Fashion Firms and Counterfeiting: Causes and Actions

The counterfeiting phenomenon, i.e., all those instances when a violation of intellectual property rights (IPRs), either trademarks, copyrights or patents occurs, has reached truly remarkable dimensions. The 2011 BASCAP report (ICC, 2011)1 indicated that by 2015 the value of counterfeiting would reach $1.7 trillion dollars globally, inclusive of internationally traded, internally produced and consumed counterfeits as well as digitally pirated products. As Loredana Gulino, General Director for the fight against Counterfeiting of the Italian Patent and Trademark Office argues: “There is no way to fully contrast the counterfeiting phenomenon if it isn’t deeply understood, both quantitatively and qualitatively.” Europe is very much affected by the phenomenon, since it is a privileged destination market for counterfeits. As a European Commission Report (2014)2 highlights, the United Kingdom, Germany, Italy, Spain, Belgium, and France are the European countries most hit by the phenomenon in terms of numbers of cases and number of articles intercepted. The fake products crossing Europe are coming mainly from China (that alone accounts for 66.12 percent of the total), Hong Kong, Greece, Turkey, and the United Arab Emirates. In addition, in 2013 the EU customs agencies opened almost 87,000 cases for a total of almost 36 million illicit goods whose domestic retail value (i.e., the price at which they would have been sold on the national market if they had been genuine) was worth almost 768 million euros. The most affected industries (in terms of lost equivalent domestic retail value) were the fashion and luxury goods industries that between accessories (watches, sunglasses, bags, wallet, purses) and clothing comprised 53.05 percent of the total (Figure 5.1).