Counterfeited products – regarding safety, rights and financial losses

Counterfeiting is a problem that has increased in line with the internationalisation of the purchase and sale of goods and services. Counterfeited products can now be purchased both online and in stores. Below is information on how counterfeited products can have a wide-ranging impact, from your personal safety to the public economy in general.

Film: Counterfeited products (1:15)

When someone creates a lower quality and less expensive copy –a counterfeited product – of something you have created, the consequences can be negative. Unfortunately, counterfeiting is an international phenomenon. One first step towards better protection is to register your intellectual property rights.

The problems involved in counterfeiting can be divided into three categories:

  • Financial losses
  • Product safety
  • Protection of rights for the person who developed and/or produces the good or service

Product safety

A high number of imitation products fail to comply with safety requirements. As a consumer, you have no guarantee of the contents of the fake product/service you are buying. Take cosmetic products, for example. Make-up and skincare products may contain 60-70 ingredients, with production requiring advanced technology.

Perfumes are easier to copy, as they contain fewer ingredients than colour cosmetics and skincare products. Even if the scent of the counterfeited product is similar to the original, a fake perfume could cause severe allergic reactions.

Fake medicines

Fake medicines are another example of counterfeited products that can be directly harmful for humans, according to a study by the European Union Intellectual Property Office (EUIPO). They may contain harmful substances and can therefore be directly life-threatening or cause disabilities. The risk is that they either do not contain the active substance or that the contents are insufficient, random or even incorrect.

The Swedish Medical Products Agency has also issued warnings, stating that pirate copy medicines are a health risk. According to the Agency, pirate copy medicines cannot guarantee the level of quality to which the patient is entitled, as they are not governed by the regulations and control system established to monitor medicines. Swedish Customs has stated that the increase in sales of counterfeited medicines can be attributed to the recent introduction of sales via illegal online pharmacies.

Financial losses

A report of research findings published by the EUIPO shows that counterfeited products result in annual losses of EUR 60 billion within 13 industries in the EU. The producers of the legal products are forced to reduce production due to the pirate copies, also having to cut their workforce, and this represents a loss of 434,000 jobs in the EU, according to the report.

Counterfeited products have a severe impact in Sweden

A report published in May 2019 by the Organisation for Economic Co-operation and Development (OECD) shows that trade of counterfeited products is comprehensive and has major consequences for Sweden, individual companies and consumers. Consumers are tricked into buying copies, in the belief that they are buying original products, and the value of such purchases is SEK 4.5 billion per year. 

A couple looking into their mobile phones

Swedish companies are losing earnings from the investments they have made, and Sweden is losing tax revenue. Some thousands of Swedish jobs are lost, and Swedish products are particularly vulnerable.

Facts about counterfeited products

Rights

Innovations are protected by intellectual property rights for a reason. Many inventors and creators invest a lot of time and resources in realising their visions. The process leading from the initial idea to the finished product can often take a long time and require years of research, song writing or other creative work.

Ideas in the making

The right of a copyright holder to decide what happens to his or her own work is a reward for all the hard work invested. The party holding the financial rights to a work is also the party to decide whether and in which way the work can be utilised and distributed. This may involve whether a song can be used for a commercial, whether a short story can be published in a collection of short stories or whether a photograph can be used on a poster.

In Sweden, copyright is automatically assigned when a work is created. You do not therefore have to apply for copyright.

Sources

ECC Sweden's website (external website)

The EUIPO’s report on the consequences within the pharmaceutical industry (PDF, 581 kB)

The Swedish Medical Products Agency (external website)

Swedish Customs (external website)

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Infringement of intellectual property rights