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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
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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.
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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 or Digital Versatile 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
(FTZs)
Free Trade Zones
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(GACG)
Global Anti-Counterfeiting Group
(GATS)
General Agreement on Trade in Services
(GATT)
General Agreement on Tariffs and Trade
(GdF)
Guardia di Finanza
(GIBP)
General Inspectorate of Romanian Border Police
(GICO)
Gruppo
d’Investigazione
sulla
Criminalità
(Investigation Group on Organized Crime)
(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 Commercio Estero (Monitoring
and 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)
U.S. National Intellectual Property Law Enforcement Coordination
Council
(OAPI)
African Intellectual Property Organization
Organizzata
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(OECD)
Organisation for Economic Cooperation and Development
(OPOs)
Other Public Officials
(OSIM)
Romanian State Office for Inventions and Trademarks
(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
(RCO)
Romanian Copyright Office (ORDA)
(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
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(WHO)
World Health Organisation
(WIPO)
World Intellectual Property Organisation
(WTO)
World Trade Organisation
(ZPAV)
Związek Producentów Audio Video (Polish Society of the Phonographic Industry)
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SECTION 1
Intellectual Property Rights (IPRs): Basic Definitions
A. BASIC IPRS DEFINITIONS
The definitions of Intellectual Property Rights (IPRs) that will be 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
General Information on Copyright Protection
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.
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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 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 20th 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 […]”
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
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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:
“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 Stateparties.
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 rules4. 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.5
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.6
The Paris Convention foresees common rules which have to be followed by the contracting
parties regarding the categories of patents, utility models, industrial designs, marks, trade
names, indications of source and industrial designs.
The Paris Convention on the Protection of Industrial Property ,
http://www.wipo.int/treaties/en/ip/paris/trtdocs_wo020.html#P232_38660
4
World Intellectual Property Organization (WIPO), Summary of the Paris Convention for the Protection of
Industrial Property. Online. Available HTTP: http://www.wipo.int/treaties/en/ip/paris/summary_paris.html
5
Ibid.
6 I
bid.
3
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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 (IPRs on one side and
competition law on the other side) 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 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 anticompetitive 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.7 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 years8.
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 party9.
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 patentable10.
The legal basis on patents is principally provided in the Paris Convention11 (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:12
7
World
Intellectual
Property
Organization
(WIPO),
Frequently
Asked
Questions/
Patent,
http://www.wipo.int/patentscope/en/patents_faq.html#protection
8
Ibid.
9
Ibid.
10
Ibid.
11
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
12 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
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
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;

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;

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.
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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.
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.13
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."14 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."15
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.16
13
The part of General Information on Patents is taken from the 2007 UNICRI report “Counterfeiting: A Global
Spread, A Global Threat”, pp. 17-19
14
WIPO, Protecting Inventions by Utility Models, What is a Utility model?
http://www.wipo.int/sme/en/ip_business/utility_models/utility_models.htm
15
Ibid.
16
Ibid.
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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. This option is not available in Romania.
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).17
1.4 Industrial design (industrially applicable)
Definition
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.
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 must appeal to the eye to be protected under most national laws. This
means that an industrial design is primarily of an aesthetic nature and does not protect any
technical features of the article to which it is applied.18
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 assists to ensure a fair return on investment. An
effective system of protection also benefits consumers and the public, by promoting fair
competition and honest trade practices, encouraging creativity and promoting more aesthetically
attractive products.19
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.20
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.21
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.22
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)23
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
17
18
19
20
21
22
23
http://www.wipo.int/treaties/en/ip/paris/trtdocs_wo020.html#P145_20374
http://www.wipo.int/designs/en/
http://www.wipo.int/designs/en/about_id.html#protect
Ibid.
Ibid.
Ibid.
http://www.wipo.int/treaties/en/ip/paris/trtdocs_wo020.html#P145_20374
13
Reference Text for Trainers
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
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.24
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
24
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
interconnections of an integrated circuit or such a three-dimensional disposition prepared for
an integrated circuit intended for manufacture […]”
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.25
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.26
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.27
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.28
In addition to trademarks identifying the commercial source of goods or services, 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.29
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.30
25
World
Intellectual
Property
Organization
(WIPO),
What
is
a
Trademark?
http://www.wipo.int/trademarks/en/trademarks.html
26
World Intellectual Property Organization (WIPO), About Trademarks, What does a Trademark do?
http://www.wipo.int/trademarks/en/about_trademarks.html#function
27
Ibid.
28
World Intellectual Property Organization (WIPO), About Trademarks, What kinds of trademarks can be
registered?
http://www.wipo.int/trademarks/en/about_trademarks.html#function
29
Ibid.
30
World Intellectual Property Organization (WIPO), About Trademarks, How is a trademark registered?
http://www.wipo.int/trademarks/en/about_trademarks.html#function
15
Reference Text for Trainers
Finally, the rights applied for cannot be the same as or similar to rights already granted 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.31
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.32
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.33
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.34
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 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:35
(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, 911)36 and in the TRIPS Agreement (Articles 15-21)
31
Ibid.
World Intellectual Property Organization (WIPO), About Trademarks, How extensive is trademark protection?
http://www.wipo.int/trademarks/en/about_trademarks.html#function
33
Ibid.
34
World Intellectual Property Organization (WIPO), Madrid System for the International Registration of Marks,
http://www.wipo.int/madrid/en/
35
World Intellectual Property Organization (WIPO), Madrid Agreement concerning the International registration of
Marks, http://www.wipo.int/madrid/en/legal_texts/trtdocs_wo015.html
32
16
Reference Text for Trainers
The Paris Convention lays out a few common rules which all the contracting States must follow
regarding trademarks. The most important shall be outlined below.37
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.
General information on Trademarks
The primary function of a trademark is to differentiate between manufacturers, suppliers of
services and entrepreneurs in general and is linked to the quality of what they offer and market.
The rationale behind the existence of a trademark is based on a collection of interests. It is
important that the consumer can direct his/her purchasing choices towards products whose
origin represents a quality guarantee and that the efforts implemented by the producer in order
to reach these quality standards are protected.
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.
The more a symbol is arbitrary or distinctive or comes close to having such characteristics, the
more it will tend to be considered representative of a particular producer of goods and services,
thereby allowing it to be used as a trademark. In contrast, an excessively generic name or
symbol does not sufficiently guarantee the distinguishing function of the trademark and its usage
for this purpose will not be recognized by the legal system. Consider, for example, the usage of
the Hewlett Packard (HP) trademark for the production of electronic devices for PCs, such as
printers, scanners and even digital cameras. HP is a sufficiently arbitrary or distinctive name and
thereby allows the consumer to differentiate a printer produced for example by HP, from other
printers that are marketed by other producers. The same cannot be said for a manufacturer who
intends to use the word “printer” as a trademark, given that this term is clearly generic and does
36
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
37
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
17
Reference Text for Trainers
not serve any distinguishing function. This argument may also be extended to cases where the
trademark is not a name but a symbol.
The Paris Convention requires that all member states (even those which grant protection on the
basis of usage) create a registry of trademarks. The registration is implemented by an
application: it allows governments to verify the existence or inexistence of the characteristics
that are required for the symbol or name to be used as a trademark.
The duration of the protection varies from country to country; however, this limitation is
essentially based on the bureaucratic formalism of the administrations which are entrusted with
trademark registration. It is possible to renew the protection term for an equivalent duration on
the expiration date of each term. The TRIPS Agreement states that the minimum duration of a
granted protection term, from both the initial registration as well as subsequent renewal dates,
may not be less than seven years (Art. 18, “Terms of Protection).
The owner of a registered mark may therefore use it in order to distinguish the registered
products or services. The actual marketing of these products will be subject to further regulation
and may require specific authorizations.
The purpose of the protection granted by the legal system is closely linked to the commercial
activity and the ability to distinguish the origin of products or services.. An unjustified failure to
use the registered trademark will primarily allow other parties to take action in order to cancel
the trademark so that it may be newly registered but with a different owner. This does not apply
in cases where the failure to use the trademark is justified, for example, cases of uncontrollable
circumstances. It should be noted that, in the case of legal action initiated for the purposes of
cancelling the trademark, the burden of proof is reversed and falls upon the party owning the
trademark. They must prove the use of the trademark or provide evidence of causes that
prevented its use.
The loss of the trademark’s distinguishing function would serve as an additional case where
cancellation is warranted. Consider, for example, the case in which a producer’s mark or a name
attributed to a product becomes synonymous with the product itself, as with aspirin. In such
cases, the mark is defined as having acquired a generic nature.
Ownership of the trademark, similarly to other intellectual property rights, may be sold. It may
also be subject to specific licensing agreements which authorize third parties to use the
trademark for commercial purposes while simultaneously allowing the owner of the trademark to
control the quality of any marketed products.38
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.”39
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.”40
Legal provisions on trade names can be found in the Paris Convention (articles 1§2, 5bis, 8-10,
10ter)41
38
The part of General Information on Trademarks is taken from the 2007 UNICRI report “Counterfeiting: A Global
Spread, A Global Threat”, pp. 20-22.
39
http://legal-dictionary.thefreedictionary.com/trade+name
40
Ibid.
41
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
18
Reference Text for Trainers
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.”42
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.43
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.44 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.45
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.46
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.47
A trademark is a sign used by an enterprise to distinguish its goods and services from those of
other enterprises. It gives its owner the right to exclude others from using the trademark. A
trademark will often consist of a fanciful or arbitrary name or device. 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. It may be used by all producers who make their products in
the place designated by a geographical indication and whose products share specified qualities.
42
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
43
World Intellectual Property Organization (WIPO), About geographical indications, What is a Geographical
Indication? http://www.wipo.int/geo_indications/en/about.html#agri
44
Ibid.
45
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
46
World Intellectual Property Organization (WIPO), About geographical indications, What does a geographical
indication do? http://www.wipo.int/geo_indications/en/about.html#agri
47
World Intellectual Property Organization (WIPO), About geographical indications, Why do geographical
indications need protection? http://www.wipo.int/geo_indications/en/about.html#agri
19
Reference Text for Trainers
Unlike a trademark, the name used as a geographical indication will usually be predetermined
by the name of the place of production. 48
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

specific laws or decrees that recognize individual geographical indications.
In essence, unauthorized parties may not use a geographical indication in respect of products
that do not originate from the place designated by that indication. Applicable sanctions range
from court injunctions preventing the unauthorized use the payment of damages and fines or, in
serious cases, imprisonment.49
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).50
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.51
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. 52
Two issues are debated under the Doha mandate, both related in different ways to the higher
(Article 23) level of protection: creating a multilateral register for wines and spirits; and extending
the higher (Article 23) level of protection beyond wines and spirits. Both are as contentious as
any other subject on the Doha agenda.
Although the two issues are discussed separately, some delegations see a relation between
them. In July 2008, a group of WTO members called for a “procedural decision” to negotiate
48
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
49
World Intellectual Property Organization (WIPO), About geographical indications, How are geographical
indications protected? http://www.wipo.int/geo_indications/en/about.html#agri
50
World Intellectual Property Organization (WIPO), About geographical indications, How are geographical
indications protected on the international level? http://www.wipo.int/geo_indications/en/about.html#agri
51
World Intellectual Property Organization (WIPO), About geographical indications, What is a "generic"
geographical indication? http://www.wipo.int/geo_indications/en/about.html#agri
52
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
20
Reference Text for Trainers
three intellectual property issues in parallel: these two geographical indications issues and a
proposal to require patent applicants to disclose the origin of genetic resources or traditional
knowledge used in their inventions53. Members remain divided over this idea, opponents arguing
that the only mandate is to negotiate the multilateral register. 54
Legal provisions on Geographical Indications can be found in the following articles of the Paris
Convention (articles 1§2, 5bis, 10, 10bis) 55 and in the TRIPS Agreement (articles 22-24).
The Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPS Agreement)
includes the following provisions for geographical indications in Section 3:56
The Paris Convention lays out the following common rule regarding trade names, which all the
contracting States must follow: measures must be taken by each contracting State against direct
or indirect use of a false indication of the source of the goods or the identity of the producer,
manufacturer or trader.57
General information on Geographical Indications58
All products are covered by Article 22, which defines a standard level of protection. This states
that geographical indications have to be protected in order to avoid misleading the public and to
prevent unfair competition.
Article 23 provides a higher or enhanced level of protection for geographical indications for
wines and spirits: subject to a number of exceptions, they have to be protected even if misuse
would not cause the public to be misled.
Exceptions (Article 24): In some cases, geographical indications do not have to be protected or
the protection can be limited. The exceptions that the agreement allows include: when a name
has become the common (or “generic”) term (for example, “cheddar” now refers to a particular
type of cheese not necessarily made in Cheddar, in the UK), and when a term has already been
registered as a trademark.
Information that members have supplied during a fact-finding exercise shows that countries
employ a wide variety of legal means to protect geographical indications ranging from: specific
geographical indications laws to trademark law, consumer protection law and common law. The
TRIPS Agreement and current TRIPS work in the WTO take account of that diversity.
53
Document TN/C/W/52 of 19 July 2008
World Trade Organization (WTO), TRIPS: Geographical indications, Background and the Current situation,
http://www.wto.org/english/tratop_e/trips_e/gi_background_e.htm
55
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
56
World Trade Organization (WTO), Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS
Agreement), Part II “Standards Concerning the Availability, Scope and Use of Intellectual Property Rights”, Section 2
“Trademarks” http://www.wto.org/english/tratop_e/trips_e/t_agm3c_e.htm#5
57
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
58
World Trade Organization (WTO), TRIPS: Geographical indications, Background and the Current situation,
http://www.wto.org/english/tratop_e/trips_e/gi_background_e.htm
54
21
Reference Text for Trainers
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United Nations Interregional Crime and Justice Research Institute (UNICRI) (2011)
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trademarks can be registered? available at:
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World Intellectual Property Organization (WIPO) (2010) Frequently Asked Questions/ Patent,
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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
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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
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Reference Text for Trainers
SECTION 2
Treaties, Agreements and Conventions at the International Level
2.1 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)59 and negotiated
and achieved, during the Uruguay Round of the General Agreement on Tariffs and Trade
(GATT)60, 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 (IP) regulation as applied to nationals of other WTO Members. 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; 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 General Agreement
on Tariffs and Trade (GATT) and General Agreement on Trade and Services (GATS): i.) the
national treatment (treating one’s own nationals and foreigners equally); and ii.) the mostfavoured-nation treatment (equal treatment for nationals of all trading partners in the WTO).
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. Romania is Party to the TRIPS Agreement.
2.2 On Copyright and related rights
2.2.1 The Berne Convention
The Berne Convention for the Protection of Literary and Artistic Works 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.61
59
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.
60
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.
61
For
further
information
on
the
Berne
Convention,
see
http://www.wipo.int/treaties/en/ip/berne/summary_berne.html
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Reference Text for Trainers
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 Berne Union has an Assembly and an Executive Committee. The Berne Convention,
concluded in 1886, was revised at Paris in 1896 and at Berlin in 1908, completed at Berne in
1914, revised at Rome in 1928, at Brussels in 1948, at Stockholm in 1967 and at Paris in 1971,
and was amended in 1979. 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 State-parties. Romania is Party to the Berne Convention.
2.2.2 The WIPO Copyright Treaty (WCT)
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 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 Treaty obliges each Contracting Party to adopt the measures necessary to ensure the
application of the Treaty in accordance with its legal system. In particular, the Contracting Party
must ensure that enforcement procedures are available under its law so as to permit effective
action against any act of infringement of rights covered by the Treaty. This action must include
expeditious remedies to prevent infringement and remedies which constitute a deterrent to
further infringements.
The Treaty establishes an Assembly of the Contracting Parties. Its main task is to deal with
matters concerning the maintenance and development of the Treaty and it entrusts the
administrative tasks concerning the Treaty to the Secretariat of WIPO. The Treaty entered into
force on 6 March 2002. 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. Romania is Party to the WIPO Copyright
Treaty.
2.3 On Industrial Property
2.3.1 The Paris Convention
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.62
The substantive provisions of the Convention fall into three main categories: i) national
treatment; ii) right of priority and; ii) common rules63 which apply to all the categories of industrial
62
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
63
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Reference Text for Trainers
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 of the treaty,64 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. Romania is Party to the
Paris Convention.
2.3.2 The Patent Cooperation Treaty
Apart from the Paris Convention and the TRIPS provisions on patents, there is also the Patent
Cooperation Treaty (PCT).65 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 withdrawn, it is published by the International Bureau together
with the international search report. The written opinion is not published.
64
Article 1- Establishment of the Union; Scope of Industrial Property:
“1) The countries to which this Convention applies constitute a Union for the protection of industrial property.
2) The protection of industrial property has as its object patents, utility models, industrial designs, trademarks, service
marks, trade names, indications of source or appellations of origin and the repression of unfair competition.
3) Industrial property shall be understood in the broadest sense and shall apply not only to industry and commerce
proper, but likewise to agricultural and extractive industries and to all manufactured or natural products, for example,
wines, grain, tobacco leaf, fruit, cattle, minerals, mineral waters, beer, flowers and flour.
4) Patents shall include the various kinds of industrial patents recognized by the laws of the countries of the Union,
such as patents of importation, patents of improvement, patents and certificates of addition, etc.”
65
The description and information provided here on the Patent Cooperation Treaty can be found on
http://www.wipo.int/pct/en/treaty/about.html
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Reference Text for Trainers
The procedure under the PCT has the following advantages for the applicant, the patent offices
and the general public: (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.
Instruments of ratification or accession must be deposited with the Director General of WIPO.
The PCT created a Union which has an Assembly. Every State party to the PCT is a member of
the Assembly. Currently there are 142 Contracting Parties of the Patent Cooperation Treaty.
Romania is Party to the PCT.
2.3.3 The Hague Agreement on Industrial Designs66
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 (both referred to as “Contracting Parties”) by means of a single international
application filed with the International Bureau of the World Intellectual Property Organization
(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 application of the London Act of 2 June 1934 (“the 1934 Act”) was frozen on 1 January
2010, so that no new designation under that Act may be recorded in the International Register.
The freeze of the application of the 1934 Act does not affect the designations made under the
Act which were before 1 January 2010.
The Hague System Concerning the International Registration of Industrial Designs 67
The Hague System for the International Registration of Industrial Designs68 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). An international registration
produces the same effects in each of the designated countries, as if the design had been
registered directly with each national office, unless protection is refused by the national office of
that country.
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.69
66
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
67
The information on the Hague System presented here are taken from 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
68
Ibid
69
Hague System for the International Registration of Industrial Designs,
http://www.wipo.int/ hague/en/
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Reference Text for Trainers
Advantages of the Hague System

The Hague System of international registration of industrial designs arose from a need
for simplicity and economy. In effect, it enables design owners from a Contracting Parties
to obtain protection for their designs with a minimum of formalities and expense. In
particular, they are relieved of the need to make a separate national application 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.

In effect, under the Hague Agreement, the same result can be obtained by means of a
single international registration, made in one language, on payment of a single set of
fees, in one currency and with one Office (the International Bureau).

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 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. Romania is a Party to the Hague Agreement
which entered into force in Romania on 18 July 1992.
2.3.4 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
currently 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. As far as the implementation of this protection is
concerned, 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”. In Art. 1 the Treaty foresees the establishment of a Union constituted by the
Contacting parties for the purposes of the Treaty.
2.3.5 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. Any country being a party to the Paris Convention may
join the Madrid Protocol. 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
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Reference Text for Trainers
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. Romania is a
member of both.
2.3.6 The Singapore Treaty on the Law of Trademarks
The Singapore Treaty on the Law of Trademarks70 was signed at the Diplomatic Conference for
the Adoption of a Revised Trademark Law Treaty, which took place in Singapore in March 2006.
The Treaty entered into force in March 2009, when it was ratified by the following countries:
Singapore, Switzerland, Bulgaria, Romania, Denmark, Latvia, Kyrgyzstan, USA, Republic of
Moldova and Australia. Spain, Poland and Estonia also ratified the Treaty in 2009.
The Treaty establishes common standards for procedural aspects of trademark registration and
licensing. It maintains the streamlined application formalities of the current TLT (Trademark Law
Treaty of 1994) but eliminates the TLT provision that required national offices to accept paper
applications. This variation in provision consents national trademark offices to progress to an
entirely electronic system, allowing them to take advantage of electronic communication
systems which are presently considered to be efficient alternatives to paper communications.
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 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 non-graphic 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.
The creation of an Assembly of the Contracting Parties introduces a degree of flexibility for the
definition of details concerning administrative procedures to be implemented by national
trademark offices where it is anticipated that future developments in trademark registration
procedures and practice will warrant the amendments of those details. The Assembly is
endowed with powers to modify the Regulations and the Model International Forms, where
necessary. At a preliminary level, the Assembly can also deal with questions relating to the
future development of the Treaty.
The Diplomatic Conference adopted a Resolution Supplementary to the Singapore Treaty on
the Law of Trademarks and the Regulations thereof, stating that: the Treaty does not impose
any obligations on Contracting Parties to (i) register new types of marks, or (ii) implement
electronic filing systems or other automation systems. 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. The future Assembly is charged with the task to
monitor and evaluate the progress of the assistance granted at every ordinary session. It is
suggested that any dispute arising with respect to the interpretation or application of the Treaty
should be settled amicably through consultation and mediation under the auspices of the
Director General of the WIPO.
70
The full text of the Singapore Treaty could be found on: http://www.wipo.int/treaties/en/ip/singapore/
29
Reference Text for Trainers
2.3.7 The Lisbon Agreement for the Protection of Appellations of Origin and their International
Registration 71
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 1883 Paris Convention for the Protection of
Industrial Property. Instruments of ratification or accession must be deposited with the Director
General of WIPO.
The aim of the Agreement is to provide for the protection of appellations of origin, that is, the
“geographical name of a country, region or locality, which serves to designate a product
originating therein, the quality and characteristics of which are due exclusively or essentially to
the geographic environment, including natural and human factors” (Article 2). 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. Romania signed it on 31 October 1958.
2.4 Other Important International Tools for Combating Counterfeiting
2.4.1 The United Nations Convention against Transnational Organized Crime (Palermo
Convention)
The United Nations Convention against Transnational Organized Crime72, 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. Romania ratified the Palermo Convention on 4 December 2002.
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.
71
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
72
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
30
Reference Text for Trainers
SOURCES
United Nations Convention against Transnational
http://www.unodc.org/unodc/en/treaties/CTOC/index.html
Organised
Crime,
available
at:
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
World Intellectual Property Organization (WIPO), Full text of the Singapore Treaty available at:
http://www.wipo.int/treaties/en/ip/singapore/
World Intellectual Property Organization (WIPO), Hague System for the International
Registration of Industrial Designs, available at: http://www.wipo.int/hague/en/
World Intellectual Property Organization (WIPO), Patent Cooperation Treaty can be found on
http://www.wipo.int/pct/en/treaty/about.html
World Intellectual Property Organization (WIPO), 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
http://www.wipo.int/treaties/en/ip/paris/
(WIPO),
Paris
Convention,
available
at:
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
World Trade Organization (WTO), General Agreement on Tariffs and Trade, available at:
http://www.wto.org/english/tratop_e/gatt_e/gatt_e.htm.
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Reference Text for Trainers
SECTION 3
Definitions of Counterfeiting and Piracy
3.1 Definitions of Counterfeiting and Piracy
Counterfeiting and piracy are terms used to describe a range of illicit activities linked to IPR
infringement.73 In its broader sense, the term counterfeiting is often used at the international
level 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.74
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 COCACOLA®, 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.”75
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
signals.”76 The same source also mentions an interesting debate on the compatibility between
73
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
74
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
75International
Trademark
Association
website,
“What
is
counterfeiting?”,
http://www.inta.org/index.php?option=com_content&task=view&id=1534&Itemid=&getcontent=4
76
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
32
Reference Text for Trainers
the term of “piracy” and the absence of the commercial purpose in the activity by stating that
“traditionally, 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. […]”77
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”.78 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”.79
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.80
According to Casillo, another distinction could be made between two modalities of
counterfeiting: allusion and expropriation.81 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.82 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 one83; (b) the original product is imitated in its
format or design or functionality84; (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.85
3.2 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 that fall 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.86
A comprehensive definition of IPC or Intellectual Property Theft (IPT) has been made by the
Northern Ireland Organized Crime Taskforce according to which IPC involves “counterfeited and
77
Ibid.
Staake, T., Fleisch, E. (2008), “Countering Counterfeit Trade”, Springer (ed.), p.17.
79
Ibid.
80
“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.
81
Respectively “allusione” and “espropriazione”. See Casillo, S. (1998), “L’irresistibile ascesa dell’industria del falso
in Italia”, in Il Mulino, n°4, p.709.
82
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”).
83
For example the brand of a perfume could be affixed to clothes or other goods which are not perfumes.
84
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.
85
Casillo, S., op. cit., p.698.
86
Information retrieved form the Interpol website, http://www.interpol.int/public/FinancialCrime/default.asp
78
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Reference Text for Trainers
pirated goods, manufactured and sold for profit without the consent of the patent or trademark
holder.”87 This implies infringement of the legal rights that are most commonly granted under the
form of copyright, trademarks and patents which guarantee the moral and economic rights of the
creators, recognize their creativity and protects the dissemination of their work.88
IPC represents one aspect of the informal economy (black market) which operates in parallel to
the formal economy.89 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.90 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
companies91 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.
3.3 Beyond IPR Infringement, the Negative Impact of Counterfeiting
Counterfeiting is generally considered to be a relatively harmless and “victimless” crime.92
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.93 In reality, however, counterfeiting constitutes a serious problem which causes
grave repercussions throughout the economy, the state and in many cases, among
consumers.94
Adopting the mainstreaming classification of the costs of crime (e.g. example the Mainstreaming
Methodology for Estimating Costs of Crime project -MMECC)95, 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
87
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
88
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, http://www.iccwbo.org/uploadedFiles/BASCAP/Pages/links.pdf
89
Ibid., pp.2-3.
90
Ibid., p.3.
91
Interpol website, op. cit., http://www.interpol.int/public/FinancialCrime/default.asp
92
OECD (2008), op. cit., p.263.
93
Ibid.
94
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.
95
See the MMECC website, http://www.costsofcrime.org/CostingPrinciplesandMethodology/
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Reference Text for Trainers
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).96
3.3.1 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:97

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.98 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. This is as it reduces the
demand for original goods. 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.99 Lower expenses incurred mean that the counterfeiting industry can produce and
sell counterfeit goods at a lower price.100 This can be considered as the first direct loss for the
legal companies, as lower prices of the replicas may reduce the demand for original goods
increasing the demand for fake ones.101 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.
96
Ibid.
Calovi, F., Vettori, B., Yu J. (2008), op. cit., pp.132-134.
98
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.
99
UNICRI (2007), op. cit., p. 41.
100 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
101 Ibid., pp. 40-49.
97
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Reference Text for Trainers
Other than the previously mentioned costs, there are further costs linked to the crime of
counterfeiting. According to a classification system formulated by Bronca, two categories of
costs can be distinguished:102

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.
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.103 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, according to
WHO estimates that more than 50% of medicines sold online through sites that conceal their
actual postal address are counterfeit.104
According to the Centre for Economics and Business Research, counterfeiting within the
pharmaceutical sector has led to a loss of 292 million Euros 105. 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.106 According to WIPO, total
losses in the perfume and cosmetics sector are estimated to be 3,017 million Euros. 107
Furthermore, according to the Council of Europe, every year counterfeiting causes a total loss of
100,000 jobs within the European Union.108
3.3.2 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.109
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.110 Examples include: pharmaceuticals, electronic components,
102
Bronca, E. (1998), “La contraffazione del marchio” in Micro&Macro Marketing, n°2, August, pp.195-196.
APCO (2003), “Global Counterfeiting”, Background Document, p.18.
104 WHO (2006), “Counterfeit medicines: an Update on Estimates”, International Medical Products AntiCounterfeiting
Taskforce,
IMPACT,
15
November
available
online
http://www.who.int/medicines/services/counterfeit/impact/TheNewEstimatesCounterfeit.pdf
105 Centre for Economics and Business Research (CEBR ) (2000), “The Economic Impact of Counterfeiting in
Europe”, pp. 2-3.
106 Majid, Y. (2005), “A Deadly Faith in Fakes”, quoted in CEBR (2000), ibid., p.8.
107 World Intellectual Property Organization (WIPO) (2004), “WIPO National Seminar” ibid., p.4.
108 Council of Europe (2004), “Counterfeiting: Problems and Solutions”, Report of the Committee on Economic
Affairs and Development.
109 Curcio, A.M (1998), “Desiderio di falso, falso desiderio?” in Micro&Macro Marketing, n°2, pp.215-216.
110 UNICRI (2007), op. cit., pp. 49-50.
103
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Reference Text for Trainers
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)111 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 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.112 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.113 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).114
3.3.3 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. All
these costs are necessary to repress counterfeiting and to ensure effective implementation of
the law.115
Police costs are related to the costs incurred for the work carried out by the police forces; justice
costs refer to expenses deriving from court cases; costs deriving from criminal sanctions include
costs such as those incurred for the management and running of fine collections, the criminal
justice system, including the remuneration of those who work in the penitentiaries and who work
in the courts; costs linked to the drawing-up of laws include fees due to parliamentarians, as well
as the remuneration of customs / police and the purchase of technological items considered to
be essential for the detection of counterfeited goods at borders.
Further costs incurred by the State include those which derive from crime. These costs can be
divided into two categories:
111
112
113
114
115

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
"Global Counterfeiting” (2003), background document, pp.11-15.
Ibid.
Ibid., pp.49-51 and UNICRI (2007), op. cit., pp. 49-50.
For further information see http://www.costsofcrime.org/CostingPrinciplesandMethodology/
Ibid.
37
Reference Text for Trainers
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.116
3.4 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 enforcement117 are
also taken into account. Furthermore, the evaluation of benefits weighs up the opportunities of
earning large profit margins at low costs.118 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.119
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.120 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. 121 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.122
Five types of counterfeiters have been detected by Staake and Fleisch:123
116
“Global counterfeiting” (2003), ibid., p.16, and UNICRI, (2007), op. cit., p. 49.
Williams F.P., Mc Shane M.D. (2002), “Devianza e criminalità”, Il Mulino, Bologna, p.196.
118
OECD
(2008),
“The
Economic
Impact
of
Counterfeiting”,
Paris,
pp.
47-49,
http://www.iccwbo.org/uploadedFiles/BASCAP/Pages/OECD-FullReport.pdf
119 Ibid., p.87.
120 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%2
0Report.2nd%20edition2004.pdf
121
UNICRI, op. cit., p.110.
122 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).
123 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.
117
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Reference Text for Trainers

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 often included in statistics concerning counterfeit
products and their dissemination through business associations.
3.4.2 The Implication of Organized Crime
According to the United Nations Convention against Transnational Organized Crime, 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”.124 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.125 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.126 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.
124
125
126
United Nations (2000), “United Nations Convention against Transnational Organized Crime”, Art. 2(a).
UNIFAB (2004), op. cit., p.7.
UNICRI (2007), op. cit., pp.104-109.
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Reference Text for Trainers
Indirect involvement in counterfeiting occurs when one of these groups decides to endorse a
pre-existing legal company.127 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 distribution chain.128 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.129
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.130 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.131 According to police and
investigations132, 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.133 The Camorra is also involved in the production of counterfeit CDs.
These CDs are often imported from countries such as Bulgaria and Ukraine.134 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.135
The Link between Counterfeiting and other serious Organised Crime
As any serious organised crime, counterfeiting poses a significant threat to the legitimate
economy, consumer safety, national values and social stability.136
Nevertheless, IP crime is still considered very attractive to global criminal groups as it is highprofit 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 counterfeiting is lowered, organized crime entrenches itself in the activity in order
to fend off amateur competitors. In the second, a criminal group expands into counterfeiting to
127
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.
128 UNICRI (2007), op. cit., pp.104-109.
129 “Global counterfeiting” (2003), Background document, p.20.
130 OECD (2008), op. cit., pp.87-88.
131 Union des Fabricants, (2004), op. cit., pp.16-17.
132 See, Saviano R. (2006), “Gomorra. Viaggio nell’impero economico e nel sogno di dominio della camorra”,
Mondadori (editions), Milano, pp.11-47.
133 Ibid.
134 UNIFAB (2004), op. cit., pp.16-17.
135 Ibid.
136 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.February20
08.UK.pdf
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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 counterfeiting and vice-versa. The third,
and most prevalent, motivation is expanding into counterfeiting to diversify a criminal group’s
illicit revenue streams.
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.137
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. This is mainly due to the fact that investigations on counterfeiting cases usually are not
deep enough to allow discovering possible links with other crimes.
For this very reason, 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
137
RAND Corporation (2009), Film Piracy, Organised Crime and
http://www.rand.org/pubs/monographs/2009/RAND_MG742.appendix.pdf
Terrorism,
RAND,
available
at:
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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 ghdTM 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
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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
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SOURCES
APCO (2003), “Global Counterfeiting”, Background Document, p.18.
Bronca, E. (1998), “La contraffazione del marchio” in Micro&Macro Marketing, n°2, August,
pp.195-196.
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
ccs.org/index.php?option=com_content&view=article&id=29&Itemid=3
at:
http://www.icc-
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.215-216.
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.
Staake, T., Fleisch, E. (2008), “Countering Counterfeit Trade”, Springer (ed.), p.17.
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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
available
at:
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
45
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SECTION 4
Counterfeiting at the European Union Level
4.1 The Normative Framework
The Green Paper of 15th 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 were: (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 within the European Union by a series of international
normative instruments of which the Member States of the European Union (EU) are also a
Party. The EU Legislator is strongly committed to improving and harmonizing the EU legislation
on intellectual property and related rights. 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 Copyright Directive falls within the scope of articles 47 (2), 55 and 95 of the Treaty of Rome
and is also aimed at implementing the WIPO Copyright Treaty and the WIPO Performances and
Phonograms Treaty, of which the European Union is a Party. The philosophy at the basis of the
EUCD is the need to prevent and punish all forms of unauthorized use of the works resulting
from the activity of human intellect. 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 rights holders, as identified in the Directive, 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. As previously outlined
in the WIPO Copyright Treaty, 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 regarding 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.
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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 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, as in the WIPO Copyright Treaty, 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. Examples of the
implementation of the EU Copyright Directive (foresaw not later than the 22nd December 2002)
include: the United Kingdom adopted in 2003 the Copyright and Related Rights Regulation;
France adopted in 2006 the Loi sur le Droit d'Auteur et les Droits Voisins dans la Société de
l'Information (DADVSI); while Finland modified in 2005 the Finnish Copyright Act and the Penal
Code. For Italy, art. 30 of law 39 /2002 the Italian Parliament delegated to the Government the
issuance of a legislative decree aimed at implementing the Directive. The decree in question is
the D. Lgs. 68 of 9th April 2003, entitled “Implementation of Directive 2001/29/CE on the
harmonization of certain aspects of copyright and related rights in the information society”.
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
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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, in particular, the goods in question 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 (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
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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 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
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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 which Member States will have to conform to enhance the fight against
counterfeiting and piracy. Apart from the criticism138 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 CED139 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.
4.2 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, reexports, trans-shipments 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
138
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).
139 Mainly because of the complexity of these rights for which it is not always clear if the infringement has been
committed.
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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
Source: TAXUD
Image 2
Source: TAXUD
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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
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
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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
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
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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
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
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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.
Image 9
Source: TAXUD
The provenance140 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
140
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
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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.
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
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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)
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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.
Image 14
Image 15
Source: WCO
Source: WCO
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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).
Image 18
Image 19
Source: WCO
Source: WCO
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4.3 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)
2009: Hundreds of Chinese workers were kept in virtual slavery for years as part of a
multimillion-pound 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.
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(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: 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.
(Source: IFPI)
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.
(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)
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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 31 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, June 2nd 2007)
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 for Honduras.
(Source: Emballage Digest, 17 December 2008)
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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, 3 March 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)
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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
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SECTION 5
Counterfeiting at the National Level in Romania
1 Legislation on Intellectual Property Enforcement:
1.1 Implementation of the European standards and International Treaties
In order to comply with the EU standards for the protection of the IPR provided by Council
Regulation 1383/2003 of 22nd July 2003 (concerning customs action against goods suspected of
infringing certain IPRs and the measures to be taken against goods found to have infringed such
rights) at the European level, Romania has imposed the Emergency Government Ordinance No.
100/14.07.2005 concerning all IPRs.
The amended law 84/1998 published on 27 May 2010 on Trademarks and Geographical
Indications and the Emergency Government Ordinance No. 100/14.07.2005 on the enforcement
of the Industrial Property Rights have implemented the principles of Directive 2004/48/EC.
The principal copyright legislation is the Law No. 8/1996 on Copyright and Related Rights. It
entered into force on the 27 June 1996.

For being in full compliance with the acquis communautaire in the copyright field (a
precondition for the EU integration), this law has undergone the following subsequent
modifications and completions:

Law No. 285/2004 (Of.M.no.587/30.06.2004, operational on 30.07.2004)

Emergency Ordinance of the Government No. 123/2005 (Of.M.no.843/19.09.2005)

Law no. 329/2006 for the approval with modifications of E.O.G. No.123/2005
(Of.M.no.657/31.07.2006, operational on 03.08.2006)

At present, Romania’s copyright and related rights legislation is fully harmonized with
that of the EU, being in compliance with the provisions of all 8 directives of the European
Council and Parliament, in force up to now.
1.2 National legislation
Copyright and neighbouring rights

Law on Copyright (Consolidation), 14/03/1996 (2006), No. 8 (No. 329)

Law on Copyright, 14/03/1996, No. 8

Copyright (Organization, Functioning Copyright Office), Decision, 29/03/2006, No. 401
(implementing rules and regulations)
Patents

Patent Law No. 64/1991

Patent Law No. 64/1991, as republished on 8th August 2007 + implementing regulations
published on 2008

Law on Utility Models No. 350/12, December 2007

Government Ordinance No. 41/1998 on the fees in the industrial property protection field
and the conditions for using the same + amendments published on 4th January 2006

Law on transitional protection of patents for inventions (No. 93/13 May 1998)

Law on the Repression of Unfair Competition, published on 30 January 1991
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Utility Models

Utility Model Law No. 350/2007 + implementing regulations
Trademarks and Geographical Indications

Law No. 84/1998 on Marks and Geographical Indications + implementing regulations

Law No. 84/1998 on Trademarks and Geographical Indications as published in 2010

Government Ordinance No. 41/1998 on the fees in the industrial property protection field
and the conditions for using the same + amendments published on 4th January 2006
Industrial Designs

Design Law No. 129/1992 as republished in December 2007

Government Ordinance No. 41/1998 on the fees in the industrial property protection field
and the conditions for using the same + amendments published on 4th January 2006
Topographies of Semiconductor Products

Law No. 16 of 6th March 1995 on the protection of topographies of semiconductor
products, as republished on 5th December 2005

Law No. 16 of 6th March 1995 on the protection of topographies of semiconductor
products, as republished on 6th October 2006

Government Ordinance No. 41/1998 on the fees in the industrial property protection field
and the conditions for using the same + amendments published on 4th January 2006
New Plant Varieties

Law No. 255/1998 on the protection of new plant varieties + implementing regulations

Law no. 255/1998 on the protection of new plant varieties, republished on 26th January
2007

Government Ordinance No. 41/1998 on the fees in the industrial property protection field
and the conditions for using the same + amendments published on 4th January 2006
Unfair competition

Law No. 11/1991 on fighting against unfair competition
Other laws related to IPRs

The Criminal Code of Romania, republished in the Official Journal of Romania no. 65 of
16 April 1997, with subsequent amendments

The Criminal Procedure Code of Romania, republished in the Official Journal of
Romania no. 78 of 30 April 1997, with subsequent amendments.
1.3 Relevant Legislation on Organized Crime
Romania signed the United Nations Convention against Transnational Organized Crime (the
“Palermo Convention”) on 14 December 2000 and ratified it on 4 December 2002 together with
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. It
joined the Protocol against the Illicit Manufacturing of and Trafficking in Firearms, their Parts and
Components and Ammunition by accession on 16th April 2004. These international legal
instruments (except for the 3rd Protocol) were signed and ratified by Romania with the Law no
565/2002.
In 2005, Romania adopted the Convention of Council of Europe for fighting against trafficking in
human beings and in accordance with this Convention, Romania adopted G.D. No. 79/2005
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which modified and complete the Law No. 678/2001 on preventing and combating trafficking in
human beings.
The adoption of the national legislation involved a whole package of legislation coming into force
in 2001-2003. It enables the law enforcement agencies to take action for diminishing this
phenomenon of illegal migration, trafficking in human beings. It also harmonizes the Romanian
legislation and strategies with the European standards and proceedings in the field:

Law No. 678/2001 regarding prevention and combating trafficking in human beings;

Governmental Decision (G. D.) No. 1216/2001 for the approval of National Action Plan
for prevention and combating trafficking in human beings;

Law No.682/2002 regarding witness protection;

Law No. 565/2002 on ratifying UN Convention against Transnational Organized Crime
and Additional Protocols;

Law No. 39/2003 regarding prevention and combating organized crime;

G.D. No. 299/2003 on approval of the Regulation for implementation of the Law
678/2001.
Human trafficking, alongside drugs and weapons trafficking, were carefully scrutinised as they
were seen as a threat against humanity. The Law No. 678/2001 on prevention and combating
the trafficking in human beings was issued in 2001.
The domestic legislation has many provisions related to the Palermo Convention in various
national Laws including:

Law No. 21/1999 regarding the prevention and penalization of money laundering,
amended by Law 78/2000 on prevention, detection and penalization of the crimes of
corruption;

Law No. 143/2000 on fighting against drugs trafficking and use, establishes the
undercover investigator and regulates controlled deliveries and the Penal Procedure
Code that legalizes the interception of telephone calls and images;

Government Emergency Ordinance No. 105/2001 regarding the state border of
Romania; - Government Emergency Ordinance No. 112/2001 which penalizes certain
acts committed abroad by Romanian citizens or by any persons without citizenship
residing in Romania.
The General Directorate for Fighting against Organized Crime and Anti-Drugs is part of the
General Inspectorate of Police, Ministry of Interior. The General Directorate has structures both
at central and territorial level. There are Directorates for Fighting against trans-border criminality
within the General Inspectorate of the Border Police.
A section within the Public Ministry has been established to fight against corruption and
organized crime. The Prosecutor’s Office to the Supreme Court of Justice and services for
combating corruption and organized crime, function at the level of Public Prosecutor’s Office of
the Appeal Courts.
Since 2000, laws have been adopted regarding the organization and functioning of the police,
the fight against organized crime, witness protection, the fight against cybercrime and the fight
against trafficking in human beings. Furthermore, these laws were adopted to implement the
acquis communautaire. The legal interception of telecommunications is a very important
investigation technique in fighting against organized crime and corruption. In order to transpose
Council Resolution of 17th January 1995 on the legal interception of telecommunications,
legislation has been adopted regulating the technical rights, restrictions and obligations of all the
authorized offices, network operators and service providers in case of legal interceptions of
telecommunications.
Law No. 161/2003 on Certain Measures to Ensure Transparency in the Exercise of Public
Dignity, of Public Office and in the Business Environment, and to Prevent and Punish Corruption
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Law No. 161/2003 states in Article 57 that "access to a computer system, as well as interception
and recording of communications taking place through computer systems may be done when
they are useful for finding the truth, and when establishing the factual situation or if identifying
the perpetrators would be impossible based on any other evidence."
In justified cases, to prevent, detect or eliminate threats to national security, the State agencies
with competences in the field of national security may intercept and record communications,
according to Law No. 535/2004 to Prevent and Suppress Terrorism, based on an authorization
(warrant) issued by a judge.
According to the national legislation in this field, the word "communications", includes "signals
sent through wire, radio, optical fibre or any other electromagnetic means, including satellite
communications, fixed networks (with circuit or packet switching, including the Internet) and land
mobile networks, systems for the conveyance of electricity, to the extent that they are used in
order to send signals, networks used for transmitting audiovisual communication and TV cable
networks, regardless of the type of information that they convey" (G.O. No. 34/2002, Article 2
(a)).
Focus on Trademarks: Definitions and Conduct
The recently amended Law no. 84/1998 provides a more specific definition of a trademark. In
particular, according to the revised Article 2 of mentioned law, any sign capable of being
graphically represented and has a distinctive character may be considered a trademark. The list
of signs which can be considered as trademarks has been extended and now includes nontraditional trademarks and combinations of them. In fact, the list explicitly mentions that the
following can be considered as trademarks: words, including names of persons, drawings,
letters, figures, figurative elements, three dimensional shapes, especially the shapes of the
goods or their packaging, colours, combination of colours, holograms, sound signals as well any
combination of herein.
Article 3 of the same law also defines:

Renowned trademark: a sign which is widely recognised throughout Romania, especially
by the segment of the population specifically targeted by the goods and services bearing
the sign in question, even if the sign in question has not yet been registered as
trademark;

Collective trademark: when the trademark distinguishes goods and/or services which
belong to the members of an association from those of another;

Certificated trademark: certifies the quality of the materials used, the means of
manufacturing, precision and/or other characteristics of goods or services;
In Romania, the state authority in charge of processing the registration of trademarks is called
State Office for Inventions and Trademarks (OSIM).
The first natural or legal person to file an application for the registration of a trademark, under
the provision of the Trademark law, will be given the exclusive right over the trademark in
question.
Chapter III of “Application for trademark registration”, states that a request for the registration of
a trademark may be filed if sent by post and/or electronically, via e-mail, individually or jointly by
any person.
Under the new provisions, the opposing procedure in trademark registration has assumed a
relevant role for the protection of previously registered trademarks. The public is entitled to
submit observations and/or even object to the registration of the trademark on the “relative
grounds for refusal” within the three months following publication of an application for the
registration of a trademark. Every petition opposing registration of a trademark must be written,
motivated and presented along with proof of payment of the corresponding fee due by law. The
OSIM notifies the applicant on all related opposing petitions. During the three months following
such notification, the applicant has the right to present a report in defence of his/her request for
the trademark to be registered.
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The OSIM examines the application by appraising its merits and, within six months from the date
of publication, decides whether the trademark should be accepted for registration or rejected. If
the application for registration complies with the necessary requirements, the trademark will be
published in the Official Bulletin for Industrial Property within two months from the date of its
registration. The applicant receives certification of the registered trademark only after the fee
has been paid.
Once a trademark has been registered, the applicant is given the exclusive right over the
trademark.
The exclusive right to the trademark holder and the applicant (only after the publication of the
trademark) to file a request for action to prevent the unauthorised use of their trademark in
commercial activities by third parties are given by Article 35 and Article 36 of the Trademark Law
respectively. Infringement of the right of protection for a trademark consists of the unlawful use,
in the trading phase, of:

a sign identical to the registered trademark on goods and/or services for which the
trademark is registered;

a sign identical or similar to a registered trademark and placed on identical and/or similar
goods, if a likelihood of misleading the public and the risk that the public may associate
the sign with a registered trademark, exists;

a sign, identical or similar to a trademark, placed on goods or services other than those
for which the trademark is registered.

In particular, under Article 35, par. 3, it is considered infringement of the trademark law:

affixing a registered trademark to goods or the packaging without the consent of the
rightful holder of the trademark;

to offer and/or sell products bearing a registered trademark without the consent of the
rightful holder of the trademark; or possess products bearing a registered trademark with
the intent to offer or perform services under the trademark in question without the
consent of the rightful holder of the trademark.
The revised Article 83 of the Trademarks and Geographical Indications Law considers
infringement, the following:

the unlawful performance of any act provided for in Article 35, which is considered civil
infringements;

acts infringing provisions of Articles 9-11 of the Community Trademark Regulation.
It is to be noted that Article 86 has been repealed. Hence, the use of trademarks and/or of
geographical indications considered to be against fair practice implemented in industrial or
commercial activities and intended to mislead consumers is no longer punishable by a term of
imprisonment from 1 month to 2 years.
2.1 Romania and the other EU Member States
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Recent statistics by TAXUD provide an overview of the number of suspect counterfeit articles
intercepted in the period 2006-2009.
Source: European Commission, Taxation and Customs Union, “Report on EU Customs Enforcement of
IPRs. Results at the EU Border-2009”, p.19
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Source: European Commission, Taxation and Customs Union, “Report on EU Customs Enforcement of
IPRs. Results at the EU Border-2009”, p.12i
2.2 Cases in Romania
 24 August 2010, “Romanian Customs Seize Chanel, Prada, Puma, Gucci, Hugo Boss,
Adidas Counterfeits”
During regular controls in the period between 8 July and 17 August 2010, the Romanian
customs officials at the port of Constanta seized a considerable quantity of goods believed to be
counterfeit, bearing the labels of well-known brands and worth over EUR 600,000 (USD
761,000).The items were shoes, backpacks, pants and baby clothes, originating in China and
were intended for companies in Hungary, Bulgaria and Moldova.
On 26 July, the customs officials seized a considerable quantity of counterfeit goods at a
shopping centre in Bucharest. They seized more than 2,000 clothing articles, 551 pairs of
sneakers and 931 perfume bottles.
(Source: Romanian Customs)
 21 July 2010, “Romanian Customs Seize Puma, Adidas, Nike, Disney Counterfeits”
During regular controls in the period between 9 June and 2 July, 2010, the Romanian customs
officials seized a considerable quantity of goods believed to be counterfeit, bearing the labels of
well-known brands, worth approximately EUR 1,250,000 (USD 1,600,000). The seizures took
place in various locations, namely in Giurgiu on 9 June, in Bechet on 14th June, at the port of
Constanta between 21 June and 1 July 2010 and in Calafat on 2 July.
(Source: Romanian Customs)
 23 June 2010, “Romanian Customs Seize Adidas, Nike, Armani Counterfeits”
During regular controls in the period between 21 May and 3 June 2010, the Romanian customs
officials seized a considerable quantity of goods believed to be counterfeit, bearing well-known
brand labels, worth approximately EUR 1,000,000 (USD 1,225,797). On 21 May the customs
officials in collaboration with members of the police ran a regular control at a commercial centre
in Bucharest, the outcome of which was the seizure of 15,885 items believed to be counterfeit,
including 13,347 clothing articles, 1,068 pairs of sneakers, 1,466 perfumes and cosmetic
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products and four wristwatches. On the same day, the customs inspectors at the port of
Constanta, on the western coast of the Black Sea, seized 20,728 items believed to be
counterfeit, including games and toys such as electric motorcycles, dolls, ponies, puzzles,
stickers, drums, playing cards, plastic laptops, minicomputers and plastic football game sets.
On 26 May the officials at the port of Constanta seized 3,258 pairs of shoes and 2,160
cardboard toys. On 28 May the officials seized 9,120 pairs of clogs, cardboard and plastic toys
on 1 June and 8,160 clothing items on 3 June. The goods were discovered in containers
originating in China and intended for companies in Romania.
(Source: Romanian Customs)
 26 April 2010, “Romania Customs Seize EUR 3,434,733 Worth of Counterfeit Goods”
During regular controls between 1 March and 31 March 2010, the customs officials at Romania’s
port of Constanta, on the western coast of the Black Sea, seized items bearing top brand
names, believed to be counterfeit, worth approximately EUR 3,434,733 (USD 4,671,952). The
seized goods include 9,500 pairs of shoes, 16,188 clothing items (jackets, caps, T-shirts),
17,050 sportswear items (shorts and T-shirts), 7,488 pairs of leggings, 8,000 leather articles
(bags, wallets, key chains), 13,790 balls, 214 printer cartridges, 416 furniture parts and 10,000
zippers.
(Source: Romanian Customs)
 30 March 2010, “Number of Seized Counterfeit Goods in Romania Triples in 2009 Compared
to 2008”
The Romanian Customs have reported that the number and the value of seized counterfeit
goods greatly increased in 2009 compared to 2008 – 70,076,524 items worth EUR 91,230,000
(USD 125,743,216) were confiscated in 2009 compared to 21,411,728 items worth EUR
41,686,277 (USD 57,471,797) the year before.
The majority of confiscated items originated in China, Turkey, Ukraine and the Republic of
Moldova. Cigarettes were the most prevalent fake goods seized in 2009 (67,564,860 pieces),
followed by clothing (1,792,589 items) and cigarette lighters (298,000 items).It has been noted,
however, that certain counterfeit items were less frequently seized in 2009 than in 2008. For
instance, in 2008, 433,903 cosmetic products were seized whereas in 2009 242,284 were
seized. The same applies to footwear (296,116 pairs in 2008; 99,783 in 2009), leather products,
pharmaceutical products and car parts.
In 2009, new forms of counterfeit items were also discovered during inspections, most notably
printer cartridges, jewellery, water filters and even nail files, which were not on the list in 2008.
(Source: Romanian Customs)
 30 March 2010, “Romanian Customs Seize Burberry, Disney, Armani, Nike, Boss
Counterfeits”
During regular controls at the borders from 19 February to 2 March 2010, the customs officials
confiscated various products carrying big brand names, believed to be counterfeit, worth
approximately EUR 2.7 million (USD 3.7 million). Between February 19 and 22, the officials at
the port of Constanta, on the western coast of the Black Sea, seized balls, sneakers and socks,
all discovered in containers originating in China.
On 1 March 2010, officials in the town of Siret, North-eastern Romania, seized various textile
products. The products originated in Turkey and were intended for a company in Ukraine. On 2
March 2010, the customs inspectors in the town of Varsand, in North-western Romania, seized
various textile products, discovered in a truck driven by a Turkish citizen.
(Source: Romanian Customs)
 23 February 2010, “Ten Percent of Car Parts in Romania Counterfeit”
At a press conference on 15 February 2010 Jean Francois Martin the quality and services
manager of Dacia, the Romanian subsidiary of Renault, stated that 10% of car parts on the
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Romanian market are counterfeit and that this had caused EUR 5 million (USD 7 million)
damage to Renault in 2009. During the previous year and a half, the Romanian customs and
border police seized almost 25,000 counterfeit Dacia car parts.
The Romanian Customs reported that there was an increase in counterfeit auto parts by 2005
within a year. Out of the 70 million products seized in 2009, the auto parts accounted for less
than 1%. Most of the seized car parts originated in China, Bulgaria and Turkey.
(Source: Financiarul.ro)
 23 February 2010, “Romanian Customs Seize EUR 160,000 Worth of Counterfeit Goods”
The Romanian Customs officials at the port of Constanta, on the western coast of the Black
Sea, seized goods suspected of being counterfeit worth approximately EUR 158,969 (USD
219,096). The confiscated goods included 78,082 glass containers bearing various marks. The
containers, used for storing fake cosmetics, originated in China and were intended for a
company located in Poland.
In an activity report published on its website, the Romanian Customs announced that in 2009
the customs officials confiscated 60,959,923 counterfeit items, worth approximately EUR
80,500,000 (USD 112,000,000).
(Source: Romanian Customs)
 20 January 2010, “Romanian Customs Seize Counterfeit Adidas and Juventus Sweatshirts”
On 14 December 2009, the Romanian Customs officials at the port of Constanta, seized
suspected counterfeit goods worth approximately EUR 204,500 (USD 296,435), which were
intended for a company in Romania. The seized goods included 2,500 sweatshirts and
tracksuits bearing Adidas and Juventus (Italian soccer club) marks.
(Source: Romanian Customs)
 22 December 2009, “Romanian Customs Seize 20 Tonnes of Fake Perfume”
On 29th November 2009, the Romanian Customs at the border crossing with Hungary in the
town of Varsand in western Romania seized, a truck containing 20 tonnes of counterfeit perfume
bottles, being driven by a Bulgarian citizen. According to the documents presented by the driver,
the goods originated from Turkey and were intended for a company in Poland.
(Source: Romanian Customs)
 21 October 2009, “Romanian Customs Seize 7,000 Counterfeit FIFA Soccer Balls”
On 30 September 2009, the Romanian Customs seized EUR 290,000 (USD 425,000) worth of
goods believed to be counterfeit. The seized items included 7,269 soccer balls bearing the
International Federation of Football Association (FIFA) sign. The customs officials at the port of
Constanta on the Black Sea discovered the counterfeit balls, in a container originating from
Pakistan and intended for a company located in Ukraine.
(Source: Romanian Customs)
 21 July 2009, “Romanian Customs Seize Counterfeit Adidas, Dior, Lacoste and Nike Items”
In the period between 29 June and 4 July 2009, Romanian customs officials seized two loads of
various counterfeit goods. On 29 June 29 2009, the customs officials found 3,613 pairs of
counterfeit Adidas sports shoes, and 6,418 items of counterfeit Nike sportswear. The goods,
worth EUR 350,000 (USD 487,113), were discovered in Bechet in southern Romania, in a truck
driven by a Bulgarian citizen. According to the documents presented to the customs officials, the
goods originated in Singapore and were intended for a company in the Netherlands.
On 4 July 2009, the customs officials seized approximately 37,900 litres of counterfeit Chanel,
Dior, Dolce & Gabbana, and Lacoste perfume. The seized goods were discovered in Varsand in
North-western Romania, in two trucks coming from Turkey. They were intended for a company
in Germany.
(Source: Romanian Customs)
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 25 June 2009, “Romanian Customs Seize Counterfeit Adidas, Armani, Chanel, Lacoste and
Nike Goods”
The Romanian Customs recently seized two loads of counterfeit goods. The first load was
confiscated on 15 June 2009, when customs officials discovered 6,000 pairs of counterfeit
Adidas sports shoes worth EUR 290,000 (USD 401,471). The customs found the counterfeit
goods at the town of Bechet in southern Romania. The goods were discovered in a truck driven
by a Bulgarian citizen. The second load was discovered on 2 June 2009 in the town of Varsand,
in North-western Romania, in a truck driven by a Greek citizen. This load contained various
counterfeit goods worth approximately EUR 86,400 (USD 119,928). The load included 519
bottles of perfume and 1,534 pairs of sport shoes, bearing various trademarks.
(Source: Romanian Customs)
 12 May 2009, “Romania Destroys 150,000 Pirated CDs, DVDs and VHS Tapes”
To mark the Intellectual Property Day on 26 April 2009, the Romanian Copyright Office (ORDA)
organized a public destruction of approximately 150,000 pirated CDs, DVDs and VHS cassettes
with music, films and computer programmes in downtown Bucharest. Officials also destroyed
approximately 200 hardware items. The value of destroyed goods was estimated at about EUR
238,000 (USD 319,044). The goods were seized from more than 1,000 persons who had either
produced or marketed them.
(Source: Romanian Customs)
 14 April 2009, “Romanian Customs Seize Counterfeit Toys and Cosmetics Worth EUR
142,700”
The first seizure took place on 27 March 2009 at the port of Constanta, when customs officers
discovered 2,045 plastic toy cars and motorcycles, bearing various trademarks. Their value was
estimated at approximately EUR 25,700 (USD 34,000). On the second occasion, on 1 April
2009, the customs officers seized 12,090 counterfeit cosmetic products of various famous
trademarks, worth approximately EUR 117,000 (USD 155,000). In both instances, the
counterfeit goods were found in containers shipped from China.
(Source: Romanian Customs)
3 Remedies and Actions Against Counterfeiting:
3.1 Border Measures
Under Article 91 of the law concerning Trademarks and Geographical Indications, the General
Department of Customs has been nominated as the State authority in charge of guaranteeing
the protection of registered trademarks and geographical indications.
The Law on Measures to Enforce IP rights Within Customs Proceedings, Law No. 344/2005, in
accordance with the Regulation 1383/2003 allows:

Ex officio measures: when the customs office has sufficient grounds for suspecting

Preventive application for action: according to Article 5 of the Regulation, the registered
owner of a trademark, the person authorized to use the trademark or their
representatives may file a request for action, valid for one year. This request allows
customs authority to seize any goods suspected of infringing the recorded rights when
imported in, or exported from, Romania. When customs suspend the release of
suspected goods, they inform the right-holder who has to decide whether to initiate civil
or criminal proceedings.

Simplified procedure: when the right holder confirms that the seized goods are
counterfeited and the importer, the holder or the designee of the goods does not
goods that infringe rights, they may suspend the release of the goods or detain them.
Subsequently, Customs will inform the owner of the allegedly infringed IP right, the
importer, holder or designee of the goods.
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expressly object to destruction of the seized goods, the customs authorities may destroy
the alleged infringing goods. The operation is carried out only by companies approved by
authorities, at the expense of the rightful owner of the trademark. As such actions are
often costly, the rightful owners of trademarks tend to choose this procedure only if the
quantity of seized goods to be destroyed is significant.
3.2 Civil Sanctions
In order to enhance the quality of the judicial decision, Bucharest Tribunals have the exclusive
jurisdiction over trademark cancellation and revocation cases. Furthermore, special panels have
also been created at the Bucharest Court of Appeal and the High Court of Justice and
Cassation.
Due to its entrance into the EU, Romanian anti-counterfeiting legislation has become more rigid
in recent years. Government Ordinance on Enforcing IP Rights, No. 100/2005, which
implements the Directive 2004/48 allows the owner to request the following responses:
 Preliminary measures: under Article 9, in order to prevent any other violation, when there is a
suspicion of infringement of an IPR, the complainant may request an interim injunction against
the infringer or against an intermediary whose services are used by the infringer. The competent
authority may also order the imposition of a guarantee intended to ensure the compensation of
the owner. When the injured party proves the existence of circumstances that could make the
recovery of damages impossible, the competent court could order the blocking of bank accounts
and other goods in possession of the alleged infringer. The release of the banking, fiscal or
commercial documents could also be ordered. When any delay is liable to cause irreparable
prejudice to the trademark’s owner, the president of the court can dispose provisional measures
inaudita altera parte, with an immediate communication to the parties involved.
 Proceedings on merits: When an infringement is established, the registered owners can
obtain the following corrective measures:

A cease and desist order by a presidential order. The violation of the forbidding measure
will be considered a new violation of the protected trademark.

Article 11 allows for a court ruling to order the removal of counterfeited goods from
commercial district networks and/or from commercial circuits. This article also allows for
the destruction of counterfeited goods, as well as of the materials used in the
manufacturing of such goods. All expenses are to be paid by the offender/infringer.
The court ruling should take into account the proportionality between the severity of the act and
the corrective measures applied. Article 13 of the same law states that if the offender/infringer
acted unintentionally then he/she may ask for the right to compensate the injured party for the
damage caused by his/her actions, as by acting unintentionally the execution of the measures
cause a disproportional prejudice and the payment of the compensation is reasonably
satisfactory;

Damages: the injured party may claim damages-interests corresponding to the prejudice
the party suffered as a result of the violation of its rights. Beside damages, when the
infringer acts intentionally, the court may rule income coverage.

Broadcast information regarding the court ruling as a partial or integral part of the
ordinance, on request of the injured party and expenses covered by the
offender/infringer. The party who loses the case is obliged to bear all legal expenses,
including those for the court hearing and those accumulated by the winning party.
It is important to note that Government Ordinance No. 731 of 4th July 2007 provides a procedure
for the destruction of goods which infringe an IPR. Under Article 34, the rightful owner of the
trademark whose rights have been violated may appoint a commission consisting of one
representative from the General Directorate for Public Finance in the county.
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In Bucharest the commission consists of: one representative of the holder of the goods; one
representative of the General Police Inspectorate of the county or the General Police Directorate
from Bucharest; one representative from the Consumer Protection Office of the county or of
Bucharest and; one representative from the Environmental Protection Agency in the county.
Once formed, the commission will decide on a location where the destruction of the
counterfeited goods is to take place. If necessary, specialised services for the destruction of the
goods will be used. Once the counterfeited goods have been destroyed, the commission must
complete a destruction report, 3 copies of which must then be signed by each commission
member.
Civil measures have been adopted regarding copyright to protect the copyright holder. Article
139 of the Law 8/1996 provides that the owners of copyright may:

claim damages for the redressing of the prejudice caused (Article 139 (1));

demand immediate measures to be taken for preventing the imminent occurrence of
damage through the violation of a right, for ensuring the remedy of the damage or for
maintaining evidence (article 139 (3));

ask for the seizure of objects and documents that may constitute evidence of the
infringing of copyright or neighbouring rights (article 139 (10));

apply for the ordering of the remittance of the proceeds from unlawful deed (article 139
(14);

apply for the destruction or removal of the illegally made copies or equipment and means
intended for the perpetration of the unlawful deed (article 139 (14)).
In establishing the damages, the court considers criteria such as the negative economic
consequences or whether they represent triple the amounts that would have been lawfully owed
for the type of use that made the object of the illicit deed (article 139(2)).
3.3 Criminal sanctions
After negotiations concerning Romania’s entry into the EU, Romania sought to improve state
activities carried out by the police and the Prosecutor’s Office. As a result, a specialized
department was created to prevent counterfeiting and the infringement of IPRs.
Whoever commits an offence under Article 83 shall be sentenced to a term of imprisonment
from 6 months to 5 years.
If the crime committed jeopardises the health and/or safety of the consumers, the
offender/infringer shall be sentenced to a term of imprisonment from 2 to 10 years and the
disentitlement of specific rights.
When an offender is found guilty of having carried out activities which involve the counterfeiting
of goods, the rightful owner of the associated trademark may present a claim to the court asking
that the offender/infringer pay the damages sustained due to losses borne by the rightful owner
of the trademark, along with payment for all expenses incurred by the Romanian State during
the criminal proceedings.
The revised paragraph 1 of Article 84 of Trademarks Law permits criminal investigation offices
to request the implementation of ex officio measures during the preliminary procedure in order
to deter the trade in products bearing counterfeited trademarks and safeguard evidence. During
the investigative stage of criminal proceedings, the Prosecutor assigned to the case may order
the seizure of counterfeits, assets and bank accounts of alleged infringers.
Since it is thought that the State suffers most damages as a result of counterfeiting activities,
proceedings are conducted by State institutions. Consequently these criminal proceedings tend
to be slower than civil proceedings and the time required to complete investigation takes an
average of three to six months.
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The rightful owners of trademarks which have been counterfeited, therefore, tend to opt for
criminal proceedings, particularly when they lack information on the infringer and/or when there
is a major case of infringement. In cases where there is insufficient information, article 90 allows
the trademark owners, as well the Ministry of Agriculture and Rural Development, to file a
request in court asking that the individual(s) accused of violating the IPR be compelled to
provide information regarding the origin and the commercial network of the unauthorised
distribution of the alleged counterfeits; the name of manufacturers and/or traders and the
quantity of the product manufactured, delivered or ordered.
Criminal remedies also exist in the case of copyright infringement. The Court may make the
following sentences:

imprisonment;

criminal fine;

seizure or destruction of the goods or remedies for the injured party.
Pirated goods are pieces of evidence which prove a criminal offence. The pieces of evidence
are governed by articles 94-95 of Criminal Procedure Code of Romania.
During the criminal proceedings (but not in the preliminary procedure), the prosecutor may order
security measures for the pirated goods in order to assure a remedy for the injured party.
If the criminal proceeding is completed, the prosecutor will refer the case to the court. The court
may impose an imprisonment or a criminal fine. The court may also order for the seizure and
destruction of the goods and award remedies for the injured party.
In the Romanian judicial system, the penal regulations are also applied for the legal individuals if
the criminal offence was carried out on behalf of, or for the benefit of that legal person. The
criminal liability of the legal person does not exclude the criminal liability of the natural person
who committed the same criminal offence.
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LEVEL OF CRIMINAL PENALTIES IN CASES OF INFRINGEMENT OF IPR
Copyright
Legal
Basis
Constituent Elements Of The
Offence
Nature And Level Of The Penalty
Aggravating Circumstances
Nature And Level Of Penalties
Assistance To Investigations By The Rights
Owners
Complaint
Needed For
Public Action
Art.139
-Making of pirated goods for
distribution without aiming
directly or indirectly material
benefits;
-Imprisonment from 2 to 5 years;
-commercial purpose141 is
sanctioned with imprisonment
from 3 to 12 years;
-Measures to prevent the imminent
occurrence of damage through the violation
of a right;
no complaint
needed
-involvement of an organized
criminal group is sanctioned
with imprisonment from 5 to 15
years;
-Measures to ensure the remedy of the
damage (on movable and immovable
assets);
§§
1,3, 6,7;
Law No.
8/1996
-Placing of the pirated goods
under a final import or expert
regime, a suspensive customs
regime or in free zones;
-Introduction of pirated goods
in the domestic market
whatsoever.
-fine 100 to 50,000 RON for natural persons;
2,500 to 2,000,000 RON for legal persons.
Other complementary penalties against legal
persons:
-dissolution;
-suspension from 3 months to 1 year of the whole
activity or suspension from 3 months to 3 years
of one of the activities related to the committed
offence;
-shutting down certain local offices from 3
months to 3 years;
-cause of very serious
consequences142 is
sanctioned with imprisonment
from 5 to 15 years.
-Devolve upon competent authorities the
goods suspected for violation of a right
granted by Law 8/1996 to prevent their
introduction in the commercial circuit;
-Owners of the presumably infringed rights
or their representatives are entitled to
participate in the enforcement of the
measures taken to ensure the evidence or
establish the facts.143
-interdiction of participating to public procurement
procedures for a period from 1 to 3 years;
-publication or dissemination of the conviction
judgment.
141
For the purposes of the Law on Copyright and Related Rights, commercial purpose means aiming at obtaining, directly or indirectly, an economic or material benefit. The
commercial purpose shall be presumed if the pirated good is identified at the headquarters, working locations, in the annexes thereof or in the means of transport used by the legal
persons that have in their object of activity the reproduction, distribution, rental, storing or transport of products involving copyright or related rights (Art. 139, §§ 9 and 10 of Law No.
8/1996).
142
“Very serious consequences” means a material damage bigger than 200,000 RON or a very serious disorder in the activity performed by a public authority or by any other
entities mentioned in article 145 of the Criminal Code or by another legal or natural person (Art. 146 of the Criminal Code). In order to evaluate the seriousness of the consequences, the
calculation of the material damage is made by taking into account the identified pirated good and the price per unit of the original products, cumulated with the amounts illegally earned
by the offender (Art. 139, §6 of Law No. 8/1996).
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Art.139,
§§
2,3,6,7
-Offer, distribution, possession,
storage and transportation for
the purpose of distribution;
Law No.
8/1996
- Possession of pirated goods
for the purpose of using them
by public communication at the
working locations of the legal
persons.
-Imprisonment from 1 to 5 years;
-Fine 100 to 50,000 RON for natural persons;
2,500 to 2,000,000 RON for legal persons (+
other complementary penalties for legal persons
mentioned above)
-commercial purpose is
sanctioned with imprisonment
for 3 to 12 years;
-Measures to prevent the imminent
occurrence of damage through the violation
of a right;
-involvement of an organized
criminal group is sanctioned
with imprisonment for 5 to 15
years;
-Measures to ensure the remedy of the
damage (on movable and immovable
assets);
-cause of very serious
consequences is sanctioned
with imprisonment for 5 to 15
years.
no complaint
needed
-Devolve upon competent authorities the
goods suspected for violation of a right
granted by Law 8/1996 to prevent their
introduction in the commercial circuit;
-Owners of the presumably infringed rights
or their representatives are entitled to
participate in the enforcement of the
measures taken to ensure the evidence or
establish the facts (+ the general provisions
mentioned in fn.5).
143
In addition, the Criminal Procedure Code contains the following general provisions, applicable to all offences: (1) the possibility for all parties to assist to the following
investigation acts: Field investigation - according to the Art. 129, § 2 of Criminal Procedure Code “…The investigation is performed in the presence of the parties, when necessary.”; Field
reconstruction of the way and conditions in which the deed has been committed (Art. 130, § 2 of Criminal Procedure Code); Expertise (Art. 120, § 4 of Criminal Procedure Code); (2) the
rights of parties’ defenders to assist all investigation acts which imply the hearing or the presence of the parties that are defended and to draw up claims and memories (Art. 173 of
Criminal Procedure Code). These provisions are applicable in case of all infringements of copyright, rights related to copyright and sui generis rights of a database maker.
79
Reference Text for Trainers
Art.139,
§§4,6,7
-Rental or offer for rental of
pirated goods.
Law No.
8/1996
Imprisonment from 3 to 12 years (+ other
complementary penalties for legal persons
mentioned above)
-involvement of an organized
criminal group is sanctioned
with imprisonment for 5 to 15
years;
-cause of very serious
consequences is sanctioned
with imprisonment for 5 to 15
years.
-Measures to prevent the imminent
occurrence of damage through the violation
of a right;
no complaint
needed
-Measures to ensure the remedy of the
damage (on movable and immovable
assets);
-Devolve upon competent authorities the
goods suspected for violation of a right
granted by Law 8/1996 to prevent their
introduction in the commercial circuit;
-owners of the presumably infringed rights or
their representatives are entitled to
participate in the enforcement of the
measures taken to ensure the evidence or
establish the facts (+ the general provisions
mentioned in fn.5).
Art.139,
§§5,7,
Law No.
8/1996
-Promotion of pirated goods by
any means and any modalities,
including the use of public
announcements or electronic
means of communication or by
public exhibition or
presentation of lists or
catalogues of such products.
- Imprisonment from 6 months to 3 years;
-Fine 100 to 50,000 RON for natural persons;
2,500 to 2,000,000 RON for legal persons (+
other complementary penalties for legal persons
mentioned above)
-Involvement of an organized
criminal group is sanctioned
with imprisonment for 5 to 15
years.
-Measures to prevent the imminent
occurrence of damage through the violation
of a right;
no complaint
needed
-Measures to ensure the remedy of the
damage (on movable and immovable
assets);
-Devolve upon competent authorities the
goods suspected for violation of a right
granted by Law 8/1996 to prevent their
introduction in the commercial circuit;
-Owners of the presumably infringed rights
or their representatives are entitled to
participate in the enforcement of the
measures taken to ensure the evidence or
establish the facts (+ the general provisions
mentioned in fn.5).
80
Reference Text for Trainers
Art.139,
Law No.
8/1996
-Refusal to declare the source
of the pirated goods or of the
pirated access control devices
used for conditioned access
programme services
- Imprisonment from 3 months to 2 years;
/
-Fine 100 to 50,000 RON for natural persons;
2,500 to 2,000,000 RON for legal persons (+
other complementary penalties for legal persons
mentioned above)
-measures to prevent the imminent
occurrence of damage through the violation
of a right;
no complaint
needed
-measures to ensure the remedy of the
damage (on movable and immovable
assets);
-devolve upon competent authorities the
goods suspected for violation of a right
granted by Law 8/1996 to prevent their
introduction in the commercial circuit;
-owners of the presumably infringed rights or
their representatives are entitled to
participate in the enforcement of the
measures taken to ensure the evidence or
establish the facts (+ the general provisions
mentioned in fn.5).
Art.139,
Law No.
8/1996
-making available to the public,
including through the Internet
or other computer networks,
without the consent of the right
owners, products involving
copyrights (…) or copies thereof
regardless the physical
storage medium, so that the
public may access them from
any place and at any time,
individually chosen by them.
- Imprisonment from 1 to 4 years;
-Fine 100 to 50,000 RON for natural persons;
2,500 to 2,000,000 RON for legal persons (+
other complementary penalties for legal persons
mentioned above)
/
-measures to prevent the imminent
occurrence of damage through the violation
of a right;
no complaint
needed
-measures to ensure the remedy of the
damage (on movable and immovable
assets);
-devolve upon competent authorities the
goods suspected for violation of a right
granted by Law 8/1996 to prevent their
introduction in the commercial circuit;
-owners of the presumably infringed rights or
their representatives are entitled to
participate in the enforcement of the
measures taken to ensure the evidence or
establish the facts (+ the general provisions
mentioned in fn.5).
81
Reference Text for Trainers
Art.139,
Law No.
8/1996
-unauthorized reproduction of
computer programmes on
computer systems in any
through installation, storing,
running or execution,
displaying or transmission
within the internal network
-Imprisonment from 1 to 4 years;
/
-Fine 100 to 50,000 RON for natural persons;
2,500 to 2,000,000 RON for legal persons (+
other complementary penalties for legal persons
mentioned above)
-measures to prevent the imminent
occurrence of damage through the violation
of a right;
no complaint
needed
-measures to ensure the remedy of the
damage (on movable and immovable
assets);
-devolve upon competent authorities the
goods suspected for violation of a right
granted by Law 8/1996 to prevent their
introduction in the commercial circuit;
-owners of the presumably infringed rights or
their representatives are entitled to
participate in the enforcement of the
measures taken to ensure the evidence or
establish the facts (+ the general provisions
mentioned in fn.5).
Art.141,
Law No.
8/1996
-unlawfully claim of the
authorship of a work or the
disclosure of a work to the
public under another name
than the one decided by the
author.
-Imprisonment from 3 months to 5 years;
-Fine of 2,500 to 50,000 RON (+ other
complementary penalties for legal persons
mentioned above)
/
-measures to prevent the imminent
occurrence of damage through the violation
of a right;
no complaint
needed
-measures to ensure the remedy of the
damage (on movable and immovable
assets);
-devolve upon competent authorities the
goods suspected for violation of a right
granted by Law 8/1996 to prevent their
introduction in the commercial circuit;
-owners of the presumably infringed rights or
their representatives are entitled to
participate in the enforcement of the
measures taken to ensure the evidence or
establish the facts (+ the general provisions
mentioned in fn.5).
82
Reference Text for Trainers
Art.143,
§§ 1 and
2, Law
No.
8/1996
- the unlawful production,
import, distribution, rental, offer
for sale or rent, or possession
for commercial purposes of
devices or components that
allow the neutralization of the
technological protection
measures or perform services
which lead to the neutralization
of some technological
protection measures, including
in the digital environment;
- the removal or modification of
any electronic information
regarding the applicable
copyright (…) regime from the
works or other protected
products for commercial
purposes without the
permission of the rights
owner;.the distribution, import
for distribution, radio broadcast
or public of works or other
protected products from which
any electronic information
regarding the applicable
copyright or related rights
regime has been removed or
modified without authorization,
so that anybody can access by
means of digital technology
-Imprisonment from 6 months to 3 years;
- Fine 100 to 50,000 RON for natural persons;
2,500 to 2,000,000 RON for legal persons (+
other complementary penalties for legal persons
mentioned above)
/
-measures to prevent the imminent
occurrence of damage through the violation
of a right;
no complaint
needed
-measures to ensure the remedy of the
damage (on movable and immovable
assets);
-devolve upon competent authorities the
goods suspected for violation of a right
granted by Law 8/1996 to prevent their
introduction in the commercial circuit;
-owners of the presumably infringed rights or
their representatives are entitled to
participate in the enforcement of the
measures taken to ensure the evidence or
establish the facts (+ the general provisions
mentioned in fn.5)
83
Reference Text for Trainers
Rights related to Copyright
legal
basis
constituent elements of
the offence
nature and
penalty
level
of
the
aggravating
circumstances
nature
and
level
assistance to investigations
by the rights owners
complaint
needed
for public action
of penalties
Art.
<0}139
Law No.
8/1996
Making available to the public,
including through the Internet or
other computer networks, without
the consent of the right owners, of
products involving (…) related rights
(…) or copies thereof, regardless the
physical storage medium, so that the
public may access these products
from any place and at any time,
individually chosen by them.
-Imprisonment from 1 to 5
years;
-Fine 100 to 50,000 RON for
natural persons; 2,500 to
2,000,000 RON for legal
persons.
Other
penalties
persons:
complementary
against
legal
- dissolution;
- suspension from 3 months
to 1 year of the whole
activity or suspension from 3
months to 3 years of one of
the activities related to the
committed offence;
/
- measures to prevent the imminent occurrence of
damage through the violation of a right;
no
complaint
needed
- measures to ensure the remedy of the damage
(on movable and immovable assets);
-devolve upon competent authorities the goods
suspected for violation of a right granted by Law
8/1996 to prevent their introduction in the
commercial circuit;
- owners of the presumably infringed rights or their
representatives are entitled to participate in the
enforcement of the measures taken to ensure the
evidence or establish the facts (+ the general
provisions mentioned in fn.5).
- shutting down certain local
offices from 3 months to 3
years;
- interdiction of participating
to
public
procurement
procedures for a period from
1 to 3 years;
-publication or dissemination
of the conviction judgment.
84
Reference Text for Trainers
Art
<0}140
Law No.
8/1996
Acts committed without the
authorization of the rights owner:
-Imprisonment from 1 month
to 2 years;
a) reproduction of works or products
involving related rights;
-Fine 100 to 50,000 RON for
natural persons; 2,500 to
2,000,000 RON for legal
persons (+ other
complementary penalties for
legal persons mentioned
above)
b) distribution, rental or import, on
domestic market, of copies of works
or products involving related rights,
other than those of the pirated
goods;
/
- measures to prevent the imminent occurrence of
damage through the violation of a right;
no
complaint
needed
- measures to ensure the remedy of the damage
(on movable and immovable assets);
- devolve upon competent authorities the goods
suspected for violation of a right granted by Law
8/1996 to prevent their introduction in the
commercial circuit;
- owners of the presumably infringed rights or their
representatives are entitled to participate in the
enforcement of the measures taken to ensure the
evidence or establish the facts (+ the general
provisions mentioned in fn.5).
c) communication to the public of
the works or products involving
related rights;
d) broadcasting of works or products
involving related rights
e) cable retransmission of the works
or products involving related rights;
f) making of derivative works;
g) recording of performances or
radio or television broadcasts for
commercial purpose;
- infringement of Art. 134
- the unlawful production, import,
distribution or rental, offer for sale or
rent, or possession for commercial
purposes of devices or components
that allow the neutralization of the
technological protection measures or
performs services which lead to the
neutralization of some technological
protection measures, including in the
digital environment;
imprisonment from 6 months
to 3 years; fine 100 to 50,000
RON for natural persons;
2,500 to 2,000,000 RON for
legal persons
(+
other
complementary
penalties for legal persons
mentioned above)
/
- measures to prevent the imminent occurrence of
damage through the violation of a right;
no complaint
needed
- measures to ensure the remedy of the damage
(on movable and immovable assets);
- devolve upon competent authorities the goods
suspected for violation of a right granted by Law
8/1996 to prevent their introduction in the
commercial circuit;
- owners of the presumably infringed rights or
their representatives are entitled to participate in
the enforcement of the measures taken to ensure
the evidence or establish the facts
85
Reference Text for Trainers
(+ the general provisions mentioned in fn.5).
- the deed of a person who, without
having the consent of the right
owner and knowing or having to
know that in this way he/she
permits, facilitates, causes or hides
an infringement of a right provided
for by the present law:
/
a) removes or modifies, for
commercial purposes, from the
works or other protected products
any electronic information regarding
the applicable (…) related rights
regime;
b) distributes, imports for
distribution, radio broadcasts or
publicly communicates or available
to the public works or other
protected products from which any
electronic information regarding the
applicable (…) related rights regime
has been removed or modified
without authorization, so that
anybody can access them in any
place and at any time individually
chosen by them, without having the
right to do so, by means of digital
technology.
86
Reference Text for Trainers
Sui generis right of database maker
legal basis
constituent elements of the
offence
nature and level of the penalty
Art.139, Law No.
8/1996
making available to the public
products involving (…) sui generis
rights of the makers of databases
or copies thereof regardless the
physical medium and including
through the Internet or other
computer networks, without the
consent of the owners of rights,
so that the public may access
them from any place and at any
time
imprisonment from 1 to 4 years; fine
100 to 50,000 RON for natural
persons; 2,500 to 2,000,000 RON for
legal persons (+ the provisions for
legal persons mentioned in fn. 2).
illicit production, import,
distribution, possession,
installation, maintenance or
replacement of the access control
devices, either original or pirated
ones, used for the conditioned
access programme services
- imprisonment from 2 to 5 years; fine 100 to 50,000 RON for natural
persons; 2,500 to 2,000,000 RON for
legal persons (+ the provisions for
legal persons mentioned in fn. 2).
Art.141, §§ 1 and
5, Law No.
8/1996
aggravating
circumstances
nature and level
of penalties
assistance to investigations by the rights owners
complaint
needed
for
public action
/
- measures to prevent the imminent occurrence of
damage through the violation of a right;
no complaint
needed
- measures to ensure the remedy of the damage (on
movable and immovable assets);
- devolve upon competent authorities the goods
suspected for violation of a right granted by Law
8/1996 to prevent their introduction in the commercial
circuit;
- owners of the presumably infringed rights or their
representatives are entitled to participate in the
enforcement of the measures taken to ensure the
evidence or establish the facts (+ the general
provisions mentioned in fn.5).
commercial
purpose
is
sanctioned
with
imprisonment from
3 to 10 years.
- measures to prevent the imminent occurrence of
damage through the violation of a right;
no complaint
needed
- measures to ensure the remedy of the damage (on
movable and immovable assets);
- devolve upon competent authorities the goods
suspected for violation of a right granted by Law
8/1996 to prevent their introduction in the commercial
circuit;
- owners of the presumably infringed rights or their
representatives are entitled to participate in the
enforcement of the measures taken to ensure the
evidence or establish the facts
(+ the general provisions mentioned in fn.5).
Art.141, §§ 2 and
5, Law No.
8/1996
unlawful connection to the
conditioned access programmes
- imprisonment from 6 months to 3
years;
- fine 100 to 50,000 RON for natural
commercial
purpose
is
sanctioned
with
imprisonment from
- measures to prevent the imminent occurrence of
damage through the violation of a right;
no complaint
needed
- measures to ensure the remedy of the damage (on
87
Reference Text for Trainers
persons; 2,500 to 2,000,000 RON for
legal persons (+ the provisions for
legal persons mentioned in fn. 2).
3 to 10 years.
movable and immovable assets);
- devolve upon competent authorities the goods
suspected for violation of a right granted by Law
8/1996 to prevent their introduction in the commercial
circuit;
- owners of the presumably infringed rights or their
representatives are entitled to participate in the
enforcement of the measures taken to ensure the
evidence or establish the facts (+ the general
provisions mentioned in fn.5).
Art.141, §3, Law
No. 8/1996
- use of public announcements or
electronic communication means
for promotion of pirated control
devices for access to conditioned
access programme services;
Imprisonment from 1 month to 3
years (+ the provisions for legal
persons mentioned in fn. 2).
/
sale or rental of pirated access
control devices
no complaint
needed
- measures to ensure the remedy of the damage (on
movable and immovable assets);
-devolve upon competent authorities the goods
suspected for violation of a right granted by Law
8/1996 to prevent their introduction in the commercial
circuit;
- unlawful exhibition or
presentation to the public of the
information needed to make
devices able to ensure the
unauthorized access to
conditioned access programme
services or intended for the
unauthorized access in any mode
to such services
Art.141, §4, Law
No. 8/1996
- measures to prevent the imminent occurrence of
damage through the violation of a right;
- owners of the presumably infringed rights or their
representatives are entitled to participate in the
enforcement of the measures taken to ensure the
evidence or establish the facts (+ the general
provisions mentioned in fn.5).
Imprisonment from 3 to 10 years (+
the provisions for legal persons
mentioned in fn. 2).
/
- measures to prevent the imminent occurrence of
damage through the violation of a right;
no complaint
needed
- measures to ensure the remedy of the damage (on
movable and immovable assets);
- devolve upon competent authorities the goods
suspected for violation of a right granted by Law
8/1996 to prevent their introduction in the commercial
circuit;
- owners of the presumably infringed rights or their
representatives are entitled to participate in the
enforcement of the measures taken to ensure the
evidence or establish the facts (+ the general
88
Reference Text for Trainers
provisions mentioned in fn.5).
Art.143, §1, Law
No. 8/1996
- unlawful production, import,
distribution or rental, offer for sale
or rent and possession for
commercial purposes of devices
or components that allow the
neutralization of the technological
protection measures;
- performance of services which
lead to the neutralization of some
technological protection
measures, including in the digital
environment
imprisonment from 6 months to 3
years; fine 100 to 50,000 RON for
natural persons; 2,500 to 2,000,000
RON for legal persons (+ the
provisions
for
legal
persons
mentioned in fn. 2).
/
- measures to prevent the imminent occurrence of
damage through the violation of a right;
no complaint
needed
- measures to ensure the remedy of the damage (on
movable and immovable assets);
- devolve upon competent authorities the goods
suspected for violation of a right granted by Law
8/1996 to prevent their introduction in the commercial
circuit;
- owners of the presumably infringed rights or their
representatives are entitled to participate in the
enforcement of the measures taken to ensure the
evidence or establish the facts (+ the general
provisions mentioned in fn.5).
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Reference Text for Trainers
Rights of the creator of the topographies of a semiconductor product
legal
basis
constituent elements of the offence
Art.
38,
Law No.
16/1995144
Unauthorized commercial exploitation or
production of a protected topography or
semiconductor product embedding a
protected topography or a circuit
element
embedding
such
a
semiconductor product, as far as the
said element still contains a topography.
This act is considered as offence if
committed after the date of publication
of the topography registration in the
National Register of Topographies.
nature and level of the
penalty
- Imprisonment from 3 months
to 2 years;
aggravating
assistance to investigations by the rights owners
circumstance
s nature and
level
of
penalties
/
complaint needed
for public action
- possibility for the rights holder to assist the following no complaint needed
acts:
Field investigation: “…The investigation is performed in
the presence of the parties, when necessary.” Art.129,
§2, Criminal Procedure Code
- Fine from 10,000 to 30,000
RON (and upon the right
holder’s request: confiscation
or destruction of the counterfeit
products and confiscation or
destruction of the equipment
used directly for committing
the offence)145
Field reconstruction of the way and conditions under
which the act has been committed; Art.130, §2,
Criminal Procedure Code
Expertise; Art.120, §4, Criminal Procedure Code;
- the right of the parties’ defenders to assist all
investigation acts which imply the hearing or the
presence of the parties that are defended and to draw
up claims and memories; Art.173, Criminal Procedure
Code.
Art. 5,
§1 (a) (g),
Law
No.
11/1991146
- making use of an (…) integrated circuit
topography (…),able to cause confusion
with the one legitimately employed by
another trader;
imprisonment from 6 months to
2 years; fine from 2,000 to
5,000 RON
- manufacture, import, export, storage,
sale or offer for sale of goods/services
bearing deceptive indications regarding
[… ] integrated circuit topographies […],to
misleading other traders and consumers
/
- possibility for the rights holder to assist the following
acts:
Field investigation: “…The investigation is performed in
the presence of the parties, when necessary.” Art.129,
§2, Criminal Procedure Code
Field reconstruction of the way and conditions under
which the act has been committed; Art.130, §2,
Criminal Procedure Code
Expertise; Art.120, §4, Criminal Procedure Code;
- the right of the parties’ defenders to assist all
144
145
146
public action upon the
injured party’s
preliminary complaint,
upon notification by the
local Chamber of
Commerce and
Industry or by another
professional
organization or upon
notification of agents
authorised by the
Competition Office
Law on the protection of topographies of semiconductor products.
Additional sanctions applicable according to art. 38, §4 of Law 16/1995.
Law on the Fight against Unfair Competition.
90
Reference Text for Trainers
investigation acts which imply the hearing or the
presence of the parties that are defended and to draw
up claims and memories; Art.173, Criminal Procedure
Code
91
Reference Text for Trainers
Trademark rights
legal basis
constituent elements of the offence
nature and level of the penalty
aggravating
circumstances
nature
and
level
of
penalties
Art.83,
§1
(a),
(b);
Art.35, Law
No.
84/1998147
counterfeiting/infringement148,
imitation or unlawful use of a
trademark with the intent of
misleading the public as to the
quality of the goods or services to
which the trademark applies;
imprisonment from 3 months to 3
years or fine of 1,500 RON (also
applicable:
confiscation
or
destruction of the counterfeit
products and confiscation or
destruction of materials and
equipment used directly to
commit the infringement)149
/
- the unlawful marketing of a
product under a trademark that is
identical or similar to a trademark
registered for identical or similar
products, causing prejudice to the
owner of the registered trademark
Art.86, Law
No.84/1998
Unfair competition: “any use of imprisonment from 1 month to 2
trademarks (…) contrary to honest years; fine of 1,500 RON
practices in industrial or commercial
activities, with an attempt to mislead
consumers”
assistance to investigations by the rights owners
complaint needed
public action
- possibility for the rights holder to assist the following acts:
no complaint needed
for
Field investigation: “…The investigation is performed in the
presence of the parties, when necessary.” Art.129, §2,
Criminal Procedure Code
Field reconstruction of the way and conditions under which
the act has been committed; Art.130,
§2, Criminal
Procedure Code
Expertise; Art.120, §4, Criminal Procedure Code;
- the right of the parties’ defenders to assist all investigation
acts which imply the hearing or the presence of the parties
that are defended and to draw up claims and memories;
Art.173, Criminal Procedure Code
/
- possibility for the rights holder to assist the following acts:
Field investigation: “…The investigation is performed in the
presence of the parties, when necessary.” Art.129, §2,
Criminal Procedure Code
preliminary complaint of
the injured party needed
Field reconstruction of the way and conditions under which
the act has been committed; Art.130,
§2, Criminal
147
Law on Trademarks and Geographical Indications.
The performance of any act referred to in the second paragraph of Article 35 by a person not having the consent of the owner of the registered trademark shall constitute such an
infringement, meaning the use in the course of trade of:
(a) any sign which is identical with the trademark in relation to goods or services which are identical with those for which the trademark is registered;
(b) any sign where, because of its identity with or similarity to the trademark or the identity or similarity of the goods or services on which the sign is affixed with the goods or services for
which the trademark is registered, there exists a likelihood of confusion on the part of the public, including the likelihood of association between the sign and the trademark;
(c) any sign which is identical with or similar to the trademark in relation to goods or services which are not similar to those for which the trademark is registered, where the latter has a
reputation in Romania and where the use of that sign without due cause could take unfair advantage of the distinctive character or the repute of the trademark or where such use would cause
prejudice to the trademark owner.
149 Additional sanctions applicable according to art. 84 of Law 84/1998.
148
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Reference Text for Trainers
Procedure Code
Expertise; Art.120, §4, Criminal Procedure Code;
- the right of the parties’ defenders to assist all investigation
acts which imply the hearing or the presence of the parties
that are defended and to draw up claims and memories;
Art.173, Criminal Procedure Code
Legal
Basis
Constituent Elements Of The
Offence
Nature And Level Of The Penalty
Art. 50,
Law No.
129/1992
The unlawful claiming of the
status of author of an industrial
design
- Imprisonment from 6 months to 2
years;
150
Aggravating
Circumstances
/
Assistance To Investigations By The Rights Owners
Complaint Needed For
Public Action
- possibility for the rights holder to assist the following
acts:
no complaint needed
Field investigation: “…The investigation is performed in
the presence of the parties, when necessary.” Art.129,
§2, Criminal Procedure Code
- Fine of 1,500 to 3,000 RON
Field reconstruction of the way and conditions under
which the act has been committed; Art.130, §2, Criminal
Procedure Code
Expertise; Art.120, §4, Criminal Procedure Code;
- the right of the parties’ defenders to assist all
investigation acts which imply the hearing or the
presence of the parties that are defended and to draw up
claims and memories; Art.173, Criminal Procedure Code
Art. 50,
Law No.
129/1992
150
counterfeiting of the industrial
design:
the
unlawful
reproduction of an industrial
design for the purpose of
manufacturing products with an
identical
appearance,
manufacturing, offering for
sale, selling, importing, using or
storing such products for the
- Imprisonment from 6 months to 2
years;
- Fine of 1,500 to 3,000 RON (also
applicable:
confiscation
or
destruction of the counterfeit
products and confiscation or
destruction of materials and
equipment used directly to commit
/
- possibility for the rights holder to assist the following
acts:
no complaint needed
Field investigation: “…The investigation is performed in
the presence of the parties, when necessary.” Art.129,
§2, Criminal Procedure Code
Field reconstruction of the way and conditions under
which the act has been committed; Art.130, §2, Criminal
Procedure Code
Industrial Design Law.
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Reference Text for Trainers
purpose
of
putting
into
circulation or using them,
without having the consent of
the owner of the certificate of
registration of the industrial
design, during the period of
validity thereof.
151
the infringement)151
Expertise; Art.120, §4, Criminal Procedure Code;
- the right of the parties’ defenders to assist all
investigation acts which imply the hearing or the
presence of the parties that are defended and to draw up
claims and memories; Art.173, Criminal Procedure Code
Additional sanctions applicable according to Art. 52 of Law 129/1992.
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Reference Text for Trainers
Design rights
Patent rights, including rights derived from supplementary protection certificates 152
Legal Basis Constituent Elements Of The Nature And Level Of The Penalty
Offence
Art.
58,
Law
No.
64/1991153
unlawful claim of the
status of inventor
- imprisonment from 6 months to 2
years;
Aggravating Circumstances
/
Assistance To Investigations By The Rights Owners
- possibility for the rights holder to assist the following acts:
Field investigation: “…The investigation is performed in the
presence of the parties, when necessary.” Art.129, §2,
Criminal Procedure Code
- fine of 5,000 to 10,000 RON
Complaint
Needed For
Public Action
no complaint
needed
Field reconstruction of the way and conditions under which
the act has been committed; Art.130,
§2, Criminal
Procedure Code
Expertise; Art.120, §4, Criminal Procedure Code;
- the right of the parties’ defenders to assist all investigation
acts which imply the hearing or the presence of the parties
that are defended and to draw up claims and memories;
Art.173, Criminal Procedure Code
Art. 59, Art.
32,
§2,
Law
No.
64/1991
counterfeiting consisting
of the following acts:
- Imprisonment from 3 months to 2
years;
- manufacture, use, offer
for sale, sale or import for
the purposes of use, offer
for sale or sale, where the
subject matter of the
patent is a product;
- Fine of 10,000 to 30,000 RON (also
applicable: confiscation or destruction
of the counterfeit products and
confiscation
or
destruction
of
materials and equipment used directly
to commit the infringement)154
- use of the patented
process and use, offer for
sale, sale or import for
these purposes of the
/
- possibility for the rights holder to assist the following acts:
Field investigation: “…The investigation is performed in the
presence of the parties, when necessary.” Art.129, §2,
Criminal Procedure Code
no complaint
needed
Field reconstruction of the way and conditions under which
the act has been committed; Art.130,
§2, Criminal
Procedure Code
Expertise; Art.120, §4, Criminal Procedure Code;
- the right of the parties’ defenders to assist all investigation
acts which imply the hearing or the presence of the parties
that are defended and to draw up claims and memories;
152
Law 350/2007 on utility models (Art. 28) makes reference to the provisions regarding patent rights protection stipulated within the Patent Law No. 64/1991, which shall be applied
accordingly.
153
Patent Law.
154
Additional sanctions applicable according to Art. 59, §3, Law 64/1991.
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Reference Text for Trainers
product directly obtained
by the patented process,
where the subject matter
of the patent is a process
Art.
62,
Law
No.
64/1991
disclosure by the staff of
the OSIM and also by
other persons whose
activities
deal
with
inventions
of
the
information contained in
patent applications prior
to the publication thereof
Art.173, Criminal Procedure Code
imprisonment from 3 months to 2
years
/
- possibility for the rights holder to assist the following acts:
Field investigation: “…The investigation is performed in the
presence of the parties, when necessary.” Art.129, §2,
Criminal Procedure Code
no complaint
needed
Field reconstruction of the way and conditions under which
the act has been committed; Art.130,
§2, Criminal
Procedure Code
Expertise; Art.120, §4, Criminal Procedure Code;
- the right of the parties’ defenders to assist all investigation
acts which imply the hearing or the presence of the parties
that are defended and to draw up claims and memories;
Art.173, Criminal Procedure Code
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Reference Text for Trainers
Geographical indications
Legal Basis
Constituent
Elements
Of The Offence
Nature And Level Of The Penalty
Art. 83, §1 (c),
Law
No.
84/1998155
- marketing of a product
under a geographical
indication
suggesting
that
the
concerned
product originates from
a geographical region
other than its true region
of origin, with the intent
of misleading the public
as to the geographical
origin of the product
- imprisonment from 3 months to 3 years;
Aggravating
Circumstances
/
- fine of 1,500 RON (also applicable:
confiscation or destruction of the
counterfeit products and confiscation or
destruction of materials and equipment
used directly to commit the infringement)156
Assistance To Investigations By The Rights
Owners
Complaint Needed For
Public Action
- possibility for the rights holder to assist the
following acts:
no complaint needed
investigation: “…The investigation is
performed in the presence of the parties, when
necessary.” Art.129, §2, Criminal Procedure
Field
Code
Field reconstruction of the way and conditions
under which the act has been committed;
Art.130, §2, Criminal Procedure Code
Expertise; Art.120, §4, Criminal Procedure
Code;
- the right of the parties’ defenders to assist all
investigation acts which imply the hearing or the
presence of the parties that are defended and to
draw up claims and memories; Art.173, Criminal
Procedure Code
Art. 86, Law
No. 84/1998
Unfair competition: any
use of (…) geographical
indications contrary to
honest
practice
in
industrial or commercial
activities
with
an
attempt
to
mislead
consumers.
- imprisonment from 1 month to 2 years;
- fine of 1,500 RON
/
- possibility for the rights holder to assist the
following acts:
preliminary complaint of
the injured party needed
investigation: “The investigation is
performed in the presence of the parties, when
necessary.” Art.129, §2, Criminal Procedure
Field
Code
Field reconstruction of the way and conditions
under which the act has been committed;
Art.130, §2, Criminal Procedure Code
Expertise; Art.120, §4, Criminal Procedure
Code;
155
156
Law on Trademarks and Geographical Indications.
Additional sanctions applicable according to Art.84, Law 84/1998.
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Reference Text for Trainers
- the right of the parties’ defenders to assist all
investigation acts which imply the hearing or the
presence of the parties that are defended and to
draw up claims and memories; Art.173, Criminal
Procedure Code
98
Reference Text for Trainers
Plant variety rights
Legal Basis
Art. 44,
§§ 1,2,3,5,6; Art.
31, §1,
Law
255/1998157
No.
Constituent Elements Of The Offence
Nature
And
Level Of The
Penalty
Aggravating
Circumstances
Assistance To Investigations By The Rights Owners
Complaint
Needed
For Public Action
Intentional counterfeiting without the variety patent
holder’s authorization:
Imprisonment
from 3 months
to 2 years;
perpetration of
one of the
hereby
mentioned
actions by a
civil
servant/official
in the course of
his/her duties is
sanctioned with
imprisonment
for 6 months to
5 years
- possibility for the rights holder to assist the
following acts:
preliminary complaint
by the injured party
needed, only if the
offender is a civil
servant/official in the
course of his/her
duties
- production or reproduction;
- process for the purpose of propagation;
- offer for sale;
- sale or other marketing;
- import/export;
- stockpile for one of the purposes mentioned in
subparagraphs above; And/or:
- use of a denomination, other than the registered
one for the new variety, for the produced and sold
propagation material;
Fine
of
10,000
to
30,000 RON
(also
applicable:
confiscation
or destruction
of
the
counterfeit
products)158
Field investigation: “…The investigation is performed
in the presence of the parties, when necessary.”
Art.129, §2, Criminal Procedure Code
Field reconstruction of the way and conditions under
which the act has been committed; Art.130, §2,
Criminal Procedure Code
Expertise; Art.120, §4, Criminal Procedure Code;
- the right of the parties’ defenders to assist all
investigation acts which imply the hearing or the
presence of the parties that are defended and to
draw up claims and memories; Art.173, Criminal
Procedure Code
- use of the registered denomination of a new
variety for the produced and sold propagation
material that does not belong to that variety;
- grant of a denomination to the produced and sold
propagation material that is so similar to the
denomination of the protected variety, that it may
cause confusion;
- sale of propagation material with false indications
which belongs to a variety for which a variety
patent has been granted, thereby misleading
purchasers;
- falsehood in the registration of a variety in the
National Register of Protected Varieties;
157
158
Law on the protection of the new plant varieties.
Additional sanction applicable according to Art. 44, §6, Law 255/1998.
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Reference Text for Trainers
- false reports and falsification of documentation
required by this Law;
- submission of documents containing false
information
Art. 44, §§ 4,5,6,
Law
No.
255/1998
Disclosure of data and information constituting a
trade secret on a new variety for which a variety
patent has been applied or granted
Imprisonment
from 6 months
to 2 years;
Fine
of
10,000
to
30,000 RON
perpetration of
one of the
hereby
mentioned
actions by a
civil
servant/official
in the course of
his/her duties is
sanctioned with
imprisonment
for 6 months to
5 years
- possibility for the rights holder to assist the
following acts:
Field investigation: “…The investigation is performed
in the presence of the parties, when necessary.”
Art.129, §2, Criminal Procedure Code
Field reconstruction of the way and conditions under
which the act has been committed; Art.130, §2,
Criminal Procedure Code
preliminary complaint
by the injured party
needed, only if the
offender is a civil
servant/official in the
course of his/her
duties
Expertise; Art.120, §4, Criminal Procedure Code;
- the right of the parties’ defenders to assist all
investigation acts which imply the hearing or the
presence of the parties that are defended and to
draw up claims and memories; Art.173, Criminal
Procedure Code
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Reference Text for Trainers
Trade names
legal basis
constituent
offence
the
nature and level of
the penalty
Art. 5, §1 (a)
(g),
- use of a trade name (…) which is
likely to cause confusion with the
one legitimately employed by
another trader;
-Imprisonment
from 6 months to 2
years;
Law No.
11/1991159
elements
of
- manufacture in any manner,
import, export, storage, sale or
offer for sale of goods/services
bearing deceptive indications
regarding (…) trade names (…), for
the purpose of misleading other
traders and consumers
aggravating
circumstances
/
assistance to investigations by the rights owners
complaint needed for public action
- possibility for the rights holder to assist the following
acts:
public action upon the injured party’s
preliminary
complaint,
after
notification by the local Chamber of
Commerce and Industry or by
another professional organization/
after notification of agents authorized
by the Competition Office
Field investigation: “…The investigation is performed
in the presence of the parties, when necessary.”
- Fine of 2,500 to
5,000 RON
Art.129, §2, Criminal Procedure Code
Field reconstruction of the way and conditions under
which the act has been committed; Art.130, §2,
Criminal Procedure Code
Expertise; Art.120, §4, Criminal Procedure Code;
- the right of the parties’ defenders to assist all
investigation acts which imply the hearing or the
presence of the parties that are defended and to draw
up claims and memories; Art.173, Criminal Procedure
Code
Know-how
legal basis
constituent elements of the offence
nature and level
of the penalty
Art. 5, §1 (e)
and (f), Law
No.
11/1991160
as by the representatives of the
legitimate owners of these secrets
assigned to represent them in front
of public authorities
- Imprisonment
from 6 months to
2 years;
159
160
- Fine of 2,500 to
5,000 RON
aggravating
circumstances
/
assistance to investigations by the rights
owners
assist all investigation acts which imply the
hearing or the presence of the parties that
are defended and to draw up claims and
memories; Art.173, Criminal Procedure Code
complaint needed for public action
public action upon the injured party’s
preliminary complaint, after notification by the
local Chamber of Commerce and Industry or
by another professional organization or after
notification of agents authorized by the
Competition Office
Law against Unfair Competition.
Law against Unfair Competition.
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Reference Text for Trainers
3.4 Role, Competences and Coordination of Decisions and Actions of the National Working
Group on IPRs
Based on the principles of cooperation and coordination in the matter of efficient enforcement
of IPRs among the various concerned stakeholders, the Grupul de Lucru pe Probleme de
Proprietate Intelectuală (Working Group on Intellectual Property Issues) is a public-private
partnership between State institutions and major private organizations which all share the
common objective of combating piracy and counterfeiting.
The public-private partnership that was founded in the field of IP in Romania developed into a
viable project and was appreciated by foreign observers. It is the first fruit of the National
Intellectual Property Strategy (2003 - 2007) which was approved by Government Decision No.
1424/2003 which was later amended and supplemented. In this context, the partnership led to
the formalization, on June 26, 2006 of a formal structure: the Working Group on Intellectual
Property Issues.
According to the “Action Plan regarding urgent common measures with a view to improving
enforcement in the area of Intellectual Property Rights (2005-2007)” adopted by the
Government Decision No. 1174/2005 and following the initiatives of the central structure of the
Public Ministry and the Ministry of Justice, together with the other stakeholders, a central
working group was established to coordinate the national IP enforcement policy comprising
representatives of all the institutions involved.
To establish the Working Group, 32 members representing State institutions and the private
sector alike, signed the Protocol establishing the structure on 26th June 2006, in Bucharest, at
the Prosecutor of the High Court of Cassation and Justice of Romania. Subsequently, on 12th
March 2007, the National Audiovisual Council joined the group by signing the accession
agreement after the invitation by the Group management thus raising the number of members
to 33. The Group was formed to ensure a suitable environment, to develop and foster
creativity, innovation, fair competition and IPRs. The Group operates in accordance with the
provisions of the Protocol of Incorporation.
It is a high-level decision–making group with regular meetings where information on the risk and
action zones is shared. Consultative reunions for drafting the proposals for amending the legal
framework are also organized.
Furthermore, the representatives of public and private sectors decided to create three subworking groups on: counterfeiting, piracy and collecting agencies to increase efficiency. The
members of the working groups decided to have monthly meetings. The first meeting took
place on 10th March 2006.
The core aims of the Working Group on IPRs can be summarized in its achievements such as:

Strong communication between enforcement agencies and industry representatives

Action to combat counterfeiting and piracy

Identification of gaps, analysis and suggested solutions to improve the enforcement of
IPRs

Support of the implementation and respect of National Strategy in IPR field

Great contribution towards legislation improvement (for instance the adoption of the
new trademark law)

Contribution towards the new IPRs Strategy

Training for law enforcement agencies and the manuals destined for police officers and
prosecutors
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Reference Text for Trainers

Coordination of investigators and information used in successful criminal procedure

Awareness-raising actions in both the public and private sector.
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Reference Text for Trainers
SOURCES
Industrial Design Law
Law on the Fight against Unfair Competition
Law on the protection of the new plant varieties
Law on Trademarks and Geographical Indications
Law on the protection of topographies of semiconductor products
Law 350/2007 on utility models
Patent Law No. 64/1991
Romanian Customs, http://www.customs.ro/en.aspx
Transcrime (Joint Research Centre on Transnational Crime), (2010) Anti Brand Counterfeiting in
the EU: Report on International and National Existing Standards (unpublished version)
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Reference Text for Trainers
SECTION 6
Main Concepts and Suggested Best Practices for Investigations
6.1.1 Detection of Counterfeit Goods and Initiation of the Investigation161
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 possible involvement of criminal organisations.162
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?163
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 structure164;

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.
161
The main source for the whole paragraph is UNICRI (2010), Strategies for technical-juridical training and awareness
raising on counterfeiting, (unpublished Italian version).
162 UNICRI (2010), Strategies for technical-juridical training and awareness raising on counterfeiting, (unpublished Italian
version), p. 101.
163 See, INTERPOL (2007), Guide To Intellectual Property Crime And Investigations, Lyon.
164 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.
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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”. 165
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.166
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:

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.
The scenario to be investigated will be more or less complex depending on whether investigations
will consider:
165
166
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.
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Reference Text for Trainers

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);

Surveillance;

Ambushes;
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Reference Text for Trainers

Use of informants;

Raids;

Retrieve declarations and information;

Other investigation techniques;

Undercover operations.
6.1.2 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.167
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.168
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 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”169.
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
167
168
169
IP Crime Group (2010), Annual Report 2009-2010, p. 9.
Unions des Fabricants (2005), “Rapport sur la contrefaçon et la criminalité organisée”, p. 13.
Unions des Fabricants (2005), “Rapport sur la contrefaçon et la criminalité organisée”, p. 14.
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Reference Text for Trainers
Dhabi and Fujairah), China (Hong Kong, Shanghai and Guangdong), Panama, Taiwan and
Mexico.170
BOX 5
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, it became clear that the counterfeits were manufactured in China, transported by
truck to Hong Kong, and then air freighted to the UAE. From there they were shipped via London to the
Bahamas. Customers for the Bahamas Company were generated from a Canadian internet pharmacy
website.
To maintain the illusion the drugs came from a legitimate manufacturer, orders were routed to the
Bahamas where the drugs were packaged and addressed, and then sent back to London by air. From
here, they were mailed to recipients 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 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.
170
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
109
Reference Text for Trainers
Source: Europolk, in UNICRI (2007)
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.171
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
171
analysis of this database look also p. xx, chapter 5, part C (a good practice: DIIP).
110
Reference Text for Trainers
BOX 6
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, see the
implementation of the EU Customs Regulation in Romania (Part 4 of this manual).
In the following, boxes two good practices on customs action (in Ireland and in France respectively)
are presented as suggestions for both Romania and the rest of the EU.
111
BOX 7
Customs action against goods suspected of infringing IPRs 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 imported 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 Anti-Fraud Unit, in accordance with
standing instructions on the reporting of seizures. A copy of this report should also be sent to the
IPR Coordinator, at the address above. 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.
BOX 8
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 yearsmaximum 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 (Tribunal de Grande Instance) 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.
6.1.3 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.172
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-Yugoslavia was inspected. A double bottom was discovered containing more than
220,000 pirated CDs whose value was about USD 500,000.173
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 2008:174
12
13
14

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
UNICRI (2010), “Strategies for technical-juridical training and awareness-raising on counterfeiting”
UNICRI, 2007, op. cit.
CEIPI (2004), p.27
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 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 examples 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.175
International Best Practices
175
Transcrime (Joint Research Centre on Transnational Crime), (2010) Anti Brand Counterfeiting in the
EU: report on best practices (unpublished version)
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)
Box 9
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.
6.1.4 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.
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:

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 e-commerce);

Examination of documentation proving ownership of trademarks,
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;

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;
licenses,

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)”.176
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.177
6.1.5 Evidence Gathering and Types of Evidence Presented to the Court in Counterfeiting
Cases178
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.179
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.
176
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.
178
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
177
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:
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.
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.
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.
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 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.
Box 10
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
6.1.6 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.

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 involves 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 goods 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”.180
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
180
IPO Crime Group, IP crime Report 2009/2010, United Kingdom, p.10 and following.
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:

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

Nicknames of forum users, the ones who make non-authorized exploitations”.181
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.182
181
Ministerio de Cultura de España (2008), Manual de buenas practicas para la prosecución de los delitos
contra la propiedad intelectual.
182
L'Espresso, available HTTP: http://espresso.repubblica.it/dettaglio-archivio/1077207.
BOX 11
Internet investigations by the US
Immigration and Customs Enforcement (ICE)
Operation Ocean Crossing – February 2005
The ICE discovered a trade network of counterfeit medicines originating from China and directed
towards the US, the UK and other European nations. This trade was managed by a Chinese criminal
organization that was linked to an American citizen. Three Chinese citizens operating in the province
of Tianjin were arrested and the following was seized: more than 55,000 packages of counterfeit
Viagra and Cialis, 75,000 loose pills, a device used to seal pharmaceutical packages and a
significant amount of counterfeit trademarks bearing the Viagra inscription. In September 2005, a
police operation was implemented in three facilities with in the region of Henanth were involved in
the production of counterfeit drugs. This operation led to the arrest of eight Chinese citizens and the
seizure of more than 222,000 pills of counterfeit Viagra, 70,000 loose pills, 260 kilograms of raw
materials and 580,000 counterfeit Viagra trademarks. At the same time, U.S. authorities arrested a
US citizen who subsequently pleaded guilty to the charge of importing counterfeit drugs.
Onelinepillbox.com
Investigations conducted by the ICE, the FDA and the Drug Enforcement Administration (DEA) led
to the discovery of an Internet site, onlinepillbox.com, which offers regulated drugs and substances
with out requiring a valid medical prescription. These substances were sent to US consumers
through regular mail. It was later discovered that the delivered substances were unauthorized drugs
from Thailand, the Philippines and Mexico.
Source: US Immigration and Customs Enforcement (ICE), www.ice.gov
BOX 12
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
6.1.7. 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.183 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 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.184
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. 185
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.
183
184
185
UNICRI (2010), op.cit., p.33.
UNICRI (2010), op.cit., p.34.
Unions des Fabricants (2005), Rapport sur la contrefaçon et la criminalité organisée.
Box 13
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
6.1.8 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.186
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
activities187. 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 informant188:
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
186
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.
188
Fitzgerald D.G. (2007), Informants and undercover investigations: a practical guide to Law, Policy and
Procedure, Taylor & Francis Group, New York, pp. 4-5.
187
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
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
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:189

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 measures190. 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.
189
APS
University,
professor
Tom
O’Connor
website,
available
HTTP:
www1.apsu.edu/oconnort/3220/3220lect07a.htm
190
For instance, confiscation, also in case of disproportion of the assets if compared to the declared income
(in some countries).
6.1.9 The Role of National Common Databases
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 useful elements.
Primarily, the importance of information sharing tools should be considered. These include
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, together with a
comparison with other existing databases, which can be considered as good practices.
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 IPRrelated 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).
“All the beneficiary institutions, according to their competences, have access to the database
and they can introduce or use the data introduced by the others. For example, a prosecutor
can easily check if someone has had previously any kind of sanctions on IPR, even if those
sanctions were not of a criminal matter, but administrative sanctions. Consequently, they can
proceed with in-depth information on the person that they are dealing with. As a result, all of
the institutions involved in the fight against counterfeiting are always aware of their partners`
activities; they also have access to the database of the Register of Commerce, the Police
database and the Customs’ database, etc”.191
6.1.10 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.192
For what concerns the involvement of organized crime in counterfeiting crimes, the
Convention against Transnational Organized Crime (a.k.a. Palermo Convention)193 defines
the guidelines both for seizures of goods and for the management of confiscated
goods/crime seized proceeds.
Art. 12 – Confiscation and seizure
“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
191
All the information on the database has been reported by the Romanian Public Ministry.
Schott P.A. (2006), Reference Guide to Anti-Money Laundering and Combating the Financing of
Terrorism, World Bank, Washington D.C.
193
To
download
the
full
text
of
the
Palermo
Convention
please
visit:
http://www.unodc.org/unodc/en/treaties/CTOC/index.html#Fulltext
192
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;
(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 goods194
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”.195 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:
194
Transcrime (Joint Research Centre on Transnational Crime), (2010) Anti Brand Counterfeiting in the EU:
report on best practices (unpublished version)
195
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.
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”.
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.
6.1.11 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:196

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.
For Romania - as previously stated in chapter 4.B.3.4 - according to the Action Plan, and
following the initiatives of the central structure of the Public Ministry and the Ministry of
Justice, together with the other stakeholders, a central working group was established to
coordinate the national IP enforcement policy comprising representatives of all the
institutions involved. This proved essential for improving the IP enforcement in Romania, or
as the last peer review reflected, “the creation of a high level decision making group has
been critical”.197
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
196
Ministerio de Cultura de España (2008), Manual de buenas practicas para la prosecución de los delitos
contra la propiedad intelectual
197
Source: 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.12.
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.
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 Center198.
International Collaborations199
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.
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.
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.
2. 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 knowhow; 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.
3. This agreement should increase the level of trust in future EU-China trade
relationships.
4. 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.
198
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)
199
5. 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 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 antimalarial 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 cross-agency 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.
6.2. Prosecution. Legal Proceedings200
200
The present paragraph is based on the following sources: Romania country profile, by Transcrime &
Vilau D.M., 2010, Anti-counterfeiting measures, country chapter: Romania.
6.2.1 Jurisdiction in Cases of Counterfeiting: Criminal or Civil cases
Box 14
Criminal cases
-
According to art. 27 para. 1 (e1) of the Criminal Procedure Code Tribunals have
jurisdiction for IPR cases in first instance
Tribunals’ decisions may be appealed in front of the Courts of Appeal and a second
appeal may be lodged in front of the High Court of Cassation and Justice
Criminal investigations are conducted by prosecutors from the Prosecutors’ Office
attached to the court having jurisdiction for the case
Civil cases
-
According to art. 2 para 1 (e) of the Civil Procedure Code Tribunals have jurisdiction for
IPR cases in first instance
Tribunals’ decisions may be appealed in front of the Courts of Appeal and a second
appeal may be lodged to the High Court of Cassation and Justice.
6.2.2 Main Proceedings
Precedents in Romania concerning copyright infringements
“The Romanian rock band Vama recently lost a legal battle against another rock band Trupa
Veche over copyright infringement involving songs composed during the existence of their
common former band Vama Veche. This is the first time a Romanian court has ruled on an
issue involving a copyright infringement between two rock bands. It is expected that this
case will form an important precedent in Romania’s copyright practice.
The lawsuit began in December 2006, when three members of Trupa Veche sued Vama for
performing their former band’s songs on tour without their approval.
On 11th March 2010, the Romanian Supreme Court ruled against Vama for breaching the
copyright law, ordered them to pay EUR 15,000 (USD 20,674) in damages and legal costs,
and forbid them to perform the Vama Veche songs without the authors’ consent”.201
Internationally, the law has prescribed very effective remedies to fight disease of
counterfeiting in most jurisdictions. The U.S. Trademark Act in various jurisdictions
dispenses a deterrent punishment for counterfeiters which may include a jail sentence and
stringent fines (asides from the confiscation and destruction of the counterfeiting articles). In
Thailand, counterfeiting is even punishable by death. In addition to criminal remedies, the
law of most countries also provides the brand owner remedies under the civil law by which
suits for damages can be filed and damages obtained swiftly and efficiently.
“In most jurisdictions, counterfeiting is being attacked in a random, haphazard and
unsatisfactory manner. Anti-counterfeit actions are handled either by law firms or agencies
headed by retired police or government officials. These actions take the form of minimalistic
investigation by 'informants' followed by 'raids' on 'unearthed retailer of counterfeit goods'.
The raids are conducted with the help of police officials either directly or under the orders of
a local judicial officer such as a magistrate.
Counterfeit goods seized in the course of these raids are confiscated and destroyed. The
person who is raided generally ends up paying 'compensation'. A portion of which goes
towards financing the raid and a fraction goes towards the brand owner. If a case is
201
Source: Libertatea.ro in http://www.petosevic.com/resources/news/romania
registered, this is necessarily required to be compounded or quashed in legal systems where
criminal cases relating to IPR cannot be compounded. The brand owner is proudly presented
periodically with a report on the number of raids successfully conducted, the amount of
counterfeit goods seized, and the compensatory amounts collected along with undertakings
from individuals not to repeat the activity. There is almost no initiative to pursue complaints
to conviction. A trial is needed is for a conviction. Criminal trials need to be meticulously
conducted by lawyers proficient in the criminal process. These trials can be time consuming
and relatively more expensive than the process of obtaining the initial orders and conducting
'raids'. This failure to oversee the proceedings to its conclusion, however, is the root cause of
the escalation of the problem. Truncating the anti-counterfeit proceedings by settlement is
equivalent to prematurely ending antibiotic treatment on the second day of a five day course,
when the patient apparently feels dramatically better and healthy. This can lead to the
danger of relapse and also the possibility that the microbe becomes resistant to the
treatment”. 202
6.2.3 Bringing Evidence into Court
Existing practices in the U.K. 203
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 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.
6.2.4 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
202
Mohan Dewan at http://EzineArticles.com/?expert=Mohan_Dewan
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.
203
have can vary significantly in the pre-trial phase – during the actual investigation of a
crime.204 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’205.
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.
The Public Ministry (prosecutors’ offices)
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)206, a department of the Public Ministry207.
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
204
UNICRI & UNODC, Investigation, prosecution and adjudication of drug – related cases (200?), pp.102-
104
205
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
206
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
207
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
working methods and establishing best solutions to streamline the legislation and its
implementation; and ensuring 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 Justice208
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 accorded to asset recovery initiated numerous international initiatives.
Examples include, the StAR (the Stolen Asset Recovery Initiative), the ADB/OECD AntiCorruption 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.
208

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
Ibid, p.16
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.
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.
6.3. The Role of the Private Sector
6.3.1 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 enforcement209:
209

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 investigations LEAs 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
The Canadian IP Council, Intellectual Property: Enforcement Manual. A Practical and Legal Guide for
Protecting Your Intellectual Property Rights, p.19
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 officials: 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
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 15
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
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
6.3.2 The Contribution of the Private Sector during the Evidence-Gathering Monitoring
Process210
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.
210
The main source for the whole paragraph is Staake T., Fleisch E. (2008), “Countering Counterfeit Trade.
Illicit market insights, Best-Practice Strategies, and Management Toolbox”, Springer-Verlag (editions), Berlin
Heidelberg, chapter 5.
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.
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 nondeceptive 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:
1. Withdrawing counterfeit articles from circulation:
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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
Box 16
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 lifethreatening 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
6.3.3 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 anti-counterfeiting 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 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 Governments/Authorities Meeting on Semiconductors).
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.211
211
The main source of this paragraph is Transcrime (2010), Anti-brand counterfeiting in the EU: report on
best practices, unpublished version, pp. 57-59.
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