Globalisation, policies for improving trade facilitation and the rising economic importance of intellectual assets are important drivers of economic growth. These intangible assets in the global context have shifted the attention of industry and policymakers to intellectual property (IP). For modern industries, IP is one of the key value generators and enablers of success in competitive markets, and for policymakers it plays a crucial role in promoting innovation and driving sustained economic growth.
However, this rising importance of IP in the globalised world has created new opportunities for criminal networks to free ride on others’ intellectual assets and pollute trade routes with counterfeits. The recently observed broadening scope and magnitude of counterfeiting, in particular in the context of trade, is seen as a significant economic threat that undermines innovation and hampers economic growth.
In order to provide policymakers with reliable empirical evidence on this threat, the Organisation for Economic Co-operation and Development (OECD) and the European Union Intellectual Property Office (EUIPO) joined forces to develop an understanding of the scale and magnitude of the problem of IP infringement in international trade. The results published in a series of reports that provided a general overview of this threat: Trade in Counterfeit and Pirated Goods: Mapping the Economic Impact (OECD/EUIPO, 2016[1]), Mapping the Real Routes of Trade in Fake Goods (OECD/EUIPO, 2017[2]) and Trends in Trade in Counterfeit and Pirated Goods (OECD/EUIPO, 2019[3]).
Apart from these core reports, subsequent studies have deepened our understanding on specific aspects of trade in counterfeit goods. These include Trade in Counterfeit Goods and Free Trade Zones: Evidence from Recent Trends (OECD/EUIPO, 2018[4]); Why Do Countries Export Fakes? (OECD/EUIPO, 2018[5]); Misuse of Small Parcels for Trade in Counterfeit Goods (OECD/EUIPO, 2018[6]); Trade in Counterfeit Pharmaceutical Goods (OECD/EUIPO, 2020[7]) and Misuse of Containerized Maritime Transport in Counterfeit Trade (OCDE/EUIPO, 2021[8]).
Altogether, these reports provide robust evidence of the significant volume of trade counterfeiting and piracy. They also document the large extent of this threat to efficient business and the well-being of consumers worldwide and point to the damages it causes by reducing firms’ revenues and undermining their incentives to innovate.
The existing studies triggered great policy attention on combating counterfeit and pirated trade. This has been paralleled by increased efforts by the private sector to raise awareness of this threat. However, the existing dataset is becoming dated, and this could hamper understanding of the recent trends linked to trade in counterfeit goods.
In addition, several recent developments could also affect the current state of the trade in counterfeits. This includes the boom in trade in small parcels, which has been boosted by the COVID-19 pandemic. What is more, the lockdowns and border closures of the on-going sanitary crisis has created – and will continue to create – further impacts on the illicit trade in counterfeit goods. These impacts occur through several direct and indirect transmission channels, including such phenomena as shifting consumer demand, changing priorities in customs controls and re-shaping trade routes.
This report provides policymakers with updated information on the trade in counterfeit and pirated goods. It measures the scale of counterfeiting using of the methodology developed in the (OCDE, 2008[9]) report and updated in (OECD/EUIPO, 2016[1]). This methodology is used with a new set of world data on seizures of counterfeit and pirated goods, leading to a set of objectives and a robust illustration of economy- and industry-specific patterns in the trade of counterfeits.
The authors stress that the quantitative analysis predates the COVID‑19 pandemic. It is clear the pandemic has largely reshaped both licit trade and the trade in counterfeit goods. While some initial effects on counterfeiting having already been observed, the longer-term impact is expected to emerge gradually. Given the fast pace of change, a precise quantitative analysis of this has not yet been possible. Nevertheless, discussions with law enforcement officials and industry representatives, along with monitoring ongoing law enforcement actions, have shown that the main impact thus far has been an accelerated transition to e-commerce, with a boom in offers of counterfeits online (OECD, 2020[10]); (UNICRI, 2020[11]).
This study largely draws on statistical data on counterfeiting and piracy, which due to their nature are largely incomplete and limited. Consequently, the quantitative results presented in this study illustrate only certain parts of counterfeiting and piracy. Despite this, the methodological apparatus was tailored to the available dataset to ensure the conclusions are clear and based on fact.
