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Contents
Foreword Executive Summary Chapter 1: Crime and its impacts A. Defining IP crime B. Overall scope and scale C. Risks from fakes D. Links to organised crime and other criminality Chapter 2: Tackling IP Crime A. Coordinated response to IP crime B. Innovation and new initiatives C. Spotlight on Europe and International D. Awareness and training E. Sentencing, seizures and the Proceeds of Crime Act Chapter 3: Results of the 2011/12 Survey of Trading Standards A. Types of goods investigated B. Where counterfeit/pirated goods have been investigated in 2011-12 C. Coordinated working D. Levels of infringement E. Levels of IP enforcement F. Training G. Resources H. Proactive monitoring of the internet I. Links to other criminality Glossary Bibliography page 1
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Foreword

launch of the Preventing IP Right Infringement in the Workplace e-guide and tools to help business protect themselves from legal action and potential damages, and; appointment of the IP attachs to encourage effective enforcement in other countries.

Of course the UK is not the only country that is affected by IP crime. However, the UK is leading the way and other countries are seeking advice from us on how to tackle this criminal activity. The work of the IPOs Intelligence Hub continues to be a central factor with its national database supporting and adding value to an increasing number of investigations at local, regional, national and international levels. Intellectual Property (IP) crime remains a tangible threat within the UK and internationally. The IP Crime Report is proving to be a vital tool in highlighting that threat, along with the large amount of work that has been carried out over the past year by industry, law enforcement agencies and government departments to tackle IP crime. I am extremely pleased by the increased submissions by IP Crime Group members which has enabled us to collate this Report. IP crime continues to receive an increased amount of publicity, which can only benefit consumers by giving them the knowledge to make an informed choice when purchasing goods in person or via the internet. Indeed, trading standard authorities have seen an increase in the trend of goods being bought via social networking sites which raises the probability of purchasing counterfeit products. This adds to the profits of the criminals who have no regard for the safety or well being of the people who are buying their products and continues the unfair and damaging infringement of IP rights owners property. It is therefore important that the recently launched IP Crime Strategy 2011-2015 continues to focus on ways to tackle IP crime and to protect consumers from the considerable harms posed by untested fake products. The IP Crime Group has a key role to play in taking forward this Strategy where coordination is vital. As always there are many positive contributions to the Report, but I am particularly pleased to see the: development of a Best Practice section on the IPOs website bringing together all IP Crime Group members resources to support businesses and enforcement agencies on IP and IP crime; With the Olympic Games this year we have yet to see any significant seizures or incidents relating to counterfeit Olympic products. However, law enforcement agencies have been proactive in receiving training on identifying such products, in preparation to protect tourists visiting the UK from purchasing counterfeit Olympic products. I am in no doubt that the challenges we have faced in the fight against IP crime over the past year have been tough. In difficult economic times resources are even more precious and I am encouraged to see the quality and quantity of work being done. Customs and Border authorities have increased levels of seizures, trading standards have maintained theirs, police have taken a lead in financial investigations and along with the Serious and Organised Crime Agency investigated some sophisticated organised crime groups. Equally industry has invested heavily individually and collectively in IP crime investigations, the quality of which consistently meets the requirements of courts and provides good evidence of the scope and scale of the problem. When all this work comes together, the outcomes are better, the impact more effective and everyone but the offender benefits. I encourage this approach to continue and develop so that the UK is a safer place for consumers, better for business and unattractive to criminals. Deputy Chief Constable Giles York Sussex Police ACPO Lead for IP Crime Chair of the IP Crime Group

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Executive Summary
The Intellectual Property (IP) Crime Report (the Report) is an annual Report which provides an overview of the initiatives and activities to tackle IP crime during the reporting year. This years Report covering the period 1 April 2011 31 March 2012 has seen an increase in the volume of contributions received. These have been received not only from industry (IP right owners), government departments and enforcement agencies (trading standards, customs authorities and police) within the IP Crime Group but also from those outside of the Group - indicating that awareness is being raised at both industries and consumers on the importance and affects of IP crime. All the data and figures have been provided by those contributors. Whilst there is no simple measurement of the scale of IP crime, this Report shows the breadth of it and the vast scale reaching every part of society. Enforcement of IP rights is a complex matter, with so many products and services involved and the different roles and responsibilities of law enforcement agencies, the need to coordinate and cooperate across institutions is fundamentally important. There is good evidence throughout the Report of this and the development of structures and processes that make them sustainable. The report is broken down into three chapters each focusing on specific areas: Chapter 1 looks at the impact of IP crime and some of the effects it has both directly and indirectly and provides a number of perspectives on the scale of the problem. Digital IP crime is an increasing problem impacting on all sectors, and the borderless nature of the internet also sets new challenges for the enforcement of IP. The UK is developing appropriate legal frameworks, voluntary actions and awareness campaigns which provide an effective response, while not restricting access to the internet. Industry continues to effectively deploy Cease and Desist notices against websites that contain infringing content, with the British Recorded Music Industry (BPI) removing over four million illegally hosted music files in 2011 and the Publishers Association issuing 200,000 take down notices, with a success rate of 90%. Physical IP crime remains an issue and covers a massive range of goods sold to consumers through a variety of methods such as markets sites, private residences and workplaces. These goods pose a risk

for consumers, from electrical products, medicines and batteries to cosmetics and skin care products. The National Markets Group (NMG) is beginning to show when industry, enforcement agencies and government adopt a common purpose and coordinate their activities, the results can be significant. Assessing the scale of IP crime is difficult. There are various perspectives, studies and data available, however this Report highlights the various projects that will look at addressing how to measure IP infringements. The findings of these projects will be updated in the next Report. IP crime often has links to serious and organised crime, and it is global. Several case studies within this Report highlight the complex and integrated methods used by criminals that cross international boundaries. Chapter 2 focuses on what is being done to tackle IP crime. The enforcement arena is in a period of change. In June 2011, plans for the National Crime Agency (NCA) were published. The NCA is designed to cut serious and organised crime - including IP crime - throughout the UK. The Government also published its response to the consultation on Empowering and Protecting Consumers, which sets a framework for consumer advice and how trading standards will protect consumers and businesses - including the establishment of a National Trading Standards Board (NTSB) to coordinate cross-boundary enforcement cases. The updated IP Crime Strategy 2011-2015, published in August 2011, provides direction on the coordination and practical activity to improve the response to IP crime. The online environment is a key threat which is used by criminals to trade their wares. The NTSB commissioned the delivery of the trading standards national e-crime project to tackle the increasing threat of IP crime. The police announced in November 2011 the setting up of three new police e-crime hubs to improve national capability to investigate and combat web crime. New initiatives to combat IP crime are being implemented and showing positive results. In preparation for the Olympic Games, LOCOG delivered a comprehensive programme of training on enforcement. The Anti-Counterfeiting Group (ACG) are piloting a project to identify and evaluate the benefits of creating a specialist Enforcement Co-ordinator to assist in improving standards of reporting counterfeit goods and enforcement actions.

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Awareness raising and training on IP crime continues. The results of some of the initiatives demonstrate that consumers are becoming more aware of counterfeits, and reporting instances of IP crime. The Brand-i initiative, founded in 2011, offers a free-to-use site listing legitimate e-stockists of branded goods. This is designed to help consumers gain confidence in buying genuine products online. The Crimestoppers campaign produces a steady flow of information on fake goods which can be used by law enforcement, as well as raising awareness with consumers. Internationally, the IPO is establishing a network of IP attachs based in key markets. The attachs will not only support innovation and growth in those markets by UK businesses, but also encourage effective enforcement of IP rights. The Report highlights key statistics by enforcement agencies such as the highest numbers of detentions by Her Majestys Revenue and Customs (HMRC) and Border Force of counterfeit products in air and sea freight for over three years - worth 70 million. Trading standards are also as involved in IP enforcement as ever, with the increase in the volume of counterfeit seizures. However, prosecutions and cautions for trade mark and copyright offences have seen a reduction. The Proceeds of Crime Act 2002 (PoCA) continues to be used to great effect to confiscate the criminal gains reaped by those involved in IP crime. This year in particular the Medicines and Healthcare products Regulatory Agency (MHRA) received a confiscation order for 14.4 million from the proceeds of selling counterfeit and unlicensed medicines. Chapter 3 provides data from the annual trading standards survey which highlights what has been investigated, who they have worked with and the types of criminality IP crime is associated with. There were 100 responses (up from 87 in 2010/11 Report). The survey supported data throughout the Report that optical media, cigarettes and tobacco, alcohol and clothing and footwear were the most seized products by trading standards this past year, although products such as toiletries, cosmetics, batteries and medical products continue to feature. Fake labels and packaging are also being seized, indicating possibly a growing propensity to manufacture in the UK. Once again more coordination is being carried out between government, enforcement agencies and industry, with for example 98% of trading standards authorities have engaged with police and 83% with other

authorities. Trading standards have continued to work closely with industry for example 74% have worked with the ACG and 65% with the Federation Against Copyright Theft (FACT). The link between benefit fraud and IP crime has also increased compared to other criminal activity, up 20% from last year to 75%. Trading standards have noted the trend for using social networking sites for illegal activity and an increase in the use of residential premises as the second highest location investigated for IP crime. The monitoring of auction and online markets sites continues to remain a high priority for trading standards. As a whole trading standards level of enforcement activity/interventions in relation to IP crime has increased by 30% since last year.

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Chapter 1: Crime and its impact

Introduction

P2P software client that searches for other connected computers. The peers are computer systems connected to each other through the internet. BitTorrent is a P2P protocol for distributing large amounts of data over the internet and is one of the most common protocols for transferring large files. Streaming is multimedia that is constantly received by and presented to an end-user while being delivered by a streaming provider. Streaming can be through a direct connection between the provider and receiver or via P2P software. Cloud computing (Cyberlocker) is where computing and storage facilities previously contained within the endusers system are now provided as services by a third party. Whilst it is an infringement of IP rights to possess or download files in contravention of copyright, it is not the intention to criminalise the consumer in the UK. The scale of infringement has brought the issue of copyright infringement into debate. On the consumer side, the Digital Economy Act is being progressed towards the goal of a system of notification of consumers where infringement is repeated. Criminal sanctions in the UK are focused on wilful copyright piracy on a commercial scale. Where there is evidence of IP crime, under existing legislation, associated rules and regulations are used to intervene. For example, payment services are highly regulated. When the police, through their specialised knowledge of money laundering laws and regulations, are satisfied that a website is criminally driven they have worked with the financial sector to have payment services withdrawn. Police e-crime units have investigated a number of cases of criminal counterfeiting and piracy of IP and used the evidence gathered to remove and using the Fraud Act 2006 in some cases take control of the internet domain used for criminal purposes. Under European legislation, Internet Service Providers (ISPs) are considered as mere carriers and not primarily responsible for the content a subscriber might have. However, where an ISP is notified by an IP right owner of an alleged infringement, the webpage is removed. Cease and Desist notices issued by publishers, the music industry, films and games and individual IP rights owner run into millions.

A. Defining IP crime
Intellectual Property (IP) crime is the counterfeiting and piracy of trade marked and copyrighted products and services. In the UK, IP crime does not include infringements of patents or design rights, although the latter is under review. IP is a private right and recourse to justice over alleged breaches is ultimately through the civil courts, with administrative and mediation services also available. However, certain infringements, for example the manufacture, sale or distribution of infringing copies in the course of a business, are criminal offences and offenders are liable to prosecution. IP crime is classified as counterfeiting and piracy, which is a Schedule 2 offence under the Proceeds of Crime Act 2002. This means that it is criminal lifestyle offence which has significant consequences in relation to the confiscation of assets. In addition where the criminal conduct is for gain, money laundering offences may be committed. As well as the particular offences relating to IP crime defined in statutes such as the Trade Marks Act 1994 and the Copyright, Designs and Patents Act 1988, some conduct also meets the criteria of the Fraud Act 2006 and the common law offence of Conspiracy to Defraud. Digital IP crime Digital IP crime refers to content protected by copyright that is stored in electronic form. This makes copying material much easier and as technology has developed along with mass access to the internet and other developing systems of storage and file sharing, increasing capacities in connection speed, large files such as films and games, are being illegally accessed in vast numbers. The borderless nature of the internet sets new challenges for enforcement, especially where there are substantial differences in national laws, policies and procedures as there are in IP. Peer-to-peer (P2P) file sharing allows users to download media files such as music, movies, and games using a

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Individual IP right owners use Cease and Desist notices including: The British Recorded Music Industry (BPI): identified and removed 4,298,729 illegally hosted digital music files in 2011 (although they have already passed that figure this year and are likely to be in excess of 12 million for 2012). In addition they identified and removed 61,232 illegally UK hosted digital music files. The Federation Against Copyright Theft (FACT): as a result of an application to the High Court by the Motion Pictures Association, supported by FACT Mr Justice Arnold ordered BT to block access to the website Newzbin2, using Cleenfeed (BTs site blocking technology, originally set up to block websites featuring child pornography). This action was brought using section 97A of the Copyright, Designs and Patents Act 1988 (CDPA) and was the first time that this part of the CDPA had been used. Subsequent to BTs order, further orders have been given against other ISPs, who have then agreed to block Newzbin2 using their own software. The Publishers Association (PA): to date over 200,000 takedown notices have been issued to over 5,200 infringing domains with a removal success rate of circa 90%. In the UK where an IP rights owner seeks to have access to an infringing site blocked by the ISP the route is by a Civil Court order provided for by the Copyright, Designs and Patents Act 1988. Other interventions are by way of voluntary agreement such as the system under development by the internet advertising industry, IP rights owner and brand holders to reduce the appearance of legitimate adverts on IP infringing sites. Physical IP crime Physical IP crime refers primarily to counterfeiting of a variety of goods. There is evidence to show that just about anything that can be manufactured and has an added value through its trade mark, construction, standards of material and performance will be counterfeited. From pharmaceuticals to clothing, machinery and automotive parts, personal care items and electrical goods where there is a demand knowing or unknowing for counterfeited and pirated goods and there are places with high volume, low cost manufacturing and access to shipping and transportation, goods are illegally copied and sold either as genuine or openly as a fake.

Whilst the highest volume of counterfeit manufactured goods are from China, there is a complex relationship between the various stages of ordering, manufacturing, delivery and retail that involves many more countries and emerging economies or where there is a particular skill base. For example pharmaceuticals and the Indian sub-continent. Money flow investigations are indicating a global organising structure, comparative and complementary to established trading links. Distribution is in retail outlets, open markets, workplaces and informal shopping networks. There is evidence of fakes entering the genuine retail marketplace and in the component market. For example, counterfeit pumps being supplied in a building contract. A massive growth area of supply and demand for counterfeits is now through the internet and online auction sites, reflecting the changes in the genuine market and new opportunities for suppliers and consumers. Trading Standards Officers throughout the country, often in response to consumer complaints, regularly identify counterfeits and interact with intermediaries such as online auction providers to prevent further criminal activity. The demand for prescription drugs has led to a huge growth in their illegal supply online, evidenced by the Operation Pangea series led by the Medicines and Healthcare products Regulatory Authority (MHRA) in the UK along with international partners across the globe. The UK intervention includes not only removal of counterfeit drugs in the supply chain, but removal of the domain registration to frustrate continuing criminality. Whilst it may be obvious from the price, environment and appearance that goods are counterfeit, it is not always so clear. Pricing tactics by suppliers of counterfeits show a tendency towards only slightly cheaper goods. Diversion stories such as factory over-runs, seconds and replicas to ease consumer concerns, whilst targeting the less aware and experienced. The safety of distance selling to suppliers and the diminishing of consumer rights are key concerns. The entry of fakes into the genuine market place and outlets where the consumer relies on the credibility and integrity of goods offered for sale is a growing issue, not only in the retail sector but in the component supply. There are numerous examples of well known branded counterfeit products appearing in outlets not normally associated with this type of business and parts infiltrated

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into the genuine supply side of the motor, aircraft, electronic and construction industries. Conviction of valve counterfeiter1: a Chinese court fined and jailed two companies and those responsible individuals for counterfeiting valves. They had made and sold counterfeit valves which generated 1 million in sales since 2006. These valves failed in service at Chinese power stations, causing serious injuries and damage, as well as risking the lives of workers. One company was fined 666,000 and its manager jailed for 16 years. The second company was fined 48,000 and its manager was also jailed for 16 years. Both managers have been ordered to pay sums in the region of 125,000.

unfair competition to legitimate businesses, reducing their presence and service to people. Consumers there are obvious and apparent risks to the health, welfare and safety of consumers from sub-standard, uncontrolled and toxic substances, dangerous parts and faulty equipment. Consumer rights are compromised and often the most economically vulnerable are the hardest hit. Businesses where legitimate trading is undermined by counterfeiting and piracy, outlets close and areas degenerate, employment is harmed and investment in growth declines. Criminality there is continuing evidence of the involvement of serious and organised crime in IP crime and similarly with observations that criminals involved in it are also engaged in other types of crime. Shoppers warned about dodgy counterfeit goods that could kill2 Consumers were warned of cheap, counterfeit consoles and other electrical goods flooding in from the Far East which could kill. Consumer group Which? issued the warning after investigating fake items on the market. They found dodgy wiring on bogus Nintendo Wiis which could electrocute a child, while fake iPhones, laptops and Nintendo DSi handhelds were at risk of overheating. International partners there is often a complex relationship between demand and supply of counterfeited and pirated goods, which undermines the development of strong and sustainable relationships economic, political, cultural and social - between the UK and its trading partners. Scale As with any problem, understanding its nature and scale is necessary to formulate good policy and action to deal with it. The quest to quantify the scale of IP crime is a difficult one and there is no easy solution. There are various perspectives and studies that add to our knowledge, but there is, as yet, no single measurement. The challenge is acknowledged elsewhere in the world. In the USA efforts are directed at assessing the magnitude whilst stating the same belief as the UK that even though this is work-in-hand, the need to respond to
2 http://www.mirror.co.uk/news/top-stories/2011/12/08/ shoppers-warned-about-dodgy-counterfeit-goods-that-couldkill-115875-23618137

B.

Overall scope and scale

Introduction Counterfeiting and piracy crosses all commercial sectors and there are a range of views and perceptions of its scale and impact. It is an important challenge to be able to accurately and credibly assess the scope and scale of IP crime. Scope There is no material, physical or digital that is protected by IP rights that at some stage or other is or might be subject to counterfeiting or piracy. Whilst the most common motivation is for profit, there are other influences, especially in the digital world, such as ideology, capability and ease of access. However, it is clear that IP crime reaches into some key areas of life directly and indirectly. IP rights owners suffer from economic loss, reputation and association with quality, commercial sensitivities and business planning. Revenue losses of tax revenues both from the goods themselves and indirectly as criminals rarely pay other dues such as income tax. Communities in terms of community safety if criminals are allowed to flourish and control locations such as markets where there is commonly a threatening and aggressive environment, poor role models and
1 http://www.bbc.co.uk/news/uk-scotland-scotland-business-13704034

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the problem is vitally important. In Europe, through the European Observatory at the Office of Harmonisation for the Internal Market (OHIM), a project is dedicated to establishing means of assessing the scale of IP crime and a study by the Rand Group is due to report in the near future and the UK is closely involved. In the UK the IPOs Economic Research and Evidence Department is leading on a project to develop a series of building blocks of measurement using a range of data from industry and the public sector. It is a long-term objective over the next five years. Meanwhile, through this annual Report, a collection programme of data, statistics and enforcement information provides for the best assessment of the scale of IP crime and helps provide areas of priority through a qualitative assessment of it. Hargreaves Review In May 2011 Professor Ian Hargreaves published his Independent Review of IP and Growth3. The Government published its response to the Hargreaves Review4 (the Review) on 3 August 2011, broadly accepting many of its recommendations. The 2011 IP Crime Strategy 5was published on the same day as the Government response, echoing many of its enforcement-related messages and committing, as did the response, to reporting on progress via annual IP Crime Reports. Also in its response, the Government accepted the Reviews argument that a combination of education, effective markets, appropriate enforcement and modern laws was most likely to be successful in preserving the value of IP rights for their owners. Accordingly, the Government is committed to working with industry on supporting efforts to develop new legitimate digital markets, tackling organised IP crime and enhancing the availability of high quality evidence. One of the messages repeated throughout the Review was the lack of good quality evidence imperative for proportionate and effective enforcement efforts. One of the commitments made in the Government response, as part of the evidence-gathering process, was to begin work with OFCOM to establish benchmarks and data on trends in, and motivations underlying, online copyright infringement. OFCOM and the IPO have agreed to a large scale survey of consumer behaviours, practices and attitudes towards such infringement. By attempting to understand underlying motivations, the research should make an important contribution to education and
3 http://www.ipo.gov.uk/ipreview-finalreport.pdf 4 http://www.ipo.gov.uk/ipresponse-full.pdf 5 http://www.ipo.gov.uk/ipcrimestrategy2011.pdf

awareness efforts. This research is ongoing and results are expected later this year. In its Hargreaves response the Government made further commitments to improve access to justice at proportionate cost for businesses, in particular SMEs and the consumer, through its reform of the Patents County Court (PCC). There were commitments around the introduction of a small claims track in the PCC and the renaming of the PCC so that it better reflected the range of IP disputes that came before it. The small claims track is due to be introduced in October 2012. The Government is also looking at ways to change the name of the PCC to better reflect its jurisdiction.

Measurement of IP crime Economic Research at the Intellectual Property Office (IPO) Enforcement of IP rights is an increasingly important part of the IPOs work. The challenge is to understand where to focus resources for effective IP enforcement. The IPOs economists have held discussions with a range of stakeholders both domestic and internationally on how best: to measure the impact of IP infringement, and; to give the IPO the evidence and data it needs to inform enforcement policy. there will be two streams of work, one addressing how to measure infringement, and the other looking at the costs of enforcement.

To start, the IPO will commission work to provide an evaluation of current methods used to estimate levels of IP infringement and subsequent harm. This will be scoped over the summer 2012 to provide results by late Autumn. The next step will be to decide which building blocks can be usefully done during the next financial year by the IPO, and which could be done with researchers in partner IP offices and which in universities and other research institutions. As part of this work the IPO will cover physical and digital areas of the economy, criminal and civil enforcement methods, and at consumer and business issues. Each of these are important to the overall picture.

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The National Markets Group The National Markets Group (NMG) draws its membership from IP rights owners, trade bodies, law enforcement and the Government and has three strands intelligence, enforcement and prevention. It is proposed to build an Availability Index for counterfeit goods in the UK. Using a standard template for observations at open-markets. Resources from the private sector, law enforcement agencies and other departments are working together to identify what counterfeit goods are on offer and how that changes. This will provide an assessment of the scope and scale of counterfeit goods, a means of benchmarking various interventions and whether or not they are successful in reducing the supply of counterfeits, whilst assisting in prioritising problematic locations and products. The methodology will be developed through the South East Region Government Agency Intelligence Network (GAIN) and the Availability Index managed by the IPOs Intelligence Hub. Perspectives on the scope and scale of IP crime Business Software Alliance BSA Piracy impact study 2010 The economic benefits of reducing software piracy6 The BSAs piracy impact study suggests that if the 2009 piracy rate of 27% was reduced by 10 percentage points, 13,011 new jobs would be created, nearly 12 billion would be added to GDP and an extra 3.2 million of extra taxes in the first 2 to 4 years. Seven percent of UK PC users admit to obtaining software illegally all of the time, whilst a further 23% obtain software illegally most of the time. The global average is 13% and 34%. National Audit Office Protecting consumers the system for enforcing consumer law June 20117 Collating data from various sources, Trading Standards in the South West were able to identify that 442 million illegal cigarettes and 347,000 kilograms of hand rolling tobacco are purchased every year in the South West with a total retail value of over 216 million per annum. It also linked over 300 individuals to the illegal tobacco trade and generated problem profiles to help target multi-agency enforcement work.
6 http://portal.bsa.org/piracyimpact2010/studies/piracyimpactstudy2010.pdf 7 http://www.nao.org.uk/publications/1012/protecting_consumers.aspx

IFPI - Recording Industry in Numbers 20118 The report looks at how the implementation of the Hadopi Law has worked in France. In short, it involves a system of escalating education and warning notices being sent to copyright infringers culminating, for those who repeatedly ignore warnings, appropriate sanctions. By February 2012 more than 890,000 warning letters had been sent to infringers reaching over 10% of P2P users. 165 individuals had been referred to the courts. They could face fines of up to 1,500 or internet suspension for one month. P2P usage fell by 26% between October 2011 and January 2012 equating to the loss of nearly two million P2P users. Research showed that 32% had changed their behaviour as a result of Hadopi. Research has also shown that iTunes sales were 23% higher for singles and 25% higher for albums than they would have been in the absence of Hadopi. In the UK a growing collection of consumer research findings confirm that most consumers accept the concept of a graduated response. Sixty two per cent of consumers agree that if someone breaks the law, despite warnings, it is right that their internet connection should be suspended. Even among copyright infringers, this drops to a still relatively high acceptance rate of 48% (Entertainment Media Research, 2011). BASCAP Estimating the global economic and social impacts of counterfeiting and piracy, February 20119 The Business Action to Stop Counterfeiting & Piracy (BASCAP) estimate that counterfeiting in four sectors (luxury goods, pharmaceuticals, food and beverages and software) costs the government 500 million in lost taxes and higher welfare payments. This is made up of losses in sales tax, corporation tax, excise duty and income tax and by increases in benefit payments. BASCAP estimate that these sectors account for 6% of UK GDP. BASCAP also estimates that in the short term (less than a year) the UK looses around 15,000 jobs in these four sectors due to the impact of counterfeits. With the UK having a low employment level it is expected that these workers obtain employment elsewhere. Long term unemployment is likely to affect 1,200 jobs across the four sectors. The report notes that the estimates are only for the four sectors listed. BASCAP estimates that the UK economy
8 http://www.ifpi.org/content/section_resources/rin/rin.html 9 http://www.iccwbo.org/Advocacy-Codes-and-Rules/Special-Projects/ Bascap/Economic-Impacts/Global-Impacts-Study/

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as a whole has 380,000 jobs lost in the short term and 31,000 permanent job losses. BASCAP also states that if counterfeiting were to be responsible for raising the UK crime rate by 1%, the economic and social cost of crime in the UK would increase by 1.7billion. In summary, BASCAP suggests that counterfeiting costs the UK: 4.1 billion in lost taxes and higher welfare spending; 380,000 jobs in the short term and 31,000 in the long term; and 1.7 billion for every 1% increase in crime caused by counterfeiting.

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Fake champagne seized from shops: trading standards and licensing officers in Berkshire have discovered counterfeit and illegal alcohol and tobacco on sale in shops in the county. Officers working for the Royal Borough of Windsor and Maidenhead removed 30 bottles of fake champagne in 15 premises, 70 bottles of fake Jacobs Creek and Blossom Hill wine. Among the fake champagne were bottles falsely labelled as Bollinger, being sold for up to 50. Several shops in the borough were also found to be selling tobacco products bearing German health warnings. Counterfeit car parts Counterfeiters have no qualms about faking safety related spare parts such as brake components and filters, which can have life threatening consequences for the people inside the car. To minimise the risk to consumers, BMW original spare parts are now being gradually given safety labels. BMW is fighting all types of product piracy with the globally active Brand Protection Team, whose mandate is to protect BMWs brands and designs. The primary goal is to track down counterfeit goods and designs and hold the infringers accountable through legal proceedings. This requires intensive cooperation with relevant authorities, as well as the provision of information and resources required to actively assist them. In recent years, a number of successful raids have been carried out worldwide and counterfeit BMW goods worth a total of 33.4 million were confiscated last year thanks to the active input of the international authorities. The experience from the Brand Protection Team shows that counterfeit products are made to look like replicas of original products. The accurate identification of the copy is therefore an extremely time consuming process and is often virtually impossible without detailed knowledge of the product.

HMRC/UKBA - Tackling tobacco smuggling building on our success April 201110 According to the Her Majestys Revenue and Customs (HMRC) and UK Border Force (UKBA) reported tobacco fraud costs taxpayers over 2.2 billion a year. Since HMRC Tackling Tobacco Smuggling strategy was first introduced in 2000, the size of illicit cigarette market has been cut by almost half with more than 20 billion cigarettes and over 2,700 tonnes of hand rolling tobacco seized. There have been more than 3,300 criminal prosecutions for tobacco offences following action by HMRCs officers. The report also states that smoking remains the primary cause of preventable illnesses and premature deaths in the UK and illicit tobacco makes smoking more affordable. The report also comments that it makes it easier for children and young people to access tobacco products which will perpetuate health inequalities across socio-economic groups. HMRC/UKBA are investing 917 million to tackle organised crime, tax evasion and avoidance through the Governments Spending Review with an objective to achieve further sustainable pressure on the illicit market in cigarettes and hand rolling tobacco through to 2015.

10 http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_Mis cellaneousReports&propertyType=document&columns=1&id=HM CE_PROD1_031246

11 http://www.bbc.co.uk/news/uk-england-berkshire-13792224

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Primary data is available from the EU Customs who year on year seize increasing amounts of fake skin care and consumer goods destined for the EU, running into many thousands of individual items. That the EU would be the target for such criminal activity comes as no surprise given that the potential margins of profit, whilst costs of production and importation remain low. The majority of the illicit factories are located in Southern East China in regions such as Guangzhou, Guangdong, and Shantou which is particularly notorious. There are two types of factories engaged in the manufacture of counterfeit consumer goods, and skin care products. Either the underground hidden factory, operating in rented office space or disused premises or the established overt factory producing Chinese brands but open to making counterfeit branded goods also. Whilst sea route shipping is a primary route for the products to reach the UK, recent evidence has shown quantities of counterfeit products being transported by road from China through the Khazakstan border into eastern Europe and then the EU. Anti-Counterfeiting Group (ACG) The Anti-Counterfeiting Group (ACG) is a not for profit trade association, founded in the UK in 1980 with just 18 members (mostly in the automotive industry) who discovered that they had a common problem with counterfeit product. Today ACGs membership comprises over 170 organisations globally, operating in, or providing specialist advice to, most industry sectors where counterfeiting is an issue. ACG represents the interests of UK and multinational companies, manufacturing just about everything you can think of, from toothpaste to mobile phones, chocolate to car parts. Its membership also includes lawyers, trade mark attorneys and brand protection specialists, creating a unique environment for anti-counterfeiting interests to collaborate. The ACG campaigns against the trade in fakes on behalf of consumers and legitimate business interests, in partnership with government and law enforcement agencies, and other IP rights organisations. Their ultimate aim is to change societys perception of counterfeiting as a harmless activity, by exposing the worldwide economic and social cost of IP crime.

Can you tell the difference? The fake air filter (on the left) and the original BMW part (on the right) are virtually indistinguishable from each other.

The Brand Protection Team is continuously working on ways to hinder the development of counterfeit goods. One of the methods is the recent introduction of a security label that goes way beyond the usual functionality of a hologram. It is a specialised parts label containing product protection features that identify the parts clearly as originals, just like the security features on bank notes.

New specialised parts label with a thermo-chromatic dye.

Amongst other security features included on this label, a thermo-chromatic dye is used that reacts to heat: friction reveals the Original/Genuine logo. The label combines different security features to achieve a high standard of reliability against forgery giving BMW the ability to accurately identify originals and effectively remove forged products from circulation. The threat to skin care and consumer goods industry The availability of counterfeit skin care and consumer goods is increasingly evidenced by seizures and market place observations by IP right owners. The main source of the counterfeit products, as for many industries, is China where there are a great many cosmetic factories selling counterfeit branded skin care, hair care, toothpaste, mouthwash and other personal goods.

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ACG General Overview The true scale of counterfeiting in the UK is not known. However, contributors to this Report have evidenced that counterfeiting is a lucrative business opportunity for both the criminal entrepreneur and the organised crime group. Intelligence and seizures suggest that both the complete counterfeit product and labels and other separate parts for domestic manufacture of counterfeit goods are being imported into the UK from countries such as China (including Hong Kong), India, Pakistan and Turkey. Although importation is still in the ascendency, the domestic manufacture of counterfeit goods appears to be on the increase. Recent raids in Leicester and Manchester have led to the seizure of blank goods, counterfeit labels and badges as well as production machinery such as sewing machines and printing presses. Statistics provided by representatives from the clothing, footwear and consumer goods sectors show that during the reporting year some 300,000 items were seized with an estimated street value of 12 million. This is only a snapshot of the scale of the problem and in order to reduce this threat it is essential that all IP rights owners engage and work in partnership with law enforcement and Government agencies, sharing intelligence, information, best practice and expertise. ACG members engage in a variety of partnership projects such as: Coventry International Postal Hub intercepting small packages imported via the postal service which contain a variety of counterfeit goods including footwear, clothing, golf clubs, cosmetics, accessories such as handbags and purses, jewellery and lifestyle products including toothbrushes and razor blades. Vast seizures of counterfeit goods have been made and intelligence gathered as a result of this work has led to numerous enforcement actions.

Routes to market
IP crime on the internet In recent years, the Federation Against Copyright Theft (FACT) has witnessed a significant shift away from the distribution and sale of infringing film content in DVD format. Illegally acquired content can now be accessed through websites which offer direct downloads, file sharing or streaming. The sophisticated nature of social networking websites has meant that the internet has become the new medium for sellers, replacing traditional street sellers and market places. DVDs that infringe IP rights are now advertised within users profiles on sites such as Facebook and on forums as well as on auction sites. The internet has opened up opportunities for criminals to prosper in multiple circumstances. For films, recording in a cinema remains the primary source and the material is uploaded online. Cammers invariably belong to a release group and are typically recruited online. The internet has provided a global platform where kudos can be achieved by releasing film or television content that is deemed to be of high quality. Release groups often run private websites that are accessed exclusively by registered members. Further opportunities arise around the transfer and storage of audio-visual content. This is typically administered by file hosting services such as FTP sites and cyberlockers, which provide illegal revenue for those running them. Significant financial gains, generated through selling advertising space, are also made by website owners which provide free public access to copyright infringing content. Many legitimate companies and brand owners unwittingly provide this revenue.

C.

Risks from fakes

Introduction The analysis of the scope of IP crime reveals a broad area of effect. Some of these are directly dangerous, others have a more subtle and indirect, but nevertheless harmful impact. Dangerous products Products for human consumption Alcohol and tobacco feature heavily in this risk area. Counterfeit alcohol has been found all over the UK in

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wine and spirits, in and beyond the legitimate supply chain. Production of alcohol and illegal distilleries has been identified, with multiple fatalities in one case. Counterfeit spirits are typically made from industrial alcohol that contains toxic substances. There is no way of removing these and making it comparable to properly manufactured products. The potential for serious harm to a consumer is high. Five dead in huge fireball during illegal vodka brewing operation 12 Five men have been killed and another seriously injured in an explosion allegidely started at a Boston industrial estate amid claims it was sparked by an illegal vodka distillery operation. The men, died instantly after a fireball ripped through the Broadfield Lane industrial estate in Boston. One of the men was seen fleeing on fire from the unit, less than 600 feet from neighbouring allotments and a block of flats. Earlier this year, dangerous counterfeit vodka was discovered again in Boston during the first ever operation to crackdown on the illicit tobacco and alcohol trade. In March, coordinated raids, the first of their kind in Britain, were carried out by officers from HMRC who seized 88 litres of illegal alcohol from six stores after carrying out raid across the town. Counterfeit tobacco products compound an already dangerous product with no control on the content and constitution. Medicine and Healthcare products Regulatory Agency (MHRA) and trading standards report that vulnerable communities are the hardest hit and suffer more from smoking-related illness which has a disproportionate impact upon healthcare resources.

13

Dangerous counterfeit vodka discovered in Bedworth: Warwickshire County Councils Trading Standards Service received a complaint from a Bedworth consumer who was concerned about a bottle of Glens vodka she had purchased. Only half the bottle had been drunk and officers were able to send a sample off to be tested. Tests revealed that the vodka was counterfeit and contained high levels of methanol. The levels present in the counterfeit product are not thought to be high enough to lead to a risk of death, but consumption of high levels of methanol can be toxic to the nervous system, particularly affecting the eyesight and if enough is consumed can result in permanent blindness. The fake vodka is labelled as the Glens Vodka brand. Genuine Glens Vodka (70cl) can be easily identified. It will only be bottled in a bottle supplied by Allied Glass Containers. This bottle has a small AGC logo on the base of the bottle. The front and back labels on the counterfeit bottles also appear to be self-adhesive as there is no visible glue pattern. Genuine Glens Vodka (70cl) labels are applied by a labeling machine using a wet adhesive that produces a distinctive glue pattern on the back of the label resulting in horizontal lines, approximately 2mm apart. Consumables Recoveries of counterfeit healthcare products such as condoms highlight direct risks to consumers health through lack of protection against disease and consequences in terms of unplanned pregnancy. Razor blades have also been tested and show the presence of human DNA from the manufacturing process. Pharmaceuticals Counterfeit pharmaceuticals may contain dangerous or damaging ingredients or may simply be ineffective, due to missing ingredients or may contain the wrong quantities of ingredients. Increasing international trade of pharmaceuticals and sales via the internet has further facilitated the entry of counterfeit or substandard healthcare products into the supply chain. The demand for pharmaceuticals is a complex area. Even where prescription charges are low or even free, there is evidence of demand from illegal sources, especially online. Raids and arrests in China

12 http://www.telegraph.co.uk/news/uknews/crime/8636424/Bostonexplosion-five-dead-in-huge-fireball-during-illegal-vodka-brewingoperation.html

13 http://www.warwickshire.gov.uk/corporate/newsstor.nsf/8070743895 3795f380256e85002b2be0/5aff3e6b76c57cf1802578cb00422787?Op enDocument&Highlight=2,counterfeit

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have demonstrated the completely uncontrolled and dangerous production environments where contamination is rife. Counterfeit pharmaceuticals have entered the legitimate supply chain and in a particularly distressing case, cancer drugs which did not contain the active ingredient were found to have been dispensed. Powys Trading Standards seize counterfeit make up: Trading standards in Powys have successfully prosecuted two individuals for supplying counterfeit make up, worth over 17,000. Some make up contained high levels of lead prompting safety concerns, for users of the product. Evidence showed that the defendants made over 2,000 per month from selling the products on ebay, which contained 20 times the safe level of lead content. The defendants were sentenced to community orders and investigation costs totalling 5,000. Electrical goods It is often found that counterfeit electrical goods fail to reach the minimum standards of safety required for safe operation. Products such as hair straighteners are well documented, but counterfeit circuit breakers have been recovered posing a risk not just to the user of the product but to the building they were meant to protect and others who have access to it. Agricultural products The food supply chain depends on the integrity of all the many different stages of farming, agriculture and animal husbandry through to the safe supply to the consumer. There is evidence of counterfeit venterinary drugs14, pesticides and feedstuffs, with one case in the UK highlighting the scope and scale. A husband and wife ran a Europe wide black market empire which flooded the UK alone with 6 million worth of illegal veterinary drugs, Regine Lansley, 62, and Ronald Meddes, 73, supplied 1,800 clients from their 11-bedroom French farmhouse. The couple appeared the epitome of respectability. Lansley, who hired herself out for appearances based on her similarity to the late Princess, claimed to be an expert horsewoman. Her husband, was also well known in equestrian circles and bought his wife the farmhouse, 80 miles from Paris, for her 50th birthday.

In July 2011 the couple were jailed and warned they would come out penniless after proceedings to confiscate the proceeds of their crime. Lansley was given 20 months and her husband 28 months after Croydon Crown Court heard that a raid on their farmhouse represented the largest seizure of illegal veterinary products in Europe. Such was the scale of their illicit operation that some medicines enjoyed the largest market share in the UK over legitimate products and just one of their delivery companies transported 8.5 tons of black market drugs into the UK in two years. There was a threefold price mark up on some medicines brought in from India and investigators discovered paperwork showing total sales of 13.5 million over a six year period. Revenue losses There is a complex relationship between the sale or offer for sale of a counterfeit product and the effect that has on the sale of a genuine product and subsequent loss to the IP rights owners and that is the thrust of the current research. In the meantime estimates of losses to the IP rights owners or excise to the government on a like-for-like comparison provide some valuable context for considering the impact of IP crime and from there the consequential losses in terms of employment, investment and development. The costs of enforcement through litigation and investment in investigations by the industry are considerable and demonstrate their belief of the harm it causes as well as the fact of infringement being wrong in law and principle. The level of seizures of counterfeit products at borders in the UK highlights the constant flow of counterfeit goods whilst trading standards and police intervention takes place around the country showing that counterfeiting and piracy is present everywhere. As more Proceeds of Crime Act 2002 confiscations are made, a better picture of the accumulation of wealth by IP criminals, which represents a loss to IP rights owners, is emerging. Revenue losses are not confined to IP rights owners and the government. In an operation in Manchester, directed at open markets in the city and Salford, shops in the vicinity had felt pressure from the growth in counterfeit goods at the markets through unfair competition that made some of them unviable and forced them to close. Community safety There is increasing recognition that IP crime has an impact on community safety. In a market near London, the stall holders selling counterfeit products presented

14 http://www.dailymail.co.uk/news/article-2012348

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an aggressive, intimidating attitude that pervaded the area. As stall holders were prosecuted and the market organiser encouraged to run it by Real Deal mutual code of practice for markets, the atmosphere has changed for the better and more business and customers are being attracted to it. The perception of tolerance of IP crime permits criminal dominance in an area that undermines community safety and confidence.

Manufacture how is demand satisfied and what are the enablers that lead to successful production? Shipping and transportation how are counterfeit goods so easily moved without hinderance from checks and balances at borders? What delivery and storage requirements are there for counterfeits and how do criminals manipulate them? How do criminals use legitimate outlets, formal and informal to trade? What are the money flows at each stage and who are the beneficiaries? Where there are re-working facilities, what is the involvement of illegal immigration, human trafficking and benefit fraud? The IPO and the National Fraud Intelligence Bureau are in the process of joining up the intelligence from IP crime to the wider fraud arena. Part of this is a requirement to assess organised crime groups through a national mapping process which will provide further substantive evidence of the links it has with serious and organised crime. The Italian Government sent a Parliamentary Committee to the USA and UK to gather information on tackling IP crime as it is so concerned about the purposeful involvement of organised crime, especially mafia type crime organisations. In recognition of the problem IP crime is regarded as a threat in the same terms as drug trafficking and penalties have been amended to reflect that. IP crime crosses borders with ease, so the threat in Italy will have an impact upon the UK. Drugs and counterfeit goods found in Bridgnorth club raid15 in December 2011 drugs and counterfeit clothes, shoes and jewellery were seized following a raid at a country club near Bridgnorth. Shropshire Councils trading standards team, who worked with police searched the outbuildings and the main house and discovered more than 50 mature cannabis plants and a quantity of a class A drug. A locked unit at the back of the site also contained fake Barbour jackets, Ugg boots, Nike trainers and Pandora jewellery. Two vehicles and two trailers believed to have been stolen were also seized. One man is currently on police bail whilst the investigation continues.
15 http://www.shropshirestar.com/news/2011/12/08/drugs-and-counterfeit-goods-found-in-bridgnorth-club-raid/

D.

Links to organised crime and other criminality

Introduction The annual survey of trading standards has consistently shown that a significant proportion of respondents (79%) identify that the IP criminals they encounter and deal with are linked to networks of criminality that involve other forms of illegal activity. Key investigations have uncovered typical organised crime structures for example Operation Blackout, (details of which can be found in section E in chapter 2). Throughout the country, IP right owners and the Intellectual Property Office, (IPO) have engaged with cross border law enforcement resources because the nature of the investigation shows the involvement of serious and organised crime. IP crime has to be organised as it involves so many different stages usually across international boundaries. There are numerous examples of investigations into other types of serious and organised crime uncovering a link to IP crime and vice versa. As the structure for the new National Crime Agency is developing, national tasking for economic crime is being co ordinated by the Economic Crime Portfolio. IP crime is on that agenda and meets the criteria for serious and organised crime. The Economic Crime Portfolio Project which is under development requires a thorough knowledge and understanding of the key stages in the supply of counterfeit goods with a parallel objective on digital piracy. Wholesale demand where does the organising demand come from and how is that converted to production and manufacture?

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Eleven arrests in stolen goods crackdown in Leeds: 16 eleven people were arrested in a week long operation in Leeds on those suspected of selling counterfeit cosmetics on city centre market stalls being involved in the trade of stolen goods. Police and trading standards officials searched 37 residential and business premises across the city. Police recovered suspected class A drugs, a Taser-style weapon, games consoles, power tools, counterfeit DVDs and designer clothing were among suspected stolen items recovered during the operation.

Notebooks found at Stocec-Bots house in Milton Keynes showed the complexity of the operation, with multiple bank accounts, six properties being bought and sold and money being transferred overseas to China and Romania. It was found that Stocec-Bot had access to over 50 bank accounts, many of which were not in her name, allowing her to transfer money between accounts and concealing the trail of criminal profits. Financial investigations revealed many millions were obtained over a 3 year period. A Confiscation Order is currently being sought to return these criminal proceeds.

International organised crime Despite the ever increasing use and speed of the internet within the UK and the availability of copyright infringing digital content online, a market still exists for the sale of illegal hard copies. These are sold in the street, at markets and online. Seventy percent of DVD burners seized by the Federation Against Copyright Theft (FACT) over the last year have been from factories set up by Chinese Organised Crime Groups (OCGs). This ethnic group have developed a highly profitable business model, whereby the typical setup involves converting a residential property or an industrial unit into an illegal DVD factory. The product is transferred to another property where street sellers stock up on the discs they sell to the public across the UK. International counterfeit DVD operation: in 2010, a pair of counterfeiters who ran a 1 million illegal DVD copying operation in Milton Keynes were jailed for a total of more than three years. Rosalba Stocec-Bot, a 28 year old Romanian national, and Achilles Ekedi-Tanenang, 36 and from Cameroon, were the UK operators behind a hugely successful website which sold illegal discs over the internet. Raids in July 2009 uncovered their DVD manufacturing sites in Milton Keynes, with racks of DVD burners capable of producing in excess of 25,000 illegal discs per day. Also seized were over 67,000 discs ready for dispatch. 56,000 blank discs and associated materials were seized from a storage site rented by Ekedi-Tanenang.

16 http://www.bbc.co.uk/news/uk-england-leeds-13175657

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Chapter 2: Tackling IP crime

Introduction This chapter highlights the coordination both strategically and tactically on the ground through operations and investigations to tackle IP crime within the UK and internationally. Some of the initiatives are showcased as best practice along with key training and awareness activities. An update is given on the legal outcomes in tackling IP crime, including the volume of cases being progressed through the courts for criminal IP infringements and an overview on the seizure data received from enforcement agencies and industry bodies. The use of the Proceeds of Crime Act 2002 to tackle the problem of IP crime is detailed.

The key objectives of the IP Crime Strategy are: reinforce the attractiveness of the UK as a place to do business by protecting legitimate marketplaces and providing a strong platform for business growth; make the UK unattractive to criminals seeking to engage in IP Crime, and; protect consumers from harms posed by dangerous and untested fakes and by wider criminality.

One of the Strategys requirements is to report on progress on enforcement in the annual IP Crime Report. The Intellectual Property Office (IPO) has produced an IP Crime Strategy Action Plan and the IP Crime Group has formed a sub group chaired by Deputy Chief Constable Giles York of Sussex Police to monitor and manage progress against it. The enforcement action points are: Enforcement agencies working together to share intelligence and resources with each other and industry to tackle IP crime at local, regional and international levels.

A.

Coordinated response to IP crime

Introduction Previous IP Crime Reports have highlighted the successes associated with coordinating enforcement activities in tackling IP crime. The annual survey of trading standards 2011/12 showed that trading standards services continue to work closely with both other enforcement agencies as well as with industry bodies. This sub chapter looks at the activities within the UK that assist in this coordination. Strategic level activity and policy initiatives Government initiatives UK IP Crime Strategy 2011 - 201517 In August 2011, the government published its IP Crime Strategy setting out objectives over the next five years, building upon the previous strategies from 2004 and 2006.

Progress Update. There is a significant increase in organisations interacting with the IPOs Intelligence Hub via a Memoranda of Understanding that permits lawful and ethical intelligence sharing. The number of intelligence logs submitted and generated has risen by 25%. Likewise membership of tasking groups such as the National Markets Group (NMG) has resulted in coordinated and sustainable action across industry, law enforcement and government linking in the three elements of intelligence, enforcement and prevention (Real Deal campaign). The NMG and IPO are engaged with the South East Regional Government Agency Intelligence Network to produce an Availability Index. There are examples of enforcement activity at local, region (through Government Agency Intelligence Network (GAINs) the Regional Intelligence Officers (RIOs) network and Regional Asset Recovery Teams (RART). IP crime is on the agenda of the Economic Crime Command Operations Group with a proposal of a project developing intervention at each of the stages of IP crime.

17 http://www.ipo.gov.uk/ipcrimestrategy2011.pdf

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A number of high profile operations by the Serious Organised Crime Agency (SOCA), City of London Police, Metropolitan Police and e-crime units have all engaged international partners. The UK played a significant role in Operation Pangea through the Medicines and Healthcare products Regulatory Agency (MHRA) and Operation Opson through the IPO in Europol and Interpol sponsored initiatives. The UK is developing constructive tactical work with Chinese authorities, particularly around the Olympics, but using it as a basis of best practice to extend beyond the event itself. Develop an action plan on tackling counterfeiting and criminal piracy online.

IPO to publish and maintain clear information on the respective roles and activities of agencies and government departments.

Progress Update. A standard item on the bi-monthly IP Crime Group agenda is individual updates from government agencies resulting in a dynamic, clear and transparent perspective of departmental roles and responsibilities. IPO to promote the pooling of information, tools and training on IP crime.

Progress Update. The IPO has linked in with the Department of Culture, Media and Sport (DCMS) Stakeholders Roundtable to support the progress of the Digital Economy Act 2010 whilst identifying other opportunities for intervention using a variety of resources and methods. Payment Service providers police and money laundering regulations. Police e-crime units and domain removal advertisers and voluntary codes of practice. IPO introduced law enforcement into the industry-led IP Online Protection Group through the SOCA IP group and the IP Crime Group so that common standards of investigation, best practice and intelligence sharing can be facilitated. Industry led relationships with the National Fraud Intelligence Bureau (NFIB) are being complemented by IPO and NFIB sharing intelligence. These new structures will provide the necessary vehicles to join up and coordinate across diverse industries and provide the clarity for an online crime enforcement strategy. Facilitate discussion and information on how technology can better be used to prevent counterfeiting and piracy.

Progress Update. The IPO best practice website also provides for a calendar of IP events to improve access and coordination and promote sharing and joint enterprise. Improve dialogue between those who hold IP related intelligence to improve coordination.

Progress Update. The Anti-Counterfeiting Group (ACG) appointment of an Enforcement Coordinator has broadened the range of brands engaging with the IP Intelligence Hub. The IPO is in the process of seconding an Intelligence Officer to the National Fraud Intelligence Bureau (NFIB). British Recorded Music Industry (BPI) and other trade bodies with a particular interest in online piracy have engaged with NFIB and seconded an analyst to work on the material derived from internet investigations. The NMG members are sharing resources across organisations to develop an Availability Index, promote joint operations and engage a wider enforcement community. Push forward operational successes and use threat assessments and alerts to mainstream innovative tactics for tackling IP crime.

Progress Update. IPO coordinated the UK response to Operation Opson and identified a public health threat from counterfeit alcohol that was disseminated across the EU by way of an Europol alert. IPO produces a quarterly IP crime newsletter which can be used to communicate alerts. IP is contained within the SOCA National Threat Assessment, Home Office Strategic Assessment and National Fraud Authority Fraud assessment through IPO and industry strategic assessments.

Progress Update. A best practice section has been created on the IPO website to sign post where best practice has been identified and can be accessed. It is being populated by members of the IP Crime Group.

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Use IP attachs to encourage effective enforcement in other jurisdictions.

Progress Update. The first appointment in Beijing has made substantial progress in generating effective and influential networks in Chinese enforcement resources, de-mystifying and understanding different systems and procedures and resulting in a two-way flow of information aimed at reducing the bulk supply of counterfeit goods. The Olympic Games pose a particular threat and the collateral benefit from the Games having been held in Beijing has helped maintain a very much less than expected flow of Olympic-related counterfeits. Her Majestys Revenue and Customs (HMRC) have developed constructive relationships with foreign colleagues and engaged with the Beijing Attach to maintain and develop them. The Attach presented a UK perspective to a significant law enforcement conference in Hong Kong, which not only supported further dialogue, but identified new routes of smuggling counterfeits through Khazakstan and Russia. Support regional coordination of trading standards work.

Progress Update. There is no central government body to direct consumer awareness issues as the main resources are industry-led. The trade bodies have developed considerable expertise in identifying consumer awareness issues and developing campaigns to raise them. The IPO has focused on IP rights awareness, access to rights protection and products such as the IP Supply Chain Toolkit and Preventing IP Infringement on the Workplace e-guide. Other marketing campaigns are led by the IPO such as Cracking Ideas which uses Wallace and Gromit characters to raise awareness and the importance of respect for IP amongst the public. IP Crime Group and sub groups Since 2004 the IP Crime Group has provided a useful platform for taking forward strategic work on IP crime. It brings together government, industry and enforcement agencies (IPO provides the Secretariat) to identify and disseminate best practice, coordinate enforcement activities and raise awareness of IP crime. The Group is chaired by Deputy Chief Constable Giles York of Sussex Police and Association of Chief Police Officers (ACPO) Lead for IP Crime. The Group has several active sub groups including the Training and Awareness sub group to coordinate activities and development of new products, IP Crime Strategy sub group to deliver the Strategys Action Plan, and Trading Standards Landscape sub group which looks at identifying how trading standards services resources can be utilised in the changing consumer landscape. Multi agency operation tackles counterfeiter at Manchester market: Trading standards tackled counterfeiting in the notorious area of Cheetham Hill, Manchester in a week long disruption exercise prior to Christmas 2011. Officers from ten authoritys across the North West, police and industry joined forces led by Manchester and Cheshire East Trading Standards. Over 2 million of counterfeit goods were seized and cash seizures under PoCA totalling over 5,000 were made. A number of individuals were arrested and two were deported. The investigation is ongoing. Home Office National Crime Agency In June 2011 the Home Office published the National Crime Agency plan18 which set out the vision for the new
18 http://www.homeoffice.gov.uk/publications/crime/nca-creationplan?view=Binary

Progress Update. Whilst the regional trading standards (TS) network is not complete and consistent, the IPO TS secondee has made great efforts to support and coordinate their roles. A RIO seminar was held at the IPO and the flow of intelligence to and from the IPOs Intelligence Hub markedly improved. The network has been used to disseminate intelligence, policy and legal framework issues and the promotion of initiatives to tackle IP crime. Develop common methodology for assessing scale and impact of IP crime.

Progress Update. The project is led by the IPO Economic Research and Evidence department and is a long-term objective engaging industry, government and academia. The UK is closely involved in the OHIM project seeking a European system of IP crime measurement. Improve evaluation of consumer awareness campaigns to help shape effective action.

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National Crime Agency (NCA), which will tackle serious and complex crime and bring organised criminals to account, in partnership with local and international forces. Within the NCA will be an Economic Crime Command, which will ensure a coherent approach to the use of resources focused on economic crime across the full range of agencies deploying them. Based on intelligence, the Economic Crime Command will draw on the NCAs overall authority to task, to ensure a consistent approach to how economic crime cases are prioritised and which agency takes them on. It will work closely with the National Fraud Intelligence Bureau in the City of London Police and with the centralised intelligence functions within the NCA. Attended by key partner organisations tackling economic crime, the Economic Crime Coordination Board (ECCB) is laying the foundations for the Economic Crime Command and is implementing changes to the operational response before the formation of the NCA in 2013. The ECCB is making a difference it has a clear operational focus and it is starting to deliver real impact against economic crime. It is developing a better understanding of the threat and providing improved operational coordination and activity against criminals committing fraud, bribery and corruption. In early 2012, the ECCB oversaw a multi-agency operation targeting money mule accounts - front bank accounts used for money laundering. Led by the City of London Police, it involved nine agencies and saw 13 arrests. Other multi agency operations are currently being developed. The IPO attends one of the ECCBs sub groups, giving it the opportunity to benefit from greater coordination in the economic crime space. Serious Organised Crime Agency (SOCA) The Serious Organised Crime Agency (SOCA) responds to the links IP crime, both digital and physical, has on serious and organised crime. It formed a working group under other statutory agreements and stakeholders, and has developed an action plan to help identify priority areas for intervention. Part of the development of the NCA, SOCA has supported the introduction of IP crime as an area of concern within the Economic Crime Command (ECC).

Where intelligence has identified serious and organised crime involvement, that has been shared between all members and considerable value added, this has led to the proposal for the adoption of a series of intervention strategies at each of the key stages of IP crime: organising and ordering manufacture shipping transportation storage and distribution wholesale re-working retail money flows

In support the IPOs Intelligence Hub coordinated intelligence, enforcement and prevention work is also being done. SOCA is part of an online criminal copyright group based in the UK and through its e-crime unit, took control of the domain used to distribute illegal music files. This involved close cooperation and coordination across law enforcement agencies, industry, government and international partners. Operation Fleetwood: International Federation of the Phonographic Industry (IFPI) investigators were alerted that individuals in Germany had used sophisticated methods to obtain pre released music files before illegally uploading these files on the internet for sale. These individuals were working with others within the UK to facilitate the distribution of the music files. In response the IPOs Intelligence Hub with the assistance of SOCA, liaised with its law enforcement partners in Germany and a Regional Asset Recovery Team in the UK to take coordinated enforcement action and disrupt this criminality. Although no criminal charges were brought against any of these individuals, the music industry reported a significant drop in the attempts by criminals to use these methods which had been causing damage to the industrys reputation and revenue. It is also an illustration of effective cooperation between industry and law enforcement across Europe. Jeremy Bank, Director of Anti-Piracy at IFPI says, Prerelease leaks have always been a damaging problem for record labels and artists, threatening to sabotage months of work. In the last couple of years we have seen such piracy take a new and sinister form. This is being addressed through cooperation between artists, labels, anti-piracy experts and law enforcement.

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The National Fraud Authority and the National Fraud Intelligence Bureau The National Fraud Review in 2006 recognised the need for a joined up approach to reporting, recording and analysing fraud. The National Fraud Authority (NFA) was created to coordinate and oversee the UKs response to counter fraud. The NFA is working closely with a wide range of partners aiming to make fraud more difficult to commit in and against the UK. The City of London Police is the National Lead Force for fraud with the responsibility to set up and lead the centre for excellence for fraud investigations in the UK. A part of this was the creation of the National Fraud Intelligence Bureau (NFIB). In 2011 the Fighting Fraud Together a cross sector strategy was launched to target and reduce fraud. The IPOs Intelligence Hub (Hub) has an objective to reach out to the many different agencies and organisations concerned with IP crime and to share information and intelligence to add value and generate better enforcement outcomes. The quality of intelligence progressing through the Hub is constantly increasing and helping identify opportunities for intervention in terms of enforcement and prevention at local, regional, national and international levels. It is clear that this intelligence cuts across other sources of information, particularly involving where the NFIB lead. To capitalise on this, NFIB and the IPO are engaging in collaboration, cooperation and coordination of their intelligence. Empowering and Protecting Consumers: Government response to the consultation on institutional reform19 On 11 April 2012 the Government published their response to the consultation Empowering and Protecting Consumers proposing a number of approaches to improve the current landscape of bodies that provide consumer advice, representation and enforcement within the UK. Citizens Advice and Citizens Advice Scotland (the Citizens Advice service) will provide information and advice about general consumer matters. Trading standards protect consumers and businesses in their local authority areas, but to prioritise, fund and
19 http://www.bis.gov.uk/assets/biscore/consumer-issues/docs/e/12510-empowering-protecting-consumers-government-response.pdf

coordinate national and cross-boundary enforcement cases a National Trading Standards Board (NTSB) will be established that will bring together representatives of trading standards from England and Wales. Trading Standards Officers from Scotland and Northern Ireland will attend NTSB meetings. They will bring together intelligence and develop expert teams to tackle priorities such as internet scams and illegal money lending and other enforcement issues that go beyond local authority boundaries. To ensure better coordination a Strategic Intelligence, Prevention and Enforcement Partnership (SIPEP) will be created with membership from the NTSB, Trading standards in Scotland and Northern Ireland, the Office of Fair Trading (and subsequently the Competition and Markets Authority), the Regulated Industries Unit and the Citizens Advice service. Again sharing intelligence, identify future issues that could adversely affect consumers and agree priorities for enforcement, information and education will be their key objectives. The proposed consumer landscape is laid out in Appendix A. Her Majestys Revenue and Customs (HMRC) HMRC and Border Force continued to work together to tackle the risks posed by IP crime. Their successes included detaining 31,817 consignments of IP infringing goods in postal traffic and 2,066 consignments in air and sea cargo, courier and vehicle traffic. These were the highest numbers of detentions in air and sea freight for over three years. Collectively, all of the detentions amounted to 4.1 million items with a value (estimated equivalent to legitimate goods) of 70 million. This figure does not include substantial quantities of counterfeit products such as tobacco and alcohol which were seized under Excise legislation on the grounds of revenue evasion. Additionally there has been continued sharing of intelligence between Border Force and the IPOs Intelligence Hub to help use the information derived from border detentions to enable inland enforcement by the police and trading standards in suitable cases. The range of goods detained was wide from clothing and footwear through to electrical goods and other consumer goods. To tackle the threat posed by illicit medicines, HMRC, Border Force, and the Medicines and Healthcare products Regulatory Agency (MHRA) participated in Operation Pangea IV which is an Interpol-coordinated initiative designed to seize unlicensed, counterfeit, or other categories of illicit medicines. During the week

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long operation in September 2011, more than one million doses of illegal medicine worth approximately 2 million, including 52,000 doses of counterfeit pills were seized by MHRA at the UK border. HMRC and the Border Force also worked with the London Organising Committee of the Olympic and Paralympic Games (LOCOG) to protect the Olympic and Paralympic brands. LOCOG and HMRC provided training to frontline Border Force staff to help them identify fake products and to familiarise them with the relevant legislation and procedures. This training helped lead to detections of substantial quantities of infringing goods including clothing, childrens toys and sunglasses in locations as varied as Heathrow, Coventry, Felixstowe and Dover. HMRC has also been actively negotiating at EU level on the European Commissions proposals for replacing the EU IPR Border Enforcement Regulation. HMRC policy officials in London and their customs representative in Brussels have engaged with a wide variety of stakeholders, including trade associations such as the Anti-Counterfeiting Group, to hear their views and to influence decision-makers in EU member states, the European Commission, the European Parliament and the EU Presidency. The negotiations are continuing throughout 2012. Operation PANGEA IV In September 2011 the MHRA took part in Operation PANGEA IV, a week of action to tackle illegal websites worldwide that supply counterfeit, illegal and substandard medicines. The operation involved 81 countries globally with activities being coordinated via Interpol. The aim of the operation was to foster cooperation between the participants and raise public awareness, as well as targeting the three essential components needed by fraudulent websites to conduct their illegal trade. Internet Service Providers (ISPs), Electronic Payment System (ESP), and mail delivery services. The operation focussed attention on suspending websites, disrupting payment services and intercepting illegal medicines in the postal system. In the UK the MHRA assisted the Metropolitan Police e-crime unit with the takedown of 12,842 illegal websites, removed 600 adverts from auction sites, seized 461 packages at the UK postal hub and seized 1,300,000 tablets valued at over 2 million, of these 56,000 were counterfeit medications. 14 warrants were executed leading to the arrest of 13 persons, 94,000 tablets seized valued at 180,000. Worldwide, dozens of

arrests, 2.4 million tablets seized valued at $6.3 million. Following the operation, 1,000 different articles were published in 30 countries containing important public health messages warning the public of the dangers of buying medicines on the internet and the risks posed by counterfeit medicines. Scambusters Scambusters is a Department of Business Innovation and Skills (BIS) funded project aimed at targeting rogue trading and scams across England, Wales and Scotland. The 2005 Consumer Strategy A Fair Deal for All, set out a commitment to pilot regional Trading Standards Scambuster pilots. 1.5 million per year was funded in 2006/7 and 2007/8, for three area Scambuster pilots in the North East, South East, and the West Midlands. Following the success of the pilots approximately 7.5 million additional funding was provided over three years in 11 Scambuster teams throughout the UK. The teams work with local authorities and other enforcement agencies such as the police, Her Majestys Revenue and Customs and the Benefits Agency to target the hardest to tackle scams and rogue traders that set out to defraud and rip people off. Regional Asset Recovery Teams (RART) Regional Asset Recovery Teams (RARTs) are dedicated investigative units made up of police and HMRC Officers. Created in 2003, they support law enforcement by proactively investigating money laundering and conducting recovery of criminal assets on a regional and international level. Traditionally they supported the police forces within their regions, gradually expanding their scope to support other law enforcement, for example trading standards and the Environment Agency. Initially there were five RARTs covering England and Wales in the North East of England, North West, West Midlands, Wales and London. Following the success of the RARTs these were expanded to nine regions in 2010 to include the East Midlands, South East, East, West and South West (known as Zephyr). The RARTs work in close partnership with the GAIN network, and play a key role in the efforts to fight IP crime.

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Operation KOBLENZ In November 2008 officers from the Metropolitan Police Service (MPS) and Virgin Media representatives executed search warrants at the business premises of Rayyonics Ltd and also at the home addresses of several employees. Over a three year period Rayyonics Ltd had commissioned the manufacture, importation and sale of in excess of 400,000 illicit set top boxes that allowed the user to view Virgin Media subscription channels without payment to Virgin Media. Rayyonics Ltd were the biggest supplier of these illicit products within the UK. The total estimated value of sales completed by this company exceeds 24 million. London Regional Asset Recovery Team (RART) were subsequently referred the financial investigation and confiscation responsibility for this case. One employee pleaded guilty prior to trial. Two further employees were found guilty of conspiracy to defraud virgin media after an 8 week trial. On the 14th July 2011, the company director was sentenced to eight years imprisonment, the Web Designer/Software adviser six years imprisonment and the warehouse manager 1 year imprisonment. One defendant is currently appealing against conviction. London RART is completing the confiscation investigation. Confiscation proceedings are still pending and planned for September 2012. Significant assets remain restrained. Government Agency Intelligence Network (GAIN) The Government Agency Intelligence Network (GAIN) is an intelligence sharing group comprising various government agencies with law enforcement and intelligence responsibilities. Members include police, HMRC, Border Force, SOCA, trading standards, MHRA and IPO (all involved in IP crime enforcement) and Environment Agency, VOSA and Insolvency Service to name a few. Other agencies are regularly added to the network. GAIN works in two ways; firstly it provides a secure conduit for partner agencies to request and share each others intelligence around criminality, secondly it provides a tasking framework where agencies can request support from their GAIN partners to progress their investigations, which often have cross overs of criminality. GAIN has become a multi agency resource for tackling regional organised crime. There are currently five functioning GAINs throughout the UK, which are closely affiliated with the nine policing regions

in England and Wales and the RARTs; they are situated in the North East, East Midlands, South East, South West and Eastern regions. Progress is being made to create GAINs in the remaining four regions. Coordinated working: In May 2012 collaboration between Border Force, IPO, South West GAIN, brand representatives and with assistance from French Customs resulted in the recovery of counterfeit luxury goods. The IPO provided intelligence to the South West GAIN that suspects were importing counterfeit goods from China and distributing them across Europe. Acting on this intelligence, officers from the South West RART made arrests and recovered counterfeit goods from premises in London. Investigations continues. Regional Intelligence Officers The Local Better Regulation Office (LBRO) which work on minimising the regulatory burdens placed on businesses to enable a better focus on rogue traders and encouraging the provision of local authority regulatory services has now been absorbed into the Better Regulation Delivery Organisation (BRDO). Formerly LBRO developed the role of the regional Single Points of Contacts (SPOCs) to enable a simple, effective and efficient intelligence flow as possible; using technology to its best advantage and focussing resources so that the best support for operational activity can be provided. Using the regional SPOC network will ensure information on IP and related crime issues to improve links to trading standards services, Scambusters and Illegal Money Lending teams in a timely and accessible manner. National Markets Group Tackling IP crime at markets and car boot venues is at the centre of this group consisting of industry, enforcement and the IPOs Intelligence Hub by taking coordinated action against criminal activity and promoting the Real Deal national code of practice for market operators. Real Deal 20 The Real Deal was launched in June 2009 by the Industry Trust in collaboration with the Alliance Against IP Theft to take a national approach to tackling the problem of counterfeit products at UK markets and car boot fairs, many of which were unregulated and poorly policed. Funded by industry, the Real Deal provides
20 http://www.realdealmarkets.co.uk

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resources and consumer education materials to local authorities, trading standards and market operators and facilitates information sharing and best practice in enforcement of IP rights to keep markets clear of fakes to protect IP rights owners, legitimate traders and shoppers. At the heart of the programme is a national markets charter supported by all the partners in the initiative including the Trading Standards Institute (TSI) , Local Government Regulation, the Local Government Association, IPO, the National Association of British Market Authorities (NAMBA), the National Market Traders Federation, industry bodies representing IP rights owners and individual brand owners. This is the first time that all of these organisations have universally joined forces in a campaign of this type. It is an illustration of the benefit of working on a cross sector, cross industry base to enhance consumer protection and raise awareness of IP infringement. By April 2012, a total of 196 markets and car boot fairs, across 48 local councils, had adopted the Real Deal campaign. The aim is for 500 markets, including privately run markets and car boot fairs to be on board by the end of 2013. The Real Deal campaign has produced a Guide to IP Protection at Markets and Car Boot Fairs for Enforcement Professionals, available from TSI and the Real Deal. This resource brings together in one place a collection of articles, ideas and best practice in this area. A series of training courses for market operators and Enforcement Officers is being delivered during 2012 in conjunction with NABMA and TSI. During 2012, the Real Deal is also supporting the Markets Alliance Love Your Local Markets21 campaign and National Market Day, which focus on promoting well run markets as being at the heart of local communities and encourages new market traders. The launch of the Real Deal in Northern Ireland is planned to take place during 2012.

Project Gulf On 25th November 2011 Greater Manchester Police and its partners, worked collaboratively against counterfeit trade in the run up to Christmas, targeting suspects at Salford, Greymare Lane and Conran Street Markets. This coordinated approach resulted in six arrests and as a consequence Salford Market, which has been blighted by the sale of counterfeit goods, was closed from 31 January 2012. The operation was prompted and supported by the National Markets Group and demonstrates the success of coordinated working, sharing resources, and developing new initiatives to gather sufficient evidence to engage with the police. Due to the evidence the police were able to identify the links between consumer harm, community safety and serious and organised crimes and invest substantial resources along with trading standards to target the operators of these markets. Intellectual Property Office The IPO has a national coordinating role in the area of IP crime. It works to bring together government, industry and enforcement agencies like customs authorities, police and Trading Standards Services all of whom have an important role to play. As well as working to raise awareness, spread best practice and share information. The IPO also provides practical support for enforcement agencies through its Intelligence Hub. Intelligence Hub The IPOs Intelligence Hub is an intelligence resource and manages the Intellectual Property Intelligence Database (IPID). The team includes specialists in financial and internet investigations, Intelligence Officers and a dedicated Crime Analyst. The Hub actively assists trading standards, police and industry in the collection, assessment and dissemination of intelligence material. They also provide advice on IP crime related investigations and regularly offer practical assistance following raids. This year alone the Hub has processed some 3010 data searches against the database, thereby creating a valuable resource for the enforcement community and enabling a coordinated response to tackle IP crime. The Hub is now engaged with law enforcement tasking groups at local, regional, national and international levels with action being taken on IP crime cases throughout the UK. There has been an increase of some 20% over the past year in intelligence reports

21 http://www.loveyourlocalmarket.org.uk/

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being handled by the IPO Intelligence Hub. This means that there is more efficient networking across sectors with the outcome of more opportunities for targeted law enforcement intervention. The North of England Tackling Illicit Tobacco for Better Health programme With some of the highest smoking rates in the UK, health partners brought together other agencies to create the North of England (Tackling Illicit Tobacco for Better Health) Programme. This has since been highlighted as A world-first initiativewhich has led to similar programmes starting elsewhere.22 Partners in all three regions, the North West, North East and Yorkshire and Humber have been working together alongside stakeholders including HMRC, regional trading standards groups and the police, to address the challenges of illicit tobacco through eight key areas of activity, including enhanced enforcement action, marketing campaigns and direct engagement with communities where illicit tobacco is widely available. The Programme has led to increased enforcement work in the North of England. In the North West, the Trading Standards North West Illicit Tobacco Team has played a key role in providing enforcement and investigative support including a surveillance capability to local authority trading standards departments. The team have also assisted in developing and managing intelligence from communities via Crimestoppers, and from other agencies. In Cumbria, two Days of Action have taken place in 2012 targeting both residential and retail addresses where intelligence had suggested that illicit tobacco was being sold to the public, including to children. The operations was led by Cumbria Trading Standards but supported by the Illicit Tobacco Team, HMRC and the police. A total of 18,000 cigarettes and 21 kg of handrolling tobacco was seized. This high profile activity resulted in further intelligence from communities. Since the Programmes launch in 2009, there has been a shift in the illegal tobacco market as well as in public opinion towards the trade:23

The proportion of smokers admitting to buying illegal tobacco has reduced from 20 per cent to 17 per cent; The average proportion of tobacco consumed which is illicit is down from 35 per cent to 32 per cent; The estimated market share of illicit tobacco has reduced significantly.

Willingness to report trading has increased and there are signs that the trade has become less of a social norm. CeNTSA Food Group Alcohol fraud, including counterfeit and non duty paid wines and spirits is fast becoming a national issue and is estimated to cost the UK 1 billion a year in lost revenue. It also poses a serious risk to health. During September 2011 to December 2011, Central England Trading Standards Authority (CEnTSA) Food Group carried out a project to identify and remove counterfeit, bootleg and non-duty paid alcohol from the market place. Working with various partners such as police, HMRC and trade bodies they visited 879 premises and identified 25% of sales of alcohol was illegal totalling approximately 150,000. These products were seized by trading standards, Environment Health and HMRC. The figure is not a surprise as results from other parts of the country revealed a similar problem nationwide. Some of the alcohol seized in the CenTSA region was found to be contaminated with high levels of methanol or Chloroform, the presence of which rendered the drink unfit for human consumption. The consumption of methanol can cause blindness or in extreme cases death and the consumption of Chloroform (a banned carcinogenic chemical) can cause liver and kidney damage. The following table details the number of premises visited, percentage non compliance, and value of alcohol seized.

22 (UK Centre for Tobacco Control Studies; Final Evaluation Report 2012). 23 http://www.illicittobacconorth.org/FileUploads/Tackling_illicit_tobacco_in_your_communities-for_web.pdf

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Authority

Number of premises visited 21 49 49 74 62 33 432 34 54 25 23 14 9

% of non compliant premises 62 59 37 32 25 25 20 20 15 15 15 15 0

Value of Alcohol Seized 33, 500 2,000 25,000 40,000 5,000 1,900 30,000 2,600 1,000 500 810 100 0

NIKE - Operation Cedar Lincolnshire Trading Standards - Over a period of months, a vast quantity of counterfeit goods were stopped at Coventry International Postal Hub destined for fictitious addresses in close proximity of Eastgate market in Lincolnshire. Following extensive surveillance and a joint investigation between Nike, Lincolnshire Trading Standards, local police, RART and HMRC, market stalls and traders selling the infringing goods were identified. Several arrests were made together with raids at five market stalls and 18 associated storage containers where approximately 13,000 counterfeit items, worth an estimated value of over 1 million were seized. Sheffield Operation, For a period of almost two years, large parcels were stopped at Coventry International Postal Hub, that were imported by a Chinese network, heading to various storage addresses in the Sheffield area. A joint investigation between Nike, Border Force, Sheffield Trading Standards and South Yorkshire Police Economic Crime Team led to raids in December 2011 at storage locations and dwelling houses resulting in the arrest of two suspects and the recovery of over 400,000 worth of counterfeit goods. Chloe Long, Nikes Brand Protection Manager, says: Nike aggressively protects its brand and taking a multi-agency approach like this is very effective in uncovering sophisticated criminal networks involved in the importation and distribution of counterfeit goods throughout the UK. We very much appreciate the work of all involved in this case Electronics UKEA Electronic technology plays an important part in so many areas of our daily lives from the obvious mobile phones and laptops to the less obvious such our cars, public transport systems and medical equipment. However, counterfeiting represents a threat to this technology as, while we may be sure that the mobile phone or laptop we own is genuine, the components inside may not be. Over the last year, a number of internationally recognised standards bodies including International Electrotechnical Commission (IEC), International Organisation for Standardisation (ISO) and Society of Aeronautical Engineers (SAE) have been working to develop international standards to provide common measurable performance standards to aid detection

Wolverhampton Coventry Birmingham Sandwell Stoke Walsall Staffordshire Warwickshire Worcestershire Solihull Dudley Herefordshire Shropshire

One of the most important parts of the project was the sharing of information between the partners. This helped produce a Counterfeit Alcoholic Products Guide by Coventry Trading Standards. This along with the training and equipment provided by The International Federation of Spirits Producers UK (IFSPUK) was essential in assisting enforcement officers on their visits to identify illegal spirits. The International Federation of Spirit Producers (IFSP) The International Federation of Spirit Producers (IFSP) continues to support UK law enforcement agencies in the fight against spirits counterfeiters. IFSP supported a number of successful operations throughout the UK, resulting in the seizure of counterfeit spirits from retail premises throughout the country by supplying training, equipment and physical presence to bolster the knowledge base on the ground, as well as acting as the single point of contact when dealing with any follow up enquiries with the IP rights owners. This has served to instil confidence in the operational officers and encourage enforcement action against the illicit spirit trade.

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of counterfeit components in the supply chain. Many companies in the UK are already adopting these standards. Demand for information and guidance on managing the threat, from the UK electronics community, continues to grow. The website set up by the UK Electronics Alliance just two years ago, to raise awareness of the problem, www.anticounterfeitingforum.com has received over 20,000 visits in the last six months. Illegal recording in cinemas (camcording) Combating individuals and groups that obtain illegal copies of movies is a key focus for the Federation Against Copyright Theft (FACT). This acquisition is the vital source for criminals; from those offering downloadable film content online to those offering hard copies on websites or at markets and other public locations. FACT has continually targeted those that seek to acquire copyright infringing content at cinemas using a multifaceted approach to successfully arrest or deter individuals who illegally record in cinemas (commonly referred to as cammers). FACT also has a dedicated Cinema Investigator and the strategy crucially has a preventative aspect which continually educates the cinema industry through training programmes and incentives. This activity is supported by the Film Distributors Association Ltd (FDA), the trade body for film distributors in the UK. The police response to illegal recording incidents has improved in recent years, following FACTs training and education programme. In 2011 police attended the scene in 88% of instances and 71% of these suspects were either issued with a formal warning or caution. This is a sign that police recognise this as a criminal offence and, coupled with cinema staff who are confident in their ability to deal with the situation, has led to excellent results. Encouragingly, 83% of suspects were ejected from the cinema once a suspected offence was identified and in over three quarters of cases, the device used to record was examined. Another indicator to consider is the number of suspected illegal recording incidents identified and the subsequent actions taken by cinema staff and police. 42 such incidents were recorded in 2011 which clearly shows FACT is successfully targeting source piracy.

Furthermore, intelligence suggests that criminals are being forced to acquire film content illegally recorded overseas and dubbed in English audio due to the stringent security measures in place in the UK. Since the beginning of 2010, these collective steps have led to five criminal convictions of those recording films in cinema theatres, including: Emmanuel Nimley, aka Dragon convicted at Harrow Crown Court in September 2010 of ten related charges under the Fraud Act 2006 and sentenced to six months imprisonment; Christopher Clarke, convicted at the Sheriffs Court in Glasgow in June 2011 of multiple offences under the Copyright, Designs and Patents Act 1988 and sentenced to 160 hours of community service; and, Matthew Lisett, aka Silentninja, convicted at Salisbury Combined Court in November 2011 of eight offences under the Copyright Designs and Patents Act 1988 and given a two year conditional discharge.

Illicit recording in London cinema: In February 2011 at Wood Green, London, a Cinema Manager instructed a member of staff to cover his uniform and sit close to the suspect to confirm there was an illegal recording taking place. Once confirmed, police were called and upon arrival directed to the relevant screening. The offender was escorted out of the auditorium and footage found on his iPhone. The police were unsure of what action to take next but were handed FACTs Advice for Police booklet. The offender was subsequently arrested and taken to the police station whereby he was given a caution under section 6a of the Fraud Act 2006, demonstrating effective intervention.

B.

Innovation and new initiatives

Introduction This section details the initiatives which are being delivered to target IP crime. Updates are given on some of the activities described in the last Report, specifically the key threats within the online environment and on the forthcoming London 2012 Olympic Games.

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Anti-Counterfeiting Group (ACG) initiatives Faced with numerous calls for evidence from both the government and enforcement agencies regarding the true scale and impact of product counterfeiting and its links to organised crime, ACG members are regularly challenged to provide timely and accurate intelligence products in a coherent and coordinated manner. ACG is committed to helping its members achieve the best enforcement response and have commissioned a six month pilot to identify and evaluate the benefits of creating a specialist Enforcement Co-ordinator role, both to support ACGs initiatives and to assist its members in their efforts to improve standards of reporting and enforcement actions. The Enforcement Co-ordinator, acting as a single point of contact, will seek to better utilise information and intelligence held by the brands in order to provide more assistance to law enforcement and government agencies in tackling counterfeiting and other linked criminality, and to support ACGs own lobbying and awareness remits. This pilot has already seen success with several high level cases being identified and developed in partnership with the IPOs Intelligence Hub, trading standards departments, City of London Police and others. Some of the results of this pilot are shown in Chapter 2 section E. Sentencing, seizures and the Proceeds of Crime Act. Online Environment Over recent years a lot of work has begun to tackle the growing challenge of online IP infringement more effectively. Digital Economy Act (DEA) The Department for Culture Media and Sport (DCMS) has the lead responsibility for the internet and is responsible for the implementation of the Digital Economy Act 2010. This act has introduced new legislation, further regulating digital media, in order to make the internet an easier place for people to enforce their IP rights. DCMS also chairs a stakeholder group not only with representatives from IP right owners, service providers but also others with different views of protecting IP rights.

Halting the flow of money As progress is made on the implementation of the Digital Economy Act, existing legislation and best practice is being used to sites where there is clear criminal intent. The City of London Police has worked closely with IP right owners and where there is evidence of money laundering engaged with Payment Service Providers (ISPs) to ensure obligations under money laundering regulations are met. Legitimate brands do not wish their advertisements to appear on illegal sites and the internet advertising industry is developing a code of practice that assists to prevent them from doing so. The experience of UK IP rights owners in pro-actively identifying infringing online activity has led to a partnership with the National Fraud Intelligence Bureau (NFIB). IP right owners and government are working together to establish the process and more recently IP right owners have engaged with the NFIB to develop a gate keeping role so that those set up to criminally infringe IP rights are identified and the appropriate action taken. The Metropolitan Police e-crime unit actively identifies sites illegally offering counterfeit goods and take action with the domain registrars to prevent continuing offences. Priority is given to consumer safety issues, particularly medicines. Site Blocking in the UK Two significant court judgements have been made using the Copyright Designs and Patents Act 1988 Newzbin 2 and Pirate Bay, where ISPs have been required to bring in measures to block access to the offending sites. In October 2011Justice Arnold,at the High Court in London, ordered BT to block its customers access to the website Newzbin2, using Cleanfeed (BTs site blocking technology, originally set up to block websites featuring child pornography). This action was brought using section 97A of the Copyright, Designs and Patents Act 1988 (CDPA) and was the first time that this part of the CDPA had been used. Subsequent to BTs order, further orders have been given against other ISPs, who have then agreed to block Newzbin2 using their own software. A second order was given for the six main ISPs (who provide internet to 94% of UK users) to block the pirate Bay website.

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Further to this in another case an ISP has been required to disclose details of subscribers in pursuit of alleged IP infringement. The Intellectual Property Online Protection Group (IPOP) The Intellectual Property Online Protection group (IPOP) with members from many of the leading audio visual industry and IP anti piracy and trade groups continues to share ideas and best practice with the community and has been joined in 2012 by members of SOCA e-Crime unit and City of London police. 2012 and 2013 will see the group work more closely with law enforcement at the national level in support of combating IP crime than ever before and this will include considering IP crime beyond UK borders reflecting the growth and transnational emergence of IP crime. The Internet Auction Working Group (IAWG) The Internet Auction Working Group is made up of Trading Standards Officers. Its purpose is to implement and disseminate best practice, thus ensure consistency of advice to and regulation of online marketplaces and their users. The Group has devised an Enforcers Guide for use by Trading Standards Officers and brand holders to enable both parties to easily share relevant case law and information improving the capability of all to advise and/or take action against eMarketplaces, with regards to illegality on their sites. The Group has a number of priorities that they feel will address these issues, including, sharing data on banned criminal users between eMarketplaces; implementing a national blacklist of banned products and eMarketplaces code of practice. 7 million worth of fake goods confiscated from a self storage unit: Trading standards 24sent a warning to counterfeiters prior to this summers festivities in East London, by securing a major conviction at the Old Bailey. Lei Pan, of Fonda Court, who had 7 million worth of fake goods confiscated from a self storage unit in Bow, was sentenced to 33 months in prison. This outcome was the result of an extensive investigation, to which the Border Force and the IPO made valuable contributions. Mayor Of Tower Hamlets, Lutfur Raham vowed that counterfeiting will not be tolerated... especially as we head toward the Olympic games.

Trading Standards National E-Crime Project. The Yorkshire and The Humber Trading Standards Group (YAHTSG) and the East of England Trading Standards Association (EETSA) have been commissioned by the National Trading Standards Board, with funding from BIS, to deliver the Trading Standards National E-crime Project. The project will establish a National E-crime unit and a central intelligence hub from April 2012 for three years, to tackle the increasing threat to UK consumers and businesses. The E-crime Unit will be tasked to undertake and assist regional/national trading standards groups in England and Wales in investigations involving consumer online scams, frauds and other consumer protection problems such as: web sites which contain false, misleading or deceptive information likely to lead to considerable consumer detriment; issues around mobile commerce via smart phones etc; mass marketing scam emails sent to UK consumers and businesses; illegal use of consumers private information provided in the online environment for unfair trading practices; and; online fraud specifically targeted at consumers and businesses.

Police E-Crime Hubs In November 2011 it was announced that three new police hubs to tackle web crime were to be established, based in Yorkshire and the Humber, the North West and East Midlands. Funded from a budget of 30 million over four years and granted by the Government to improve national capability to investigate and combat web crime. The hubs will focus on online crime, with the exception of online child abuse which is already covered by units that specialise in the area. The hubs will work alongside the Metropolitan Police E-crime Unit as part of the National E-Crime Programme to provide extra capabilities for the Metropolitan Police E-crime Units operations.

24 http://www.tradingstandards.gov.uk/extra/news-item.cfm/newsid/888

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Federation Against Copyright Theft (FACT) Websites that host or provide access to copyright infringing material are a key target for the Federation of Copyright Theft (FACT). Where there is a UK nexus (UK based owner/administrator, hosting or other link) FACT may be able to directly progress the case for law enforcement. In other cases it may be necessary to liaise with international colleagues. FACT notes the success of ICE in the US who have taken a strategic approach to tackling online criminality by taking the sites offline through removal of their .com domains. Operation In Our Sites has targeted websites offering not only pirated movies like NinjaVideo.net but also music, software, clothes, electronics, games and counterfeit pharmaceuticals and has been highly successful with 758 domains seized. Website owners can be motivated by financial gains that infringing website can generate. In many cases, the placement of advertisements on such sites provides the operator with the sole revenue to allow the website to function with a profit. An estimate of a streaming website operating in 2009 indicated that the website was producing profits of at least 30,000 per month through the revenue generated from the placement of advertisements. As such, the advertising sector is viewed by FACT as an enabler for criminals wishing to operate infringing websites. Commencing in January 2011, the first stage of FACTs advertising strategy was to identify the leading UK companies and/or brands whose advertisements were shown on copyright infringing websites identified during the course of FACT investigations. These brand owners were then contacted and screen grabs of their advertisement along with the copyright infringing website it was placed on were sent to them. From January to September 2011, FACT identified and contacted 83 brand owners. Of the 51 identified in round one and two, 25 of these were re evidenced featuring on other infringing websites. Response from brand holders was largely positive. Their respective marketing departments had the advertisements removed from the infringing websites. The majority of these companies had no idea their advertising was appearing on these websites and, interested to collaborate, also appreciated FACTs intervention. The only negative aspect was the general delay in some companies responses. This was partly due to difficulties in locating the correct individual to

contact but there also seemed reluctance on the part of some brand owners to engage with FACT. FACT has also engaged with IAB, the trade body representing the advertising networks and exchanges to develop procedures that will prevent advertisements from legitimate companies and household brand names appearing on infringing websites. In October 2011 FACT supported the Motion Picture Associations application to the high court for the Newzbin2 website to be blocked . The Publishers Association (PA) The PA administers a variety of anti-piracy activities on behalf of its members, the most recent development being the Copyright Infringement Portal (CIP)25, an online tool that enables rights holders to search online for infringing content and to issue takedown notices. Since its launch in 2009 use of the CIP has grown significantly and the service now issues several hundred takedown notices per day. To date over 200,000 takedown notices have been issued to over 5,200 infringing domains with a removal success rate of circa 90%. Developments for the CIP in 2011 included an expanded search facility and the addition of the Google Trusted Removal programme for removing Google search links. In 2011 the top countries for hosting infringing sites were the USA, the Netherlands, Hong Kong, Germany and Sweden. UK publishing sells across the world and The Publishers Association also actively pursues instances of piracy in international markets, and run anti-piracy campaigns in India, China, Nigeria, Bangladesh, Turkey and Pakistan. The PA works closely with international publishing and bookselling associations, copyright licensing societies and local industry to ensure that professional pirates and those who choose to systematically ignore the IP rights are actively discouraged from continuing their activities. In India during 2011 there were 10 major raids seizing 40,000 books and 600,000 semi-finished prints. The PAs anti-piracy activities in Turkey resulted in 75,780 books being confiscated over the summer. Another 50 bookstores were then closely monitored and a further 196,143 pirated books (including 14,230 Turkish books) seized.

25 http://copyrightinfringementportal.com/

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In China the PA has been working with partners to promote copyright awareness and in March 2011 hosted a copyright education seminar in Beijing for academic librarians. This was followed by a similar event in Yunan organised by a local Copyright Coalition, supported by the PA. 2011 also saw the announcement at the 2011 Beijing Book Fair of a Memorandum of Understanding (MOU) between publishers and Taobao, one of Chinas biggest e-retailing sites well known for facilitating the sale of pirated goods. The MOU ensures the regular screening of products and joint investment in mechanisms for preventing the sale of illegal commodities, as well as other IP protection activities. Richmond Trading Standards Richmond Trading Standards Authority has undertaken a project to gain a better understanding of how counterfeit goods are stored, distributed and sold around the various outlets such as car boot sales, online traders and markets. The project utilises both a proactive and a reactive approach to enhance enforcement and information gathering. Test purchases and inspections were carried out and complaints were monitored to gather the necessary information required. Complaints still continue to provide major leads for enquiries. A car boot sale in Twin Oaks caused the most concern with several different traders selling counterfeit DVDs, clothing, cosmetics and cigarettes. This led to the arrest and the sentencing of several traders, ranging from a 12 week curfew to three month suspended sentence and confiscation orders amounting to over 40,000. IP crime is still an issue within Derbyshire and for Derbyshire consumers and businesses. Trends have changed slightly with Facebook and Kindle books appearing as concerns, GHDs products and Ugg boots ceasing to be an issue and DVDs, related formats and tobacco still causing problems.

Counterfeit seizures in 2011/12 Items DVDs MP3 discs CD XXX Pornography Jewellery Kindle books Clothing Software Games PCs Cigarettes HRT Perfume Vehicles Total retail value Quantity 10,742 1,555 963 1,051 121 5,669 3,531 664 157 7 2,340 7 20 2 615,508 819 105 600 Retail price 107,420 419,850 7,704 21,020 4,235 17,007 12,118 19,920 4,710

The British Recorded Music Industrys (BPI) The British Recorded Music Industrys (BPI) Anti-Piracy Unit identified and removed 4,298,729 illegally hosted digital music files (although already this figure has been passed this year and it is likely to be in excess of 12 million for 2012) In addition 61,232 illegally hosted digital files were identified and removed. BPI are seeking partnerships with advertisers, payment processors, hosting companies and ISPs with the aim to tackle all the enablers that support the infrastructure of sites hosting or facilitating access to unlicenced content. BPI are also continuing to engage in partnership with The Internet Advertising Bureau and National Fraud Intelligence Bureau to discourage brand holders and advertising networks from advertising on infringing sites. They are building up relationships with hosting companies and have recently had success in providing information to a small hosting company which lead to them discontinuing as host to a cyberlocker that was causing significant harm to both the music and film industry.

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BPI pursued a successful Section 97A (CDPA) blocking action against The Pirate Bay, obtaining orders which require six major ISPs to block access. BPI also is seeing a huge upturn in the popularity of stream ripping sites and devices for hand held devices. This introduction of the 4g network will offer increased mobile network speeds. May 2011 - Anne Muir pleaded guilty at Ayr Sheriff Court on Filesharing charges. This was the first Filesharing conviction in Scotland. She was sentenced to three years probation and had to attend for psychiatric and psychological treatments throughout this period. November 2011 - Thomas Norman pleaded guilty at Kilmarnock Sheriff Court to manufacturing, offering or exposing for sale and distributing music and book files both physical and digital. This was due to go to the High Court in Scotland but he changed his plea to guilty. He is also paying the BPI 35,000 in compensation. November 2011 - Alexander Barkley pleaded guilty at Hamilton Sheriff Court to manufacturing and distributing music, both physical discs and digital music files through the internet. He received a 27 month prison sentence. Industry Trust/BPI Activity The Trusts partnership with Childnet and BPI continued with a range of initiatives which promote safe and responsible access to entertainment content online. Assets include A guide for parents and teachers for music, film TV and the Internet and Internet Safety IQ test created for Safer Internet Day. Medicines and Healthcare products Regulatory Agency (MHRA) Fake pharmaceuticals may contain dangerous or damaging ingredients or may simply be ineffective, due to missing ingredients or may contain the wrong quantities of ingredients. Increasing international trade of pharmaceuticals and sales via the internet has further facilitated the entry of counterfeit or substandard healthcare products into the supply chain. In April 2012 the MHRA launched a new strategy, the Falsified Medical Products Strategy 2012 - 201526. The strategy details the measures that the MHRA will take to tackle counterfeit medicines and medical devices. It brings together its stakeholders and international
26 http://www.mhra.gov.uk/home/groups/ei/documents/websiteresources/con149816.pdf

partners to combine efforts in raising public awareness and carrying out enforcement policy. The overall aim of the new strategy is to reduce the risks to patients and consumers in the UK from the threats posed by counterfeit medical products whilst increasing the pressure on those behind this illegal activity. It falls into three main areas centred around prevention, incident management and investigation. Nimo Ahmed, MHRA acting Head of Enforcement said at the launch of the strategy: The UK market for medicines is immense and is estimated to be worth around 8 billion. Combating the real and present threat posed by counterfeit medical products continues to remain a priority for the MHRA. MHRA are committed to working closely with international partners and providing leadership in dealing with this issue to protect public health and maintaining public confidence in the way we obtain our medical products. The Olympics London 2012 As well as organising and hosting the Games, the London Organising Committee of the Olympic and Paralympic Games (LOCOG) is responsible for protecting and maintaining the value and integrity of the London 2012, Olympic and Paralympic brands in the UK and for ensuring unauthorised third parties are unable to derive a commercial benefit by using Games related IP or associating with the Games. Much of LOCOGs privately raised operating budget is generated through its official merchandise and sponsor programmes consequently, LOCOG must protect licensees exclusive rights to produce official merchandise. Since 2006, a range of actions have been taken to prevent the sale/ distribution of goods which seek to replicate official London 2012, Team GB/ParalympicsGB merchandise and other goods which use Games-related IP, without LOCOGs permission. Prior to 2012, LOCOGs key focuses were to spread its brand protection message, educate enforcement bodies/ general public of its special legal rights and maximise its legal protection. In addition to asserting its civil rights including under The Olympic Symbol etc (Protection) Act 1995 and The London Olympic Games and Paralympic Games Act 2006 LOCOG has, since 2005, worked with enforcement organisations including trading standards, HMRC, Border Force and the Metropolitan Police in relation to combating counterfeit products. In 2007 LOCOG set up the London 2012 IP Crime Group, which includes representatives from UK

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enforcement organisations. The objective is to facilitate and encourage the sharing of information and best practice to combat Games related counterfeit goods in the UK. To help the public and enforcement personnel identify official merchandise, since 2007, official merchandise has featured the London 2012 hologram, supported by an online track and trace system which LOCOG has granted all UK enforcement personnel access to. In summer 2010, LOCOG rolled out its bespoke Education and Awareness Programmes, tailored specifically for trading standards, UK Customs and the Metropolitan Police. As the Games draw closer, LOCOG has switched its focus from education and planning, to ensuring that its venues are clean of commercial branding and combating ambush marketing, ticket touting and counterfeit product. Although volumes of Games-related counterfeit product remain relatively low, LOCOG has noticed an increase in activity since January 2012 and experienced its first hit at UK borders this April. Enforcement personnel have also noted this increase and continue to show their support by tackling such product: LOCOG has worked with LOTSA and various authorities outside London where there are Games venues to establish its London 2012 Intellectual Property Champions, trading standards officers (in their respective local authority) who have been fully trained by LOCOG on Games-related brand protection matters. LOCOG is already in regular contact with IP Champions and other trading standards officers to provide witness statements to assist in addressing counterfeit product, ranging from cigarette lighters to dog coats! LOCOG along with HMRC and Border Force and with their support, rolled out Customs specific training to all major ports/airports in 2010/2011. LOCOG shares the surprise of the ports that counterfeit product was not detected until April this year. It has, since then, been made aware of nine detections at major ports LOCOG is delighted that this counterfeit product was prevented from entering the UK market, which would not have been possible without the excellent level of support and cooperation of UK Customs.

LOCOG continues to work with Operation Podium (which deals with Games-related e-crime) to combat Games is related ticketing crime. With Podiums support, LOCOG has continually engaged with the public to stress the importance of purchasing Games tickets through authorised channels and has successfully dealt with fake ticket websites.

With the Torch Relay currently touring and the hugely positive response it has received, the UKs excitement in the Games is starting to manifest. The fear is that counterfeiters will exploit this excitement, resulting in a higher level of counterfeit product. LOCOG values the relationships developed with enforcement personnel across the UK and will continue to work with UK enforcement to deliver an inspirational and memorable Games, untarnished by counterfeit goods. Consumer Law Enforcement Powers Consultation On 28 March 2012, the Department for Business, Innovation and Skill published the consultation on Modernising and Consolidating Consumer Law Powers. The proposals seek to simplify Enforcement Officers investigatory powers into a single set, and will help trading standards operate more efficiently. The proposals also aim to reduce burdens on business, by requiring businesses to be given reasonable notice of officers routine visits unless there are good reasons for them to be unannounced. This forms part of a package of measures to simplify consumer law and is a key response to the retail theme of the Governments Red Tape Challenge. The proposals include: consolidating and simplifying consumer law investigatory powers; making it easier for Trading Standards Services to tackle rogue traders operating across local authority boundaries; enabling officers to present cases in County Courts to encourage more use of civil enforcement; allowing local authorities more flexibility in training their trading standards staff.

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The consultation closed on 20 June 2012 and the Governments response is expected in the Autumn. It is anticipated that any legislative changes will be made in the proposed Consumer Bill of Rights which is expected to enter Parliament in May 2013.27 Patents County Court reforms The recent Jackson Review of Civil Litigation Costs recommended sweeping reforms to the Patents County Court (PCC) as the means of improving access to justice at proportionate cost in relation to IP disputes. These reforms are being taken forward by the IPO, the Ministry of Justice and the Judiciary and will make it easier for small firms to enforce their IP. Amendments to the Civil Procedure Rules in October 2010 introduced more streamlined procedures and a fixed scale of recoverable costs capped at a maximum 50,000 in the PCC. The work to limit the value of claims to be heard in the PCC to 500,000 was completed on 1 October 2011. This limit will help SMEs avoid potentially costly disputes about whether a case should be heard there or in the High Court. The Government is now introducing a small claims track, for cases with damages of 5,000 or less, to the PCC as a further means of improving access to justice. The introduction of the small claims track was approved by the Civil Procedure Rules Committee on 18 May 2012, the track will be introduced in October 2012. The Hargreaves Review identified a number of barriers facing SMEs trying to make the most of their IP. One of these was the cost of managing IP, in particular resolving disputes surrounding the enforcement of their own IP rights and defending themselves against allegations of infringement made by others. The IPOs Alternative Dispute Resolution (ADR) mechanisms can offer a range of options which are more appropriate to the needs of all parties and represent lower and more predictable costs for smaller businesses. A formal consultation was launched on 12 June 2012 on expanding our Patent Opinions Service and a call for evidence on the IPO Mediation Service.

C.

Spotlight on Europe and international

Introduction An overview is given of only some of the activities that have taken place over the reporting period beyond the borders of the UK. UKs International Strategy on Intellectual Property The UKs new International Strategy for Intellectual Property 2011 - launched alongside the Governments response to the Hargreaves Review sets out the UKs five year vision to get the international IP framework in the best shape to support innovation and growth and encourages effective approaches to enforcement. European activity On 24 May 2011 the European Commission adopted a Strategy on a Single Market for Intellectual Property Rights28. This set out the Commissions thoughts on IP rights and included proposals to: review the IPR Enforcement Directive; replace the regulation on customs enforcement on IP rights; expand the tasks of the Observatory on Counterfeiting and Piracy and for it to be transferred into the Office of Harmonisation in the Internal Market.

The European Commission also commissioned RAND to assess the scope, scale and impact of counterfeiting and piracy in the internal market. The work is being piloted during 2012. Enforcement Directive The aim of the Directive is to support the functioning of the internal market by harmonising and setting out a minimum legal framework for enforcement of IP rights. It is important that individuals and businesses are able to seek timely and affordable resolution to the IP disputes through the civil justice system and the EU Enforcement Directive provides a valuable function in ensuring that there is a minimum civil legal framework across the EU.

27 http://www.bis.gov.uk/policies/consumer-issues/consumer-rights/ consumer-law-enforcement-powers

28 http://ec.europa.eu/internal_market/copyright/docs/ipr_strategy/ COM_2011_287_en.pdf

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The Enforcement Directive is part of a wider suite of actions to enforce IP rights. The Government supports the industrys and EUs work on communication and education on IP rights. There is an also a need for alternative business models, particularly to deal with the challenge of new technology. European Observatory on Infringements of Intellectual Property Rights The Observatory brings together industry, Members States and European institutions to consider infringements of IP rights. The Regulation to move the Observatory from the European Commission to the Office of Harmonisation for the Internal Market (OHIM) was approved on 22 March 2012. This move will ensure that the Observatory is properly resourced and will complement existing UK based activity on enforcement by governments, industry and enforcement. It will help to improve the evidence picture, support the exchange of information and promote best practice. The Observatory will help to protect the innovation of businesses and the health and safety of consumers. Office of Harmonisation in the Internal Market: Cooperation Fund There are two ongoing projects funded by the Cooperation Fund that have relevance to IP crime. The first one is a Counterfeiting Intelligence Support Tool, the aim of which is to support the application of methodology identified in the RAND study and it should assist strategic enforcement decision-makers in measuring, determining and targeting enforcement. The second one is a database on the enforcement of IP rights, the aim of which is to set up an electronic tool to facilitate the exchange of data between Commission services, OHIM, National offices, IP Enforcement Officers and IP right holders.This will improve IP coordination, support enforcement authorities fight against counterfeiting, enable users to contribute to the defence of their rights and enhance IP protection.

Customs The European Commission publishes on an annual basis a report on Customs Enforcement of Intellectual Property Rights29. On 24 May 2011 the European Commission published a proposal30 for Regulation on Customs Enforcement of Intellectual Property Rights, which if passed will replace the existing Regulation 1383/03. This Regulation provides the legal framework for owners of IP rights to apply to customs administrations for action to help them protect their rights when consignments of goods cross the European Unions external border. The proposal is part of the Commissions strategy on Intellectual Property Rights and seeks, amongst other things to introduce a specific procedure to deal with small goods. The Court of Justice of the European Union also ruled on two cases (Nokia and Phillips) concerning goods in transit from non EU countries to the European Union31 Review of best practice project on SMEs enforcement of IPRs In February 2012 the European Commission started a project to consider progress that had been made since the best practice project of 2008-2009 entitled making IPR work for SMEs. This is ongoing. Interpol/Europol The IPO led the UK organisation and coordination of a European initiative from Interpol and Europol to establish the nature and scale of food-related IP infringement called Operation Opson. During a week in December, the Food Standards Agency, UK Customs and Border Force and Trading Standards Officers concentrated on food related IP issues, along with several European Member States. The main concerns from Italy and France were connected to geographically protected products. The Italian authorities however, pursued a lengthy investigation into organised crime taking over certain premium quality brands and substituting cheap inferior products which were introduced into the normal retail markets. The UK findings from the week of action related mostly to counterfeit alcohol.
29 http://ec.europa.eu/taxation_customs/resources/documents/customs/customs_controls/counterfeit_piracy/statistics/statistics_2010.pdf 30 http://ec.europa.eu/taxation_customs/resources/documents/common/legislation/proposals/customs/com(2011)285_en.pdf 31 http://curia.europa.eu/juris/document/document.jsf?text=&docid=11 5783&pageIndex=0&doclang=en&mode=doc&dir=&occ=first&part=1& cid=19622

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International WIPO Advisory Committee on Enforcement On 1 December 201132 there was a meeting of the Advisory Committee on Enforcement (ACE). The ACE covered a range of presentations from experts on evidence on IPO infringements. This included a presentation from the UK on the findings of a study it had commissioned entitled Attitudes and Behaviours of Consumers in the Digital Age The ACE presentation was given on WIPOs commissioned research into statistical information on counterfeiting and piracy. This held up the UKs IP Crime Report as a good example of published data on domestic law enforcement. Megaupload On 19 January 2012 the US seized and shut down the file-hosting site Megaupload.com and commenced criminal cases against its owners and others. The FBI said that the action was among the largest criminal copyright cases ever brought by the US and directly targeted the misuse of a public content storage and distribution site to commit and facilitate intellectual property crime. The hackers group Anonymous said it disrupted the FBI website immediately after the action taken against Megaupload. Intellectual Property Office (IPO) The IPO was again active on the international stage during 2011/12, including collaborative working with the Federation of Indian Chambers of Commerce and Industry (FICCI) and the EU Southern Mediterranean Development Programme; and dialogue with counterparts from Mexico and Moldova. Furthermore, the IPO hosted the first UK/China Symposium on IP in December 2011. IPO presented to EU and Chinese Customs in Cologne, demonstrating how to exchange intelligence between different agencies and sectors to reach operational outcomes and the use of financial investigation to support cases of counterfeiting. IPO has also linked US law enforcement into UK law enforcement to pursue a UK investigation into the criminal use of an auction site to sell illegal copies of US copyrighted material made available for visually impaired consumers.
32 http://www.wipo.int/meetings/en/details.jsp?meeting_id=22170

IP Attach Network In December 2011, the IPO deployed its first ever IP Attach, Tom Duke, to Beijing and in March 2012, the second Attach, Anshika Jha, was appointed to New Delhi. The IPO will deploy a further two attachs to Brazil and East Asia in 2012. The appointments are an important part of the Governments plans to strengthen trade relations and unlock the growth potential of UK businesses abroad. IP enforcement will feature prominently in the role of the IP attach, though varying from country to country. US IP Crime Strategy In March 2012, the 2011 U.S. Intellectual Property Enforcement Coordinators (IPEC) Annual Report on Intellectual Property Enforcement was launched. This report provides an update on activities and general progress since the launch of the Joint Strategic Plan on Intellectual Property Enforcement in June 2010. SOPA/PIPA In January 2012, the US postponed indefinitely the proposed legislation, Stopping Online Piracy Act (SOPA) and Protect IP Act (PIPA) following intense lobbying including a blackout campaign by Wikipedia and others. Both acts were designed to provide a mechanism for IP rights holders to protect their IP: with SOPA proposing the taking down of domain names of those foreign websites hosting or facilitating infringing content. PIPA was limited to tackling those websites dedicated to infringing activities. The Anti-Counterfeiting Trade Agreement (ACTA) ACTA is aplurilateral agreement which seems to improve global enforcement of IP through the creation of common enforcement standards and practices, and more effective international cooperation. The treaty was negotiated by Australia, Canada, the EU (and its Member States), Japan, Mexico, Morocco, New Zealand, Republic of Korea, Singapore, Switzerland and the United States. All the negotiating partners apart from five EU Member States, Mexico and Switzerland signed the treaty in Tokyo on 1 October 2011. The UK signed the agreement on 26 January 2012, but no party has yet ratified. The treaty will come into force when it has been ratified by six of the negotiating parties. Following EU signature, there were protests in a number of Member States spearheaded by an intense lobbying effort by open rights groups. This led to increased

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unease amongst individual EU Member States and MEPs, and ultimately led to the European Parliaments decision to reject ACTA when it voted on 4 July 2012. In light of the rejection of ACTA, the UK Government are reviewing the implications of the Parliaments decision for the UKs national ratification of the treaty. Richard ODwyer On 13 March, the Home Secretary approved the extradition of Richard ODwyer to the US for alleged copyright infringement. Mr ODwyer created the TV Shack website which directed people to sites hosting free content and is believed to have generated revenue from advertising on TV Shack.

Intellectual Property Office (IPO) activities During the reporting period the Intellectual Property Office (IPO) continued to raise awareness of IP and IP crime to a broad range of audiences. These have included consumers, businesses, enforcement agencies and industry. Activities have focused on IP basics, intelligence gathering, sharing of best practice and the services of the IPOs Intelligence Hub and how to use the Proceeds of Crime Act 2002 in IP investigations. The annual survey of trading standards for 2011/12 indicates that 84% of trading standards services are aware of the IPOs Intelligence Hub. The IPO launched their first quarterly IP Crime Newsletter 33 which brings together a small sample of the good work being done within the UK and internationally. The newsletter also highlights the milestones and successes in tackling IP crime including key IP investigations. 12 IP Crime Tweets of Christmas In the 12 days preceding Christmas 2011 the IPO posted a series of successful tweets reaching 286,411 Twitter users, and several Facebook posts. The tweets were seen and retweeted by other government departments, enforcement agencies and consumers which were given hints and tips of how to avoid buying counterfeits goods. A key pillar of the IP Crime Strategy 2011-2015 is to establish a smarter and coordinated approach to training and awareness on IP crime - through using the tools and resources wisely. In March 2012 the IPO launched a best practice area on IP crime on the IPOs website34, Here the IPO sign posts business, enforcement and industry to information products, hyperlinks and contacts relating to IP crime. Business activities The IPOs business outreach team offer a range of IP training options for businesses and business advisors. These include an online diagnostic tool which over 10,000 businesses have now used, training workshops and a Masterclass programme. The IPO also attended a large number of exhibitions and seminars during 2011/12 including Business Start Up, New Start Scotland and the Franchise Show and over 22,000 received direct advice from the outreach team. Key

D.

Awareness and training

Introduction Training and awareness of IP crime remains a key priority for the IP community. The annual survey of trading standards 2011/12 indicates 82% of trading standards personnel had either received and/or delivered training on IP crime. This included specific training on the London 2012 Olympic Games and how to identify counterfeit Olympic merchandise. The commitment to training and awareness is reinforced in the IP Crime Strategy 2011-2015, where a coordinated approach in this area is vital to not only reduce the demand for fake products but also develop an even more effective enforcement network to tackle the problem. Previous IP Crime Reports identified the need for consumer targeted campaigns. This Report has seen an increase in raising awareness and supporting businesses against IP crime. The methods of communicating the potential harm and impact of IP crime has also changed, increasing in momentum through various mediums. Often campaigns are using social media and terrestrial television, for example the BBC series Fake Britain, to emphasise the type of fake products available, potential health and safety risks and the gains individuals obtain from their criminal activities.

33 http://www.ipo.gov.uk/crime-newsletter.pdf 34 http://www.ipo.gov.uk/pro-policy/pro-crime/pro-crime-bestpractice. htm

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outreach partners include Companies House, UK Trade & Investment, the Institute of Directors and the British Chamber of Commerce. From Ideas to Growth: Helping SMEs get value from their intellectual property In April 2012 the IPO discussion paper From ideas to Growth: Helping SMEs get value from their intellectual property35 was published. This paper was developed to build on the initiatives outlined in the BIS Innovation and Research Strategy for Growth36 to address the difficulties faced by SMEs in accessing the IP system. It builds on existing initiatives and identifies new opportunities in respect of raising awareness and understanding of IP. It ensures SMEs have the skills to assess the IP that is owned by and used within their company. It will improve access to commercially based IP advice, long term skills development to ensure that young people have an awareness of IP and future work on dispute resolution to recognise concerns regarding potential IP disputes that are a major issue for SMEs. The IPO has held a series of roundtable discussions to discuss the paper with SMEs, their representative organisations, advisory services and stakeholders to develop the ideas further. The IPO will now consider the key messages from these discussions and draw them into their plans for future support in respect of SMEs to ensure that they derive maximum value from their IP and realise their growth. Awareness through education The IPOs Cracking Ideas website at www. crackingideas.com provides resources to introduce students and educators to the world of innovation and creativity. The fifth nationwide Cracking Ideas competition was launched in April 2011, inviting children to develop a new sports themed innovation and to identify how IP can help them protect their creativity and gain value from their ideas. The competition closed on 30 April 2012 with over 4,000 entries received. The IPO Sprocket Rocket game featuring Wallace & Gromit with user friendly IP messaging continues to raise awareness of the work of the IPO. Since its launch the game has received over 5 million plays! The Wallace & Gromit Presents a World of Cracking Ideas exhibition ran throughout most of the reporting
35 http://www.ipo.gov.uk/whyuse/business/business-sme.htm 36 http://www.bis.gov.uk/policies/innovation/innovating-for-growth

period at the Life Science Centre, Newcastle. Presented by Aardman Animations, produced by SGA Productions and sponsored by the IPO to inspire a new generation of innovators, the exhibition was seen by over 146,000 visitors. Since launch in March 2009 the exhibition has been seen by 545,189 visitors; evaluations indicated that the event had a positive impact on awareness and respect for IP with 86% of children who visited the exhibition wanting to become inventors. Since the exhibitions close in January 2012 the IPO has developed a partnership with Spaceport, Liverpool, to bring a bespoke schools workshop highlighting the science of space and IP. This links with the IPOs launch of a new national Cracking Ideas competition featuring Wallace & Gromit with a space and IP theme in May 2012. Crown Prosecution Service and IPO e-learning module In August 2011 the IPO and the Crown Prosecution Service (CPS) launched their new e-learning toolkit. This new training resource was a joint initiative which aimed to raise awareness to CPS prosecutors of IP crime offences and reduce the threat of IP cases being unsuccessful in their prosecution or not pursued due to a lack of knowledge. It highlights examples of IP crimes and their impact, following the prosecution of a fictitious case to demonstrate best practice. This e-learning facility has also been sent to every Trading Standards Service to share best practice and knowledge. The annual survey of trading standards showed that 42% of respondents indicated that they were aware of the e-learning toolkit to assist in their communications with public prosecutors. IP Crime Group A key strand of the Group is to raise awareness of IP crime not only to enforcement agencies but also to consumers including businesses. This reporting period has seen the updating of the successful Supply Chain Toolkit 37 intended for SMEs, but suitable for all businesses. The toolkit aims to raise awareness of counterfeit goods entering legitimate supply chains and offers guidance on how to protect their assets. It includes a step by step approach on what action should be taken if counterfeits are found within the supply chain.
37 http://www.ipo.gov.uk/ipctoolkit.pdf

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Training and Awareness Sub-group The IPO has launched an IP crime Best Practice 38 section on the professional side of the IPO website on behalf of the IP Crime Group members. This includes various information products and hyperlinks to resources targeting businesses, consumers and enforcement agencies on IP and IP crime, including the Supply Chain toolkit and preventing IP rights in the workplace e-guide and also events and contacts for businesses and the enforcement community. A communications planner also provides details of events held by industry, enforcement or government. Preventing IPR Infringement in the Workplace e-guide and tools39 In September 2011, the IP Crime Group launched the e-guide and tools that helps businesses assess their risks and develop their response to preventing themselves becoming liable to legal costs and damages from infringing the IP rights of others. In the first two weeks there were over 675 viewings of the e-guide on the IPOs website, with the majority being on the various guides and tools to assist in dealing with any infringements. Diploma in Consumer Affair and Trading Standards (DCATS) Qualification: IP module The IPO partners the Alliance Against IP Theft (AAIPT) to deliver the IP module as part of the Diploma in Consumer Affairs and Trading Standards (DCATS) qualification for Trading Standards Officers in preparation for the IP module examination. This successful course which is always well subscribed is increasing seeing industry representatives and other enforcement agencies in attendance on specifically civil and criminal law training courses. The IP module is the third most popular examination in the DCATS qualifications. Better Regulation Delivery Organisation (BRDO) formerly LBRO: Common Approach to Competency for Regulators Framework40 The common approach to competency for regulators was launched in November 2011 with the aim of providing regulators with a robust and cost effective means of identifying and meeting their development
38 http://www.ipo.gov.uk/pro-crime-bestpractice. 39 http://www.ipo.gov.uk/ipenforce/ipenforce-crime/ipenforce-role/ ipenforce-group/ipenforce-workplace.htm 40 http://www.bis.gov.uk/brdo/resources/competency

needs, thereby supporting their professional development. Over 1,000 council officers from nearly two thirds of local authorities across England, Wales, Scotland and Northern Ireland have now registered to use the online Regulators Development Needs Analysis (RDNA) tool, which currently covers the Core Regulatory Skills and Leadership Skills relevant to officers that work within regulatory services, along with the technical knowledge sections relevant to particular regulatory functions. New technical knowledge sections are currently being developed, and work will start on developing an IP crime section in the Autumn 2012. Industry and enforcement agency activities Anti-Counterfeiting Group (ACG) The Anti-Counterfeiting Group (ACG) continued with their enforcement roadshows and conferences during the reporting period to raise awareness of IP crime and enable networking of enforcement personnel with industry bodies. In March 2012 the first IP Protect Expo Conference, 41 an industry lead IP and Brand Protection Trade Exhibition was held. The aim is to have an annual networking space for the worldwide IP and brand protection community. The event focuses on the practical aspect of IP protection and the development of best practice. In 2012 over 60 brands attended the two day exhibition with an associated seminar and workshop programme. The event will be held again on 5 - 6 February 2013, Business Design Centre, London. The Federation Against Software Theft Investors in Software (FASTIiS) The Federation Against Software Theft (FAST) have delivered a Software Stay Legal Event Programme in 2011/12 to the enforcement community including trading standards. Various guides have been produced for businesses to raise awareness of how to stay legal with software within their businesses, including a guide highlighting how employees can report their employers for illegally using software. Industry Trust for Intellectual Property Awareness The Industry Trust for IP Awareness continues to deliver on the UK audio-visual industrys commitment to use education and awareness campaigns as a core part of its broader strategy to tackle copyright infringement. The Trust delivers campaigns across a range of audiences
41 http://www.ip-protectexpo.com

IP

CRIME GROUP

39

encompassing youth, young males and parents with a communications strategy which focuses on positive, celebratory messages that encourage and directs audiences to authorised sources of film and TV content. Activity is measured by independent evaluation. The Moments Worth Paying For campaign, now entering into its second year, is a positive message that promotes the array of official channels available to audiences, the campaign aims to communicate the value of creative works, by turning the camera on to the audience, capturing their emotions invoked by film and TV, and ultimately, making people realise that its worth paying for. The campaign directs to the legal film search engine, FindAnyFilm.com to find All films, all above board, all in one place, driving down unofficial activity by targeting barriers to access. Moments Worth Paying For is an integrated multimedia campaign centred around a collection of cinema trailers and extensively supported with outdoor, digital and PR, it built on the insight and success of the previous You Make the Movies campaign and took an intentionally positive approach to positioning film as something worth protecting and supporting in all formats. The campaign communicates to males (16-34), who are the most likely to engage in unofficial activity (48% vs. 19% of full adult population) and the ICM research shows that Moments Worth Paying For is increasing peoples propensity to pay for official film, TV and video, even more so within the target group. Those who recall the campaign are more likely to say they have reduced their illegal downloading compared with those who do not recall it. Youth Outreach The youth facing campaign ScreenThing42 continues to engage and inspire young people, educating about the effort that goes into creating AV content, via social media channels. ScreenThing brings young people closer to the industry, fostering a greater respect for copyright and creativity. Offline, partnerships with Film Education, Film Club and Cineclub, task young people with creating their own pro-copyright trailers, to raise awareness amongst their peers, and driving support of the UK film industry and the importance of copyright to the future of the industry.

Cinemas: Training, Outreach and Rewards The Federation Against Copyright Theft (FACT), with the support of the Film Distributors Association (FDA), supports training of cinema staff across the UK to prevent illegal recordings of films (camcords) that are the primary source for internet and hard goods pirate copies. Best Practice Guides are produced and distributed to all UK cinemas, a website (www. fightfilmtheft.org.uk) provides additional and easy to access information and a reward scheme has paid out over 32,000 in the past four years to cinema staff who have prevented illegal recordings and reported the information to police and to FACT. FACT also provides training for police officers to make them aware the background to such criminality and the impact on all parts of the legitimate cinema sector. Advice is also given on how to respond and what would constitute a criminal offence. The British Recoded Music Industry (BPI) In October 2011, BPI organised, in conjunction with the Crown Office in Edinburgh, a full days training session for Procurator Fiscals at the Fiscals training centre in Glasgow on the investigation and prosecution of counterfeit music cases. At the event BPI launched their investigation and prosecution guidelines for Scotland. They were launched by David Harvey, Director of Serious and Organised Crime at the Crown Office. The guidelines are now also on the Crown Office and Procurator Fiscal Service intranet where all Procurator Fiscals have easy access to them when dealing with a music case. The International Federation of Spirit Producers (IFSP) The International Federation of Spirit Producers (IFSP) continues to support UK law enforcement agencies in the fight against spirits counterfeiters. During 2011 IFSP delivered a total of 26 Counterfeit Spirit Awareness and Recognition Workshops to 511 delegates from the various law enforcement agencies within the UK. These workshops are also an opportunity to brief the law enforcement agencies on counterfeit spirit trends and modus operandi throughout Europe, some of which are likely to impact on the UK. Food Standards Agency

42 http://www.copyrightaware.co.uk/about-the-industry-trust/screenthing.asp

Throughout 2011 the Food Standards Agency (FSA) worked closely with industry to raise awareness

IP

CRIME GROUP

40

amongst the food law enforcement community and consumers of the ongoing problem relating to the widespread sale of counterfeit wine across the UK. This close working relationship enabled the Food Standards Agency to perform a pivotal role in the speedy removal of the product from the market thus helping to protect both the consumer and industry. As a result of the Agencys awareness raising programme, and assisted by intelligence provided by industry, local authorities were able to seize large quantities of counterfeit wine throughout the year. A large number of these seizures have subsequently led to the premises licence holder being prosecuted for placing counterfeit products on the market for sale. Additionally, a growing number of local authorities via their internal licensing review procedures have suspended/revoked alcohol licenses and have imposed hefty financial penalties on those found to be guilty of selling illicit alcohol in their shops. Scottish Crime and Drug Enforcement Agency (SCDEA) This year SCDEA have continued to run numerous events in Scotland to make people aware of the issues of buying counterfeit goods, including: Girls Day out show 2011 three day event Attendance 19,000 visitors. Attendance at the girls day out event at the exhibition centre where 19,000 people attended, the display mainly included pertinent items for a mainly female audience. Golf show 2011 three day event Attendance 18,500 visitors. Attendance at the Scottish Golf show over three days in April showing counterfeit golfing items and educating the public on the harm caused. This display attracted considerable publicity including TV interview on prime time news article. Airport events five airports across Scotland Targeted approx 30,000 people. Displays at Glasgow, Edinburgh, Aberdeen and Inverness airports showed the hidden harms of counterfeit goods and the costs caused by IP crime. The aim was to educate and spread the message on holiday and even return with it making the message sustainable.

Scottish N01 magazine article The Real cost of Fake Goods, December Edition Readership in excess 25,000 A double page spread article in the No 1 magazine in Scotland on the harm caused by counterfeit goods the magazine reaches 25,000 readers.

National campaigns National Consumer Week: Good Sports Dont Fake it In November 2011, the Trading Standards Institutes annual National Consumer Week campaign focused on the Olympics and IP related theme Good Sports Dont Fake It. The aim was to raise awareness of fakes and scams relating to sporting events such as fake branded sports clothes and equipments, fake ticket websites and tickets, fake travel/accommodation packages. The theme filtered through local trading standards authorities as in previous years who communicated the key messages to their local community. IPeuropAware business guides43 The EC IPeuropAware project brings together two important existing Europe wide initiatives: InnovAccess, a Web portal created by the National Patent Offices from member states to provide information on their services for the end user and IPR-Helpdesk, Helpline and training mechanism for current and potential contractors in EC-funded Framework Programme projects. These initiatives, together with further actions foreseen in the project aim to target and improve usage of and access to research, exploitation and innovation in Europe. Brand-i Brand-i44 is a new anti-counterfeiting initiative founded in 2011 by a Trading Standards Officer and a consumer Journalist and supported by the Trading Standards Institute. Aimed at filling the gap in the anti counterfeiting market by focusing on the consumer, Brand-i is a free to search online shopping directory listing legitimate e-stockists of branded goods. Brands use the directory as a confidence-boosting reference tool for their consumers, and those brands included on the directory include ghd, UGG Australia, MBT and Timberland footwear, Chanel, Sennheiser headphones, Makita power tools, and Totseat baby highchairs.
43 http://www.ipeuropaware.eu/ 44 https://www.brand-i.org/

IP

CRIME GROUP

41

Brand-is remit is to help consumers find a wide range of online stockists of their favourite brands, and help establish greater confidence shopping online. Its secondary aim is to educate consumers via its shopping advice pages, which give advice on how to spot fraudulent e-commerce stores, and how to claim back money via Section 75 of the 1974 Consumer Credit Act or the relatively unknown Chargeback system. One of Brand-is key functions is its Report a Site feature. Consumers can anonymously report ecommerce sites they are suspicious of, or which they have purchased from, via an online system that filters reports directly to brandholders IP, customer service, and digital teams. Since its launch in June 2011, Since launch Brand-i has received 1,200 consumer reports regarding counterfeit and fraudulent websites featuring 265 separate brands. most of which relate to actual purchases consumers have mistakenly made. The majority of these consumers list disappointment and surprise that they have received counterfeit goods when ordering in good faith via online websites that appear genuine. Reports fall across the following sectors.
Apparel & designer clothing Baby & Children Electronics Health & Beauty Jewellery Personal accessories Spor ng goods and leisure Toys & games Business and o ce supplies Entertainment and Media Footwear Mobile phones and accessories Pharmaceu cals and medical Sunglasses & Eyewear Other

website, even using an identical favicon.ico, almost identical logo on their pages and very similar look and feel. Even more fraudulent is the contents of the most important html tags: <title>Links of London Jewelry - Links of London Outlet Sale</title> <meta name=keywords content=Links of London, Links of London Jewelry, Links of London Outlet, Links of London Sale, Links of London Uk, Links of London Charms /> <meta name=description content=Links of London, Buy 100% Authentic Links of London Jewellery Free Shipping, Get Links of London Outlet, Links of London Sale , Links of London Charms and Links of London Uk in UK London Shop. Easy 365-Days Returns. /> All of these things point to a deliberate attempt at passing off their website as the real thing! Although I have not received the goods yet, I can be sure that they will either be deemed to be counterfeit or be of such poor quality that they dont even qualify as counterfeit! Neither prospect being very appealing! The 1st clue I had to this scam was when I received an order confirmation email sent from: officialtiffanyjewelry@hotmail.com. The 2nd, even bigger, clue was when I received a payment notification from PayPal, some of which contained Chinese writing. CASE STUDY: UGG Australia Amount spent: 197.26; website address: no longer trading A respondent reported: I ordered genuine UGG boots off this website on 28 December but had difficulty inputting card details. Although card details were only accepted once, three orders were created. I emailed the company to say that two were in error but have had no response. I checked on their website and the only telephone number I could find was overseas and a dead line when I tried to call. The boots have not yet arrived. Crimestoppers Fakes Fund Crime campaign The IPO assisted Crimestoppers, Home Office and the Serious and Organised Crime Agency to develop and support their four week Crimestoppers IP crime campaign launched on 15th November 2010. The campaign aimed to educate the public about the links between fake goods and serious organised crime, deter the public from purchasing fake goods and generate actionable information on fake goods and serious organised crime which can be used by the law enforcement community.

Top reported payment methods are Visa followed by Mastercard and over the ten months since launch, the amount of reported consumer spend on counterfeit/ fraudulent goods totaled 104,578. Sixty per cent of respondents included spend statistics in their reports. The average number of reports per month was 118. CASE STUDY: Links of London Amount spent: 39.99; website address: www. officiallinksoflondonjewelry.co.uk A respondent reported: This website is clearly attempting to look like it is the real Links of London

IP

CRIME GROUP

42

The IPOs Intelligence Hub has continued to receive intelligence reports since this campaign. Some 2,000 people per year take the time to contact Crimestoppers about IP crime. This is a significant number of people and indicated not only a concern about IP crime but a potential for raising awareness. The following table shows the number of reports per month against counterfeit products and the locations of those products. The reports received by crimestoppers follows a similar pattern to the other reporting in this Report. Optical media is the highest reported issue followed by clothing and footwear. Tobacco products and alcohol are also reported widely although this area is the lead of HMRC. Hence over the past 12 months the majority of crimestoppers campaigns have focussed on these areas.

Monthly Crimestoppers Breakdown Again the number and consistency of reporting for optical media shows this as a problem that continues consistently throughout the year, with a similar pattern across clothing and footwear, and tobacco and alcohol. Other areas seem to have a greater flux with a greater tendency for reporting around the Christmas/New Year period. Crimestoppers reports against Location of Crime Home counterfeiting is the most prevalent way of committing IP crime according to the reports received by crimestoppers. Other areas include the internet, shops, and workplaces.

Product seized Pharmaceuticals Electrical Goods

Circumvention devices

Luxury Goods

Sports Goods

Optical Media

Accessories

Hair Stylers

Sunglasses

Cigarettes

Handbags

Fireworks

Jewellery

Footwear

Toiletries

E-Games

Software

Clothing

Tobacco

Alcohol

Bikes

Other 3 4 6 3 1 11 19 18 7 5 6 83

Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Total

50 52 53 73 59 62 45 53 52 58 59 53 669

10 13 13 19 12 18 26 45 33 35 22 31 277

3 3 1 9 3 9 14 20 24 15 15 23 139

20 27 31 31 33 24 23 44 26

14 17 27 20 31 25 13 27 22 55 46 60

6 4 5 22 7 6 9 10 11 11 16 14 121

4 8 3 5 3 4 3 12 13 14 8 10 87

4 2 4 5 1 2 2 1 2 6 5 1 35

3 3 2 1 3 2 3 1 3 4 11 5 41

1 1 1 3 0 0 2 1 3 2 2 4 16 15 3 2 2 1 1 2

1 3 0 3 1 2 4 4 4 13 3 6 44

2 4 4 2 4 5 5 7 7 16 6 10 72 21 2 1 3 2 4 7 2 1 0 4 1 1 2 5 1 3 2 7 27

1 2 2 2 3 1 3

1 1 1 1 1 1

123 149 152 205 166 170 167 258 230 240 203 231 2294

2 4 1 1 1

1 1 12 4 3 2 1 1 8

259

357

IP

CRIME GROUP

Total

Toys

43

Product seized by location Local Area Workplace Self-Store

Cinema

Internet

Factory

Vehicle

School

Market

Border

Home

Other 2 6 7 20 7 9 18 8 15 15 11 19 137

Shop

Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Total

7 9 10 10 7

16 24

46 44 53 66

18 20 20 26 19 20 15 21 20 26 23 30 258

2 4 7 12 6 9 12 10 10 26 19 17 134

5 6 6 11 10 4 6 5 9 9 10 12 93

4 12 9 10 7 7 3 8 8 9 12 10 99

1 1

108 126 125 175 135 144 124 212 182 194 170 199 1894

2 7 2

9 11 14 21 19 33 39 31 34 37 288 3 1 1

1 2

62 53 39 110 67 63 47 54 704

8 4 8

9 3 7 5 4 7 8

2 1 4 1 1 2 2 1 9 3 17 2 1

2 1

4 7 5 8

87

57

There will be occasions where individuals sell directly from the home to local residents. It is however interesting to note that market sales are not as highly reported. Premier League Overview The Premier League is one of the most popular football leagues in the world. Unfortunately, such is the popularity of the league and its Clubs that they experience the downside of this enviable reputation by being a prime target for counterfeiters. The counterfeit

industry capitalises on the passion and loyalty of millions of fans by producing, supplying and selling unauthorised quality Club merchandise. Many fans often find themselves unwillingly purchasing goods which they believe to be real. This is especially the case with goods bought over the internet. Whilst counterfeit merchandise can still be found for sale in markets, retailers and outside stadia, the internet is now the main outlet for fake merchandise. The majority of this merchandise is of poor quality and originates from China and Thailand.

Total

Pub

IP

CRIME GROUP

44

Over the past year, counterfeit mobile phone and smoking accessories have become increasingly popular, with thousands flooding into the UK and Ireland. To tackle this problem a proactive brand protection strategy is implemented, with particular emphasis on the education of enforcement agencies. Regular training sessions, communications and an enforcement guide are provided, with the aim of empowering agencies and showing them how to differentiate between genuine and counterfeit merchandise. Additionally, the marketplace is continually policed and when fake products are located enforcement action is arranged and conducted. The strategy aims to continually stimulate short and long term seizures of counterfeit Premier League Club merchandise. Local campaigns Throughout the UK, trading standards raised awareness of IP crime within the community to not only highlight the risks associated with buying fakes, such as health and financial risks, but also directed consumers to how and where to purchase genuine products, for example through the Brand-i initiative. These messages were targeted especially in the run up to Christmas when consumers are particularly vulnerable. Significantly local authorities are reaching to new methods in communicating their messages. Suffolk Trading Standards won a big media prize for their entry Social Media the lethal weapon in the fight against rogue traders. Consumers warned about buying counterfeit goods at Christmas North East Lincolnshire was warned of the risks of buying fake products in the run up to Christmas by local Trading Standards Officers who had already seized fake vodka containing a potentially fatal level of chloroform and hazardous childrens toys. Officers sent a message to traders that they are clamping down on the sale of counterfeit goods through websites, markets or in pubs. Several arrests had already been made after raids on three addresses in the Grimsby area, which uncovered over 30,000 counterfeit cigarettes.

E.

Sentencing, seizures and the Proceeds of Crime Act

Introduction This section provides an update on the legal outcomes in tackling IP crime. It includes published statistics on the volume of cases being progressed through the courts for criminal IP infringements under specific IP legislation. An overview is provided on the seizure data received from enforcement agencies and industry bodies, and the use of the Proceeds of Crime Act 2002 to tackle IP crime during this reporting period. Sentencing Outcomes The Ministry of Justice provided the data on the following page, showing the number of individuals proceeded against, found guilty and cautioned under the criminal provisions of the Copyright, Designs and Patents Act 1988 (CDPA88) and the Trade Marks Act 1994 (TMA94). The statistics show that those individuals preceeded against, found guilty or cautioned have steadily increased since 2002, however in the past two years there has been a slight decrease under the TMA, and larger decrease in relation to the CDPA. Seizure data from the IPOs Intelligence Hub showing the volume of seizures of counterfeit goods by trading standards indicates that enforcement activities remain high in comparison to seizures in previous years as suggested by this years annual survey of trading standards. Her Majestys Revenue and Customs and Border Force during this reporting period detaining 31,817 consignments of IP infringing goods in postal traffic and 2066 consignments in air and sea cargo, courier and vehicle traffic. These were the highest numbers of detentions in air and sea freight for over three years. Collectively, all of the detentions amounted to 4.1 million items with a value (estimated equivalent to legitimate goods) of 70 million. This figure does not include substantial quantities of counterfeit products such as tobacco and alcohol which were seized under Excise legislation on the grounds of revenue evasion.

IP

CRIME GROUP

45

Number of people proceeded against Year TMA CDPA Total Year TMA CDPA Total Year TMA CDPA Total 2002 455 97 552 2002 329 71 400 2002 18 13 31 2003 507 111 618 2003 399 84 483 2003 59 55 114 2004 629 134 763 2004 503 100 603 2004 120 171 291 2005 962 195 1157 2005 749 160 909 2005 194 202 396 2006 1128 342 1470 2006 920 249 1169 2006 187 247 434 2007 1068 514 1582 2007 884 362 1249 2007 187 177 364 2008 1012 621 1633 2008 913 478 1391 2008 201 180 381 2009 958 753 1711 2009 801 563 1364 2009 118 79 197 2010 753 520 1273 2010 662 366 1028 2010 66 45 111 2011 655 113 768 2011 487 97 584 2011 55 41 96

Number of people found guilty

Number of people cautioned

Number of people proceeded against

Number of people found guilty

Comparison of trends in proceedings and cautions under CDPA and TMA

IP

CRIME GROUP

46

The following figures from the Ministry of Justice detail the age and sex of the individuals who were proceeded against in the period between 2002 2011.
Sex of people proceeded against Year TMA Male Female Other Not stated CDPA Male Female Other Not stated 81 13 3 85 24 2 117 17 172 22 1 265 74 6 392 114 8 2002 367 40 48 2003 440 46 21 2004 555 43 31 2005 826 102 34 2006 952 128 48 2007 888 155 25 2008 806 123 22 46 429 159 12 21 2009 725 133 34 66 487 196 15 54 2010 562 117 25 49 353 128 12 27 2011 481 78 36 60 72 15 2 5

Sex of people found guilty Year TMA Male Female Other Not stated CDPA Male Female Other Not stated 63 6 2 71 13 89 10 6 139 20 1 201 44 4 291 70 4 2002 277 21 21 2003 353 33 13 2004 447 37 19 2005 652 82 15 2006 793 93 34 2007 742 126 16 2008 745 128 13 27 356 106 6 10 2009 624 112 26 39 390 124 10 39 2010 517 103 15 27 263 83 6 14 2011 378 57 16 36 78 14 0 5

Age of people proceeded against Year TMA Under 18 18 - 20 21 30 31 40 41 50 50 + CDPA Under 18 18 - 20 21 30 31 40 41 50 50 + 2002 1 12 238 110 66 28 1 0 53 23 10 10 2003 7 14 265 127 68 26 1 1 65 26 11 7 5 65 37 19 9 2004 10 28 238 223 100 30 2005 11 31 394 309 158 59 2 9 62 90 31 5 11 182 90 46 15 2006 8 57 418 398 183 64 2007 13 44 369 389 194 59 2 10 270 113 86 33 2008 17 31 330 374 189 71 2 16 328 129 103 45 2009 9 29 307 318 216 79 2 8 423 124 119 75 2010 3 12 215 273 178 72 2 3 226 110 106 71 1 31 33 38 10 2011 2 13 239 197 148 56

IP

CRIME GROUP

47

Age of people found guilty Year TMA Under 18 18 - 20 21 30 31 40 41 50 50 + CDPA Under 18 18 - 20 21 30 31 40 41 50 50 + 38 15 13 5 2002 1 10 152 88 55 23 2003 2 11 194 116 52 24 1 1 44 19 23 6 3 47 31 12 8 2004 8 24 170 187 84 30 2005 6 22 285 254 131 51 1 5 51 70 27 6 10 113 80 37 9 2006 4 50 306 352 165 43 2007 9 35 287 337 167 49 2 7 168 91 68 29 2008 13 30 274 357 172 67 2 11 224 108 93 40 2009 6 21 226 282 201 65 1 8 301 106 97 50 12 173 247 167 63 3 145 82 92 44 23 30 36 8 2010 2011 1 9 154 159 117 47

Statistics show that in relation to those individuals who were proceeded against, found guilty or cautioned there was a considerable higher level of males compared to females in both Acts. Concerning the age of those individuals, in relation to the TMA 21 40 year olds were the highest number of offenders, followed closely by 41 50 year olds. CDPA offences were most commonly found in 41 50 year olds, followed by 31 40 year olds. Seizure and detention activity The data on the following page has been submitted and collated by the IPOs Intelligence Hub from a range of sources including enforcement agencies and industry bodies. What are the major problems? The greatest number of seizures was in the area of clothing and footwear. This included a large number of counterfeit clothing labels in the Westminster area, showing counterfeit product is still being imported in parts and made up within the UK. Optical media (music, film and TV, etc) is also still a major problem and is reported by a large number of the contributing trading standards authorities. A large, one off seizure of vinyl records was made in the Birmingham area showing willingness to counterfeit items for niche markets.

Are there any developing trends (Regional/product)? Clothing and Footwear and optical media are the most reported seizures across all the contributing authorities. There are a number of authorities only reporting in these areas. Such authorities as Rhondda Cynon Taff and Brent and Harrow report across a number of different areas. Reporting is too varied to be able to identify regional trends. In terms of product there now appears to be a trend for a move into cosmetics and accessories with large numbers being identified across the country. Generally, items which raises concerns for consumer harm appears across the country. Coventry Postal Hub The Coventry International Postal Hub receives all incoming and outgoing international Royal Mail and Parcel Force packets that weigh between 2.2 and 30 kg. It is staffed by approximately 275 postal workers, who handle around 1 million items per month. Also present on site is a team of UK Border Force (UKBF) officers who are responsible for the detection of a vast array of illicit goods. In addition to IPR infringements, using X-ray scanning technology they routinely identify importations of firearms, class A drugs, and non duty paid tobacco. They also encounter more unexpected consignments, such as those containing live animals

IP

CRIME GROUP

48
Product seized

Intelligence determines which goods streams are examined, and the UKBF are able to swiftly adjust their focus in accordance with the latest information. To assist with the process of clarifying which packages contain counterfeit products, representatives of an ever increasing number of rights owners are present, who have the expertise necessary to recognise fakes. Upon detection, the representatives write to importers informing them that their goods are counterfeit, and that any objections to this declaration must be raised within 10 days. With the prospect of incurring considerable expenses in an inevitably unsuccessfully contested case, the vast majority abandon their goods which are subsequently destroyed. Within less than two years, 40,000 individual consignments infringing just one particular brand of footwear have been recorded. The source country for the vast majority of counterfeit goods passing through the Hub is China and occasionally Singapore, India and Malaysia. Details of such importations are collated by the brand representatives, but under European directive 1383/2003 they cannot retain the information. However, they are able to pass it to the UKBF, who disseminate to the IPOs Intelligence Hub, which engages trading standards and if appropriate, other law enforcement agencies. This route forms a legal gateway that transforms the data gathered by the brands into vital criminal Intelligence. From the spreadsheets it receives, the IPO can discern geographical hot spots and criminal methodology, and identify individual offenders, providing the knowledge necessary to instigate and inform enforcement action.

Cigarettes

Barking & Dagenham Bexley Birmingham Brent & Harrow Bristol Dorset Enfield Gloucestershire Greenwich Havering Hull Kent Lambeth LOTSA Manchester North Lincolnshire Oxfordshire Powys 251 5 600 1 918 18 280 3 300 50

493 200 500 562 667

16 325 16 13

635

Redbridge Rhondda Cynon Taff SCOTS Sheffield Somerset Southwark Staffordshire Stoke Surrey SWERCOTS Swindon Tower Hamlets TSNW Walsall Waltham Forest Wandsworth Warwickshire West Yorkshire Westminster Total

3000 118 7 700 10 96 420 2 2 857 27 28 498 4 49

263

47 3000 1104

300 5 447 39

7164 5330 272 1686 56 15932

5 769

IP

CRIME GROUP

Footwear

Clothing

Tobacco

DVDs

CDs

49
Product seized Mobile Accessories

Hair Straighterners

Electronic Games

Circumvention

Vinyl Records

Accessories

Sunglasses

Cosmetics

Jewellery

Watches

Perfume

Alcohol

Other 200 50 37 10 193 490

Bags

Food

Barking & Dagenham Bexley Birmingham Brent & Harrow Bristol Dorset Enfield Gloucestershire Greenwich Havering Hull Kent Lambeth LOTSA Manchester North Lincolnshire Oxfordshire Powys 23 23 62 16 40 "Retail Value: 17'000" 8 9 143 58 284 4 4 70 10 509 1000 506 1473 22 4020

493 422 4520 4767 350 70 28 283 4 20 325 16 941 320 668 16 40 944

Redbridge Rhondda Cynon Taff SCOTS Sheffield Somerset Southwark Staffordshire Stoke Surrey SWERCOTS Swindon Tower Hamlets TSNW Walsall Waltham Forest Wandsworth Warwickshire West Yorkshire Westminster Total 8 1704 0 727 1000 12 26 687 491 7853 4020 10 462 1493 694 129 60 24 1 335 370 4 44 179 1 6 9 12 5 6 718 24 84 747 694 5800 24 71

3000 1962 39 185 924 5800 718 24 1835 3000 5 1310 1 306 1 344 910 12 8341 42944

If products have not been listed as in previous Reports, there was no reported seizures to the IPO's Intelligence Hub Other consists of seizures with no clear product details

IP

CRIME GROUP

Total

50

The following data has been collated by the IPOs Intelligence Hub from the Coventry Postal Hub. The data details the number of products seized within the period 1 April 2010 to 31 March 2011.

Product seized Headphones Accessories Bathroom Accessories Sunglasses Hair Stylers Cosmetics Footwear

Clothing

Tobacco

Games

Sports Goods

Bags

Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Totals 26 3515 2788 3662 793 1121 2637 14542

5976 462 325 2890 4446 4390 5874 147462 45994 2228 2278 1086 223411 21850 2734 5312 3049 44164 1726 9493

268 187 157 653 129 37 2 253 936 1132 3754 7578 4052 7922 2322 2496 1352 6229 31951

265 403 114 104 451 18968 5923 554 346 307 27435

6380 10549 6727 3012 1641 1284 45 228 714 1505 17434 895 1053 894 1483 32243 1664 582 23847 215950 2880 89856 53900 50142 6834 12338 2326 2946 420 460 50 6202 681 459 715 94 92 46 2087

12889 11601 97179 59906 57333 41649 37540 184542 78940 10417 17296 16294 625586

What are the major problems? The major problems being identified by the Intelligence Hub are largely clothing and footwear and bathroom accessories in the form of razor blades and toothbrush heads. Other detentions are still in very high volumes. Are there any developing trends (regional/product)? There is a developing trend in counterfeit over the ear headphones. The headphones are a high end product where genuine products retail above 100 and are popular with professional sportsman and DJs making them a highly desirable product. There is a concern to public safety as counterfeit goods will not have undergone the stringent tests that the genuine product will have withstood meaning that noise levels could cause a large risk to users.

There are also seasonal issues in relation to fur lined boots in the winter months and sunglasses in the summer months. Counterfeit sunglasses also raise consumer harm issues as they have not been tested to meet minimum requirements for UV protection. The following seizure data has been collated by the IPOs Intelligence Hub from seizure data received from areas within the UK Border Force and HMRC within the period 1 April 2011 to 31 March 2012.

IP

CRIME GROUP

Total

51

Product seized DVDs/software

Postal Hubs Consignment Ports Airports HMRC Total 7874 200 400 7474 200

14542 42189 88062

223411 24051 7187

32243 16470 3194 22

27435 308 399 1004 170 1697 9046

23847 6592 12115

144793

254649

51907

22

28142

1004

170

10743

42554

Product seized Circumvention Devices Vinyl Records Pharmaceuticals

Headphones

Mobile Accessories

Postal Hubs Consignment Ports Airports HMRC Total 1095 125249 200 895 11157 114092

6202 2174 8092

2087 1391

31951 38317 4246 130736 8724 3610

44164 740 5082

215950 45611

16468

3478

74514

139460

3610

49986

261561

Product seized Toys & Stickers Iphones/ iPads/ MP3 players Sport goods& Fitness products Car parts/ accessories

Batteries

Phones

Other

Postal Hubs Consignment Ports Airports HMRC Total 2012 1583 2012 1583

3754 30000 3970 1854 459 3285 94009 1474 130736 8724

625586 530235 343496 22

7724

31854

3744

95483

139460

1499339

Total

IP

Bathroom accessories

Cosmetics

Electronic Games

Other

Bags

Food

CRIME GROUP

Accessories

Sunglasses

Hair Stylers

Cigarettes

Jewellery

Footwear

Watches

Clothing

Tobacco

Perfume

Alcohol

CDs

52

Production equipment and packaging seized Computer Hardware Postal Hubs Consignment Ports Airports HMRC Total 14,765 5,870 53,454 2,222,982 127,548 139,460 2,564,079 5,215 9,550 5,870 53,454 Computer Consumables Inlays Product Components Packaging Labels Other Total

116,100 245,252 1,861,630

35,500 130,736 92,048 8,724

151,600 381,203 2,031,276

Industry seizures The following seizure data has been received and collated by the IPOs Intelligence Hub from industry sectors within the period 1 April 2010 to 31 March 2011.

Hair Straighterners

Sunglasses

Cigarettes

FACT 461,472

21,494

5,157

2,020

2,000

Jewellery 0

Footwear

E-games

Watches

Clothing

Tobacco

Mobile Accessories

Electronic Games

Circumvention

Vinyl Records

Accessories

Cosmetics

Other

Bags

Food

FACT

492,143

The Federation of Copyright Theft (FACT) records all sentences notified for cases where there has been FACT involvement. For 2011 there was 229 convictions, this included 67 imprisonments and 1 deportation.

IP

CRIME GROUP

Total

Perfume

Alcohol

DVD's

CD's

53

The following table of seizures was provided by the British Recorded Music Industrys (BPI) Anti-Piracy Unit for the period 1 April 2011 to 31 March 2012. The seizures are compared to the same calendar months between 2009-10 and 2010-11.

Group CDs

Description Bootleg CD Bootleg CDR CD Album CD Single CDRs Album DJ Pirate Mix Compilation Hip Hop Pirate Mix Compilation Pirate Music CD (CDR) Total

2009 4,966 262 6,895 1 103,552 640 1,696 933 118,945 1,767 2,754 4,521 28,089 2,500 651,306 9,516 25,654 717,065 816 190 2,573 1,858 5,437 425 425 4,533 10,390 14,923

2010 n/a 1,026 1,499 n/a 76,155 3,671 76 n/a 82,427 1,788 4,280 6,068 77,645 n/a 1,673,620 18,208 30,819 1,800,292 1,385 n/a 548 2,464 4,397 302 302 5,789 13,951 19,740

2011 62 1278 8230 n/a 181438 7447 1914 167 200,536 23 4000 4,023 80,256 1 1,676,503 23,051 40,204 1,820,015 1,886 26 1,306 635 3,853 514 514 36,700 10,923 47,623

Comparison n/a 25% 449% n/a 138% 103% 2418% n/a 143% -99% -7% -34% 3% n/a 0% 27% 30% 1% 36% n/a 138% -74% -12% 70% 70% 534% -22% 141%

Vinyl

Bootleg Vinyl Vinyl Total

Digital Album

Digital Albums Digital Bootleg DVD Digital Tracks MP3 CDR MP3 DVDR Total

DVD

Bootleg DVDR Bootleg VHS Music DVD Pirate Music DVD (DVDR) Total

Burners

Burners per tray Total Blank CD Blank DVD Total

Blank Discs

IP

CRIME GROUP

54

Group Other Repertoire

Description Asian Film DVD(pressed) Asian Film DVDR Asian Music CD (pressed) Karaoke Miscellaneous Sat Nav Systems Server Scanners Total

2009 177,425 7,953 41,304 737 251,164 3 3 n/a 478,589 4,511 129 91 43 17 22 20 19 50 4,902 6,760 1 17,816 60,892 38 n/a n/a 85,507 1,430,314

2010 2,850 11,931 5,029 186 203,365 2 n/a 4 223,367 3,780 116 215 45 14 61 15 11 29 4,286 6,248 n/a 3,219 132,829 2,871 177,416 2,575 325,158 2,466,037

2011 583 34,982 1885 433 22,802 3 n/a 5 60,693 1,756 141 291 47 17 99 20 6 35 2,412 3,910 n/a 26,417 142,209 240 n/a 3,733 176,509 2,316,178

Comparison -80% 193% -63% 133% -89% 50% n/a 25% -73% -54% 22% 35% 4% 21% 62% 33% -45% 21% -44% -37% n/a 721% 7% -92% n/a 45% -46% -6%

Hardware/ Accessories

Card Inlays Computers Hard Drives Laptops Memory Cards Memory Sticks Mobile Phones Monitors Printers Total

Default

Adult DVD Advise and Warning Digital Inlay sleeves DVD Film Genuine CDs Digital Karaoke Tracks Merchandise Total Overall Total

Circumvention - The UK Interactive Entertainment (UKIE) In the last year, the UKIE IP Crime Unit has been involved in 81 raids involving a large number of private dwellings and business premises. Over 26,000 master discs of illegally copied games were seized and there is no way of knowing how many times they had been copied and sold. As the games industry moves towards digital distribution and sale of product, then UKIE have seen a reduction of games for sale in markets/car boots and a considerable increase in sales online by means of web sites, auction sites, forums and social networks. The latest increased trend is the sale of game files loaded

on hard drives. For instance, 300 Xbox 360 games were recently offered on a 500 gig hard drive for 130. The forensic examination of seized computers have supported this view as over 6,000 master games files were found, which means a far greater number have undoubtedly been produced. UKIE continue to see the sale of copied games by organised criminals, in particular linked to the sale and distribution of drugs. On two occasions, criminals were found producing large quantities of games as well as preparing packets of class A drugs. The police have often reported finding games and copying equipment when searching cannabis factories. The last year has also seen an increase to 840,000 of court orders under the Proceeds of Crime Act 2002 (POCA).

IP

CRIME GROUP

55

UKIE continues to take action against those who modify games consoles, or advertise that service, to allow illegally copied games to be played. In 2011/12 over 500 consoles were seized in raids, with one offender admitting that he had modified 2,000 consoles over a two year period, although UKIE believe that evidence found on his computer indicated that the figure was considerably more. The latest device is a dongle for the PS3 console which allows not only games files on external hard drives to be played, but also copied games on Blue ray rewritable discs. It is apparent that the people producing this illegal circumvention device have also protected that item with their own code. This means that anyone copying or cloning the dongle, also copies this code that wipes clean the hard drive of the PS3 console of any unsuspecting purchaser of this item. The courts to take criminal circumvention offences under section 296ZB of the Copyright, Designs & Patents Act 1988. On two occasions in the Crown Court, the judges made the following comments in sentencing the offenders to jail terms for these types of offences. ...you were selling discs. In my view, perhaps more seriously, you were running an illegal business of enabling people to play counterfeit discs from their machinery by installing chips which negatived the protective devices that the industry requires to be built into them. these offences . were serious intellectual property theft and companies have spent considerable sums of money to protect their product.

IP

CRIME GROUP

56

Computer Equipment

DVD/Software

Computer consumables

UKIE

1,430

14

10 757 200 710 184 570 25 2,178 1,700 490 1840 183 60 3 2 13 5 14 2 4 4

12

8 weeks suspended sentence 140 Hours unpaid work 12 month supervision order 50 weeks suspended sentence 250 hours community punishment 18 months supervision order 20 weeks electronic tag curfew 16 weeks suspended sentence 120 hours community punishment 1600 costs. 18 months imprisonment 60,000 POCA order. Community sentence unpaid work 750 cost Caution Caution Caution Caution 12 months suspended sentence & supervision order 21 months suspended sentence 36 weeks suspended sentence 100 hours community punishment 8 month suspended sentence 150 hours community punishment 9 months sentence half in prison half community punishment

22 7 10 4

12 months suspended sentence Caution Caution Caution Caution Caution Caution Caution Caution 150 hours community punishment Selling pre-chipped Wii consoles and flashing Xbox360 drives. R4 cards offered. Offering DS and Wii 150 hours community punishment 12 month supervision order confiscation orer of 5000 150 Fine

200

3 12 2 18 800

Hub Total

26,100 26,100 10,527 873 90

IP

CRIME GROUP

Sentencing

E-games

Other

57

Anti-Counterfeiting Group The following seizure statistics have been provided by 3 members of the Anti-Counterfeiting Group (ACG) Clothing and Footwear group and provide an overview of the scale of distribution of counterfeit products in the UK.
Product Type Clothing & Footwear Clothing & Footwear Clothing & Footwear Luxury Goods Luxury Goods Luxury Goods Toys & games Clothing & Footwear Clothing & Footwear Clothing & Footwear Toys & Games Luxury Goods Luxury Goods Luxury Goods Total Authority TS and Police TS and Police TS and Police TS and Police TS and Police TS and Police TS and Police Customs Customs Customs Customs Customs Customs Customs Location Manufacturer Wholesaler Retail/market/other inc Internet Manufacturer Wholesaler Retail/market/other inc Internet All Airport Mail Centre Port All Airport Port Mail Centre Quantity 9,259 2,358 5,516 3,800 labels 234 3,328 1,388 31,374 2,771 14,590 1,964 10,099 10,258 69,336 166,175 Genuine Retail Value 842,000 172,130 365,140 No retail value 141,000 2,125,330 19,646 2, 233,015 215,940 733,340 125,610 1,588,910 1,288,950 22,503,865 30,354,876 20,000 250,000 10,000 250,000 25,000 85,000 75,000 200,000 190,000 3,000,000 4,175,000 Street Value 100,000 20,000 40,000

The following seizures by product by police, trading standards and customs during the reporting period was submitted by an ACG member from the luxury goods sector.
Items Accessories Clothes Components Cosmetics Costume Jewellery Eyewear FJW Handbags Other Perfumes Shoes SLG Unspecified Watches Totals Customs 750 162 1,250 4,786 898 156 0 2,371 965 7,124 226 821 0 108 19,617 Police 0 0 1 0 12 2 0 0 0 0 8 2 0 4 29 TS 281 10 155 170 1012 66 32 246 1,008 194 10 62 10 193 3,449 Total 1,031 172 1,406 4,956 1,922 224 32 2,617 1,973 7,318 244 885 10 305 23,095

IP

CRIME GROUP

58

Footwear Trading Standards HM Revenue & Customs Irish Customs Police Garda Other Total 36 53,324 22,539 26,714 222 3,813

Apparel 28,684 330 972 2,485 798 13 33,282

Equipment 134 403 51

Other 3,863 23

3,108

1 589

43 7,037 94,232

Footwear Trading Standards HM Revenue & Customs Irish Customs Police Garda Other Total 2,176,254 2,397,430 22,022 354,170 0 3,449 4,953,325

Apparel 1,225,158 16,265 47,367 135,807 45,535 690 1,470,822

Equipment 1,748 2,821 563 0 0 10 5,142

Other 4,458 330 0 3,120 0 215 8,123 6,437,592

Footwear Trading Standards HM Revenue & Customs Irish Customs Other Total 42 10,954 6,562 41 17,599

Apparel 2

Equipment 187 110 19

316 17,917

Footwear Trading Standards HM Revenue & Customs Irish Customs Other Total 1,890 492,930 295,335 1,845 792,000

Apparel 100

Equipment 2,895 1,650 295 0

100

4,840 796,940

IP

CRIME GROUP

59

Primary seizures by customs were at Coventry postal hub and Heathrow airport. Trading standards cases were conducted across the UK, and police cases primarily were in the South East of England. In addition the brand conducted a total of 241 Trademark infringement cases - 93 with customs, 5 with the police and 143 with trading standards. An example of the problems facing an individual IP right owner is shown in the following table. These are cosmetic products from a high profile brand.
Enforcement Agency Customs / UKBA Trading Standards Trading Standards Police Other Other Product Makeup Makeup Fragrance Makeup Makeup Fragrance Total Seizures Value of seizure 4,295 1,641 11 2 7,979 48 13,976 490,300 27,563 456.00 300.00 164,226.00 936.00 683,781.00

The legislative role of a Senior Appropriate Officer (SAO) applicable to all law enforcement outside of the police and HMRC enables appropriate oversight and scrutiny to take place ensuring the integrity and proportionality of its PoCA investigations. POCC can provide training to trading standards regular investigators and management, focussing on initiatives and raising awareness of money laundering investigations, confiscations and evidence gathering. Additionally, there is emphasis on the broad proactive application of the legislation and its practical use. Significantly, aspects of IP crime relating to trade marks and copyright are deemed scheduled offences under PoCA, this enhances a FIs capability by which a defendant is said to have a criminal lifestyle. Strategically the POCC has been working together with organisations such as the Trading Standards Institute to drive forward initiatives in support of mutual objectives. Trading standards departments are fully supported with the establishment of national and regional financial investigators working groups, and in 2011 the POCC invited trading standards to join the National Financial Investigators Working Group. This has placed them on equal footing alongside the police, HMRC and other law enforcement bodies at the national table. It is seen as an investment in a professional relationship that enables the exchange of working initiatives, as well as the opportunity to discuss concerns and legislative matters. However, whilst the Act has been in force for nine years only 24% of local authorities are presently represented by accredited financial investigators.

The National Policing Improvement Agency Proceeds of Crime Centre The UK Government has indicated that the Proceeds of Crime Centre (POCC) - which sits within the National Policing Improvement Agency (NPIA) - will move with reorganisation into the new National Crime Agency (NCA) in 2013. This clearly demonstrates the governments continuing support of the POCC and its authority under Part 1 Section 3 Proceeds of Crime Act 2002 (PoCA) as amended. The Act legislatively empowers the NPIA to train, accredit and monitor the performance of Financial Investigators (FIs) within law enforcement agencies. The POCC in addition to its primary role provides added value through the support, guidance and advice available to FIs with a network of centrally and regionally based trainers. There is also a dedicated trainer responsible for the direct liaison with all law enforcement agencies outside of the police and HMRC. This specifically includes all of the trading standards departments throughout the UK whether or not they have an FI.

IP

CRIME GROUP

60

Operation AIRBORNE Six people have been convicted for money laundering and fraud as a result of fake branded golfing equipment and computer accessories that was produced in China and then sold on as genuine products in the UK and overseas via E-Bay and obtaining a profit of 7m. In May 2011 Confiscation Orders were made against Roy Cottee, age 67, for 220,000, his wife Kay Cottee, age 47, for 80,000, Keith Thomas, 51, for 173,000 and Sharron Williams, 50 for 40,000. In October 2011 the final defendant, Gary Bellchambers, was given a Confiscation Order of 998,000 and a default sentence of five years if no payment was made within four months. On 19 March 2012 Sharon Williams received an immediate default sentence of 15 months imprisonment having made no effort to sell her property to satisfy her Order. Proceeds of Crime legislation The legislation provides for financial investigation into whether a person has benefitted from a criminal act. It allows FIs to apply to the Crown Court for investigative orders to obtain financial evidence. The Act also caters for the recovery of the criminal benefit through a confiscation process, as well as enabling a compensation regime. Investigative Orders Investigative orders compel financial institutions to provide evidence held on persons that are under investigation or convicted of criminal offences. Production Orders provide detailed banking information such as statements and account opening material which can be used as evidence to support the prosecution and confiscation process. Customer Information Orders facilitate the enquiry of financial institutions as to a customers personal information identifying a suspect to enable a criminal financial investigation to progress.

Account Monitoring Orders are a form of electronic banking surveillance that can be granted to operate for up to 90 days into the future. Financial institutions will report on all a suspects account transactions within the terms of the order to satisfy and progress a financial investigation. Restraint orders prevent a suspect from dealing with their assets anywhere in the world, and can be imposed at any time after a financial investigation has started. They are particularly useful where cash has been identified in a suspects bank account which would otherwise be dissipated.

Cash Seizure This process allows an FI to seize cash45 believed to be over 1,000 which is suspected of being recoverable property or intended by any person for use in unlawful conduct. As a civil means of recovering cash found, the burden of proof is on the balance of probabilities. For example, where a search is conducted of a person and/ or premises where involvement in counterfeit goods is suspected and cash is also found. The cash seizure process is dealt with through the Magistrates Courts where successful applicants will recover 50% of the forfeited amount for their authority. Confiscation Orders A person on conviction of an acquisitive crime from which there has been a criminal benefit can see the Crown Court46 make a confiscation order. The order will deem that a persons recoverable amount is an amount equal to his benefit from the criminal conduct concerned. This amount is recoverable from the persons identified assets. Successful applications will see 37.5% of the recovered amount returned to the applicants authority under the incentivisation scheme.

45 Cash means notes and coins in any currency, postal orders, cheques of any kind including travellers cheques, bankers drafts, bearer bonds and bearer shares found at any place in the United Kingdom. 46 Magistrates Courts can send a convicted person to the Crown Court to address a confiscation order enquiry under section 70 Proceeds of Crime Act 2002 as amended

IP

CRIME GROUP

61

Joint Assets Recovery Database (JARD) JARD is a national financial information database accessed by approximately 4,500 users, including FIs, prosecutors, enforcement staff and the courts, and managed by the NPIA. It is used to gather information from the start of an investigation through the prosecution stage, to conviction at court and any later confiscation. It supports the incentivisation process by recording financial case details and monetary amounts confiscated and forfeited. It encourages crime reduction in the community aided by the incentivisation process and is seen as a valuable and essential tool to fight acquisitive crimes. Previously IP crime was recorded along with the counterfeiting of money and forgery so it was difficult to ascertain a specific IP crime confiscation figure. However, in consultation with trading standards the JARD administrators have since added IP crime as its own independent primary offence type option. This change will allow reporting tools to more accurately indentify cases that are exclusively related to IP crime and will make available precise data reporting functions on IP crime specific offences. The total recorded on the new heading of 4,325,000.00 provides the baseline for future assessment. In April the MHRA completed its largest ever Proceeds of Crime investigation resulting in a convicted counterfeit/unlicensed medicines seller being ordered by the Crown Court to repay a 14.4 million confiscation order. Martin Hickman of Ashton Under Lyne had previously been sentenced to 2 years imprisonment in 2009 following an MHRA investigation into his online medicines websites. The financial investigation was undertaken with the assistance from the North West Regional Asset Recovery Team. The money trail was followed through over 30 bank accounts in six foreign jurisdictions and included the setting up of an online casino based in Malta. It also uncovered the extent of Hickmans lavish lifestyle with Range Rovers and luxury flats restrained by investigators. During the investigation, Hickman breached a restraint order that was in place preventing him from dealing with his assets. He also sold a flat in London without revealing the true selling price and subsequently diverted in excess of 600,000 to an associate.

He was sentenced to a further two years for contempt of court and trying to obtain a passport by deception by claiming he had lost his previous one when in fact it had been retained by the MHRA. The court found that Hickman benefited from his criminality to the value of 15,427,850 and the order to pay 14,407,850 was made. He was given six months to pay with a default sentence of 10 years if he does not pay in time. Civil Recovery Part 5 of PoCA enables law enforcement to pursue the recovery of criminal property through a civil process. It can be utilised where conventional criminal processes have failed for a variety of reasons under the Act, and therefore it is not dependent upon a successful criminal prosecution. The Serious Organised Crime Agency (SOCA) is responsible for this function allowing them to apply to the High Court to freeze and forfeit assets obtained through unlawful conduct. In addition, SOCA have powers under Part 6 of PoCA to raise a tax assessment against individuals and companies including offences such as IP crime, where there has been a failure to pay tax on income, with additional sanctions of other penalties and non payment of interest available. Again these are powerful tools available to all law enforcement involved in IP crime. Harm Reduction Policy & Crime and Disorder Act The return of incentivisation monies to local authorities has enabled an investment into good causes and is seen as a strategic engagement underwriting a Harm Reduction Policy. Money is seen to be directed back into the communities from where the initial crime occurred. An integrated policing strategy bringing together various law enforcement agencies has seen the police and local authorities for instance working together under the Crime and Disorder Act 1998 to combat crime and antisocial behaviour. Results have demonstrated that through the practical application of PoCA law enforcement is tackling crime head-on, reducing re offending and causing disruption to organised crime networks through driving forward a dynamic criminal justice system. This raises public confidence and awareness together with victim/witness satisfaction. A strategic approach to law enforcement partnerships and integrated policing is fundamental to a Harm Reduction Policy servicing the community.

IP

CRIME GROUP

62

Operation BLACKOUT Following on from the 2010-2011 IP Crime Reports article on Operation Blackout, three of the five men charged with offences under money laundering laws and the Trade Marks Act 1994 were convicted of conspiring to distribute and sell counterfeit goods on a commercial scale. The defendants were working closely with a Chinese based criminal organisation smuggling fake Nike trainers from China into the UK, distributing them to market sellers, and selling some directly at markets around the country. The street value of the counterfeit trainers amounted to 1.1 million, with a loss to the trade mark owner in the region of 4 million. Bundles of cash amounting to over 400,000 was also seized from houses and safety deposit boxes. The three men were sentenced to a combined total of 15 years imprisonment. Proceeds of Crime Act 2002 Federation Against Copyright Theft (FACT) Through effective use of the Proceeds of Crime Act 2002 (PoCA) FACT believes that a strong deterrent to involvement on IP crime can be created. FACT actively encourages use of this legislation to target organised criminals who are running pirate DVD manufacturing, distribution and sales operations. FACT is pushing for greater use of PoCA in cases where there is an IP crime element online websites that are providing access to pirated films, TV programmes, sporting events and other media may be charging for access or may, more often, be free to access but generating substantial revenues from advertising placed on the sites. FACT has been supporting the employment of an accredited Financial Investigator at Central Bedfordshire Trading Standards whose is available to assist in financial investigations where the criminality impacts on FACT members IP. This has proved to be an incentive to police and trading standards in England and Wales.

IP

CRIME GROUP

63

Chapter 3: Results of the 2011/12 Survey of Trading Standards

The annual survey of trading standards (TS) work into IP crime was launched in March 2012. This survey covered the fiscal period April 2011 to March 2012 and provides an indication not only to the scale of IP crime, including the type and location of counterfeit goods investigated, but also the resources available and training dedicated throughout authorities in their efforts to address the problem. The Intellectual Property Office (IPO) received a total of 100 responses from trading standards that represented 12 regions throughout the United Kingdom. In some cases the responses were anonymous. The charts and analysis that follows illustrate the most frequent answers and where possible were compared year-on-year to the results of the 2009/10 and 2010/11 surveys. Full tables of the survey data that include region and authority information are produced as appendices A-D at the end of this chapter.

Clothing remains as one of the most reported items with 95% of the authorities who responded to the survey indicating that they had investigated counterfeit clothing this has remained the highest investigated product for the past three surveys. Compared to the 2010/11 Report there was an increase in investigating counterfeit watches and jewellery, toiletries/cosmetics and electrical goods. The survey also showed increases in other products not included in the chart, such as batteries (13%), medical products (8%), computer parts (8%) and e-books (9%). Vehicle parts (6%) were also investigated, however there was a drop in the number of authorities investigating digital files to 8% from 18% . Although seizure data from the IPO Intelligence Hub showed a nil return from trading standards on the seizure of counterfeit toys and batteries, the survey does highlight they are still actively investigating these and many other items. Year on year comparison The table below provides a comparison between the last three surveys. The most noticeable trend is the number of authorities reporting fake alcohol compared to the same period last year. In last years report it had risen by a quarter to 64% and again this year has seen a rise to 75%. Along with alcohol, there has also been a steady increase over the past three years in cigarettes/ tobacco, toiletries and cosmetics and some increase in clothing. This highlights the concerning trend of counterfeit consumable products. It also suggests that toys, watches and jewellery, and electronic components remain fairly static in the volume of investigations undertaken. There is no clear national geographical indication as to the main locality of this threat, although the majority of reports covered London, the North West and the South East. Only one region did not report an instance of fake alcohol. The other noticeable changes are the decreases in reporting authorities which investigated fake software, DVDs and CDs, computer games, MP3/4 files, computer parts, online streaming and electrical goods between 2010/11and 2011/12. This could be reflective of increased protection measures by the IP rights owners or could support the trend that more of this content is becoming digital. The number of authorities reporting fake footwear has also declined compared to 2009/10.

A. Types of goods investigated

Respondents were asked what types of goods they had investigated since 1 April 2011 until 31 March 2012. The chart below indicates the 13 most investigated products (those which 20% or more authorities responded as to investigating).

Top 12 fake/products investigated by TS

100 80 60 40 20 0

IP

CRIME GROUP

64

All fake/pirated products investigated by TS

2011/12

B. Where counterfeit/pirated goods have been investigated in 2011-12

The survey asked where authorities had investigated counterfeit or pirated goods since 1 April 2011 to March 2012. The chart overleaf illustrates the top 11 most frequent locations of investigations. As with previous years, the figures indicate a fairly even split between the online environments through websites and web auction sites and physical high streets (labelled as ordinary shops) as equally likely to be reported as locations where fake products are purchased. Many authorities highlighted the use of social networking sites as a mechanism for offering counterfeit items for sale or for acting as a secure gateway to pirated material this is registered under Other Internet Use. There are numerous other locations which reflect that

physical locality is more often reported than online for trading counterfeits. There is a variety of physical locations specified: apart from high street shops, private residences (70%), outdoor markets (62%) and car boot sales (49%) remain major locations for investigation for trading standards authorities even though the latter two show slight decrease this past year. Most noticeably the third highest location for investigating IP crime by those respondents was at private residences. This has increased to 70% which may account for the links between benefit fraud committed alongside IP crime.

IP

CRIME GROUP

65

100

Top 11 IP crime locations investigated by TS

80

60

40

20

0 Private Residence Outdoor Markets

Auction sites

Ordinary Shops

Carboot Sales

Pubs/Clubs

Other Internet Uses

Factories & Industrial Units

Year on Year comparison The results between this and last year remains consistent in terms of the most investigated locations for online or physical market places. However there are some increases between 2010/11 and 2011/12 with a number of authorities reporting a rise in on the street selling and in other internet uses.

All IP crime locations investigated by TS

Other Workplaces

Festivals/Music Venues

On the Street

2011/12 2010/11 2009/10

IP

CRIME GROUP

66

As last year the majority of respondents had investigated between three to four locations with a quarter looking into five to six.

How many different types of locations TS undertook investigations in 0-2 3-4 5-6 7-8 9-10 11+ Total

Actual 10 30 24 21 14 1 100

% 10% 30% 24% 21% 14% 1% 100%

The chart overleaf shows that work with the optical media industries remains high with three quarters of all responding authorities worked in partnership with at least one of these agencies - BPI, FACT and UKIE over the reporting period, although this is down on the 86% who had worked with these partner agencies in 2009/10. Work with IP rights owners has increased with 72% (58% in 2010/11) of authorities working directly with AntiCounterfeiting Group (ACG) members. Year on year comparison Work with other TS authorities on IP crime investigations was high again this year with 82% of respondents saying they had partnered other local authorities, this is up from 76% in 2010/11. Work with the police continues to grow, with 98% of responses compared to 93% in 2010/11 and 92% in 2009/10. There was also 14% increase in the use of the IPOs Intelligence Hub utilising the national IP crime database in order to add value to their investigations. Seizures of counterfeit blue disabled badges, car service histories using genuine garage logos, and main car dealer service stamp resulted in a 64% increase in partnership working with VOSA.

C. Coordinated working
A wide range of organisations including other law enforcement agencies, Government departments and industry bodies - were identified by respondents as key partner agencies in the past reporting year. Over 90% of authorities that responded worked with the police, possibly highlighting the requirement of a police presence during enforcement activity, followed by other trading standards authorities.

Percentage of TSs which worked with partner agencies

100

80

60

40

20

IP

CRIME GROUP

67

TS work with industry bodies

80 70 60 50 40 30 20 10 0 ACGF ACT IFSP BPI UKIER EACT PRS for Music FAST BSA IFPI

Work with IP right owners remains strong with a 21% increase working with the ACG. Further work was carried out with IFSP (up 22% from last year) continuing a worrying trend that consumable products are becoming more of a problem area than previously recognised. There were also significant increases in working with MHRA (up 44%) along with FSA (30%), and DVLA (32%). However there were also some significant drops in partnerships particularly with FASTIS (down 143%) PRS for Music (- 58%), BSA (-33%) and SOCA (-10%).

Although IFPI shows a large drop in working with TS, only two TS authorities worked with IFPI in 2010/11 compared to only one in 2011/12.

Although IFPI shows a large drop in working with TS, only two TS authorities worked with IFPI in 2010/11 compared to only one in 2011/12. Increase/Decrease in Percentage of TS work
with partner agencies & Industry between 2010/11 and 2011/12

IP

CRIME GROUP

68

Number of agencies TS worked with (+/- between 2010/11 & 2011/12)

Number of different organisations TS had worked with 0-4 5-8 9-12 13-16 17 + All Total

2009-2010 Percentage 21 45 25 8 1 100%

2010-11 Percentage 25 44 14 10 7 100%

2011-12 Actual 14 43 28 12 3 100 Percentage 14% 43% 28% 12% 3% 100%

+/-

-9% -2% 14% 2% -4%

There have been 100 responses to the TS survey in 2011/12 this compares with 104 responses in 2009/10 and 88 in 2010/11. There is an increase in the number of authorities who dealt with nine to twelve partner organisations for 2010/11 along with an increase in the number of TS authorities that worked with more than 13 organisations compared to the previous year. Cross Authority Work The chart on the right shows where local authorities have worked according to the National Intelligence Models (NIM) levels I, II and III (these levels indicate: I-local, II-cross-authority or III-nationally/internationally working for trading standards). The results show a slight decrease (-5%) in cross border activity compared to 2010/11 with a slight increase at local level (+3%). The level of national/international work is slightly down by -4% on last years figure. However, work is continuing to show there are organised crime groups involved in counterfeiting and piracy, and as a result, evidence of a tactical response by enforcement to the wider threat of IP crime.

NIM Levels

Level III, 16% Level I, 41% Level II, 37%

A variety of reasons were provided for the increase but the use of the internet for carrying out IP infringements was the most frequent answer.

D.

Levels of infringement

The questionnaire asked whether or not respondents felt that the level of IP criminality in their authority had increased or decreased. Thirty six percent of the 100 responses felt that there had been the same amount of criminality over the past year, 31% said there had been an increase and only 4% suggested a decrease, with 29% not being sure.

E.

Levels of IP enforcement

Respondents were asked to identify on the levels of IP enforcement that they had undertaken during the year. The overall indication from the 100 responses to this question was that the majority (40%) had maintained their levels of IP enforcement over the past year. Authorities undertaking more proactive training and even implementation of a new standalone computer purchased with funding from the E-Crime project that has assisted with online market surveillance and open

IP

CRIME GROUP

69

source intelligence. There were other responses that suggested an increase in awareness and complaints of counterfeit products. Apart from 40% of authorities where the level of enforcement did not change, some remaining authorities had decreased their activity. These authorities reported that this was the result of limited resources, council cuts and other priorities within the authority. The table below concentrates on the average increase, decrease and same levels of enforcement activity over the past three years for all trading standards regions. Although the levels of enforcement that had increased in 2011 are not as high as 2009 they are up on last year by 9%. It is also encouraging to see that there is only a slight decrease in enforcement activity with a 4% decrease compared to 25% in 2010/111 and 28% in 2009/10. A slight increase in similar levels of activity from 2010/11 is up by 23% compared to 2009/10. Considering the budget cuts to trading standards services during the survey period these are encouraging statistics.
Year 2008/09 to 2009/10 2009/10 to 2010/11 2010/11 to 2011/12 Increased 38% 21% 30% Decreased 28% 25% 4% Same 17% 38% 40%
100%

Percent of TS per Region: Change in level of Enforcement between 2010/11 and 20211/121

80%

60%

40%

20%

SWERCOTS

SCOTS

ESSTA

TSEM

TSNE

Increased

Decreased

Same

F.

Training

The TS authorities were asked if they had delivered or received IP related training over the past year. All authorities responded to this question with 85% confirming that they received the training and only 15% saying they had not or did not know of any training available. The majority of those who had received training did so through established routes such as Trading Standards Institute conference, the IP module of the Diploma in Consumer Affairs and Trading Standards (DCATS) and Anti-Counterfeiting Group Roadshows. There was also a clear indication that Olympic Games counterfeit merchandise identification training had been attended.

The following Chart shows how the level of enforcement activity has changed in each region from 2010/11 and 2011/12. The proportion of authorities where this level is the same as in the last year is similar across all region about 40%, although in TSNE it was 60% and in CENSA 50%. But there is a huge variety between regions in this proportion where the enforcement has increased: between 5% and 75%. The regions with a big proportion of Authorities indicating the increase in enforcement were: York/HUMBS (75%), TSSE and WHOTS (50%). This indicates either the increase in counterfeiting activities or the increase in authorities activities or both.

G.

Resources

As part of the survey respondents were asked to provide figures as to the resources that were dedicated to the enforcement of IP crime in the period 2011/12. Out of the responses to this question, an average of 405 staff days per region was dedicated to the enforcement of IP crime. This is higher than 2010/11 figures of 300 staff days per region. Welsh Heads of Trading Standards (WHOTS) reported the highest average of over 889 staff days being dedicated with half of that being spent on middle management grades. This is supported by the national average (per region) of 663 days being devoted by middle management, followed by 311 days of junior grades and 1,169 days by senior officers.

IP

CRIME GROUP

York/HUMBS

WHOTS

TSNW

CENSA

LOTSA

TSSE

Total

NI

0%

70

The average time per authority spent on IP crime in 2011/112 was broken down as follows: junior staff dedicated 37 hours on IP crime, middle management 79 hours and senior staff 20 hours.

I.

Links to other criminality

H.

Proactive monitoring of the internet

The survey asked authorities to indicate the level of internet monitoring they had undertaken over the past year. Sixty four percent focused their monitoring on auction websites. There was a slight increase to 45% on other online market places and an increase to 6% looking at P2P uploaders. Many of the responses stated that they were also monitoring Facebook for transactions of counterfeit products.

The survey asked respondents to identify other criminality associated with IP crime they had investigated. Of the 78 responses to this question 75% reported benefit fraud is the crime most frequently associated with IP crime - this is a 20% increase on last year and nearly 30% increase from 2009/10. The number of identified links to organised criminality dropped slightly to 29% down from 34% last year. This may account for the drop in national work carried out by TS from the previous year. There was however a significant increase in money laundering up from the previous year to 49%, along with an increase in the links to drug crime to 40%.

Links to other criminality

Prostitution Loan Sharking People Trafficking Violence Drug Crime Organised Crime Money Laundering Benefit Fraud 01 0 20 30 40 50 60 70 80 2009/10 2010/11 2011/12

IP

CRIME GROUP

71

Appendix A43 - Empowering and Protecting Consumers: Government response to the consultation on institutional reform - proposed responibilities
Responsibilities Information, advice and education Advocacy Horizon scanning of possible consumer issues arising from commercial practices or developments in regulation Structural market cases and studies Legal precedent cases on Unfair Contract Terms Lead on international liaison work Accountability Responsible for coordination of: Intelligence about market problems Assessment of current and potential consumer detriment Enforcement policy and international liaison joint work Agreement on the responsibility for specific issues including cases arising from market studies

Citizens Advice & Citizens Advice Scotland

BIS

CMA

TREASURY BIS

Chief Trading Standards Officers

Coordination, decision-making and financial management in respect of: National Trading Standards Board/ Scottish counterpart Intelligence analysis and database management Cases referred by local TS teams Scambuster cases Illegal Money lending Internet enforcement (e-Crime) Funding for enforcement at ports Indemnity fund to mitigate risk BIS & Local Authorites

Delivery by Trading Standards teams

Most large enforcement cases Most legal precedent cases (except unfair contract terms) through lead authorities Specific projects (eg e-crime, ports, illegal money-lending)

Strategic Intelligence, Prevention and Enforcement Partnership (SIPEP)

Enforcement Workplan agreed with BIS

Individual local authorities Taking forward: Joint project work with Trading Standards teams Cases under Primary Authority

43 http://www.bis.gov.uk/assets/biscore/consumer-issues/docs/e/12510-empowering-protecting-consumers-government-response.pdf

IP

CRIME GROUP

72
Appendix B - types of goods investigated by authority

Online Streaming of Digital

Fake Labels / Packaging

Electronic Components

Construction Materials

Toiletries / Cosmetics

Cigarettes / Tobacco

Region CENTSA CENTSA CENTSA CENTSA CENTSA CENTSA CENTSA CENTSA CENTSA CENTSA EETSA EETSA EETSA EETSA LOTSA LOTSA LOTSA LOTSA LOTSA LOTSA LOTSA LOTSA LOTSA LOTSA LOTSA LOTSA SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS

Authority Birmingham Sandwell Solihull Staffordshire Stoke Telford & Wrekin Walsall Wolverhampton Worcesteshire Hertfordshire Central Bedfordshire Essex Suffolk Peterborough Bromley Croydon Hackney Hammersmith & Fulham Islington Merton Camden Greenwich Lambeth Lewisham Redbridge Tower Hamlets Aberdeenshire Angus Dumfries & Galloway Dundee East Ayrshire East Lothian Edinbugh Glasgow Inverclyde Moray Orkney Islands

x x x x x

x x x x

x x x x

x x x x x

x x x x

x x x x x x x x

x x x x

x x

x x

x x x x

x x x

x x x x x

x x x

x x x x x x x x x x x x x

x x x x x x

x x x x x x x x x x

x x x x x x x

x x

x x x x x

x x x x

x x

x x

x x

x x x x x x x x x

x x

x x x

x x x x x x x x x x x x x x x x x x x x x x x x x

x x x x

x x x x

x x x x x x

x x x x

x x x x x x x x

x x x x x x x x

x x x x x x

x x

IP

CRIME GROUP

Watches / Jewellery

Online File-sharing

Computer Games

Medical Products

Electrical Goods

Computer Parts

Vehicle Parts

MP3 Files

Footwear

Batteries

Software

Clothing

e-books

Alcohol

DVDs

Toys

CDs

73

Online Streaming of Digital

Fake Labels / Packaging

Electronic Components

Construction Materials

Toiletries / Cosmetics

Cigarettes / Tobacco

Region SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SWERCOTS SWERCOTS SWERCOTS SWERCOTS SWERCOTS TSEM TSEM TSEM TSEM TSEM TSEM TSNE TSNE TSNE TSNW TSNW TSNW

Authority Renfrewshire Scottish Borders Shetland Islands Stirling & Clackmannanshire N Lanarkshire W Dunbartonshire West Lothian Devon Dorset Gloucestershire Wiltshire Plymouth South Gloucestershire Derbyshire Leicestershire N Lincolnshire Lincolnshire Nottinghamshire Stockton-onTees Gateshead Newcastle Upon Tyne South Tyneside Blackpool Bury Cheshire West & Chester Borough Council Cumbria Lancashire Manchester Salford Stockport St Helens

x x x x

x x x

x x x x x

x x x x x

x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x

x x

x x x x x x x

x x x x x

x x

x x x

x x

x x x

x x x x x

x x x x x x x

x x

x x x x x x

x x x x x x x x x x x x x x

x x

x x

x x

x x x x x x

x x x x x x x x

x x

x x x x x x x x x x

x x

x x

x x

TSNW TSNW TSNW TSNW TSNW TSNW

x x x x x

x x x x x

x x x x

x x x x x x x x x x x

x x x x x

x x x

x x x x

x x x x x x x

x x x x

x x x x x x

IP

CRIME GROUP

Watches / Jewellery

Online File-sharing

Computer Games

Medical Products

Electrical Goods

Computer Parts

Vehicle Parts

MP3 Files

Footwear

Batteries

Software

Clothing

e-books

Alcohol

DVDs

Toys

CDs

74

Online Streaming of Digital

Fake Labels / Packaging

Electronic Components

Construction Materials

Toiletries / Cosmetics

Cigarettes / Tobacco

Region TSNW TSNW TSNW TSNW TSSE TSSE TSSE TSSE TSSE TSSE TSSE TSSE TSSE TSSE TSSE WHOTS WHOTS WHOTS WHOTS WHOTS WHOTS WHOTS WHOTS WHOTS WHOTS WHOTS WHOTS WHOTS Yorks/ Humbs Yorks/ Humbs Yorks/ Humbs Yorks/ Humbs

Authority Tameside Trafford Wigan Wirral East Sussex Hampshire Isle of Wight Kent Medway Milton Keynes Portsmouth Reading Slough Surrey West Sussex Anglesey Blaenau Gwent Bridgend Caerphilly Carmarthenshire Denbighshire CC Merthyr Tydfil Newport Powys Rhondda Cynon Taff Torfaen Vale of Glamorgan Wrexham Barnsley York Hull Lincolnshire

x x x x

x x

x x x

x x x x

x x

x x x x x

x x x

x x x x x x x x

x x x

x x x x

x x x x x

x x x x

x x x x x

x x x x

x x x x

x x

x x

x x x x

x x x x x x x

x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x

IP

CRIME GROUP

Watches / Jewellery

Online File-sharing

Computer Games

Medical Products

Electrical Goods

Computer Parts

Vehicle Parts

MP3 Files

Footwear

Batteries

Software

Clothing

e-books

Alcohol

DVDs

Toys

CDs

75

Online Streaming of Digital

Fake Labels / Packaging

Electronic Components

Construction Materials

Toiletries / Cosmetics

Cigarettes / Tobacco

Region Yorks/ Humbs Yorks/ Humbs Yorks/ Humbs Yorks/ Humbs Yorks/ Humbs Other/Misc

Authority NE Lincolnshire N Lincolnshire N Yorkshire Rotherham W Yorkshire Anon 1 Anon 2 Anon3 Anon 4 Anon 5 Anon 6 Anon 7 Anon 8 Anon 9 Anon 10 Anon 11 Anon 12 Anon 13 Anon 14 Anon 15 Anon 16 Anon 17 Anon 18 Anon 19 Anon 20 Anon 21 Anon 22 Anon 23

x x x

x x

x x x x x x x x x

x x x

x x x x x x x x x x x x x x x x x x x x x 75 13 x x x

x x x x

x x x x x x x x x x x x x x x x x x x x x x x 94 x x x 46 8 2 x x x x x x x x x x x

x x x x x x x x x x x

x x x x x x x x x

x x x x x x x x x x x x x

x x

x x

x x x x x x x x x x x x x x

x x x x x x x x

x x x x

x x x x x x x x x x 55

x x x x x x x x x x x x x x x 82

x x x x x x x x x 77 9 x 45 7 32 x 69 8 8 6 3 x x x x x 33 52 x 25 6 x x x x x x x x x x x x x x x 64 x x x x x x

Percentage of Authorities who investigated product

IP

CRIME GROUP

Watches / Jewellery

Online File-sharing

Computer Games

Medical Products

Electrical Goods

Computer Parts

Vehicle Parts

MP3 Files

Footwear

Batteries

Software

Clothing

e-books

Alcohol

DVDs

Toys

CDs

76
Appendix C - locality of counterfeit/pirated products

Region CENTSA CENTSA CENTSA CENTSA CENTSA CENTSA CENTSA CENTSA CENTSA EETSA EETSA EETSA EETSA EETSA LOTSA LOTSA LOTSA LOTSA LOTSA LOTSA LOTSA LOTSA LOTSA LOTSA LOTSA LOTSA LOTSA SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS

Authority Birmingham Sandwell Staffordshirre Solihull Stoke Telford Wrekin Walsall Wolverhampton Worcesteshire Central Bedfordshire Essex Hertfordshire Peterborough Suffolk Bromley Croydon Greenwich Hackney Hammersmith & Fulham Islington Lambeth Merton Camden Lewisham Redbridge Tower Hamlets East Ayrshire Aberdeenshire Angus Council Dumfries & Galloway Dundee East Lothian Glasgow Inverclyde Moray Orkney Islands Renfrewshire

x x x x x x

x x x x

x x

x x x x x

x x

x x x x

x x x

x x x x

x x x

x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x

x x x x x x x x x x x

x x x

x x x x x x x x x x x x

x x x x

x x

x x

x x x x x x x x x

x x

IP

CRIME GROUP

UK Ferry / Shipping ports

Festivals / music venues

Factories and industrial units

Auction Site / Website

Other internet uses

Private residences

Door to door sales

Other workplaces

Outdoor markets

Ordinary shops

Car boot sales

On the street

Pubs / clubs

Postal hubs

Pharmacies

UK airports

77

Region SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SWERCOTS SWERCOTS SWERCOTS SWERCOTS SWERCOTS SWERCOTS TSEM TSEM TSEM TSEM TSNE TSNE TSNE TSNE TSNW TSNW TSNW

Authority Scottish Borders S Lanarkshire Stirling & Clackmannanshire W Dunbartonshire West Lothian Devon Dorset Gloucestershire Plymouth South Gloucestershire Wiltshire Derbyshire Leicestershire Lincolnshire Nottinghamshire Gateshead Newcastle Upon Tyne South Tyneside Stockton-on-Tees Blackpool Bury Cheshire West & Chester Bourough Council Cumbria Lancashire Manchester Salford Stockport St Helens Tameside Trafford Wigan Wirral East Sussex Hampshire Isle of Wight Kent

x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x

x x x x x x x x x x x x x x

x x x

x x

x x

x x

TSNW TSNW TSNW TSNW TSNW TSNW TSNW TSNW TSNW TSNW TSSE TSSE TSSE TSSE

x x x x x x x

x x x x

x x x x x

x x x x x

x x x

x x x

x x x x x x x x x x x

x x x x x x x x x

x x x x x x

x x x

x x x x

IP

CRIME GROUP

UK Ferry / Shipping ports

Festivals / music venues

Factories and industrial units

Auction Site / Website

Other internet uses

Private residences

Door to door sales

Other workplaces

Outdoor markets

Ordinary shops

Car boot sales

On the street

Pubs / clubs

Postal hubs

Pharmacies

UK airports

78

Region TSSE TSSE TSSE TSSE TSSE TSSE TSSE WHOTS WHOTS WHOTS WHOTS WHOTS WHOTS WHOTS WHOTS WHOTS WHOTS WHOTS WHOTS WHOTS Yorks/Humbs Yorks/Humbs Yorks/Humbs Yorks/Humbs Yorks/Humbs Yorks/Humbs Yorks/Humbs Yorks/Humbs Other/Misc

Authority Medway Milton Keynes Portsmouth Reading Slough Surrey West Sussex Anglesey Blaenau Gwent Bridgend Caerphilly Carmarthenshire Denbighshire Merthyr Tydfil Newport Powys Rhondda Cynon Taff Torfaen Vale of Glamorgan Wrexham Barnsley York Hull NE Lincolnshire N Lincolnshire N Yorkshire Rotherham W Yorkshire Anon 1 Anon 2 Anon 3 Anon 4 Anon 5 Anon 6 Anon 7 Anon 8 Anon 9 Anon 10

x x x x x x x x

x x x x x x

x x x x

x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x

x x x x x x x x x x x x x

x x

x x

x x

x x x x x x x x x x

x x x

x x

x x x

x x x

x x x x x x x x

x x x x x x x

x x

x x x

x x x

x x x x x

x x

IP

CRIME GROUP

UK Ferry / Shipping ports

Festivals / music venues

Factories and industrial units

Auction Site / Website

Other internet uses

Private residences

Door to door sales

Other workplaces

Outdoor markets

Ordinary shops

Car boot sales

On the street

Pubs / clubs

Postal hubs

Pharmacies

UK airports

Region

Anon 11

Anon 12

Anon 13

Anon 14

Anon 16

Anon 15

Anon 17

Anon18

Anon 19

Anon 21

Anon 20

Anon 22 x x x x x x x x Auction Site / Website Car boot sales Door to door sales Factories and industrial units Festivals / music venues x x x x x x x x x x x x x x x On the street x x x Ordinary shops Other workplaces x x Other internet uses x x x x x Outdoor markets Pharmacies Postal hubs x x x x x x x x x x Private residences x x x x x x x x x x x x x x x x x

Authority

Anon 23 x x x x x x

Percentage of Authorities who investigated product 84 49 13 23 15 45 76 18 36 62 3 4

IP

68 x 5 3 38

Pubs / clubs x x UK airports UK Ferry / Shipping ports

79

CRIME GROUP

80
Appendix D - working with partner agencies

Federation Against Software Theft IiS

Vehicle & Operator Services Agency

Federation Against Copyright Theft

Driver & Vehicle Licensing Agency

Int Federation of Spirit Producers

Serious Organised Crime Agency

Department of Work and Pension

British Recorded Music Industry

Business Software Alliance

Anti-Counterfeiting Group

HM Revenue & Customs

Food Standards Agency

UK Immigration Service

Other TS Authorities

IPO Intelligence Hub

UK Border Agency

PRS for Music

Scambusters

Home Office

REACT x x x x x x x x

MHRA

Police

Region CENTSA CENTSA CENTSA CENTSA CENTSA CENTSA CENTSA CENTSA CENTSA EETSA EETSA EETSA EETSA EETSA LOTSA LOTSA LOTSA LOTSA LOTSA LOTSA LOTSA LOTSA LOTSA LOTSA LOTSA LOTSA SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS

Authority Birmingham Sandwell Solihull Staffordshire Stoke Telford & Wrekin Walsall Wolverhampton Worcesteshire Bedfordshire Essex Hertfordshire Peterborough Suffolk Bromley Croydon Greenwich Hackney Hammersmith & Fulham Islington Lambeth Merton Camden Lewisham Redbridge Tower Hamlets Aberdeenshire Angus Council Dumfries & Galloway Dundee East Ayshire East Lothian Edinburgh

x x x x

x x

x x x

x x x x x x

x x

x x

x x x x

x x x x x x

x x

x x x x

x x

x x

x x

x x

x x x x x x x x x x x x

x x x x x x x x

x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x

x x x x x

x x x

x x x x x x

x x

x x

x x x

x x x

x x x x x x x x x x

x x x x

x x

x x x

x x

x x x x x

x x x x x x

x x

x x

x x

x x

IP

CRIME GROUP

UKIE

IFPI

81

Federation Against Software Theft IiS

Vehicle & Operator Services Agency

Federation Against Copyright Theft

Driver & Vehicle Licensing Agency

Int Federation of Spirit Producers

Serious Organised Crime Agency

Department of Work and Pension

British Recorded Music Industry

Business Software Alliance

Anti-Counterfeiting Group

HM Revenue & Customs

Food Standards Agency

UK Immigration Service

Other TS Authorities

IPO Intelligence Hub

UK Border Agency

PRS for Music

Scambusters

Home Office

REACT x x x x x x

MHRA

Police

Region SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS

Authority Glasgow Inverclyde Moray Orkney Islands Renfrewshire Stirling & Clackmannanshire Scottish Borders Shetland Islands S Lanarkshire W Dunbartonshire West Lotian Devon Dorset Gloucestershire South Gloucestershire Plymouth Wiltshire Derbyshire Leicestershire Lincolnshire Nottinghamshire Gateshead Newcastle Upon Tyne South Tyneside Stockton-on-Tees Blackpool Bury

x x

x x x x x

x x x x x

x x x x x

x x x

x x

SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SWERCOTS SWERCOTS SWERCOTS SWERCOTS SWERCOTS SWERCOTS TSEM TSEM TSEM TSEM TSNE TSNE TSNE TSNE TSNW TSNW

x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x

x x

x x x x x x x x

x x x x x x x x x x x x

x x x x x x x x x x

x x x x x x

x x

x x

x x

x x

x x x x x x

x x x x x x x x x

x x x x x x x x

x x x x x x x

x x x x

x x

IP

CRIME GROUP

UKIE

IFPI

82

Federation Against Software Theft IiS

Vehicle & Operator Services Agency

Federation Against Copyright Theft

Driver & Vehicle Licensing Agency

Int Federation of Spirit Producers

Serious Organised Crime Agency

Department of Work and Pension

British Recorded Music Industry

Business Software Alliance

Anti-Counterfeiting Group

HM Revenue & Customs

Food Standards Agency

UK Immigration Service

Other TS Authorities

IPO Intelligence Hub

UK Border Agency

PRS for Music

Scambusters

Home Office

REACT x x x x x x x x x x x x x

MHRA

Police

Region TSNW

Authority Cheshire West & Chester Borough Council Cumbria Lancashire Manchester Salford St Helens Tameside Trafford Wigan Wirral East Sussex Hampshire Isle of Wight Kent Medway Milton Keynes Portsmouth Reading Slough Surrey West Sussex Anglesey Blaenau Gwent Bridgend Camarthenshire County Council Caerphilly Denbighshire CC Merthyr Tydfil Newport Powys Rhondda Cynon Taff

TSNW TSNW TSNW TSNW TSNW TSNW TSNW TSNW TSNW TSSE TSSE TSSE TSSE TSSE TSSE TSSE TSSE TSSE TSSE TSSE WHOTS WHOTS WHOTS WHOTS WHOTS WHOTS WHOTS WHOTS WHOTS WHOTS

x x x x

x x x

x x

x x x x x x x x x x x

x x x x x x

x x x x x x x x

x x x

x x x x x x x x

x x

x x x x x x x x x x

x x x x x x x

x x x

x x

x x x

x x x x x x x x

x x x x

x x x x x x

x x

x x x x

x x

x x x x

x x x

x x

x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x

x x x x x x x x x x x x x x

x x x x x x x x x x x x x x x x x x x x x

x x x x x x x x x x x x x x x x

x x x x

x x

x x x

IP

CRIME GROUP

UKIE

IFPI

83

Federation Against Software Theft IiS

Vehicle & Operator Services Agency

Federation Against Copyright Theft

Driver & Vehicle Licensing Agency

Int Federation of Spirit Producers

Serious Organised Crime Agency

Department of Work and Pension

British Recorded Music Industry

Business Software Alliance

Anti-Counterfeiting Group

HM Revenue & Customs

Food Standards Agency

UK Immigration Service

Other TS Authorities

IPO Intelligence Hub

UK Border Agency

PRS for Music

Scambusters

Home Office

REACT x x x x x

MHRA

Police

Region WHOTS WHOTS WHOTS Yorks/ Humbs Yorks/ Humbs Yorks/ Humbs Yorks/ Humbs Yorks/ Humbs Yorks/ Humbs Yorks/ Humbs Yorks/ Humbs Other/ Misc

Authority Torfaen Vale of Glamorgan Wrexham Barnsley Hull NE Lincolnshire N Lincolnshire Rotherham York N Yorkshire W Yorkshire Anon 1 Anon 2 Anon 3 Anon 4 Anon 5 Anon 6 Anon 7 Anon 8 Anon 9 Anon 10 Anon 11 Anon 12 Anon 13 Anon 14 Anon 15

x x

x x

x x x

x x

x x

x x

x x x

x x

x x x

x x

x x

x x

x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x

x x x x x x x x x x x x x x x x

x x x x

x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x

x x

x x x x x x x x

x x x

IP

CRIME GROUP

UKIE

IFPI

84

IP
Region Anon 23 Authority x x x Department of Work and Pension x Driver & Vehicle Licensing Agency Food Standards Agency x HM Revenue & Customs Home Office x IPO Intelligence Hub x x x MHRA Other TS Authorities x Police Serious Organised Crime Agency x Scambusters x x UK Border Agency x x UK Immigration Service x Vehicle & Operator Services Agency x x x x x x Anti-Counterfeiting Group x x x x x British Recorded Music Industry x 6 Business Software Alliance x x x x 65 Federation Against Copyright Theft x 8 Federation Against Software Theft IiS 1 IFPI x x x x x x 50 Int Federation of Spirit Producers x x 12 PRS for Music x x x x 36 REACT x x x x x 41 UKIE Anon 22 Anon 21 Anon 20 Anon 19 Anon 18 Anon 17 Anon 16 Percentage of Authorities who worked with other agencies 29 x 28 x x x x 25 x x x x x x 77 4 28 16 x x x x x x x x 82 x x x x x x x 95 x 10 x 40 26 12 14 70 47

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Glossary
AAIPT The Alliance Against IP Theft ACG The Anti-Counterfeiting Group AFI Accredited Financial Investigator AFV Armoured fighting vehicle AIA Aerospace Industries Association BASCAP The Business Action to Stop Counterfeiting & Piracy BBC British Broadcasting Corporation BEAMA The British Electrotechnical and Allied Manufacturers Association BIS The Department of Business, Innovation and Skills BPI The British Recorded Music Industry BSA Business Software Alliance BVA British Video Association CCA Consumer Credit Act 1974 CD Compact disc CDRs Compact disc recordable format CDPA The Copyright, Designs and Patents Act 1988 CENTSA Central England Trading Standards Authorities CPS Crown Prosecution Service COG Component obsolescence group The Commission European Commission DCATS Diploma in Consumer Affairs and Trading Standards DCMS Department for Culture, Media and Sport DETINI Department of Enterprise, Trade and Investment, Northern Ireland DVD Digital video/versatile disc DVDr A DVD recordable format DVLA Driver and Vehicle Licensing Agency DWP Department for Work and Pensions EETSA East of England Trading Standards Association eGame Electronic game EU The European Union FACT The Federation Against Copyright Theft FASTIiS The Federation Against Software Theft Investors in Software FI Financial investigator

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CRIME GROUP

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FSA The Food Standards Agency GAO US Government Accountability Office GHD Good hair day gTLD generic top level domain HMRC Her Majestys Revenue & Customs HQ Headquarters The Hub Intellectual Property Offices Intelligence Hub IAWG Internet Auction Working Group ICANN The Internet Corporation for names and numbers IFPI International Federation of the Phonographic Industry IFSP International Federation of Spirits Producers IP Intellectual Property IPC Intellectual Property Crime IPID The national IP crime Intelligence Database IPO Intellectual Property Office IPOP The Intellectual Property Online Protection group IPR Intellectual Property Right ISP Internet Service Provider

JARD Joint Assets Recovery Database LBRO Local Better Regulation Office LGR Local Government Regulation (formerly known as LACORS) LOCOG The London Organising Committee of the Olympic and Paralympic Games Limited LOTSA The London Trading Standards Authorities Group Met Police Metropolitan Police Service MHRA Medicines and Healthcare products Regulatory Agency MOU Memorandum of Understanding NETSA North East [of England] Trading Standards Association NPIA National Policing Improvement Agency NHS National Health Service NIM National Intelligence Model The Observatory The European Observatory on counterfeiting and piracy ODA Olympic Delivery Authority OGDs Other government departments OECD Organisation for Economic Co-operation and Development OFT The Office of Fair Trading

IP

CRIME GROUP

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OHIM The Office for Harmonization in the Internal Market P2P Peer-to-peer PA The Publishers Association PACE Police and Criminal Evidence Act 1984 PC Personal computer PDDRP Post delegation dispute resolution procedure PLS Publishers Licensing Society PoCA Proceeds of Crime Act 2002 POCC Proceeds of Crime Centre The Portal The Publishers Associations Copyright Infringement Portal PPA Professional Publishers Association PSNI Police Service of Northern Ireland The Report IP Crime Report 2011/12 SCDEA The Scottish Crime and Drug Enforcement Agency SCOTSS The Society of Chief Officers of Trading Standards in Scotland SMEs Small and medium enterprises SOCA The Serious Organised Crime Agency

SOLAM Society of Outside Local Authority Members (now called Business Members Group) SOLID Secure Online Identification SWERCOTS Trading Standards Partnership for the South West of England TMA Trade Marks Act 1994 TS Trading standards TSEM Trading Standards East Midlands TSI Trading Standards Institute TSNW Trading Standards North West [of England] TSSE Trading Standards South East [of England] UK United Kingdom UKBA UK Border Agency UKBF UK Border Force UKEA The UK Electronics Alliance UKIE The Association for UK Interactive Entertainment (formerly The Entertainment and Leisure Software Publishers Association ELSPA) UNICRI The United Nations Interregional Crime and Justice Research Institute UKIS UK Immigration Service

IP

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URL Uniform Resource Locator URS Uniform Rapid Service US United States of America USD US Dollar VAT Value Added Tax VOSA Vehicle and Operator Services Agency WHO World Health Organization WHOTS Wales Heads of Trading Standards WYTS West Yorkshire Trading Standards YORKS/HUMB Yorkshire and the Humber Trading Standards Group

IP

CRIME GROUP

89

Bibliography

A Fair Trade for All - Scambusters (Department for Business, Innovation and Skills).
Anti Counterfeiting Forum - UKEA
Centre for Tobacco Control Studies, Final Evaluation Report 2012.
Empowering and Protecting Consumers - Department for Business, Innovation and Skills.
Estimating the global economic and social impacts of counterfeiting and piracy - BASCAP
From Ideas to Growth, Helping SMEs get value from their intellectual property Intellectual Property Office.
Hargreaves Independent Review of Intellectual Property and Growth - Department for Business, Innovation and Skills
HMRC Tackling tobacco smuggling - building on our success
Home Office - National Crime Agency Plan.
IFPI - Recording Industry in Numbers.
International Chamber of Commerce Estimating the global economic and social impacts of counterfeiting and piracy.
IP Crime Strategy 2011-2015 - Intellectual Property Office.
IP Crime Toolkit - Intellectual Property Office.
Love your Local Market Markets Alliance.
National Audit Office - Protecting consumers.
National Crime Agency Plan - Home Office
Piracy impact study 2010 - The economic benefits of reducing software piracy - Business Software Alliance (BSA) .
Real Deal - Industry Trust.
Strategy on a Single Market for Intellectual Property Rights - EU Commission
The Digital Economy Act 2010 - Department for Business, Innovation and Skills.
UK Centre for Tobacco Control Studies - Final Evaluation Report 2012.
Preventing IP Right Infringement in the workplace E guide IP Crime Group.
IP Awareness and Enforcement IpeuropAware

IP

CRIME GROUP

The IP Crime Team is based at: Intellectual Property Office Concept House Newport South Wales NP10 8QQ The contact details are: E-mail: ipcrimeteam@ipo.gov.uk Tel: 01633 814535 Fax: 01633 814950