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IP Crime Annual Report 2010 to 2011

Contents
Foreword page 3 Executive Summary page 5

Chapter 1: Crime and its impacts page 7 A. B. C. D. Defining IP crime Overall scope and scale Dangers of fakes Links to organised crime and other criminality page 7 page 9 page 12 page 15

Chapter 2: Tackling IP Crime page 18 A. Coordinated response to IP crime B. Innovation and new initiatives C. Spotlight on Europe - the work of the European Commission D. Awareness and training E. Sentencing, seizures and the Proceeds of Crime Act Chapter 3: Results of the 2010/11 Survey of Trading Standards A. B. C. D. E. F. G. H. I. Types of goods investigated Where counterfeit/pirated goods have been investigated in 2010-11 Coordinated working Levels of infringement Levels of IP enforcement Training Resources Proactive monitoring of the internet Links to other criminality page 18 page 24 page 29 page 30 page 35 page 47 page 47 page 48 page 49 page 51 page 51 page 52 page 52 page 52 page 53 page 63

Glossary

Bibliography page 66

Foreword
I am pleased to report that the ongoing work of the IP Crime Group has brought several developments over the past year: the production of a toolkit that describes how counterfeit products can enter the genuine supply chain and how businesses can enforce their IP assets; the development of an electronic guide that describes to businesses how intellectual property can be infringed in the workplace; continued coordination of training and awareness activities that support group members, industry bodies and law enforcement officials.

Intellectual Property crime has arguably gained more headlines in the past year than ever before. With online technologies offering ever increasing consumer choices, options for those involved in IP crime are equally mirrored. We are witnessing criminals offering online access to live events, electronic media and more with greater ease than ever before (as a result of high speed broadband) and fraudulent websites enticing and misleading consumers into buying fake products. Such illegal activities are often linked with other criminality, including fraud and identity theft, and continue to attract media attention because of the public mystery around internet based crime. These cases also support the reality that IP crime is a real and serious threat; and is most relevant to policing when IP crime presents a clear threat to public safety, coincides with serious organised crime or presents significant financial gain to the villains, or loss to the victim. Therefore, it is essential that the dedication and excellent work of the IP Crime Group members, industry and law enforcement continues to develop over the next year, as it did during 2010/11, in order to detect and prevent IP and associated crime. The work of the IPOs intelligence hub remains a central factor with its national database supporting and adding value to an increasing number of investigations.

Like many of you, I look forward to seeing the Olympic Games next year but am also conscious of the associated risks that hosting such a prestigious event can bring. We are already witnessing counterfeit London 2012 products in the UK supply chain. There are recorded instances of counterfeit clothing and fake lighters bearing the official logo. Organised IP criminal gangs have already put into place their infrastructures and we should coordinate our combined efforts against this threat. The current economic climate for the country continues to present its own challenge, as it does for industry and law enforcement as well. To this end, it is crucial that collaboration remains a key focus for all these agencies in order to make an impact against IP crime. I believe this report is a key building block to bring that collaboration together and continue to tackle criminals who damage our economy and endanger our safety. Deputy Chief Constable Giles York Sussex Police ACPO Lead for IP crime Chair of the IP Crime Group

Executive Summary
This years intellectual property (IP) crime report (the Report) continues to focus on the activities of those involved in combating IP crime over the past year. The Report does not provide any measurement as to the scale and impact of IP crime on the UK economy, but it does illustrate industry estimates and information from seizures of counterfeit products. The annual survey of trading standards authorities (Chapter 3 of the Report) canvassed evidence from those who most regularly enforce copyright and trade marks. There were 94 responses to the survey from 88 different trading standards authorities. This represents almost 50% of all authorities in the UK and helps provide a national assessment to the current threat of IP crime. The survey provides a variety of information, including data on types of products being copied, the distribution channels and associated criminality. Chapter 1 looks at the impact of IP crime and provides information on the range of products that are being illegally counterfeited that have a direct affect on consumers wellbeing. There is a focus on counterfeit BMW parts, including an example of fake oil filters that have found their way into the genuine supply chain. Pharmaceuticals, alcohol and electrical goods are also products that are being readily copied causing genuine risk to consumer health and wellbeing. IP criminals have no requirement to ensure the goods they sell are safe they are purely interested in capitalising on a brands status or reputation and, in some cases, the desire of the consumer to get what they perceive as a bargain. Chapter 2 focuses on what is being done to counter IP crime. There is ongoing and increased partnership working between law enforcement, industry and government. The UK IP Crime Strategy, launched in 2004 and updated in 2006, provided a focus on practical activity to improve the on the ground response to counterfeiting and piracy. The Strategy encouraged an environment of intelligence led enforcement and targeting, raising awareness, improving the skills capacity and developed the coordination of networks and best practice. The Strategy is being refreshed in line with the new challenges being faced, such as new technological threats and the need to provide improved consumer protection and services. Other strategies being developed include the creation of a National Crime Agency in 2013. This new organisation is intended to strengthen the operational response to serious and organised crime and secure UK borders more effectively and will draw upon and exploit the intelligence, analytical and enforcement capabilities of the Serious and Organised Crime Agency (SOCA). The past year saw a number of education and awareness activities take place from government, industry and law enforcement, as highlighted in Chapter 2. One such activity was the Buying Fakes Online guide, launched in September 2010 by the Trading Standards Institute (TSI) in conjunction with the Intellectual Property Office. The guide was published during National Consumer Week and aimed to raise public awareness and understanding of the risks associated with fake goods. It also provided guidance on how to shop safely online, avoid malicious websites and tips to avoid scams and identity theft. Crimestoppers ran a campaign over the 2010 Christmas period which aimed to educate consumers about the dangers of fakes. The campaign included a fakes fund crime micro-site which provided consumer advice and current examples of fakes, such as clothing, DVDs and tobacco. Market research, in conjunction with YouGov, was also carried out which identified that 40% of all people surveyed had purchased fake products in the past; but 56% would definitely not buy a product if it was proved to fund organised crime. The results of the trading standards survey in Chapter 3 identifies that more criminality is being carried out online be it through auction sites, social networking media, misleading domain names and so forth. The survey results also confirm that other distribution channels which are more commonly associated with IP crime, such as outdoor markets and car boot sales, also remain problematic. The Proceeds of Crime Act 2002 continues to ensure that IP criminals do not profit from their illegal activities. The Joint Asset Recovery Database indicates that cash forfeitures orders and confiscation orders for fraudulent activities, including IP crime, more than doubled to 21.5 million in 2010/11. Enfield Trading Standards also recorded one of the largest PoCA confiscations in May 2010 when they obtained an order to the value of 11 million.

CHAPTER 1: IP crime and its impacts

A. Defining IP crime
The term intellectual property crime (IP crime) is used to describe certain types of infringement of intellectual property rights (IPRs). The wilful infringement of registered trade marks (also known as counterfeiting) and the unauthorised copying and use of material protected by copyright (piracy), are both criminal offences, and are most often prosecuted where such acts are carried out on a commercial scale and/or for direct (or indirect) commercial gain. IP crime does not, in the UK, include infringement of patents or design rights. However, not all infringements of trade marks or copyright will amount to criminal offences; some acts will only be civil infringements, such as the unauthorised downloading of digital files from the internet. The use of the internet to sell physical products and distribute digital content has increasingly become an additional threat as well as an opportunity to trade mark and copyright owners. There are different challenges for the owners of different rights and therefore, for clarity, this report distinguishes between digital and physical IP crime. Digital IP crime is a term that refers to content protected by copyright that is stored in electronic form and is capable, for example, of being sent, shared or distributed over the internet. Historically it has been considered to cover the distribution of illegal formats of certain types of copyright protected material, e.g. music and films. However, the increasing sophistication of online applications, improved accessibility and the growth in high-speed broadband connections have made it much easier for larger more complex digital files to be transferred over the internet. This is exposing more and more entertainment sectors to these risks. For example, the Association for UK Interactive Entertainment (UKIE) has reported a growing trend of high-memory video games being downloaded (be it using standard peer-to-peer (P2P) or BitTorrent software). Moves to commence the streaming of live subscription TV and the advent of the e-book have also exposed broadcasting and publishing content to these issues. Physical IP crime primarily relates to counterfeiting of a variety of goods ranging, for example, from pharmaceuticals, to clothing, personal care items, car parts and electrical goods. It also relates to digital content that is being stored on physical discs (such as pirate DVDs or video games). These fake goods are distributed through a variety of routes including car boots/open markets, workplaces, online marketplaces (eg auction sites) and, increasingly, entire fake websites. In some instances it may be very obvious to the consumer through the price, location of sale or quality that they are purchasing a fake. In other instances it may not be clear. The use of the internet to distribute fake goods can often conceal the presence of fakes from the consumer, with criminals posing as legitimate suppliers with sophisticated websites and payment facilities. Another area of risk is the threat of contamination to the genuine supply chain where counterfeits are innocently sold with the real product. These fakes not only cause direct harm to the reputation of the brand and to legitimate traders and rights holders but can expose consumers to serious health and safety risks.

Poor quality fakes dupe online customers A woman who swindled hundreds of people by selling them fake goods on an internet auction site has been given a suspended prison sentence following an investigation by Wandsworth trading standards officers. Kitty Lin-Wilson, from Balham, raked in thousands of pounds by duping her online customers into believing that the items she sold them were genuine - but in reality they were all poor quality counterfeits. Her online customers paid top end prices for a range of phoney goods including cosmetics, make up brushes, purses, bags and clothing - advertised as genuine items from exclusive manufacturers. Her business exploits involved so many online usernames and financial accounts that when she was being interviewed under caution she claimed not to be able to remember all of them. Lin-Wilson, from Gosberton Road, was given a six month jail sentence, suspended for two years, by a judge at Kingston Crown Court. She had pleaded guilty to seven breaches of the Trade Marks Act 1994 at an earlier hearing and also admitted a money laundering offence. Financial investigators also discovered that in the 19 month period between July 2007 and February 2009, more than 76,000 had been paid into various financial accounts she controlled. Following her conviction and sentencing, further legal action is being taken against Mrs Lin-Wilson by seeking a money confiscation order under the Proceeds of Crime Act 2002. This is to ensure that she does not keep the profits she gleaned from her criminal activities. Wandsworth Councils spokesman on consumer protection Councillor Sarah McDermott said People were not getting a cut price bargain from her - they were getting poor quality rip offs. We have now launched additional legal action against Mrs Lin-Wilson to makes sure she is not allowed to keep her ill-gotten gains. Digital IP crime in context: cyber crime The increase in online technologies over the past 20 years has provided new opportunities for crime generally. Such crime includes hacking, industrial espionage over the internet, phishing, identity theft,

online card fraud and many other types of criminal acts. These can occur alongside IP crime, for example in online fraud, where criminals use the payment card details they have obtained by purporting to offer genuine goods for sale on their website to commit identity theft or to empty bank accounts. The National Fraud Authority published their Annual fraud indicator report1 in January 2011, which identified the following statistics: total loss to the UK economy from fraud is 38 billion; organised crime is responsible for a quarter of this loss; illicit online activities, such as illegal ticket sales, results in a total fraud of 168 million; online banking fraud increased by 14% to 60 million - an overall increase in 48 million since 2004.

Estimates suggest that, in overall terms, cyber crime profitability has exceeded illegal drugs in the rankings of organised crime2, although figures on cyber crime should be treated with considerable caution, particularly when extrapolated from survey data3. This report covers only counterfeiting and piracy; wider cyber crime issues with relevance to IP such as industrial espionage are not included. Even with IP crime specifically, technology has provided a new marketplace for those who want to trade in illicit goods. Pop-up websites, auction sites and social networks all provide opportunities for criminals to offer fake goods for sale to consumers. The rise of superfast (fibre optic) broadband and the greater bandwidth it provides has also allowed the easier and faster sharing of digital files. There is a lack of consistent data on the scale and impact of IP crime over the internet. However, it is generally acknowledged that the internet is now one of the primary marketplaces for counterfeit goods and pirated copyright works. It is also one of the most challenging for rights holders and enforcement agencies - in terms of identifying, disrupting and prosecuting the individuals concerned who may be thousands of miles away in a different jurisdiction. The CIBER team, based at the Department for Information Studies at University College London, produced a report4 in 2009 for the Strategic Advisory Board for Intellectual Property Policy.

1 http://www.attorneygeneral.gov.uk/nfa/WhatAreWeSaying/Documents/AFI%202011.pdf 2 http://www.rackspacecloud.com/blog/2010/09/23/locking-out-cyber-criminals-securing-your-cloud-based-web-applications/ 3 Sex, lies and cyber-crime surveys, D. Florencio and C. Herley, 2011, http://research.microsoft.com/pubs/149886/SexLiesandCybercrimeSurveys.pdf 4 http://ciber-research.eu/download/20090601-SABIP-executive.pdf

The report assessed digital consumer behaviour and attitudes and their implications for intellectual property rights. It highlighted the effect that increased broadband width (at 50mbs) has, by identifying that a user can either download or upload: 200 mp3 music files in five minutes the film of Star Wars in three minutes; and the complete digitized works of Charles Dickens in less than ten minutes

indicate the value of IPRs to their owners and the UK economy, as well as the importance of such rights in a competitive global marketplace. The US Government Accountability Office (GAO) published a report in April 2010 following their examination of the data and evidence on the scope and scale of counterfeiting and piracy. They concluded that it was hard to quantify exact impact and that there were weaknesses in existing studies, in particular that methodologies would often appear to exaggerate the impact on genuine sales through the use of generous substitution rates. However, the GAO did say that there were a number of clear negative effects for consumers, rights holders, governments and the economy as a whole and that research suggests the problem is sizeable. While much more needs to be done to better understand the scale and impact of IP crime, it is clear that there are significant negative economic and societal consequences from IP crime. It is known, through the results of the trading standards survey and from evidence supplied by Financial Investigators, that IP crime attracts organised crime groups and that they are able to, even over a short period of time, make considerable profits from engaging in such activities. It has also been established that some counterfeit goods can pose health and safety risks for customers, including: counterfeit pharmaceuticals that imperil effective medical treatment across the world; fake aviation parts that can have potential fatal consequences; dangerous alcohol containing poisonous methanol; and unsafe hair straighteners that can lead to disfiguring burns

The report also suggested that between 44% to 79% of all worldwide internet traffic is made up of file sharing, although whether this is illicit or not cannot be identified. Get Safe Online5 is a joint initiative between government, law enforcement, leading businesses and the public sector in order to help raise awareness to all computer users about the threat of online criminality and how to keep safe whilst using the internet. The website provides practical advice on how to protect your PC, your personal details as well as any business information.

B. Overall scope and scale

Just as it is hard to reliably assess the impact of cyber crime as a whole, it is difficult to accurately measure the direct harm that IP crime has on the economy, businesses and society. The Hargreaves Review6 , published in May 2011 and therefore outside the period covered by this report, draws on work published by the US Government Accountability Office7 and the US Social Science Research Council8, among other sources. It suggests a number of difficulties with assessments of the harm done by counterfeiting and piracy. The IP Crime Group has not at the time of writing examined the Reviews findings in any detail; we would expect to cover the Hargreaves Review in next years report. While current data has some issues that need to be addressed, it is widely recognised that IPRs are valuable. UK business invests more in intangible assets than physical ones, and nearly half of that intangible investment - 65 billion in 20089 was in IPRs. Although this does not define the level of IP crime, it does clearly

all of which can directly affect UK consumers. There are also economic costs associated with counterfeiting and piracy. Businesses that own IP may be affected by reductions in sales when people buy fake instead of genuine items and through loss of future custom and brand reputation, especially if low quality fakes damage consumer confidence. Lost sales may not be a one to one mapping but even a 10%

5 http://www.getsafeonline.org/ 6 http://www.ipo.gov.uk/ipreview-finalreport.pdf 7 http://www.gao.gov/new.items/d10423.pdf 8 Reference report - US Social Science Research Council, 2011, Media Piracy in Emerging Economies, 9 http://www.ipo.gov.uk/ipresearch-iprights-full-201107.pdf

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substitution rate on fake trainers can have a sizeable impact on profit margins. Some firms and sectors also make substantial investments to guard against IP crime, for example through the adoption of track and trace technology or through employing trained specialists to help them deal with IP crime. The economic impact stretches beyond IP owning businesses to retailers (at the local as well as national and international level) who are deprived of genuine custom and income when consumers chose to purchase through unofficial and illegal routes. They may also suffer a loss of custom if poor quality fakes affect customer demand for legitimate products. IP criminals operate outside legitimate business structures and rarely pay any form of taxation. UK tax liability for counterfeit and smuggled alcohol and tobacco in 2010 were estimated to be 2.2 billion. The impact goes beyond alcohol and tobacco though with avoidance of other required taxes such as VAT and corporation tax. Again this is an area where clearer data would be beneficial. Estimating the economic impact of IP crime some examples It is difficult to provide any exact figures to highlight the scale and scope of counterfeiting and piracy. A sale of a counterfeit item does not necessarily relate to the loss of a genuine sale; and not all online filesharing is illicit. Conversely, seizure data only reflects illegal activity that has been identified. The ability of local enforcement agencies to address IP crime depends on local resourcing priorities and therefore statistics on successful seizures and so forth will vary according to this prioritisation. Until there is a consistent and robust mechanism for identifying, reporting and analysing actual losses as a result of criminal IP infringement, then an accurate figure cannot be provided. The examples below are provided from a range of resources in order to provide an informal indication to the scale and impact of IP crime: OECD November 200910 estimated that global trade (cross border) in physical fakes was worth around $250 billion per year11. The OECD qualified this by saying

that it was based on data from national Governments and relevant industries and had not been independently assessed. EU Customs - number of goods suspected of infringing IP rights and detained at the EU external border in 2009 was 118 million, with China being reported as the main source of these products (64% of the total amount of articles). Over 4 million items were seized at the UK border in 2009/10 - with an estimated value (based on the price of genuine items) of around 40 million.

Industry estimates In November 2009 a tracking study by British Video Association estimated lost sales for the audio visual sector were around 535 million in 2009. The Alliance Against IP Theft estimate that the cost to the clothing and footwear industries is around 3.5 billion per year (with over 750 million being generated by sales at markets). 23% of Small and Medium Sized Enterprises have had their businesses significantly affected by IP crime11. The Business Software Alliance estimate the software industry lost 1.1 billion in 2009/10 - with over 27% of software installed in the UK being illegal. UK seizures for pharmaceutical products in 2010-11 include: - 25,625 individual replacement toothbrush heads - 12,454 individual razor blades - 428 individual bottles of fine fragrance The Federal Aviation Authority suggests that 2% of the 26 million airline parts installed each year are fake12. A recent survey by the Professional Publishers Association reported that over 80% of their members experienced incidents of illicit use of copyright material, with 89% of this infringement being online or digital violations.

10 http://www.oecd.org/dataoecd/11/11/2090589.pdf With world merchandise export levels of nearly US$5 000 billion in 1995, 5 per cent would represent approximately US$250 billion for that year (WTO, 1996). In 1990, world trade was worth almost US$3 400 billion, and the value of counterfeit goods was assumed to be around 3 per cent of world trade, which gives losses of approximately US$100 million per annum. This implies that, while world trade increased by about 47 per cent during the five-year period 1990-95, the value of trade in counterfeit goods increased by more than 150 per cent over the same period. OECD report, page 24. 11 http://www.allianceagainstiptheft.co.uk/facts_figures.html 12 http://www.internationalauthenticationassociation.org/content/counterfeit_statistics.php

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The 2010 BPI Digital Music Survey13 identified that 29% of respondents were engaged at some time in unauthorised music downloads and 76% of all music obtained online was unlicensed. 14% of internet users illegally download films and TV programmes from P2P services14. The 2010 Tera Consultants/BASCAP report suggested that there are 778 million digital piracy copyright infringements per year. There are over 45 million unique monthly worldwide visitors to the 15 most popular Torrent websites15. 34 to 70% of global internet traffic (depending on region) is taken up with file sharing16. 10 media brands in a Mark Monitor study17 identified 43 sites as being involved in digital piracy which received 140+million hits per day. Action at the borders: UK and EU Between April 2010 and March 2011 the UK Border Agency detained more than 27,000 postal consignments and over 1,800 consignments in other traffic that were suspected of infringing IP rights. Most of these consignments were abandoned for destruction, thus permanently removing them from the open market. During the reporting period it was noticed that effective enforcement is driving the organised criminals behind the production of infringing goods to be ever more innovative in their efforts to circumvent controls. For example, detections of large quantities of fake brand labels suggest the clothing and footwear to which they were to be attached was despatched to the UK unbranded, so the labels could be subsequently affixed. This strategy avoids the risk of having the most costly element, the clothing and footwear, detained at importation and recognises that the labels alone can be replaced much more cheaply if they fall victim to customs checks. In addition, perpetrators have been found to use ever more sophisticated concealments to hide their goods: over 1,200 fake mobile phones were discovered hidden in a consignment appearing to be AC/DC transformers. Examination showed that the transformer casings contained no electrical components at all but were filled with between nine and twelve fake phones each.

These cases are illustrative of the persistence of organised crime gangs in their efforts to circumvent customs controls to penetrate the UK market with fake goods, and show that continued vigilance at borders is needed to play an important role in IP enforcement. The 2009 EU Customs Report18 suggests that the number of goods, suspected of infringing IP rights, detained in 2009 was less compared with 2008 (118 million and 178 million respectively). However, figures relating to the UK indicated that over 3.5 million counterfeit and pirated products destined for the UK market were detained at borders. This is an increase of over 70% compared to 2008. The report breaks down the goods into product type and counterfeit clothing remains the highest problem (over 25%) although there is an increase of counterfeit medicines (from 6.5% to 8%). This is put into perspective when it is compared to other goods more associated with counterfeiting such as jewellery and watches (3%) or recorded CDs and DVDs (4%). Operation Singapore: A man has been jailed for eight years after an investigation into the importation of fake cancer and other life saving drugs. Following a trial at Croydon Crown Court lasting four months and involving the most serious known breach of the UK regulated supply chain, a 64 year old man from Windsor, Berkshire was found guilty of all charges on 8th April 2011 and was sentenced to eight years imprisonment. Four other men on trial for their involvement were acquitted. The case, known as Operation Singapore, involved the infiltration of counterfeit medicine into the UK legitimate supply chain during a five-month period in 2007. More than two million doses of fake life-saving drugs were imported into the UK and, although more than half of these were seized by the Medicines and Healthcare products Regulatory Agency (MHRA), almost 900,000 doses reached pharmacies and patients. The MHRA carried out an immediate recall of Zyprexa (used for the treatment of psychosis), Plavix (used for the prevention of blood clots) and Casodex (used for the treatment of prostate cancer) and, as a result, a further 196,000 doses were recovered; however 700,000 doses were unaccounted for.

13 http://www.bpi.co.uk/assets/files/Digital%20Music%20Nation%202010.pdf 14 2010 Harris Interactive 15 eBizMBA, April 2011 16 2008-09: Ipoque 17 https://www.markmonitor.com/download/report/MarkMonitor_-_Traffic_Report_110111.pdf 18 http://ec.europa.eu/taxation_customs/resources/documents/customs/customs_controls/counterfeit_piracy/statistics/2009_statistics_for_2008full_ report_en.pdf

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The tablets were manufactured in China and were transported to the UK via Singapore and Belgium. Further work on the products, to improve their appearance for UK supply, was undertaken at an industrial unit in Basingstoke where they were transferred into outer cardboard boxes to remove all evidence of their origin. The products, now purporting to come from Luxembourg but manufactured in France, were then supplied to two licensed UK wholesalers who, in turn, sold them on into the supply chain where they were eventually dispensed by unsuspecting pharmacists to UK patients. The EU report suggests that the distribution route of these illicit goods remains problematic in the Far East and developing countries. The 2005 EU strategy for the enforcement of IP rights (2005/C 129/03) provides actions for Member States to: achieve a significant reduction to the level of IP right violations; coordinate the mechanisms available to achieve the reduction; improve communication between right holders and other entities; and enhance cooperation between right holders and other entities in terms of technical assistance

C. Dangers of fakes
Food and Drink Counterfeit alcohol is typically made using industrial alcohol, like anti-freeze which had toxic ingredients such as methanol added to them to render them unsuitable for consumption. Their use in the production of fake alcohol can pose a serious risk to consumers. In March 2011 a man appeared at Wood Green Crown Court on two offences under the Trade Marks Act 1994 for his involvement in a counterfeit alcohol operation which was producing vodka which contained methanol. He was prosecuted following raids in 2008 acting on intelligence from the Food Standards Agency (FSA), involving trading standards, environmental health officers, HM Revenue and Customs (HMRC) and the police at several self-storage premises in the London Borough of Haringey. The raids resulted in the seizure of a huge quantity of counterfeit vodka and other illegal wines and spirits. The manager of the limited company that was behind the illicit vodka business was charged under the Trade Marks Act 1994 and was sentenced on 12 April 2011. He received a nine month custodial sentence (suspended), plus 200 hours unpaid work to be completed within 12 months or he would have to serve his prison sentence. He was also ordered to pay 2,000 by way of forfeiture towards the London Borough of Haringey for the Councils investigation plus a further 2,000 towards costs. The International Federation of Spirits Producers (IFSP) continues to support UK law enforcement agencies in the fight against spirits counterfeiters. During 2010 IFSP delivered a total of 32 Counterfeit Spirit Awareness and Recognition Workshops to 382 delegates from the various law enforcement agencies within the UK. These workshops are also an opportunity to brief the UK law enforcement agencies on counterfeit spirit trends and modus operandi throughout Europe, some of which are likely to impact on the UK. IFSP has also 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 brand owners. This has served to instil confidence in the operational officers and encourage enforcement action against the illicit spirit trade.

Altering perceptions IP crime potentially has influences on many businesses and individuals: the rights holder faces an economic burden where they will need to invest into protection methods this cost is often incurred by the genuine retailer; a consumer could purchase a fake item innocently through a genuine marketplace damaging both the reputation of the brand and marketplace owner reducing the opportunity of future sales; more products are being copied than ever before of which many have direct consumer harm risks, e.g. pharmaceuticals, machine parts, spirits, electrical chargers, etc; those involved in IP crime typically do not pay VAT or tax, which impacts revenue streams to the Treasury; those involved in IP crime are also often involved in other crimes with counterfeiting and piracy being used to money launder profits from serious criminal activity.

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The advancement of the equipment available on loan from IFSP means that officers are able to make more effective use of their time when visiting retail premises, by carrying out simple but effective checks on IFSP spirit brands. Electronics Electronic technology plays an important part in so many areas of our daily lives from mobile phones and laptops through to cars, public transport systems and medical equipment. Both the complete product and its separate components are at risk of counterfeiting. The counterfeiting of components can pose particular challenges as once installed within a product they can be difficult to detect. Little phone charger shop of horrors Sutton Trading Standards officers raided a shop for selling unofficial phone chargers and counterfeit goods. Officers came across the potentially dangerous chargers and illicit phone lanyards last May while visiting a squat shop based in Rosebys shop in Sutton High Street on an unrelated matter. As a result, Jamon Singh, 25, from Southall, was sentenced to 100 hours community service and told to pay 1,500 towards costs this week (Wednesday 17 November 2010) at Sutton Magistrates Court. General Dynamics UK General Dynamics UK has detected and prevented various alleged military specified counterfeit parts from being used in company products. Some of the components were deemed to be commercial parts in a similar package to the authentic product, black topped or sanded and re-marked as a higher military specification component. The detected components were high cost, generally obsolete and are highly targeted by counterfeiters. These components were originally supplied by approved brokers who were not aware of the alleged counterfeit components. Brokers have improved their processes in order to more easily identify counterfeit products in the supply chain. General Dynamics UK, industry workshops run by Component Obsolescence Group (COG) and the UK Electronics Alliance (UKEA) have all helped in raising awareness of the risk of fake goods. Pharmaceuticals and healthcare products Fake pharmaceuticals and healthcare products pose a number of risks to consumers. At best they fail to contain the required active ingredients (or too little of them) and do not provide the medicinal support being sought. At worst they may contain dangerous filler

substances such as bleach or chalk which can actively harm the person taking the medicine. Healthcare products like condoms, bandages and toothbrushes may also contain dangerous ingredients and may be produced in unhygienic environments which could expose the consumer to infections. Such products will not have been subject to safety tests and are likely to be of very low quality. In 2010, counterfeit condoms found in Harrow were found to fail all required safety tests and would provide no protection against infection or pregnancy. Hair products - ghd Counterfeit hair products present a genuine risk to consumer safety and there are several examples of fake hair straighteners having resulted in serious injury to unwitting customers. As with other products there is an increasing online market for hair goods. A typical example that ghd faces is where counterfeit websites use similar domain names and site graphics to authentic companies in order to mislead consumers into buying fake products. ghd have a comprehensive approach to such online sale platforms and have invested in sophisticated web tracking software which provides greater visibility of illicit sales online. As part of their online strategy, ghd monitors, detects and enforces against websites that have been created by counterfeiters on a daily basis. This strategy has proved effective in tackling the sale of counterfeit ghd products and there has been a significant reduction in the number of counterfeit websites appearing online, which has enabled consumers to purchase their ghd product in a much safer shopping environment19. Fake straighteners burn 17 year old girl In September 2010, Leicestershire County Council Trading Standards were cautioning consumers to take care when buying straighteners. A pair of counterfeit straighteners had been received by a 17 year old girl as a birthday present, but when used her hair melted and her scalp was singed. The girl said the website claimed to be an approved retailer and she had no reason to believe they were fake straighteners. Transport car and aviation parts The counterfeiting of car and aeroplane parts expose travellers to significant health and safety risks which can arise if a system fails due to the inadvertent use of a low quality fake. Such fakes will not have been subject to safety testing.

19 GHD have a website that allows consumers to check the authenticity of products, see http://bewareoffakes.ghdhair.com/ for more information.

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Trading Standards issues counterfeit brake pads warning20 Motorists and mechanics are being warned that unsafe counterfeit brake pads are circulating in Northern Ireland. Trading Standards has made two seizures of dangerous brake pads in Belfast and County Armagh. The counterfeit brake pads, branded as Volkswagen, SEAT, Skoda and Audi were seized following a tip-off from the Volkswagen group. Examinations of the brake pads revealed they failed to meet required friction levels and are held together by glue. When subjected to testing, the counterfeit parts showed that exceptional leg strength would be needed to apply the necessary pressure to stop an average family car. At higher speeds, the heat and friction generated when braking could result in the counterfeit pads disintegrating. Damien Doherty of Trading Standards Service said: In the past, counterfeit car parts were mainly non-safety items such as window wipers, mud flaps and car interior accessories. Now, counterfeit items such as brake pads, brake shoes, suspension components and steering linkages are readily available on the market. The Aerospace Industries Association published a report21 in March 2011 on counterfeit parts in the aviation industry. The report, titled Counterfeit parts: increasing awareness and developing countermeasures makes several recommendations which are aimed to encourage further discussion on how to most effectively reduce counterfeit parts in the supply chain, including: develop training for employees to help detect, report and dispose of counterfeit parts develop an approved suppliers list for use by government and industry create standards in the area of mechanical parts and materials scrutinise the procurement process to limit the use of automated systems

merchandise are being copied to the same extent as high quality watches or handbags through networks of criminals operating on a global basis. To protect its BMW and MINI brands and designs, BMW is actively fighting all types of counterfeit products in all of its sales regions. BMW has established a Global Brand Protection Team to track down counterfeit goods, remove them from the market and hold the infringers accountable through legal proceedings. They cooperate with the responsible local authorities including on awareness work to assist understanding of risks from fake parts and how to spot them and providing intelligence, advice and support on investigations. BMW Groups products are the result of many years of development work and need to pass extensive quality checks before going into production. BMW said Counterfeit products are not subject to these quality standards, thus allowing them to be developed and sold at lower prices. In the best case scenario for the consumer it means that the parts will wear out faster and more frequent visits to the workshop will diminish any expected savings. In the worst case scenario, individual counterfeit components can damage the car and thereby impair the safety of its driver and passengers. One of the products often copied are oil filters. In a laboratory test that mimics BMWs quality checks, the original and a copy were compared with each other. The results clearly indicate that in virtually all of the relevant technical aspects, such as the filter medium, filtration performance and filter surface, the copy showed serious shortcomings. In such cases using the fake components could risk the engine being damaged severely.

The illustration on the left shows an original BMW oil filter after the laboratory test, while the one on the right shows the fake oil filter after the same test. Routes to market (online) The expansion of the global market, particularly through the use of the internet, has provided greater opportunities for illicit products to reach the market place. In essence there is now an online high street which consumers reach through the confines of their

Spotlight on BMW Counterfeiting represents a major challenge to all car manufacturers. Spare parts, accessories and
20 http://www.bbc.co.uk/news/uk-northern-ireland-10846035 21 http://www.aia-aerospace.org/assets/counterfeit-web11.pdf

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own home. The remote nature of these transactions mean that consumers are placing considerable trust in online merchants over how they will use their personal and financial data and in terms of the quality and legitimacy of the products they are purchasing. The use of the internet by traders who are seeking to pass fake goods off as genuine plays straight into this trust. By using the same routes to market as legitimate retailers they are hoping to attract customers from auction sites (where unverified users can sell a range of goods) and sites purporting to be officially linked to the genuine brand. In some instances they will copy the look of the brands official site, which often carry authentic advertising, to convince consumers that they are selling genuine goods and that they are a reputable firm. As broadband speeds increase, households are increasingly using internet linked TVs, games consoles or their home computers to view films and TV shows and to play video games using genuine, legal content through services such as online movie rentals, music download stores or through live streaming services for sports. Genuine social networking sites, blogs and forums are also being mistreated by some users to act as a means of selling or redirecting others to fake products. Those involved in IP crime often exploit privacy rules and unverified user accounts that prevent clear identification of such illicit practices. Illegal content providers are also using this enhanced capability to reach out to consumers offering a wide range of content, either in direct competition with these legitimate services or in advance of official release dates to maximise their revenues.

It is usually witnessed, through enforcement activity, that such organised groups have a standard core of criminals and employ spiders (people who are not connected directly to the whole operation but are brought in to facilitate the higher risk element of the crime, i.e. the sale and delivery of fake items). The use of spiders reduces the risk of the core criminals being caught and convicted of the greater fraud and allows them to move operations quickly and efficiently across different locations. Operational intelligence suggests that organised criminal networks often use IP crime as a mode of operating in order to launder financial gain from other criminality as the penalties for such activity are less severe. IP crime is also a low investment/high return for criminals that offers larger profits than, for example, drug dealing. Those involved in IP crime can use generally available materials (e.g. in the case of physical optical media CD-Rs and related software) and operate from their own premises which reduces the risk of being identified during the initial stages of any investigation. Evidence of Level 2/3 criminality The National Intelligence Model (NIM) provides three geographical levels of criminality: Level 1 criminality that involves one authority/region Level 2 where crime is committed cross-border that involves more than one authority/region Level 3 criminal activity on a national or international level. Analysis from the IP Intelligence Database (IPID), managed by the Intelligence Hub at the IPO, identifies that IP criminals operate at all three levels of NIM. Aside from local criminality, intelligence indicates that traders, who are involved in the sale and distribution of counterfeit products, operate across a number of markets in a variety of authorities. Further evidence of this is where enforcement action had forced such traders to cease operating in one location then the effect is felt in other locations. Level 3 criminality (national/international) continues to be a major problem with reports of seizures from UK Border Agency (UKBA) increasing and the major exporting countries being China, India and Pakistan. The IPO continues to work closely with the seaports, airports and central postal depots to identify offenders and coordinate enforcement activity.

D. Links to organised crime and other criminality

The survey of trading standards in Chapter 3 of the Report looks at other crime associated with IP offences. It also asked respondents to identify, where possible, links to organised criminal networks. The results of the survey indicate that IP criminals do often work in collaboration as part of a wider network that typically involves other forms of illegal activity. The survey results indicated that 79% of all respondents had discovered associated criminality when investigating IP cases. Such crime included money laundering, drug dealing, illegal immigration and in one case weapon smuggling. There are also connections to other lower forms of criminality including benefit fraud, anti-social behaviour and illegal gambling.

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The IPOs survey of trading standards also looked into cross border criminality that involved more than one authority. Over 40% of respondents indicated they had worked with other authorities on investigations over the past year and 20% reported Level 3 activity. This suggests that not only are criminals becoming more diverse in their operations but trading standards authorities are working more proactively with each other in identifying those responsible. However, challenges remain in tackling organised crime groups. The growth of international trade and more open borders makes it easier to transport physical goods between countries. The expansion and availability of technology has increased opportunities to manufacture, sell and distribute higher quality fake products as well as reduce the cost involved in doing so. The growth and accessibility of high speed broadband has furthered opportunities to extend criminal networks internationally and provided further opportunities for the distribution of illicit digital copies. The internet has also provided a platform for criminals to advertise their fake goods through social network sites. As these are often within closed communities it adds difficulty for law enforcement to infiltrate and identify the perpetrators. International IP fraud: Gary Finch of Brighton pleaded guilty at Croydon Crown Court to three counts of Importation of Pirate DVDs and three counts of money laundering following a joint investigation between FACT and Sussex Police. Police were alerted to Mr Finch by a customer using an online auction website who had, in good faith, purchased a box set of DVDs. They were being advertised as a genuine product being shipped from within the UK. On arrival, the customer notices a number of foreign postmarks. It was clear that the DVDs were fake. A warrant was executed at Finchs home address in May 2009. Dozens of pirated DVDs were recovered together with computer equipment and financial documents. Further investigation revealed an organised criminal network from Malaysia who were responsible for shipping the DVDs. The website account belonged to Finch and was being used to advertise the discs. Financial enquiries established that over a twelve month period, Finch had sold DVDs to the value of 255,961. Finch first appeared in Croydon Crown Court in May 2010. He told the court that he acted as an administrator answering emails on behalf of an unknown male in Malaysia. He would regularly transfer substantial monies overseas whilst drawing a salary of 2,000 per month.

In August 2010, police were successful in a forfeiture application of 34,074 that represented the funds remaining in Finchs account. He pleaded guilty and appeared in front of His Honour Judge Anderson who took into account the fact that monies had been repaid. However, he noted that over a twelve month period Finch knew or suspected what he was doing was illegal and that the monies he was transferring or keeping for himself represented criminal property and proceeds from his criminal conduct. Sentencing Finch to six months imprisonment, HHJ Anderson stated that his actions had been damaging to the legitimate film industry and hoped that the sentence would act as a deterrent to others involved in film piracy. Drivers and Enablers IPO research, in conjunction with law enforcement agencies and IP rights owners, highlighted the vulnerabilities that are being exploited by IP criminals as being: public demand for counterfeit or pirated goods; there is limited reporting on criminals perception of IP crime and the reasons for undertaking the activity, however on assessment the main factor encouraging criminal involvement as the high profits available balanced against the perceived low risks involved in pursuing this activity; there is clear evidence of organised criminal involvement in IP crime, however in some sectors, such as online digital piracy, those involved in perpetrating the offences may not be organised criminals but have the belief that media should be freely accessible to all; over recent years the internet has become the key enabler to IP crime. It has greatly expanded the consumer market for counterfeit goods as well as offering additional revenue streams to the counterfeiters. Some forms of IP crime, such as the illegal sharing of digital content, could not operate effectively without modern internet speeds; the process for identifying counterfeit goods and the eventual condemnation and destruction is overly bureaucratic and time consuming. Part of this failing is due to the fact that the goods themselves are not regarded as prohibited items and therefore their counterfeit status has to be proven and the recipient given the opportunity to appeal against seizure before they can be destroyed;

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many different stakeholders are involved in combating IP crime and, with no single body responsible for the coordination and tasking of activity, it becomes difficult to effectively manage the response, resulting in opportunities being missed or duplication of effort;

Operation Fordingbridge: Custodial sentence career criminal engaged in games piracy (Chipper) In 2010 a five year custodial sentence was handed to a man found guilty of producing and selling counterfeit computer games. The operation began in July 2007, when Halifax Police and West Yorkshire Trading Standards (WYTS) targeted Halifax Market as a place where illegally copied video games were being sold. Aamer Ali was identified and arrested for conducting a business of selling copied games along with chipped games consoles. When officers searched his home address, they discovered hundreds of chipped video games consoles, copied games, and 347 genuine PS2 video games stolen from a lorry in Hampshire. In total, over 400 Nintendo Wiis and Microsoft Xbox 360 games consoles were seized, as well as DS Lite, PS2, PSP consoles and PS2 chips at the time the largest chipping seizure anywhere in the UK. Various personal computers were seized containing hundreds of computer games files, game disc cover inlays, and flashing software. Dozens of R4 Revolution circumvention cards were also seized. Ali continued to operate at the Northern Computer Market, Bowlers Fair, Manchester where, in June 2008, he was again arrested for selling video games and was found in possession of 2,400 discs containing copied games. Upon a search of his premises in 2009, law enforcement officers discovered a sophisticated production line for producing copied video games. In total, in excess of 6,000 copied games were seized from Ali as well as more than 500 games consoles, stolen video games, more than 80 stolen televisions, and over 200 stolen laptop computers.

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CHAPTER 2: TACKLING IP CRIME

A. Coordinated response to IP crime
Introduction At the strategic level there have been some real challenges over the year as public sector organisations have begun to adjust their priorities and structures to respond to new financial constraints. There continues to be a strong focus from industry, enforcement agencies and government on cooperation and coordination over the reporting period. This collaborative approach is evidenced both in strategic activity and during operations and will be increasingly important going forward if we are to continue to make progress on tackling IP crime. The results of the annual Intellectual Property Offices (IPO) survey of trading standards (see Chapter 3 for more detailed information) indicated a strong working relationship between trading standards authorities and other organisations. Aside from continued work with government bodies and enforcement agencies, trading standards have established stronger operational relationships with many right holders, with over half of all respondents now working directly with brands. Strategic level activity and policy initiatives Government initiatives Following the 2010 general election a series of key consultations and reviews were launched by the new Coalition Government. These included a review of the UKs policing strategy, its approach to tackling cyber crime and the future shape of consumer protection. In some cases conclusions have been reached and implementation is underway, but in others consultation and development was continuing at the end of the reporting period. Many of these initiatives are discussed below. IP Crime Group and its subgroups The IP Crime Group brings together government, industry and enforcement agencies to better coordinate the response to IP crime. The Group is run by the IPO which provides the secretariat and is chaired by Deputy Chief Constable Giles York of Sussex Police. It has provided a forum for the identification of new and common issues and the sharing of information, expertise and best practice (within the Group and more widely) as well as work to raise awareness of the issue amongst enforcement agencies, SMEs and other key groups. It has also provided a forum to draw together wider strategic work in other areas such as fraud and organised crime to consider the connection to IP crime and to help ensure that a coherent picture is in place. In the period 2010/11 the Group welcomed a number of new members to expand the Groups focus. The new members include representatives from the pharmaceuticals industry and the Food Standards Agency (FSA) as well as market operators. The Groups work has included the development of an e-guide on tackling IP infringement (predominately criminal infringement) within the workplace and work on delivering a more coordinated approach to awareness raising and training. This will be supported by the IPO/ Crown Prosecution Service (CPS) joint project on e-training for prosecutors, which was one of the IPOs key training priorities for the reporting period (see part D of this Chapter). Updating the UKs IP Crime Strategy The IPO commenced work, in late 2010, to review the existing IP Crime Strategy and to set out a new strategy which would identify the governments priorities for the future on IP crime. The timetable for this work has been impacted by the Independent Review of IP and Growth (Hargreaves Review) that was launched by the Prime Minister in November 2010. That review, which was chaired by Professor Ian Hargreaves, was tasked with looking at how intellectual property supports innovation and growth. Given that one of the issues identified, in the terms of reference for the review, was the enforcement of IP rights, it was decided that work on updating the UKs IP Crime Strategy would be progressed in a longer timeframe. It could then take proper account of the findings of the Hargreaves Review. An updated IP Crime Strategy was published in August 2011. Home Office: a new approach to policing and crime In March 2011 the Home Secretary set out the governments approach to tackling crime22 which will deliver greater freedom for the police through increased discretion and local level accountability. Alongside this there will be an enhanced national focus on tackling organised crime. The publication of the plan for the National Crime Agency (NCA) in June 2011 set out in more detail how national capabilities would be enhanced through the creation of a new national crime-fighting agency. The

22 http://www.homeoffice.gov.uk/publications/crime/new-approach-fighting-crime?view=Binary

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NCA will strengthen the operational response to serious and organised crime defend our borders, fight fraud and cyber crime and protect children and young people. It will draw upon and exploit the intelligence, analytical and enforcement capabilities of SOCA. Comprising of distinct commands (for organised crime, economic crime, border policing and the Child Exploitation and Online Protection Centre), the NCA will also house the national cyber crime unit. Work within the Home Office was also continuing at the end of the reporting period on assessing the threats posed to the UK by cyber crime and the appropriate response. In late 2010 the government made clear its intention to develop a new strategic approach to tackling cyber threats and cyber crime within the UK (and internationally) and proposals are expected in Summer 2011. This will assist the work to tackle IP crime due to growing concerns about the use of the world wide web as a sales platform for fake and pirated goods. The National Fraud Authority The National Fraud Authority was established in 2008 initially as the National Fraud Strategic Authority. Along with a new National Fraud Intelligence Bureau, this was set up to try and combat the threat that fraud poses to businesses and consumers. In 2011 the government announced that responsibility for the National Fraud Authority would transfer from 1 April 2011 to the Home Office (from the Attorney Generals Office). This move is intended to strengthen the UKs enforcement response to fraud by enabling a more coordinated response. It will also strengthen the links between the National Fraud Authority and enforcement responses to cyber crime and serious and organised crime. Consumer Protection Policy (BIS and OFT) Responsibility for consumer protection policy sits within the Department for Business, Innovation and Skills (BIS). In November 2010, as part of its broad proposals on the reform of public bodies the government announced plans for changes to the consumer protection landscape, including the merger of the Office of Fair Trading (OFT) with the Competition Commission. As part of this restructuring the consumer advice elements of the OFTs work would move to the Citizens Advice Bureau and that national enforcement activities on consumer protection would be transferred to trading standards. This announcement took place against the wider backdrop of ongoing work by BIS to update and improve the consumer landscape to ensure that it delivers effective and targeted protection. Since these announcements BIS have been consulting closely

with trading standards, consumer groups and others to explore in more detail how these new arrangements might work. A public consultation23 on these proposals was launched on 21 June 2011. In December 2010 the Office of Fair Trading published a strategy24 setting out its planned approach to protecting consumers who shop online. The strategy identifies a number of areas for action, including improved collaboration on intelligence across trading standards and with other agencies. BIS has also been looking at the powers that are currently provided to trading standards to support their enforcement activities, to consider whether the powers are appropriate and to identify any potential required changes. This review includes an examination of their powers in relation to the enforcement of copyright and trade mark criminal laws. BIS have been consulting with the IPO, industry and enforcement agencies to better understand how these powers are used and how they might need to evolve to reflect new issues. This review includes an examination of internet investigation powers. A formal consultation on a proposed generic set of trading standards consumer law powers is expected in Autumn 2011. The BIS Fighting Fund continued to operate through 2010/11 providing a potential funding stream to support IP related investigations by trading standards officers. This fund will continue in 2011/12. Local Government Regulation and council trading standards services Local Government Regulation, formerly LACORS, was part of the Local Government Group. It offered advice and guidance to councils throughout the UK and their partners and lobbied on behalf of councils to ensure that legislation and government policy can be practically implemented. During the year its primary focus on IP crime issues has been: facilitating the local authority IP Focus Group that consists of representatives from every region in England, Wales and Scotland who come together to discuss issues, share information and best practice; working with the auction website home authority for trading standards to develop thinking on policy solutions for tackling online trading in fake goods; spreading awareness of the Proceeds of Crime Act 2002 and its potential role in helping to tackle criminality, including IP crime.

23 http://www.bis.gov.uk/consultations/empowering-and-protecting-consumers?cat=open24 24 http://oft.gov.uk/shared_oft/consultations/eprotection/OFT1252.pdf

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Local Government Regulation ceased to exist at the end of the financial year due to cutbacks, but some of its work is now being carried out by a small Regulatory Support Unit that will provide some advice, guidance and lobbying. Local Better Regulation Office (LBRO): enforcement priorities and competence training LBRO was established in 2007 and is an Executive Non-Departmental Public Body. Its focus has been on minimising the regulatory burdens placed on business to enable a better focus on rogue traders and encouraging the provision of local authority regulatory services in a way that accords with the better regulation principles. Following a review carried out as part of the governments wider work on public bodies reform, Ministers have announced that LBROs work will be carried forward by a new streamlined organisation that will form part of BIS. The government is consulting on proposals for the new Better Regulation Delivery Organisation that works with national regulators, policy departments, local authorities, businesses and nongovernmental organisations to improve the delivery of regulation for the benefit of businesses and citizens. In February 2011, LBRO issued a consultation25 setting out new priority regulatory outcomes to be used by local authorities in determining their local enforcement priorities which will ultimately drive resourcing decisions. These proposed outcomes include the promotion of a fair trading environment and the need to protect consumer safety, both of which link to the need to tackle IP crime. LBRO provides support and advice through a range of initiatives. Last year, as part of this work, they launched a new initiative to improve competency and skills across all regulatory officers. A specific requirement has been identified for trading standards officers on IP crime and LBRO are working with TSI, IPO and other partners to ensure that IP related competences and training is properly reflected. Spotlight on medicines the MHRA The Medicines and Healthcare products Regulatory Agency (MHRA) has developed a comprehensive and effective programme of work to combat counterfeit medicines. This is being achieved through a sustained programme of communication, collaboration and regulation as set out in its Anti-Counterfeiting Strategy26 published in November 2007.

Proposals to strengthen the UK medicines supply chain against the growing threat from counterfeits arising from that strategy are now at an advanced stage of development. In addition, the EU has made proposals to strengthen the EU medicines supply chain against the threat from counterfeits and these will be concluded soon. Taken together, the UK and EU proposals will significantly strengthen the supply chain in the UK. These proposals include: strengthening the rules governing anyone trading in medicines removing anomalies in the legislation that allow certain trading in medicines to take place without the relevant licence increasing controls over active substances that are imported into the EU requiring medicines that are at risk of counterfeiting to be protected by a tamper-proof seal and means to identify individual packs.

MHRA have reported that the availability of counterfeit medicines is a growing threat globally, the supply of counterfeit medicines is predominantly via the internet and in 2010 the MHRA participated in Operation PANGEA III which was specifically designed to tackle websites illegally supplying medicines. MHRA: Operation Pangea 3: This international initiative involved the participation of 45 countries, comprising 105 separate agencies worldwide, who took part in a week of action tackling the four components of the internet supply of counterfeit and unlicensed medicines. This included Internet Service Providers (ISPs), Domain Name Registrars, Payment Service Providers and Postal Delivery Services. During one week in October 822 websites were identified - 297 were closed down and 30 advertisements removed from auction sites. 355 postal hubs were inspected worldwide with 278,524 packages examined. 11,783 packages were seized containing 1,091,952 tablets. 104 investigations were begun and 130 search warrants executed with 87 individuals under investigation resulting in over 1.3 million seizures (through test purchases, controlled deliveries and premises inspections).

25 http://www.lbro.org.uk/docs/priority-regulatory-outcomes-consultation.pdf 26 http://www.mhra.gov.uk/home/idcplg?IdcService=GET_FILE&dDocName=CON2033156&RevisionSelectionMethod=Latest

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A wide range of medicines were seized including erectile dysfunction pills, weight loss tablets, antibiotics, hormones and steroid products, anti-depressants, pain killers, cardiac medication, anti-cholesterol, stimulants/ amphetamines, cancer medication and insulin. A total of 2.3 million pills were seized with a total value of 4.1 million. A joined up response on the ground The IPO Intelligence Hub (the Hub), which manages the national IP crime Intelligence Database (IPID), was created to provide coordination and support to law enforcement and industry, using relevant legal gateways. It acts as a central resource for public and private sector investigators to utilise when taking forward investigations. The Hub supports enforcement activity and enhances the collection, analysis, sharing and use of intelligence to better understand and combat IP crime. The Hub continued to engage with industry and enforcement organisations during 2010/11. It received over 6,500 intelligence records between April 2010 and March 2011 and processed 1,100 enquiries against the national IP crime intelligence database from enforcement agencies. Over 500 matching records were identified on the database with results being turned around in 48 hours from receipt to dissemination. The Hub is designated as a competent authority under Article 2(4) of the Europol Convention in respect of Europol business and it has been charged by SOCA and Europol to act as the UKs central point for collecting, analysing and disseminating IP crime intelligence. The IPO Intelligence Hub is also a designated authority under the Proceeds of Crime Act 2002 (PoCA) and employs a trained and accredited financial investigator to work with enforcement and industry to pursue money laundering investigations using the powers under PoCA. National Markets Strategy The Hub continued to support the flow and management of intelligence between trading standards and industry sectors to develop the intelligence picture relating to IP crime at markets, car boot sales and computer fairs. Following the completion of an Intelligence Requirement27 to support this multi agency approach the IPO Intelligence Hub provided specific support for a series of targeted enforcement actions at key markets.

Threats The 2010-2011 UK Threat Assessment identified the main threats as being: counterfeit medicines optical digital media clothing and footwear other products relating to consumer harm.

Intelligence on these areas account for over 85% of the total received by the Hub and clearly indicates the risk of consumer harm from the nature of the goods involved. The Hub has also received intelligence identifying Olympic branded goods as an emerging threat in the build up to London 2012. Already there have been seizures of counterfeit goods within Westminster and more recently a detention of counterfeit polo shirts carrying the Olympic logo was made in Southampton. There is a clear evidential rise in the supply and distribution of counterfeit tobacco and alcohol, including recent high levels of seizures of fake wine between London and South Wales. Multi-agency intelligence The Hub receives information from several contributors made up of industry, law enforcement and government agencies. The range and volume of data held by the hub can help add value to ongoing investigations and avoid any potential situations where, for example, two or more agencies are investigating the same individual. For example, a recent seizure of 23 cartons of t-shirts (2,748 items) contained several well known brands. Work between UKBA, Westminster Trading Standards and the IPO has led to the managing director of the company responsible for this import being on police bail with his passport withheld. May Day Market Raid in Brighton: Fake designer goods worth more than 150,000 were seized during a bank holiday raid at a city market in May 2010. Trading standards officers and police swooped on Brighton Racecourse in a bid to catch peddlers of fake goods in the act. Hundreds of items including pirate CDs and DVDs, computer games and clothes bearing multiple fake designer labels were all found. It was the third major haul taken by trading standards from that market in the past year. Trading standards officers said there has been an escalation of the problem in Brighton in recent years and linked the trend to the recession.

27 a means of collecting specific data to provide a clearer picture of the threat.

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Industry Referrals In conjunction with the Welsh Police Regional Intelligence Unit, the Hub continued to support the optical digital media sector (film, music and games) to develop raw information into actionable intelligence. This was then used to support enforcement action by trading standards and police across the UK. Between April 2010 and March 2011 the Hub processed over 100 intelligence referrals from industry double that of the 2009/10 figures. First conviction for illegal music sharing A woman from Ayr has become the first person in Scotland to be convicted of illegally sharing music online. Anne Muir, 58, illegally distributed 54,000 worth of copyright protected music files via a peer-to-peer file sharing application. The case was supported by the IPOs Intelligence Hub who developed an initial referral from the British Recorded Music Industry (BPI) in order to help identify Muir. Strathclyde Police searched Muirs home address and discovered 7,493 digital music files and 24,243 karaoke files highlighting her prolific criminality. Muir was found guilty of contravening section 107(1) (e) of the Copyright, Designs and Patents Act 1988 and sentenced to three years probation. In addition the Hub supports other industry sectors in developing links with trading standards and police and offers them advice and assistance in developing their investigations.

disseminated to the relevant law enforcement agency in order for them to take any appropriate action. Awareness raising During the year there was a strong focus on intelligence gathering and on the potential role of the Proceeds of Crime Act 2002 in tackling IP crime. This included a series of events in Scotland, working with Strathclyde Police, Scottish Trading Standards and the Scottish Crime and Drug Enforcement Agency (SCDEA) to improve awareness of IP crime and the services provided by the IPO Intelligence Hub. Engagement with the Government Agency Intelligence Network (GAIN) and other regional intelligence networks Improved engagement with these networks has been an important area of focus for the IPO over the past year. The Hub is now engaging with a range of GAIN networks and received 139 requests from them for the period April 2010 to March 2011. These are not all IP crime related but as part of the Network all partners are asked to search their databases for all types of criminality, although the IPO only store data relating to intellectual property. The Hub is part of the South West, South East and East Midlands GAIN networks as well as networks operating in Wales (Tarian) and the East of England (the East of England Regional Partners Group). These groups are all based around the National Intelligence Model (NIM) and provide a mechanism for stakeholders (enforcement and non-enforcement) to share intelligence over secure gateways. Their primary aim is to increase knowledge and confidence in as many partners/stakeholders as possible to allow the sharing of intelligence to the principles of NIM. UK Border Agency Portal with IPO The identification of counterfeit goods at UK Borders is governed by EU Council regulation 1383/03, currently under review, and requires notification of the brand holder and a response confirming they are in breach of IP rights. During this period, the brand holder is not permitted to further disseminate the information provided by UKBA. The UKBA and the IPO Intelligence Hub have developed a Memorandum of Understanding to ensure that once this is done, there is a flow of intelligence not only to maximise enforcement opportunities from a

Crimestoppers campaign on fakes The main aim of the campaign was to generate actionable information on fake goods and organised crime, in order to assist law enforcement in solving cases and making arrests. A section of the website was also dedicated to help educate the public about how counterfeit products can cause harm as well as the links between purchasing fake goods and organised crime. The campaign was supported by SOCA, the IPOs Intelligence Hub and received financial backing from other industry organisations. During this period the Hub received and processed over 150 intelligence logs which resulted in numerous matches against existing data. These results were

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particular intervention but also to add to the intelligence picture determining future action. This added value is proving to be very useful and is a good example of co-operation between law enforcement agencies, government departments and industry. Scambusters The trading standards service is delivered through over 200 local authorities in England, Wales and Scotland. The activities of individual trading standards services are typically limited to the geographical boundary of their local area. In 2007 the government provided funding for the establishment of a series of regional Scambusters Teams to complement these local teams by working on larger scale consumer scams at the regional level. 2010/11 saw a number of IP crime related activities, including: Scambusters South West led an operation in the Bristol area in May 2010 which resulted in the arrest of four people when police stopped two vans carrying fake designer goods with a street value of around 90,000. The haul included counterfeit sportswear purporting to be several well known brands. The goods were destined for sale at a local market. In September 2010 two men were jailed following an investigation led by East Midlands Scambusters (working with UKBA and Nottinghamshire Police) for their involvement in a scam to sell hundreds of thousands of pounds worth of counterfeit goods which was being run from a house in Eastwood. The haul included 5,000 hair straighteners, 3,000 pairs of footwear, jewellery, computer software, MP3 players and designer clothing. All of the items seized were found to be fake. Investigations revealed illegal money laundering activity with over 400,000 profits laundered to China via Western Union. Stuart Peach received a four year sentence for money laundering and received a concurrent 32 month sentence for trade mark offences. Another man was jailed for 10 months for his part in the scam. Initially these goods had been imported from China with logos in place but subsequently they began to ship the labels and logos in separately to try to avoid detection. UK Border Agency officers seized goods at East Midlands airport and other airports in Summer 2009.

of respondees stated that they had worked with other organisations in investigations during the year. Over 85% reported that they had collaborated with industry bodies, as shown in Chapter 3 of this Report. UKBA and MHRA - working together to tackle fake medicines: UKBA continues to work with the MHRA and other partners to combat the supply of fake medicines in the UK. UKBA estimates, in February 2011, over 8.5 million fake erectile dysfunction tablets were seized by them in 2010, with an estimated value of 13 million. UKBA refers all relevant seizures to MHRA who act as the lead enforcement agency within UK. There were a range of seizures of fake and unlicensed erectile dysfunction tablets around the country: around 6 million doses were seized at Heathrow Airport 2.1 million were found in parcels at Coventry international postal hub 250,000 at Mount Pleasant postal hub in London 116,000 at Birmingham Airport 50,000 at Stansted Airport, a single seizure in October 2010.

Operation Blackout: in March 2010, following a long term trans-Atlantic operation involving City of London Police and the US Immigration and Customs Enforcement, seven men were arrested across Greater London. These men were alleged to be part of an organised crime group who had been shipping goods from the Far East. Around 50,000 fake items were seized covering a range of products including footwear, clothing, jewellery and sportswear. In September five of the men were charged with offences under money laundering laws and the Trade Marks Act 1994. The games industry: update from the Association for UK Interactive Entertainment (UKIE) During 2010, UKIEs Anti Piracy Unit supported over 110 raids that concerned illegally copied games and circumvention of games consoles. During the raids over 70,000 master copies of games (each of which could have been used to make hundreds of additional copies) were recovered and over 6,000 circumvention devices. Circumvention devices represent a significant threat to the games industry and their sole function is to allow copied games to be played on games consoles. Sixteen custodial sentences were delivered to the criminals involved in these cases and a further 10 community punishments were issued. UKIE also assisted in five successful PoCA cases during 2010, with over 800,000 being recovered as a result of these cases.

Joint operations Enforcement agencies and industry continue to work closely with each other, as demonstrated by the results of the 2010/11 IPO survey of trading standards. 97%

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Nintendo v Playables Ltd and Wai Dat Chan: This High Court civil case, taken by Nintendo, established the illegality of circumvention device game copier cards (for example R4 cards) for the Nintendo DS lite handheld games console. The evidence for this case was established when UKIE, HMRC and trading standards officers from the London Borough of Camden coordinated an investigation into the sale and distribution of such devices from a number of websites operated by Chan. Over 165,000 devices were seized in the operation highlighting the scale of the illegal activity The defendants were found guilty of copyright infringement under 296ZD and 296 of the CDPA 88. Tackling illicit tobacco and alcohol HMRC continue to run their successful tackling tobacco smuggling strategy which has been in place since 2000. Since its launch the size of the 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. However, organised criminal gangs continue to use this form of crime to help fund other criminality including the smuggling of drugs, weapons and people trafficking. HMRC estimate in their document titled tackling tobacco smuggling building on our success28 that tobacco smuggling costs the UK taxpayer 2.2 billion per year; how the figure was arrived at is unclear. The cost is not simply financial though and the unregulated production of counterfeit tobacco products and alcohol presents serious additional health risks. HMRC is determined to continue the strategic approach to tackle the problem with its partners using all the measures at its disposal. 56 years in jail for counterfeit vodka gang Six members of a gang who used high-tech equipment to turn out 24 fake bottles of vodka a minute were jailed at Southwark Crown Court for more than 56 years in July 2010 following an international investigation by HMRC. The gang made more than 1.3 million litres of the illegal vodka in a rat infested warehouse in Hackney, East London in an attempt to deprive the public purse of nearly 16 million in duty and VAT. They spent the money on powerful cars, luxury Docklands apartments and lavish holidays in exclusive hotels, including a 4,000 three-day jaunt to Dubai. Confiscation proceedings are now underway. The gang were also involved in counterfeit tobacco using sophisticated equipment which produced 9.5 tonnes of counterfeit

hand rolling tobacco at the rate of 100 pouches per minute, valued at 800,000 in duty. The packaging of both the vodka and tobacco was so convincing that the public would have been duped into thinking they were buying the real thing. HMRC investigators worked closely with European law enforcement agencies from the Netherlands, Germany, Belgium, Poland and Cyprus to bring the gang to justice. The ethanol used in the vodka factory came from Eastern Europe and the tobacco was stored in Holland before coming to the UK. Further evidence suggested the counterfeit packaging came from Cyprus. Fake alcohol for sale in many UK off-licences: the BBC reported29 that up to a quarter of licensed premises in some parts of the UK are involved in the sale and distribution of counterfeit alcohol. The report suggests that organised crime gangs are behind the manufacture of the fake alcohol and that such fraud costs the UK economy around 1 billion per year. South west England was found to be a prominent area with 26% of licensed premises being found to be selling counterfeit alcohol. The North of England Tackling Illicit Tobacco for Better Health programme brings together the three regional smoke-freeorganisations across the North of England and partners from keyintelligence and enforcement agencies including trading standards, HMRC, UKBA, police and SOCA. It focuses on tackling counterfeit and smuggled tobacco and on preventing the avoidance of age related restrictions. Counterfeit tobacco found in Chinese tea: an operation by HMRC in Scotland resulted in the search of a flat in Glasgow that uncovered a large-scale tobacco factory. Officers discovered fake tobacco found within bags of Chinese tea and seized 615 kilos of hand-rolling tobacco an approximate UK tax loss of 104,000, or 1.5 million over the course of a years trade. Laboratory analysis of the fake tobacco revealed that it contained 30 times the amount of lead than found in a genuine product.

B. Innovation and new initiatives

This section of the report highlights two key areas of activity on IP crime over the past year. It considered some of the new initiatives that have been launched to try and deal with the challenges posed by IP crime over the internet. Secondly, it highlights work within the UK relating to the enforcement of IP around the London 2012 Olympic and Paralympic Games.

28 http://customs.hmrc.gov.uk/channelsPortalWebApp/downloadFile?contentID=HMCE_PROD1_031246 29 http://www.bbc.co.uk/news/uk-12456360

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Tackling IP crime over the internet It is widely recognised across all parties active in the field of IP enforcement that some of the biggest challenges being faced relate to tackling IP crime over the internet. Chapter 1 touched upon this, looking at the changing nature of the challenge as bandwidth increases and consumers look to purchase goods and consume content over the internet as opposed to relying on more traditional channels. A number of innovative projects and partnerships have been launched over the past year to address some of these challenges. These have included the engagement of new partners, including domain name registries and credit card companies as well as the adaptation of existing enforcement activities and techniques to respond to changing threats. The identification and dissemination of innovation and best practice plays an important role in helping to ensure that all enforcement agencies are able to understand how best to deal with online IP crime. Illegal recording in cinemas is a method used by criminals to acquire new film release content for internetbased release groups, websites and DVD production. Those involved in illegal recording use mobile phones or camcorders, together with customised mounts and audio devices to obtain the film content. The Federation Against Copyright Theft (FACT) continue to combat this form of criminality and now have a dedicated investigator for the theatrical sector who works proactively with cinemas. Graduate used Smartphone to record films in cinema: A graduate from London was found guilty of breaching copyright by illegally recording films in cinemas. Emmanuel Nimley, 22, used his mobile phone to record the films and then upload them onto the internet where others were able to watch them or burn them onto illegal DVDs across the world. Unemployed Nimley - who admitted ten charges against him relating to illegally copying and distribution of movies - was arrested after he was caught trying to copy the Jennifer Aniston and Gerard Butler film, The Bounty Hunter. He then admitted other offences under pressure from his family. He was charged under sections six and seven of the 2006 Fraud Act, and section 107(1)(e) of the 1988 Copyright Designs and Patents Act. Nimley had already used his mobile phone to record The Crazies, Alice In Wonderland and The Green

Zone on their first screenings in the three weeks before he was caught. Domain names Domain names as business identifiers have increasing strategic importance with the growth of e-commerce, but unauthorised registration by others (known as cyber squatters) presents particular challenges for trade mark/ brand owners. The Internet Corporation for names and numbers (ICANN) is introducing new generic top-level domains (gTLDs) that will increase the number of domain name endings, such as .co.uk and .com, from the twenty two options that are currently available. Although this provides greater opportunities to brands, it has also been reported that there is a resulting increase in the threat from cyber squatters and those looking to illicitly benefit from registered trade marks. However, ICANN are keen to avoid such situations and have proposed to introduce: a trade mark clearing house that acts as a single reference point to validate IP rights in claims associated with domain name registration a uniform rapid suspension service (URS) that allows speedy resolution in obvious cases of misuse or bad faith post delegation dispute resolution (PDDRP) which permits allegations of abuse by the register operator running a new gTLD to be addressed.

Dealing with domain names used in connection with crime Nominet is the .uk domain name registry, managing one of the worlds largest registries. It is a non-profit company aimed at facilitating and protecting the .uk space. Nominet can work with brand owners via their award winning Dispute Resolution Service30 and will also investigate and, if appropriate, suspend registrations which breach their requirements to disclose an identifiable registrant and accurate contact information. Nominet has recently set up an issue group to discuss proposals to develop an abuse policy to deal with domain names suspected of being used in connection with criminal activity, including IP crime. Membership of the group includes representatives from law enforcement, government and an Anti-Counterfeiting Group representative.

30 http://www.nominet.org.uk/digitalAssets/30363_DisputeResolutionServiceBooklet.pdf

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The Publishers Associations Copyright Infringement Portal Update In March 2009 the Publishers Association launched the Copyright Infringement Portal, which enables publishers to issue notices requesting the removal of copyright protected material from infringing domains. Since the launch there has been a significant increase in member engagement in tackling online infringement with over 110 publishers now subscribed to the service. In 2009 the number of notices served was 5,986 in 2010 this has risen fourfold to 26,133 notices.
Notices served by country

have the necessary knowledge and skills to enforce the requirements of legislation, support businesses effectively and to deliver successful outcomes for consumers and business, whilst enabling local authorities more flexibility in resourcing. 4. Applying for rights of audience for trading standards in civil courts BIS are engaging with enforcement and business stakeholders to seek views and aim to formally consult on these proposals in Autumn 2011. The Internet Auction Working Group (IAWG) is a Local Government Regulation (formerly LACORS) focus group 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 owners. The guide31 provides direction for parties to share relevant case law and information with each other on the issue of the safe harbour defence and duties. This will improve the capability of all to advise and/or take action against e-Marketplaces, with regard to sales of counterfeit goods and other illegal practices on their sites. The IAWG have also been developing plans for a Code of Practice and a National Inter-Agency list of prohibited products that e-Marketplaces would then use to prevent illegal products appearing on their sites and have commenced discussions with relevant government departments to explore some of these issues. They have contributed to the debate on the misuse of .uk domains by counterfeiters; the application of s75 of the Consumer Credit Act 1974 (CCA) protection to eMoney claims (i.e. consumer claims against credit card companies when they receive counterfeit goods and have paid by credit card via an eMoney provider); an Enforcer/ Industry Notice and Takedown template to encourage consistency between the various agencies and industry; and are involved in a number of other initiatives which serve to make the industry a more compliant and competitive market. The Intellectual Property Online Protection Group (IPOP) is focused on looking at IP threats delivered via the internet and is primarily made up of online experts from industry bodies and government agencies. The group works proactively in order to share best practice, knowledge and intelligence whilst raising awareness to the public of risks, such as malicious software and identity theft, associated with online piracy.

Trading Standards Powers The Department for Business Innovation and Skills (BIS) is undertaking a project that is looking into trading standards powers. Specifically the project is considering: 1. Developing a single set of consumer law powers So far as is practicable, BIS are looking to develop a single set of generic consumer law powers for trading standards which will bring together powers which are dispersed in different pieces of legislation. 2. Simplifying/improving trading standards cross border cooperation and authorisations To develop proposals for simplifying/improving trading standards cross-local authority border cooperation and authorisations. To ensure that authorisations are clear and simple in every case for the protection of consumers. 3. Developing less prescriptive trading standards qualifications and enable improved competency requirements The aim is to look at developing less prescriptive trading standards qualifications requirements and enable improved competency requirements to take effect. This will help ensure that trading standards professionals

31 Available to enforcers, brandholders and interested parties on the LGR website by Googling Enforcers Guide - Online Marketplaces.

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First Cyber Security32 has launched a new innovative technology to allow consumers to know whether a website is safe or whether it is best avoided. The technology, called SOLID (Secure OnLine Identification), only requires the consumer to glance at a small window. If the window contains the websites logo the consumer can be sure that they are not visiting a spoof website. Consumers can also be redirected to legitimate sites helping enhance their online safety. This software is free for consumers to download and helps reduce the risk from harmful sites including fraudulent or phishing emails and a number of other cyber scams. London 2012 and IP crime: LOCOGs preparations for the Games As well as organising and hosting the Games, the London Organising Committee of the Olympic Games and Paralympic Games Limited (LOCOG) are responsible for protecting and maintaining the value and integrity of the London 2012, Olympic and Paralympic brands in the UK; and ensuring that unauthorised third parties are unable to derive a commercial benefit by using Games related intellectual property or associating in some way with the Games. A large percentage of LOCOGs privately raised 2 billion operating budget to stage the Games will be generated through the official merchandise programme. Therefore, LOCOG needs to ensure that licensees are guaranteed exclusive rights to produce official merchandise. A range of actions are being taken to prevent the sale and distribution of any goods which seek to replicate official London 2012, Team GB/ Paralympics GB merchandise and other goods which use London 2012, Olympic and Paralympic intellectual property, without LOCOGs permission. LOCOGs work: 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 been working with trading standards, HMRC, UKBA and the Met Police on a range of education training and enforcement matters on counterfeit goods. Public education includes information available on the London 2012 website at www.london2012. com (e.g. explaining principles of enforcement, FAQs, brand protection booklets for businesses and non-commercial organisations, guide to identifying counterfeit merchandise), publicity where the opportunity is presented and the LOCOG Brand Protection Teams presence at conferences and fairs around the UK.
32 http://www.firstcybersecurity.com/main/index.asp

Members of the public are able to communicate with the LOCOG Brand Protection Team directly by emailing brandprotection@london2012.com. The London 2012 IP Crime Group: the Group includes representatives from Adidas (a London 2012 sponsor and licencee), London Trading Standards Authority (LoTSA), Newham Trading Standards, HMRC, the Olympic Security Directorate, the Olympic Intelligence Centre, the Olympic Delivery Authority, IPO, the Metropolitan Police Service, SOCA, BIS, the Department for Culture Media and Sport (DCMS) and Consumer Direct. The objective of the Group is to bring together this broad range of expertise to coordinate, collaborate and share information and best practice in relation to London 2012 and the problem of unofficial merchandise and counterfeit goods in the United Kingdom. The Group further divides into agency focused subgroups which meet frequently.

The London 2012 Hologram: To protect the exclusivity of the London 2012 brand and to help the public and enforcement personnel identify official merchandise, since 2007 all official London 2012 merchandise has featured the London 2012 hologram (see above). The holograms have special visual and security features built into them which both the public and enforcement personnel are able to interrogate to authenticate the products. The London 2012 hologram is supported by an online track and trace system, accessible by UK enforcement personnel. Education and Awareness Programmes: LOCOG has been engaged with enforcement personnel since 2005. In the summer of 2010, LOCOG began rolling out its bespoke Education and Awareness Programmes, specifically for HMRC, UKBA, trading standards and the Metropolitan Police. The London Olympic Games and Paralympic Games Act 2006 provides for controls on unlawful advertising and street trading in the vicinity of London Olympic events. The Department for Culture, Media and Sport has consulted on secondary legislation and the London

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Olympic Games and Paralympic Games (Advertising and Street Trading etc) (England) Regulations 2011 (and equivalent measures for Wales and Scotland) will provide that: - a person may not engage in advertising activity in an event zone during the relevant event period or periods - unless excepted under the Regulations or authorised by LOCOG; a person may not engage in street trading in an event zone during the relevant event period or periods unless excepted under the Regulations or authorised by the Olympic Delivery Authority (ODA). It is expected that these regulations will be made in late Autumn 2011. The ODA is responsible for enforcement of the regulations and will look to designate appropriate Local Authority Enforcement staff to enforce the regulations on its behalf. The ODA is also a prosecuting authority for the regulations. LoTSA and TSI have nominated certain trading standards officers from across the country to be identified by LOCOG as London 2012 Intellectual Property Champions (IP Champions). The IP Champions have and will continue to be trained and briefed as the trading standards officer (in their respective local authority) who can be contacted and has knowledge on Games-related brand protection matters. In addition to working with, and providing training to the 32 London Boroughs, LOCOG has done the same for trading standards officers from local authorities outside London where there are Games venues, including authorities in north England, Scotland, Wales and the Society of Outside Local Authority Members (SOLAM). LOCOG has similarly been working with senior officials from HMRC and UKBA since 2006 with bespoke sessions which have, to date, been rolled out to HMRC/UKBA officials in Coventry, Southampton, Felixstowe and Heathrow Airport. LOCOG has been working with senior officials at the Metropolitan Police - specifically Operation Podium, which was established to deal with Games-related economic crime. To date, LOCOG has engaged with over 700 enforcement officers across the UK and continues

to develop and build relationships. In addition LOCOG has been working to raise awareness and build relationships with a wider range of interests, including the UK IP Crime Group, the Institute of Trade Mark Attorneys, FACT, IPO, Citizens Advice Bureau, Consumer Direct, Trading Standards Institute, Consumer Education Liaison Group, UK Interactive Entertainment (formerly ELSPA), ACG and the Office of Fair Trading. Within the past year there have been a number of seizures of counterfeit merchandise, including over 1,300 hats/t-shirts and 39,655 lighters which have been recently seized by trading standards. Looking at the experience of previous Olympic Games and Paralympic Games, the volume of counterfeit product is expected to increase in 2011/2012 as we get closer to the Games33. This will not be limited to Olympic merchandise. Fake Olympic goods seized in Coventry: Coventry City Councils trading standards officers have seized fake Olympic goods from a car boot sale. Cigarette lighters displaying the iconic Olympic five interlocking rings symbol and stating London 2012 were discovered as part of regular inspections at car boot sales. Although only a relatively small number were found, officers believe they are part of a larger consignment and steps are now being taken to trace the supply of these lighters. The London Olympic trade mark and the symbol of the Olympic Rings are protected trade marks. The London Organising Committee of the Olympic Games and Paralympic Games Limited (LOCOG) confirmed the lighters are fake. People looking to buy genuine London 2012 Games merchandise are reminded that it will include a numbered holographic version of the official logo as part of the packaging or labelling as a guarantee of authenticity. Authorised products provide financial support to the Olympic and Paralympic Games which will see 12 football matches played at the Ricoh Arena which is being renamed the City of Coventry Stadium. Brand-i On World Anti-Counterfeiting Day (8 June 2011), the Trading Standards Institute (TSI) launched a new

33 Enforcement personnel can make enquiries via bprhelpdesk@london2012.com

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initiative designed to help consumers avoid fake goods. Brand-i34 is an online tool that helps users locate authorised e-commerce websites for particular brands. This is in response to the growing number of illicit sites that are listed when a particular brand is entered into a search engine. It also allows consumers to report sites that are suspected of selling counterfeit goods. The site is funded and maintained by the brands themselves. Childnet International In conjunction with the Industry Trust, IFPI and BPI, Childnet International35 has developed a useful guide to assist parents, teachers and young people well informed on how to stay safe and legal when enjoying entertainment on the internet or via a mobile device. The guide describes associated risks with illegal file sharing, links to informative websites and more information on intellectual property as well as generic online safety.

promote and spread best practice amongst public authorities; promote and spread successful private sector strategies; and raise public awareness.

The Observatory is essentially driven through private stakeholders meetings and Member States representative meetings, which are regularly held to discuss developing issues and experiences and to agree and organise key strategies and approaches. Alongside this the Commission has established three technical industry working groups: the Legal sub group (industry) which has been exploring industry views on the existing legal framework in relation to IPR enforcement and has included a detailed analysis of the current Civil Enforcement Directive (2004/48/EC). All reports can be found on the Observatorys website; the Public Awareness sub-group (industry) has been working to develop a more sustainable strategy to develop public awareness, throughout the EU, through exchanges of experiences and approaches used by different national associations. The group also assisted the European Parliaments Forum on Counterfeiting, Contraband and Organised Crime and the British Chamber of Commerce in the organisation in 2010, which included a competition for EU schools (the REAL Fake competition). Hundreds of entries were received from students from 16 EU countries, and even a few from schools in Russia. The ceremony took place in the EU Parliament and was the highpoint of a week-long exhibition in the Parliament, aimed at raising awareness about the threat posed by counterfeit and pirated products. A similar event, focused on designs, is planned for February 2012; the Statistics subgroup has been involved in preparatory work to support work on assessing the scope and scale of counterfeiting and piracy in the EU, including the development of a potential common methodology. A contract was awarded to RAND Europe Cambridge Limited in December 2010 and work is already underway. Throughout the contract, the subgroup will act in an advisory capacity and will assist in preparation of the study. This will be the first study and report of its kind and the report is due for publication in early 2012.

C. Spotlight on Europe the work of the European Commission

IP crime is not an issue that solely affects the UK. Criminals operate across geographical boundaries and the manufacture of fake goods often occurs overseas, with products being shipped to the UK at a later date, either as complete items or for future assembly. The growth of the internet and the use of the World Wide Web as a trading platform for fake and pirated goods can often mean that sellers are located thousands of miles away from the purchaser. It is essential that governments, enforcement agencies and industry work effectively with international partners, both in terms of operational activities but also in helping to shape the wider strategic response to the challenges we face. This section provides a brief overview of some of the key developments, within Europe on IP crime issues over the past year. The European Observatory on Counterfeiting and Piracy: The Observatory was launched in 2009 and has been extremely well received by stakeholders, the European Parliament and by Member States. The Observatory brings together industry, Member States and the Commission and is intended to complement and support existing work to tackle counterfeiting and piracy. Its primary functions are to: improve the collection and use of information and data;

During the coming year the Commission will seek to progress legislative plans, published on 24 May 2011, to transfer the Observatory to the Office of Harmonization

34 https://www.brand-i.org/ 35 http://www.childnet-int.org/

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in the Internal Market (OHIM). However, ahead of any such possible change, a Memorandum of Understanding (MOU) was signed between the Commission and the OHIM on 18 April. This will enable OHIM to provide essential technical cooperation and support to the European Commission in respect of the tasks of the European Observatory, in relation to the protection of trade mark and design rights. There has been two years of intensive discussions between a wide range of stakeholders on how to prevent and combat the sale of counterfeit goods over the internet and a successful agreement has been reached. A MOU was signed in May 201136. The MOU sets out a series of joint principles including effective measures to prevent offers of counterfeit goods from being listed on internet platforms. The MoU will have an assessment period of one year to review and measure progress, under the auspices of the Commission services.37

awareness of IP crime, its impact on the economy and links to organised criminals as well as specialist training on intelligence management. This included specific training to officers from Scottish police forces and trading standards authorities which led to an increase in engagement with the Hub and with the identification of potential targets for enforcement activities. Specific training has been delivered to raise awareness of IP crime and its links to fraud and other criminality to the Regional Asset Recovery Teams (RARTs) and National Fraud Investigators course attended by specialist fraud investigation departments in 10 police forces. Regular attendance at Payback Conferences throughout the UK covering government departments (including Her Majestys Revenue and Customs (HMRC), UK Border Agency (UKBA), Department for Work and Pension (DWP) and the Crown Prosecution Service (CPS)), senior police officers and senior managers from local authorities, all of whom represent a wide variety of disciplines within the field of local authority investigations demonstrated the need for coordination working in combating IP crime. The IPO also partners with industry for events and courses, including sponsoring, with the Alliance Against IP Theft, an IP module for the Diploma in Consumer Affairs and Trading Standards (DCATS) for trading standards officers. The course develops an understanding of all aspects of IP, civil copyright and trade mark issues, the role and responsibilities of those in industry, enforcement and government and the procedures and processes of investigating and prosecuting IP crime cases. This IP module supports the Trading Standards Institute DCATS diploma. The IPO promotes best practice by updating existing and developing new guides for businesses and enforcement, such as the updated Aide Memoire. This informative pocket booklet for police and trading standards officers helps them further understand aspects of IP crime, the legislation that governs it and relevant contacts. The booklet has been updated to include information on the Fraud Act 2006; police powers under the Copyright Designs and Patents Act 1988 and the Trade Marks Act 1994; and information on topical subjects such as illicit recordings in cinemas. Awareness through education The IPOs Cracking Ideas website at www. crackingideas.com provided resources to introduce students and teachers to the world of innovation and creativity. The fourth nationwide Cracking Ideas

D. Awareness and training

Introduction Awareness raising is an important tool in the fight to disrupt and prevent counterfeiting and piracy. Training continued throughout the reporting period with enforcement agencies, industry and government sharing knowledge, information and best practice in order to maximise their effectiveness in tackling IP crime. In addition, several awareness campaigns have been targeted at the consumer, which illustrate the impact of IP crime, the potential health and safety risks with fake products and the associated links to other criminality. A variety of methods have been used to deliver these messages, including guides, press articles, poster campaigns and information tools, such as the updated Supply Chain Toolkit and National Consumer Campaign. The Crimestoppers Fakes Fund Crime campaign combined several of these methods Intellectual Property Office activities The Intellectual Property Office (IPO) provides training courses on a range of topics including: IP basics, intelligence gathering and the IPOs Intelligence Hub (the Hub) and the use of proceeds of crime legislation in relation to IP crime. Training was provided to the law enforcement community throughout the UK in order to raise their

36 http://ec.europa.eu/internal_market/iprenforcement/docs/synthesis_report_2009_2010_en.pdf 37 http://ec.europa.eu/internal_market/iprenforcement/stakeholders_dialogues_en.htm#Sale

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competition was launched In April 2010, inviting children to develop a new theme park innovation and to identify how intellectual property can help them protect their creativity and gain value from their ideas. The competition closed 31 March 2011 with over 6,000 entries received. In May 2010 the IPO launched the Sprocket Rocket game; featuring Wallace and Gromit the game features user friendly IP messaging devised to raise awareness of IP and the IPO. Since its launch the game has received over 3.9 million plays! The Wallace and Gromit Presents A World of Cracking Ideas exhibition ran throughout most of the reporting period at the Glasgow Science Centre. 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 212,591 visitors. Since its launch in March 2009 the exhibition has been seen by 398,591 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. The exhibition has now moved to its third and final venue at the Centre for Life, Newcastle where it opened on 16 April 2011. Crown Prosecution Service and IPO e-learning programme A joint initiative by the IPO and the Crown Prosecution Service (CPS) aimed to develop a training tool which would deliver specific IP crime training to a wide range of prosecutors. This is to be an e-learning facility through an interactive series of modules on IP basics, offences and charges and common pitfalls and will be complemented by practice notes on key issues like illegal recording in cinemas. This is an important step in filling a perceived gap in knowledge that had been a concern to enforcement and industry. The training tools will be launched in Summer 2011. It would be mandatory for key prosecution staff including fraud division prosecutors, serious and organised crime division and prosecutors working in metropolitan areas and London 2012 regions. IP Crime Group The group continues to proactively engage in the development of support mechanisms to help raise awareness amongst law enforcement, industry and other businesses. Over the past year the IP Crime
38 http://www.ipo.gov.uk/ipctoolkit.pdf

Supply Chain Toolkit38 has been updated in order to incorporate the new HMRC processes, new case studies and links to further resources. This informative toolkit for businesses and SMEs aims to raise awareness of counterfeit goods entering legitimate business supply chains, and offers guidance on how to strengthen and protect their assets. It also includes a step by step approach on what action should be taken if counterfeits are found within the supply chain. Following previous research which identified a knowledge gap in businesses with respect to employees infringing IP rights in the workplace, the group has taken forward the production of an electronic guide that is supported by online tools that aims to bridge this gap. The guide, which is due to be completed in Summer 2011, has been developed jointly between industry, enforcement agencies and government. It will deliver practical support and advice for businesses on how to understand their corporate risks, spot potential problems and how to respond effectively (including preventative steps). Industry and enforcement agency activities Considerable work is undertaken by the IP community to raise awareness of the type of products being counterfeited, how to identify fakes and tackle IP crime. The Anti-Counterfeiting Group (ACG) Roadshows continued to bring together government, enforcement and industry to share knowledge and experience, and join forces on investigations. These Roadshows covered the UK - including London, Glasgow, Cardiff, Leicester, Worcester and Bradford - throughout the reporting year providing the opportunity to network with brand/IP owners and the enforcement community to highlight the scope, scale and harm of IP crime, key legislation and best practice, and the initiatives to assist in combating it. ACGs Spring and Autumn conferences in South Gloucestershire, London and Crewe, also brought together the IP community to highlight the current issues faced by the many industry sectors to share best practice and to update brand owners and law enforcement with the latest information. The Anti-Counterfeiting Group has been developing their training and awareness programme during 201011, in addition to the road shows they have: run a return on investment for rights holders in an online environment workshop;

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helped provide expert witness training in conjunction with Bond Solon; worked with Fulcrum Data Forensics in order to deliver internet enforcement training; and provided awareness education with UKBA on seizure and detention activity. all of these events have helped raise awareness and knowledge throughout represented brands in order to maximise their effectiveness in combating IP crime. 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. Wholly funded by industry, the Real Deal provides 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 rights owners, legitimate retailers and shoppers. At the heart of the programme is a national markets charter created in consultation with all the partners in the initiative including the Trading Standards Institute, Local Government Regulation, the Local Government Association, the National Association of British Market Authorities, the Retail Markets Alliance and industry bodies such as FACT. The AntiCounterfeiting Group and its members have joined the audio-visual sector in providing substantial funding and on-the-ground support for this initiative over the past two years. Since inception the programme has expanded and is now supported by, represents and protects the interests of an extensive range of creative industries, including music and the broad membership of the ACG. 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 intellectual property infringement. In June 2011 a total of 130 markets/car boot fairs39 across 33 councils are operating the Real Deal campaign.It is expected that 200 markets, including privately run markets, will be on board by the end of 2011. The Real Deal has extended into Wales, with Powys Council signing the Real Deal charter with the
39 A full list of markets can be viewed at www.realdealmarkets.co.uk

organisers of the Royal Welsh Show, as part of their commitment to keep illicit traders from infiltrating this flagship event. Important developments are also taking place in Northern Ireland, where trading standards have agreed to introduce the Real Deal charter as part of a renewed approach to tackling IP infringement at markets, working in partnership with Policing Service in Northern Ireland (PSNI). During 2011, a new resource is being added to the materials available to enforcement professionals working in this field - A Guide to IP Protection at Markets and Car Boot Fairs for Enforcement Professionals, will bring together in one place a collection of articles, ideas and best practice in this area. Enterprise Act 2002 update from Lancashire Trading Standards Lancashire Trading Standards have continued over the past year to use the Enterprise Act to address reoffending. One of the options Lancashire use is to give the offender the option of giving an undertaking during the course of the criminal proceedings. However, it is made clear to the offender that, whether or not he provides an undertaking, prosecution will be taken against him for the offences in his summons. As a way of incentivisation, it is explained to the offender that an undertaking can be a powerful mitigation and can be brought to the courts attention as part of the sentencing exercise. On the other hand, if the offender refuses to give an undertaking, this fact may also be brought to the courts attention. Lancashire have found that a defence advocate, faced with having to mitigate for a previously convicted client, will usually recommend an undertaking, probably because it represents a tangible manifestation of his clients (claimed) intention to change his ways. It is likely that a more lenient sentence will be applied for the offences, although this could be viewed as a small sacrifice to address the problem itself. The number of problem counterfeiters dealt with in this manner by Lancashire Trading Standards has now reached double figures and not a single breach has been observed. Although the use of this method is still relatively young, the signs are promising for developed success in combating the problem of counterfeiters in the area. The Federation Against Software Theft - Investors in Software (FASTIiS) has been raising awareness within the enforcement community about its new enforcement website portal. Also a series of four events have been

33

held including events in trading standard authorities in the North West, North East region and soon Wales to launch the advice guide Software Stay Legal. This new initiative educates and supports trading standards professionals in tackling software piracy. SCDEA IP Campaign During October 2011, the Scottish Crime and Drug Enforcement Agencys (SCDEA) Interventions Team (the team) conducted a national awareness campaign that was designed to educate and reinforce the message to the general public around intellectual property crime. The campaign took place at six airports as well as Stranraer ferry port, where the team was able to display onboard the cruise ship Voyager to 500 passengers. The campaign also received support from other agencies including trading standards and the UK Border Agency, and received local and national press interest; including television, radio and internet coverage. In order to reinforce the scope and scale of counterfeit products, the team exhibited a diverse range of products from a wide range of brands. As well as displaying physical products, the team also raised awareness of how new technology, for example in the form of illegally downloaded music and e-books, is an ongoing threat to copyright. In addition to personnel presenting advice and information at each venue, a free handout in the form of a luggage label - was developed containing the campaign message. Handed out at each event, the luggage label allowed the message to be continued onwards from the day, remaining relevant and something that could be used by those travelling. National campaigns The Trading Standards Institute National Consumer Week campaign Buying Fakes Online. In September 2010 the campaign saw the IPO join forces with the Trading Standards Institute (TSI) for National Consumer Week to help advise consumers on how to shop safely online through advertising posters and Safe Shoppers Guide. The campaign raised consumer awareness and understanding of the risk posed by fakes - a checklist for consumers detailed how to shop safely online and how to avoid fake websites and products, scams and identity theft. Many trading standards authorities used the campaign to highlight in their own areas the fake products which shoppers should be particularly aware of including mobile phones, hair straighteners, gaming consoles, video games, clothing,
40 http://today.yougov.co.uk

toys, perfumes and cosmetics, alcoholic drinks and cigarettes. TSI Website: Visitors to the TSI website during the campaign were surveyed which found that 73% of people are concerned about shopping online, with 6% concerned specifically that items were potentially fake. 28% had problems shopping online where 19% found that when the items bought arrived they were fake and 48% did not receive their items purchased. Of those surveyed 10% would not have taken any action if they experienced problems, saying they would take it on the chin and avoid using the same website. From this campaign, calls to Consumer Direct around counterfeits rose by 43% (2,801 calls) between August 2009-10, compared with (1,958 calls) from August 2008-09. Crimestoppers campaign on fakes 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. A Fakes Fund Crime microsite divided into a number of strands covered counterfeit DVDs, money, tobacco and clothing providing advice on how to shop safely online and how to spot different types of fakes. Beer mats and posters highlighting the potential harmful effects of buying fake goods were distributed in pubs and clubs. Some local Crimestoppers raised awareness with their local consumers and counterfeiters by holding amnesty on fake goods, such as Derby Crimestoppers who advised the public to hand in any fake goods they had bought. Tower Hamlets Trading Standards joined Crimestoppers setting up a stall full of fake goods to warn people of the dangers of buying dodgy gifts for Christmas. Advice was given on how to identify fakes and warn them of the consequences of buying them. Crimestoppers worked with YouGov40 to commission market research investigating peoples awareness and perception of counterfeiting to help better inform the campaign strategy, messages and publicity activities. 2,103 adults completed the online survey between 20 and 23 August 2010, which found: 24% of adults have knowingly bought a fake DVD and 17% of people surveyed have purchased a fake CD;

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40% have purchased counterfeit goods of which 15% would not report it to any organisation if they knew of somewhere or someone selling fake goods; 41% of people surveyed would buy a fake product regardless of knowing its potential consequences, and would do so as they believe it is just a scaremongering tactic to say fake goods fund serious crime; 3% of people have knowingly bought fake tobacco; 56% of people would definitely not buy a product knowing it might fund organised crime and 31% would then reconsider buying it; 27% of people would feel more comfortable in passing on information about crime to Crimestoppers knowing it is a charity.

The project is delivered on and offline and seeks to create an audience of informed young people who are confident to raise awareness amongst their peers. The offline element is delivered in collaboration with Film Education, CineClub and Film Club. Now in its fourth year the programme evaluation demonstrates audience engagement and an ability to drive positive attitudes towards the role of copyright and protecting the production of audio-visual content. e-Consumer Protection Project In 2010, the Department for Business Innovation and Skills provided funding for a 27 month initiative which enables trading standards to deliver a national project on e-consumer protection and internet enforcement. The initiative focuses on three main areas: market surveillance work to identify sectors where issues are threatening consumer safety, or are financially detrimental to consumers or legitimate businesses; training of trading standards staff in how to conduct internet investigations; and equipping trading standards services with the minimum computer equipment required to undertake internet enforcement.

Industry Trust for IP Awareness The Industry Trust for IP Awareness (the Trust) continues to build on the audio-visual industrys commitment to consumer education which forms part of its overarching strategy to reduce the impact of copyright infringement on the sector. The impact of such activity is demonstrated by the independent evaluation of the Trusts activity. The results of the survey indicates that the attitude towards illegal downloading and the purchasing of counterfeit DVDs continues to move in a positive direction with 58% of adults considering the behaviour is downmarket (cheap), compared with 48% in 2009. The primary education commitment of the audio-visual sector addressing digital copyright infringement is to a young male audience via the Moments Worth Paying For campaign which concentrates on the emotional payback of great film and TV as something worth paying for. Rather than lead on an anti-piracy message it capitalises on peoples passion for film, TV and video content with the aim of making them care about creativity and the copyright that underpins it. The campaign also highlights numerous official ways of watching film and TV by directing viewers to the website www.findanyfilm.com a gateway to official film, video and TV services across a range of formats, off and online. The Trust has developed a dedicated youth strand using social networking media41. Screenthing focuses on creativity and its value to society as a means of reducing the tendency of young people to infringe copyright.
41 www.facebook/screenthing

Base line intelligence has been collated from local authorities for the period April to September 2010. In this six month period 25% of respondents had investigated a breach of IP legislation, notably: 225 IP offences/breaches were investigated across 17 local authorities; one authority reported that 20% of all investigations related to IP crime; 62% of respondents indicated that website addresses that appeared to be UK based were in fact hosted outside of the European Union which resulted in little enforcement action.

Awareness through businesses To help raise the knowledge of IP within SMEs, the IPO continues to deliver its regional business IP awareness campaign supported by a varied programme of events, workshops and training seminars. Alongside this work

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and to reach a wider audience, the IPO introduced a new online diagnostic tool, for international trade mark registration, to complement the IP Healthcheck series which is available at www.ipo.gov.uk/iphealthcheck. This step by step free guide is aimed at SMEs and helps them identify the types of IP they own which might be worth protecting along with helpful tips and advice. SMEs receive a confidential electronic report which identifies areas for potential action. To help raise awareness of IP within businesses the IPO delivered a varied programme of events, workshops and IP audits including a programme of free Intellectual Property (IP) awareness seminars across the UK. To support this work and help reach a wider audience, the IPO continued to market its free online diagnostic software tool the IP Healthcheck which is available at www.ipo. gov.uk/iphealthcheck. This step by step questionnaire is aimed at SMEs and helps them identify the types of IP they own which might be worth protecting along with helpful tips and advice. SMEs receive a confidential electronic report which identifies areas for potential action. The IP Masterclass, developed by the Intellectual Property Office in partnership with Coventry University and the British Library has continued. The course provides students with the skills to conduct an IP health check, and gain a thorough understanding of patents, licensing, trade marks, copyright, brand identity and IP valuation. It also offers delegates the opportunity to increase and refine their skills in licensing along with patent, trade mark and design database searches to a professional standard. It is aimed at experienced Business Advisors who want to develop their knowledge and skills when working with businesses on issues around IP, IP Managers and SMEs who wish to develop their own IP knowledge. Feedback from delegates indicates an 89% customer satisfaction rate. Local campaigns In November 2010, the Fake Free Renfrewshire Strategy42 was officially launched, in conjunction with Crimestoppers Scotland. This event was also used as the Scottish launch of their national IP Crime campaign. Counterfeit clothing and computer equipment was donated to His Church charity for rebranding, who in turn donated food, toys and rebranded clothing to local charities such as the Councils Homeless Unit and the Blue Triangle Housing Association. This event attracted substantial press and media coverage.

To tackle anti-social behaviours, crime and issues of community safety across the area, Renfrewshire Council, working with their community partners Strathclyde Police and Strathclyde Fire & Rescue Service, implemented initiatives such as the Anti-Social Behaviour Joint Tasking Group. Renfrewshire has the seventh highest crime rate in Scotland according to recorded crime figures (Renfrewshire Council Plan 2008 to 2012, Page 14). Whilst partnership working is wellestablished in Renfrewshire, there was no cohesive, joined-up strategy to better focus their efforts on higher level criminality such as IP crime. The Strategy provides a new and innovative approach to tackling IP crime, through the promotion of three principles: education about the true cost of IP crime by means of school talks, displays, press releases and promotional materials; participation in joint-working initiatives with interested partners wherever possible, and maintaining good working relationships with partners and industry; and regulation to stop offenders from trading in this type of crime such as market surveillance.

E. Sentencing, seizures and the Proceeds of Crime Act

Introduction This section provides an update on legal outcomes in tackling IP crime. It includes statistics on the volume of cases that are being progressed through the courts for criminal IP infringements. It also provides some information on seizure data by enforcement agencies and industry bodies and the use of the Proceeds of Crime Act 2002. Sentencing Outcomes The following figures are provided by the Ministry of Justice and illustrate the number of individuals proceeded against, found guilty and cautioned under the criminal provisions of the Copyright Designs and Patents Act 1988 (CDPA 88) and the Trade Marks Act 1994 (TMA94).

42 http://www.renfrewshire.gov.uk/WebReplicas/agendar.nsf/00000000000000000000000000000000/28884113C3DDD09C802577370042F80E/$fi le/Fake%20Free%20Appendix.pdf

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Number of people proceeded against Year TMA CDPA Total 2002 455 97 552 2003 507 111 618 2004 629 134 763 2005 962 195 1157 2006 1128 342 1470 2007 1068 514 1582 2008 1012 621 1633 2009 958 753 1711

storing it at a warehouse in Cheshire. Flat pack boxes along with individual nine kilogramme bags of detergent were found. Three of the men received sentences of 12 months in prison and another two were both given six month prison sentences suspended for two years and ordered to carry out 200 hours of unpaid work. A sixth man found guilty of the same offence was jailed for two years. Following a confiscation hearing attended by the five men, they were ordered to hand over more than 37,000 under the Proceeds of Crime Act. The sixth man was due to attend a confiscation hearing at a later date.

Number of people found guilty Year TMA CDPA Total 2002 329 71 400 2003 399 84 483 2004 503 100 603 2005 749 160 909 2006 920 249 1169 2007 884 362 1249 2008 913 478 1391 2009 801 563 1364

Trade marks: 2009 saw the fourth successive decrease in the number of people proceeded against down 15% on the 2006 figure. However, the number of successful prosecutions resulting in a guilty verdict was the second highest of this four year period at 83%. Copyright: conversely, the number of copyright cases continue to grow year on year and the 2009 figure is more than double that of 2006. 75% of all copyright cases resulted in a positive conviction. Overall 80% of all criminal IP proceedings ended with a guilty verdict for the defendant(s). This data is based purely on criminal provisions under the CDPA 88 or the TMA 94, it does not include other related legislation under which IP cases are often brought , such as the Fraud Act 2006 and money laundering regulations. Proceedings under the TMA 94 continue to outweigh those under the CDPA 88 although there also continues to be a year-on-year rise for CDPA cases43. It remains more likely that criminal prosecution will primarily be focused around trade marks, as the proof of existence and use of a trade mark is easier to establish compared with that of copyright protected material.
Number of people cautioned Year TMA CDPA Total 2002 18 13 31 2003 59 55 114 2004 120 171 291 2005 194 202 396 2006 187 247 434 2007 187 177 364 2008 201 180 381 2009 118 79 197

Number of people facing proceedings under TMA and CDPA

2000 1500 Total Proc 1000 500 0 TMA Proc CDPA Proc

2002 2003 2004 2005 2006 2007 2008 2009

% of people proceeded against found guilty

100 90 80 70 60 50 40 30 20 10 0

Total TMA CDPA

2002 2003 2004 2005 2006

2007 2008 2009

Comparison of trends in proceedings and cautions under CDPA and TMA

1200 1100

Case study - Counterfeit soap powder scam September 2010 - Five men who had admitted possession of an infringing article with a view to sale (under Section 92 of the Trade Marks Act 1994) were convicted for their part in smuggling 25 tonnes of low quality fake washing powder in to the country and

800 600 400 200 0 2002 2003 2004 2005 2006 2007 2008 2009

TMA Cautions CDPA Cautions TMA Proceedings CDPA Proceedings

43 The rise in copyright cases is reflective that trading standards did not have responsibility to enforce such offences until 2007.

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Seizure and detention activity The following data has been collated by the IPOs Intelligence Hub from a range of sources including industry sectors and enforcement bodies.
Product seized Mobile accessories Circumvention devices/chipping Tobacco products DVD/Software Pharmaceuticals

Vehicle accessories

Perfumes

Batteries

e Game

Brent & Harrow CENTSA Coventry Croydon Havering Lambeth Lancashire LOTSA Manchester Newport Powys Rhondda Cynon Taff Sheffield Staffordshire Stockport Tower Hamlets2 TSNW3 Waltham Forest Warrington4 Wolverhampton Total
1

1,877 51 817 64 83

13 608 3 66 690

800 5 packs 3.5 kg 1,120 5,100 500 25 0.3 kg 1,050 7,580

5 3,247 3,252

186 186

50 44 253 347

Alcohol 19 8 47 1 63 113 657 199 33 3 1,143

Where possible, we have tried to eliminate duplication of seizure results, but cannot guarantee total elimination of duplication. We have done this by comparing product type and seizure size. The above and other authorities may have submitted further intelligence reports, but they will not have been included if they did not include seizure details or if dissemination was not permitted. DVD/software - Manchester includes music discs where no clear figure is given Tobacco products includes cigarettes and hand roll tobacco Pharmaceuticals includes condoms 1 In addition to the Tobacco products figure, 4 packs of hand rolled tobacco were seized. 2 In addition to the Tobacco products figure, 2.25 kg of tobacco product was seized. 3 In addition to the Tobacco products figure, 1.3 kg of tobacco product and 5 packs were seized. 4 In addition to the Tobacco products figure, 0.25 kg of tobacco product was seized.

CD

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Product seized Ceramics and ornaments Accessories Sunglasses Hair stylers Chainsaws Handbags Footwear Jewellery Toys and stickers Watches

Clothing

Barking and Dagenham Bristol Camden CENTSA Coventry Croydon Greenwich Havering Hertfordshire Kent Lewisham Lincolnshire LOTSA Manchester Newport North Yorkshire Oldham Powys Rhondda Cynon Taff Sheffield Shropshire Staffordshire Tower Hamlets Vale of Glamorgan Wandsworth Warrington Warwickshire Westminster Wolverhampton Total
5

315 36 308 121 67 2 849

3,000 17 1,671 147 388 235 750 75 870 1,056 1,694 2,152 7,775 117 4 20 5,887 138 32 7 large boxes 445

160 35 2 128 220 545

10 10

445 4 4 453

114 87 31 53 150 kg 285 + 150kg

10 50 54 185 252 71 421 1,043

177 329 10 4,000 4,516

0 16 8 94 95 34,538 200 127 2 4 115 35,199

Clothing also includes trainers, footwear, jewellery, bags and accessories where no clear figure per item were given but only an overall figure for several items. Accessories also includes purses, wallets, belts, bags, sunglasses, jewellery, watches, pouches where no clear figure per item were given but only an overall figure for several items. Other consists of seizures with no clear product details; where several products have been combined; or miscellaneous items, for example cigarette cases, lighters, packages of fabric, footfiles, vinyl records, thumbnails, badges, toiletries, guitars, power tools, ashtrays, beer glasses, coasters and earphones. 5 Under Other, 29,523 thumbnails were recovered.

Other

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Production equipment and packaging seized Computer consumables

Computer equipment

Packaging

Brent & Harrow Manchester Powys Rhondda Cynon Taff Vale of Glamorgan West Yorkshire Computer equipment also includes plotter (vinyl cutter) Computer consumables includes R4 cards, memory sticks

4 8 2

85 14

51,729

Labels 43,670

Update from Surrey Trading Standards Surrey TS continue their proactive work against markets and other workplaces which are involved in the sale and distribution of counterfeit goods. Between 1 April 2010 and 31 March 2011, Surrey TS seized in excess of 30,000 clothing, footwear or jewellery products; over 750 music CDs; 700 cosmetic items and 80 bottles of alcohol including vodka, champagne and wine. The following data was provided directly by Surrey but not via the Intel Hub. Product seized Circumvention devices/chipping 5,863 1,140

Inlays

HMRC UKBA

3,515

25

9.5 tonnes 800,000

22,233

210

30

1,238,700

Where possible, we have tried to eliminate duplication of seizure results, by comparing seizure size and product type, but cannot guarantee total elimination of duplication. 1 In addition to UKBAs figure, 517 packages and 49 box sets were also seized. 2 Under Tobacco product, the UKBAs seizures figure also includes 40,000 pouches. 3 In addition to UKBAs figure, 282 kg of condoms were also seized. CD includes other music formats. Pharmaceuticals also includes toilet products and condoms.

Vehicle accessories

Mobile accessories

Pharmaceuticals3

Tobacco product2

DVD/Software1

Perfumes

Batteries

e Game

CD

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Product seized

Accessories7

Sunglasses

Hair stylers

Handbags6

Footwear4

Jewellery

Clothing5

Watches

Alcohol8

HMRC UKBA

2,780 40,652

165 61,835

669

413 1,751

27,808

2,680

5,805

28,800

3,048

Other10 720,071

Where possible, we have tried to eliminate duplication of seizure results, by comparing seizure size and product type, but cannot guarantee total elimination of duplication. 4 In addition to UKBAs figure, 2,134 cartons of footwear were also seized. 5 In addition to UKBAs figure, 20 boxes and 630 cartons of clothing were also seized. 6 Under Handbags, UKBAs seizures figure also includes 537 cartons of handbags. 7 Under Accessories, UKBAs seizures figure also includes 1,226 cartons and 25 kg of accessories. 8 In addition to UKBAs figure, 2,400 packs of beer were also seized. 9 Under Toys, UKBAs seizures figure also includes 15 cartons and 76 boxes. 10 Under Other UKBAs seizures figure also includes 3 cases, 8 containers and 3,153 cartons of seized products. Clothing also includes watches where no clear figures were given but only an overall figure for several items. Handbags include accessories. Other consists of seizures with no clear product details; where several products have been combined; or miscellaneous items, for example money boxes, lighters, bicycles, solar panels, power tools, microphones, headphones, set top boxes, make up, electrical accessories, food (2,680 cartons), adaptors (25,250), console controls and sporting equipment.

Production equipment and packaging seized Computer consumables Computer equipment Product components 417,270 114,620

Packaging

HMRC UKBA

50

6,768

10,231

Labels includes stickers Under Product components, UKBAs seizures figure also includes labels where no clear figures were given but only an overall figure for several items.

Labels

Toys9

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Product seized Circumvention devices/chipping

Mobile accessories

Tobacco product1

DVD/Software

Perfumes

FACT UKIE (formerly ELSPA)

259,732 10,000

8,930

178,764

4 1,151

10

2,200 14,470

Where possible, we have tried to eliminate duplication of seizure results, by comparing seizure size and product type, but cannot guarantee total elimination of duplication. The above organisations and others may have submitted intelligence reports, but they will not have been included if they did not include seizure details or if dissemination was not permitted. 1 In addition to the FACT seizures figure, there was also 64 packets, 7 pouches and 150.95 kg of product. CD includes other music formats.

Product seized

Accessories

Sunglasses

Handbags

Jewellery

Watches

Clothing

FACT UKIE (formerly ELSPA)

265

Other

Where possible, we have tried to eliminate duplication of seizure results, by comparing seizure size and product type, but cannot guarantee total elimination of duplication. The above organisations and others may have submitted intelligence reports, but they will not have been included if they did not include seizure details or if dissemination was not permitted. Clothing includes footwear and accessories where no clear figure can be given.

Toys

Footwear

e Game

Alcohol

CD

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Production equipment and packaging seized Computer consumables

Computer equipment

Packaging

FACT UKIE (formerly ELSPA)

209 618

40,859

416,560

Labels

Computer consumables include plastic sleeves/covers.

The following table of seizures was provided by the British Recorded Music Industrys (BPI) Anti-Piracy Unit. It covers the period 1 April 2010 to 31 March 2011 and compares to figures reported for 2009-10. There is a significant increase in the total number of products seized compared to the previous year (+72%) with a clear indication of shift between physical products (CD related products are down 31%) and digital products (151% increase). Group Description Bootleg CD Bootleg CDR CD Album CD Single CDs CDRs Album DJ Pirate Mix Hip Hop pirate Mix Pirate Music CD (CDR) Bootleg Vinyl Vinyl Vinyl Digital Albums Digital Bootleg Video Digital Album Digital Tracks MP3 CDR MP3 DVDR Bootleg DVD Bootleg DVDR DVD Music DVD Pirate Music DVD (DVDR) 2009 4,966 262 6,895 1 103,552 640 1,696 933 Total 118,945 1767 2,754 Total 4,521 28,089 2,500 651,306 9,516 25,654 Total 717,065 816 190 2,573 1,858 Total 5,437 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 n/a 1,385 548 2,464 4,413 Comparison n/a +292% -78% n/a -26% +474% -96% n/a -31% +1% +55% +34% +176% n/a +157% +91% +20% +151% n/a +629% -79% +33% -19%

Inlays

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Group Burners

Description Burners per tray Blank CD

2009 425 Total 425 4,533 10,390 Total 14,923 177,452 7,953 41,304 737 251,164 3 3 n/a Total 478,616 4,511 129 91 43 17 22 20 19 50 Total 4,902 6,760 1 17,816 60,892 38 n/a n/a Total 85,507 Overall Total 1,430,341

2010 302 302 5,789 1,3951 19,740 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 2,466,053

Comparison -29% -29% +28% +34% +32% -98% +50% -88% -75% -19% -33% n/a n/a -53% -16% -10% +136% +5% -18% +177% -25% -42% -42% -13% -8% n/a -82% +118% +7,455% n/a n/a +280% +72%

Blank Discs

Blank DVD Asian Film DVD (pressed) Asian Film DVDR Asian Music CD (pressed) Karaoke

Other/Repertoire

Miscellaneous Sat Nav Systems Server Scanners Card Inlays Computers Hard Drives Laptops

Hardware/ Accessories

Memory Cards Memory Sticks Mobile Phones Monitors Printers Adult DVD Advise and Warning Digital Inlay Sleeves

Default

DVD Film Genuine CDs Digital Karaoke Tracks Merchandise

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The National Policing Improvement Agency The National Policing Improvement Agency (NPIA) has legislative responsibility and function to train, accredit and monitor accredited financial investigators (AFI) and senior appropriate officers under the Proceeds of Crime Act 2002 (PoCA) to all of the UK law enforcement community. This legislation is endorsed by The Proceeds of Crime Act 2002 (References to financial investigators) (amendment) Order 2009 statutory instrument 2707/2009. Within the NPIA sits the Proceeds of Crime Centre (POCC), the heart of operations, the purpose of which in addition to its primary role is to add value through the support, guidance and advice available to other law enforcement agencies in the application of PoCA. The POCC has a dedicated trainer responsible for the direct liaison with all law enforcement agencies outside of the police and HM Revenue and Customs. This specifically includes all of the trading standards departments throughout the UK whether or not they have an AFI. The use of PoCA is increasingly coming under scrutiny to ensure that those with the relevant PoCA authority are utilising their powers correctly; and that its applications are proportionate to the investigations and circumstances. On a tactical level the POCC supports and runs seminars and training sessions to trading standards, regular investigators and management. The training focuses on initiatives and raising awareness of money laundering investigations, confiscations and evidence gathering that supports their AFI and PoCA. Additionally, there is emphasis on the broad proactive application of the legislation and its practical use and relevance. Strategically the POCC has been working together with trading standards establishing national and regional financial investigators working groups. It has invested in a professional relationship that enables the exchange of working initiatives, as well as the opportunity to discuss concerns and disseminate legislative matters.

Bogus Burberry conman must pay back millions or face ten years in jail London Borough of Enfield Trading Standards Service secured an 11 million confiscation order in May 2010. The defendant, Amram Braha, was convicted in February 2008 of offences under the Trade Marks Act 1994, following the seizure of 30,000 pairs of counterfeit Burberry shoes from the defendant in August 2005 and has served a 10 month prison sentence. The subsequent Proceeds of Crime Act investigation by Enfields in-house AFI revealed that not only had the defendant been involved in counterfeiting but he was also a participant in a 72 million VAT Carousel fraud. The defendant has six months to pay or faces a ten year default sentence. Sue McDaid, Head of Business Regulation at Enfield Council, said: This was an extremely complex investigation that started in an Edmonton warehouse and led us to a bank in the Caribbean through which a VAT fraud operation had taken place. However, thanks to the diligence, tenacity and professionalism of my officers and excellent cooperation of HMRC, we have struck a hammer blow for consumers and legitimate traders everywhere. This confiscation order is one of the largest ever obtained by any Council under PoCA. 2011 has seen, for the first time and with the full support of POCC, trading standards join the National Financial Investigators Working Group. This has placed them on equal footing alongside the police, HMRC and other law enforcement bodies. David Craze, the POCC representative, is keen to liaise with trading standards officers and departments, providing training, advice, guidance and support in encouragement of the use of PoCA. MORI Poll In 2009 MORI poll assessed the publics view about recovering assets from criminals. The poll found that over 85% support such work and over half agreed that it is an effective deterrent.

45

NPIA Joint Assets Recovery Database (JARD) Update The Joint Assets Recovery Database (JARD) is a national financial information database accessed by approximately 4,500 users, including financial investigators, prosecutors, enforcement staff and the courts. It supports the means by which incentivisation monies are returned to constituent law enforcement authorities by recording financial case details. It can also be used to gather information from the start of an investigation through the prosecution stage, to conviction at court and any later confiscation. Users input various asset recovery actions, such as cash seizures, restraints, confiscations and other ancillary orders, as investigations develop through to enforcement. This supports crime reduction in the community aided by the incentivisation process. It is another valuable and essential tool in the fight against all acquisitional crimes. Prior to February 2011, IP crime was recorded along with other counterfeiting and forgery so it was difficult to ascertain a specific IP crime confiscation figure. However, JARD administrators at NPIA have since added intellectual property 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 produce more precise data about IP crime specific offences. JARD users can also specify the IP crime subcategory (if known), but this information will not be immediately extractable on the current version of JARD. Between February and May 2011, eight cases have been added to JARD where the new IP crime category has been selected as the offence type (comprised of five confiscations and three cash seizures). Cash Seizure and Forfeiture Orders If a person is found in possession of cash which appears to be over 1,000, police, customs officers or an accredited financial investigator can seize it on suspicion that the cash came from or was intended for use in unlawful conduct (recoverable property) e.g. in sales of counterfeit goods. A magistrate can make an order for the forfeiture of the cash if satisfied that it is recoverable property.

Confiscation Orders If a person has benefited financially from crime, including being involved in the sale and distribution of counterfeit goods, the Crown Court can order the defendant(s) under PoCA to pay a recoverable amount equal to that from which they have criminally benefited and taken from any, or all, of their available assets. The table below provides previous legacy orders on JARD where the Counterfeiting/Forgery and Intellectual Property44 option has been selected. Although this does not purely identify the level of IP crime it provides a general indication as to the amount of assets recovered from those involved in IP crime. The order count is made up of either cash forfeiture orders or confiscation orders and the total value of these orders.
Year Order Count 49 6 43 93 13 80 102 27 75 191 70 119 196 2008/ 2009 71 122 3 2009/ 2010 2010/ 2011 191 65 126 178 60 117 1,000 Cash Forfeiture Order Confiscation Order Cash Forfeiture Order Confiscation Order Cash Forfeiture Order Confiscation Order Recovery Order Cash Forfeiture Order Confiscation Order Cash Forfeiture Order Confiscation Order Cash Forfeiture Order Confiscation Order Cash Forfeiture Order Confiscation Order Order Type Order value 2,713,727.84 70,335.59 2,643,392.25 3,973,863.92 215,790.81 3,758,073.11 7,751,531.32 304,459.67 7,447,071.65 7,811,054.21 436,176.88 7,374,877.33 4,374,390.62 336,549.44 3,581,375.32 456,465.86 8,898,080.13 790,919.59 8,107,160.54 21,792,546.67 222,176.81 21,570,369.86 57,315,194.71

2004/ 2005 2005/ 2006 2006/ 2007 2007/ 2008

44 Counterfeiting and forgery in this case relates to counterfeit notes or coins as defined by the Forgery and Counterfeiting Act 1981

46

JARD Counterfeiting/IP crime/Forgery Records

900,000 800,000 Cash Forfeiture s 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 20,000,000 15,000,000 10,000,000 5,000,000 0 25,000,000 Confiscation Orders s

04

05

06

07

08

09

0/ 11

/9

/1 0

/5

/6

/7

/8

Cash Forfeiture Confiscation Order

20

20

20

20

20

20

Civil recovery under PoCA Civil recovery is a tool under Part 5 of PoCA which can be used to recovery criminal assets accrued through criminal conduct such as IP crime. It can be used in instances where it has not been possible to confiscate these assets under the confiscation provisions under Part 2 of PoCA for varying reasons, including a failed prosecution, lack of resources or case law preventing confiscation. Unlike confiscation, civil recovery is not dependent on a successful criminal prosecution. SOCA is responsible for this function; civil recovery allows SOCA 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 involved in IP crime yet have failed to pay tax on income, with a further ability to add penalties and interest for nonpayment. Both are powerful tools available to all law enforcement involved in IP crime.

20

01

47

CHAPTER 3: Results of the 2010/11 Survey of Trading Standards

The annual survey of trading standards work into IP crime was launched in March 2011. This survey covered the fiscal period April 2010 to March 2011 and provides an indication not only of the scale of IP crime but also the available resources and dedicated training throughout authorities in their efforts to address the problem. The IPO received a total of 94 responses from some 204 authorities throughout the UK. In some cases the responses were anonymous and there were a few instances of more than one reply from the same authority. In the latter case multiple responses were collated to represent one consolidated entry for that authority totalling 88 contributors. The charts and analysis that follow illustrate the most frequent answers and where possible were compared year-on-year to the results of the 2009/10 survey. Full tables of the survey that include region and authority information are produced as appendices at the end of this Chapter. The figures in the chart show what percentage of respondents investigated each type of product. Clothing remains as one of the most reported items with 88% of the authorities who responded to the survey indicating that they had investigated counterfeit clothing in the period April 2010 to March 2011. The survey also covered other products including batteries (16%), medical products (8%), computer parts (7%) and vehicle parts (3%). Notably, 7% had investigated e-books and the number of authorities investigating digital files increased from 6% to 18% supporting the evidence of more online criminality. Although the survey prompted responses on well known copied items, replies also indicated details of other less well known copied products including toothbrushes, mobile phones, foot files, lighters, washing powder, condoms, razors and vinyl records. Year on year comparison The following chart provides a comparison between 2010/11 and 2009/10 figures. It suggests that most counterfeit products remain fairly static with DVDs, footwear, cigarettes/tobacco or clothing as being the most investigated products. The most noticeable trend is the number of authorities reporting fake alcohol compared to the same period last year. It increased by a quarter to 64%, highlighting the concerning trend of counterfeit consumable products. 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 responding authorities which investigated fake software, DVDs and CDs between 2009/10 and 2010/11. This could be reflective of increased protection measures by the 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 2010 until 31 March 2011. The chart below indicates the 13 most investigated products (those which 20% or more authorities responded as to investigating).

100 80 60 40 20 0

48

B. Where counterfeit/pirated goods have been investigated in 2010-11

The survey asked where authorities had investigated counterfeit or pirated goods since 1 April 2010. The chart below illustrates the top 11 most frequent locations of investigations. The figures indicate an even split between the online and physical high streets (marked as ordinary shops) with both websites and ordinary shops equally likely to be reported as locations where fake products are offered. Many authorities also reported 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. There are numerous other locations which reflect that the physical locality is more often reported than online for trading counterfeits. Apart from high street shops, car boot sales (59%) and outdoor markets (65%) remain major locations for investigation for trading standards authorities.

Naturally, a high percentage of returns reported built up cities (TSNW and LOTSA) as having problems with ordinary shops selling fakes. Almost a quarter of all reports of public houses/clubs selling fakes came from the North West. Indeed the dispersion of counterfeit goods in the North West is notable as they reported investigating fake products in 8 of the 11 most popular locations.
Top 11 IP crime locations investigated by TS
100

80

60

40

20

49

All IP Crime Locations investigated by TS

Year on Year comparison The results between this year and last year remain consistent in terms of the most investigated locations for online or physical market places. However, there are some notable increases between 2009/10 and 2010/11 with a number of authorities reporting auction sites/ websites, ordinary shops as well as in pubs and clubs and factories/industrial units being used for trading fake goods. The locations on the street and outdoor market locations were reported by far fewer authorities in 2010/11 compared to 2009/10, perhaps as an effect of awareness campaigns such as the Real Deal. Private residencies and other workplaces were also reported less than in the previous 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 investigated in 0-2 3-4 5-6 7-8 9-10 11+

Actual (88) 8 31 22 13 10 4

% 9 35 25 15 11 5

C. Coordinated working
The 88 authorities that responded to the survey indicated that they had worked with a wide range of organisations over the past year including law enforcement agencies, government departments and industry bodies. 93% of authorities that responded worked with the police over the reporting period, possibly highlighting the requirement of a police presence during enforcement activity, as well as joint working. The results also indicate that links remain between IP crime and other

50

criminality, as evidenced with replies to cross-authority working and links with other crime. 41% of those who responded indicated that they had worked with Scambusters between April 2010 and March 2011. This number is encouraging and is possibly as a result of the Scambusters IP crime campaign earlier in the year. 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, UKIE, IFPI or PRS for Music over the reporting period, although this is down on the 86% who had worked with these partner agencies in 2009/10. Work with brand owners continues to grow with 58% of authorities working directly with ACG members compared to 38% for 2009/10.
TS work with partner agencies
100

Year on year comparison Work with other trading standards authorities on IP crime investigations was high again this year with a 76% of respondents saying they had partnered other local authorities, although this is a slight reduction from the 85% recorded last year. Work with the police continues to be the most frequent partnership in line with previous years (93% of responses compared to 92% in 2009/10 and 91% in 2008/09). A quarter of respondents said that they worked with the IPOs Intelligence Hub utilising the national IP crime database in order to add value to their investigations. One of the largest increases in partnership working was with HM Revenue & Customs which saw a 10% rise compared to 2009/10. Work with rights holders remains strong with continued interaction with organisations such as BPI, FACT and UKIE (formally ELSPA) with a half of all respondents saying that they have worked with at least one of these organisations. More work was carried out with IFSP (up 90% from last year to 40%), possibly reflecting increased engagement with IFSP who have been undertaking more awareness work with trading standards. Trading standards authorities greatly increased their partnership working with the Business Software Alliance (by 80%), ACG, PRS of Music, Home Office and IFPI (all by 40%) this year, but the partnership working with VOSA, UKIS, FASTIiS and UKIE decreased (from 60% to 20%).

80

60

40

20

51

Number of agencies TS worked with

Number of different organisations TS had worked with 0-4 5-8 9-12 13-16 17 + 2010-11 Actuals 22 39 12 9 6 Percentage 25% 44% 14% 10% 7% 2009-10 Percentage 21% 45% 25% 8% 1% +/+ 4% - 1% - 11% + 2% + 6%

D. Levels of infringement
The questionnaire asked whether or not respondents felt that the amount of IP criminality in their authority had increased or decreased. 58% of the 82 responses (to this question) felt that there had been the same amount or an increase in criminality over the past year, 30% were not sure and only 12% suggested a decrease. A variety of reasons were provided for the increase but primarily the use of the internet for carrying out IP infringements was the most frequent answer. It was also suggested that the current economic downturn has led to an increase in the amount of fake goods being purchased especially where customers could not afford the original and buying a copy was the only way of obtaining the product. Of those who thought that there had been a decrease, the most common explanation was that it was the result of previous high level enforcement campaigns which had driven the criminals either from the area or from IP crime altogether. However, some authorities claimed that without proactive enforcement they are reliant on intelligence from other agencies or the public and that this was not forthcoming.

104 authorities responded to the questionnaire in 2009/10 and 88 in 2010/11. Although the number of authorities who dealt with nine to 12 partner organisations for 2010/11 is fewer, there is an increase in the number of TS authorities that worked with more than 13 organisations compared to the previous year. Although 17% of trading standards authorities worked with more than 13 agencies, the median number of agencies trading standards authorities worked with is 5 to 8. A quarter of trading standards authorities worked with 0 to 4 agencies. Cross Authority Work The chart below indicates where local authorities have worked according to National Intelligence Models 1, 2 and 3 (in terms of trading standards this is local, cross authority or nationally/internationally). The results indicate that more authorities are now working with other partner agencies outside of their region in order to coordinate a unified response. A fifth have also worked on a national basis which is further evidence not only of organised crime groups being involved in counterfeiting and piracy but a tactical reaction by enforcement to the threat of IP crime.

E. Levels of IP enforcement
Respondents were asked to identify the levels of IP enforcement that they had undertaken during the year. The overall indication from the 82 responses to this question was that the majority (68%) had maintained or increased their levels of IP enforcement over the past year. This was evidenced through authorities undertaking more proactive training of staff for monitoring internet use and developing their skills with industry experts (Section F of this Chapter provides more detail). There were other responses that suggested an increase in intelligence from partner agencies and better awareness of the National Intelligence Model and related laws including the Proceeds of Crime Act. Of the authorities who reported an overall decrease various reasons were given including: limited resources, council cuts and other priorities within the authority. Some suggested that the amount of intelligence being disseminated was actually less than in previous years. There were also a couple of instances where the actual level of enforcement was only lower because in previous years there had been large IP crime investigations that had distorted the results slightly.

Percentage of TS authorities who worked at NIM Levels 1, 2 and 3

Level III 20% Level I 38% Level II 42%

52

The table below concentrates on increases or decreases within each region, which are combined for two calendar years: 2009/10 and 2010/11. What can be identified is that there is an overall national drop in the level of IP enforcement by 11% in 2010/11 but there was a large increase in the previous year 2009/10. However, the drop in IP enforcement in 2010/11 is mainly a result of the SCOTSS region, where the enforcement decreased by 9% (as a result of differing priorities); in other regions there was little or no change. Combined increase in IP enforcement over two years: 2009/10 and 2010/11
Region SCOTSS TSNW CENTSA WHOTS SWERCOTS NETSA YORKS/HUMB TSEM EETSA LOTSA TSSE Total 2009/10 - 4% - 3% + 6% + 2% - 1% + 1% = 0% = 0% + 3% + 3% +4% +11% 2010/11 - 9% = 0% = 0% = 0% - 2% - 1% + 1% = 0% =0% - 1% + 1% - 11% Running total - 13% - 3% + 6% + 2% - 3% = 0% + 1% = 0% + 3% + 2% + 5% = 0%

Those who did not undertake any form of training cited a lack of funding as being the main obstacle to development. It was also suggested that travel to a course or conference outside of the authority would not be permitted as a result of a lack of resources and other authority priorities.

G. Resources
As part of the survey respondents were asked to provide figures for the resources that were dedicated to the enforcement of IP crime in the period 2010-11. Out of the 85 responses to this question, an average of 300 staff days per region was dedicated to the enforcement of IP crime. LOTSA reported the highest average of over 700 staff days being dedicated with half of that being spent on middle management grades. This is supported by the national average (per authority) of 85 days being devoted by middle management, followed by 44 days of junior grades and 29 days by senior officers. Local figures did vary considerably with three authorities recording over 1,000 days per year whilst 16 authorities reported that no time was dedicated. In some cases authorities did provide a nil return but indicated that they had received some IP related training and this would encourage more proactive engagement in 2011/12.

F. Training
95% of the authorities who responded to the questionnaire replied to the training section which asked if they had delivered or received IP related training over the past year. 78% of respondents indicated that they had received or delivered training, 20% said they had not and 2% were unsure. The majority of those who had received training did so through established routes such as the Trading Standards Institute (TSI) conference, the IP module of the Diploma in Consumer Affairs and Trading Standards (DCATS) and Anti-Counterfeiting Group (ACG) Roadshows. There was also a clear indication of more authorities undertaking training that covered either computer forensics (e.g. Encase software) or online investigations either through industry specialists or through training colleges.

H. Proactive monitoring of the internet

This report has focused more on the use of the internet to facilitate IP related criminality compared to last year. The survey asked authorities to indicate the level of internet monitoring they had undertaken over the past year. 70% of the 85 responses to this question indicated some form of monitoring with 58% of those concentrating on auction web sites, 47% on other online market places and 3% looking at P2P uploaders. Those who did not respond positively to the question indicated that measures were in place to take forward this activity next year and that more collaborative work with industry specialists is already in place to help deliver the required training.

53

I. Links to other criminality

The survey asked respondents to identify other criminality associated with IP crime they had investigated. Of the 74 responses to this question 55% reported benefit fraud is the crime most frequently associated with IP crime - this is a 10% increase on last year. The number of identified links to organised criminality doubled to 34% whilst money laundering and other crimes remained relatively high as per last year. Drug crime reported the most significant decrease in association with IP crime.

Links to other types of criminality

Prostitution Loan Sharking People Trafficking Violence Drug Crime Organised Crime Money Laundering Benefit Fraud 2009/10 2010/11

10

20

30

40

50

60

Percentage of authorities who found links to other crime

43 Counterfeiting and forgery in this case relates to counterfeit notes or coins as defined by the Forgery and Counterfeiting Act 1981

54
Appendix A types of goods investigated by authority

Online Streaming of Digital Content

Fake Labels/Packaging

Electronic Components

Construction Materials

Toiletries/Cosmetics

Cigarettes/Tobacco

Online File-sharing

Region CENTSA CENTSA CENTSA CENTSA CENTSA CENTSA CENTSA EETSA EETSA EETSA LOTSA LOTSA LOTSA LOTSA LOTSA LOTSA LOTSA LOTSA NI SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SWERCOTS SWERCOTS

Authority Birmingham Coventry Sandwell Staffordshire Walsall Wolverhampton Worcesteshire Hertfordshire Suffolk Thurrock Greenwich Hackney Islington Merton Camden Lewisham Newham Tower Hamlets DETI Northern Ireland Aberdeenshire Dumfries and Galloway Dundee Glasgow N Lanarkshire Orkney Islands S Lanarkshire W Dunbartonshire Devon Dorset X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X

Watches/Jewellery

Computer Games

Medical Products

Electrical Goods

Computer Parts

Vehicle Parts

MP3 Files

Footwear

Software

Batteries

Clothing

e-books

Alcohol

DVDs

Toys

CDs

55

Online Streaming of Digital Content

Fake Labels/Packaging

Electronic Components

Construction Materials

Toiletries/Cosmetics

Cigarettes/Tobacco

Online File-sharing

SWERCOTS SWERCOTS TSEM TSEM TSEM TSEM TSNE TSNW TSNW TSNW TSNW TSNW TSNW TSNW TSNW TSNW TSNW TSSE TSSE TSSE TSSE TSSE TSSE TSSE TSSE TSSE TSSE WHOTS WHOTS WHOTS WHOTS WHOTS WHOTS WHOTS

Gloucestershire Wiltshire Derbyshire Leicestershire Lincolnshire Nottinghamshire Stockton-on-Tees Blackpool Cheshire East Cumbria Lancashire Liverpool Stockport Tameside Trafford Wirral Rochdale East Sussex Hampshire Isle of Wight Kent Milton Keynes Oxfordshire Portsmouth Slough Surrey West Sussex Blaenau Gwent Bridgend Caerphilly Merthyr Tydfil Newport Rhondda Cynon Taff Vale of Glamorgan

X X X X X X X X X X X X X X X X X X X X

X X X X X X X X X X X X X X X X X X

X X X X X X X X X X X X X X X X X X X

X X X X X X X X X X X X X X X X X X X X X X X

X X X X X X X X X X X X X X X X

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X

X X X X X X X X X X X X X X X X X X X X X

X X

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X

X X X X X X

X X X X X

X X

X X X

X X X X X X X X X X X

X X X

X X

X X X X X

X X X X X X X X X X X

X X X X X X

X X X X X X X X X

X X X X X X X X

X X X

X X

X X

X X

X X X

X X

X X X

X X

Watches/Jewellery X X X X X

Computer Games

Medical Products

Electrical Goods

Computer Parts

Vehicle Parts

MP3 Files

Footwear

Software

Batteries

Clothing

e-books

Alcohol

DVDs

Toys

CDs

56

Online Streaming of Digital Content

Fake Labels /Packaging

Electronic Components

Construction Materials

Toiletries/Cosmetics

Cigarettes/Tobacco

Online File-sharing

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

Wrexham Barnsley York Hull NE Lincolnshire N Lincolnshire 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 Anon 16 X X X X X X X X X X X X X

X X X X X X

X X X

X X

X X X X X

X X X

X X

X X X X X X X X X

X X X X X X X X X X X X X X X X X X X X X X X

X X X X X X X X X X X X X X X X X X

X X X

X X

X X X X X X X X X X X X X X X X X 20 3 X 58 X X X X X X X X X X X X X X X X X X X X X X X X X X X

X X X X X

X X X X X X X

Percentage of Authorities who investigated product

64

16

60

80

88

52

75

45

31

65

18

43

48

Watches/Jewellery X X X X X

Computer Games

Medical Products

Electrical Goods

Computer Parts

Vehicle Parts

MP3 Files

Footwear

Software

Batteries

Clothing

e-books

Alcohol

DVDs

Toys

CDs

57

Appendix B locality of counterfeit/pirated products

Factories and industrial units

Region CENTSA CENTSA CENTSA CENTSA CENTSA CENTSA CENTSA EETSA EETSA EETSA LOTSA LOTSA LOTSA LOTSA LOTSA LOTSA LOTSA LOTSA NI SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SWERCOTS SWERCOTS

Authority Birmingham Coventry Sandwell Staffordshire Walsall Wolverhampton Worcestershire Hertfordshire Suffolk Thurrock Greenwich Hackney Islington Merton Camden Lewisham Newham Tower Hamlets DETI Northern Ireland Aberdeenshire Dumfries & Galloway Dundee Glasgow N Lanarkshire Orkney Islands Perth & Kinross Shetland Islands S Lanarkshire W Dunbartonshire Devon Dorset X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X

UK Ferry/Shipping ports

Festivals/music venues

Auction Site/Website

Other internet uses

Private residences

Door to door sales

Other workplaces

Outdoor markets

Ordinary shops

Car boot sales

On the street

Pharmacies

Postal hubs

UK airports

Pubs/clubs

58

Factories and industrial units

SWERCOTS SWERCOTS TSEM TSEM TSEM TSEM TSNE TSNW TSNW TSNW TSNW TSNW TSNW TSNW TSNW TSNW TSNW TSNW TSSE TSSE TSSE TSSE TSSE TSSE TSSE TSSE TSSE WHOTS WHOTS WHOTS WHOTS WHOTS WHOTS WHOTS

Gloucestershire Wiltshire Derbyshire Leicestershire Lincolnshire Nottinghamshire Stockton-on-Tees Blackpool Bury Cheshire East Cumbria Lancashire Liverpool Stockport Tameside Trafford Wirral Rochdale East Sussex Hampshire Isle of Wight Kent Milton Keynes Portsmouth Slough Surrey West Sussex Blaenau Gwent Bridgend Caerphilly Merthyr Tydfil Newport Rhondda Cynon Taff Vale of Glamorgan

X X X X X X X X X X X X X X X X X X X X X

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X

X X X X X X

X X X

X X X X X X X

X X X X X X X X X X

X X X X

X X

X X X X

X X X X X

X X X X X X X

X X X X X X X X

X X

X X

X X X X X X

X X X

UK Ferry/Shipping ports X

Festivals/music venues

Auction Site/Website

Other internet uses

Private residences

Door to door sales

Other workplaces

Outdoor markets

Ordinary shops

Car boot sales

On the street

Pharmacies

Postal hubs

UK airports

Pubs/clubs

59

Factories and industrial units

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

Wrexham Barnsley York Hull NE Lincolnshire N Lincolnshire 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 Anon 16

X X

X X

X X X X X X X X X X X X X X X

X X X X

X X X X X X X X X

X X X X X X X X X X X X X X X X X X X X X X X X X X X X 19 40 88 20 26 11 25 X X X

X X

X X

X X

X X X X

X X X X X X X X X X 88 59 X X X X X X

X X

X X X 65 0 5

X X X

X X X

X X 58 39 3 5

Percentage of Authorities who investigated product

UK Ferry/Shipping ports

Festivals/music venues

Auction Site/Website

Other internet uses

Private residences

Door to door sales

Other workplaces

Outdoor markets

Ordinary shops

Car boot sales

On the street

Pharmacies

Postal hubs

UK airports

Pubs/clubs

60

Appendix C work with partner agencies

Enforcement agencies, OGDs etc Industry / Brands

Federation Against Software Theft IiS

Vehicle & Operator Services Agency

Federation Against Copyright Theft

Driver & Vehicle Licensing Agency

Serious Organised Crime Agency

Department of Work and Pension

Int Federation of Spirit Producers

British Recorded Music Industry

Business Software Alliance

Anti-Counterfeiting Group

HM Revenue & Customs

Food Standards Agency

UK Immigration Service

IPO Intelligence Hub

Other TS Authorities

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 EETSA EETSA EETSA LOTSA LOTSA LOTSA LOTSA LOTSA LOTSA LOTSA LOTSA NI SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS SCOTSS

Authority Birmingham Coventry Sandwell Staffordshire Walsall Wolverhampton Worcestershire Hertfordshire Suffolk Thurrock Greenwich Hackney Islington Merton Camden Lewisham Newham Tower Hamlets DETI Northern Ireland Aberdeenshire Dumfries & Galloway Dundee Glasgow N Lanarkshire Orkney Islands Perth & Kinross Shetland Islands S Lanarkshire W Dunbartonshire

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X

X X X X X X X X X X X X X X X X

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X

X X X X X X X

X X X X X X X X

X X X

X X X X X X X X X X X X X X X X X

X X X X X X

X X

X X X X

X X

X X X

X X X X X X X

X X

X X

X X X X X X X X X X

X X X X X X

X X

X X

X X X X

X X X X X

X X X X X

UKIE X X X X X X X X X

IFPI

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Enforcement agencies, OGDs etc

Industry / Brands

Federation Against Software Theft IiS

Vehicle & Operator Services Agency

Federation Against Copyright Theft

Driver & Vehicle Licensing Agency

Serious Organised Crime Agency

Department of Work and Pension

Int Federation of Spirit Producers

British Recorded Music Industry

Business Software Alliance

Anti-Counterfeiting Group

HM Revenue & Customs

Food Standards Agency

UK Immigration Service

IPO Intelligence Hub

Other TS Authorities

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 SWERCOTS SWERCOTS SWERCOTS SWERCOTS TSEM TSEM TSEM TSEM TSNE TSNW TSNW TSNW TSNW TSNW TSNW TSNW TSNW TSNW TSNW TSSE TSSE TSSE TSSE TSSE TSSE TSSE TSSE TSSE WHOTS WHOTS WHOTS

Authority Devon Dorset Gloucestershire Wiltshire Derbyshire Leicestershire Lincolnshire Nottinghamshire Stockton-onTees Blackpool Cheshire East Cumbria Lancashire Liverpool Stockport Tameside Trafford Wirral Rochdale East Sussex Hampshire Isle of Wight Kent Milton Keynes Portsmouth Slough Surrey West Sussex Blaenau Gwent Bridgend Caerphilly

X X X

X X

X X

X X X X

X X X X

X X X

X X X

X X

X X

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X

X X X X X X X X X X X X X X X X X X X X X X X X X

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X

X X X X X X X X X X X X X X X X X X

X X

X X X X X X

X X X X X X X X X X X X X X X X X X X X X X X X X

X X X X X X X X X X X X X X X X X X X X X X

X X X X X X X

X X

X X X X X

X X X

X X X X X X X

X X X X X X

UKIE X X X X X X X X X X X X X X X X X X

IFPI

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Enforcement agencies, OGDs etc

Industry / Brands

Federation Against Software Theft IiS

Vehicle & Operator Services Agency

Federation Against Copyright Theft

Driver & Vehicle Licensing Agency

Serious Organised Crime Agency

Department of Work and Pension

Int Federation of Spirit Producers

British Recorded Music Industry

Business Software Alliance

Anti-Counterfeiting Group

HM Revenue & Customs

Food Standards Agency

UK Immigration Service

IPO Intelligence Hub

Other TS Authorities

UK Border Agency

PRS for Music

Scambusters

Home Office

REACT X X X X X X 30

MHRA

Police

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

Authority Merthyr Tydfil Newport Rhondda Cynon Taff Vale of Glamorgan Wrexham Barnsley York Hull NE Lincolnshire N Lincolnshire 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 Anon 16

X X X X X X

X X X X X X X X

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X 93 11 41 25 11 5 58 X X 41 8 X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X

X X X X X X X X X

X X X X X X X X X X X X X X X X X X X X X X X X

X X X X X X X X X X X X X X X X X X X X X X X X X X X X 26 19 16 80 3 24 9 76 X X X X X X X X

X X X X 66

X X

Percentage of Authorities who worked with other agencies

17

40

19

UKIE X X X X X 42

IFPI

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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 FSA The Food Standards Agency GAO US Government Accountability Office GHD Good hair day gTLD generic top level domain

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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 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

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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 2010/11 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 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 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

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Bibliography
Annual fraud indicator - National Fraud Authority Sex, lies and cyber-crime surveys D. Florencio and C. Herley, 2011 CIBER research for the Strategic Advisory Board for Intellectual Property Hargreaves Independent Review of Intellectual Property and Growth Scope and scale of counterfeiting and piracy US Government Accountability Office The digital music nation The British Recorded Music Industry Mark Monitor 2011 traffic report Report on EU Customs Enforcement of Intellectual Property Rights European Commission Counterfeit parts: increasing awareness and developing countermeasures - Aerospace Industries Association New Approach to Fighting Crime Home Office e-consumer strategy the Office of Fair Trading Consultation on priority regulatory outcomes Local Better Regulation Office Anti-counterfeiting strategy the Medicines and Healthcare products Regulatory Agency Tackling tobacco smuggling building on our success HM Revenue & Customs Dispute resolution service booklet Nominet IP Crime Toolkit Intellectual Property Office

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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 Published August 2011 Revised November 2011