The UK Intellectual Property Office published its annual report on intellectual
property (IP) crime in September. The report reviews current and
emerging threats in the field of IP crime and provides details of
the enforcement activities undertaken in the UK over the past
year.
The overall picture is an encouraging one in terms of the targeted
enforcement activity being carried out by specialist agencies,
often working together, and the increasing range of tools at the
disposal of rights owners for pursuing criminals. However, it
appears that illegal activity, particularly on the internet,
remains a significant issue which is difficult to police.
The Internet
The report highlights a continuing trend in the use of the
internet by consumers to source pirated content, illegal streams
and counterfeit items.
It reveals that, in the period from May 2014 to the publication of
the report, the Police IP Crime Unit suspended 3,426 rogue websites
selling fake luxury goods. In particular, it appears that there is
a growing threat from activity on social media sites. The
Anti-Counterfeiting Group's Facebook initiative "Operation
Watch" identified the availability of over 30,000 individual
images of counterfeit goods in just one day in 2014. The misuse of
social media has required targeted enforcement activity. Operation
Jasper (which brought together Trading Standards teams, police
officers, industry bodies and government agencies to tackle
counterfeiting and piracy on social media sites) carried out a
campaign in which it took down 4,300 Facebook listings, 20 Facebook
profiles, issued over 200 warning letters and delivered 24 cease
and desist letters in just a few weeks.
In addition, the Federation Against Copyright Theft has reported a
marked rise in cases involving illegal access to subscription pay
TV services, which now account for 18 per cent of the
investigations that it carries out each year. The Anti-Piracy Unity
has also highlighted a significant increase in the number of
instances of websites and software offering stream-ripping
services, which are seriously undermining the subscription-based
streaming model and the remuneration returned to rights holders.
From July 2014 to June 2015, the Police IP Crime Unit diverted over
11 million views from pirate TV/film/music websites to an official
police warning page.
This sort of activity on the internet remains a challenge for the
various enforcement agencies to police, and their projects
continue.
Sales on the ground
On the ground, the report suggests that seizures of counterfeit
goods from markets are decreasing. There was a very successful
operation at the Barras Market in Glasgow between August 2013 and
March 2014 in which over £2million worth of goods were seized
and 32 individuals were arrested. A full-time police officer has
now been allocated to oversee all IP crime in Glasgow and there has
been a significant reduction in criminal activity.
However, there is still a lot to do. It appears that the infringers
are increasingly dealing in high-value counterfeit items, with an
increase in the sales of items such as handbags, watches and
electrical items. The report reveals that over £3million
worth of fake goods have been seized since September 2013. One
member of the Anti-counterfeiting Group seized 75,000 of its
products (with a retail value of £2.5million) from
criminals.
There is also significant action at the borders. The UK Border
Force detained over 1.6 million infringing items in 2014/15, the
retail value of which, if genuine, would have been in excess of
£65million. The predominant source country for goods seized
at the UK border continues to be China, together with its special
administrative region, Hong Kong.
Criminal convictions
Despite the continuing infringing activity on the internet and
the high value of the items that are being traded, the report
suggests that there has been an overall reduction in the instances
of IP crime being reported to Crimestoppers, and in the number of
individuals receiving cautions and being found guilty of criminal
acts. It is unclear whether this results from a reduction in
criminal activity, or if the activity is becoming harder to
identify or less likely to be reported.
Notwithstanding this general trend, there have been some notable
successes in tackling the criminals. Thirty seven arrests were made
by the Police IP Crime Unit in the period from May 2014 to June
2015 and the two individuals behind "Dancing Jesus", an
illegal music forum, were sentenced at Newcastle Crown Court to
four years and five months in prison.
The Intellectual Property Act 2014 introduced new criminal offences
in relation to intentionally copying registered designs, which will
offer rights owners a new avenue for enforcing their rights.
The impact of IP crime and strategies for dealing with it
As discussed in the report, IP crime brings about social,
economic and reputational harm to the UK. Criminal activity
undermines the genuine retail market, restricts the revenue to the
UK Treasury and, in some cases in which unsafe counterfeit goods
are sold, threatens the safety of the consumer. There are links to
organised crime, with profits being redistributed into other
activities such as drug supply and money laundering. It is
therefore vital for owners of IP rights such as design rights and
trade marks to have as many options available to them as possible
for dealing with criminal activity.
In our experience, putting in place border detention measures can
be a very effective way of preventing counterfeit goods from
entering the country in the first place. Once counterfeit goods are
available on the ground, it can be difficult to control them.
Trading Standards authorities are often financially stretched,
which means that they have very limited resources for pursuing
criminal prosecutions, except in cases where the volumes of goods
are very large, or where there are health and safety issues at
stake. It is open to individual rights holders to commence private
prosecutions against criminal infringers, but these cases are rare
in the UK. In the circumstances, we would advise right holders to
file applications for action with the Customs Authorities to cover
their key IP rights. If the "simplified procedure" is
followed, this can be an efficient way of having the infringing
products destroyed without the need to commence legal
proceedings.
We also recommend that rights holders put in place measures to
monitor infringing activity on the internet. This can be a more
effective method of tracking down the source of the products and
the key operators than carrying out investigations on the ground.
Once the key infringers have been identified, it should be possible
to put in place a focussed attack on them and to consider whether
or not it would be appropriate to pursue criminal sanctions.
It is a difficult battle for rights owners to fight, but this
report shows that it is possible to restrain the activities of
criminals. Each success will hopefully send a message to the market
place that this activity will not go unchallenged and, in a world
where technology is enabling criminals to become ever more
sophisticated, it is simply not an option to do nothing.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.