War declared on piracy

© VDMA

© VDMA

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© Messe Düsseldorf

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Product and brand piracy is a business worth billions - in the negative sense. According to the EU, around ten percent of world trade is affected. The damage amounts to between 200 and 300 billion Euro each year according to estimates by international experts. Tendency: rising.

Product and brand piracy are the most serious forms of white-collar crime worldwide. The spectrum of counterfeited products extends from parts and components in original quality offered at lower prices up to fakes of inferior quality, which harbour genuine safety risks. This applies for example to security-relevant machinery, vehicle or aircraft components and pharmaceutical products. In addition, there is a growing trend towards the reproduction of complete machines. In addition to this threat, the most dramatic consequences are, of course, also direct profit and sales losses, but also image damage and not least the effects on the employment market. Throughout the whole of Europe a total of 300,000 jobs are believed to be affected.
A major problem is that patents are only granted on a national level. There is neither an EU nor worldwide-applicable patent law. In most countries simple replication is permitted or then only prohibited if unfair competition methods are also used.

Great need for action

An increasing number of institutions, associations and companies worldwide are taking up the fight against product and brand piracy. "The Internet makes a lot of things more transparent, as it does trademark infringement", says Marc Wiesner, expert on product piracy at the VDMA’s (German Engineering Federation) legal department. The counterfeiters are in the meantime no longer just copying the ideas and products of the original manufacturers, but can also use their photos and brochures relatively unimpeded. On the other hand companies can identify illegal copies available on the Internet much more quickly.

The VDMA recently published the results of a current study of its member firms on product and brand piracy. On average it revealed that more than one in two companies is affected. According to the figures, 71 percent of copies are sold and marketed in Asia, 37 percent in America and Europe. In terms of countries, China (68%) heads the list, followed by Germany, India and the USA with 21 percent each. Most companies were alerted to the problem by information from their customers, who recognized the copies at trade fairs or through their own market knowledge. 16 percent of the VDMA members became aware of the problem through a corresponding decline in sales. The sector most seriously affected is the plant engineering sector. In this connection a marked rise in components and spare parts is evident. The VDMA explains that this is due to the currently lower turnover generated by sales of complete machines and the increasing introduction of integrated protective measures against product piracy.

In the meantime almost every company is taking protective measures, even if they themselves are not yet affected. These extend from registration to commercial trademark protection such as patents or brands through to the careful selection of cooperation partners and strict secrecy up to technical copy protection. The most frequently used technical protective feature is product labelling along with investments in product surveillance and tracking. However, the possibilities available on the market are frequently still regarded as insufficient. In order to achieve successful security technology, the focus is on aspects such as the uniqueness of the original, its forgery-proof characteristics and resistance to forgery during the complete product life cycle, but of course also the efficiency and effectiveness of these measures.

In focus

The VDMA launched its broadly structured strategies against product piracy with the "Pro-Original" campaign founded in 2007. In the meantime this has been joined by the "Innovations against product piracy" research offensive and a working group entitled "Product and know-how protection". In this connection, six areas form the focal point: product labelling and protection, the detection and authentication of protected products, tracking and tracing systems, Embedded Security in industrial products and systems, technical protection of undesired know-how transfer along with engineering and consulting.

Checks and controls at K

Strict controls have been announced for the upcoming K 2010, the world’s largest trade fair for plastics and rubber. The examination of machines presented at the trade fair for compliance with the requirements of the EU Machinery Directive and the CE protection regulations is aimed at opening up new approaches in the fight against piracy.