
IPO Crime Group, IP crime Report 2009/2010, United Kingdom, p.10 and following.
94
Reference Text for Trainers

Nicknames of forum users, the ones who make non-authorized exploitations”.164
In this regard, in Poland, among various special inter-ministerial working groups to counteract IPR
infringements, the “Internet Group” was also established. In particular, two achievements of this
Group should be mentioned as good practices:
a) creation, under the supervision of experts from the Higher Police School in Szczytno, of a
complex IT communication tool connected with a discussion platform, the so called
Dedicated Portal for Knowledge Management, used by the members of the Group to solve
problems and to quickly transfer information about infringements, new technologies, etc. as
well as
b) development of effective methods of conduct aimed at reducing piracy on the web in the
form of a document entitled „Methodology of police work in disclosing and combating
intellectual piracy on the Internet”.165
International Best Practices
In 2004, an investigation related to various Internet sites and the pharmaceutical distribution chain
was implemented by the US Immigration and Customs Enforcement (see box below). The
Immigration and Customs Enforcement (ICE) believes that the Internet is the preferred tool for
criminals involved in the trafficking of counterfeit medicines. Nevertheless, the Internet is also a
preferred supply channel for other products posing a risk to consumers’ health and safety, such as
spare parts for aircraft.166
BOX 14
Case study on auction sites
March 2010 saw the eventual conviction of three men who defrauded buyers out of hundreds of thousands
of pounds through the sale of counterfeit goods through eBay following investigations and raids in 2007
and 2008 by Sandwell Trading Standards. One of the men was jailed for 12 months and the other two were
given suspended sentences and unpaid work in the community. The men were convicted under the Trade
Marks Act 1994 for offences relating to the possession and sale of a range of counterfeit goods through the
auction website. The goods included trainers, clothing, perfume, handbags and sunglasses and were
being sold to consumers as genuine products. The men now face a Proceeds of Crime Act hearing.
Source: www.sandwell.gov.uk
5.1.6. Financial Investigations
A financial investigation is a combination of the more traditional investigative techniques and those
used by auditors for 3,000 years. What makes financial investigation any different from other
techniques used by law enforcement? The reason for creating a paper trail is to enable someone to
reconstruct what happened, to whom, and for the use of criminal investigators. Although much of
an auditor’s time is spent reviewing financial documents, a substantial amount is devoted to
interviewing people, asking questions about the records and about specific transactions.
The links that exist between counterfeiting and organized crime today are proven and recognized
at the international level. The potential and financial profits are becoming more and more
attractive.167 As a case in point, we may refer to the creation of companies operating with the sole
purpose of laundering or reinvesting proceeds of crimes originating from the same criminal group
or transferred to it from other criminal organizations for this purpose. In this context, counterfeiting
represents a new investment opportunity.
The counterfeiting enterprise also benefited from the already existing financial profits that were at
the disposal of criminal groups rendering it a surprisingly flexible activity, capable of reacting
164
Ministerio de Cultura de España (2008), Manual de buenas practicas para la prosecución de los delitos contra la
propiedad intelectual.
165
166
167
Team for Counteracting Infringements of Copyright and Related Rights (2009), Special Report, p.18.
L'Espresso, available HTTP: http://espresso.repubblica.it/dettaglio-archivio/1077207.
UNICRI (2010), op.cit., p.33.
95
Reference Text for Trainers
quickly to variations in product demand and to enforcement controls. Channels and methods used
for the introduction, trade and sale of other illicit products were also ready to be used for fake
products. In Italy, for instance, in the territories where the Mafia-type organizations are stronger,
they have been able to force legitimate shops to sell their counterfeit products as a substitute to
extorting protection money from them.
Counterfeiting and its huge economic potential are in the process of being fully exploited by
organized crime. Following this assumption, there is no reason to replicate only luxury products
since every product in the market can be replicated due to the modern technologies available.
From medicines to toys, from spare parts to food and beverages, everything can be and is
counterfeited. The rule of profit maximization is also at the basis of the search for the cheapest raw
materials, which often involves using substandard, toxic or poisonous substances for a variety of
products, turning them into real dangers for consumers’ health and safety.168
Two short examples are presented below showing how financial investigations can be successful.

In July 2002, during the breaking up of an important network of luxury counterfeited
trademarks in Southern Italy (specifically in Naples and Teramo), the Italian Guarda di
Finanza discovered some significant money transfers between London and Naples,
concerning revenues generated by the counterfeiting business.

In December 2004, a counterfeiter’s network was broken up in Tours, France. Thirteen
individuals were investigated; counterfeit trousers and shirts, equivalent to 25 cubic metres
of fabric were seized. In addition, many bank accounts were frozen, some properties
bought with ‘dirty money’ have been embargoed prior to forfeiture and huge sums of cash
have been confiscated. 169
Counterfeiting is considered an easy and profitable investment yielding massive sums of ‘dirty
money’ from the different types of trafficking involved. It is frequently just part of a much wider
criminal portfolio and its participants cooperate with the other criminal organizations.
According to ICE, partnerships between the public and private sectors may represent one of the
strongest means to detect, deter, disrupt and deny criminal organizations illicit profits and material
support required to fuel their evil acts. In the case study (Box 6) we provide an example of good
practice on financial investigations and the possible vulnerabilities and red flag indicators of
criminal activity are presented.
The role of the private sector in countering counterfeiting is later analyzed in this manual.
168
169
UNICRI (2010), op.cit., p.34.
Unions des Fabricants (2005), Rapport sur la contrefaçon et la criminalité organisée.
96
Reference Text for Trainers
Box 15
Case Study: Counterfeit of alcoholic drinks in Romania
(use of shell companies, offshore centres – real estate investment)





A and B are two companies working in the domain of alcoholic drinks (production and sale),
whose associates and administrators are Romanian citizens. Company B designated a nonresident citizen from a Middle East country as administrator for 39 days. Police indicated that he
was acting in Romania under 3 false identities and was member of a criminal network.
The Romanian Financial Intelligence Unit (FIU) received information from the Border Police that
company A exported to a Free Zone an important quantity of alcoholic drinks to be packed and
labelled. The control noticed that the export documents mentioned that the merchandise was
“alcohol”, but the product was packed and labelled in bottles specific to “Ballantyne’s Scotch
Whisky”. According to company A’s representatives it was meant to be sold on the Romanian
market.
The tax police when controlling the headquarters of company B found that the invoices issued to
company A were registered as being stolen and that the means of transport registered were not
proper for transporting alcohol.
It appeared that similar “commercial operations” had been made by the two companies many
times before. The loss to the state budget made by A company evading taxes was calculated at
more than 8,300,000 lei (2.5 million US$).
A few months after these transactions, company C (a Romanian company) became the
beneficiary of an external loan for 12 million US$, the transfer being made by a bank situated in
another offshore jurisdiction. The majority associates of that company is a foreign company
registered in the second offshore jurisdiction (from where the money came), and the
administrators of the company are the same Romanian citizens involved in A and B companies
mentioned above.
In this case, in order for company C to give its external transfer a legal aspect, company C and its nonresident associate made an external loan agreement registered at the Romanian National Bank, on the
private debt. This facto would allow them to get a legal form for their further transfers with explanation
“credit reimbursement”. The administrator of company C used these to buy more tourist resorts (hotels,
boarding houses) in Romania.
Source: Moneyval, Money laundering and counterfeiting, Typologies Report 2007-2008
97
Reference Text for Trainers
5.1.7 Use of Informants and other Special Investigative Techniques
The use of informants is fundamental to investigative work. It is accompanied with the opportunity
to receive clear intelligence about the activities of an individual or groups of people acting illegally.
On occasion, it can also give rise to serious problems and abuses. Informants must be given clear
and unambiguous instructions about what they can and cannot do. For this reason it is important to
carry out a risk analysis before deploying an informant, not only for the safety of the individual
concerned but for the organisation as a whole. This risk analysis should include an assessment of
the motives of the informant.
In some countries the regulations controlling the use of informants are stringently enforced and any
deviation from them can lead to defendants subsequently being released and embarrassment
being caused to law enforcement and industry.170
The generic term “informant” is often used by police and prosecutors to describe a wide variety of
individuals who confidentially provide them with information concerning criminal activities 171. The
Black’s Law Dictionary, a legal resource for lawyers, defines an informant as “A person who
informs or prefers an accusation against another, whom she/he suspects of the violation of some
penal statute”.
The testimony of witnesses must be considered with more caution than the testimony of others: for
instance, a paid informer or a witness who has been promised that he/she will not be charged or
prosecuted may have reason to make a false statement.
Terms used to identify informants and methods of utilizing informants can differ drastically from
region to region and within different agencies.
The list provided below is reported by the American FBI Manual of Investigative Operations and
Guidelines and concerns the factors considered in determining an individual’s suitability to be an
informant172:
1. whether the person appears to be in a position to provide information concerning violations
of law that are within the scope of authorized […] investigative activity
2. whether the individual is willing to voluntarily provide information
3. whether the individual appears to be directed by others to obtain information
4. whether there is anything in the individual’s background that would make him/her unfit for
use as an informant
5. whether the nature of the matter under investigation and the importance of the information
being furnished outweigh the seriousness of any past or contemporaneous criminal activity
of which the informant may be suspected
6. whether the motives of the informant in volunteering to assist the police appear to be
reasonable and proper
7. whether the information that the informant can provide could be obtained in a more timely
and effective manner through other sources or by a less intrusive means
8. whether the informant is sufficiently reliable and trustworthy, and whether there is an
adequate means by which to verify his/her truthfulness
9. whether the individual appears to be willing to conform to the agency’s rules regarding
his/her operation
10. whether the police will be able to adequately monitor and control the activities of the
informant
170
Interpol, Guide to IP crime and investigations, 2007, p.29.
Fitzgerald D.G. (2007), Informants and undercover investigations: a practical guide to Law, Policy and Procedure,
Taylor & Francis Group, New York, p.1.
172 Fitzgerald D.G. (2007), Informants and undercover investigations: a practical guide to Law, Policy and Procedure,
Taylor & Francis Group, New York, pp. 4-5.
171
98
Reference Text for Trainers
11. whether the use of the informant could compromise an investigation or subsequent
prosecution that may require the government to move for a dismissal of the case.
With organized crime the informants can be particularly difficult to control, though they are most of
times essential for the investigators’ job.
One of the responsibilities of the analysts (investigator) is to corroborate an informant’s information
(by checking on whether it is substantiated by other intelligence) and to determine the informant’s
reliability.
The following terminology states a scale of reliability for the informants:173

Reliable - no doubt of the person's authenticity; past information reliable in all instances

Usually Reliable - some doubt, but past information has been reliable in most instances

Fairly Reliable -- some doubt, but past information has been reliable on average

Not usually Reliable - there is doubt, and past information has only been reliable on
occasions

Unreliable - there is great doubt; past experience has proven it to be unreliable but that
doesn't mean that this piece of information now is not reliable.
Wiretapping represents a more adequate response to the complexity and transnational nature of
criminal activities and criminal trafficking, often supporting the possibility to achieve a "mapping" of
criminals behind this illegal phenomenon. It is also important to highlight the importance of
controlling data communication, since in several operations conducted it has been shown that the
heads of criminal organizations made extensive use of the VoIP (Voice over Internet Protocol), and
in particular of Skype, for their communications.
A variety of measures can also be used in the fight against counterfeiting in terms of assets’
control. These measures are aimed at identifying the criminal turnover and profits, analyzing the
suspects’ movable and immovable properties, money, and values for which a preventive seizure
can be proposed to the Competent Authority, in view of the possible adoption of further
measures174. Furthermore, where the illegal proceeds were not subject to the previously mentioned
penal measures, it is always possible, and appropriate, to proceed with controls on tax evasion. In
particular, this activity must be primarily aimed at detecting and targeting the evasive behaviour put
in place by natural/legal persons involved in different phases of the production of illicit products,
often identified by the omission of tax records or the issue of documents for nonexistent
transactions.
For a more in-depth analysis of assets recovery see also paragraph 6.2.5, page 263.
5.1.8 Confiscation and Management of Confiscated Counterfeit Products
The principle behind forfeiture is ancient and is commonly regarded as a logical and fair response
to its detractors: the criminal. The criminal cannot keep the fruits of his/ her crime, nor can the
instruments or tools used to commit the crime be allowed to stay in criminal hands. Forfeiture is the
legal process by which the government may confiscate those items.175
In respect of the involvement of organized crime in counterfeiting offences, the Convention against
Transnational Organized Crime (a.k.a. Palermo Convention)176 defines the guidelines both for
seizures of goods and for the management of confiscated goods/crime seized proceeds.
Art. 12 – Confiscation and seizure
173
APS University, professor Tom O’Connor website, available HTTP: www1.apsu.edu/oconnort/3220/3220lect07a.htm
For instance, confiscation, also in case of disproportion of the assets if compared to the declared income (in some
countries).
175 Schott P.A. (2006), Reference Guide to Anti-Money Laundering and Combating the Financing of Terrorism, World
Bank, Washington D.C.
176 To
download
the
full
text
of
the
Palermo
Convention
please
visit:
http://www.unodc.org/unodc/en/treaties/CTOC/index.html#Fulltext
174
99
Reference Text for Trainers
“1. States Parties shall adopt, to the greatest extent possible within their domestic legal systems,
such measures as may be necessary to enable confiscation of:
(a) Proceeds of crime derived from offences covered by this Convention or property the value of
which corresponds to that of such proceeds;
(b) Property, equipment or other instrumentalities used in or destined for use in offences covered
by this Convention.
2. States Parties shall adopt such measures as may be necessary to enable the identification,
tracing, freezing or seizure of any item referred to in paragraph 1 of this article for the purpose of
eventual confiscation.
3. If proceeds of crime have been transformed or converted, in part or in full, into other property,
such property shall be liable to the measures referred to in this article instead of the proceeds.
4. If proceeds of crime have been intermingled with property acquired from legitimate sources,
such property shall, without prejudice to any powers relating to freezing or seizure, be liable to
confiscation up to the assessed value of the intermingled proceeds.
5. Income or other benefits derived from proceeds of crime, from property into which proceeds of
crime have been transformed or converted or from property with which proceeds of crime have
been intermingled shall also be liable to the measures referred to in this article, in the same
manner and to the same extent as proceeds of crime.
6. For the purposes of this article and article 13 of this Convention, each State Party shall empower
its courts or other competent authorities to order that bank, financial or commercial records be
made available or be seized. States Parties shall not decline to act under the provisions of this
paragraph on the ground of bank secrecy.
7. States Parties may consider the possibility of requiring that an offender demonstrate the lawful
origin of alleged proceeds of crime or other property liable to confiscation, to the extent that such a
requirement is consistent with the principles of their domestic law and with the nature of the judicial
and other proceedings.
8. The provisions of this article shall not be construed to prejudice the rights of bona fide third
parties.
9. Nothing contained in this article shall affect the principle that the measures to which it refers
shall be defined and implemented in accordance with and subject to the provisions of the domestic
law of a State Party.”
Art. 14 - Disposal of confiscated proceeds of crime or property
1. Proceeds of crime or property confiscated by a State Party pursuant to articles 12 or 13,
paragraph 1, of this Convention shall be disposed of by that State Party in accordance with its
domestic law and administrative procedures.
2. When acting on the request made by another State Party in accordance with article 13 of this
Convention, States Parties shall, to the extent permitted by domestic law and if so requested, give
priority consideration to returning the confiscated proceeds of crime or property to the requesting
State Party so that it can give compensation to the victims of the crime or return such proceeds of
crime or property to their legitimate owners.
3. When acting on the request made by another State Party in accordance with articles 12 and 13
of this Convention, a State Party may give special consideration to concluding agreements or
arrangements on:
(a) Contributing the value of such proceeds of crime or property or funds derived from the sale of
such proceeds of crime or property or a part thereof to the account designated in accordance with
article 30, paragraph 2 (c), of this Convention and to intergovernmental bodies specializing in the
fight against organized crime;
100
Reference Text for Trainers
(b) Sharing with other States Parties, on a regular or case-by-case basis, such proceeds of crime
or property, or funds derived from the sale of such proceeds of crime or property, in accordance
with its domestic law or administrative procedures.
Corrective measures involving counterfeit goods177
Recall from the market, definitive removal and/or destruction of counterfeit goods are the corrective
measures contemplated by the EU Directive on the Civil Enforcement of Intellectual Property
Rights (IPRED) as remedies in the cases of IPR infringement.
However, as highlighted by the EU Counterfeiting and Piracy Observatory, even if all EU Member
States have adopted these remedies, “it is unclear in certain member states from whom the
infringing products may be recalled/removed”.178 This is due to “the scarcity of precedents/relevant
court cases”. For instance, in many countries it is not specified if the costs for removing and
destroying the infringing goods must be borne by the infringer, the IPR holder or the state.
The general principles of these corrective measures are explained below.
1. Destruction of counterfeit goods:
According to IPRED, destruction of goods infringing IPR should be the general principle. Goods
have to be destroyed in order to avoid to the infringer advantages for his/her activity: they should
not be able to distribute counterfeit products on the market after removing the infringing items (e.g.
trademarks or brands or logos).
As mentioned before, it is not clear by whom the destruction costs must be borne: in principle, in
civil proceedings, costs must be paid by the infringer: they are borne by the right owner, who must
be reimbursed by the infringer. In criminal proceedings, destruction is usually performed by state
officials, mainly by the police, and the destruction costs are borne by the State. However, practices
vary country by country: in Greece the costs of destruction are borne by the State, whereas storage
costs are paid by right holders. In Belgium, Luxembourg and the Netherlands the destruction of
goods is deemed to be a penalty and can only be imposed on a defendant who has been
convicted.
2. Secondary use of counterfeit goods:
Even if destruction of counterfeit goods should be the general rule, sometimes a secondary use of
fakes is also allowed. After removing the infringing items (e.g. brands, trademarks, logos, etc),
goods could be donated to charities, recycled or reused. Some precedents exist: counterfeit goods
can be reused in Estonia, Denmark, Germany, Hungary, Italy, Portugal, Romania, Sweden and
UK. In Denmark, Germany, Hungary and UK the secondary use is not allowed in customs
proceedings. In Finland the secondary use appears to be the general rule, when destruction is
ordered only recycling can be implemented. In some countries, on the contrary, the secondary use
is prohibited: France, Greece, Latvia, Belgium, Netherlands and Slovenia. In Poland “secondary
use of goods is not explicitly mentioned as a remedy available to the plaintiff in civil proceedings”.
3. Definitive removal of counterfeit goods from commercial channels
In order to be destroyed and/or reused, counterfeit goods and other products infringing IPR must
be firstly removed from commercial channels. Compared to market recall, which is a temporary
measure, the removal of counterfeit goods from the market is definitive and aimed at the
destruction of the goods.
As noted by the EU Counterfeiting and Piracy Observatory, the removal of products from the
commerce is necessary, “otherwise only the infringing products already seized or still present at
the infringer’s premises […] would in the end, be destroyed”.
177
Transcrime (Joint Research Centre on Transnational Crime), (2010) Anti Brand Counterfeiting in the EU: report on
best practices (unpublished version)
178
See EU Counterfeiting and Piracy Observatory, Corrective Measures in IPR infringements, p. 1. It can be
downloaded here: http://ec.europa.eu/internal_market/iprenforcement/observatory/index_en.htm.
101
Reference Text for Trainers
As we have seen earlier, this practice is implemented differently according to differences in
national legislations. For instance, it is unclear if goods must be removed only if they are still in the
hands of the infringer, if the measure can also be put in place when products are already in
commerce, when distributed by wholesalers and retailers or even possessed by
customers/consumers/end-users.
In many countries, when goods are already in commerce or in the hands of consumers, it is no
more than an obligation for the infringer to inform all his/her customers notifying them of the
infringement, and offering them the possibility to sell back the fakes (e.g. in the Netherlands) and/or
to give back goods to the infringer at their own expense (e.g. Germany).
In other countries, such as in UK, if the court orders the destruction of goods (and their removal
from the market), this order applies irrespectively, no matter who holds the product.
4. Recall of counterfeit goods from commercial channels
Different from the definitive removal, recalls of counterfeit goods from the market must be
considered temporary or precautionary measures: this implies that the recall can be reversed or
the goods can be marketed again after the IPR attached to the goods expires. However, as noted
by the EU Counterfeiting and Piracy Observatory, “this interpretation seems to be inconsistent with
the deterrence purpose of these measures, since it would give the infringers the possibility of
retaining at least a part of the economic benefit coming from their infringing activity”, enabling them
to wait for the expiration of the IPR with no consequences for its counterfeiting activity.
5.1.8 Inter-sectorial Cooperation between Customs and Police Services and International
Collaborators
Inter-sectorial cooperation
In order to optimize the available police resources within the territory and offering consumers a
better security service related to the IP crimes, it should be necessary that specific coordination
protocols exist between Law Enforcers, Customs authorities etc. include specific agreements
concerning the following issues:179

Information exchange, in order to obtain an accurate analysis of the situation concerning
these kinds of crime, aimed at promoting the corresponding policies and police operation.

Development and integration of databases. With respect to the existing laws related to data
protection, the development and implementation of specific databases of persons,
companies, and all the information linked to these crime activities, both for statistical aims
and for understanding, for a better knowledge of piracy/counterfeiting organized networks’
modus operandi within a country. This could really represent a step forward in countering
counterfeiting and piracy. (see also par. B.2.1)

Participation by the Local Police to the juridical police offices.
Most certainly, there can be no efficient enforcement of IPR without appropriate cooperation
among the various institutions having competencies on IP matters.
In Poland, special inter – ministerial working groups has been established in order to counteract
infringements of IPR. The main groups are specified hereinafter:
1. The Team for Counteracting Infringements of Copyright and Related Rights180, created in 2000,
deals with different IPRs. In fact, developing drafts of legal regulations, fighting economic crime,
protecting and safeguarding EC customs area against the influx of fake and pirate goods,
protecting borders and controlling border traffic as well cooperating with different social partners
are all actions closely correlated and concern common problems for all IPRs.
179
Ministerio de Cultura de España (2008), Manual de buenas practicas para la prosecución de los delitos contra la
propiedad intelectual
180
Team for Counteracting Infringement of Copyright and Related Rights (2009), Special Report, p. 15.
102
Reference Text for Trainers
Primary tasks of the Team consist in providing highly effective coordination of activities performed
by government administration bodies and services within the framework of combating crimes
against copyright and related rights. Other tasks include:
- presentation of the current analysis of the situation within the scope of observance of the
copyright and related rights law to the President of the Council of Ministers – in the form of a semiannual and annual report;
 - presentation of an actions proposal aimed at preventing infringements of copyright and
related rights and combating infringements – in the form of the 2008-2010 “Programme for
the protection of copyright and related rights in Poland”;
 - development of proposals of legislative amendments leading to a more effective
enforcement of copyright and related rights law;
 - periodic evaluation of the progress of actions within the scope of combating the
infringements of copyright and related rights.
Within this team, an Internet Group was also established (see above, page 213).
2. The Team for Counterfeit Medicines181. The role of the Team is to undertake activities which
are supposed to contribute to minimize trade with counterfeit medicinal products, medicines sold in
places which are not intended for distribution, as well as with counterfeit dietary supplements. The
main areas of activities are:
 - operational activities
 - awareness activities
 - legislative work
3. Additionally, as Poland and Ukraine organize the European Football Championship
“EURO 2012”, the Polish government adopted numerous guarantees and commitments for the
benefit of UEFA which relate to the observance of intellectual property rights. In order to fulfil these
guarantees and to improve civic awareness in terms of the protection of IPRs, the Rights
Protection Committee182, a cooperation platform, was created. It plays the role of a consultative
and advisory body to the Minister of Sport and Tourism in terms of the protection of intellectual
property rights and related issues concerning the European Football Championship “EURO 2012”.
At the European level, a significant progress in this direction was achieved by the Council Act of 28
November 2002, with a Protocol amending the Europol Convention. The Protocol stipulates that
Europol can ask the competent authorities of Member States to initiate conduct or coordinate
criminal investigations in specific cases. If the competent authorities decide not to positively
respond to this request, they shall inform Europol of their decision unless it has to be kept
confidential for reasons related to national security or for the success of other ongoing
investigations. The Protocol also provides for the inclusion in the Europol Convention of an article
regarding the participation of Europol officials in joint investigation teams if they are investigating
crimes falling within the Europol competence.
The cooperation possibilities contemplated by the creation of joint investigative teams are
potentially highly innovative. Joint and common investigations carried out by different countries
imply in fact that they should be valid and enforceable by the courts of all countries taking part in
the investigation. The creation of joint investigative teams can be performed under specific
conditions:
 They must arise from complex investigations conducted by a Member State but having
repercussions in other countries of the European Union;
 They must investigate crimes that require coordinated action with the participation of more
than one Member State.
181
182
Ibid., p.20.
Ibid., p.23
103
Reference Text for Trainers
Investigation teams will be headed by a representative of the competent Member State in which
the team operates and will operate in accordance with the law of the Member State in which the
team is intended to conduct its operations. Furthermore they will be created only with the mutual
agreement of the Member States concerned, for a specific purpose and for a limited period
extendable only with the agreement of all the parties.
Another instrument at the European level is the Supplementary Information Request at the National
Entries (SI.RE.NE) and is a link service ensuring a continuous assistance, 24h per day, for the
police forces of EU Member countries. This is one of the so called "compensation mechanisms”
adopted by the EU to balance the effects of the free movement of persons and vehicles, since in
the Schengen no internal border controls are usually foreseen.
The SI.RE.NE offices are a unique point of contact, where representatives of all the National
authorities related to the Schengen Information System operate. Their main task is the analysis of
"reports" included in the Schengen Information System (SIS) and the implementation of specific
monitoring measures. They also play a key role in cross-border police cooperation.
In particular, these offices provide additional information for the alerts, coordinate the measures
related to alerts in the SIS, and ensure that appropriate measures are taken in different cases, for
instance: if a wanted person is arrested, if a person who had already been refused entry attempts
to enter the Schengen area, if a missing person is found or a stolen car or ID document are seized.
EUROJUST is an agency of the European Union dealing with judicial co-operation. It is composed
of national prosecutors, magistrates or police officers of equivalent competence from each of the
EU states. Its task is to enhance the effectiveness of the national authorities when they are dealing
with the investigation and prosecution of cross-border and organised crime.
The Southeast Cooperative Initiative, SECI Center, is an operational regional organization bringing
together police and customs authorities from 13 member countries in Southeast Europe. The
Center supports the national customs and law enforcement agencies by offering a trusty
environment for information sharing, knowledge development, joint planning and common action in
the field of trans-border crime. Member States of SECI Center are: Albania, Bosnia and
Herzegovina, Bulgaria, Croatia, Greece, Hungary, F.Y.R. of Macedonia, Moldova, Montenegro,
Romania, Serbia, Slovenia and Turkey. The SECI Center's network is composed of the Liaison
Officers of Police and Customs Authorities from the member countries, supported by 13 National
Focal Points established in each member state. The NFP representatives stay in permanent
contact with the liaison officers in the headquarters and keep close relationships with the police
and customs authority in the host country. The National Focal Points assure the rapid information
flow, by collecting and distributing the information requests and answers from and to the law
enforcement agencies and the headquarters liaison officers.
The SECI Center will transform into SELEC - Southeast European Law Enforcement Center - once
two thirds of the Member States have deposited their instruments of ratification of the Convention
of SELEC signed on the 9th December 2009, during a ceremony organized in Bucharest, Romania,
together with celebrating 10 years of the SECI Center183.
International Collaborations184
Counterfeiting is a transnational crime, since counterfeit goods are often produced in countries
other than the ones where they are purchased and consumed. Counterfeit goods are often
transported across borders, thus involving different customs and border authorities. For these
reasons, international collaborations musts to be properly set up and promoted in order to combat
counterfeiting.
We itemise in the following paragraphs some of the most important International agreements
signed during recent years and some police/customs operations carried out at the international
level.
183
For a more in-depth analysis of SECI Center’s activities: http://www.secicenter.org/m105/Home
Transcrime (Joint Research Centre on Transnational Crime), (2010) Anti Brand Counterfeiting in the EU: report on
best practices (unpublished version)
184
104
Reference Text for Trainers
International Agreements
1. The EU-US Action Strategy for the Enforcement of IPR was adopted at the EU-USA
Summit held in Vienna on 21st June 2006. This Action Strategy has three main goals: 1)
promote enforcement of related laws by customs and border control officials, 2) strengthen
cooperation among the parties, 3) promote public-private partnerships.
2. In order to achieve the first goal, the Action Strategy introduces measures such as the
exchange of IPR border enforcement practices and experiences, as well as the exchange
of information on IPR seizures and the introduction of a joint IPR border enforcement
action. As far as the second goal is concerned, bilateral networks with third countries have
been created, in primis with China and Russia. Such networks facilitate the exchange of
information, technical assistance and joint industrial practices related to the enforcement of
relevant laws. With regard to the third goal, joint public-private discussions have been
organised and representatives from various business sectors have been invited to
exchange information and intelligence with law enforcement agencies.
3. The EU-China Project on the protection of the IPR, launched in 2007, defines which
technical assistance shall be provided by EU to China with regards to the enforcement of
China’s IPR regulation. Such technical assistance includes: 1) the training of custom
officers ; 2) the exchange of expertise, best practices and know-how; 3) cooperation
between a network of authorities, including Chinese and European right holders and other
stakeholders; and 4) techniques for a more effective enforcement of IPR regulations.
4. This agreement should increase the level of trust in future EU-China trade relationships.
5. According to the Agreement on Trade, Development and Co-operation between the
European Community and its Member States and the Republic of South Africa, which
entered in force on 1st January 2000, the Community may provide technical assistance to
South Africa in the preparation of laws and regulations for protection of IPR; the
establishment and reinforcement of domestic offices and other agencies involved in
enforcement and protection, including the training of personnel.
6. According to the Framework Trade and Co-operation Agreement between the European
Community, its Member States and Korea, which entered in force on 1st April 2001, parties
should respect the obligations contained in multilateral IPR conventions, integrate the
TRIPS within their national legislation and facilitate cooperation between customs
authorities.
International Operations
1. The Joint Customs Operation “Infrastructure”, carried out in November/December 2007,
was the first IPR enforcement operation undertaken by Customs and Border Protection
(CBP) and the European Union. It created a close relationship between European Union
and United States customs reinforcing the EU-US Action Strategy for the Enforcement of
Intellectual Property Rights. The operation consisted of cooperation and the exchange of
information, concerning counterfeit goods, between EU and US customs. This action
strategy was implemented especially for the seizure of counterfeit integrated circuits and
computer networking equipment. In all, over 360,000 counterfeited integrated circuits
bearing over 40 different trademarks were seized. These kinds of goods were chosen for
the strategy because they have an IPR infringement risk and also a high safety risk.
2. Joint Customs Operation “Diabolo II”.
The Asia-Europe Meeting (ASEM) is a form of informal cooperation between Asia and
Europe which started in 1996. Many initiatives have been suggested to strengthen
relationship between these two continents in the fight against counterfeit goods. One of the
objectives of ASEM partners is to increase customs cooperation. During the 7th meeting,
held in Yokohama in November 2007, it was decided to implement operation “DIABOLO II”.
This operation was signed by all 27 EU Member States and 13 Asian countries
(Burma/Myanmar, Cambodia, Indonesia, Japan, Laos, Malaysia Mongolia, Pakistan, the
105
Reference Text for Trainers
Philippines, Singapore, Republic of Korea, Thailand, and Vietnam). DIABOLO II was
organised and coordinated by the European Commission.
The operation focused on containers shipped from Asian ports of loading to EU ports of
discharge. Each country appointed a national contact point which was responsible for the
gathering of national data and its transmission to other countries, ensuring its
confidentiality. This operation, focused mainly on counterfeited cigarettes but also on other
products, leading to the seizure of more than 65 million counterfeited cigarettes and
369,000 other counterfeited items, bearing over 20 different trademarks.
3. Operation “Mamba”
Operation “MAMBA” is the first combined INTERPOL and WHO (World Health
Organization) operation targeting counterfeit pharmaceutical products. The operation was
carried out by the WHO’s International Medical Products Anti-Counterfeiting Taskforce
(IMPACT). The aim of IMPACT is to raise awareness of the dangers of counterfeit medical
products and to curb their manufacture and distribution. In many countries, especially in
Africa, counterfeit medical products (such as fake anti-malarial drugs) represent a big
problem. Operation Mamba is deployed in Uganda and Tanzania. In this Operation multiple
law enforcement agencies (police, drugs and financial crime authorities) joined forces to
confiscate counterfeit medicines. INTERPOL and IMPACT organized a two-day training
course in each country on methods and procedures of anti-counterfeiting, to support crossagency efforts to combat transnational organized criminals who manufacture and distribute
counterfeit medical products throughout Africa. An investigative guide produced by the
Permanent Forum on International Pharmaceutical Crime was also distributed.
4. Operation Matthew II
The Joint Customs Operation, code-named Matthew II, was aimed at detecting the
smuggling of cigarettes in commercial consignments entering the EU by road. The
operational phase took place from 24 November to 3 December 2009 and large seizures of
cigarettes carried in personal cars and buses were reported. Controls were focused on
methods of transport entering the EU customs territory from third countries via the eastern
EU border.
The operation was organised by the Czech Republic, in close cooperation with Poland and
the European Commission (OLAF) which provided organizational and technical support. All
Member States were invited to participate in the JCO Matthew II, as were Europol and the
WCO/RILO WE (World Customs Organization / Regional Intelligence Liaison Office for
Western Europe). The WCO/RILO WE supported the joint operation by means of analytical
activity. Selected non-EU Member States (Croatia, Russia, Serbia, Norway and
Switzerland) were also invited to participate in this operation.
The Operation has led to the seizure of more than 16 million cigarettes, 241 kilograms of
tobacco products, 6 400 litres of alcohol, 20 tonnes of counterfeit perfumes, 53.418 other
counterfeit items such as bags, coats, scarves, wallets, and 1.515,75 kilograms of
cannabis. During the operational phase, additional seizures of more than 25 million
cigarettes also took place in some EU ports.
5.2. Prosecution. Legal Proceedings
5.2.1 Jurisdiction in Case of Counterfeiting: Criminal or Civil Case
Criminal procedure
Criminal proceedings are initiated by state prosecutor / police. For most crimes a motion for
prosecution of the injured party is necessary.
The link with organized crime may be considered an aggravating circumstance, such as the risk for
consumer’s health and safety.
106
Reference Text for Trainers
Moreover, the injured party may provide expert testimony/witness statements as to the existence of
its rights, to identify possibly infringing goods and other facts relevant to the case.
The role of the injured party in criminal proceedings is set out in the Code of Criminal Procedure.
Additionally, having in mind ethical rules, informal relations and training for police staff is
possible.185
Civil procedures
In the period from 2006 to 2008, there were approximately 3,900 cases examined in civil law
courts. In respective years figures were similar (1200, 1400).
The analysis of data shows that within the framework of civil procedure, the number of allowed
claims, both those issued in the form of granting civil complaint in full or in part (approx. 13.5% 15.0%) and those issued in the form of a consent judgement (5 – 7%) is systematically growing.
A decreasing number of claims discontinued by the court is another positive trend.
While in 2006 they constituted 11.4%, in 2007 these percentages fell to 10.5% and in 2008 claims
discontinued by the court constituted 9.5%.
It should be noted that very frequently only a criminal law way of prosecuting infringements is
chosen, despite wide possibilities of prosecuting claims in civil proceedings. This can be
considered unusual within the European framework, as civil proceedings are usually preferred.
The issue of security measures (in the form of temporary restraining order) is fully regulated by the
provisions of the Code of Civil Procedure (C.C.P.).186
185
The International Trademark Association (INTA) (2010), Criminal Prosecution of Counterfeiting and Piracy in
Member States of the European Union, September, pp 73-75.
186
For a more in-depth analysis see Team for Counteracting Infringement of Copyright and Related Rights (2009),
Special Report, pp. 79-81.
107
Reference Text for Trainers
5.2.2 Main proceeding
BOX 16
Good practice in Poland on counterfeit medicines-related preparatory proceedings
In order to eliminate the phenomenon of counterfeit medicinal products, we should concentrate above all on
fighting illegal trade in these products. One of extraordinary meetings of the CMP Team in 2008 was
devoted to the problem of illegal trade in medicinal products in sex shops. As a result of decisions made
during the meeting, shops previously selected by the Police have been controlled. The control was
conducted by police officers in cooperation with pharmaceutical inspectors from Provincial Pharmaceutical
Inspectorates and with sanitary inspectors. Within the framework of the operation (conducted
simultaneously in seven voivodships) 1 fitness club and 68 sex shops were controlled.
In these places, numerous cases of trade in medicinal products (in one place 400 packages of medicinal
products used for treating erectile dysfunction were confiscated) and in medicinal products unauthorized for
marketing (containing yohimbine) were detected and numerous dietary supplements were called into
question.
According to the data as of December 2008, out of 14 preparatory proceedings 3 were dismissed (due to
the lack of statutory features of a prohibited act or due to insignificant social noxiousness of an act) and 2
proceedings were suspended (due to extended time needed to obtain an expert’s opinion). Three cases
were handed over to a Regional Prosecutor’s Office with a motion for the approval of bills of indictment. The
remaining preparatory proceedings are in progress.
Similar operations were repeated in 2009.
As a result of these operations, 22 preparatory proceedings were instituted. In 6 of these proceedings
charges have already been brought and 2 of them have ended with bringing bills of indictment.
In five cases proceedings were dismissed, while in 11 remaining cases proceedings are in progress.
In three cases sanitary inspectors imposed fines.
Source: Team for Counteracting Infringement of Copyright and Related Rights (2009), Special Report
5.2.3 Bringing Evidence into Court
Existing practices in the U.K. 187
The general principle with criminal proceedings within the United Kingdom is that a witness should
give evidence orally in a court of law or, as an alternative, a written statement.
In advance of any trial, a prosecutor must disclose the existence of the statement identifying the
counterfeit goods to the defence. The defence, can request for a copy of the statement and of any
test results based on experts’ findings on the counterfeit goods. A clear and concise expert’s
statement can contribute greatly towards encouraging a ‘guilty’ plea; while any contradictions in
such statements will encourage the evidence to be contested and/or enter for a ‘not guilty’ plea.
A witness bringing evidence into court must primarily give details regarding her/his qualifications
and her/his appropriate experience. Furthermore, her/his statement should give details on the
literature or other information used by or provided in reaching a particular opinion. For instance,
she/he can declare if the trademark owner has a manual for identifying counterfeit goods.
All information given must be proven to have substance. The expert witness should provide the
information received that led to the preparation of the report/witness statement. The witness must
prove that the trademark is officially registered. The integrity of the counterfeits’ sample plays a
pivotal role in the trial. It is also necessary to identify when the sample was received. It is preferred
not to identify any individual involved.
Anyone who makes a statement, whether within the UK or abroad may be called to give evidence
in person at court. It is the witness’ responsibility to attend court, even if the arranged time is
187
The source of this paragraph is The Anti-Counterfeiting Group (seventh revision, April 2010), ACG guidance note.
Guidelines for Witnesses in Counterfeiting, based upon the Criminal Procedure Rules 2010, effective from 5 April 2010.
108
Reference Text for Trainers
inconvenient. The witness should describe the sample, by stating the points of difference between
the genuine and the counterfeit item. It may be relevant in some cases to exhibit a genuine product
to compare against the counterfeit version.
5.2.4 The Prosecutor’s Role in the Criminal Case
The basic role and function of prosecutors vary considerably among legal systems, particularly with
the civil law system and the common law system. The role that prosecutors may can vary
significantly in the pre-trial phase – during the actual investigation of a crime.188 In inquisitorial
systems, as in Italy, ‘the prosecutor is duty bound to begin investigations immediately on receipt of
a notitia criminis, that is, as soon as she/he is aware of the possible commission of a criminal
offence. If, after investigation, the Prosecutor considers that there is sufficient evidence to
prosecute, she/he is legally bound to prosecute. Yet she/he does not enjoy any discretionary
power. Though, discretionary power exists in other civil law countries such as in France and
Belgium, it is tightly controlled within the UK.
As emphasised in the preamble of the United Nations Guidelines on the Role of the Prosecutors, it
is essential for States ‘to ensure that prosecutors possess the professional qualifications required
for the accomplished of their functions, through improved methods of recruitment and legal
professional training, and through the provision of all necessary means for the proper performance
of their role in combating criminality, particularly in its new forms and dimensions’189.
The UN guidelines include several paragraphs, which stress the importance of the role of the
prosecutor in maintaining the rule of law and criminal justice. Prosecutors shall perform an active
role in criminal proceedings. Responsibilities include: institution of prosecution; when authorized by
law or consistent with local practice, in the investigation of crime, supervision over the legality of
these investigations; supervision of the execution of court decision and the exercise of other
functions as representatives of the public interest.
Existing practices in Romania
For Romania, a central role in ensuring the proper enforcement of IPR and coordination of the
various institutions in this field was recently entrusted to the General Prosecutors Office (GPO)190,
a department of the Public Ministry191.
According to the Romanian Constitution the Public Ministry functions under the Minister of Justice’s
(MoJ) authority. It should be clearly stated that the MoJ retains no authority over cases but only has
a coordinating role. According to the legal provisions, upon proposal of the general prosecutor the
MoJ, set up, by Order 412/2006 a specialized IPR unit, within the GPO. The unit is composed of 10
prosecutors specializing in IP crime and organized in two tiers:

Operative sub-unit: prosecutors effectively working on IPR cases

Studies sub-unit: prosecutors centralizing data countrywide, studying the process of
investigation of IPR cases, drafting analyses and disseminating them in the country, for the
appropriate, unified and efficient enforcement of IPR.
This structure acts as a central hub for coordinating the other institutions. Its responsibilities
include: centralizing the relevant data needed for the enforcement of IPR from the other institutions
and private entities; coordinating the development of activities of the Prosecutor’s Office and all
prosecutors within Romania (including resources and training); monitoring the implementation of
the National Strategy - Action Plan; organizing meetings to optimize the working methods and
establishing best solutions to streamline the legislation and its implementation; and ensuring
188
UNICRI & UNODC, Investigation, prosecution and adjudication of drug – related cases (200?), pp.102-104
United Nations, Guidelines on the Role of the Prosecutors, Adopted by the Eight United Nations Congress on the
Prevention of Crime and Treatment of Offenders, Havana, Cuba, 27 August to September 1990
190 The General Prosecutors Office is officially named the Prosecutors Office attached to the High Court of Cassation
and Justice and is the central prosecutorial structure that coordinates the other prosecutors’ offices countrywide. The
GPO and the rest of prosecutors offices, which function attached to the courts, form the Public Ministry
191 WIPO, Advisory Committee on Enforcement, Romanian efforts to improve awareness of decision makers and public
on issues related to the enforcement of intellectual property rights (2006), p.6
189
109
Reference Text for Trainers
communication and cooperation between Government institutions and anti piracy/counterfeiting
groups.
Another important measure includes the appointment in each prosecutor’s office attached to
tribunals of at least one prosecutor to deal with IP cases. Special training programmes are
designed and organised for these prosecutors. This measure is taken according to the Action Plan.
It should be regarded as bringing the penal IP cases up to the level of tribunals and prosecutors
offices. Furthermore, it reflects the growing importance now placed upon IP crime.
Government Emergency Ordinance n. 190/2005 includes provisions to increase efficiency in
prosecuting offences against IPR:
1. IPR offences are prosecuted ex officio and the possibility of amiable settlement of criminal
litigation has been eliminated
2. IPR offences are under the jurisdiction of tribunals
3. IPR offences are investigated by more experienced prosecutors at the level of county
offices (minimum 4 years length of service)
4. IPR offences related to organized crime are investigated by the specialized department
within the Prosecutors’ Office attached to the High Court of Cassation and Justice192
6.2.5 Asset Recovery
Asset recovery is a very recent field of international activity in countering a variety of crimes. It
involves an efficient and effective criminal justice system, sound preventive policies, and
transparent financial regulations.
The high priority given to asset recovery initiated numerous international initiatives. Examples
include the StAR (the Stolen Asset Recovery Initiative), the ADB/OECD Anti-Corruption Initiative
for Asia and Pacific, the International Centre for Asset Recovery (ICAR) at the Basel Institute on
Governance, U4 Anti-Corruption Resource Centre and other entities.
Article 6 and article 12 of the UN Convention on Transnational Organized Crime (the Palermo
Convention) deal with such areas, particularly on the criminalization of the laundering of proceed of
crime and the confiscation and seizure of those proceeds of crime.
Asset recovery is relevant in cases of seizure or forfeiture of counterfeit goods. Recovered assets
and proceeds of illegal counterfeiting activities may be used in order to compensate the material
(and moral) damages of the victims.
Existing good practices in EU
Some EU countries’ internal laws already possess such measures.
192
-
In Austria, for the civil remedies and in particular the proceedings on merits, “(b) in case of
negligence, the payment of damages – including lost of profits and moral damages – or the
handing over of any asset made by the infringement” is foreseen.
-
In Belgium, the civil measures adopted only deal with the seizure of counterfeit goods
during the preliminary proceedings. Proceeds generated by illegal activity, personal or real
goods of the suspected infringer and the freezing of the infringers’ bank account. As far as
the damages within the proceedings on merits concern: “(c) the confiscation of all profits
made by the unauthorized use of registered trademark” is stated.
-
In Estonia, civil law holders may claim compensation for damages, whether material or
moral. Material damages may include damage to assets and loss of profits.
-
In the Czech Republic, within proceedings on merit, the removal action and destruction of
infringing goods can occur. The court can consider the profits obtained through the violation
of the law in order to calculate damages.
I bid, p.16
110
Reference Text for Trainers
Assets recovery measures are taken into consideration by the national laws mainly within the civil
remedies, as mentioned previously. The shortage of juridical measures concerning this challenging
matter can be regarded as a gap in the national and European legislative framework. An important
step forward should involve both single States and the EU as a whole. Furthermore, applied
research in this field may play a significant role.
5.3. The Role of Private Sector
5.3.1 Experience Exchange and Knowledge Sharing and Cooperation with the Private Sector in
Terms of Information-Exchange
Prosecutions of IP crime depend on the cooperation between IP owners and law enforcement.
Without the sharing of information, prosecutors can neither determine the most effective overall
enforcement strategies, nor meet the burden of proof in a given case.
The Canadian IP council, is a Canadian business coalition designed to provide a central voice to
press for stronger IP protection both in Canada and worldwide. They suggest the following steps
for private sector collaboration with law enforcement193:
 Conduct a thorough investigation: investigations encompass a variety of investigative steps
including interviewing witnesses, acquiring counterfeit goods, conducting surveillance of
suspects as well as an examination of computers and other services
 Document all investigative steps: maintain a record of investigative steps employed (to be
presented to law enforcement and entered into evidence)
 Preservation of evidence
 Contact law enforcement agencies without delay: early referral is the best way to ensure
that all investigative avenues are fully explored
 Assist in the identification of stolen IP: law enforcement may call upon an owner’s
representative or expert to examine items obtained during an investigation to determine
their origin or authenticity […] in certain investigation LEA may wish to have an intellectual
property owner present during the execution of a search warrant to help agents identify
specific items to be seized.
 Share the results of internal investigations or civil lawsuits with law enforcement
 Participate in law enforcement task forces
 Help train law enforcement authorities
 Registering IP by ‘private sector’: the resources of law enforcement and customs are
limited; the private sector should provide them as much information as possible. They also
have to designate a central point of contact (an individual or a group) which Customs can
work with, to deal with the counterfeiting problem.
 Help Customs to be helped by them: providing customs with tools, like a dedicated email
address for them to send in info or request; a secure webpage; a reference manual etc.
 Help train customs official: there is no substitute for one-on-one training; training seminars
[by enterprises] should be complemented by the distribution of product identification
manuals, security feature identifiers etc.
 Responding to inquiries regarding suspect goods
 Following up on seizures
Existing best practices in the EU
193
The Canadian IP Council, Intellectual Property: Enforcement Manual. A Practical and Legal Guide for Protecting
Your Intellectual Property Rights, p.19
111
Reference Text for Trainers
INTERPOL works as a catalyst to encourage police, customs, international organizations, the
public health sector, cross-industry representative bodies, IP crime affected industries and other
stakeholders to work together to combat transnational organized counterfeiting and piracy.
The database that INTERPOL is developing within the IPR programme to further improve the
exchange of information and intelligence on this subject is presented below:
BOX 17
Database on International Intellectual Property Interpol
The INTERPOL Database on International Intellectual Property (DIIP) Crime is an autonomous iBase
database containing information on transnational and organized IP crimes.
It has been specifically developed to be a depository for private sector industry information on
transnational and organized IP crime. The DIIP Crime neither competes with established public sector IP
crime databases nor duplicates existing IP crime data collection mechanisms.
Data contained in the database will be subjected to criminal analysis to identify links between
transnational and organized cross-industry sector IP criminal activity; facilitate criminal investigations; and
develop regional and global strategic IP crime reports.
INTERPOL does not disclose information contained in DIIP. Participating industries receive feedback in
the form of referrals indicating that two or more industries are being targeted by the same transnational
organized criminals.
Arising benefits:
 It is used to inform and facilitate law enforcement interventions in transnational organized IP
crime
 It is used to produce regional and global strategic IP crime reports
 Improves the information flow between stakeholders and leads to more effective international law
enforcement
The expressed purpose of DIIP is to collect reliable information about transnational organized criminals
from IP crime affected industries. Industries often know the identity of the individuals or groups who attack
them. They are the same people that affected industries take civil actions against to protect their IP and
enforce rights.
Information collected to support civil actions is expensive and typically once the civil action is complete
the information is not used for any other purpose. This information is a valuable resource since it contains
information about transnational organized criminals. Pooling the information in DIIP adds value to the
information and improves its cost effectiveness. Pooled information is searched to identify links between
all IP crime affected industries and can then be used for the collective benefit of all stakeholders.
The priority is to ensure that confidential and proprietary information provided by participating industries is
not disclosed.
Information contained in DIIP will be subjected to criminal analysis to identify links between transnational
and organized cross-industry sector IP criminal activity, facilitate criminal investigations, and develop
regional and global strategic IP crime reports.
Source: Interpol
112
Reference Text for Trainers
Member countries working within the INTERPOL IPR Programme
Source: Interpol
Interpol issued a ‘Recommended Minimum Global Standard’ for the Collection of Information on
Counterfeiting and Piracy by the Private Sector.
The purpose of the INTERPOL Recommended Minimum Global Standard is to provide IP crime
affected private sector entities with guidance about the type of information they should consider
collecting about transnational and organized IP crime attacks on their interests.
It is expected that private sector entities will continue to collect data on their business activities.
The information collected for this purpose, however, will not necessarily be information which can
be used to identify if they are being attacked by the same organized criminals that are also
attacking other entities or industry sectors.
Some private sector entities do systematically collect information about how transnational and
organized IP criminals affect their business. Other private sector entities do not collect such
information, but may wish to do so in the future.
The Recommended Minimum Global Standard provides both types of private sector entities with
recommended minimum standards for the collection of information, which is compatible with
searchable information fields, contained in the INTERPOL DIIP Crime. In the event that the private
sector entities adopt the Minimum Global Standard it will enable the information to be easily
assimilated into the INTERPOL DIIP Crime in accordance with DIIP Data Handling and Referral
Procedures.
The Minimum Global Standard will also enable private sector entities to share information about
transnational and organized IP crime with each other more effectively.
Annex table:
http://www.interpol.int/Public/FinancialCrime/IntellectualProperty/DIIP/ExplanNotes.asp
113
Reference Text for Trainers
5.3.2 The Contribution of the Private Sector during the Evidence-Gathering Monitoring
Processes194
The monitoring of counterfeit market activities serves two purposes. Firstly it helps to identify
incidents of counterfeit trade and allows for timely responses at an operational level. Secondly it
provides management with information on the development of the counterfeit market and thus
supports decision-making as well as market observations or competitor analyses for the licit
market.
Information exchange across industry associations (and between industry associations and
institutions, law enforcement agencies etc.) is desirable as an illicit producer often targets more
than one brand within the same product category; implementing monitoring processes is closely
related to awareness training.
If a larger number of counterfeit products are sold on a regular basis, illicit actors need to establish
some sort of stable distribution channel to market their products. In such cases, brand owners must
obtain timely data on shipment routes, sales channels and identifying features of imitation products
to ease product inspections at other locations.
Monitoring activities often call for the engagement of local investigators to track down middle men
and the identification of sources of counterfeit production.
Local contacts can also support test purchases in suspect stores or help to analyze warranty
claims, etc. Frequent counterfeit cases also lead to better market insights, thus helping to identify
high-risk distribution channels and typical import routes.
The relevant information sources as well as selected recommendations for organizing data
collection and reporting activities are outlined below:
Customs enforcement statistics
Pro: they provide the basis for counterfeit market share analyses. They also reveal other
information such as locations of production, import routes and addresses; they may help to predict
the future development of counterfeit activities.
194
The main source for the whole paragraph is Staake T., Fleisch E. (2008), “Countering Counterfeit Trade. Illicit marke I
nsights, Best-Practice Strategies, and Management Toolbox”, Springer-Verlag (editions), Berlin Heidelberg, chapter
5.
114
Reference Text for Trainers
Con: official statistics rarely provide timely information, they are strictly dependent on Customs
performance and are thus only of limited value for triggering reaction processes.
Consumer surveys
Pro: they can provide a variety of information on market penetration and the availability of imitation
products, pricing strategies of counterfeit actors, sales channels, consumer behaviour and
awareness, reasons for and against buying counterfeit goods, characteristics of counterfeit
consumers, the perceived impact on the exclusiveness and reputation.
Con: surveys are difficult to design and they are expensive to conduct if the required sample size
has to be high.
Sampling
Pro: it provides the brand owner with information on how counterfeit goods are sold and allows for
a detailed physical analysis of the products after purchase.
Con: the approach is relatively expensive especially if the authentication procedure is destructive
and if the share of counterfeit articles is small.
Company-internal data
Pro: they can provide timely information on counterfeit occurrences; an analysis of warranty cases
or consumer inquiries constitutes a more sensitive instrument.
Con: the analysis of warranty cases is only applicable with respect to deceptive counterfeit cases
where customers are concerned about unannounced changes in product appearance, taste etc.
Data on counterfeit production facilities may help to gain a better understanding of the mechanism
of counterfeit trade. Related information facilitates retrospective cross-checks of other monitoring
activities.
Information provided by supply chain partners
Within the corporate world and especially organizations which are not directly affected by a given
counterfeit case, established personal contacts appear to be essential for thorough information
exchange.
Information from competitors often proves helpful as counterfeit actors frequently target more than
one product or brand. Industrial associations play an important role in establishing contacts among
brand-protection experts.
Information from Internet research
The World Wide Web constitutes an important distribution channel especially for non-deceptive
counterfeiters and for deceptive counterfeit products that consumers tend to avoid purchasing in
person.
Reporting activities
The information obtained from the various sources has to be organized, processed and put into a
form which is suitable for presentation and communication to a given audience that does not
necessarily consist of anti-counterfeiting experts.
The frequency of reporting depends on the magnitude of threats. Standardized reporting tools may
also help to increase awareness of the problem among senior management, provide an organ for
brand-protection experts, foster information exchange between different business units and
functions, and help to document the company’s anti-counterfeiting efforts.
Reaction processes
Trademark and copyright holders have the prime responsibility for initiating measures to protect
their goods […] the reaction process may be subdivided into 6 steps:
Withdrawing counterfeit articles from circulation:
115
Reference Text for Trainers
Initiating product seizures is the first step to avert danger from the customer; the brand owner may
require search warrants and support from the police. Seizures become more difficult the earlier
they take place in the counterfeit actor’s value chain. The closer they are to production, the more
likely it is to cut off counterfeit supply.
Warning those who are affected by the imitations
The timeliness of information is critical, not only to prevent accidents but also to document that the
company is properly dealing with the case.
Finding/eradicate the source of illicit products
Brand owners should approach the occurrence of counterfeit goods in a constructive way and
collect as much information as possible to increase the chance of successful prosecution of
offenders.
Seeking the prosecution of offenders
Prosecution of offenders is the logical consequence of identifying illicit actors; even if it is a difficult
process. The importance of tacking legal steps should be stressed, even if they do not directly
affect the illicit financiers. They may lead to seizures of production machinery and unsettle middle
men, which can dramatically increase the cost of counterfeiting.
Managing the relationship with the informant and other supportive stakeholders
Most reactions are initiated after receiving hints from individuals such as customs officials or
managers from retail stores who are not directly associated with the brand owner.
Refining the anti-counterfeiting strategy
Details from individual cases should be fed back to adjust the monitoring process and improve
prevention techniques
In conclusion, the reaction processes are highly dependent on the affected product, country, and
the nature of the individual case.
116
Reference Text for Trainers
BOX 18
Case Study
Operation Jupiter in South America (2005-2010)
Operation Jupiter was launched with the support and participation of the national police forces of
Argentina, Brazil and Paraguay. Brazilian customs also joined the operation, together with
representatives from pharmaceutical, recording, motion picture and tobacco cross-industry representative
bodies. The operation then involved 7 countries of Latin America; the Romanian Police was also involved
in this Operation.
INTERPOL IPR programme, which spearheaded Operation Jupiter, provides a central point of reference
to facilitate co-operation between law enforcement authorities and the public and private sectors in the
fight against transnational organized IP crime.
Under the umbrella of Operation Jupiter, police and customs agents from Argentina, Bolivia, Brazil, Chile,
Paraguay, Peru and Uruguay carried out 299 co-ordinated enforcement operations resulting in 311
arrests and the recovery of a range of dangerous products including life-threatening fake medicines,
counterfeit foodstuffs, electrical goods and agrochemicals.
INTERPOL and the WCO worked with participating countries to identify the transnational organized
criminal groups involved in cross-border smuggling and to target resources accordingly. Police and
customs authorities in each country then launched investigations and combined interventions to disrupt
these frequently complex criminal activities.
An important part of Operation Jupiter was the close co-operation and support provided to investigators
by the private sector. “Public-private partnerships like this are pivotal for bringing criminal counterfeiters
to justice, while protecting the innovators, workers and consumers who rely on intellectual property
protection,” said Dr. Mark T. Esper, Executive Vice President of the U.S. Chamber of Commerce’s Global
Intellectual Property Centre.
Since the first phase of Operation Jupiter in 2005 – which involved just three countries – operations
throughout the region have so far resulted in nearly 700 arrests and the seizure of goods worth an
estimated USD 290 millions.
Source: Interpol
5.3.3 Cooperation Initiatives with the Business Sector
As several studies and reports emphasize, some business sectors are more exposed to brand
counterfeiting and IPR violations than others. Consequently, a more active role in suggesting anticounterfeiting initiatives can be expected from the sectors most at risk. Common initiatives
promoted by sector-related associations, as well as liaison with public authorities and public
institutions are examples of best practices.
1) Liaison between EU customs administrations and the pharmaceutical sector
A meeting was held on 14th September 2009 between the EU Commission, EU customs
administrations and EU pharmaceutical companies in Brussels. It was the first step in an ongoing
liaison between those parties. The main issue discussed regarded the effectiveness of the seizure
of goods suspected of infringing IPRs, carried out by customs during EU border controls.
Participants discussed customs measures relating to the enforcement of patent rights at the
border, in particular the need to protect such rights effectively, whilst ensuring that “the legitimate
flow of and access to genuine generic products from manufacturer to customer outside the EU was
not restricted” (from the Joint Statement after the meeting, see below). As a result of this meeting,
EU custom authorities will extend and improve their collaboration with EU pharmaceutical
companies in order to prevent any chance that the detention of suspected goods might hinder the
legal trade of medicines. Such measures should speed up control procedures and the procedures
117
Reference Text for Trainers
related to the releasing of suspected goods. Customs will notify EU pharmaceutical companies
about each and every case of goods suspected of infringement. This joint commitment to act
demonstrates the will to act in accordance with EC Regulation 1383/2003.
2. Liaisons between Custom authorities and the semiconductor industry
The liaisons between customs experts and manufacturers of semiconductor devices concerning
anti-counterfeiting issues cover the following countries: China, Chinese Taipei, European Union,
Japan, Korea and the United States (countries adhering to the GAMS ).
For the first time, representatives from each of the six major regions involved in the manufacturing
of semiconductor devices (joined in the GAMS), met to discuss the problems posed by counterfeit
semiconductor products. On 21st – 22nd September 2009, customs experts from China, Chinese
Taipei, the European Union, Japan, Korea and the United States convened in Korea, together with
representatives from their relevant industries and trade ministry officials. During the meeting
customs experts shared experiences and best practices in the fight against counterfeited
semiconductor devices. Customs experts also reaffirmed the need for governments to join forces
and increase joint government/industry cooperation in the fight against the counterfeit industry. It
was also mentioned that a particularly effective countermeasure, is that which gives customs
officers access to information about products manufactured and processes implemented by the
semiconductor industry. This type of information facilitates the identification of suspected
counterfeit products.195
195
The main source of this paragraph is Transcrime (2010), Anti-brand counterfeiting in the EU: report on best
practices, unpublished version, pp. 57-59.
118
Reference Text for Trainers
Sources
Agenzia Delle Dogane, available at:
www.agenziadogane.it/wps/wcm/connect/ed/Servizi/F.A.L.S.T.A.F.F.
BBC News, International counterfeit goods raids http://news.bbc.co.uk/2/hi/uk_news/8576691.stm
BBC Newsround, How well can you spot a fake?
http://news.bbc.co.uk/cbbcnews/hi/newsid_7650000/newsid_7657300/7657362.stm
CEIPI (Centre d’études internationales de la propriété intellectuelle), (2004) Impacts de la
contrefaçon et de la piraterie en Europe – Rapport Final:
Dewan, Mohan Multi Pronged Effective Strategy For Anti Counterfeit Actions,
http://EzineArticles.com/?expert=Mohan_Dewan
DGLC (Direzione Generale per la Lotta alla Contraffazione) – Ufficio Italiano Brevetti e Marchi,
(2009), Rapporto sulle attività del 2009
EC Directorate General for Enterprise & industry, Making IPR Work for SMEs, Annex B: Best
practices, available HTTP:
http://ec.europa.eu/enterprise/newsroom/cf/document.cfm?action=display&doc_id=4055&userservi
ce_id=1&request.id=0
EC Directorate General for Enterprise & industry, Making IPR Work for SMEs, Annex C: Inventory
IPR Enforcement Support Measures, avaiable HTTP:
http://ec.europa.eu/enterprise/newsroom/cf/document.cfm?action=display&doc_id=4056&userservi
ce_id=1&request.id=0
EU Counterfeiting and Piracy Observatory, Corrective Measures in IPR infringements, online
available HTTP: http://ec.europa.eu/internal_market/iprenforcement/observatory/index_en.htm
EUROPOL, Camorra-type clan behind massive counterfeiting of power tools and clothing, press
release, available at:
http://www.europol.europa.eu/index.asp?page=news&news=pr100521.htm
Fitzgerald D.G., (2007) “Informants and undercover investigations: a practical guide to Law”, Policy
and Procedure, New York: Taylor & Francis Group
http://counterfeiting.unicri.it/docs/IACD.A%20key%20information%20resource%20to%20combat%
20the%20global%20plague%20of%20counterfeiting.2009.pdf
http://counterfeiting.unicri.it/docs/study_ceipi_counterfeiting_fr.pdf
ICC Counterfeiting Intelligence Bureau, (2009) International Anti-Counterfeiting Directory
INDICAM, (2005) Lotta alla contraffazione e tutela penale, fact sheet of Indicam Congress of 28th
february, Milan
International & Trade Security Branch, Customs Division, (2008) Intellectual Property Rights (IPR)
Manual Customs action against goods suspected of infringing certain intellectual property rights
and the measures to be taken against goods found to have infringed such rights, Ireland
International Anti-Counterfeiting Directory, (2009) A key information resource to combat the global
plague of counterfeiting
International Intellectual Property Alliance (IIPA) (2010), Report on Copyright protection and
enforcement, Special 301: Poland
INTERPOL, Database on International Intellectual Property,
http://www.interpol.int/public/FinancialCrime/IntellectualProperty/DIIP/Default.asp
119
Reference Text for Trainers
INTERPOL Database on International Intellectual Property (DIIP) Crime,
http://www.interpol.int/Public/FinancialCrime/IntellectualProperty/DIIP/ExplanNotes.asp
INTERPOL, (2007) Guide To Intellectual Property Crime And Investigations, Lyon
IPO Crime Group, IP crime Report 2009/2010, United Kingdom
Inventory of IPR enforcement support measures in each country (EU), available HTTP:
http://www.innovaccess.eu/enforcement_best_practices.html
Ministerio de Cultura de España, (2008) Manual de buenas practicas para la prosecución de los
delitos contra la propiedad intelectual, Spain
Ministero dell’Interno, (2004) “Commercio abusivo e vendita di prodotti contraffatti: come agire”,
Manuale operativo, Rome, Italy
Schott P.A., (2006) Reference Guide to Anti-Money Laundering and Combating the Financing of
Terrorism, World Bank, Washington D.C.
Staake T., Fleisch E., (2008) Countering Counterfeit Trade. Illicit market insights, Best-Practice
Strategies, and Management Toolbox, Berlin Heidelberg: Springer-Verlag
Team for Counteracting Infringement of Copyright and Related Rights (2009), Special
Report,Poland
Team for Counteracting Infringement of Copyright and Related Rights (2009), Support to Special
Report, Poland
The Anti-Counterfeiting Group (seventh revision, April 2010), ACG guidance note. Guidelines for
Witnesses in Counterfeiting, based upon the Criminal Procedure Rules 2010, effective from 5 April
2010
The Canadian IP Council, Intellectual Property: Enforcement Manual. A Practical and Legal Guide
for Protecting Your Intellectual Property Rights
The Partnership for Safe Medicines, (2005) Counterfeit Drugs in Europe, fact sheet, online
available HTTP: http://www.safemedicines.org/resources/europe.pdf
Transcrime (Joint Research Centre on Transnational Crime), (2010) Anti Brand Counterfeiting in
the EU: Report on International and National Existing Standards (unpublished version)
Transcrime (Joint Research Centre on Transnational Crime), (2010) Anti Brand Counterfeiting in
the EU: report on best practices (unpublished version)
Tual D. (2008), Evolution de la lutte contre la contrefaçon et la piraterie en Afrique – éléments
d’analyse et perspectives, Belgium
U.S. Customs and Border Protection, http://www.cbp.gov/xp/cgov/trade/priority_trade/ipr/
UNICRI (United Nations Interregional Crime and Justice Research Institute), (2011) Counterfeiting
a global spread a global threat, Advanced Unedited Edition
UNICRI (United Nations Interregional Crime and Justice Research Institute), (2010) Strategies for
technical-juridical training and awareness raising on counterfeiting, (unpublished Italian version)
UNICRI (United Nations Interregional Crime and Justice Research Institute), (2010) Strategies for
technical-juridical training and awareness-raising on counterfeiting, Turin
UNICRI (United Nations Interregional Crime and Justice Research Institute) & UNODC (United
Nations Office on Drugs and Crime), (2008) Investigation, prosecution and adjudication of drug-
related cases in Afghanistan
UNIFAB (Unions des Fabricants), (2004) La lutte anti-contrefaçon. Manuel destiné aux officiers de
police judiciaire, 2nd edition
UNIFAB (Unions des Fabricants), (2005) Rapport sur la contrefaçon et la criminalité organisée, 3rd
edition, available at : http://www.unifab.com/doc/2005/rapport_c05.pdf
120
Reference Text for Trainers
United Nations, Guidelines on the Role of the Prosecutors, Adopted by the Eight United Nations
Congress on the Prevention of Crime and Treatment of Offenders, Havana, Cuba, 27 August to
September 1990
United States Food and Drug Administration (last update march 2010), Investigations Operation
Manual, chapter 8, available at:
http://www.fda.gov/downloads/ICECI/Inspections/IOM/UCM123515.pdf
United States National Intellectual Property Law Enforcement Coordination Council, (2008) Report
to the President and Congress on Coordination of Intellectual Property Enforcement and Protection
Vilau D.M., (2010) Anti-counterfeiting measures, country chapter: Poland
121