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Christmas shoppers warned over fake goods

DEPARTMENT FOR INNOVATION, UNIVERSITIES AND SKILLS News Release (IP Crime Report 121207) issued by The Government News Network on 12 December 2007

Consumers who buy fake goods on the cheap will end up worse off in the long run and in some cases are taking risks with their health, the Government said today.

The warning came as the Department for Innovation, Universities and Skills (DIUS) launched the Intellectual Property Crime Report 2007 which outlines the impact on the UK by criminals who counterfeit and pirate products.

The intellectual property (IP) crime market in the UK has been estimated as worth around £1.3 billion per year. Criminals are targeting a wide range of products including designer clothing, music and films, luxury and electrical goods, toys, alcohol and cigarettes. The cost to UK taxpayers of counterfeit cigarettes alone was £2.9 billion in 2006.

Today's report shows that closer cooperation between law-enforcement agencies and industry groups is beginning to pay off with a rise in the number of successful prosecutions. These have risen from 600 in 2004 when the IP Crime Strategy was launched to over 1,000 a year, according to the most recent figures available.

The report also highlights the need for more work to raise public awareness around negative effects of IP crime such as the damage to the UK's economic competitiveness and the stifling of innovation. There are also considerable health risks with counterfeit cigarettes found to contain far higher levels of tar, illicit alcohol made with poisonous methanol; fake pharmaceutical goods containing no active ingredient or an incorrect one; and electrical goods - including toys - which are unsafe or incompatible with the domestic electrical supply.

Lord Triesman, Minister for Intellectual Property, said:

"This report highlights some of the progress that law-enforcement agencies are making in tackling the theft of intellectual property and those who seek to make money from producing and selling fake goods. But there is much more to do and a key part of our future work must be to ensure that people understand the very damaging consequences of counterfeiting and piracy.

"Buying cheap goods may seem like a bargain especially in the run up to Christmas but that doesn't mean you are getting a good deal, in fact you are probably worse off in the long run.
"One way or another everyone ends up paying through the nose for this illegal trade. Whether through lost jobs or lost profits for businesses; higher costs being passed back to the consumer; risks posed to health; or the stifling of innovation, it is all of us who lose out. That is why ensuring that consumers do not create a market for criminals to exploit will be a central aim in our future strategy."

The report highlights the increasing use of the internet for criminals selling fakes on demand as well as the exploitation of children and links to people smugglers. It also brings together research and figures on the scale of the IP crime market.

Nine recommendations are made including that the UK Intellectual Property Office (UK-IPO) establishes a secure website for law-enforcement agencies and industry bodies to share intelligence. Further work to agree a national standard to measure the level of IP crime and training for police and Trading Standards enforcement officers will also take place.

Assistant Chief Constable Giles York, ACPO lead on IP Crime, said:
"As the first and newly appointed ACPO lead for IP crime I believe the challenges ahead involve building positive bridges between our organisations. In the current climate it will always be a challenge to promote IP crime as a priority in policing, but there are very clear opportunities to tackle organised crime through robust partnerships.

"Our priorities share much in common, and success will be achieved by exploiting this common ground. There are already some leading examples of excellent practice around the country, but not enough to celebrate total success just yet.

"There are police officers embedded with the UK-IPO and FACT, and the Wales Regional Intelligence Unit is piloting a 'UK Clearing House' approach for relevant referrals to the police. We will build on these examples by tackling Organised Crime Groups, exploiting POCA opportunities and through the vigorous sharing of intelligence."

The IP Crime Report is published annually by the IP Crime Group. The Group was established in 2004 by the UK-IPO in collaboration with industry.

Notes to editors:

1. The IP Crime Group has in the last two years produced the national IP Crime Strategy, the Annual Enforcement Report, a database for recording counterfeiting and piracy activities which is now recognised by the Police, intelligence officers and Trading Standards as the key database on IP Crime. The Annual Enforcement Report is available at http://www.ipo.gov.uk/crime/crime-enforcement-role.htm

2. The IP Crime Report has made nine recommendations, which will be formally discussed and taken forward by the IP Crime Group and industry.

3. The UK-IPO is an Executive Agency of DIUS. It is responsible for the role of IP rights in supporting innovation.

4. Andrew Gowers' Review of Intellectual Property, published in December 2006, underlined the importance of effective enforcement. He said: "The ideal IP system creates incentives for innovation, without unduly limiting access for consumers and follow-on innovators. And it must take tough action against those who infringe IP rights at a cost to the UK's most creative industries". The Review, including the final report, the commissioned research and responses to the Call for Evidence, is available at http://www.hm-treasury.gov.uk/

5. The IP Crime Report is available for download from http://www.ipo.gov.uk/

6. Public enquiries: DIUS enquiries line 020 7215 5555.