MEDICINES HEALTHCARE REGULATORY AUTHORITY
The MHRA brings prosecutions, under legislation it enforces, for illegal activity involving medicines and medical devices. Additionally, the MHRA will use trademarks legislation where the falsification (counterfeiting) of medicines and devices has occurred.
Falsified (counterfeit) medicines in the unregulated supply chain (Internet) are mostly erectile dysfunction medicines and slimming products: since the beginning of 2011 the MHRA has seized almost 400,000 doses. The predominance of erectile dysfunction medicines is a direct result of the significant demand for these types of medicine in the UK and worldwide and the profit that can be made by trading in these medicines.
Additionally, during the same period the MHRA seized several million doses of unlicensed generic versions (non-counterfeit) of the same type of product. Counterfeit medical devices currently being investigated include dental equipment and condoms.
NATIONAL MARKETS GROUP
The availability of, and threat from the sale of counterfeit goods at markets is a serious problem. However, a concerning and growing threat is presented by social media, in particular Facebook.
This platform, while populated by millions of genuine users, has been infiltrated by thousands of people engaged in the manufacture, supply and distribution of an array of counterfeit and pirated goods. Work by the NMG and partners shows that illicit traders set up bogus Facebook accounts using closed groups to attract customers and sell infringing products, including unsafe goods.
During a recent investigation it was found that the sale of a counterfeit hair straightener by a Facebook trader had caused serious burns to the user’s scalp due to overheating of the product.
The National Markets Group (NMG) was established in 2008 to provide a forum for a national, co-ordinated, cross-sector approach to tackle the trade in counterfeit goods at markets and car boot fairs, and, more recently, through social media and online platforms. With over 2,000 open air markets and car boot sales in the UK alone, the temptation and opportunity for counterfeiters to infiltrate this legitimate supply chain and prey on the vulnerable and or those who ‘like a bargain’ is enormous.
Monitoring of 10 key markets in the UK by the NMG and its members shows tens of thousands of counterfeit and pirated goods openly available to the consumer. Products range from clothing, footwear, handbags, purses, caps, jewellery, watches, perfume, cosmetics and electrical goods, many of which have the ability to maim or even cause fatal injury.
Exercises by the NMG in conjunction with enforcement and government partners show thousands of counterfeit goods entering the UK daily, via sea, air and fast parcel ports, which end up for sale at markets, car boot sales and online marketplaces, including social media platforms such as Facebook.
ANTI-COUNTERFEITING GROUP
The Anti-Counterfeiting Group (ACG) is a not-for-profit trade association that will be celebrating its 35th year in 2015. Today ACG’s membership comprises over 170 organisations globally, operating in, or providing specialist advice to, most industry sectors where counterfeiting is an issue.
As concluded by most IP agencies, the true scope and scale of IP crime remains unknown; however, using a snapshot of data from just two ACG members, it is evident that counterfeiting of all types of goods from luxury to electrical is still at a significant level.
For one member, 75,000 counterfeit products were seized during 2014/15, with a retail value of £2.5 million.
Another ACG member dealt with 68 Customs cases relating to the detention of 280,000 products and 660 Trading Standards cases leading to the recovery of 60,000 items.
BPI
The BPI has good grounds to believe that IP crime, particularly online copyright infringement, remains high but is showing a small but steady decline. BPI suggest that the UK has one of the lowest percentages of users who have accessed at least one pirate service using a personal computer.
Unfortunately this study is limited to PC use and the ever-growing use of mobile technology that is bound to impact on these statistics. However, there are signs that the combination of good legal digital music services and the efforts being made by government, law enforcement and industry are having an impact.
In the past year, the following successful prosecutions have been brought by the BPI.
Dancing Jesus
On 10 November 2014, two individuals behind the illegal music forum, Dancing Jesus, were sentenced at Newcastle Crown Court to a total of four years and five months (53 months) in prison.
Dancing Jesus was an online forum that allowed members to post tens of thousands of illegal links to music uploaded to cyberlockers such as Rapidshare,
Filesonic and Mediafire. Approximately two-thirds of the tracks were distributed pre-release. More than 22,500 links to 250,000 individual titles were made available via Dancing Jesus between 2006 and 2011. The site welcomed more than 70 million user visits during its lifespan. In the course of her comments, Judge Sherwin noted that it would be easy to consider such activities a victimless crime but reaffirmed that piracy only serves to reduce the ability of the industry to promote and fund new artists.
In 2010, the BPI’s Copyright Protection Unit commenced an extensive investigation with the co-operation of the IFPI, the City of London Police, the Intellectual Property Office and the US Department of Homeland Security, which identified the creator and operator of the Dancing Jesus site as Robinson. On 1 September 2011, Robinson was arrested and, in a co-ordinated operation with US law enforcement in Dallas, the servers behind the forum were seized.
On 24 February 2015, the defence made an oral application in front of a single judge at the Court of Appeal to have both conviction and sentence reviewed. Following submissions from both defence and prosecution, the judge dismissed both requests and therefore endorsed the sentences issued by the trial judge, which were four years for Kane Robinson, reduced to 32 months as a result of his early guilty plea, and two years for Richard Graham, reduced to 20 months following his guilty plea. A request to recover all prosecution costs has been submitted to the NTT and its assessment is awaited.
Ian Atkinson received a 27-week custodial sentence at Liverpool Crown Court on 19 November 2014 for supplying counterfeit music CDs and film DVDs. This resulted from a stop and search exercise that found him in possession of a bag of copied music CDs, which he admitted, at the time of arrest, he had been supplying to local pubs in and around the Merseyside area. His home address was also searched and forensic examination of his seized computer and mobile phone confirmed that he had been supplying and selling on a much bigger scale.
Following a protracted BPI enquiry dating back to 2008, on 16 October 2014, Arnold Elder from Bristol pleaded guilty to 21 offences relating to copying, manufacturing and distributing CDs, DVDs and computer games. Elder was running a regular weekly mailing list to a vast customer base over an extensive period of time. He received a 12-month sentence on each count, suspended for two years, plus a three-month curfew, electronic monitoring and 200 hours’ unpaid work.
In the past year, the BPI has submitted 66,488,717 URLs to search engines for removal from search results, demonstrating that a large quantity of infringing content is still available on the Internet. While the recent change in Google’s algorithm demotes sites receiving high levels of infringing results is welcome, search still remains a substantial source of visitors to infringing sites who may well have been looking for legitimate sources of music.
While digital piracy continues to grab the headlines, the struggle to crack down on counterfeit goods continues. The table outlines the number of seizures conducted by the BPI (British Recorded Music Industry) for the period 01 January 2014 to 15 July 2015.
PROFESSIONAL PUBLISHERS ASSOCIATION
The Professional Publishers Association (PPA) estimates the cost of digital magazine piracy to be three times the size of the UK’s digital magazine market. Globally, the pirated digital UK magazine market is worth between £400-650 million. The PPA estimates that over 100 million copies of UK-produced digital magazines were downloaded last year.
The most recent study conducted for PPA looked at a select group of titles. The study highlighted how a specific group of identified file hosts were responsible for high percentages of detected unauthorised files of magazine content. One site accounted for over a third (35%) of all detected infringing files and showed infringing files at significantly higher levels than all other file hosts tracked.
New release groups were identified in the research, which also showed that magazine-focused pirate sites had seen a significant growth in estimated usage over the past year (183%). This suggests that there is an ever-increasing demand for ‘free’ digital copies of PPA members’ content.
Advertising accounts for the largest proportion of intermediaries.
IP ENFORCEMENT RESEARCH UNDERTAKEN DURING 2014/15
Research into IP enforcement, whether that is sector or country specific, is continually being undertaken. Here are some highlights from 2014/15.
EU Observatory on Infringements of Intellectual Property Rights - Study on the Cosmetics and Personal Care Sector
The study found that when the knock-on effect on suppliers is taken into account, legitimate businesses across the EU lose €9.5 billion of sales revenue because of counterfeiting, with around 80,000 jobs lost.
The Observatory also intends to undertake research into 12 other sectors known to be subject to IPR infringements, such as clothing, footwear and accessories; medicines; luggage and handbags; games and toys; computers and automotive parts; watches and jewellery.
IPO - International Comparison of Approaches to Online Copyright Infringement
An international comparison of approaches to online copyright enforcement in Brazil, Canada, France, Italy, The Netherlands, South Korea, Spain, UK and US.
Penalty Fair? Study of criminal sanctions for copyright infringement available under the CDPA 1988
This study was commissioned by the IPO to provide an evidence-based view on whether the criminal sanctions for copyright infringement available under the CDPA 1988 are currently proportionate and correct, or whether they should be amended. The particular point of focus for the study was the difference in the sanctions that apply to online criminal activity - often referred to as ‘piracy’ - compared with those relating to physical goods.
USTR (United States Trade Representative) Report on Notorious Markets
The Notorious Markets List highlights select online and physical marketplaces that reportedly engage in and facilitate substantial copyright piracy and trademark counterfeiting.
USTR 301 Report
The Special 301 Report is the result of an annual review of the state of intellectual property rights (IPR) protection and enforcement in US trading partners around the world, conducted by the Office of the United States Trade Representative.
INTERPOL Trafficking and Counterfeiting Casebook 2014
This casebook outlines the links between illicit trade, counterfeiting and organised crime.
EU Commission
The EU Action Plan sets out a number of actions to focus the EU’s IPR enforcement policy on commercial scale infringements (the so-called ‘follow the money’ approach). The Strategy setting out an international approach examines recent changes and presents ways to improve the Commission’s current means of action to promote enhanced IPR standards in third countries and to stem the trade in IPR infringing goods.
BASCAP: Roles and responsibilities of intermediaries: Fighting counterfeiting and piracy in the supply chain
The study looks at key intermediaries in the physical world and those providing infrastructure and services online.
UK performance
Finally, the UK has also performed well in two surveys in 2015: the Global Intellectual Property Center’s International IP Index - ‘UK highest ranked country for enforcement and a global leader’; and Taylor Wessing’s Global Intellectual Property Index - ‘UK as the best IP regime in the world’.
