EUROPEAN COMMISSION 
Brussels, 24.5.2011 
SEC(2011) 612 final 
  
COMMISSION STAFF WORKING PAPER 
IMPACT ASSESSMENT 
Accompanying document to the 
Proposal for a 
REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 
on entrusting the Office for Harmonisation in the Internal Market (Trade Marks and 
Designs) with certain tasks related to the protection of intellectual property rights, 
including the assembling of public and private sector representatives as a  
European Observatory on Counterfeiting and Piracy 
{COM(2011) 288 final} 
{SEC(2011) 613 final}  
 
EN 2   EN Disclaimer 
This impact assessment commits only the Commissi on's services involved in its preparation. 
The document has been prepared  as a basis for comment and doe s not prejudge th e final form 
of any decision to be taken by the Commission . 
TABLE OF CONTENTS 
1. Introduction................................................................................................................ .. 4 
2. Procedural issues and consulta tion of interested parties.............................................. 5 
2.1. Procedural issues......................................................................................................... .5  
2.2. Consultation of interested parties................................................................................. 5 3. Problem definition........................................................................................................ 7 3.1. Reasons for ineffective enforcement of intellectual property rights in the EU............ 7 
3.1.1. Lack of reliable, objective data .................................................................................... 7 3.1.2. Divergences in the enforcement legislati on of Member States and the application by 
the courts ..................................................................................................................... .8  
3.1.3. Insufficient coordination and exchange between responsible authorities in the 
Member States on best practices.................................................................................. 8 
3.1.4. Insufficient exchange on successf ul private sector strategies...................................... 9 
3.1.5. Insufficient knowledge of persons involved in enforcement ....................................... 9 3.1.6. Insufficient use of technologies  to prevent counterfeiting........................................... 9 
3.1.7. Insufficient awareness of consumers on the impact of IPR infringements.................. 9 
3.1.8. Demand for counterfeit produc ts and pirated content................................................ 10 
3.1.9. Lack of expertise in third countries............................................................................ 11 3.2. The role of the European Observ atory on Counterfeiting and Piracy........................ 11 
3.2.1. The Observatory's mandate........................................................................................ 11 3.2.2. The Observatory's problems to cope with its current and future tasks ...................... 12 3.3. Likely consequences if no measures  are taken (baseline scenario) ........................... 14 
3.3.1. The situation of the Observatory in the mid-term...................................................... 14 3.3.2. Assistance to be provided by the Office for Harmonisation in the Internal Market 
(OHIM) ...................................................................................................................... 14 
3.3.3. Impacts of the current situation.................................................................................. 15 3.3.4. Likely development of the situation over the next few years .................................... 18 4. Subsidiarity ................................................................................................................ 21 
 
EN 3   EN 5. Objectives.................................................................................................................. . 21 
6. Policy options and analysis of their impacts.............................................................. 24 6.1. Introduction.............................................................................................................. .. 24 
6.2. Option 1 sub-option 1a: Increa se of DG MARKT's human and  
budgetary resources.................................................................................................... 24 
6.3. Option 1 sub-option 1b: Outsourcing on a commercial basis to an 
 external contractor..................................................................................................... 26 
6.4. Option 2 sub-option 2a: The tasks are carri ed out through an industry led initiative 
financed by private se ctor stakeholders ..................................................................... 27 
6.5. Option 2 sub-option 2b: The tasks are carri ed out through an industry led initiative 
financed through a Commission grant/program......................................................... 29 
6.6. Option 2 sub-option 2c: The tasks are car ried out in the framework of a public-
private partnership...................................................................................................... 30 
6.7. Option 3 sub-option 3a: The tasks of th e Observatory are entrusted to a new 
EU agency .................................................................................................................. 30 
6.8. Option 3 sub-option 3b: The tasks of the Observatory are entrusted to an existing 
agency ........................................................................................................................ 3 2 
7. Comparing the options ............................................................................................... 34 
8. Monitoring and Evaluation ........................................................................................ 36 
ANNEX I: MEMBERS OF THE EUROPEAN OBSERVATORY ON COUNTERFEITING 
AND PIRACY..................................................................................................................... ..... 38 
ANNEX II: IPR INFRINGEMENTS IN THE EU AND EU POLICY ON 
IPR PROTECTION................................................................................................................. . 44 
ANNEX III: STAFFING NEEDS AND COSTS UNDER OPTIONS 1A (COMMISSION) 
AND 3A (NEWLY CRE ATED AGENCY) ............................................................................ 50 
ANNEX IV: IT COSTS ........................................................................................................... 59  
ANNEX V: COSTS OF OP TIONS 1B AND 2 ....................................................................... 62 
ANNEX VI: SYNERGIES AND COSTS UNDER OPTION 3B (OHIM)............................. 66 
 
EN 4   EN 1. INTRODUCTION  
The economic well-being of the EU relies on sustained creativity a nd innovation; therefore 
measures for their effective protection are indisp ensible in ensuring its future prosperity. The 
Europe 2020 Strategy1 has therefore identified "Smart Growth" as one of the Commission's 
three policy priorities for the future. In this re spect, intellectual prope rty rights (IPR) are vital 
business assets that help to ensu re that innovators and creators ge t a fair return for their work 
and investments. 
Unfortunately, legitimate businesses are not th e only ones to realise the importance of IPR 
and the organised infringeme nt of rights has become a global phenomenon. Counterfeiting 
and piracy2 are causing worldwide concern. Infringers of  IPR not only deprive EU creators of 
their appropriate rewards but also harm competitiveness, destroy jobs in the Member States, deny much needed revenue to public finances and, in some cases, threaten the health and 
safety of EU citizens. 
Strong legislation has been put in place across th e EU to protect and enforce IP rights. This 
legislation has been complemented by variou s practical measures, adopted by both public 
authorities and private s ector bodies, at national and interna tional levels in order to improve 
existing knowledge about counterfeiting and piracy and to enhance the cooperation of all 
actors involved in fighting this phenomenon. In  the same way the Commission has taken a 
lead by launching a European Observatory on Counterfeiting and Piracy, at a high-level 
conference in April 2009 involvi ng Members of the European Parliament, Member States' 
representatives and representa tives from industry and from the consumers' side. The 
Observatory's main objectives include data coll ection and the analysis of the overall scope, 
scale and impact of IPR infringements in the EU, improving cooperation between those 
engaged in protecting and enforc ing IPR, ensuring the dissemin ation of best practices in 
enforcement and developing greater consumer awareness. 
Since the launch of the Observatory, the politi cal discussion has furthe r evolved. As a result, 
additional fields of activity for the Observatory have been identified. As a result, there has 
been increasing concern that the Observatory needs to continue to deliver on its aims. 
Consequently, this has caused a need to re-examine the Observ atory's structure. In this 
respect, the Commission is concluding a Memo randum of Understandin g with the Office for 
Harmonisation in the Internal market (OHIM the EU trademarks and designs office) to enable 
the Office to support the delivery of some of the Observatory's tasks related to trademarks and 
designs. However, at this poi nt in time, this is a rela tively short term initiative. 
This Impact Assessment therefore aims at presenting solutions for a more sustainable 
infrastructure for the Observatory, which should allow it to fulfil a broadened range of tasks, in a more effective way. 
                                                
 
1 Communication from the Commission: 'Europe 2020: A strategy for smart, sustainable and inclusive 
growth'  of 3 March 2010, COM(2010) 2020. 
2 In this Impact Assessment, the term "counterfeiting and piracy" should be unde rstood as covering the 
infringement of all intellectual property rights as referred to in the Statement by the Commission 
concerning Article 2 of Directive 2004/48/EC, OJ L 94, p. 37. 
 
EN 5   EN 2. PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES  
2.1. Procedural issues 
The preparation of this Impact Assessment was monitored by an Inter-Services Steering 
Group, composed of Director ates General MARKT, SA NCO, ENTR, TRADE, HOME, 
INFSO, TAXUD, SG, LS, BUDG, HR, EMPL, AG RI and the JRC. The Steering Group met 
on three occasions. Its last meeting was convened on 14 December 2010. 
A draft of this Impact Assessment Report was submitted to the Impact Assessment Board 
(IAB) on 12 January 2011. The Board met on 9 February 2011. In its opinion dated 11 February 2011, the Board found that the report  provided the necessa ry evidence base for 
action in the area, but suggested  further improvements in the analysis on a number of issues. 
Thus, the IAB made recommendations to strengt hen the analysis of impacts and specific 
issues affecting the Observatory, to clarify th e various problem drivers and to update the 
definition of the baseline scenario to take account of the Memorandum  of Understanding that 
the Commission intends to sign with the Office for Harmonisation in the Internal Market (OHIM) on short term support in view  of the Observatory's activities. 
Following the comments from the IAB, in part icular the problem defi nition (section 3) was 
modified by moving general explanations on the EU's policy on intellectual property rights 
and the scope and impact of infringements of  such rights to a new Annex II and by extending 
the explanations on the Observatory's ro le and the problems it is currently facing. 
Furthermore, the baseline scenario in section 3.3 was adapted as well as the objectives in 
section 5 and the evaluation of th e different options in section 6. 
The initiative that this Impact Assessment relates to has been introduced into the 
Commission's agenda planning as 2011/MARKT/009. 
2.2. Consultation of interested parties 
Since its inception, issues surrounding the stru cture and financing of the Observatory have 
been discussed regularly, both at the four Observatory meetings
3 held so far and in regular 
specialist sub group meetings which have  brought together, since September 2009, 
representatives from a number of pr ivate sector Observatory members4. 
Within the Observatory , the private sector is represented by European and national 
organisations covering all geogr aphical areas and sectors affected by and involved in 
combating counterfeiting and piracy. The sect ors include pharmaceuticals, luxury goods, food 
products, toys, creative media, software, sports , fast moving consumer  goods etc. European 
associations of consumers (BEUC) and SMEs (U EAPME) also take part  in the Observatory. 
The public sector is represented by officials from a wide range of ministries, agencies, 
departments and other authorities from the 27 EU Member States, including those from 
Ministries of Justice, Economy and Culture, national intellectual pr operty (IP) offices and 
enforcement agencies. In addition, international organisations such as the World Intellectual 
Property Organisation (WIPO), the OECD, IN TERPOL, the United Nations Interregional 
                                                 
3 These meetings took place on 4 September 2009, 14  December 2009, 16 February 2010 and 10 June 
2010. 
4  See Annex I for the complete list of associations  and public bodies represented in the Observatory. 
 
EN 6   EN Crime and Justice Research Institute (UNI CRI) and EUROPOL have  been invited as 
observers, to the Observatory meetin gs involving public authorities. 
The conclusion, from discussions within the Ob servatory, has been that a more sustainable 
infrastructure is necessary to allow the Observatory to work successfully. Some Member States, however, felt that this should not lead to the creation of new structures. 
Members of the European Parliament are regularly informed about the work and 
developments of the Observatory and on tw o separate occasions, in 2010, the European 
Parliament Forum on counterfei ting, contraband and organise d crime openly discussed the 
future of the Observatory and focused, in particular, on a possible transfer of the 
Observatory's tasks to the Office for Harmonisation in the Internal Market (the trade marks and designs registration office of the Eu ropean Union, OHIM) at Alicante, Spain. 
Outside of the Observatory meetings , a wider range of stakeholders have been made aware 
of the issues facing the Observatory in terms of its potential for de livering on current and 
possible future aims. For example, DG Internal  Market and Services (DG MARKT) has been 
invited to discuss the issue at meetings of the AIM (Association des Industries de Marque, 
representing some 1800 companies in 21 count ries) Anti-Counterfeiti ng Committee, and the 
Committee members were invite d to provide their views. 
In addition, within the context of the Commi ssion's Stakeholders' Dialogue on illegal up- and 
downloading
5, issues regarding the structure of the Observatory, including the possible 
transfer of its tasks to the OHIM, have b een discussed on two sepa rate occasions with 
representatives of copyright holders, the telecommunications sector and Internet service 
providers. 
At the political level, the Council, as a reaction to the two Commission Communications 
concerning the Observatory6, adopted two Resolutions7 welcoming the creation of the 
Observatory and asking the Commission to ela borate further on its role and tasks, whilst 
supporting this through existing structures. Fu rthermore, the European Parliament on 
22 September 2010 adopted a report on the Comm ission's 2009 Communication asking for an 
enhanced involvement of the OHI M in enforcement related matters8. 
The idea of entrusting some enforcement-related activities to the OHIM has been the subject 
of additional consultations with users of th e European trade mark system, within the 
framework of a comprehensive evaluation of the trade mark system in Europe9. The contract 
for this study was commissioned in  2009 to the Max Planck Instit ute for Intellectual Property, 
Competition and Tax Law. As part of the study, the Commission asked the Institute to evaluate the potential, appropriateness and adde d value of assigning additional tasks to the 
                                                
 
5 On the Stakeholders' Dialogue see section 4.2 of Commission Communication of 11 September 2009: 
'Enhancing the enforcement of intellectual property righ ts in the internal market', COM(2009) 467 final. 
6  Commission Communication of 16 July 2008: 'An industrial property rights strategy for Europe', 
COM(2008) 465 final, and COM(2009) 467 final. 
7 Council Resolutions of 25 September 2008, OJ C253, 4.10.2008, p.1, and Council Resolution of 1 
March 2010 on the enforcement of intellectual property rights in the internal market (2010/C 56/01), OJ 
C56, 6.3.2010, p. 1. 
8 Resolution of 22 September 2010 on the enforcement of intellectual property rights in the internal 
market (2009/2178(INI)), A7-0175/2010. 
9 For details refer to the text of the study available at 
http://ec.europa.eu/internal_market/indprop/tm/index_en.htm. 
 
EN 7   EN OHIM, particularly in the fiel d of enforcement (anti-counterfe iting). In the context of the 
study, the views of users were sought on th e possible involvement of the OHIM in 
enforcement related activities. In total, eighteen business, IP and trade ma rk associations with 
national, European and/or intern ational membership contributed to this process. The question 
was finally discussed at a specific workshop at the Pan-European IP summit 2010 held in 
Brussels on 2 and 3 December 201010 where the idea received broad support. Equally, the 
proposal was viewed positively by the OHIM gove rning bodies, the Administrative Board and 
the Budget Committee11, in their meetings in November 2010. 
In view of this specific, targeted and continuou s consultation process, it was considered that 
there was no need to organise a supple mentary, standard consultation exercise. 
3. PROBLEM DEFINITION  
Despite comprehensive IPR policies, at national, EU and international le vels, infringements of 
intellectual property rights occur on a massive scale and cause considerable damage to the 
European economy by hampering growth, destroying jobs and, in some cases, putting at risk 
the health and safety of consumers12. Details on the EU policies to protect intellectual 
property rights and on the current situation concerning IPR infringements can be found in 
Annex II. 
3.1. Reasons for ineffective enfo rcement of intellectual property rights in the EU 
The reasons for the problems in effectively enforcing IPR, in the EU, are, to a large extent, 
related to a lack of knowledge, both in relati on to the precise scope and impact of IPR 
infringements and about the effective policies and methods to prevent and fight such infringements. Other major issues relate to th e legal framework to combat IPR infringements 
and the considerable demand for counterfeit products and for downloads of illegal content 
play a role. 
3.1.1.  Lack of reliable, objective data 
Existing studies suffer because there has been no agreed methodology for collecting and 
analysing data on counterfeiting and piracy. Furthe rmore, the studies have been 'snapshots' of 
limited phases of time, which have been commissioned by different industries and have employed different approaches. Moreover, due to the secretive natu re of counterfeiting, 
obtaining comprehensive data for all product sect ors has been virtually impossible. Added to 
this, some sectors of industry have been hesita nt to disclose information on the scope of the 
problem in certain areas, as they fear dama ging both consumer confidence and the reputation 
of their brands. Finally, as far as online c opyright infringements ar e concerned, a rapidly 
changing technical environment makes the collection and analysis of data a considerable 
challenge. 
Without regular, reliable and robust data on th e scale, scope and impact of the problem 
created by IPR infringements, it is  not possible to measure trends and threats. This means that 
those involved in enforcement ar e not able to establish precis e priorities and programmes, 
                                                
 
10  http://www.premiercercle.com/sites/ip2010/overview.php. 
11  Both bodies are composed of representativ es of Member States and of the Commission. 
12  For details see point 3.3.3. below. 
 
EN 8   EN targets for enforcement or to design more focused consumer campaigns. Therefore, a 
mechanism to collect and analys e data, based on an agreed me thodology, is an essential step 
in overcoming these problems.  
3.1.2.  Divergences in the enforcement legislati on of Member States and the application by 
the courts 
The recently published Commission report13 on the application of the so-called IPR 
Enforcement Directive14 reveals differences as to how th e Directive was transposed in the 
Member States and in the practical application of its provisions, e.g. concerning the use of 
provisional and precautionary meas ures such as injunctions, proce dures to gather and preserve 
evidence (including the rela tionship between the right of information and protection of 
privacy), corrective measures and calculation of damages. 
To what extent these divergences and possible other legislative shortcomings are responsible 
for the current situation, will need to be evaluated in the context of forthcoming discussions on a possible review of the IPR Enforcement Directive, a potential new proposal for a 
Directive on criminal sanctions, the planne d review of the Customs Regulation and in 
regulatory dialogues wi th third countries. 
This question therefore li es outside the scope of this Impact Assessment. 
3.1.3.  Insufficient coordination and exchange betw een responsible authorities in the 
Member States on best practices 
Despite the fact that there has been clear progress in ho w Member States are tackling 
counterfeiting and piracy at nati onal levels, the cross border natu re of the problem means that 
more effective collaboration be tween national administrations  is needed to get the problem 
under control. Administrative cohesion requ ires a clearer understanding of national 
authorities' strategies and stru ctures, and improved transparency  in relation to the methods 
used for exchanging information. Currently, there are shortcomings in these areas that prevent 
a consistently high level of IPR enfor cement, throughout the Internal Market. 
In the Member States, there have been many different and innovative developments. 
However, Member States are not always able to be nefit from the expertise of others as there is 
no functioning mechanism to exchange inform ation between them on a regular basis. 
Finally, cooperation on a daily ba sis between Member States’ authorities is often ineffective. 
A recently published, external, study commissioned by DG MARKT
15 shows that several 
electronic systems exist to exchange inform ation on counterfeit goods within a number of 
Member States. However, not all of the authori ties involved in the fight against counterfeiting 
and piracy, in those Member States, necessarily  have access to that information. Furthermore, 
there are no mechanisms in place that allow real-time exchanges across-borders, to alert 
authorities in other Member St ates about specific products, trends an d potential threats. 
Currently, a central EU customs database, entitl ed COPIS, is being de veloped to store all 
companies' applications for customs action,  as stipulated in the Customs Regulation. 
                                                 
13  COM(2010)779, available at http://ec.europa.e u/internal_market/iprenforcement/directives_en.htm. 
14 Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the 
enforcement of intellectual property rights, OJ L157, 30.4.2004, p. 16. 
15  http://ec.europa.eu/internal_market/iprenforcement/docs/study_information_en.pdf. 
 
EN 9   EN However, the scope of COPIS is mainly limite d to exchanges between customs authorities 
and the application system is speci fically tailored to their needs. 
3.1.4.  Insufficient exchange on successful  private sector strategies 
Similarly, an external study carried out on be half of DG Enterprise and Industry in 200716 
confirms that there is currently not enough exch ange on successful private sector strategies. 
Such an exchange would be beneficial for bus inesses of all dimensions, in order to create 
synergies and allow them to focus on strategies that have proven to be effective. This is 
particularly important for SMEs, who require access to information and specific support in 
protecting their IP rights. 
3.1.5.  Insufficient knowledge of pers ons involved in enforcement 
Counterfeiting and piracy is a fast moving environment. Those engaged in enforcement 
(prosecutors, customs, police etc) therefore need to  be fully aware, not on ly of the most recent 
trends in the market, but also of developm ents concerning methods of investigation. In 
particular, they need to appreciate the possibi lities and limitations at tached to cross-border 
cooperation and how best to coor dinate action most effectively. 
Although there are training measures, in Member St ates and at the EU level, these measures 
lack general coordination a nd often, only cover one target  group. For example, the OHIM 
organises series of seminars for judges sitting in trademark and design courts in the Member 
States. These seminars are likely to involve over 300 judges in 2010-2011, and will help to ensure that the judges share a common understa nding of enforcement decisions. However, at 
present, the seminars do not address the n eeds of prosecutors, enforcers or customs. 
3.1.6.  Insufficient use of technol ogies to prevent counterfeiting 
Numerous innovative techniques and systems ha ve been developed by industry sectors to 
prevent copying and to track and trace fake pro ducts within supply chains and sales points. 
However, there is a continuing la ck of interaction between busine ss sectors. Therefore there is 
insufficient mutual support and many businesse s cannot take advantage of new technical 
developments to protect themselves. For this reason, continual research is needed to make 
knowledge available on new technical tools that can be used to prevent or 'track and trace' 
counterfeited products. 
3.1.7.  Insufficient awareness of consumers on the impact of IPR infringements 
A 2009 Eurobarometer study carried out by DG MARKT
17 revealed that only between 55% 
(LT and DK) and 84% (FR) of consumers are awar e that there are EU rules on counterfeiting 
and piracy. This was a much lower awarene ss percentage than in other policy areas. 
Furthermore, the study revealed that that one out of five EU citizens had, on at least one 
occasion, unintentionally bought a counterfeit produc t. This fact substantiates the lack of 
                                                 
16  Technopolis (2007), 'Effects of counterfeiting on EU SMEs and a review of various public and private 
IPR enforcement initiatives and resources', available at 
http://ec.europa.eu/enterprise/ent erprise_policy/industry/doc/Count erfeiting_Main%20Report_Final.pdf
. 
17  Full report available at: http://ec.europa.eu/public_opinion/. For further details on the study see also 
Annex II. 
 
EN 10   EN awareness and the scale of the problem. In this  context it should be noted that, according to 
the Eurobarometer survey, the percentage of  citizens from the EU-12, who unknowingly buy 
counterfeit products is much gr eater than those in the EU-15. For example, approximately 
every second Romanian has la ter discovered that he or sh e has bought a counterfeit product. 
Most of these products were fashion wear an d accessories (38 percent), music (13 percent), 
and consumer electronics, films and perfume (each between 9 and 11 percent). In contrast, in 
Denmark, less than 10 percent of the populati on have been deceived into buying fakes. 
These figures show that consumers need to be  more aware and have a better understanding of 
the risks, to allow them to make more info rmed decisions when buying products and services. 
3.1.8.  Demand for counterfeit products and pirated content 
Not all consumers buy counterfeits inadvertentl y. Surveys regularly show that there is a 
considerable share of European consumers th at knowingly acquire products that infringe 
intellectual property rights. This is also true fo r up- and downloading of i llegal digital content. 
Where consumers knowingly acquire counterfeits considerable differen ces can be observed, 
depending on the product sector. The 2009 Euroba rometer survey showed that the vast 
majority of the population in the EU (63 to 73 percent, see Figure 2 be low) think that no 
matter the reason, it is neither acceptable nor justified to intenti onally buy counterfeit goods. 
On the other hand, this still leaves one out of  four people who believe it is acceptable to buy 
counterfeit luxury products. More over, every third person feels that it is ju stified to buy 
counterfeit products when it is c onsidered that the price of th e original is just too high.   
Figure 2: Justifications to Buy Counterfeit Products 
It's ok to buy counterfeit products, … 
7
5
5
326
22
20
1836
40
41
4227
29
30
313
4
3
4… when price for
original too high
… when original 
not available
… when quality 
doesn't matter
… when it 
concerns luxury
Agree very much
 Agree
 Disagree
 Disagree very much  
Citizens in the EUR-12 appear to be more w illing to buy counterfeit goods, with more than 
half of the citizens in Latvia, Es tonia or Cyprus finding it acceptab le, if the price is considered 
too high. On the contrary, citizens in the UK, Ireland and Denmark overwhelmingly disagreed, with up to 75 percent of citizens cons idering it to be unacceptable. Looking at the 
socio-demographic characteristics, it is clear  that young citizens and manual workers were 
much more likely to feel it acceptable to buy counterfeit products. However, it should be 
noted that among those that considered it jus tifiable to buy counterfe it products, 26 percent 
assume that these products have the same quality as the original. 
Concerning online copyright infringements, the Eurobarometer survey shows that the most 
widespread justification for downloa ding of illegal content is that doing it for 'personal use' is 
 
EN 11   EN acceptable or at least 'not as bad as' downloading in order to re-sell and make profit. This 
mitigating stance is reinforced by the view that  CDs, DVDs and cinemas are all considered to 
be very expensive and that many citizens, even  if they could not download the material, 
would not pay the legitimate prices. 
Where consumers knowingly buy counterfeit produc ts or up- and download illegal content, 
awareness measures have a limited impact18 (possibly with the exception of measures 
focusing on the lower quality of counterfeit pr oducts, including those that potentially 
endanger health and safety). Also the questi on of consumer demand for counterfeit products 
and illegal downloads will therefore largely have  to be addressed in another context, in 
particular in the impact assessments to be  drawn up to examine a review of the IPR 
Enforcement Directive and the appropriateness of adopting a new proposal for a Directive on 
criminal sanctions. 
3.1.9.  Lack of expertise in third countries 
Developing and emerging countries are particul arly vulnerable to counterfeiting and piracy 
and are used by complex criminal networks as  manufacturing and dist ribution bases. These 
countries face significant challenges and sometimes  do not have the structures and experience 
to combat IPR infringements. 
Organisations such as WIPO, Interpol and WCO already provide certain training measures for 
enforcement authorities in these countries. Howe ver, while WIPO offers  technical assistance 
to enable some developing countries to tailor thei r IP systems to their needs, these efforts do 
not always match EU needs. In particular, they have to take account of the inte rests of other 
WIPO members that are significant target re gions, such as the US and Canada. For these 
countries, the sources of counter feits are often differe nt from those assailing the European 
market. In addition, WIPO resources are cons trained and therefore they face significant 
challenges in ensuring that their techni cal assistance has a sustainable impact. 
At the EU level, a recently published st udy, commissioned by the Co mmission's Directorate 
General for Trade19, notes that the different actions  under the Commission's Enforcement 
Strategy lack coordination between Commission  services and with other institutions and 
agencies that carry out activities in this field, such as the European Patent Office (EPO) and the OHIM. 
3.2. The role of the European Observatory on Counterfeiting and Piracy 
The creation of the European Observatory on C ounterfeiting and Piracy aimed at addressing 
the problems that have been se t out under points 3.1.1, 3.1.3. to 3.1.7. and 3.1.9. 
3.2.1.  The Observatory's mandate 
The Observatory is a non decision making networ k of representatives of public authorities 
involved in the enforcement of intellectual property right s and private stakeholders. 
Membership of the network implies no specific rights or privileges other than to attend 
                                                
 
18  This view is supported both by the 2009 Eurobarometer and by the ADE study 'Evaluation of the 
Intellectual Property Rights Enforcement Strategy in Third Countries', November 2010, 
http://trade.ec.europa.eu/doclib/cfm/ doclib_section.cfm?sec=180&langId=en . 
19  ADE, see FN 17. 
 
EN 12   EN meetings and to support and cont ribute to the needs of the netw ork. Furthermore, a number of 
international organisations (e.g. WIPO, OECD ) are participating in the Observatory's 
meetings as observers. Meeting agendas are pr oposed by the Observatory's secretariat which 
is provided by the Commissi on services (DG MARKT). 
At the time of its establishment, the Observator y was assigned four main tasks. In April 2009, 
the Council had defined the two primary aims of  delivering independent data and assessments 
on the scope and scale of counterfeiting and piracy  in the internal market and raising public 
awareness20. The Commission Communication of  September 2009 added further 
responsibilities associated with  exchanging and promoting best practices in relation to public 
authorities and spreading of be st private sector strategies21. 
Despite the comparatively short time since the Ob servatory's establishment and even before it 
became fully operational, the Council and the Eur opean Parliament called for new tasks to be 
added to the Observatory's mission. Thus, th e latest Council Resolution related to the 
Observatory invited it to assess the needs for the implementation of European Union level training programmes, for t hose involved in combati ng counterfeiting and piracy
22. The recent 
European Parliament Resolution additionally calle d for the Observatory to compile scientific 
research on counterfei ting and IPR regulation23. 
Finally, the more recently published study commissioned by DG TRADE recommends that 
the Observatory should become a single point of  contact, within the Commission, for external 
parties, and an internationa l point for the creation and di ssemination of best practice24. 
For this reason, the Commission intends to assign  these three new tasks to the Observatory, in 
the context of its forthcoming IPR st rategy, which is planned for spring 2011. 
3.2.2.  The Observatory's problems to cope  with its current and future tasks 
Experience acquired during its firs t year of existence has shown th at even if its current range 
of tasks are not expanded, th e Observatory's organisational structure does not allow it to 
become fully operational. 
As indicated earlier, the Observatory was esta blished within the stru ctures of DG MARKT. 
Within DG MARKT, currently al l of the tasks related to the Observatory are carried out by a 
team of two administrators and one assistant, the latter havi ng been seconded to DG MARKT 
from the OHIM for a limited period of time. This  setting was appropriate for the launch phase 
of the Observatory, where its institutional framework was es tablished through consultations 
and meetings. However, it is not suited to the operational activities (such as data collection, training, research etc.) that the Observatory should now st art to roll out . Moreover, the 
Observatory does not have access to a suitable s upport infrastructure in terms of IT (for the 
creation, running and updating of extensive da ta bases on case law, trainings, public 
awareness campaigns, scientific research on technologies, dedicated search engines and 
information dissemination, including specific al ert systems), meeting rooms etc., or to a 
designated source of funding that  would allow the out sourcing of these tasks. Instead, the 
                                                
 
20 Council Resolution of 25 September 2008. 
21 COM(2009)467. 
22 Council Resolution of 1 March 2010. 
23 European Parliament Resolution of 22 September 2010, 2009/2178(INI). 
24  ADE, see FN 17. 
 
EN 13   EN Observatory is obliged to ma ke use of Commission resources , which are not specifically 
designed to meet its growing responsibilities and needs. Fu rthermore, with only two 
administrators, forming the secretariat to the Observatory, it is not possible to provide the expertise needed to deliver all of the specia list tasks with which the Observatory has been 
entrusted.  
Instead, the current resources only allow th e Observatory to deliver on its minimum 
objectives and the Commission is consequently constrained to strictly prioritising the 
Observatory's activities. At present, the Observatory's work is essentially limited to the following: 
– two Observatory meetings of th e private sector representativ es, the representatives from 
the Member States or both groups; due to the lack of dedicated budgetary resources for the Observatory the costs of these meetings, in the past, could only be fina nced with help from 
Council Presidencies and private stake holders, granted on an ad hoc basis
25; 
– around ten meetings of working groups per ye ar (e.g. on legal matters, public awareness, 
statistics etc); 
– the organisation of one annual conferen ce as an awareness raising activity; 
– an external study that is aime d at developing a general me thodology to collect and analyse 
the data. The results of this study are expected for the end of 2011. 
For this reason, the Observatory currently has se rious difficulties in delivering its original 
tasks in terms of data colle ction, spreading best practices  and improving cooperation and 
raising public awareness: 
– Concerning data collection and analysis, the Observator y should in future apply a 
methodology (developed in the external study) on a regular basis and produce general and 
sector-specific reports. However, ensuring the Observatory's capacity to produce reliable 
information and data for all 27 Member States necessitates the setting up of a data gathering mechanism, as well as an appropri ate IT structure to run relevant analytical 
systems and databases, on a day to day basis.  A system such as this requires relevant 
expertise in statistics and IT development. Furthermore, it woul d require significant 
investment, in terms of establishment, main tenance and running costs. Such skills and 
means for investment are currently unavailable within the Observatory. 
– In order to promote and spread  best practices between public authorities and best practice 
private sector strategies, the Observatory would need suitable archiving systems and the 
capacity to arrange specific events to co nsult on developments, with appropriate 
representatives from Member States and th e private sector. Again, at present, the 
Commission is unable to provide resources to en able the necessary analyses to be carried 
out, relevant records to be stored, accessible and searchable systems to be set up or organised events to take place. 
Also improving day-to-day cooperation thro ugh an electronic network for 'rapid' 
information sharing on IPR infringements is not feasible at this stage. The establishment and administration of such a sy stem is very demanding in term s of financial, technical and 
                                                
 
25  For details on this support from third parties see point 5 of Annex III. 
 
EN 14   EN human resources and t hus, in the current circumstances , it would be difficult for the 
Observatory to deliver on this aim. 
– The current resources of the Observatory are also not sufficient to take more 
comprehensive action to raise consumer awareness. Moreover, the introduction of 
extensive consumer awareness programmes,  based on successful campaigns already 
carried out in the EU, requires sustainable f unding and the employment of specialists in 
this area. 
3.3. Likely consequences if no measur es are taken (baseline scenario) 
3.3.1.  The situation of the Observatory in the mid-term 
With the new tasks that have been identified  for the Observatory, its situation is bound to 
deteriorate. 
– Technical training programs and professional awar eness events require experts, specialist 
materials, resources, appropriate  training facilities and adequa te administrative staff, to 
examine training needs, ensure coordination with already existing measures and design 
new programs. Gaining access to such resour ces will be impossibl e without sufficient 
financial means.  
– The same applies as far as research on new tec hnical tools that can be used to prevent or 
'track and trace' counterfeited products.  
– Furthermore, technical enforcement training and assistance at an international level cannot 
be provided in the current situation. Presen tly the Observatory has no means to provide 
such capacity building progr ammes in third countries. 
3.3.2.  Assistance to be provided by the Office for Harmonisation in the Internal Market 
(OHIM) 
Given the need to increase the Observatory's activities in the short term, the Commission has 
decided to conclude a Memo randum of Understanding (MoU ) with the OHIM. Through the 
MoU, the OHIM commits to providing technica l support to the Observatory, through certain 
related activities that the OHIM already carries out  as "accessory activities" to the registration 
of trademarks and designs. However, the MoU will be limited to trademarks and designs, in accordance with the OHIM's constrained framework and therefore, the OHIM will, in particular, be unable to work on i ssues specific to other IP rights, such as copyright or patents. 
Under the MoU, the OHIM will assist the Commission in the following: – on data collection: the follow-up to the ex ternal study aimed at developing a general 
methodology to collect and analyse the data; 
– on public awareness-raising: a plan to define  a strategy concerning infringements of 
trademarks and designs, and the organisa tion of a public awareness event in 2011; 
– on training: the establishment on an online inventory of availa ble training c ourses and the 
provision of trainings for enforcem ent authorities, as well as an e-learning tool, with regard 
to infringements of trademarks and designs; 
 
EN 15   EN – the organisation of three meeti ngs of the Observatory in 2011. 
Despite these improvements, the Observatory wi ll still, without any im provements concerning 
its infrastructure and funding, continue to be unable to carry out a considerable number of 
tasks. These include: 
– Data collection, public awareness measures a nd training related to patents and copyright; 
– Identification and exchange of best public a nd private practices, and improving day-to-day 
cooperation; 
– Research on technical tools to prevent counterfeiting and piracy; 
– International cooperation and assistance. 
Furthermore, while the MoU initiative will be very  beneficial in the short term, it also has a 
clear link with a possibility  of having the Observatory moved entirely to the OHIM. 
Assistance in organising a public awareness event and a number of Observatory meetings, 
through the MoU, is currently lim ited to the year 2011, and as suc h, the issue will need to be 
readdressed at the end of 2011, in  the light of any future deve lopments. If as a result a 
decision were to be taken to tackle the curre nt problems of the Obse rvatory through another 
measure (i.e. other than entrusting OHIM with the tasks of the Observatory in a more enduring way, it could then be anticipated that the OHIM would not be prepared to commit to 
a more long standing relations hip beyond 2011. In the same way, it cannot be expected, in 
such a scenario, that the assistance being ma de available by the OHIM under the MoU to DG 
MARKT could be extended into 2012. 
The Observatory also cannot rely, in the longer run, on the ad hoc financial support received 
from Council Presidencies and private stakeholde rs in the past. Theref ore, taking no action 
could even mean that the current meeting activ ities of the Observatory would have to be 
reduced in the future, due to a further reduced  operational budget and further reduced human 
resources to manage its activities. 
3.3.3.  Impacts of the current situation 
IPR infringements significantly reduce inve stments in innovation and destroy jobs.  The 
more the businesses fear that their IP rights are not being efficientl y protected the less 
incentive they have to invest  in research and innovation. Thei r resources are diverted to 
protecting existing brands, products and services , and therefore fewer resources are available 
to develop innovative new produc ts and services, ultimately resulting in lower economic 
growth and lost jobs. According to a recent report by the Union des Fabricants in France
26, 
27 percent of companies spend more that EUR 1 million per year protecting their rights. In the 
same report, 57 percent of companies recogni sed the direct impact of counterfeiting on 
employment, while 54 percent stated that coun terfeiting is a barrier to innovation. This 
conclusion is supported by a study done by the Centre for Economics and Business Research 
(CEBR), which stresses that a concomitant re duction in investment could have a negative 
                                                 
26 Union des Fabricants April 2010 report, available at 
http://www.unifab.com/downloads /RAPPORTUNIFABavril2010.pdf. 
 
EN 16   EN effect on GDP across the EU, to within the region of EUR 8 billion per year27. A study by 
Frontier Economics, in 2009, indicated that 2.5 million jobs were destroyed in G20 countries 
alone by counterfeiting and piracy28. While these are largely indus try figures, for the reasons 
explained above, they provide an in dicator on the size of the problem. 
Concerning piracy (or online copy right infringements), the economic impact is less clear at 
this stage, due to the very recent nature of this phenomenon. The most recent study in this 
area carried out, in 2010, by Paris-based TERA Consultants and commissioned by the 
International Chamber of Commerce’s Business  Action to Stop Counte rfeiting and Piracy 
(BASCAP) initiative, indicates that EUR 10 b illion and more than 185,000 jobs were lost due 
to piracy in the music, movie, TV, and software i ndustries in the EU in 200829. However, 
other studies30 deny any negative economic effect of pi racy and point to potentially positive 
implications for consumer welfare. 
Counterfeiting threatens the health and safety of European consumers . Apart from the 
general problem of consumers buying counterf eit products in good faith and suffering 
monetary loss, there is also the growing concer n about the perceptible increase in volumes of 
substandard and hazardous fake products, which pose significant health and safety risks for 
citizens. In its 2009 'Report on EU Customs enforcement of intellectual property rights'31, 
DG TAXUD notes that while, in the past, lu xury goods were most frequently hit by IPR 
infringements, more and more potentially dang erous items, used by European consumers in 
their daily lives, are being detained by customs. These include medicines, cosmetics, foodstuffs, beverages, shampoos, toothpastes , toys, household appliances, automotive 
components, electrical compone nts, chemicals and toiletries
32. In total, approximately 
17 million items, or 18 percent of the total number of detentions made by EU custom's authorities in 2009, had the potential to place consumers at risk
33. 
The rise of potentially dangerous counterfeit consumer products was illustrated in May 2010, 
when a two-year Europol investigation resulte d in the seizure of 800  tons of counterfeit 
electrical products, including fake  electricity generators, powe r drills and chainsaws, which 
did not comply with any Eu ropean safety standards34. UNICRI also confirms that dangerous 
counterfeits have infiltrated th e automotive markets and that the incidence of counterfeit spare 
parts in the automotive sector could represen t a loss to the industry of USD 12 billion per 
                                                 
27 CEBR (2000), The Impact of Counterfeiting on Four main sectors in the European Union, Centre for 
Economic and Business Research, London. 
28 Frontier Economics (a report commissioned by BASCAP), 'The impact of counterfeiting on 
Governments and Consumers', May 2009, available at: 
http://www.iccwbo.org/uploadedFiles/BASCAP/P ages/Impact%20of%20Counterfeiting%20on%20Gov
ernments%20and%20Consumers%20-%0Final%20doc.pdf. 
29 http://www.iccwbo.org/bascap/id35360/index.html. 
30  Van Eyck, Poort and Rutten, Legal, Economic and Cultural aspects of File Sharing, in: 
Communications & Strategies, 77, 1st quarter 2010, p.35. 
31 Available at: 
http://ec.europa.eu/taxation_customs/customs/custom s_controls/counterfeit_piracy/statistics/index_en.h
tm). 
32 Compare with Forzley, M. (2003) Counterfeit goods and the public's health and safety, International 
Intellectual Property Institute. 
33 DG TAXUD, see FN 29. 
34 http://www.europol.europa.eu/index. asp?page=news&news=pr100521.htm. 
 
EN 17   EN year35. In addition, UNICRI reports that according to the Toy Industries of Europe (TIE), one 
toy out of ten, in Europe , could be a counterfeit36. 
According to the 2009 Frontier Ec onomics study, the economic cost  of deaths resulting from 
counterfeiting amounts to EUR 14.5 billion and the additional cost to heal th services, incurred 
in treating injuries caused by dangerous fake products approximately adds another EUR 100 
million37. Moreover, the Centre for Medicine in the Public Interest, a US-based medical 
research group, predicted that worldwide sales of counterfeit medicine s would reach USD 75 
billion in 2010, which is a 90 percent surge from 200538. 
IPR infringements create serious problems for European SMEs.  The 2007 study carried 
out on behalf of the DG Enterprise and Indus try confirmed that SMEs were found to have 
been affected by lost sales, as a di rect result of count erfeiting and piracy39. The report noted 
that, in 2006, 20 percent of SMEs  in the EU estimated that ar ound 5 percent of job losses in 
their companies had been specifically due to c ounterfeiting and piracy and that the problem 
also reduced their ab ility to retain key staff. The staff of these SMEs was concerned about the 
future prospects of the businesses, due to th e continued rise of counterfeit and pirated 
products. Moreover, the report confirmed that many SMEs lack sufficient knowledge, 
resources and finances to pursue infringers . In 2008, the Commission carried out a Best 
Practice project aimed at helping SMEs to better  enforce their intellectual property rights, by 
improving available support. As part of the project, SME support and IPR enforcement 
experts from Member States analysed SMEs ’ perceived needs and available enforcement 
options40. As a result, the Best Practice Group encouraged the co-o rdination of IPR 
enforcement activities at national and EU leve ls, thus supporting the creation of an EU 
Observatory on counterfeiting and piracy to actively help SMEs fight the dangerous 
phenomenon of counterfeiting and piracy. 
IPR infringements result in losses of tax revenues due to a reduction in declared sales.  
Value added tax (VAT) authorities in the UK alone estimate losses e quivalent to GBP 1.5 
billion due to the circul ation of counterfeit goods41. This deficit in tax revenue may result in 
tightening government expe nditure in crucial areas, such as social policies42. The Frontier 
Economics' study estimated that, in 2009, EUR 62 billion in tax revenue and higher welfare 
spending was lost in G20 countries  due to counterfeiting and piracy43. 
                                                 
35 UNICRI, 'Counterfeiting: a global spread, a global threat', 2008, 
http://counterfeiting.unicri.it/report2008.php. 
36 http://www.unicri.it/news/0712-4 _Counterfeiting_PressKit.php   
37 Frontier Economics, see FN 27. 
38 http://www.cmpi.org/in-the-news /in-the-news/fake-medicines-illega l-immoral-and-liable-to-increase-
drug-resistance/. 
39 Technopolis (2007), http://ec.europa.eu/enterprise/e nterprise_policy/industry/doc/  
Counterfeiting_Main%20Report _Final.pdf. 
40 http://ec.europa.eu/enterprise/newsroom/cf/ document.cfm?action=display&doc_id=4053  
&userservice_id=1&request.id=0. 
41 Union des Fabricants, 2003. available at: 
http://counterfeiting.unicri.it/docs/Union%20des% 20Fabricants.Counterfeiting%20and%20Organised%
20Crime%20Report.2nd%20edition2004.pdf. 
42 IACC, 2005, available at: 
http://counterfeiting.unicri.it/docs/Internationa l%20AntiCounterfeiting%20Coalition.White%20Paper.p
df. 
43 Frontier Economics, see FN 27. 
 
EN 18   EN Counterfeiting and piracy is attractive to organised crime . At present, profit margins from 
counterfeiting and piracy are extremely high and, in comparison to other forms of illegal 
activities, the penalties are low. As a result, they have become an attractive investment for 
organised crime44. UNICRI confirms that organised crim e manages a significant proportion of 
counterfeit trafficking. The gl obal trade in counter feiting and piracy involves complex 
manufacturing chains and connections betwee n legitimate and other illegitimate business 
partners, some of whom operate in other illicit trades such as  illegal immigration and human 
trafficking45. A 2009 report from Rand (Center for Global Risk and Security)46, which 
compiled responses from 120 law enforcement representatives from over 20 countries, confirms the existence of "compelling evidence of a broad and continuing connection 
between film piracy and organised crime. Pira cy is high in payoff — with profit margins 
greater than those of illegal narcotics — and lo w in risk, often taking place under the radar of 
law enforcement."  In particular, the Rand report also identified movie piracy as a funding 
method of the IRA, D Company I ndia/Pakistan (both are major organised crime and terrorist 
organizations). Additionally, Interpol provides examples of how counterfeiting and piracy financially supports groups such as Chech en separatists, Hezbollah and Al-Qaeda
47. The 
Frontier Economics' study offers the added information that during 2008, G20 countries 
suffered EUR 20 billion in increased costs of crime due to counterfeiting and piracy. One 
example where the involvement of  organised criminal networks became evident was in a joint 
operation of law enforcement agencies concluded in May 201048. With the support of Europol 
and Eurojust, agencies from seven European  Union Member States  took action against a 
network of criminals who were  behind a substantial system of trafficking counterfeit 
commodities. Europol identified a criminal network centred in the vicinity of Naples which 
stretched to Australia, Icela nd and Finland. The subsequent se izure of materials and assets 
exceeded a value of EUR 11 million. 
3.3.4.  Likely development of the situation over the next few years 
Past experience and information currently available suggests that, with the economy 
recovering from the crisis, an  increase in counter feiting and piracy can be expected. 
Therefore, its dangerous and damaging impacts will become even more prevalent and serious 
in future years. 
As previously explained, without a solid base of  data, it is difficult to provide figures on what 
this will mean in terms of the scope and scal e of counterfeiting and piracy a few years from 
now. However, if the trend in the customs area continues at the same rate as that witnessed during the five years immediately prior to the cr isis (i.e. a yearly in crease of between 13 and 
                                                
 
44 http://europa.eu/rapid/pressReleasesActio n.do?reference=MEMO/10/272&type=HTML ; OECD (1998), 
'The Economic Impact of Counte rfeiting', p. 37; Europol, 'OCTA 2009 - EU Organised Crime Threat 
Assessment', http://www.europol.europa.eu/publications/Europ ean_Organised_Crime_Threat_Assessment_(OCTA)/
OCTA2009.pdf. 
45 http://www.unicri.it/news/0712-4 _Counterfeiting_PressKit.php. 
46  Rand, 'Film Piracy, Organised Crime, and Terrorism', March 2009, 
www.rand.org/pubs/monographs/2009/RAND_MG742.pdf. 
47 Interpol (2003), 'The links between intellectual property crime and terrorist financing', 
http://www.interpol. int/public/ICPO/speech es/SG20030716.asp ; see also European Commission (2006), 
'A serious problem for everyone', http://ec.europea.eu/taxation_customs/customs/custo ms_controls/countefeit_piracy/compating/index_en
.htm. 
48 See http://www.europol.europa.eu/index.asp?page=news&news=pr100521.htm 
 
EN 19   EN 40 percent), this would mean th at in 2014, we could expect the number of regist ered cases to 
have at least doubled, thus a pproaching around 100,000 per year. 
Concerning training and awareness raising measures  as well as research and data collection, 
and considering the position of the Member Stat es in times of austerity in public budgets, 
there are no indications that any additional actio n to strengthen enforcement can be expected. 
The same is true for the exchange of best pr actices and private sector strategies and the 
improvement of day-to-day cross-border coop eration, which are difficult to organise at a 
national level. On the private se ctor side, important act ivities can be expected particularly in 
the area of research on "tracking and tracing" methods. However, there is likely to be some 
reluctance on the part of companies to share their results, which may be considered to be 
valuable assets that could provide a competitive advantage. 
With reference to international activities, taki ng into account the number of institutions and 
agencies involved the existing coordination pr oblems at EU level are likely to remain. 
 
EN 20   EN  
 Problem tree 
The European Observatory on Counterfeiting and Piracy is unable to 
deliver on its aims
SOCIETY
-Lost jobs
-Lower tax receipts
-Increased crime 
Significant harm to the European economy, health and security of European citizensCONSUMERS
-Safety risks
-Lower value/qual ity products
-Unwilling purchas esCOMPANIES
-Les s investments due to more risks
-Lower focus on innovation
-S afet y ris ks
-Lower value/quality products produced/soldLack of human
resourcesLack of infrastructure in 
terms of IT, meeting 
facilities etc.Broadened
range of 
tasksLack of 
financingLack of 
expertise
Lack of 
independent
robust figures 
and statisticsLack of 
promotion 
and spread
of best 
practices 
among
public 
authoritiesLack of 
speading of 
successful
private
sector
strategiesLack of 
professional
European 
public 
awareness
campaignsLack of 
technical
training and 
development
programsLack of research and 
information 
on technical
tools and 
resourcesLack of 
international 
cooperation
and 
technical
assistanceLack of a 
comprehensive
EU-wide
system for the 
exchange of 
in formation  
 
EN 21   EN 4. SUBSIDIARITY  
Many of the activities that have  been assigned to the European Observatory on Counterfeiting 
and Piracy are of a cross-borde r nature, involving all 27 Member  States, and therefore they 
cannot be effectively delivered by  individual Member States. As  far as there is a need to 
improve bilateral cooperation be tween two Member States, in individual cases procedures 
could theoretically be improved at this level.  However, given that the tools and methods 
needed in such a context would be similar for all Member States, it seems more efficient to 
develop them at EU level. This will ensure th at solutions that are developed do not build on 
individual Member States' specificities, but  provide benefits for all Member States. 
Furthermore, as far as relations with third countries are concerned, coordination within the 
Commission services and with othe r EU and international agencies must take place at the EU 
level. 
Therefore, an EU initiative seems to be the mo st effective and appropriate way forward. Such 
an initiative could potentially be based on Ar ticles 114 and 118(1) TFEU  (ordinary legislative 
procedure). A legislative proposal could be tabled in spring 2011. 
5. OBJECTIVES  
General objective:  To enhance effective enforcement of IPR, in order to avoid significant 
harm being caused by counterfeiting and piracy to the European economy and to the health 
and safety of European citizens. 
Specific objective : To enhance knowledge, among public au thorities and private stakeholders 
about the scope, impact and trends related to counterfeiting and piracy and about effective 
techniques to fight the problem, and to improve  day-to-day cooperation; to inform consumers 
of the economic impact and dangers related to counterfeiting and piracy and to help avoid 
them from being misled into buying fake produc ts; to improve the c oordination of actions 
directed towards third countries. 
Operational objectives:  Ensure that the Observatory has the necessary infrastructure to deliver 
its activities effectively, as quickly as possible and with mi nimum costs for the EU budget. 
Such an infrastructure implies: 
– sufficient human resources,  
– the necessary IT capacities, 
– sustainable funding,  
– the expertise required to carry out its tasks, and 
–  the necessary  independence from vested interests,  avoiding any undue influence from 
stakeholders, particularly as far as data collection and analysis  would be concerned. 
 
EN 22   EN These objectives are in line wi th existing EU policies and st rategies, such as Europe 202049. 
They also fit with the Commission's main priori ties and proposals con cerning its IPR strategy 
for Europe50. 
                                                 
49 COM(2010)2020. 
50 COM(2008)465; see also Commission Communication of 27 October 2010: 'Towards a Single market 
Act – for a highly competitive social market economy', COM(2010)608 final. 
 
EN 23   EN  Objectives hierarchy
Enhance proper enforcement of IPR in Europe to avoid
harm caused to the European economy and to the 
health and safety of Europen citizens
by counterfeiting and piracyGENERAL    
OBJECTIVE
OPERATIONAL 
OBJECTIVESIndependent,  
EU wide
collection 
and analysis
of objective 
and reliable
data Exchange of 
best 
practices 
bet ween
public  
aut horities
and betweenprivate
stakeholdersTraining programs for 
professionalsCooperation
wit h and 
capacity
building in 
third
countriesPublic and professional
awareness
campaignsResearch on tools to fight
counterfeiting
and priacySPECIFIC    
OBJECTIVEPossibility to 
exchange 
inform ation 
between
enforcem ent
authorities
Ensure that the European Observatory on Counterfeiting and Piracy has 
necessary infrastructure to deliver its activities effectively through:
Sufficient
human
resourcesSustainable
fundingNecessaryIT and 
meeting 
capacitiesExp erti se required to 
carry out its
tasksNecessaryindependence
from vested
interes ts
 
EN 24   EN 6. POLICY OPTIONS AND ANALYSIS OF THEIR IMPACTS  
6.1. Introduction 
The following three main options are explored  with a view to the achievement of the 
objectives identified in section 5: 
Option 1:  The tasks are delivered within the Observatory which continues to be administered 
by DG MARKT, with uplift in available resources: 
– Sub-option 1a – DG MARKT's human and budgetary resources are increased. 
– Sub-option 1b – The management of the Observatory is outsourced on a 
commercial basis to an external contractor. 
Option 2:  The tasks are delivered by an external  body, on the basis of an industry led 
initiative: 
– Sub-option 2a – Industry led initiative, fi nanced by private sector stakeholders. 
– Sub-option 2b – Industry led initiative, financed by a Commission grant/program. 
– Sub-option 2c – Public-pri vate partnership (PPP). 
Option 3:  The Observatory is entrusted to an EU agency: 
– Sub-option 3a – The Observatory is entr usted to a newly created EU agency. 
– Sub-option 3b – The Observatory is en trusted to an existing EU agency. 
Whichever option is chosen, the Commission w ill retain the political control of EU IPR 
enforcement policies which are to be c onsidered core tasks of the Commission. 
6.2. Option 1 sub-option 1a: Increase of  DG MARKT's human and budgetary 
resources 
6.2.1.  Description 
The overall tasks would be delivered by th e Commission. DG MARKT would continue to 
manage the Observatory with its additional resources. However, under this option where a 
final decision would be taken to keep th e Observatory inside the Commission, the OHIM 
could not be expected to continue its assistance. 
6.2.2.  Analysis 
If staffed sufficiently, the Commission services  could deliver the Observatory's tasks in a 
satisfactory way, whilst ensuring the necessary independence from vested interests. In particular, due to its position as an institution and its comprehensive rules on data protection, 
the Commission services would be in a comp aratively strong positio n to obtain access to 
necessary data. In organisational terms, there would be no changes co mpared to the baseline 
scenario, so the Observatory's governan ce structure would remain unaffected. 
 
EN 25   EN In terms of human resources, under this option, DG MARKT w ould retain two AD staff to 
continue to carry out policy related tasks, in cluding those aligned to IP rights other than 
trademarks and designs. In a ddition, the DG MARKT personnel would provide briefings and 
coordinate policies linked to the work of the Observatory. 
Annex III shows that in this scenario seven st aff would have to be employed during the first 
two years, in addition to the current three staff members. The majority of these additional staff 
(four persons) would to be employed as official s or temporary staff, dealing with essential, 
substantive work strategies and initiatives re lated to raising public awareness, training, the 
development of technical tools and databases and systems to improve information exchange 
The other three members of staff, as well as the replacement for the assistant currently on 
secondment from the OHIM and dealing with th e Observatory could be contract agents, 
providing support in terms of IT and the or ganisation of meetings . At cruising speed 
(24 additional persons plus the replacement for the assistant), staff should probably consist of 
fifteen officials/temporary agents and ten cont ract agents. The posts for the temporary staff 
and/or officials would have to  be made available from the Commission's establishment plan, 
which however will not increase over the next three years, in line with the Commission's own 
commitment not to request any new posts for the period between 2009 and 201351. In this 
situation, an increase in staff numbers of the magnitude mentioned above seems hardly 
realistic. 
Furthermore, even in a situation where the staff would be made av ailable, the largely 
technical work to be carried out  in the context of the Observat ory would constantly need to 
compete with other primary tasks of the Comm ission, in particular policy making. Therefore, 
a permanent threat would exist that staff assigned to support its activities could be reallocated, 
even on a temporary basis, to ot her urgent tasks in the policy field. This would jeopardise the 
continuity of the Observatory's work. 
Finally, although the Commission's IT services would be technically able to run systems, such 
as those required by the Observatory, there w ould be a serious risk that the creation and 
management of these systems would not be assi gned the necessary prior ity, but ranked after 
other primary tasks, scheduled to ensure the running of the Commission's daily activities. A 
similar risk would also exist with a view to ce rtain tasks related to public awareness strategies 
and campaigns. 
If these obstacles are overcome, this option coul d be put in place within a relatively short 
period of time as technically it would only re quire making the budgetary arrangements within 
the Commission's budget and recruiting the n ecessary staff. In order to manage the 
recruitment procedures and the in tegration of the staff, it woul d however seem appropriate to 
expand the Observatory's tasks in two stages, ba sed on an order of priority (for details see 
Annex III). 
To summarise, while this option would theoretica lly be suited to meet the objectives, in the 
current situation, it does not seem a realisti c option to solve the Observatory's problems. 
The total costs of this option are detailed in  Annexes III and IV. Depending on the design of 
the rapid information exchange system to be chosen, these would be the following: 
                                                 
51  Commission Report of 24 April 2007: 'Planning  & optimising Commission human resources to serve 
EU Priorities', SEC(2007)530. 
 
EN 26   EN Table 1: Costs of option 1a (compared to baseline scenario)  
 
6.3. Option 1 sub-option 1b: Outsourcing on  a commercial basis to an external 
contractor 
6.3.1.  Description 
Under this sub-option, DG MARKT would not r un the Observatory's operational activities 
itself, but only act as the supervising contract  manager, employing one or several external 
contractors to help deliver the Observatory's tasks. 
6.3.2.  Analysis 
The governance structure of the Observatory would remain unaffected as the Commission 
would continue to be in charge.  
Also most of the Observatory's activities se t out above could be successfully carried out 
through an external contractor a nd therefore most of the objectiv es set out in section 5 could 
be met. An exception applies however in relation to  the task of data coll ection and analysis. In 
this respect, the problems encountered in the c ontext of previous studies on the scope and 
impact of counterfeiting and piracy makes it a ppear unlikely that pr ivate stakeholders and 
public authorities would be willing to share data, which is often perceived as sensitive, with external private sector contractors, even if the Commission would remain ultimately responsible. Therefore, although it  would be technically possible to outsource this activity, it 
seems questionable as to whether the objective pursued would be attainable. 
The time required to put this option in place would be about one year more than under 
option 1a, as, apart from making the budgetary arrangements, the tender procedures would 
also have to be carried out before the Obse rvatory's activities could be launched. However, 
this delay would be compensated for by the fact that all of the Observatory's activities could 
be launched in parallel. 
The impact for the EU budget implied under this option would probably be  slightly higher in 
the first two years than under op tion 1a, and could be slightly lower in the years to follow. 
Given the complexity of the tasks, it seems unrealistic that a singl e company or a single 
consortium would be capable of carrying out all of the different strands of work. The pillars of 
                                                
 
52  All costs in EUR million. 
53  Year n: Year in which the measure would become effective. Costs IT systems Total yearly costs Years Staff 
required Costs52 Admin 
Costs Meeting/ 
missions 
costs Basic Sophisticated Basic IT Sophisticated
IT 
n53 – 
n+1 8 0.77 incl. 0.5 1.9 2.9 3.17 4.17 
n+2 + 25 2.57 incl. 0.59 2.23 3.01 5.398 6.17 
 
EN 27   EN actions would be focused on very divergent issu es, such as public awareness, enforcement, 
legal matters, technical assistance, IT, specialised  research, training etc.  Also, most of these 
actions are designed to run over extended periods of tim e. An ideal contract or would therefore 
need to be a specialist in all of these aspects and at the same time be able to provide the 
guarantee that all of these acti ons could be secured over a considerable time span. Based on 
current knowledge, finding a suitab le contractor, with the necessa ry capabilities, facilities and 
capacity, seems unlikely. Instead, it is estimated that to deliver the Observatory's pillars of 
work, between seven and ten diffe rent contractors, with specia lised competencies, would be 
required (for details see Annex V). 
The management of these contracts (including th e preparation of calls for tender, evaluation 
processes, contract negotiations, monitoring of  contract performance and ensuring coherence 
between the different projects) would cause additional costs. 
In contrast to option 1a, all staff currently wo rking on the Observatory' s activities would also 
need to be maintained. In particular, the AST o fficial to organise mee tings etc would continue 
to be needed as this 'horizontal task' w ould not be included within the contracts. 
An estimation of potential contracts and indicativ e costs is outlined in Annex V. Compared to 
the baseline scenario, they can be summarised as follows: 
Table 2: Costs of option 1b (compared to baseline scenario)  
 
6.4. Option 2 sub-option 2a: The tasks a re carried out through an industry led 
initiative financed by pr ivate sector stakeholders 
6.4.1.  Description 
Under this option, the Commission would no longer be in charge of ensuring that the tasks 
currently assigned to the Observatory are deli vered. Instead, the tasks would be performed 
through an industry led initiative, with the pr ivate stakeholders en suring the financing. 
6.4.2.  Analysis 
Under this option, the governance structure of th e Observatory would change in the sense that 
the Commission would neither have any influe nce anymore on how the Observatory is run, 
nor on its meeting agendas. It would be up to th e private sector to determine what structure 
the Observatory should have in future. Costs IT systems Total yearly costs Years Contract 
costs 
(other 
than IT) Admi
n 
Costs Cost for 
meetings 
+missions COM 
staff 
contract 
managem
ent Cost 
Basic Sophistic
ated Basic 
IT Sophisticated
IT 
n – 
n+1 2.11 incl. 0.56 4-6 0.26-0.4 1.9 2.9 4.83-
4.97 5.83-5.97 
n+2 + 2.11 incl. 0.66 4-6 0.26-0.4 2.23 3.01 5.26-
5.4 6.04-6.18 
 
EN 28   EN To deliver the Observatory's tasks and therefor e most of the results should be technically 
feasible. 
However, as far as data collec tion and analysis are concerned, it should be recalled that there 
have been many studies carried out by indus try bodies on the phenomenon of counterfeiting 
and piracy. All have been contested due to th eir perceived partiality . Therefore there are 
serious doubts about whether such an initiati ve would guarantee the necessary independence 
and objectivity to produce reliable analyses. Fu rthermore, in this context, it seems doubtful 
that it would be possible to mobilise public and private stakeholders, to  make them cooperate 
and provide the necessary information. The same di fficulties are also likel y to arise in respect 
of the objectives aimed at ensuring exchanges of  best practices and fo stering cooperation with 
third countries. 
With a view to other activities , the necessary independence from vested interests would have 
to be guaranteed through specific measures. In  particular, where th e level of financial 
contributions from stakeholders differed, there would be a risk that ce rtain sectors, through 
higher contributions, might seek and gain a disproportionate infl uence on the way the work is 
prioritised and carried out. As a result, certain as pects of work might be neglected if they were 
of no immediate interest. In order to avoid such  influence of vested interests and to ensure 
continuous funding, under th is option, contributions would need  to be determined by way of 
regulation. 
Concerning the sustainability of  the infrastructure in terms of human resources, funding and 
IT, the assessment of this option is negative. Despite the considerable problems presented by counterfeiting and piracy in the past, industry has never been able to work  together in order to 
set up such an initiative. Cons equently, there is no reason to assume that the Commission's 
request to launch such an initiati ve would change this situation. 
The calculation of the costs of carrying out the different activities of the Observatory can be 
based on that made for option 1b, as it can be as sumed that any such industry initiative would 
largely resort to outsourcing, with  all the implications this bri ngs in terms of infrastructure, 
overheads etc, instead of directly employing th e necessary staff. Furthermore, a private 
initiative of this sort woul d necessitate the management of  contracts with their related 
overheads. Therefore total staff costs could be  estimated to be at least as high as the 
Commission's or even higher, as the size of the Commission leads to considerable economies 
of scale in this respect. 
Finally, the entire costs for th e organisation of meetings etc would have to be added. This 
total additional costs would rise to EUR 621,000 in years n and n+1, and 691,000 as of year 
n+2 (for details see Annex V). The total cost of  this option can therefore be summarised as 
follows: 
 
EN 29   EN Table 3: Costs of option 2a 
 
Under this option, there would be no co sts for the EU budget. Instead, certain savings  would 
be made as the current work of the Observatory would not have to be financed any more from 
the EU budget: these savings would amount to  EUR 38,773 for reimbursements of Member 
States' experts and the organisation of the Observatory's meetings54. 
6.5. Option 2 sub-option 2b: The tasks ar e carried out through an industry led 
initiative financed through a Commission grant/program 
6.5.1.  Description 
Under this option, the Commission would offer a grant, e.g. through an  EU program, for an 
initiative to be run by the private sector. As under option 2a, the privat e sector stakeholders 
would be responsible for delivering the objectives set out in section 5. 
6.5.2.  Analysis 
The impact on the Observatory's governance structure would be largely the same as under 
option 2a. Also the disadvantages  concerning the poten tial to deliver the Observatory's tasks 
under this option are largely the same  as those in the previous option. 
The financing through a Commission grant would, however, make this option a more realistic 
prospect. It would also remove the need to re gulate the level of contributions as there would 
be no possibility for certain i ndustry sectors to influence the Observatory's work through their 
financial contributions.  
The need to set up an entirely new initiative to apply for the necessary financing, to go 
through the award procedures for the grant an d then to outsource th e individual activities 
means that this option would require considerab le time before the Observatory would become 
operational. Five years appears to be the mini mum timescale required in this context, which 
means a substantial delay compared to the previous options. 
The financing through a Commission grant woul d, furthermore, mean that the EU budget 
would be charged with costs that would, at le ast, correspond, to those under option 2a. Taking 
into account the savings of EUR 38,773 set out under option 2a, this means that the minimum 
                                                 
54  For details see Annexes III and IV. Costs IT systems Total yearly costs Year
s Contra
ct costs 
(other 
than 
IT) Admin 
Costs Cost for 
meetings 
+missions Staff for 
contract 
managem
ent Cost 
Basic Sophistic
ated Basic 
IT Sophisticated
IT 
n – 
n+1 2.11 incl. 0.628 4-6 0.26-0.4 1.9 2.9 4.89-
5.03 5.89-6.03 
n+2 + 2.11 incl. 0.69 4-6 0.26-0.4 2.23 3.01 5.29-
5.43 6.07-6.21 
 
EN 30   EN overall cost, compared to the baseline scenar io, would lie between EU R 4.85 per year at the 
lower end or EUR 5.99 million at the upper end in years n and n+1, depending on the design 
of the IT systems to be developed, and between EUR 5.25 million and EUR 6.17 million from 
year n+2. 
6.6. Option 2 sub-option 2c: The tasks are ca rried out in the framework of a public-
private partnership 
6.6.1.  Description 
Under this option, the Commission and the privat e sector would cooperate under the terms of 
a contract, which would determine the contribu tions and the modalities of the work to be 
carried out by an entity outside the Commission services. 
6.6.2.  Analysis 
This option would avoid a number of the disadv antages outlined in the previous options. The 
contract would determine the level of influe nce of each of the partners, including the 
Observatory's governance structure and the Commi ssion's role in that context, and ensure 
continuous funding, at least for the duration of the contract. The continuous involvement of 
the Commission would facilitate an assurance th at public authorities a nd private stakeholder 
both contribute to the work  in an appropriate way. 
However, the close involvement of the private sector would probably c ontinue to make data 
collection and objective analysis  an issue. The feasibility of this option can also be 
questioned, as although the private sector, in this scenario woul d have to contribute only a 
part of the costs, it seems doubtful that indus try would be ready to commit to such an 
initiative. 
In terms of timing, this option is likely to be  similar to option 2b. The costs for the EU budget 
would depend on the modalities of the contract. Here, an equal share for the Commission on 
the one side and the private sector on the other would seem most appropriate. This means that 
the yearly costs for each side can be estimated to be half of those for sub-option 2a, i.e. 
between EUR 2.45 and 3.02 million in years n and n+1, and between EUR 2.65 and 3.11 
million from year n+2. 
Again, on the EU budget savings could be made of  EUR 38,773, bringing the total yearly cost 
for the EU budget of this sub- option to between EUR 2.41 a nd 2.98 million in years n and 
n+1, and between EUR 2.61 and 3.07 million from year n+2. 
6.7. Option 3 sub-option 3a: The tasks of the Observatory are entrusted to a new 
EU agency 
6.7.1.  Description 
A new, specialised EU agency would be set up to carry out the ta sks of the European 
Observatory for Counterfeiting and Piracy. This  option implies the adoption of a European 
Parliament and Council Regulati on, establishing a new agency. 
 
EN 31   EN 6.7.2.  Analysis 
EU agencies are fairly indepe ndent bodies with their own le gal standing, and their own budget 
and establishment plan. The Commission only ex ercises remote control functions via the 
'parent DG' ('DG de tutelle'), without influenc ing the agency's day-to-day management which 
normally is the responsibility of the agency's director. The agency director therefore, under 
this option, would also be responsible to de termine the governance and functioning of the 
Observatory, to the extent that this is not dealt with in the agency's basic regulation. The 
Commission would retain politic al control and responsibility for enforcement related policy 
initiatives. 
Agencies are set up by an act of secondary le gislation in order to accomplish a very specific 
technical, scientific or managerial task. Acco rdingly, the option of creating a new EU agency 
has the potential to allow the delivery of all the objectives described in section 5. 
The range of tasks to be carried out by a new agency and the number of staff required are 
identified in Annex III.  
However, the probable size of the Observatory is unlikely to justify the creation of a new 
agency. As identified in the ex ternal evaluation of EU decentr alised agencies, carried out on 
the Commission's behalf in 200955, a certain minimum size ("critical mass") in terms of 
human resources is required for an agency to  undertake its tasks effi ciently. The evaluator 
concluded that this critical size lies some where between 50 and 100 staff members. The 
"critical mass challenge" was also highlighted in a recent study by the European Parliament56 
which revealed that agencies with less than  100 people have a much higher proportion of 
administrative staff, which suggests that they f ace certain efficiency constraints. As indicated 
in Annex III, the tasks of the Observatory w ould only justify operationa l staff of 25 people, 
which would clearly lie belo w this indicative threshold. 
The figures contained in Annex III illustrate th e problem. With operational staff of 25 people 
at cruising speed (of which about sixteen could be contract agents  as this staff type can be 
employed in agencies on a permanent basis57), the agency would require at least five 
additional staff members to deal with administrative tasks (human  resources, finance, IT etc). 
The staffing costs would therefore, in total,  amount to EUR 1 millio n during the first two 
years. In addition, the setting up of the agency would also re quire additional resources from 
inside DG MARKT which would incur additional costs of EUR 127,000 /year during the first 
two years (for details see Annex III), and also  under this option the current two AD officials 
in DG MARKT would continue to take care of policy related tasks. From the following year 
there would be a reduction of costs, due to th e completion of IT development and the setting 
up of the agency. 
                                                 
55  http://ec.europa.eu/dgs/secretariat_general/evaluation/documents_en.htm . In 2008, the Commission 
committed itself to not propose any new regulatory agencies, while the horizontal evaluation of existing 
EU agencies was ongoing, see COM (2008)135. 
56  European Parliament, 2009, Opportunity and feas ibility of establishing common support services for 
EU agencies, Table 3, http://w ww.europarl.europa.eu/studies. 
57  See Article 3a of the Conditions of Employment for other agents of the European Communities 
(Regulation No 31 (EEC), 11 (EAEC) laying down the Staff Regulations of Officials and the 
Conditions of Employment of Other Servants of the European Economic Community and the European 
Atomic Energy Community, OJ 45, 14.6.1962, p. 1385). 
 
EN 32   EN The total costs of this option are detailed in Annexes III and IV. They can be summarised as 
follows: 
Table 4: Costs of option 3a (compared to baseline scenario)  
Agencies are financed either from the European Union's budget or via fees  paid by th eir users. 
The Observatory does not provide any payment re lated services or products to businesses; 
therefore, its activities will not generate any f ees. In these circumstances, the costs of the 
agency would need to be entirely co vered by a subsidy from the EU budget. 
Furthermore, the establishment of a new ag ency is complex and time consuming. Recent 
examples, such as the setting up of the Ag ency for the Cooperation of Energy Regulators 
(ACER) in Ljubljana, have shown that, apart from the time needed for the adoption of the 
agency's basic regulation (which can be estimate d at between 18 to 24 months), it can still 
take several years for the agency to be fully  up and running. Therefore, this option would not 
ensure appropriate support for the Observator y's activities in the short and medium-term. 
6.8. Option 3 sub-option 3b: The tasks of the Observatory are entrusted to an 
existing agency 
6.8.1.  Description 
Under this option, the Observatory would be run by an existing agency, which currently 
carries out other tasks. This would allo w the Observatory to profit from existing 
administrative structures (such as  human resources and finance). 
6.8.2.  Analysis 
For the reasons mentioned in option 3a, an EU  agency would be well suited to deliver the 
objectives described in section 5. Compared to  option 3a, this option might also provide a 
more cost-efficient solution. 
There are currently around thirty regulatory agen cies dealing with different subject matters 
and various scopes of activ ities. Several of them carry out activities comparable to those of 
the Observatory, i.e. data co llection, developing methodologies, sharing best practices or 
raising public awareness. The European Institute for Gender Equality (EIGE) in Vilnius is one 
such example, as is the European Mon itoring Centre for Drugs and Drug Addiction 
(EMCDDA) in Lisbon. However, in the context of being housed in one of these agencies the 
Observatory would be unable to benefit from any pre-ex isting knowledge of the often 
complex and wide ranging subject matter it is dealing with. Costs IT systems Total yearly costs Years Agency 
staff 
required Cost incl. 
facilities Meeting/ 
mission costs  
Basic Sophisticated Ba sic IT Sophisticated 
IT 
n-n+1 15 1.93 0.5 1.9 2.9 4.33 5.33 
n+2 + 30 2.68 0.59 2.23 3.01 5.5 6.28 
 
EN 33   EN It therefore seems more rational to consider the Office for Harmonisation in the Internal 
Market (OHIM)  which is the EU agency responsible for registering Community trade marks 
and designs, valid in all 27 EU Member Stat es. Given the clear relationship between the 
protection of IP rights and their enforcement, the expertise already available within the OHIM 
appears particularly pertinen t to taking over the Observator y's tasks. The OHIM also has 
natural working relations with national IP offices, many of whic h are responsible for leading 
on national enforcement strategies  and coordination structures. Consequently, networks exist 
that could be further develope d by the OHIM to ensure that the work of the Observatory is 
carried out. Moreover, the OHIM also has an es tablished basis for expertise in the area of 
enforcement of trademarks and designs, through its seminar series for judges. In addition, enforcement is incorporated into other traini ng activities and the Offi ce has already promoted 
IP awareness through tools such as the 'Hands off My  Design' e-learning website. 
Furthermore, the OHIM has created a legal da tabase of infringement cases, drawn from 
information throughout the EU. It will also develop other enforcem ent related projects, 
through the OHIM Cooperation Fund. One such pr oject will create a multi-modular tool to 
assist investigations by allowing customs an d other enforcement authorities to consult 
information on registered trade marks and designs , as well as contact information for right 
holders and other information to allow easier detection of counterfeit goods. 
The expertise available within the OHIM conc erning the enforcement of trade marks and 
designs provides a good basis for expanding this work. Additional expertise would in 
particular need to be acquired in relation to copyright issues and patents. This could be 
achieved through the recruitment of specialist staff and, possibl y, the training of existing, 
redeployed staff. This basis would create im portant synergies between the tasks of the 
Observatory and those currently carried out by the OHIM. As a result, such synergies could 
significantly limit the number of additional staff needed to be employed to carry out the tasks of the Observatory (for details see Annex VI). Instead  of the 25 staff men tioned in Annex III, 
only 19 staff would be required to be employed as  of the third year, as economies equivalent 
to that of six man-years could be made through synergies within existi ng functions. The total 
costs of this option, which are detailed in A nnexes V and VI, can be summarised as follows: 
Table 5: Costs of option 3b (compared to baseline scenario)  
Apart from the comparatively lower costs, th is option would also have the advantage of 
allowing the Observatory to become operational more quickly than a newly established agency. While a European Parliament and Council Regulation extending the OHIM's mandate 
would need to be adopted, ther e would, for example, be no need  to adopt new rules on human 
resources and budget before the agency could start with the recruitment of staff. Thanks to the 
already existing working relations between  DG MARKT and the OHIM, which will be 
intensified through the implementation of th e Memorandum of Unders tanding, also the Costs IT systems Total yearly costs Years Staff 
required Cost Admin 
costs  Meeting/ 
mission 
costs 
 Basic Sophisticat
ed Basic 
IT Sophisticated 
IT 
n – n+1 10 1.02 incl. 0.38 1.9 2.9 3.3 4.3 
n+2 + 19 2.06 incl. 0.45 2.23 3.01 4.74 5.52 
 
EN 34   EN handover of tasks could be done through a smooth and staged transition that would ensure 
that the Observatory's tasks continue to  be carried out without any disruption. 
The possibility of involving the OHIM in enforcement re lated activitie s, and more generally, 
in broadening the scope of its competences has already been discussed and supported,  in 
particular, by Member States and the European Parliament. In  its conclusions of 25 May 2010 
on the future revision of the Trade Mark system in the EU, the Council invited the 
Commission to include in its modifications to the Community Trad e Mark Regulation and 
Trade Mark Directive "the esta blishment of a clear legal basis for the involvement of the 
OHIM in enforcement-related activities, in cluding the fight against counterfeiting, in 
particular through fostering its cooperation with  the National Offices, in accordance with their 
national competences, and the European Ob servatory on Counterfeiting and Piracy"58. The 
European Parliament addressed this issue in  its Resolution of 22 September 2010 in which it 
called on the Member States and the Commissi on to extend cooperation between the OHIM 
and national intellectual prope rty offices, to cover the fight  against IPR infringements. 
Moreover, the Parliament's Forum on counterfe iting, contraband and organised crime viewed 
the idea to entrust the OHIM with the management  of the Observatory as the most suitable 
solution to enhance the Obse rvatory’s effectiveness.  
Furthermore, the issue of introduc ing additional tasks to the OHIM,  particularly in relation to 
enforcement (e.g. anti-counterfei ting activities), was analysed within the framework of an 
external study, commissioned by the Commissi on, on the overall func tioning of the trade 
mark system in Europe59. The Max-Planck-Institute that carri ed out the study concluded that a 
role for the OHIM in this area should be forese en. The survey of user organisations showed 
that while in general they do not perceive a particular need for the OHIM to expand its 
activities they would see merit in assistan ce related to enforcement of IP rights.  
In legal terms , entrusting the management of the Observatory to the OHIM would require a 
change to the agency's current legal basis or  the adoption of a new Regulation on new tasks 
for the OHIM in relation to enforcement activiti es. Such a Regulation could possibly be based 
on Articles 114 and 118(1) TFEU. In  practice, the management of the Observatory could be 
entrusted to a new section which would be established in the OHIM and function as an 
integral part of the Office. 
The financing  of the activities could be taken from the budgetary resources that the OHIM 
generates through its current act ivities. This would mean that the EU budget would not be 
required to cover these costs. At the same ti me, in comparison to the baseline scenario, under 
this option savings in the EU budget w ould arise to the extent of EUR 38,773 
(reimbursements of Member States' experts and organisation of the Observatory's meetings, 
for details see Annex VI) per year. 
7. COMPARING THE OPTIONS  
As set out in section 6, option 1a (an increa se in DG MARKT's resources) is not realistic 
under the given circumstances and therefore not  a suitable option. Option 2a (private, 
industry-financed initiative) is not likely to be  feasible, due to the unwillingness of the private 
                                                 
58  Council Conclusions of 25 May 2010 on the future revision of the Trade Mark system in the European 
Union, Official Journal C 140, 29.5.2010,  p. 22. 
59  The full text of the study is available at http://ec.europa.eu/internal_market/indprop/tm/index_en.htm. 
 
EN 35   EN sector to launch such an initiative, and also  does not thus offer a suitable solution to the 
problem. The risk of undue influence by vested in terests would pose a problem with a view to 
the overall objectives of the initiative. Furthermore, the sensitivity of some of the information to be handled would create an additional prob lem as far as data collection is concerned. 
These two options are therefore not containe d in the Table 6, below, which provides a 
summary of the analysed suitable options: 
Table 6: Comparison of options  
Effectiveness (achievement of objectives) Efficiency Assessment 
 
Options  Sustainable 
funding Stable 
structure Human 
resources IT  
capacity Indepen-
dence 
from 
vested interests Time 
needed  Overall costs Implication for 
EU budget Overall 
assessment 
Option 0 
(base-line 
scenario) 0 0 0 0 0 0 0 0 0 
Option 1b + + + + 0 - between 
EUR 4.83 
and 6.18 
million / 
year between 
EUR 4.83 
and 6.18 
million / 
year + 
Option 2b + - + + - -- between 
EUR 4.89 
and 6.21 
million / 
year between 
EUR 4.85 
and 6.17 
million / 
year - 
Option 2c + + + + 0 
 -- between 
EUR 4.89 
and 6.21 
million / 
year between 
EUR 2.41 
and 3.07 
million / 
year + 
Option 3a ++ ++ ++ + ++ -- between 
EUR 4.37 
and 6.32 
million / 
year between 
EUR 4.33 
and 6.28 
million / 
year + 
Option 3b 
(as 
regards 
OHIM) ++ ++ ++ ++ ++ - between 
EUR 3.3 and 
5.52 million 
/ year - EUR 0.04 
million / 
year ++ 
Magnitude of effectiveness and efficiency: ++ strongly positive,  + positive, 0 neutral, - negative, -- strongly negative, N/A 
not applicable. 
Options 1b (outsourcing) and 2b (a private, Commission-financed initiative), offer suitable 
solutions for most of the tasks that need to be performed. Only the process of data collection and analysis would need to be carried out th rough different means, in order to reach the 
 
EN 36   EN objective defined in section 5. However, both options have high overall costs and a high 
impact on the EU budget, which is strongly negati ve. Options 2c (public private partnership) 
and 3a (newly created EU agency) also offer solutions that would reach all the objectives set out in section 5 a least to a ce rtain extent. However, again, both  have an adverse impact on the 
budget and in the case of option 3a  this is particularly negativ e. Both options would also 
result in a significant delay in ge tting all activities up and running. 
By contrast, option 3b would provide all of the advantages of option 3a but also allow the 
objectives to be achieved relatively soon. Furtherm ore, it would lead to a very cost-efficient 
solution (with overall costs ranging from EUR 3.3 to 5.52 million) and would allow the costs 
to be covered from budgetary means outside th e EU budget (which woul d benefit of certain 
savings). Option 3b is ther efore the preferred option. 
8. M
ONITORING AND EVALUATION  
Should a decision be taken to entrust the ta sks of the Observatory to the Office for 
Harmonisation in the Internal Market (OHIM), then the full effect of the resulting conditions will need to be monitored, measured and evalua ted, to ensure the decision has achieved its 
intended objectives. To this end, five years after the entry into fo rce of the Regulation 
entrusting the OHIM with the management of the Observatory, the Commission should 
establish an evaluation report and transmit it the European Parliament and to the Council.  
This report would be composed of: (1) An assessment of the results that will be published by the Observatory in quarterly 
highlight reports and in its annual report, based on comp rehensive, objective data. 
(2) Any audit reports carried out by the OHI M on the work of the Observatory; 
(3) A survey of public and private stakeholders  on their perceptions of the Office's work, 
in terms of comprehensiveness, reliab ility, accuracy, usefulness, objectivity and 
independence of its results. 
The criteria that would be used in orde r to assess the effect and impact of the measure will 
be, in particular: 
• Progress made in the development of the Observatory's activities; 
• The success of the Observatory's strategy; 
• The efficient use of resources; 
• The impact and implications for public and private stakeholders. 
The following would act as the main monitoring indices : 
• Timeliness of the collation and publication of reports, of res earch on best practices, the 
development and delivery of tool kits on awar eness raising, and the development, delivery 
and maintenance of databases. 
 
EN 37   EN • Quality of reports and research (accuracy and usefulness), quality and impact of strategies 
that will be developed in th e fields of public awareness, research and tr aining, including 
the number of campaigns carried out successf ully and the number of persons trained, 
accessibility of databases and the extent to which these databases have been used in 
practice. 
 
EN 38   EN ANNEX I: MEMBERS OF THE EUROPEAN OBSERVATORY ON 
COUNTERFEITING AND PIRACY  
1. MEMBER STATES  
Table 7: Member States' repres entatives to the Observatory 
Member 
State Ministry/Office 
Austria Federal Ministry of Finance 
Belgium Federal Public Service of Economy 
Bulgaria Bulgarian Patent Office 
Cyprus Permanent Representation of the Republic of Cyprus to the EU 
Czech 
Republic Generalni reditelstvi cel (the General Directorate of Customs) 
Denmark Danish Patent and Trademark Office 
Finland Kotka Customs 
France CNAC (Comité National anti-contrefacon) 
INPI (Institut National de la Propriété Industrielle) 
Germany Federal Ministry of Justice 
Greece Hellenic Industrial Property Organization 
Hungary Hungarian Patent Office 
Ireland Customs Division, Office of the Revenue Commissioners 
Italy Anti-Counterfeiting Unit - Italian Patents and Trademarks Office -Ministry of Economic 
Development 
Latvia Patent Office 
Lithuania Ministry of Culture of the Republic of Lithuania 
Luxembourg Ministry of the Economy and Foreign Trade 
Malta Ministry of Finance, Economy & Investment, Customs Division 
Netherlands Ministry of Economic Affairs 
Poland Ministerstwo Kultury i Dziedzictwa Narodowego (Ministry of Culture and National 
Heritage), Departament Prawny (Legal Department) 
Portugal Directive Council of the Portuguese Institu te of Industrial Property (Instituto Nacional da 
Propriedade Industrial - INPI) 
 
 
EN 39   EN Member 
State Ministry/Office 
Romania Public Ministry, Prosecut or’s Office attached to the High Court of Casation and Justice 
Slovakia Slovak Industrial Property Office 
Slovenia Slovenian Intellectual Property Office 
Spain Oficina Española de Patentes y Marcas 
Sweden Ministry of Foreign Affairs 
United 
Kingdom Copyright and Enforcement Director ate, Intellectual Property Office 
2. PRIVATE STAKEHOLDERS  
Table 8: Private sector representatives to the Observatory 
Organisation 
(acronym) Full name Description 
ABAC BAAN Association Belge Anti-
Contrefacon ABAC-BAAN is a Belgian non-profit organisation that helps 
companies to fight counterfeiting, does not focus on a single segment 
of the market.  
ACT Association of 
Commercial Television 
in Europe Association of Commercial Televisi on in Europe (ACT) is a trade 
association representing the interests of the commercial broadcasting 
sector in Europe. The ACT has thir ty member companies active in 34 
European countries, operating several hundred free-to-air and pay-tv 
channels and distributing several hundred channels and new services. 
AIM Association des 
Industries de Marque (European Brands 
Association) AIM is the European Brands Association. It represents the branded 
goods industries in Europe on issues which affect the ability of brand manufacturers to design, distribute and market their brands. AIM’s 
membership groups 1800 companies of all sizes through corporate 
members and national associations in 22 countries. These companies are mostly active in every day consumer goods. They employ some 
two million workers and account for over 350 billion Euro in annual 
sales in Europe alone. 
Alliance Against IP 
Theft  The Alliance Against Intellectual Pr operty (IP) Theft is a UK-based 
coalition of 20 associations and enforcement organisations with an 
interest in ensuring intellectual pr operty rights receive the protection 
they need and deserve. With a combined turnover of over £250 billion, our members include representatives of the audiovisual, 
music, video games and business software, and sports industries, 
branded manufactured goods, publishers, authors, retailers and designers. 
ANDEMA Asociacion Nacional 
para la Defensa de la 
Marca ANDEMA is a Spanish association of trademark owners from all 
sectors. 
 
EN 40   EN Organisation 
(acronym) Full name Description 
APM Aktionskreis gegen 
Produkt- und 
Markenpiraterie e.V. 
REACT Germany The German Anti-Counterfeiting Association (APM) is a cross-
industrial alliance in the protection of intellectual property anda joint 
initiative by the German Association of Chambers of Industry and 
Commerce (DIHK), the Federation of German Industry (BDI), and 
the German Brands Association. It currently has 74 members. 
ARCC The Romanian Anti-
counterfeiting 
Association The Romanian Anti counterfeiti ng Association (ARCC) was 
established for the primary purpose of monitoring the cases of 
counterfeiting by their identification by any means necessary and drawing up strategies and programs to bring them to pubic attention.  
BASCAP Business Action to Stop 
Counterfeiting & Piracy Business Action to Stop Counterfeiting and Piracy – BASCAP – is 
an initiative launched by the International Chamber of Commerce to 
connect and mobilize businesses across industries, sectors and 
national borders in the fight against counterfeiting and piracy and to 
pool resources and expertise. 
BEUC The European 
Consumers’ 
Organisation Has a membership of 43 national consumer organisations from 31 
European countries (EU, EEA and applicant countries). BEUC acts 
as the umbrella group in Brussels for these organisations. 
BSA Business Software 
Alliance Business Software Alliance (BSA) is a non profit trade association 
created to advance the goals of the software industry and its 
hardware partners. Headquartered in Washington, DC, BSA is active 
in more than 80 countries, with dedicated staff in 11 offices around 
the globe. Members include HP, Adobe, Apple, Cisco, Dell, IBM, Microsoft, Siemens, Symantec etc. 
BUSINESSEU
ROPE Confederation of 
European Business Through its 40 member federations, BUSINESSEUROPE represents 
20 million companies from 34 countries.  
CECCM Confederation of 
European Community 
Cigarette Manufacturers CECCM is a non commercial association which was formed to 
represent the common views of major European–based cigarette 
manufacturers and several National Manufacturers Associations. 
COLIPA The European 
Cosmetics Association Colipa has been the voice of Europe’s EUR 58.1 billion cosmetic, 
toiletry and perfumery industry since 1962. As the industry’s European trade association Colipa’s membership consists of: 
- 16 major international companies  
- 25 active national associations  - 4 supporting association members  
- 2 correspondent members  
Colipa represents the interests of more than 2000 companies ranging from major international cosmetics manufacturers to small family-
run businesses operating in niche markets. Together, these employ 
more than 500,000 people within the European Union. 
DIHK Deutscher Industrie- 
und Handelskammertag 
e. V. (Association of German Industry and 
commerce) The DIHK is the central organisation for 80 Chambers of Industry 
and Commerce in Germany. All Ge rman companies registered in 
Germany, with the exception of handicraft businesses, the free 
professions and farms, are required by law to join a chamber. 
 
EN 41   EN Organisation 
(acronym) Full name Description 
ECPA  European Crop 
Protection Association  ECPA represents the crop protection industry's European regional 
network. Their members include all major companies and national associations across Europe – curren tly there are 59 members listed on 
their website. 
EDIMA European Digital Media 
Association EDiMA is an alliance of new media companies whose members 
provide new media platforms offering European consumers a wide range of online services, including  e-content, media, E-commerce, 
communications and information/search services. EDiMA represents 
some of the largest new media co mpanies and Internet platforms 
operating at the European level and interested in the development of 
the European online market. Current members: Amazon, Apple, B!, 
e-bay, Orange, Google, Microsoft,  Music choice, Napster, Nocial, 
Real, Tiscali and Yahoo.  
EECA - ESIA European 
Semiconductor Industry 
Association EECA-ESIA represents the European -based semiconductor industry. 
The semiconductor industry provides the enabling technologies at the 
forefront of the development of the information society. This sector 
supports around 115,000 jobs directly and up to 500,000 induced 
jobs in Europe, in a market valued at over € 21bn (bn) in 2009. 
Currently they have 18 company members, 8 national member 
associations and 3 research institutes. 
EFPIA  European Federation of 
Pharmaceutical 
Industries and Associations  The European Federation of Pharmaceutical Industries and 
Associations (EFPIA) represents the pharmaceutical industry 
operating in Europe. Through its direct membership of 32 national associations and 40 leading pharm aceutical companies, EFPIA is the 
voice on the EU scene of 2,200 companies committed to researching, 
developing and bringing to patients new medicines that will improve health and the quality of life around the world. 
Euratex European Apparel and 
Textile Confederation EURATEX is the association of the European textile and clothing 
industry. 
Eurimag The IT Imaging and 
Printing Industry in Europe EURIMAG  is an organisation representing the IT imaging and 
printing industry in Europe. Its membership is comprised of the leading manufacturers of printers, scanners, and multifunctional 
devices including Brother, Canon, Dell, Epson, Hewlett-Packard, 
Kodak, Konica Minolta, Lexmark and OKI. In Europe these companies account for direct employment of about 100.000 people. 
Eurochambres The Association of 
European Chambers of 
Commerce and Industry Represents European Chambers of Commerce and Industry. 
FEP - FEE Federation of European 
Publishers FEP is an umbrella association of book publishers associations in the 
European Union. FEP represents 26 national associations of book 
publishers of the European Union and of the European Economic 
Area. 
 
 
EN 42   EN Organisation 
(acronym) Full name Description 
FESI Federation of the 
European Sporting 
Goods Industry FESI is the European representative of the sporting goods industry 
vis-à-vis the European Institutions as well as other European 
authorities and bodies. FESI represents some 1,800 companies with an annual turnover of more than 60 billion Euro. 
GACG Global Anti-
Counterfeiting Group (GACG Network) GACG is an informal network of national and regional IP protection 
and enforcement organisations. Th ere are currently 23 Members 
covering 36 Countries (incl.  Andema, ABAC/BAAN, MARQUES, 
Indicam, SACG, Unifab).  
IFPI International Federation 
of the Phonographic 
Industry IFPI represents the recording indust ry worldwide, with a membership 
comprising some 1400 record companies in 66 countries and 
affiliated industry associations in 45 countries. 
INDICAM Instituto di Centromarca 
per la lotta alla contraffazione INDICAM represents nearly 180 co mpanies, industry associations, 
law and IP firms, security consultants and other organisations daily engaged against counterfeiting activities that hit branded products. Members mainly Italian and International brand manufacturers 
operating in the Italian market. 
INTA International Trademark 
Association INTA is a membership associati on of more than 5,900 trademark 
owners and professionals, from more than 190 countries, dedicated to the support and advancement of tr ademarks and related intellectual 
property. 
ISFE Interactive Software 
Federation of Europe ISFE represents the interests of th e interactive software sector vis-à-
vis the EU and international institutions. Initially founded by the 
national interactive software trade associations in the UK, France, 
Germany and the Netherlands, ISFE was enlarged in January 2002 to include any company representing the industry within the 27 
Member States plus Norway, Icelan d, Switzerland and Liechtenstein. 
Thirteen major publishers of interactive software and thirteen interactive software trade associations throughout Europe have 
joined ISFE. 
IVF International Video 
Federation The IVF represents video associations in 16 European countries and 
in the United States of America. 
ORGALIME European Engineering 
Industries Association Orgalime is the European federation representing the interests at the 
level of the EU institutions of the European mechanical, electrical, 
electronic and metal articles industries as a whole. Orgalime’s 
member federations directly or indirectly represent some 130,000 companies of an industry which employs 11.1 million people. The 
companies which are overwhelmi ngly small and medium-sized 
enterprises cover a broad industry cross-section in terms of product, 
market segment and geographical spread. 
SACG Swedish Anti-
Counterfeiting Group The Swedish Anti-Counterfeiting Gr oup (SACG) is the non-sector 
specific association in Sweden fighting counterfeiting. The members mainly consist of representatives of the Swedish industry, importers 
and distributors, as well as of Swedish attorneys specialized in 
intellectual property rights. 
 
EN 43   EN Organisation 
(acronym) Full name Description 
SNB-REACT European Anti-
Counterfeiting Network SNB-REACT is a non profit coalition with the objective to actively 
fight counterfeit trade. SNB-REAC T members come from all sectors; 
sports, footwear, football, fashion, merchandising, fragrances, 
household, automotive industry, mobile phone industry, toys and 
various. 
SROC Sports Rights Owners 
Coalition SROC is an informal group of representatives of international and 
national sports bodies with a particular focus on rights issues. SROC 
operates as a forum through which sports bodies can share 
information and experiences. 
TIE Toy Industries of 
Europe TIE is a non-profit trad e association for the European toy industry. 
At present membership includes 9 direct member companies and all 
major national toy associations, representing approximately 80% of 
European toy sales. 
UEAPME The European 
Association of Craft, Small and Medium-
sized Enterprises UEAPME is the employers’ organisation representing the interests of 
European crafts, trades and SMEs at  EU level. As the European SME 
umbrella organisation, UEAPME incorporates 82 member 
organisations from 34 countries consisting of national cross-sectorial 
SME federations, European branch federations and other associate 
members, which support the SME fa mily. UEAPME represents more 
than 12 million enterprises, which employ around 55 million people 
across Europe. 
UNIFAB Union des Fabricants Unifab is a French association whose members are companies and 
trade organizations of all sizes and sectors. 
 
EN 44   EN ANNEX II: IPR INFRINGEMENTS IN THE EU AND EU POLICY  
ON IPR PROTECTION  
1. THE EU POLICY ON IPR  PROTECTION  
Studies typically suggest that R&D spending is associated with an increase in productivity, 
with estimated gross rates of return (including bot h net return to capital and depreciation) 
ranging from 10 to 20 percent60. Conditions which are conduciv e to investment include a 
surety that investments in new creations and R&D are properly protected  and can generate an 
appropriate return for investors and the creative industries. For the EU where, due to our high 
social standards and labour costs, most areas cannot compete on the basis of price, this is a 
crucial aspect. A 2007 survey invo lving over 400 EU-based executives61 revealed the view of 
these executives that, as Europe’s industrial base  has declined, the continent has come to rely 
upon its knowledge based workers. Ideas were ther efore considered, by these executives, to 
be the EU's most valuable resource. In this respect, 53% of them said that the use of 
intellectual property rights will be very important or critical to their business models in two 
years, compared to 35% who considered this to be the case at the time of the survey. 
The Commission therefore has been committed to creating a high-standard intellectual 
property (IP) culture62. In the EU acquis , this policy is reflected in  the Charter of Fundamental 
Rights of the European Union, which states, in its Article 17(2), that  intellectual property 
shall be protected. At the level of secondary law, harmonisation measures have been adopted 
in relation to certain aspects of copyright  (such as the resale right of authors63, the term of 
protection64, exemptions from copyright in the digital environment65, and trademarks66). 
Furthermore, the EU has created specific EU inte llectual property titles that provide a unitary 
level of protection throughout the EU , namely the Community trademark67 and the 
Community design68, which are both administered by the OHIM. EU legislation also provides 
for unitary protection throughout the EU for ge ographical indications (GI) of agricultural 
products and foodstuffs69, wines70, spirit drinks71 and aromatised wines72. 
                                                 
60  OECD policy brief: Creating value from intellectual assets, February 2007, 
http://www.oecd.org/dataoecd/8/45/38194512.pdf. 
61  'The value of knowledge: European firms a nd the intellectual property challenge', Economist 
Intelligence Unit white paper 2007 published by the Economist. 
62 See in particular COM(2008)465 final. 
63  Directive 2001/84/EC on the resale right for the be nefit of the author of an  original work of art, 
OJ L 272, 13.10.2001, p. 32. 
64  Directive 2006/116/EC on the term of protection of copyright and certain related rights (codified 
version), OJ L 372, 27.12.2006, p. 12. 
65  Directive 2001/29/EC on the harmonisation of certain aspects of copyright and related rights in the 
information society, OJ L 167, 22.6.2001, p. 10. 
66  First Council Directive 89/104/EEC to approximate the laws of the Member States relating to trade 
marks, OJ L 40, 11.2.1989, p. 1. 
67  Council Regulation (EC) No 40/94 on the Community trade mark, OJ L 11, 14.1.1994, p. 1. 
68  Council Regulation (EC) No 6/2002 on Community designs, OJ L 3, 5.1.2002, p. 1. 
69  Council Regulation (EC) No 510/2006 on the protec tion of geographical indications and designations of 
origin for agricultural products and foodstuffs, OJ L 93, 31.3.2006, p. 12. 
70  Council Regulation (EC) No 1234/2007 establishing a common organisation of agricultural markets and 
on specific provisions for certain agricultural products (Single CMO Regulation), OJ L 299, 
16.11.2007, p. 45. 
71  Regulation (EC) No 110/2008 on the definition, description, presentation, labelling and the protection 
of geographical indications of spirit drinks, OJ L 39, 13.2.2008, p. 16. 
 
EN 45   EN Although the main focus of this policy is to safe guard the interests of right holders, it is not 
limited to this aspect as it clearly serves other interests in the market. For example, IP rights 
increase competition by facilitating the entry of  newcomers to a market, in particular SMEs, 
which can attract venture capital or licen se production to incumbents. Furthermore, 
particularly in the aftermath of the financial crisis , the possibility of using IP rights as security 
facilitates SMEs' access to bank loans73.  
IPRs also form the basis for cultural creation, hi gh quality journalism a nd a democratic press. 
Thus, copyright is fundamental to intellectual a nd cultural creation. It is also crucial for the 
maintenance of media plurality. The culture an d media sectors can only be sustained when 
accompanied by adequate protection and income fo r those who devote their life to the creative 
impulse or those who invest h eavily in creative industries. 
IP protection also serves the interests of consumers by ensu ring that buyers of goods and 
services can rely on acquiring products that meet their expectations in terms of quality, 
security standards and, in the case of luxury goods , brand and origin reputation. This aspect is 
of significant importance. In 2009, DG MARKT conducted a Eurobarometer survey74, which 
included a large scale quantitati ve telephone survey, delivering re presentative results for the 
EU population. The survey, which discussed intern al market issues in  depth, incorporated 
Focus Groups made up of citizen s and business represen tatives, from all Member States. The 
results showed that one out of  five EU citizens had on at le ast one occasion unintentionally 
bought a counterfeit product. 
2. ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS  
In the EU, the enforcement of all IP rights (including trademarks, copyrights and related 
rights, patents and geographical indications) is cons idered, in the first place, to be the task of 
the right holders. In this respect, the IPR Enforcement Directive provides right holders with civil law tools to enforce their rights before the courts. 
These particular enforcement measures are co mplemented by a wider range of measures at 
national, EU and international levels, wh ich are aimed at preventing and combating 
infringements of intellectual pr operty rights on a larger scale. 
2.1. Private sector 
Private business' efforts to combat IPR infr ingements focus on a number of specific areas. 
Firstly, industry sectors collect information a bout counterfeiting and piracy incidents. This 
information is used to develop public awareness about illicit pr oducts and to design relevant 
counter-measures. Secondly, legitimate producer s undertake various preventative steps to 
ensure their products are diffi cult to copy and counterfeit. These measures often involve 
sophisticated authentication tech niques and 'track and trace' technologies. Thirdly, industries 
act as prompts for enforcement and offer regul ar support to public authorities involved in 
                                                                                                                                                        
 
72  Council Regulation (EEC) No 1601/91 laying down general rules on the definition, description and 
presentation of aromatized wines, aromatized wi ne- based drinks and aromatized wine-product 
cocktails, OJ L 149, 14.6.1991, p. 1. 
73  OECD, Intellectual Assets and Value Creation: Synthesis Report, 2008, 
http://www.oecd.org/dataoecd/36/35/40637101.pdf. 
74  Full report available at: http://ec.europa.eu/public_opinion/. 
 
EN 46   EN investigations, through inform ation and intelligence about products, consignments and 
potential infringements. Moreove r, industry stakeholders regula rly assist in offering training 
and awareness raising program mes for police, prosecutors, customs officials and other 
enforcement personnel. Finally, industry takes pu rsues violators of intellectual property rights 
through the courts75. 
2.2. Public sector 
2.2.1.  EU Member States 
At national levels, over the years, Member St ates have put in place  a wide variety of 
structured frameworks for combating counterfeit ing and piracy. These enforcement structures, 
that in many Member States, are developed an d led by national IP offices, have resulted in 
significant success stories76. However, the frameworks have often been developed in 
accordance with national requirements and needs. As such, different national structures are 
often unsuitable for use in othe r Member States. Consequently, there is no particular model 
that is applied all over the EU. 
2.2.2.  European Union 
Over the past decade, several steps have been  taken, both legislative and non-legislative, to 
improve the enforcement of intellect ual property rights within the EU. 
In the legislative area , the IPR Enforcement Directive, referred to above, has harmonised the 
laws of Member States in respect of civil me asures for the enforcement of all IP rights. 
Furthermore, the Commission is currently assess ing whether it is necessary to complement 
this Directive through criminal law measures. Depending on the result of this assessment, the 
Commission could present a new legislative proposal, which would replace the 2006 proposal 
for a Directive on criminal sanctions77. Moreover, in the food and beverage sectors, the EU's 
official feed and food control system78 includes geographical indications within the 
architecture for the en forcement of food law. 
To comprehensively fight infringements of intellectual property rights and safeguard EU 
competitiveness, internal market based schemes are complemented by those that focus on the EU's external borders and on third countries. The EU Customs Action Plan to combat IPR 
infringements for the years 2009-2012
79 sets priorities for the Commission and the Member 
States to take action to strengthen customs enfo rcement at the EU border. In this context, the 
Commission is preparing a proposal for a new Regulation, to replace Regulation 1383/200380, 
with the objective of strengthe ning enforcement whilst streamlining procedures. Moreover, 
the EU-China Action Plan on customs coopera tion on IPR enforcement should provide the 
basis for reducing the scale of IP R infringements in bilateral trade between the EU and China. 
                                                 
75 OECD (2008), 'The economic impact of counte rfeiting and piracy', OECD Publications: Paris. 
76 See e.g. http://www.presstv.ir/detail.aspx?id=118579&sectionid=3510212  and 
http://www.cityoflondon.police.uk/CityPolice/ Media/News/counterfeitringsmashed.htm. 
77 Amended proposal for a Directive of the European Parliament and of the Council on criminal measures 
aimed at ensuring the enforcement of intellectual property rights (COM(2006) 168 final). 
78  Council Regulation (EC) No 882/2004. 
79 Council Resolution of 16 March 2009, OJ C71, 25.3.2009, p.1. 
80 Council Regulation (EC) No 1383/2003 of 22 July 2003 concerning customs action against goods 
suspected of infringing certain intellectual property rights and the measures to be taken against goods 
found to have infringed such rights, OJ L 196, 2.8.2003, p. 7. 
 
EN 47   EN Finally, the Commission has put in place a range of Free Trade Agreements (FTAs), 
negotiated with third countries, on provisions of protection for IP  rights and has developed a 
long-term strategy for the enfor cement of IPR in third countries81, which is due to be 
reviewed in 2011. 
These regulatory measures are complemented by non-legislative measures . Various 
initiatives to exchange best practices are carried out by the European Commission. 
DG Enterprise and Industry a nd DG TAXUD regularly organise  programmes linked to anti-
counterfeiting work for customs and market surveillance authorities. Furthermore, the 
Commission has launched initiatives to impr ove businesses' knowledge about the tools 
available to successfully pursue in fringers of their IP rights and to prevent infringements, both 
in Europe and abroad. One example is the China IPR SME Helpdesk, which provides EU 
SMEs, active in China, with the business tool s they need to develop their IP rights and 
manage  related risks.  
In respect of actual enforcem ent activities, Europol has taken a lead by launching, in 
January 2008, an analysis work file (AWF ), to focus on product piracy and IPR 
infringements82. This AWF is the means by which Europol provides support, through 
intelligence analysis, to investigations carried  out by the competent authorities of the EU 
Member States. 
However, the primary, inclusive initiative at the EU level is the European Observatory on 
Counterfeiting and Piracy. The functions and ma in pillars of the Observatory's work were 
described by the Commission its September 2009 Communication83. One of the Observatory's 
main objectives is to bette r map out the phenomenon of c ounterfeiting and piracy by 
collecting, analysing a nd reporting data related to IPR in fringements, and to use this 
information to foster more effective response s. Other objectives involve spreading best 
practices for enforcement and developing awaren ess raising activities, in order to inform 
consumers of the negative economic and societal impact of counterfeiting and piracy and the 
potential dangers related to counterfeit products. 
2.2.3.  International enforcement related initiatives 
Over recent years, there has also been an in crease in the number of internationally led 
initiatives, both at policy and operational leve ls, aimed at reducing c ounterfeiting and piracy. 
Examples in terms of policy initiatives in clude the establishment of a comprehensive 
multilateral, legal framework for international co-operation in specific areas, and regional and 
bilateral agreements w ithin the World Trade Organisation (WTO), through the adoption of the 
agreement on Trade-Related aspects of intelle ctual property rights (TRIPS). TRIPS provides 
common international rules on the minimum levels  of protection that th e government of each 
participating country must guarantee, in resp ect of the intellectual property of fellow WTO 
                                                 
81 'Communication from the Commission concerning th e strategy for the enforcement of intellectual 
property rights in third countries – An information note from Mr Lamy',  COM(2004)749 of 8.11.2004, 
OJ C 129, 26.5.2005, p.3. 
82 See Europol 'Annual Report 2008', available at 
http://www.europol.europa.eu/publications/A nnual_Reports/Annual%20Report%202008.pdf , p. 22. 
83 COM(2009)467. 
 
EN 48   EN members84. Other major international initiatives include the - recently concluded - 
negotiations on the Anti-Counterfeiting Trade Agreement (ACTA)85. 
In addition, various international organisatio ns, such as the WIPO Advisory Committee on 
Enforcement and the World 26,704 in 2005 to  43,572 in 2009 Organisation (WCO) have 
taken action to assist countries to strengthen thei r systems and infrastructures, to enable more 
effective enforcement of inte llectual property rights. More over, the Global Congress on 
Combating Counterfeiting and Pi racy regularly brings togeth er high level representatives 
from governments and from the private sect or, to pool their experiences and enhance 
international coordination and cooperation. The Congress is convened by leaders from 
INTERPOL, WCO, WIPO, the International Chamber of Commerce initiative BASCAP 
(ICC/BASCAP), the International Trademark Association (INTA) and the International 
Security Managers Association (ISMA). 
In terms of actual enforcement activities, since 2003, Interpol's Intellectual Property Crime 
Programme and Action Group (IPCAG)86 has developed a strong partnership with 
government authorities, enfor cers and major business sectors affected by counterfeiting and 
piracy. In particular, a regular work program is carrie d out alongside the World Health 
Organisation's International Medical Produc ts Anti-Counterfeiting Task Force (IMPACT)87. 
This has resulted in major operations, with se izures of counterfeit items worth millions of 
euro, including illicit medical products. 
3. THE SITUATION CONCERNING IPR  INFRINGEMENTS IN EUROPE TODAY  
Despite these measures, the number of inte llectual property rights infringements has 
continued to increase over re cent years. In the latest OECD study, published in 2009, it was 
estimated that counterfeit and pirated goods in international trade have grow n steadily over 
the last decade, from just over USD 100 billion in 2000, to up to USD 250 billion in 200788. 
The OECD estimates this amount as being larger than the national GDPs of about 
150 economies. While these figures are widely used to portray th e overall dimensions of the 
problem, they are not fully comprehensive. The OECD reports that the collection of data was 
extremely difficult and often the figures we re incomparable due to the different 
methodologies used for collec tion, analysis and reporting. 
In addition, the figures published by EU cust oms authorities reflect a clear increase in 
customs activity in recent years. Thus the numbe r of registered cases has risen from 26,704 in 
2005 to 43,572 in 2009; a rise of 60 percent in five years. 
                                                 
84 WTO, 'Intellectual property : protection and enforcement', 
http://www.wto.org/eng lish/thewto_e/whatis_e/tif_e/agrm7_e.htm. 
85  See http://ec.europa.eu/trade/creating-opport unities/trade-topics/intellectual-property/anti-
counterfeiting/. 
86 Interpol, 'Intellectual Property Rights Programme', 
http://www.interpol.int/Public/FinancialCr ime/IntellectualProperty/Default.asp  , and Interpol (2007), 
'Intellectual Property Crimes: Trademar k counterfeiting & Copyright Piracy', 
http://www.interpol.int/Public/FinancialCrime/Intell ectualProperty/Publications/IIPCAGBrochure.pdf . 
87 See http://www.who.int/medicines/services/counterfeit/en/index.html ; 
http://www.interpol.in t/Public/ICPO/speeches/2009/SGCo unterfeitingMexico20091208.asp. 
88 OECD, Magnitude of counterfeiting and piracy of tangible products – November 2009 update, 
http://www.oecd.org/document/23/0,3343,en_2649_34173_44088983_1_1_1_1,00.html. 
 
EN 49   EN Figure 1: Cases registered by EU customs 
Source: EU Customs report 2009  
In the above figure, the slight decrease in cas es from 2008 to 2009 is likely to be linked to the 
economic crisis than to a gene ral change in trend. However, once again, these figures only 
provide an indication of the scope  and scale of the problem, as th ey are limited to the situation 
at the external borders of the EU and depend on  the activities and detection rates of national 
customs authorities. 
In the online world, co pyright infringements have increase d at an exponential rate over the 
last few years. According to a French survey, 38 percent of the French Internet users admitted to having downloaded music from "torrent sites" in 2009, while only about 28 percent 
downloaded from such sites the year before
89. Furthermore, another 2010 study revealed that 
44 percent of the Dutch Internet  population over the age of 15 admitted file sharing in the 
previous 12 months (this equates to ar ound 4.7 million people). 40 percent of these 
downloaded music90. 
                                                 
89  Rapport au Ministre de la Culture et de la Communication, 2010. 
90  Van Eyck, Poort and Rutten, Legal, Economic and Cultural aspects of File Sharing, in: 
Communications & Strategies, 77, 1st quarter 2010, p.35. 
 
EN 50   EN ANNEX III: STAFFING NEEDS AND COSTS UNDER  
OPTIONS 1A (COMMISSION) AND 3A (NEWLY CREATED AGENCY)  
This Annex sets out the staffing needs of the European Observatory under options 1a and 3a. 
In the estimates, account is take n of the fact that contract ag ents (CA), in the Commission, can 
only be recruited for a maximum of three years91, whereas they can be recruited on potentially 
unlimited duration contracts in an agency. For op tion 1a, this means that most of the required 
staff would need to be offici als and temporary agents (TA). The long-term stability required 
for the build up of expertise could not be guaranteed if a larger sh are of the staff needed to be 
recruited on such contracts. Only in the area of IT  services, due to the nature of these services 
contract agents could be used under all options. 
1. ESTIMATE OF STAFFING NEEDS OF THE OBSERVATORY UNDER OPTION 1A/  
YEAR N92 AND N +1 (PRIORITY ACTIONS ) 
Where the secretariat of the Observatory w ould continue to be provided by the Commission 
services, these would have to be reinforced by 7 staff members during the first two years in 
order to deliver the most urgent tasks. The curre nt two administrators (AD) would continue to 
deal with more policy oriented work (briefings etc) and to coordinate the work technical work 
set out hereunder. The assistant (AST) would c ontinue to take care in particular of the 
organisation of meetings. Given that the as sistant currently made available by the OHIM 
would not be at the disposal of the Commission any more, an additional post would have to be 
made available for these tasks. 
Table 9: Staffing needs under op tion 1a in years n and n+1 
Observatory's main 
functions Human 
resources 
required AD/Category IV AST/ 
Categories 
II and III 
Preparation of policy, 
briefings etc 1 person 1 Senior Administrator - 
Coordination of the 
Observatory's activities  2 persons 1 Junior Administrator 1 Assistant 
Strategies and 
initiatives for raising 
public awareness 1 person 1 Senior Public Relations specialist to assess the overall needs in 
terms of public awareness, public relations and media 
management (including the Observatory website and portal); to guide and advise on events and campaigns and to develop 
Europe-wide campaigns. - 
 
                                                 
91 See Article 3b of the Conditions of Employment  for other agents of the European Communities 
(Regulation No 31 (EEC), 11 (EAEC) laying down the Staff Regulations of Officials and the 
Conditions of Employment of Other Servants of the European Economic Community and the European Atomic Energy Community, OJ 45, 14.6.1962, p. 1385). 
92  Year n is the year where the measure providing the Observatory w ith a more sustainable structure 
becomes effective. 
 
EN 51   EN Observatory's main 
functions Human 
resources 
required AD/Category IV AST/ 
Categories 
II and III 
Training and professional development 2 persons 1 Senior Training Specialist to carry out research and assessments 
of training programmes existing at national, European (EJN, ETN, Europol etc) and internationa l level (WIPO, OECD etc) and 
aimed at those engaged in enforcement related activities and to 
develop such training programs on European level. 1 Assistant 
Technical tools and 
systems for prevention 
and investigation 
purposes 1 person  1 Senior Technical Researcher to research, catalogue, promote 
and spread technical tools and systems used to prevent and 
investigate counterfeiting and piracy, for example tracking and 
tracing. - 
Case Law database 1 person  1 Junior Lawyer to collect and assess case law within and outside 
the EU; to assist in the development and maintenance of a data 
base of relevant case law; to provide legal advice on the service 
on all enforcement related matters. - 
Systems to improve 
information exchange  2 persons  1 Junior IT Systems Analyst to ensure the global project 
management, and  
1 Junior IT Analyst to coordinate the development of a cross 
border system to allow authorities to rapidly exchange 
information on counterfeiting and piracy issues, including rapid 
notification and alert facilities on seizures of potentially 
dangerous items and other significant enforcement related 
developments, and the implement of  such a system at a European 
level. - 
Total: 10 
persons 8 Administrators 2 
Assistants 
2. ESTIMATE OF STAFFING NEEDS OF THE OBSERVATORY UNDER OPTION 3A/  
YEAR N93 AND N +1 (PRIORITY ACTIONS ) 
Under option 3a, the staffing need s would be similar to those se t out under opti on 1a. In the 
year of the entry into force of the legal in strument providing the Observatory with its new 
structure and the year to follow, the agency would be gradually and increasingly set up, by 
concentrating on a number of priority activities, at each stage, using a limited number of staff. 
However, given the separation from the Commis sion services, a Head of Service would also 
be required (supported by an assistant), as well as a junior policy officer to coordinate the 
setting up of the agency and the Observ atory's activities with the Commission. 
On the Commission's side, an assistant would no  longer be needed to organise meetings, but 
the two administrators would remain to deal w ith the coordination with the agency and more 
policy-oriented tasks. Furthermore, due to th e preparatory work needed to set up a new 
                                                 
93  Year n is the year where the measure providing the Observatory w ith a more sustainable structure 
becomes effective. 
 
EN 52   EN agency, another two AD man years (i.e. one admi nistrator per year) woul d be required in the 
Commission services.  
This option, in the first two years, would th erefore lead to two pl us one administrators 
working on tasks related to the Observatory insi de the Commission, plus eight administrators 
and two assistants working in the agency on the ta sks of the Observatory, i.e. in total eleven 
staff more than under the baseline scenario. To th ese staff, administrative staff in the agency 
will have to be added (see section 4.1 below) 
3. ESTIMATE OF STAFFING NEEDS OF THE OBSERVATORY UNDER OPTIONS 1 A AND 3A/ 
YEARS N +2 TO N +5 
In the year following the entry into force of the legal instrument, the Observatory should grow 
into its final setting which, by this  stage, would allow it to run all activities envisaged. In view 
of the size of the project, it would seem appropriate that under  both options a Head of Service 
should be appointed, as well as  an administrator coordina ting the Observatory's work. 
Table 10: Staffing needs under options 1a and 3b as of year n+2 
Observatory's main 
functions Human 
resources required AD/Category IV AST/ Cat. II 
and III 
Management  1 person 
 1 Head of Service to manage the overall project. - 
Support 3 persons 1 Junior Policy Adviser to administer and implement day 
to day work programme. 2 Secretaries 
of the 
Service 
Data collection, 
measurement and analysis 3 persons 1 Senior Economist/ 
Statistician to build and implement an international methodology to collect and assess data and to analyse 
global trends. 
2 Junior Statisticians/Economists to analyse key business 
sectors, geographical areas and impacts on health, 
security, environment etc. - 
Developing public 
awareness strategies 
and public 
relations/press, webpage 3 persons 1 Senior Public Relations Specialist to design and develop 
European awareness campaign. 
1 Junior Administrator to analyse national and 
international public awareness campaigns to help to implement European campaigns; to develop press 
services, website, newsletter, write articles. 1 Assistant 
Training and 
Development – delivering technical 
training, awareness 
events and programmes 3 persons 1 Senior Training Specialist to carry out research and 
assessment of training progra ms on enforcement, and to 
design and develop training programs of the Observatory. 
1 Junior IT Specialist to create searchable, online 
directory and index of the training events and programmes. 1 Assistant to 
provide support in 
organising 
training programs 
 
EN 53   EN  
Observatory's main 
functions  Human 
resources 
required  AD/Category IV  AST/ 
Categories 
II and III  
Developing greater 
technical assistance at 
an international level in 
cooperation with IP offices  2 persons  
 
 1 Senior Administrator to work in conjunction with 
international organisations like WIPO, WTO etc. and 
Community agencies like Eurojust, Europol, to develop 
synergies between national IP offices and enforcement working groups.  
1 Junior Administrator to assess, plan and provide 
technical assistance on enforc ement matters in line with 
international needs. - 
Researching and 
making information 
available on technical tools and systems for 
prevention and 
investigation purposes  2 persons 1 Senior Technical Researcher to assess and catalogue 
technical tools and systems, for example tracking and 
tracing.  
1 Junior Administrator to create and facilitate and expert 
group to identify needs, design strategies to improve 
technologies and techniques, organise events and develop publications to promote benchmark techniques, practices 
and standards in the area of technical tools and systems. - 
Legal Section 2 persons 
 1 Senior Lawyer and 1 Junior Lawyer to collect and assess 
case law within and outside the EU, to assist in the 
maintenance of the data base of relevant case law, to 
provide legal advice to the service on all enforcement 
related matters. - 
Information exchange 
system 2 persons 1 Junior IT Systems Analyst to ensure the global project 
management for a cross border system to allow authorities 
to rapidly exchange information on enforcement issues. 1 Assistant 
Researching promoting 
and spreading best 
practice amongst public 
authorities 2 persons 
 1 Senior Administrator to research, promote and spread 
best practices. 1 Assistant to 
provide 
support  
Researching and 
spreading successful 
private sector strategies 2 persons 1 Senior Administrator to research, promote and spread 
best practices. 1 Assistant to 
provide 
support  
Total  25 persons 19 Administrators 6 Assistants 
As in the first two years, two administrators w ould take care of the pol icy-related tasks inside 
the Commission, in addition to the 25 staff worki ng on the Observatory's tasks. In the case of 
option 1a this would bring the overall Commission  staff to a total of 27; under option 3a, there 
would be 25 agency staff plus two Commission ad ministrators. In both scenarios, there would 
therefore be 25 more staff than under the baseline scenario working on tasks directly 
related to the Observatory. In addition, under option 3a, staff to deal with administrative tasks 
in the agency would be re quired (see section 4.1 below). 
 
EN 54   EN 4. ESTIMATE OF STAFFING COSTS  
The staffing costs have to be measured against th e baseline scenario. As set out in the Impact 
Assessment, under the baseline scen ario only two administrators would in future take care of 
the Observatory's tasks, given that the assist ant has been put at the Commission's disposal 
only on a temporary basis by the OHIM and that  it could not be expected that such 
secondment would be extended where a decisi on was taken to establish a sustainable 
infrastructure for the Observatory outside the OHIM. The tables below therefore only calculate the costs that would be incurred in addition to thos e of the baselin e scenario under 
the two different scenarios. 
4.1. Staffing costs in years n and n+1 
With a view to option 1a, the costs of the sta ff can be calculated on the basis of the average 
budgetary costs applicable to the Commission. Th ese costs include the costs for overheads. 
Under these options, the additiona l staffing costs (compared to th e baseline scenario), during 
the first two years would therefore amount to EUR (4 x 127,000 + 4 x 66,000=) 772,000.  
Table 11: Types of staff under option 1a in years n and n+1 
Commission  Functions (Option 1a) 
Official/TA CA FG IV CA FG III CA FG II 
General coordination - - - 1 
Public awareness 1 -  - 
Training  1 - 1 - 
Technical tools  1 - - - 
Case Law database 1 - - - 
Info exchange  - 2 - - 
Total 4 2 1 1 
 
Under the scenario, where a new agency would be created (option 3a), administrative staff 
would have to be recruited in addition to the operational staff. The figures contained in table 12 below are based on the example of the gender equality agency in Vilnius (EIGE) 
which has a size comparable to that of such a new agency.  
 
EN 55   EN Table 12: Types of staff under option 3a in years n and n+1 (compared to baseline scenario) 
Commission  EU Agency Functions (Option 3a) 
Official/T
A CA FG 
IV CA FG 
III CA FG 
II Official/T
A CA FG 
IV CA FG 
III CA FG 
II 
Setting up the service 1 - - - 1 - - - 
Coordination and 
policy tasks (COM)  - -  - 1 - 1 
Public awareness - - - - 1 - 1 - 
Training  - - - - 1 - 1 - 
Technical tools  - - - - 1 - - - 
Case Law database - - - - - 1 - - 
Info exchange  - - - - - 2 - - 
Head Administration - - - - 1 - - 1 
Human Resources - - - - - 1 - - 
Finance - - - - - 1 - - 
Total 1 - -  5 6 2 2 
The Director of an agency is recruited at AD14 level94. Assuming that the other 
officials/temporary agents would be recruited at  AD8 level for senior staff and AD 5 level for 
junior staff, and contract agents  at the entry grades (13, 8 and 4)  the total staffing costs for this 
option in the first two y ears would amount to EUR (  1x 136,000 + 4x74,000 + 6x36,000 + 
2x29,000 + 2x23,000 + 30% for allowances etc =) 1 million /year. Compared to the baseline 
scenario, furthermore the cost for one additiona l Commission official wo uld have to be added 
for the setting up of the service, bringing the total staffing cost under this option during the 
first two years to EUR (1 million + 127,000 =)  1.13 million. 
Furthermore, to this sum, ove rheads need to be added. Yearly  costs for the building and the 
office equipment can be estimated at about EUR (450,000 + 350,000=)  800,000. 
This means that the total cost of option 3a until the end of n+1, compared to the baseline 
scenario, can be estimated at  about EUR 1.93 million /year.  
4.2. Staffing costs in years n+2 to n+5 
As set out in table 13 below, as of year n+2, the staffing costs under option 1a would rise to 
about EUR ( 15 x 127,000 + 10 x 66,000=) 2.57 million more than in the baseline scenario. 
                                                 
94  SEC (2009) 27/2. 
 
EN 56   EN Under option 3a, the costs of  the agency staff can be estimated at about EUR (1x136,000 + 
9x74,000 + 12x36,000 +5x29,000 + 3x23,000 + 30% =)  1.882 million. To this sum, the 
EUR 800,000 for the building would need to be  added, leading to a total staffing cost 
(including overheads) of EUR 2.68 million. 
Table 13: Types of staff under options 1a and 3a as of year n+2 
Commission (Option 1a) EU Agency (Option 3a) Functions 
Official/T
A CA FG 
IV CA FG 
III CA FG 
II Official/T
A CA FG 
IV CA FG 
III CA FG 
II 
Management 1 - - - 1 - - - 
Policy support  1 - - 2 - 1 - 2 
Data collection 3 - - - 1 2 - - 
Public awareness 1 1 1 - 1 1 1 - 
Training  1 1 1 - 1 1 1 - 
Technical assistance 2 - - - 1 1 - - 
Technical tools  2 - - - 1 1 - - 
Legal section 2 - - - 1 1 - - 
Information exchange  - 1 1 - - 1 1 - 
Best practices (public) 1 - 1 - 1 - 1 - 
Successful strategies 
(private) 1 - 1 - 1 - 1 - 
Head of Administration - - - - 1 - - 1 
Human Resources - - - - - 1 - - 
Finance - - - - - 1 - - 
Public Procurement - - - - - 1 - - 
Total 15 3 5 2 10 12 5 3 
 
5. ESTIMATE OF OTHER BUDGET REQUIRED - COSTS OF ORGANISATION OF EXPERT 
MEETINGS  
5.1. Current yearly meeting costs 
As set out in the Impact Assessment, the Ob servatory is currently being convened in two 
meetings per year (in 2009, the year of the la unch of the Observator y, there was one meeting 
 
EN 57   EN of the private stakeholders in September 2009, and one of the public authorities in 
December 2009; also in 2010 one meeting of the private stakeholders was held in February, 
and the first plenary meeting, bringing toge ther both public authorities and private 
stakeholders, was held in June). Reimbursement s are made only for the participation of the 
public sector. 
The meetings in 2010 that were partially borne by the Spanish EU Pres idency and by private 
stakeholders can be summarised as follows: 
5.1.1.  2010 Expenditure borne by the Commission budget 
– Plenary meeting at Madrid (June 2010) 
flight tickets & accommodation for all national representatives in Madrid 
(10/06/2010) : Total EUR 19,892.15  
– Member States' meeting: N/A 
– Private sector meetings (February 2010) 
Catering 16/02/2010 Total EUR 1228,10 
– Subgroup meetings: 
Legal Subgroup: Total EUR 611,93 Statistics Subgroup: N/A 
Public Awareness Subgroup: Total EUR 740.35 
Flights for winners to the RealF AKE competition awards ceremony:  
Total EUR 16,300 
Total expenditure Commission 2010: EUR 38,772.53 
5.1.2.  2010 Expenditure borne by third parties 
– Plenary meeting at Madrid: Total EUR 19,057.15 
– RealFAKE competition: Total EUR 20,505.50 
 
TOTAL 2010 EUR 78,335.18 
 
5.2. Additional budget required to me et the Observatory's potential 
On the basis of these figures, the average costs for the reimbursement of travel expenses for 
Member States representatives can be estimat ed at EUR 50,000 per meeting, and the average 
 
EN 58   EN cost of the organisation of the meeting (room , conference organisers, limited interpretation 
regime) can be estimated at about EUR 25,000 per meeting. 
As financial contributions from third parties were made on an ad hoc basis in the past, the 
Observatory cannot rely systematically on an y comparable support in the future if its 
functioning is to be ensured. Consequently, for the purposes of this Impact Assessment, the 
full costs of the meetings have to be ta ken into account. The additional budget required, 
compared to the baseline scenario, in orde r to meet the Observatory's full potential can 
therefore be estimated as follows: 
– Costs for the Observatory's current activities th at, in the past, have been borne by third 
parties: about EUR 40,000 / year 
– Reimbursement of MS experts for two additiona l meetings involving the public authorities: 
EUR 100,000 / year 
– Costs of meeting rooms, inte rpretation and conference organi sers for three additional 
meetings per year: 3 x EUR 25,000 = EUR 75,000 / year 
– Costs of subgroup meetings - currently th e Observatory has three sub groups: public 
awareness, legal and statistic group, that are ma de up only of private stakeholders and that 
meet currently in a limited composition only a couple of times a year , due to the limited 
management capacity of DG MARKT. Once the Observatory has sufficient resources, 
these groups should meet on a monthly basis, wh ich would lead to a total of 36 sub group 
meetings a year. These groups should be enlarged to comprise a limited number (maximum five) of representatives of public authoritie s for whom mission costs would have to be 
reimbursed. Furthermore, their act ivities could also be extended  to other areas of action: 
EUR 200,000 /year 
– Mission costs of Observatory st aff: EUR € 30,000 / year duri ng the first two years, and 
100,000 / year as of year n+2. 
– Costs of publication and produc tion of promotion materials,  specialised information, 
handbooks etc.: EUR 50,000 / year 
The total other budget required (in a ddition to the baseline scenario) can therefore be 
estimated at  EUR 495,000 in years n and n+1, and EUR 592,000 / year as of year n+2. 
 
EN 59   EN ANNEX IV: IT COSTS  
IT costs are composed of the costs for the development of the system ( "development costs" ), 
the hosting costs, maintenance and support costs. 
Hosting costs  arise where physical space is rented on a server allowing information, web 
pages and files to be viewed. The vendor charge s costs for the storage and retrieval of the 
information.  
Maintenance  covers the activities necessary to correct faults after delivery, to improve the 
performance or other attributes or to adap t the system to a m odified environment. 
Support costs  cover all activities necessary to ensu re customers can use efficiently the 
information system. Technical support  concerns the diagnosis and resolution of faults during 
the operation of the system, and the provision of a contact point for all fault reporting, 
upgrades and repairs. Users support  delivers all necessary help to end-users to use the 
functionalities, including training. Also prom otional activities fall into this category. 
While development and hosting costs arise during  the development phase of the system, after 
the end of that phase costs arise from hosting, maintenance and support. In the present case, 
the development phase can be estimated to extend over the years n and n+1 so that the systems would become operational in year n+2. 
1. COSTS OF A DATA COLLECTION SYSTEM AND A CASE LAW DATA BASE95 
A data collection system and the case law data base are relatively simple information storage 
and analysis systems. The main costs arise he re for the staff that gathers the information, 
formats it and feeds it into the system. This la tter staff would be regul ar staff working for the 
Observatory, so that its costs are reflected in  Annexes III and IV, and not in this Annex. 
In terms of IT costs, for the data collection system , a cost estimate of EUR 300,000 seems 
appropriate for development and hosting in years n and n+1 (i.e. EUR 150,000 / year), and 
EUR 150,000 / year for hosting, maintenan ce and support from year n+2 onwards. 
For the case law data base  the costs can be expected to be slightly higher given that it would 
have to be accessible from the outside. Theref ore, an estimate of EUR 400,000 for the costs of 
development and hosting during years n and n+ 1 seems appropriate in this case, i.e. 
EUR 200,000 / year. As of year n+2, hosting, maintenance and support costs would arise 
which can, again, be estimated at EUR 150,000 / year. 
2. COSTS OF A RAPID INFORMATION EXCHANGE SYSTEM  
The costs for a rapid information system would be  substantially higher, due to the complexity 
of the information to be fed into the system and the need to allow different users (public authorities and private stakeholders, in particular trade mark owners) to feed in information through predefined channels. 
                                                
 
95  Internal estimates. 
 
EN 60   EN 2.1. Yearly costs during the development phase (years n and n+1) – Tables 14 and 15 
2.1.1.  Basic web-based system 
IT system  Development Hosting  Total 
Users and management 100,000   
Classification products 
management 100,000   
Fraud management and 
notification 50,000   
Agents’ and right holders’ 
contact details 50,000   
TM and designs 
synchrony 100,000   
Machine Translations 25,000   
Stats and monitoring 50,000   
    
Total Basic System 475,000 300,000 775,000 
TOTAL INCL. RISK 
FACTOR (x2) 950,000 600,000 1,550,000 
 
2.1.2.  Interconnected premier system 
IT system  Development Hosting  Total 
Costs basic system 475,000 300,000 775,000 
Additions 
interconnected premier 
system    
Web services set up 
monitoring 50,000   
Interconnection with MS 200,000   
Subtotal premier system 250,000 250,000 500,000 
    
TOTAL  (basic system + 
additions premier system) 725,000 550,000  1,275,000 
TOTAL INCL. RISK 
FACTOR (x2) 1,450,000 1,100,000 2,550,000 
 
EN 61   EN 2.2. Yearly running costs after completion of the development phase (as of year n+2) 
– Tables 16 and 17 
2.2.1.  Basic web-based system 
IT system  Hosting  Annual 
Maintenance Support costs 
(technical and user 
support) Total 
BASIC WEB-
BASED SYSTEM  300,000 200,000 462,000 962,000 
TOTAL INCL. 
RISK FACTOR 
(x2) 600,000 400,000 924,000 1,924,000 
 
2.2.2.  Interconnected premier system 
IT system  Hosting  Annual 
Maintenance Support costs 
(technical and user 
support) Total 
Costs basic system 300,000 200,000 462,000 962,000 
Additions 
Interconnected 
premier system 250,000 75,000 66,000 391,000 
TOTAL  (basic 
system + additions 
premier system) 550,000  275,000 528,000 1,353,000 
TOTAL INCL. 
RISK FACTOR 
(x2) 1,100,000 550,000 1,056,000 2,706,000 
3. TOTAL YEARLY IT COSTS – TABLE 18 
Years Info exchange system 
 Basic System 
Including risk factor  Sophisticated System 
Including risk factor Others 
n – n+1 1.55 2.55 0.35 
n+2 1.92 2.71 0.3 
 
 
EN 62   EN ANNEX V: COSTS OF OPTIONS 1B AND 2  
This Annex sets out the costs that would ar ise if support tasks to the Observatory where 
outsourced to external contractors (option 1b), taken on by a private sector initiative 
(option 2a), financed through a Commission grant (option 2b) or carried out in a PPP (option 
2c). 
1. ANNUAL INIDCATIVE CONTRACT COSTS  
In order to calculate the total cost of these op tions, the Observatory's ta sks have been divided 
into ten different activities (data collection, trai ning etc). Due to the different nature of these 
activities, consortia of tendere rs will not easily be formed: these specialists normally do not 
work together and have no prof essional contacts. Consortia therefore only seem conceivable 
with a view to the two activi ties in the area of promoting cooperation and spreading best 
practices, and with a view to the IT related tasks (listed under no 3 in  table 19 hereunder). 
Table 19: Estimated costs of contracts  
Activity Annual indicative contract costs 
(EUR) 
1. Data collection, measurement and analysis  
 Contracted team of research ers, economist and statisticians  500,000 
2. Promoting cooperation and spreading best practice96   
2a. Programmes to develop and spread best practices amongst 
public bodies, including enforcers  130,000 
2b. Programmes to develop and spread successful strategies 
amongst private sectors bodies  130,000  
3. Building technical systems97  
Years n and n+1 150,000 3a. Technical systems to coll ect, analyse and report data  
Years n+2 + 150,000 
 
                                                 
96  Cost estimates based on figures of the UK  Natural Environment Research Council 2009. 
97  Internal estimates. 
 
EN 63   EN  
Activity Annual indicative contract costs 
(EUR) 
Years n and n+1 1,550,000 Simple web-based system for 
users to log-in and register for alert system according to product 
category; only free text 
information, machine translation function Years n+2 + 1,924,000 
Years n and n+1 2,550,000 3b. Rapid information 
exchange system (costs depending on features of 
the system to be chosen, 
see Annex IV) and including risk factor  Interconnected premier system 
allowing for upload and use of 
pictures and other visual content, automatic feeding of information 
into national IT systems of 
Member States concerned Years n+2 + 2,706,000 
Years n and n+1 200,000 3c. Developing a case law database  
Years n+2 + 150,000 
4. Developing strategies and initiatives for raising public 
awareness98 500,000 
5. Training and Development – designing and organising technical 
training, awareness events and programmes99 155,000 
6. Researching, assessing and making information available on 
technical tools and resources - tracking and tracing100 250,000 
7. Developing international coop eration and technical assistance101 440,000 
Years n and n+1: 
Between 4.01 and 5.01 mio TOTAL 
Years n+2 +: 
Between 4.33 and 5.12 mio 
                                                 
98  These costs do not include the actual costs of the campaigns which will be similar under all options and 
depend on the type and scope of each campaign. 
99  Based on WIPO programme 17 http://www.wipo.int/about-wipo/en/budget/pdf/budget_2010_2011.pdf ; 
these costs do not comprise the costs of professional  trainers that, under all options, will have to be 
recruited externally. 
100 See e.g. http://ted.europa.eu/udl?uri= TED:NOTICE:246101-2009:TEXT:EN:HTML. 
101  Based on WIPO programme 17 http://www.wipo.int/about-wipo/en/budget/pdf/budget_2010_2011.pdf. 
 
EN 64   EN 2. ESTIMATE OF OTHER BUDGET REQUIRED - COSTS OF ORGANISATION OF EXPERT 
MEETINGS  
For the Observatory meetings etc, an  additional budget will be required.  
For option 1b, this additional budget would co rrespond to that of option 1a, as the 
Commission services would continue to take care of the organisation of the meetings. To that 
end, as under option 1a, also unde r option 1b the assistant curr ently seconded from the OHIM 
would have to be replaced by a Commission staff member, adding additional EUR 66,000 / 
year to the overall costs and leadin g to a total annual cost of about EUR (495,000 + 66,000 
=) 561,000 in years n and n+1, and EUR (592,000 + 66,000=)  658,000/ year as of year 
n+2. 
For the different sub-options, under option 2, these costs would be  the following:  
– Reimbursement of Member States' experts for three meetings involving the public 
authorities: EUR 150,000 / year 
– Costs of meeting rooms, interpretation and co nference organisers for five meetings per 
year (two meetings each of the public authori ties and of the stakehol ders plus one plenary 
meeting): 5 x EUR 25,0 00 = EUR 125,000 / year 
– Costs of subgroup meetings - currently the Observatory has three sub groups: a public 
awareness, legal and a statistics group, made up of only private sector stakeholders, that 
currently meet in a limited composition and only a couple of times a year, due to the 
limited management capacity of DG MARK T. Once the Observatory has sufficient 
resources, these groups should m eet on a monthly basis, which w ould lead to a total of 36 
sub group meetings a year. These groups should  be enlarged to comprise of a limited 
number (maximum five) of representatives of public authorities for whom mission costs 
would have to be reimbursed. Furthermore, thei r activities could also be extended to other 
areas of action: EUR 200,000 /year 
– Mission costs of Observatory st aff: EUR € 30,000 / year duri ng the first two years, and 
100,000 / year as of year n+2. 
– Costs of publication and produc tion of promotion materials,  specialised information, 
handbooks etc.: EUR 50,000 / year 
The additional 'other budget' required would therefore amount to EUR 555,000 in years n and 
n+1, and EUR 625,000 / year as of year n+2. Depending on the design of the option, some 
savings will be made in the EU budget. As unde r other options, the current two administrators 
in DG MARKT would continue to follow the obse rvatory from the political angle whereas the 
organisation of the meetings would be taken over by the industry-led initiative, adding the 
costs for an assistant to the overall budget required. The total 'other budg et' required under 
the different sub-options of option 2 can th erefore be estimated at EUR 621,000 in years 
n and n+1, and EUR 691,000 / year as of year n+2.   
3. COSTS FOR THE ADMINISTRATION OF CONTRACTS  
To these sums, the costs for the management of the contracts need to be  added. In the case of 
option 1b  (outsourcing to an external  contractor) these costs would arise inside DG MARKT, 
 
EN 65   EN under the different sub-options of option 2 , these costs would aris e for the external body 
taking over the tasks from DG MARKT. 
It is estimated that running fi ve contracts would require the equivalent of three AD and/or 
AST staff. In the case of seven to ten separate contracts, this equates to 4 to 6 AD/AST staff 
engaged solely in the tender pr ocedures and their direct follow up. Even if, under option 1b, 
all of these staff were recruite d on contract agents' contracts, the costs can be estimated at 
between around EUR 264,000 and 396,000 a year . For the sub-options of option 2, these 
costs can be estimated to be at least as high as  the Commission's or even higher, as the size of 
the Commission leads to considerable economies of scale in this respect.  
 
EN 66   EN ANNEX VI: SYNERGIES AND COST S UNDER OPTION 3B (OHIM)  
1. ESTIMATE OF STAFFING SYNERGIES IN CASE OF OBSERVATORY 'S TRANSFER TO THE 
OHIM  / YEARS N +2 TO N +5  
If, under option 3b, the management of the Observatory was entrusted to the OHIM, the 
Observatory's needs in terms of operational staff, during the years n and n+1 , would be the 
same as under option 3a. However, due to the fact that the Observat ory staff could use the 
Office's administration and infras tructure, the average costs of  staff (including overheads) 
would differ, and therefore the cost of this optio n would be lower than those of option 3a (see 
below, section 2.1). 
In the years n+2 to n+5 , the number of operational staff to be employed to run the 
Observatory would also differ, due to synergie s that could be realised with existing OHIM 
functions. Table 20 indicates the total resources required to perf orm the main functions of the 
Observatory between years n+2 and n+5. It show s the number of persons that would need to 
be recruited to work in the Ob servatory and alongside this, to what extent functions that are 
carried out by the OHIM could already be used for the purposes of the Observatory and could 
therefore lead to savings in  terms of human resources. 
Table 20: Staffing needs under option 3b as of year n+2  
Observatory's 
main functions Total 
resources 
required Description To be 
recruited Economies by using 
existing OHIM 
functions 
 
Management 1 Head of Service to manage the overall 
project 1 HoS - 
Policy Support 3 1 Junior102 Policy Adviser to administer 
and implement day to day work 
programme and 2 Assistants. 1 Junior 
Administrator 
and 2 Assistants - 
Data collection, 
measurement and 
analysis 3 1 Senior Economist/Statistician to build 
and implement an international 
methodology to collect assess data and analyse global trends and 2 Junior 
Economists/Statisticians to support. 1 Senior and 2 
Junior 
Economists/Statisticians - 
Developing public 
awareness strategies and public 
relations/press, 
webpage 3 1 Senior Public Relations Specialist and 
1 Junior Administrators to design and develop European awareness campaign and 
1 Assistant to support. 1 Senior PR 
Specialist and 1 Assistant 1 Junior 
Administrator by collaborating with 
the OHIM IPR 
Policy Department 
 
                                                 
102  Basic entry grades for AD staff are grades AD5 to AD8. 
 
EN 67   EN Observatory's main 
functions  Total 
resources 
required Description To be 
recruited Economies by using 
existing OHIM 
function 
 
Training and 
Development – 
delivering technical training, awareness 
events and 
programmes 3 1 Senior Training Specialist to carry out 
research and assessment of training 
programs on enforcement and two support specialists. 1 Senior 
Training 
Specialist  1 Junior Training 
specialist and 
1 Assistant by integrating the 
organisation of the 
training programs with the existing 
OHIM training 
scheme.  
Developing greater technical assistance at 
an international level 
in cooperation with IP offices  2 1 Senior and 1 Junior Administrator to 
work in conjunction with international 
organisations like WIPO, WTO etc. and 
EU agencies like Euroju st and Europol, to 
develop synergies between national IP 
offices and enforcem ent working groups. 1 Senior 
Administrator  1 Junior 
Administrator, by 
coordinating this 
activity with the work of the OHIM 
Department for 
institutional affairs 
and external 
relations 
Researching and making information 
available on technical 
tools and systems for prevention and 
investigation purposes  2 1 Senior Technical Researcher to assess 
and catalogue technical tools and 
systems, for example tracking and tracing 
and 1 Junior Administrator to support research work. 1 Senior 
Researcher 1 Junior 
Administrator, by 
cooperation with the 
OHIM Information Technologies 
Department 
Legal Section 2 1 Senior Lawyer and 1 Junior Lawyer to 
collect and assess case law within and outside the EU, to assist in the 
maintenance of the data base of relevant 
case law, to provide legal advice to the service on all enforcement related 
matters. 1 Senior and 
1 Junior Lawyer - 
Information exchange 
system 2 1 Junior IT Systems Analyst to ensure the 
global project management for a cross border system to allow authorities to 
rapidly exchange information on 
counterfeiting and piracy issues 
(including rapid notification and alert 
facilities), and 1 Assistant. 1 Junior IT 
Systems Analyst 1 Assistant, by 
cooperation with the OHIM Information 
Technologies 
Department  
Researching promoting and 
spreading best 
practice amongst public authorities 2 1 Senior Administrator to research, 
promote and spread best practices and 1 
assistant  1 Senior 
Administrator 
and 1 Assistant - 
 
 
EN 68   EN Observatory's 
main functions  Total 
resources 
required Description To be 
recruited Economies by using 
existing OHIM 
function 
 
Researching 
promoting and 
spreading successful private sector 
strategies 2 1 Senior Administrator to research, 
promote and spread best practices and 
1 Assistant  1 Senior 
Administrator 
and 1 Assistant - 
Total  25 persons - 19 persons 6 man years 
2. ESTIMATE OF STAFFING COSTS  
Table 21: Types of staff under option 3b as of year n+2 
OHIM (Option 3b) Functions 
Official/TA CA FG IV CA FG III CA FG II 
Setting up of the service 1 - - - 
Policy support   1 - 2 
Data collection 1 2 - - 
Public awareness 1 - 1 - 
Training  1 - - - 
Technical assistance 1 - - - 
Technical tools  1 - - - 
Legal section 1 1 - - 
Information exchange  - 1 - - 
Best practices (public) 1 - 1 - 
Successful strategies (private) 1 - 1 - 
Total 9 5 3 2 
 
The average staffing costs of OHIM (i ncluding overheads) of EUR 155,000 for 
officials/temporary agents and EUR 66,000 for cont ract agents would lead to a cost of the 
staff to be employed specifically for the Observatory of about EUR (4 x 155,000 + 6 x 
66,000=)  1.02 million / year duri ng the first two years. 
 
EN 69   EN In the following years, these co sts would rise to about EUR ( 9 x 155,000 + 10 x 66,000=) 
2.06 million. 
3. ESTIMATE OF OTHER BUDGET REQUIRED IN CASE OF ENTRUSTING THE 
MANAGEMENT OF THE OBSERVATORY TO THE OHIM  - COSTS OF ORGANISATION 
OF EXPERT MEETINGS  
– Reimbursement of Member States' experts and consumer representatives for two meetings 
of the public authorities/private stakeholde rs and one plenary meeting: 3 x EUR 50,000 = 
EUR 150,000 / year 
– Costs of subgroup meetings (to be developed as set out in Annex III): EUR 200,000 /year 
– Mission costs of Observatory st aff: EUR € 30,000 / year duri ng the first two years, and 
100,000 / year as of year n+2 
– No additional costs would have to arise for meeting facilities and meeting organisation (all 
available within the OHIM) and for publicatio ns etc (infrastructure and general budget of 
OHIM could be used) 
The total of other budget required would therefore amount to  EUR 380,000 during years n 
and n+1, and EUR 450,000 as of year n+2. At the same time, the EU budget would be 
alleviated by the costs borne by it in the past. On the basis of the figu res provided under point 
5 of Annex III for 2010, these savings can be estimated at EUR 38,773 for reimbursements of travel expenses of Member States' experts and the organisation of the Observatory's meetings.