European Commission unveils plans for ‘IP Market Watch List’

The European Commission has presented a series of measures designed to ensure that IP rights are better protected, in a bid to spur innovation and creativity at EU-based companies. Included in the package of initiatives are plans for a watch list similar to the USTR’s Notorious Markets publication, providing brand owners with a new tool for pressuring physical and online actors to do more to fight the trade in fakes around the world.

In addition to plans related to patents and new technology, today’s European Commission announcement includes a number of measures related specifically to counterfeiting. Internal Market, Industry, Entrepreneurship and SMEs commissioner Elżbieta Bieńkowska, declared: "Today we boost our collective ability to catch the 'big fish' behind fake goods and pirated content which harm our companies and our jobs – as well as our health and safety in areas such as medicines or toys." Specifically, the new measures are intended to:

• Clarify how the 2004 Directive on the Enforcement of Intellectual Property Rights should be applied, in a bid to harmonise the approaches taken by Member States;
• Encourage Member States to boost judicial training;
• Support industry-led initiatives to combat IP infringements, including voluntary agreements on advertising on websites, on payment services and on transport and shipping;
• Step up co-operation between EU customs authorities, including an assessment of the implementation of the EU Customs Action Plan on IP infringements for 2013-2017 and proposal of more targeted assistance to national customs authorities.

Of particular note to trademark professionals will be the intention to “create a watch-list of markets that are reported to engage in, or facilitate, substantial IPR infringement”, as well as publishing an updated report on IP rights enforcement in countries around the world (with China, South-East Asia and Latin America specifically highlighted).

The ‘IP Markets Watch List’ will be created in collaboration with the European Observatory on Infringements of Intellectual Property Rights and – much like the USTR’s notorious markets list – will identify online and physical markets outside the EU that are reported to engage in, or facilitate, substantial IP rights infringements. Again like the USTR”s project, there will be a public consultation to collect information on these markets (including location, the volume of traffic, the types of infringed goods or services, the estimated harm for right holders, possible enforcement measures in place, etc) and – following verification via the Observatory – markets of concern will be placed on the list. It is expected that the first list will be published in the second half of next year.

The USTR list has been criticised in the past over its accuracy and questions have been asked about how exhaustive it actually is. However, as we have argued, it is a good resource for brand owners. It also provides an opportunity on them to heap pressure on markets of real concern.

An example of how influential it can be is provided by in Alibaba. Last year, when the USTR’s Special 301 Out-of-Cycle Review of Notorious Markets report relisted Alibaba’s Taobao after a four year absence, group CEO Daniel Zhang sent out an email overnight to the company’s platform governance team, stating: “This is a disappointing moment for all of us.” The company has subsequently embarked on work programmes designed to bolster its anti-counterfeiting efforts. This has included legal action against those selling fakes on its platforms, the creation of new brand partnerships, building bridges with previous critics, calling for the government to do more to fight counterfeiting, unveiling an advisory board of brands, and moving to garner the support of industry associations. While critics have labelled such efforts as “a drop in the bucket”, over the past year the company has clearly been stepping up its anti-counterfeiting efforts (and seeking to highlight such through press releases and media coverage).

One doesn’t have to be cynical to see a connection between these activities and a desire to be removed from the USTR list but that is almost by the way. Even if just a contributory factor, it suggests that the list can help encourage meaningful action. In that respect, the new European Commission list will provide another tool for brands and associations to utilise.

Another aspect worth mentioning is that the press release issued by the commission makes great play of the headline figure that 5% of goods imported into the EU (equivalent to €85 billion) are counterfeited or pirated. That figure appears to be taken from the Trade in Counterfeit and Pirated Goods: Mapping the Economic Impact report, issued jointly by the OECD and EUIPO. That such evidence is being directly cited by the Commission as a motivation to act serves as an endorsement of the types of research undertaken by organisations like the EUIPO. In our coverage of the above report last year, we noted that such research is precisely designed to motivate policy-makers to ramp up efforts to fight illicit trade and hoped that it would help encourage action. Today serves as an illustration that such messaging is indeed being heard in political circles, providing payback for the investment and effort involved in such projects.