WORLD TRADE  
ORGANIZATION  IP/C/W/448 
9 June 2005 
 (05-2367) 
Council for Trade-Related Aspects 
of Intellectual Property Rights Original:   English 
 
 
 
ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS 
 
Communication from the European Communities  
 
 
 The following communication, dated 6 June 2005, is being circulated at the request of the 
Delegation of the European Communities.   
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I. INTRODUCTION 
1. Since the adoption of the TRIPS Agreement in 1994 and its entering into force, noteworthy 
progress has been achieved worldwide on the prot ection of Intellectual Property Rights (IPR). 
Intellectual property systems have been set up or improved in accordance with international standards 
in a number of countries, where different types of ri ghts are now protected by law (copyright, patents, 
trademarks, designs, but also geographical indications and plant breeder's rights).  
2. The European Communities (EC), thus, acknow ledge that most WTO Members have, in 
general, implemented or are in the process of implementing the TRIPS Agreement, including its 
provisions related to enforcement of intellectual prope rty rights.  However, in parallel with this global 
improvement of the legislative and regulatory stan dards, the volume and value of IPR violations, 
namely in the form of counterfeiting and piracy has known a dramatic increase over the last years, to 
the point where it has taken industrial proportions and now represents a considerable share of the 
global economy.
1 
3. Confronted with this apparent contradi ction between the introduction of the first 
comprehensive, multilateral set of rules for IP enfo rcement and the deterioration of the levels of 
piracy and counterfeiting, the EC would like the TRIPS Council to carefully examine compliance of Members with the enforcement provisions of TRIPS,  pursuant to Article 68 of the TRIPS Agreement. 
II. THE PROBLEM 
A. E
XPANSION OF COUNTERFEITING AND PIRACY  
4. The activity of producing, distributing and selling fake goods has expanded over the last 
years. 
                                                      
1 Although it is extremely difficult to quantify the exact values involved in the global trade of fake goods, 
some estimations point to figures representing between 3% and 9% of the total world trade, i.e. €120-270 billion 
a year.  Studies carried out by the OECD in 1998 and by the International Chamber of Commerce in 1997, 
estimated then that counterfeits accounted for 5-7% of world trade. IP/C/W/448 
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 5. First, the volume of fake goods on the market  has increased dramatically, as shown, for 
instance, by the number of counterfeits seized at the EU external borders
2 : 
- between 80 and 100 million of fake goods are subject to suspended release or detention 
by Customs administrations each year from 2001 to 2003; 
- increase by more than 900% of the number of fake goods intercepted at the EU's 
external frontiers between 1998 and 2003. 
6. Then, the geographical distribution of counterfe iting is varied.  This problem concerns the 
vast majority of the WTO Members, albeit in different degrees.  If there is widespread consumption of fake goods in most countries, other aspects of the issue like production and transit tend to concentrate 
on a limited number of locations.  A split can be made between: 
(i) Source countries 
7. These are the countries where production of pira ted and counterfeit goods , both for domestic 
consumption and for export, reaches worrying dimensi ons.  In cases of digital piracy via the internet, 
the origin of the IPR violation can be particularly difficult to detect. 
8. In these countries it is particularly important to improve the effectiveness and the 
coordination of the police, the courts, the customs and the administration in general.  It is also 
essential to ensure that the legal framework prov ides for prompt, fair and deterrent sanctions. 
(ii) Transit countries 
9. This category includes countries appearing as ma jor places of origin of fake goods suspended 
of release or of detention in the Community, no t because they are producing them domestically, but 
because they are being (ab)used by organized netw orks as transit hubs in the cross-border circulation 
of counterfeits.  These networks tend to take advantage of deficient enforcement, at least at the level 
of border controls, to establish different traffic routes, hiding the real origin of the goods. 
10. Improving the availability of border measures and the effectiveness of customs authorities in 
particular regarding the transit of  goods should help to substantia lly reduce the volume of traffic. 
(iii) Target countries 
11. Substantial volumes of sales of  fake goods occur in almost all countries.  The difficulty of 
defining countries that are main markets for pirated goods is that it is a widespread problem, albeit for 
a variety of (sometimes contradictory) reasons:  because they are too poor to buy IP-protected products, because such practice is accepted or at least not condemned, because they produce them in 
large quantities, as it is sometimes difficult to distin guish between real and fake, or because fakes are 
cheaper. 
12.  Dealing with the consumption of pirated and counterfeit goods requires an effort in terms of 
building up public awareness about the negative impact  and the risks of such practices.  It also 
requires more effective customs controls of im ported goods and a more effective reaction by the 
police and courts against those networks and indivi duals involved in large scale trading in such goods. 
                                                     
 
2 Source : European Commission, DG Taxud. 
http://europa.eu.int/comm/taxation_customs/customs/c ustoms_controls/counte rfeit_piracy/index_en.htm   IP/C/W/448 
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 13. Finally, the range of products th at can be counterfeit or pirated is virtually infinite (from food 
and drinks to clothes and accessories, cosmetics, household appliances, industrial machinery, car or 
airplane spare parts, pharmaceuticals, toys, ther e is no limit to the production of fakes). Virtually 
every type of IP is being violated on a considerable scale.  Big software producers are as likely to be harmed as small makers of a certain type of tea.  The above mentioned annu al statistics published by 
the European Commission's customs services provi de detailed and reliable information about the 
diversity, dimension and the growth of the problem. 
B. W
HY ALL WTO  MEMBERS SHOULD BE CONCERNED  
14. Counterfeiting and piracy affect legitimate right  holders with loss of sales, reputation, jobs, 
and ultimately their viability.  
15. Potentially dangerous counterfeit goods  threaten consumers' or user's health and safety.  Even 
though EU Customs controls on transit goods enable  the interception of some of these dangerous 
products, consumers in the poorest countries are particularly exposed to their sales.  The World Health Organization (WHO) reports on several cases in whic h counterfeit drugs caused the death of a number 
of persons in developing countries
3 and acknowledges that weak enforcement of IPR legislation with 
regard to fake pharmaceuticals is a crucial element in this regard.4 
16. Another reason why every country, rich or p oor, more or less industrialized should be 
concerned has to do with the undeniable role played  by organized crime networks in the spread of 
piracy and counterfeiting.  No country can afford to leave an entire sector of its economy in the hands 
of criminal organizations, allowing part of its  industrial and commercial resources to become a 
"parallel economy".  In particular when the produc tion of goods that have a direct impact on the 
health, safety and security of its citizens is at stake.   However, until this activity is no longer seen as a 
low risk/high profit type of crime, it will continue to  spread.  It is therefore also a question of public 
order, security and good governance to fight against counterfeiting and piracy. 
17. Effective enforcement of IP rights is equally essential to attract foreign investment, transfer of 
technology and know-how, as well as to protect the local  right holders in developing countries.  It is 
also an indicator of good governance, international cr edibility and respect of the rule of law and of 
bilateral and multilateral commitments.  Last, but cer tainly not least, it will encourage more domestic 
authors, inventors and investors and contri bute to the development of these countries. 
III. NEED TO ADDRESS THIS ISSUE WITHIN THE TRIPS COUNCIL 
A. WHY THE TRIPS  COUNCIL IS THE RIGHT PLACE TO TACKLE THIS ISSUE  
18. It is true that, being an underground activ ity and sometimes led by well organized groups, 
counterfeiting is difficult to eradicate.  But the theft of this kind of property is made attractive by the 
relatively low risk it involves – the risk of being caught, jailed or fined – compared to its expected profits. The present scope of the problem is, thus, a sign that the level of execution and the results of 
the implementation of the IPR enforcement measur es prescribed by the TRIPS Agreement can be 
questioned and must be improved. 
                                                     
 
3http://www.who.int/medicines/organization/qsm/activ ities/qualityassurance/cft/counterfeit_factsheet.htm  
4http://www.who.in t/medicines/organiza tion/qsm/activities/qualityassura nce/cft/CounterfeitOverview.htm   
"Enacting deterrent anticounterfeiting legislation alone will not solve the problem. It needs to be enforced. 
Where existing laws are not enforced crime is perpetuated as criminals ar e not afraid of being arrested and 
prosecuted. Lenient punishments for offences tend to encourage crimin al activities such as medicines' 
counterfeiting, particularly when the penalties for co unterfeiting non-medicinal products are more severe. 
Moreover, disregarding trademark rights may en courage large scale counterfeiting of drugs". IP/C/W/448 
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 19. It is unquestionable that the TRIPS Agreemen t establishes the freedom of each Member to 
determine the appropriate method of implementi ng its provisions.  However, ultimately such 
implementation must allow the adequate prosecution of the objectives of TRIPS. 
20. In that respect, the EC would like to reca ll that, according to Article 41.1 of the TRIPS 
Agreement, " Members shall ensure that enforcement procedures as sp ecified in this Part are 
available under their law so as to permit effective action  against any act of infringement of 
intellectual property rights covered  by this Agreement, including  expeditious remedies to prevent 
infringements and remedies which constitute  a deterrent to further infringements… ".  Hence, we have 
an obligation to take account of the present situ ation and find the ways to combat and reduce 
counterfeiting and piracy. 
21. Considering the TRIPS Council assignmen ts, in particular its task to " monitor the operation 
of this Agreement and, in particular, Members'  compliance with their obligations hereunder… " 
explicitly mentioned in Article 68 TRIPS, there is no doubt that this Council is the appropriate forum 
to address the issue. 
22. In view of the above, the EC submit that the deficient enforcement of IPRs is a major concern 
that should be carefully considered in the forthcom ing months.  The EC consequently request that the 
question be put on the agenda of the Council's ne xt meetings for an in-depth examination and 
exchange of views. 
B. E
XPECTED RESULTS  
23. The activity within the TRIPS Council woul d complement the work done by the WIPO 
Advisory Committee on Enforcement, which has a ma ndate of exchange of information, awareness 
raising and coordination of technical assistance programme. 
24. The aim of the TRIPS exercise would be to understand where the main problems, difficulties 
and shortcomings are by examini ng the implementation of TRIPS provi sions on enforcement in detail, 
and make recommendations on ways to improve  the situation (for instance by laying down 
benchmarks to evaluate the progress made by natio nal administrations towards a higher level of IP 
enforcement, suggesting best practices, etc.), to en sure a full implementation of TRIPS obligations in 
this field. 
25. Such an in-depth examination of the situa tion would also allow to better target technical 
assistance in the IP field.  The EC is an importa nt contributor to IP related technical assistance 
worldwide and has, in particular, a few programm es exclusively focused on IP, with enforcement 
components such as training of officials in charge  of IP infringements (judges, customs, etc.). 
26. Among the issues that should be given speci al attention by the TRIPS Council should be:  
procedures available to preserve evidence, methods used for calculating damag es, sanctions available 
at a civil and criminal level, the information right,  use of provisional and protective measures, custom 
measures and their availability for export and transit. 
27. This list is not exhaustive a nd the EC would be happy to exchange views with the Members 
of the WTO and to engage in a constructive dialogue. 
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