Violation of intellectual property rights poses a serious threat to EU SMEs

A report published on January 31, 2023 entitled “Risks of Illicit Counterfeit Trade for Small and Medium Enterprises” pointed out that SMEs that violate their intellectual property rights have a 34 percent reduction in their chances of survival beyond 5 years. This is particularly the case with independent SMEs that are affected by patent infringement and are not part of a large corporate group.

According to the report, Chinese goods are by far the most common source of counterfeits that violate the intellectual property rights of SMEs – they account for 85 percent of seizures related to online sales and 51 percent of global seizures of offline sales.

The products most often targeted by counterfeiters are electronics (30 percent of seizures), clothing (18 percent), perfumes and cosmetics (10 percent), and still toys (also 10 percent). Moreover, in most cases, these are goods of inadequate quality, often posing a health and safety threat to the consumer. In terms of how they are used, the report also points out that around half of the counterfeit products seized at the EU’s borders infringing the intellectual property rights of SMEs were purchased online.