Impact of Counterfeit
The legal framework
For the purpose of the report, the term “counterfeiting” is used in its broadest sense and
encompasses any manufacturing of a product which so closely imitates the appearance of the product
of another to mislead a consumer that it is the product of another. Hence, it may include trademark
infringing goods, as well as copyright infringements. The concept also includes copying of packaging,
labelling and any other significant features of the product.
Overview of industries affected by counterfeiting
It is very hard to obtain accurate statistics on counterfeiting, mainly because it is a clandestine
activity. However, the copyright industries of America have collected detailed information on piracy
of their products for a number of years. These sectors suffer the largest losses. About half of all
motion picture videos, more than 40 per cent of all business software and a third of all music
recordings sold in 1996 were pirated copies.
Counterfeit clothing, both fashion and sportswear, is very prevalent in Europe. A common
technique is to import plain clothing and attach the labels in one EU Member State and then release
the products for sale in another Member State, benefiting from the free movement of goods across
borders.
In the spare-parts industries, counterfeits are part of the overall problem of unapproved spare
parts. They are traded on the grey market, together with over-runs, recycled items, copy parts and
stolen goods, making it very difficult to control the market and separate the illegal items from the
legal.
Geographical spread of counterfeit products
While most countries have some trade in counterfeit goods, some have become notorious for
producing and exporting large quantities of fakes. Information from the customs services of the
United States and EU Member States provides an insight into which countries are the biggest
exporters of fakes and the types of products that are being counterfeited.
The top five suppliers of counterfeit goods to the United States in 1997, were China, Korea,
Chinese Taipei, Hong Kong (China) and the Philippines. The most common products were media
For the purpose of the report, the term “counterfeiting” is used in its broadest sense and
encompasses any manufacturing of a product which so closely imitates the appearance of the product
of another to mislead a consumer that it is the product of another. Hence, it may include trademark
infringing goods, as well as copyright infringements. The concept also includes copying of packaging,
labelling and any other significant features of the product.
Overview of industries affected by counterfeiting
It is very hard to obtain accurate statistics on counterfeiting, mainly because it is a clandestine
activity. However, the copyright industries of America have collected detailed information on piracy
of their products for a number of years. These sectors suffer the largest losses. About half of all
motion picture videos, more than 40 per cent of all business software and a third of all music
recordings sold in 1996 were pirated copies.
Counterfeit clothing, both fashion and sportswear, is very prevalent in Europe. A common
technique is to import plain clothing and attach the labels in one EU Member State and then release
the products for sale in another Member State, benefiting from the free movement of goods across
borders.
In the spare-parts industries, counterfeits are part of the overall problem of unapproved spare
parts. They are traded on the grey market, together with over-runs, recycled items, copy parts and
stolen goods, making it very difficult to control the market and separate the illegal items from the
legal.
Geographical spread of counterfeit products
While most countries have some trade in counterfeit goods, some have become notorious for
producing and exporting large quantities of fakes. Information from the customs services of the
United States and EU Member States provides an insight into which countries are the biggest
exporters of fakes and the types of products that are being counterfeited.
The top five suppliers of counterfeit goods to the United States in 1997, were China, Korea,
Chinese Taipei, Hong Kong (China) and the Philippines. The most common products were media
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