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European Commissioner for Internal Market and
Conference on Counterfeiting and Piracy
Members of the European Parliament, distinguished guests, ladies and gentlemen,
it is with great pleasure that I welcome you here this morning to participate in this High Level Conference on Piracy and Counterfeiting. In hosting this event, I set out to bring together the stakeholders, the lawmakers and, of course, members of the European Parliament to exchange views, debate and discuss the main issues, and work towards finding solutions to this modern day highway robbery taking place all around us. It is becoming a very serious threat to the health and safety of our families and to the economic future of the European Union.
The purpose of today’s event is twofold. Firstly to raise awareness of the dangers to health and safety, as well as the real cost of buying fakes and illegally downloading material from the internet. Secondly it is also about developing a strategy to fight those thieves who are causing more and more damage to businesses, industries and consumers every day. And it is my hope that today’s discussions will contribute to finding practical, pragmatic ideas that can be transferred into actions to tackle this virus that is eating into Europe’s profits.
This conference is not a one-off bells and whistles event; it is a beginning, and what will hopefully be the start of an action plan. And I would hope that we can repeat today’s event with a further conference in a year’s time to see what progress has been made and how best to move forward.
I would like to begin by dealing with piracy. I have always had a problem with this term – it is too soft for what it defines. There is a romantic image attached to the word, it has heroic connotations – Johnny Depp in the Pirates of the Caribbean being the most obvious example. But as all of you here today know, there is nothing romantic about the theft of material illegally downloaded from the internet. And there is nothing heroic about such downloaders putting their hands in the pockets of Europe’s creative writers, musicians and performers and stealing their copyright income. Piracy is the internationally recognised word to describe this type of theft, so we cannot go about changing the term now, but we can go about hardening up the true definition of the activities it describes.
We have seen evidence of the carnage caused by false spare parts in the airline industry for example, not to speak of the quantity of fake and often dangerous medicines and drugs on the market.
The European economy is one of the most effective and competitive in the world. And intellectual property is at the heart of our ability to compete. Through innovation, top quality design and production, together with effective branding, European companies have the edge – an ability to sell products at a premium price. We do not have to compete on price alone. Innovation and creativity give us that advantage, so it’s really no surprise that the theft of those ideas is big business.
At a conference in Ireland recently, one of the members of the audience - who happened to be a former MEP - said “ah Charlie, everyone loves a bargain – what’s the harm in buying a fake designer handbag?” She was half-joking, wholly in earnest. And while it might have been a bit of fun paying small money for a fake designer garment in the past, today the production of counterfeit and pirated products is carried out on an industrial scale. Their actions are criminal and it is networks controlled by criminals that are used to bring counterfeit goods to the market.
This is no longer about buying a t-shirt on the beach with a fake Lacoste alligator for a couple of Euro, or a fake designer watch or handbag at a market stall. This is about tried and trusted brands, quality brands, being undermined and destroyed. This is about the consumer losing trust in those brands. It is also about turnover diminishing, innovation slowing down and the stunting of growth and development. And the threat of serious job losses and companies going out of business is looming on the horizon.
I have set up within my Directorate-General a unit which will be devoted to the combat against intellectual property theft. I would like to see the resources of this unit expand over time to mobilise the fight against counterfeiting, and to work with other services of the Commission, Member States and stakeholders in upping our game against this pernicious phenomena.
As you can see from the exhibition of the Counterfeit goods at the Conference here today, nothing is safe, just about everything can be copied – from exclusive perfumes to children’s toys, drinks, pharmaceuticals and car and aeroplane parts. The phenomenon is spiralling out of control. In 2005, European customs seized about 75 million fake articles and by the following year; by 2007 that number had almost doubled to 128 million. When you bear in mind that those figures relate only to the goods actually seized, it is obvious that the real numbers must be staggering.
Something in the region of 80% of fake goods intercepted en route to the EU are made in China. Europe Makes it, then the East Fakes it is how many businessmen would phrase it. But the Chinese are beginning to see the potential damage this can do to their own development. As China begins to develop its own research, they realise that as today’s violator could become tomorrow’s victim. And, they no longer want to have the reputation of being the world’s number one counterfeiting industry.
The Commission, through bilateral and multilateral trade agreements, has been working on the international scene to improve the fight against piracy and counterfeiting in third countries. Border controls have also been improved through the Customs Regulation. The 2004 Enforcement Directive set up a legal framework to address piracy and counterfeiting, giving more efficient tools to combat violations of intellectual property. For this to work effectively, it needs to be accompanied with various practical measures. Information gathering has to be improved – data is fragmented and incomplete. We are trying to improve this.
But perhaps even more important than the collection of information throughout the EU, we need to improve cooperation between Member States. Key players including custom authorities, police, national inspection services and intellectual property offices need to work together. Better cooperation between counterparts within their own territory is essential, including the sharing of best practices. The UK already has such a system up and running, where the Intellectual Property Office has become a local point of contact and coordination for key British players in the fight against fakes.
It is also important to improve and exchange information between Member States so that where counterfeited products are detected in one country, other States can be effectively and efficiently informed about it. The Commission will explore how to establish an effective network for administrative cooperation between all Member States to facilitate rapid exchange of information.
But I believe that industry sectors themselves are best placed to lead the battle of the fakes. It is industry that has the inherent knowledge to identify the fake products and to uncover the production and distribution network used to make and sell the counterfeits. Industry could do a lot to help themselves were they to unite in the fight by developing collaboration and mutual assistance models on the basis of stakeholder agreements. Industry should also partner the authorities and provide the technical expertise enabling the competent authorities to intervene.
Illegal downloading and the sale of counterfeit goods over the internet is another area where practical cooperation would be hugely beneficial. The industry needs agreements between themselves on filters, sanctions and standard reaction on repeated infringement. In the end, it is mainly up to the internet service providers and the rights holders to solve the problem of illegal downloading. I would encourage both sides to come together to find a pragmatic approach. Industry agreements and the voluntary exchange of information would be extremely useful - for example, who is pirating, what are they pirating and who is behind a site selling counterfeit goods. I am convinced that more legislation is not the solution here. The problem will have changed before any EU Regulations would be on the statue books. As Winston Churchill once said, “If you have ten thousand regulations you destroy all respect for the law”.
Today’s event is all about working out practical solutions. The Commission and my colleagues in the European Parliament are willing to assist in any way, but the real initiative and power is in your hands as stakeholders.
I would like to thank all who are participating in today’s conference – particularly our MEPs, Arlene McCarthy and the other moderators, Edith Herczog, Janelly Fourtou, Erika Mann and Malcolm Harbour. I would also like to welcome Mr Philippe Lacoste and Mr Leonardo Ferragamo who will address you shortly on what counterfeiting has done and continues to do to their family businesses. And I look forward to hearing the results of your discussions on the four areas of counterfeiting and piracy that are being addressed today – the economic dimension, the dangers for health and safety, international trade flows and internet piracy.
As I said, today’s conference is just a beginning. I expect to see real progress coming from today’s gathering.
Thank you very much