The business of counterfeit goods is one of the largest in the EU and is growing rapidly. It hinders an effective enforcement of Intellectual Property Rights and poses a threat on European economy.

Counterfeiting impacts legitimate businesses, causing lost sales and lower profits. It also imposes great costs on governments and society in terms of lost jobs and loss of public revenue.

The amount of sales lost by the rights holders due to counterfeiting is staggering. It has been estimated that in the sectors of jewellery and watches, as well as handbags and luggage legitimate industry loses respectively EUR 1.9 and 1.6 billion of revenue annually, which corresponds to 13,5 % and 12,7 % of the sales, according to recent report prepared by OHIM. Bearing in mind that counterfeiting produces also a number of indirect effects, the figures can be even more dramatic. With both the direct and indirect effects considered, counterfeiting in the two sectors taken together causes approximately EUR 6,5 billion of lost sales to the EU economy, which leads to employment losses of about 54, 200 jobs and a loss of EUR 1,1 billion in government revenue in total.       

The growing number of counterfeit goods on the market renders it essential for companies to make sure that their IPRs are adequately protected. One of the possible ways to protect the holders of IPRs in the EU is to prevent counterfeit goods from entering the EU market, which can be done by filing an application for border seizure. A procedure for filing such an application varies from jurisdiction to jurisdiction. In Latvia, Lithuania and Estonia an application could be made for one or several states or for the entire EU.

The applicant has to submit a certificate regarding the ownership of the IPR. He also needs to provide as much information regarding a concrete infringement as possible, including, for example, the name of the infringer and special features of the goods that make it visible as being counterfeit.

The application is valid for one year but can be extended without any limitations. Imported counterfeit goods will be seized and eventually destroyed. After seizure, the owner of the goods will be informed and has a right to object. The costs for storing and destruction are beared by the applicant who can later take recourse to the infringer. There might be the necessity of a security deposit by the applicant as well as the risk of damage claims by the goods owner in case a court later finds that these goods didn’t infringe the applicants’ rights.

If you want to protect your genuine products, please contact our lawyers in Latvia, Lithuania and Estonia at info@gencs.eu.