EU delivers its take on worldwide IP protection issues

The European Commission has once again placed China at the top of a country-by-country list of nations with inadequate intellectual property enforcement that poses a risk to EU businesses.

That is the conclusion of the latest biennial Report on the Protection and Enforcement of Intellectual Property Rights (IPR) in Third Countries (PDF), which points to the "scale and persistence" of deficiencies in China despite "progress in some areas."

While welcoming efforts to update IPR legislation and streamline enforcement processes, the report notes that legal uncertainty and inconsistent application of laws remain major challenges and China (including Hong Kong) remains the source of around two-thirds of all IP-infringing goods in the EU.

The new edition lists India and Türkiye as second priority countries with "serious problems" in IPR protection and enforcement, followed by Argentina, Brazil, Ecuador, Indonesia, Nigeria, and Thailand among a third priority group. Russia – which was prominent in the last version – is now excluded because sanctions on its economy and a lack of transparency have made it difficult to take a view.

Among the main challenges for enforcement is the lack of power for customs authorities to take ex officio actions to detain, seize or destroy counterfeit and pirated goods at the border or to take action with respect to goods in transit.

Too often, counterfeit and pirated goods are not destroyed at all or quickly enough, while sanctions and penalties imposed for IPR infringements are too low to have a deterrent effect in many markets.

Counterfeit 'watch list'

The Commission has meanwhile also published the latest version of its periodic Counterfeit and Piracy Watch List (PDF), last released in 2022, which notes that the volume of fake products entering the EU remains very high, with some 17.5m items seized at the bloc's borders in 2023 with a total value of almost €811m (almost $921m).

Among the e-commerce sites highlighted by rights holders whilst providing commentary for the report include Alibaba's sites, Amazon, Meta (Facebook), and Mercado Libre, which reportedly "still have many counterfeit goods on offer," according to the report, which notes, however, that these platforms have "taken a number of measures in line with the industry best practices" to improve matters.

It also cites Shopee, DHgate, and Tokopedia among platforms that have previously been listed as making progress but require further monitoring, while a series of sites in Russia (avito.ru, tiu.ru, and youla.ru), Belarus (deal.by) and Kazakhstan (satu.kz) have high levels of counterfeits and are not responsive to takedown requests.

"IPR infringements undermine the EU's IPR-intensive industries, which contribute to almost half of the EU's total annual GDP and generate more than 80 per cent of EU exports, providing valuable and sustainable employment opportunities for society," said the Commission.

"The protection of intellectual property is, therefore, a key driver of economic growth."