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The Office for Harmonization in the Internal Market (OHIM), through its European Observatory on Infringement of IP Rights and EUROPOL co-chaired a Knowledge Building and Awareness Conference, hosted at the OHIM’s premises in Alicante on 26th, 27th and 28th March 2014.

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Overview The EU Sports Industry, both through direct jobs and second tier organisations including the Media, and advertising and tourism sectors, creates a large amount of revenue. In 2012, consumers in Europe spent more than EUR 61 billion on sports goods, and an estimated 12 to 15 million trips are made every year to attend or participate in sporting events.In 2012, a study1 published by the European Commission revealed that the EU Sports Industry represents an economic sector with a share in the national economies comparable to Agriculture, Forestry and Fishing combined. There are currently 4.5 million people employed in the Sports Industry which accounts for 2.1% of the total EU workforce. It is also considered a labour intensive growth industry, which makes a contribution to the goals defined in Europe’s strategy for smart, sustainable and inclusive growth (Europe 2020). Organised crime networks make substantial, illegal profits by infringing the Intellectual and Industrial Property Rights of the Sports Industry. Infringers cause significant damage to legitimate businesses and hamper the positive impact of sport on the economy: the criminals involved do not invest their profits into grass root level and youth development as the right holders do. Billions are lost every year through tax evasion and money laundering. The aim of the conference was to raise levels of awareness about the problem, exchange information concerning both best practices and difficulties faced by Enforcement and the private sector, discuss the new tools and databases available, and to extend and develop the network. Participants discussed infringements and threats related to counterfeit sports merchandise and the illegal broadcasting of games, and underlined that the problem will increase in preparation for major upcoming sporting events in 2014 and 2015. The conference emphasised the partnership established between EUROPOL and the Observatory, with representatives from across the private sector, law enforcement and the judiciary.Participants attended from the European Commission, EUROJUST, the World Intellectual Property Organization (WIPO), the World Customs Organization (WCO), national Intellectual Property Offices (IPOs), Customs and national police agencies from inside and outside the European Union (EU) alongside associations and federations led by the Sport Rights Owners Coalition (SROC), the Federation of the European Sporting Goods Industry (FESI), the Audio-Visual Anti-Piracy Alliance (AAPA), and stakeholders including brand protection managers from the Sports Industry. Presentations by experts were consolidated by regular feedback from the floor, in addition to a morning of topic-based workshops from which key information was gathered, and possible solutions discussed. Keys trends were noted including the increase in transportation of small consignments by counterfeiters in order to avoid detection and legal action; the loopholes and lack of harmonisation in legal provisions across the Member States when fighting the illegal streaming of live sports events; difficulties in cross-

1-“Study on the Contribution of Sport to Economic Growth and Employment in the EU”, study commissioned by the European Commission (DG Education and Culture) final report November 2012.

http://ec.europa.eu/sport/library/studies/study-contribution-spors-economic-growth-final-rpt.pdf

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border enforcement, and specifically, the difficulty of successful legal action when the infringement is carried out in one Member State but masterminded and controlled in another. The conference also raised serious questions about the role of intermediaries including logistics companies and payment platforms, and the anonymity enjoyed by infringers through the use of virtual currency and the Internet in order to sell counterfeit and substandard goods. The roles of emerging and key intermediaries in illegal streaming – advertisers and advertising agencies – were focused on: many participants agreed with SROC that by removing the financial interest for criminals, the activity would lose major impetus. It was suggested by various law enforcement agencies present that the issue of Intellectual Property Crime (IPC) should be viewed holistically – it is a medium from which funds are extracted to support serious and organised crime and terrorism, with high economic returns for the criminals involved yet far lower sanctions than those applied to drug trafficking. The result is a now global problem, linked to a shadow economy which relies on ever evolving technology and organised, reactive crime networks using sophisticated money laundering techniques. Increasingly, the infrastructures of entire sectors of intermediaries dedicate their businesses to supporting the activities of online pirates and counterfeiters. Presentations from the private sector underlined their work carried out in cooperation with Enforcement, and the need to apply the relevant civil and criminal legislation available in order to secure convictions.

Stakeholders and experts present called for a systemic, sustainable effort, stretching well beyond IP of-fices to include ministries of Education and Health, Civil Society and the Media. It was recognised that work must be carried out in order to mark a change in consumer perception concerning the gravity of IP crime - especially with the younger generation, the majority of whom assert that illegal downloads are justifiable.

The US Immigration and Customs Enforcement (ICE) called for a global cooperation against counterfeit-ing, stating that one country or one agency alone cannot tackle IPC, nor should the problem be treated ter-ritorially by Enforcement, as it affects the general public and the private sector across the world, stretching across all societies and jurisdictions.

It is acknowledged by experts in Enforcement that only a comprehensive and multidisciplinary approach, using the capabilities and expertise of many different agencies alongside those of stakeholders, is likely to bring sustainable and successful responses in this area. The findings of the event hosted in Alicante served to emphatically underline this acknowledgement and to provide benchmark targets and support multiagency cooperation in the future.

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Day OneWelcome and Introductory SpeechesThe Director of the European Observatory on Infringements of Intellectual Property Rights warmly welcomed all those present and thanked the event organisers and participants for making the conference a reality - in particular, the European Commission, EUROPOL, EUROJUST and private stakeholders.He explained that the conference involved an ever broadening representation from outside the EU including Albania, Brazil, Canada, Serbia, the Ukraine, the USA and Turkey, with a significant number of prosecutors, Police, Customs and Trading and Standards authorities - making up the 105 external participants.The Director explained that the Observatory has been entrusted with building understanding and helping Enforcement to take action against counterfeiting and piracy – and to discuss, and hopefully find practical solutions to the now global problem. He underlined the focus on building joint platforms, the creation of proactive and reactive strategies, and consolidation of the key points raised in the conferences, which are only the starting point of strategic operations signalled by the November 2013 MoU signed with EUROPOL.He drew the participants´ attention to the conference which will be held in Alicante from 5th to 7th November 2014 which will focus on the Internet as a facilitator of IP infringement. As co-host, EUROPOL warmly welcomed participants from a broad range of organisations and thanked the OHIM and its Observatory for making the conference a reality. EUROPOL explained their cooperation with the Observatory which started three years ago by the forging of a common wheel to develop knowledge, to support and liaise with the private sector, and to bring together all common stakeholders including law enforcement and right holders through the establishment of a strong and cooperative network. The organisation detailed the three events that the OHIM has hosted since the signing of the MoU, including a knowledge building conference on fake and illicit pesticides, medicines and automotive and household goods, which underline the tremendous work accomplished by the OHIM in a short space of time.EUROPOL asked the floor what factors are at stake when discussing IP crime in sport. The answer is an increasing threat to a global industry sector, its consumers and employees. EUROPOL added that expert speakers gathered from organisations such as SROC, FESI and sport leagues, such as the National Basketball Association (NBA), would clarify the issues. They emphasised that all the participants at the conference were also experts and it would be extremely useful for them to contribute as much as possible through the exchange of case studies, best practices, and salient questions that require answers.The introductory speeches of the first day started with the Brazilian National Council on Combating Piracy who explained its integrated public council structure involving ministries, the Federal Police and Customs, as well as associations representing the public sector - the National Confederation for Trade and the Pharmaceutical Industry Association. Its mission is to debate and propose public policies and national plans in order to fight against IP crimes, counterfeit and piracy. The council is structured on three pivots; to raise awareness with Brazilian consumers of IP rights, promote public policies to strengthen business in Brazil, and promote integration amongst private and public sectors

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in order to structure a joint fight against IP crime. Their national database for combating counterfeit allows enforcement direct access to information given by trade mark representatives under the National Directive for Combating Counterfeit, thus optimising the fiscal and administrative procedures available. The directory is available in the 12 states who will host the FIFA World Cup until the end of April. The council underlined their joint work carried out with the UK IPO on a seminar focused on challenges relating to IP crimes in major sporting events, and the work carried out in liaison with the brand protection team from the London Olympic Games, in order to discuss how to implement a strong brand protection strategy. They have plans to hold an imminent workshop alongside FESI, the WCO and their national Customs which will provide stakeholders with best practice tools in order to distinguish original from fake sport goods. The council expressed their hope to ensure a similar permanent and vital dialogue with the Observatory, to which the Observatory expressed their reciprocal wish.FESI underlined their pleasure at attending the conference and seeing many members from the private sector in Alicante, who would be able to provide insight into the problems surrounding IP theft and counterfeiting. They expressed their commitment to the initiative and explained more about their organisation, which represents both national and international brands, totalling 650,000 - of which 1,000 companies sit in the EU, including many SMEs. FESI underlined the two strategic pillars of the Sports Industry which focus on relentless product innovation, including design and technology which help athletes and practitioners, and the importance of serving and engaging with consumers. The 150,000 new products developed by the industry annually via new industrial technology ensure new jobs across research and development, distribution, retail, marketing and sponsorship – which are threatened by the parallel production of infringing goods in Europe and abroad. In 2012, European consumers spent more than EUR 61 billion on sports articles. Consumers make an estimated 12 to 15 million trips every year in order to attend or participate in sporting events - right holders have a duty to ensure these consumers benefit from a genuine and safe experience but their core business is attacked by the illegal production and sale of goods and services.FESI called for effective IP Enforcement across the EU and abroad and expressed their wish to work with international partners including the OHIM and EUROPOL in order to foster growth and sustainability in the economy - and to ensure the safety of consumers.

Introduction to IPC in Sports: What is the Current Situation in Europe?

The first presentation was given by DG Education and Culture who explained that they work closely with DG MARKT and DG Enterprise. They gave a general overview of the economic importance of the Sports Industry in Europe. The 2012 Study on the Contribution of Sport to Economic Growth and Employment in the EU collated data at national and international level (including advertising, education, repair services, tourism, the Media, printed matter, recorded media, clothing and equipment, and research and develop-ment) from companies directly and indirectly involved in the Sports Industry. Employment share in this sec-

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tor surpasses Gross Value Added (GVA), which means that the Sport Industry produces employment over proportional to GDP (0.28% compared to 0.31%). There are 4.5 million people employed in the EU Sports Industry, signifying 2.1% of the total EU workforce. A growth in the sports sector promotes more employ-ment in relative terms partly due to SME involvement. The conclusion underlined that, for each EUR spent on sports related production, another 70 cent is produced in the supply chain - making it a highly labour intensive industry with higher contribution to employment in the EU.

DG Education and Culture emphasised their future work in cooperation with EU-ROSTAT in order to measure the contri-bution of sport to EU economy. The floor responded with questions about future studies and it was explained that more countries will take part in the satellite accounts and further comparable work will be carried out until 2017 under the general policy framework of the EU Work Plan for Sport.

The next presentation was jointly given by FESI, the Portuguese Authority for Economic and Food Safety (ASAE) and the Spanish National Police. FESI pre-sented on the work carried out between the private and public sector by bring-ing together 10 national federations and 1800 manufacturers (with a combined annual turnover of EUR 66 billion) who work in issue orientated committees - one of which is a special IPR committee. Their key priorities are to act against sales of counterfeited and illegal online goods, assist in action against IPC, and to promote IPR protection outside the EU territory through the IPR dialogue carried out in association with the European Commission.

FESI drew attention to the current lack of responsibility expressed by intermediaries, who attempt to waiver all liability. The organisation discussed the constantly evolving and new techniques harnessed by coun-terfeiters in order to avoid detection and conviction - including the use of small consignments and Internet sales.

Since 2012, there has been a dramatic drop in Customs seizures (DG TAXUD figures show in 2011 there were 115 million items seized but in 2012, only 40 million items were seized) due to the use of small con-signments but additionally, Customs are more reluctant to seize goods in transit, (in response to the rulings of the Nokia/ Philips joined cases C-446/09 and C-495/09). FESI discussed ways in which to respond to

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the challenges posed by the sale and transportation of these goods. They have signed an MoU with the WCO, and continue to work closely with the Observatory and EUROPOL. They emphasised the need to campaign for effective legislation reflecting the latest challenges at EU level, and to support the IPR dia-logue with Third Countries.

The MoU signed with the WCO on 25th April 2013 additionally signed by MOVE (Brazil) and RASIE, (Russia) aims at coordinating Customs training and strategies ahead of large sporting events. Operation TIGRE 3 in November 2013 spanned 21 ports and 17 countries across America and resulted in more than 26 million intercepted counterfeit goods. Operation Gol in March 2014 coordinated 7 Customs hubs across Brazil, Argentina, Chile, Uruguay, Panama and Peru, in order to prepare physical controls concerning containers from or to the targeted countries.

During the 2010 World Cup in South Africa there was a growth of 500% in imported counterfeit goods: key events in the near future including the Rugby World Cup in September 2015 reinforce the need for multiagency cooperation in preparation for large sporting events.

FESI is involved with the Observatory through active working groups focused on the digital world, En-forcement, and training and statistics. They also attempt to quantify and qualify the current level of fraud during international sport events and conduct capacity building, risk analysis and to exchange information between Customs. They expressed their support at the OHIM reports produced concerning counterfeit in the pharma, automotive and household goods industries, and the work carried out in Brussels concerning IP dialogues.

FESI supports the recent proposal from the European Commission regarding the power of Customs to seize counterfeits in transit, through the new EU regulation on Customs Enforcement, (EC) No. 608/2013, which repeals Council Regulation (EC) No. 1383/2003.

ASAE followed with a presentation about Operation Laika, a year long operational investigation in 2012 into counterfeit and the illegal use of trade marks in northern Portugal and Spain. Seventy four search warrants were issued which allowed the seizure of more than 1 million items of counterfeit goods, weap-ons, ammunition, credit cards and cash, showing links to serious and organised crime with a basis in money laundering. Some of the products seized were of high quality and with the same price, packag-ing and labelling as the original products, resulting in high profits for the infringers (EUR 5.5 million in 2 years). Importantly, this operation strengthened trust between two Member States who shared intelligence throughout the operation.

The Spanish National Police presented on their role in Operation Laika, using surveillance methods in order to detect fake, unregistered companies across the border of Portugal and Spain. The counterfeiters forged and used relationships with mosques in order to exchange information, cash and fake goods. ATMs

2 - An alternative remittance channel that exists outside of traditional banking systems - Hawala is a method of transferring money without any actual movement. One definition from INTERPOL is that Hawala is “money transfer without money movement”. Transactions between Hawala brokers are done without promis-sory notes because the system is heavily based on trust.

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in Spain were used to withdraw money held in Morocco through the Hawala2 system, based on the loyalty of members in the organised crime network.

SROC followed the joint presentation by underlining the devastating effect of IP Crime on large sporting competitions themselves, which has a knock on effect at grass roots level. They presented on the impor-tance of sports rights which allow right holders to produce the best sporting entertainment possible for consumers – and in turn, reinvest in youth development, education and training. IP Crime breaks this circle as there is no incentive to invest, but high financial rewards for the infringers. SROC explained that the live, short duration and territorial dimensions of sporting events make digital enforcement more complicated as the usual tools cannot be used effectively.

They explained the huge increase in digital piracy alongside improvements in the quality of content - the Bundesliga (Germany) alone suffered a 250% increase in illegal streams during the last four years. During 2012 and 2013 there were 33,000 illegal live streams concerning Premier League (UK) matches; 250 sites were sent take down notices, and notices were sent to intermediaries. These actions reveal the resources and money spent by the Premier League in order to police these sites which could otherwise be reinvested in working with communities.

The organisation also explained that new, legal offers can be promoted but search engines continue to highly feature illegal sites. They touched on the idea of offering other legal methods, such as the choice to pay for viewing rights on an individual match basis.

SROC called for a stronger and clearer legal basis than currently exists. They stressed that blocking injunctions are not possible in every state and pose a lengthy process, and that notice and takedown notices are useful only if there is an immediate response from intermediaries, which is not the norm, in practice. Additionally, SROC stated that intermediaries, including advertising agencies should take more responsibility – the agencies involved are making huge revenues from counterfeit sites. One possibility is that the Advertising Industry and right holders could formulate agreements so that brands do not advertise on illegal websites. Attention was drawn to the work carried out by the City of London Police IP Crime Unit (PIPCU), which relays the recent cooperative efforts between the Police and private sector, the Advertising Industry and right holders in the UK.

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AAPA asked SROC and FESI if the method described of “following the money” approach is effective, to which they replied positively - but stressed it is only one method applied to a problem which requires a holistic and operationally strategic approach.

The Cypriot Police asked whether the decoders used for streaming could be detected first in order to find and prosecute the infringers, and stressed the importance of fines. FESI replied that their members have launched civil cases but the larger problem is illegal streaming using websites, an action which is easy to relocate outside the EU upon detection, and far harder to police.

WIPO asked SROC to clarify what, ideally, they would like to achieve. SROC answered that they would like to achieve a legal basis at European level which would result in commercial exploitation existing as a clear commercial agreement between the sports organisers/ right holder and the people who want to exploit that right.

FESI and AAPA Members Presented on Counterfeit and Piracy Issues Affecting Their Brands.

Adidas explained that in their activities against sales of counterfeits on platform sites, the brand focuses on known counterfeiters as well as countries known for prolific production of counterfeit. Increasingly, their attention is drawn to Internet sales (they also mentioned the huge reduction in fake adidas items seized by Customs). The brand signed an MoU in May 2011 with the European Commission.

Adidas regularly monitors auction sites and rogue websites and sends messages concerning the take down of infringing offers. Cooperation with platforms has resulted in a reduced number of counterfeits, and most notably, cooperation with eBay and iOffer which mainly features China based sellers. The standard route is a submission of a Notice of Claim of Infringement through eBay´s VERO programme. Adidas also liaises with platforms by sending images of counterfeit and genuine products, prior to large sporting events. The brand uses an external service provider to identify and take down auctions of counterfeit prod-ucts using information regarding the price, location of seller and quality of goods. They noted a declining trend of counterfeits on eBay because the site does not want to be seen as the main platform on which to find counterfeits - however, counterfeiters will simply move to another platform.

The brand discussed work carried out in cooperation with the Chinese authorities. They managed a suc-cessful civil action and publication in a newspaper in China, against Chinese sellers by working alongside alibaba.com as well as managing to install prelisting checks to prevent the listing of counterfeit goods on both .com and .cn domains. Importantly, Adidas stated that they receive intelligence from consumers and from export companies after the goods have been seized.

Nike explained that their brand protection is focused on proactive consumer protection; their global team focus on identifying the origin and supply chain of counterfeiters and transit countries which form a gate-way into markets, in addition to training Customs and Police. They work alongside high calibre private investigators who are experienced in gathering evidence thoroughly and legally during investigations.

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Importantly, the intelligence, including digital intelligence is analysed by a third party. Nike´s team ensure they supply enforcement agencies with useful data in order to secure convictions, including information on tax fraud and money laundering taken from the cases. Work alongside the tax authorities in the EU has resulted in civil seizures and those identified were subsequently linked to a previously known counterfeiter in a different country. However, when working alongside the UK Police on a large case involving a freight company smuggling packages into the country using fake addresses, civil measures proved ineffective: instead, they used the Proceeds of Crime Act and money laundering measures in order to convict those responsible.

Munich Sports presented on the problems facing SMEs when attempting to approach trading platforms and forums – simply, small companies do not have the budget or the weight to ensure their needs are answered. Currently, forums overtly selling counterfeit goods state that they are not liable for the content of their websites, and forum threads display disclaimers stating they are not responsible for the legality or quality of the content, services or goods featured on the site. A prime example is blogspot.com which belongs to Google, an online forum filled with sales of obviously counterfeited products.

The presentation by Munich Sports showed that payment platforms, hosts, domain registration companies, transport companies and web creator platforms are involved, even if involuntarily, in facilitating the sale of counterfeit goods – but have no legal liability. SROC replied by supporting the acknowledgement that the misuse of services rendered by intermediaries form a huge part of the problem.

The brand also emphasised their attempts to reduce opportunities for counterfeit which costs them money every season, by changing the labelling and packaging regularly - but counterfeiters quickly react and alter their products.

Nordic Content Protection called for a practical, collaborative solution to shut down sites which sit outside the EU.

AAPA introduced their presentation by underlining the growing trend in online and mobile viewing by consumers (85% of 18 to 29 year olds use their phones to access content online) due to rapidly evolving technology - which makes pira-cy so attractive to infringers, whilst Price-waterhouseCoopers (PwC) figures show that in the USA, media rights will fuel sports growth to USD 17 billion in 2017.

Content protection technology allows broadcasters to protect content via a conditional access system by which

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content is scrambled and subsequently unscrambled by the same control word, so the content can be viewed by the subscriber. However, the system can be hacked at various stages via a Smart Card, or decoders such as Futubox with farm sites leading consumers to illegal content.

Sky Deutschland explained that their us-ers must subscribe to packages, which are currently illegally accessed by cy-bercriminals. The company pays ap-proximately 10% of the revenue of the German Soccer League, financing 1,700 jobs in German professional football (and with a revenue of approximately EUR 1 billion). The jobs created by the company, and second tier jobs in support industries are threatened by the increas-ing trend of online piracy.

They explained that illegal streaming is produced via the use of an IP address, software and a PC, a user name and password, and a proxy server and dynamic domain name, which can be easily moved or replaced. Experience suggests that the proxy server is located in a different territory in order to hide the criminal activity, but the real server is located in same country as that in which the illegal offer is located. The cross border, clandestine and multijurisdictional bases of Cybercrime pose huge problems in terms of conviction at court level, and enforcement on a practical level. Sky Deutschland works alongside Enforce-ment in order to provide critical data about the types and sources of piracy.

The first day of the conference was closed with the agreement that a huge amount of information and discussion about counterfeiting and piracy had taken place – and a collective agreement that multiagency and private stakeholder cooperation throughout the EU and beyond must take place in order to combat this increasing criminal activity.

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Day TwoExchange of Best PracticesThe Observatory and EUROPOL opened the second day of the conference by welcoming all participants, reviewing the key messages and feedback gathered during the first day - and by stating that they did not pretend to solve the problems faced, but instead, wished to present all the tools available.Subsequently, the conference focused on exchanging views and identifying the main obstacles faced by right holders and Enforcement. There were four workshops held throughout the morning, for which participants signed up. Two focused on digital piracy and two focused on counterfeiting and sports goods. The participants discussed what is possible on an international level regarding cooperation, how to investigate cases from an investigative stance, what legal provisions are in place, and what practical obstacles have been encountered. The key findings and participants’ comments are detailed in the Annex as bullet points for ease of reference.

International Cooperation, Tools and Support.

Following a feedback session after the workshops, EUROPOL gave a presentation about its structure, services and aims. The organisation explained that it came to existence as the European law enforcement agency in 2010, “to support and strengthen action by the competent authorities of the Member States and their mutual cooperation in preventing and combating organised crime”, and its basis stemmed from an office which focused on cross-border drug issues. EUROPOL consists of 28 liaison offices from Member States and 10 liaison offices from Third Countries. The organisation has operational agreements with many countries including Switzerland and Australia – and with many other organisations who have offices in the EUROPOL main building. They facilitate the exchange of data via SIENA, their secure communication system. Operationally, the organisation works 24 hours a day, 7 days a week and focuses on two Analysis Work files, namely Serious and Organised Crime (SOC) and Counter Terrorism. All data sent by the Member States and third parties are stored on databases or in the EUROPOL Information System, which allows the collation and harmonisation of huge amounts of valuable intelligence. The IPC team, via Focal Point Copy, was created in 2008 and deals with all IPC cases except counterfeit tobacco

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products. The team is competent for cases involving Public Health including substandard pesticides and pharmaceutical goods, and provides fast operational and strategic support through criminal analysis, monitoring threats and capacity building. EMPACT priorities (2014 to 2017) will result in more resources being given to the fight against counterfeit, substandard and illegally manufactured pharma goods and pesticides by serious organised crime groups. EC3 is housed within the EUROPOL offices and fights Cybercrime. Its mandate involves work to counter organised crime, online child abuse and cyber attacks against critical information systems within the EU. The Operations Department includes experts in money laundering, financial analysis, and offers help in tracing assets through a network of asset recovery.US Immigration and Customs Enforcement (ICE) stated that from the US perspective, EUROPOL (who joined the IPR Center in 2012) has become an extremely successful partner via Focal Point Copy and has financed three multilateral operations.Following EUROPOL’s presentation, the Observatory explained their role, which is to raise awareness about IPC and facilitate a strong network across enforcement authorities; to provide evidence-based contributions and data, tools and databases to support the fight against IP infringement; and to provide knowledge and learning programmes for enforcement authorities, businesses and IP practitioners.The Enforcement Database (EDB) which is in its pilot phase and due to go live in April 2014 will allow enforcers to easily access information with one easy search on their desktop. The database is based on the original TMview and DesignView databases and holds data on all national and Community trade marks and designs. Right holders are able to enter relevant information about their products in the tool, such as contact persons for enforcement matters, logistics, identifiers, packaging, prior cases, etc. The EDB is a free tool, available in 23 languages and was formed with the collaboration of DG TAXUD, allowing right holders to add alerts about infringing items received by both Police and Customs. Alternatively, right holders can be informed about possible counterfeiting cases or approach Customs for action through COPIS. To guarantee security, the database will be federated with the DG TAXUD network for use by Customs and with the EUROPOL secure network (EPE), for use by

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the Police. The WCO’s IPM database holds data on international seizures, and the Observatory will soon sign an MoU with the WCO so that both tools can link up, in order to provide a synchronised and consolidated tool for Enforcement.AAPA expressed their hope that the tool will evolve to include information about piracy cases in future.The ACIST database was presented, whose aim is to develop a methodology for the collection and evaluation of data on counterfeiting, in order to enable enforcement authorities, right holders and national offices to effectively combat counterfeiting. The database lists all the seizures with the EU – the information is supplied by Enforcement and national offices and the data is uploaded by the Observatory. Customs data has been provided by DG TAXUD and various Member States to date. The database will go live in April 2014, with the aim to integrate all Member State data given by the Police and other Enforcement authorities in the system by the end of 2014. ACIST will provide a harmonisation of data collection and support country comparison by sharing best practice. The detailed data on seizures will help policy makers understand the gravity and size of the problem. Additionally, it will be possible to analyse performance and trends at EU level, such as the increase in small consignments used by the counterfeiters in order to avoid detection.WIPO followed with a presentation on the value and use of IP. Markets based on IP are ever increasing, with the majority of patent registration applications from China and the majority of trade mark and design applications from Europe. WIPO aims to develop simplified standards for

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industrial design registration procedures; to facilitate up to date international treaties on IP norms, and provide protection services including dispute resolution services alongside a stable legal framework for broadcasting organisations, with a focus on anti-piracy functions and protection against signal theft and free riding. WIPO´s presentation highlighted the huge spectrum of attitudes towards sentencing regarding IP infringement across the EU and an ambivalent attitude towards online piracy. The perception amongst many young consumers is that illegal streaming and downloads are justifiable – many students would not consider paying for online downloads if they can download content for free. In general, public perception supports the idea that cybercriminals are not real criminals, some are even regarded as cult heroes. WIPO expressed the need for a systemic, sustainable and multijurisdictional effort, stretching well beyond the IP offices, to include ministries of Education and Health, Civil Society and the Media. They concluded the presentation by underlining the need to work with consumers in order achieve a cultural change and to alter perceptions of IP crime, which is currently not regarded by many as a real violation. Their presentation supported SROC´s stance which underlined the confusing cultural attitude towards digital piracy - which is clearly an act of infringement - but one that is currently accepted in many societies across Europe.ICE gave an insight into their work and structure, explaining that as the border police for the US, they deal with very little domestic IPC, as it comes mainly from China and is shipped over through various countries, the money taking a different route. ICE staff work in 48 key countries, with an office in the Hague, and have strong relationships with the Member States. The countries they work alongside through investigations and training are chosen on the basis of emerging threats, and exist as transit and source countries. The IPR Centre in the US has signed up with EUROPOL because it is widely recognised that one country or one agency cannot tackle IPR due to its global structure; cooperation must involve public and private interaction and span all ages and societies in order to tackle the problem. ICE is to sign an MoU with the Spanish National Police and with the UK Police, imminently. The presentation concluded with a call to all participants, to collaborate and communicate strategically when approaching all future operations, rather than relying on conferences to do so.Brazilian Customs followed with an enlightening presentation about their work, policing a huge border with a high volume of shipments and extremely limited time in order to search and seize illegal

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goods including drugs. Additionally, Customs are in charge of Notices for Prosecution. Customs taxes account for 8% of the total revenue collected by the country. Brazil joined TRIPs in 1994, and the majority of IP laws were issued between 1994 and 1998. Enforcement works closely with right holders in order to identify the distribution route normally taken, the quantities and contact details for the brand representative in Brazil: subsequently, irregular transportation routes and quantities can be targeted by Customs.Approximately USD 87 million of counterfeit merchandise was destroyed by Brazilian Customs in 2013. The first day of Operation Gol resulted in the seizure of 40,000 pieces and in May 2013, thousands of counterfeit footballs were seized, originating from China. Customs Law or Customer Protection Law is normally harnessed in order to build a strong case through cooperation with right holders. Naturally, the strength of the case results in a higher possibility for criminal conviction by the Federal Court. However, if Customs Law cannot assist in determining the infringement, the only option is to notify the right holder in order to seize the goods. If the right holder does not want to act, the goods cannot be detained further.It must be noted that many items of prime sports clothing and merchandise cost a great deal for citizens who earn the minimum wage. Street vendors sell counterfeit sporting clothes at very low prices, and it is obvious to the majority of consumers that they are not genuine – there is a popular and economic reason that there is a global market for such products.The third day of the conference started with a review of the key points and feedback from the second day. Participants were advised that the secure EUROPOL Platform for Experts (EPE) will be used to house the presentations from the conference. DG MARKT replied to the first question of the day concerning whether the current MoU will be extended to include the role of intermediaries (including advertising agencies). They explained that there would not be an extension of the existing initiative but rather work carried out on subsequent MoUs, and that other solutions will be pursued if the current MoU is not as successful as intended.

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Perspectives from Abroad and New Challenges Ahead

The last day of the conference centred on the exchange of best practice and the new challenges ahead, starting with ICE and the NBA who gave a joint presentation concerning the situation in the USA and cur-rent enforcement measures in place. The US IPR Center was introduced as a collaborative effort joining 21 agencies alongside 4 international partner agencies (EUROPOL and INTERPOL, the Mexican Revenue Service and the RCMP), with a focus on partnership with Industry and Enforcement, and on education in order to ensure operational success. ICE has 67 offices across the globe. The assertion “We will never seize or arrest our way out of this problem” was reiterated by ICE, because if a right holder owns a suc-cessful brand there will be a reactive problem with counterfeit of that brand.

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Day ThreeICE discussed Operation Team Player which focused specifically on counterfeit in the Sports Industry. Its strategic plan centred on game day enforcement, intelligence sharing, Industry involvement, reducing demand and national coordination. The trafficking of counterfeit sports items for the four main sports in the US is extremely lucrative - there are only two days in a year without the broadcast of a major league game. Seizure statistics show that in 2013, HSI made over 24,000 seizures for IP violations, 29% of which were counterfeit sports T-shirts alone. In the four years between 2008 to 2012, more than 100,000 items (at a sale cost of USD 9.5 million) were seized, alongside 396 domain names. However, in 2013 alone, almost 200,000 items at a sale cost of USD 17.3 million were seized owing to the national, coordinated effort of Operation Team Player.

The existence of many major sporting events in the US with a predetermined location, such as the Super Bowl, allows Enforcement to start planning operations early in the year, and involve the incumbent and future officers in that state for training, to institutionalise best practice and also advise on failed operational actions. The Sports Leagues liaise by offering lists of domain names that should be focused on. Operation In Our Sites managed to achieve a reduction in demand by seizing 2,713 sites with US seizure warrants whilst improving public awareness due to the 124 million hits to the ICE warning banner which featured on the seized sites (14 Member States also took part in Operation in our Sites through involvement with EUROPOL).

However, rogue websites have evolved and are visually very sophisticated: it is often hard to spot the real from the counterfeit sites. Subsequently, they are responsible for consumer deception and fraud in addition to IPC.

ICE stressed the importance of involvement by other countries in order to send a clear and united message to the criminals - that globally, many countries are now working together both through civil and criminal actions in order to thwart infringers.

ICE offered best practice examples to the conference concerning multiorganisational cooperation prior to large sporting events. They explained that small consignments under 10 items sit below the threshold for federal investigation, but consignments from the same counterfeiter can be viewed collectively and the suspect caught due to Customs intelligence and through National Cyber-Forensics Training. Free apps held on mobiles have been used by their officers who can scan the barcodes when on street patrol in order to determine counterfeit goods sold by street vendors. HIS officers also use holograph scanning apps in order to determine counterfeits. ICE successfully liaise with the Public in the areas around large sporting venues in order to secure information about the criminal group, once citizens realise they have been duped into buying fake and unusable tickets.

ICE also found that public service announcements linked to seized sites which underline gang violence, child labour and the loss jobs caused by counterfeiting (“Know the real cost, don’t buy counterfeits”) has resulted in growing consumer interest. Additionally, buttons can be placed on websites so consumers can click to “REPORT IP THEFT” which directly links to the IPC Centre. The organisation concluded their presentation by underlining the importance of global, multiagency cooperation, their wish to support such

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cooperation, and the sharing of best practice in order to capitalise on available intelligence and resources.

The NBA explained their legal obligation to enforce their IPR as a trade mark owner, as a contractual obli-gation to licensees and their wish to protect fans and consumers. They presented on their brand’s z huge commercial opportunities owing to 16,000 trade mark registrations registered in approximately 150 coun-tries, 14 NBA websites and 5 NBA e-commerce stores, and international players who raise interest in their native countries. The company attempts to avoid IP theft by branding their sports clothing with holographs hangtags and stickers, and with the name of the licensee that produced the product but increasing technol-ogy enables counterfeiters to duplicate logos, holograms and products - making enforcement extremely complicated. They underlined the positive effect achievements of Operation In Our Sites but explained that the majority of operators now sit outside the US, so cease and desist letters have little effect. CAPS, (Coalition to Advance the Protection of Sports Logos administered by the Trade Mark Management Inc.) of which the NBA is a member aims to expose and disable clusters of rogue websites, freeze counterfeiters PayPal accounts and allow legitimate retail websites to rise higher on search engine rankings.

The NBA emphasised their work alongside the NYC Mayor´s Task Force and frequent communication between Customs and NBA international counsel in order to facilitate seizures and convictions. They com-municate through CAPS in order to exchange intelligence regarding counterfeiters. Additionally, they have started a civil programme focused at smaller volumes of counterfeit, sending cease and desist letters to those involved, asking for the source of the counterfeit, as well as offering them discounted genuine NBA products – whether the latter approach involving a legal offer is successful, will be reviewed in future.

To conclude, the NBA detailed their cooperative attempts with Enforcement by providing accurate figures and intelligence. They consider both federal and state laws, working with a specialist IPR law firm in order to apply the best legislation against those found counterfeiting. They also work in close liaison with the Prosecutor’s Office in order to see how interested they are in prosecuting the illegal activity - with the pos-sibility of ex parte seizure order of goods (CAPS manages a recidivist chart to which each member adds information). The NBA emphasised that “there is no magic bullet to this problem” and called for collective work with other brand owners and with Enforcement across the globe, in order to frustrate and dissuade IP criminals.

The floor was opened for questions. SROC asked ICE whether they can seize a domain name used for il-legal streaming as easily as one used for the sale of illegal counterfeit. ICE answered that in theory, they do have the authority to act although in practice, it is extremely hard for Enforcement to react with the neces-sary protocol within 90 minutes of a live game. The majority of sites seized through Operation In our Sites were rogue and e-commerce sites, rather than streaming sites. They added that right holders are more effective by taking the civil route against infringement. This provoked a question from the floor whether more should be done at an international level regarding copyright infringement via illegal streaming. The NBA explained their work with other content owners against the illegal streaming of their live content, and expressed their wish to coordinate with other copyright holders across Europe.

The concluding session on the third day of the conference considered the challenges and threats ahead, and alongside a roundtable discussion led by expert panellists from the private and public sectors, all par-

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ticipants were invited to discuss possible solutions and future methods of cooperation in the fight against IPC.

Roundtable Discussion amongst Expert Panellists

LEGO emphasised the fact that right holders must spend money policing their own IPR in the current age. The company identified the Internet as the biggest threat to their brand as cybercriminals use LEGO IPR to drive traffic through to their site, in addition to scam sites and infringed content. They predicted two main issues – domain registries in Third Countries are extremely hard to enforce against, outside the US; and how the new generic top level domain names available in the near future could be policed. Some of the new registries offer blocking policies at a price - subsequently, right holders must approach the registries and pay. The Trade Mark Clearinghouse only offers protection for established brands by notifying them up to 90 days after registration of the act of a potentially infringing site registering - and those who wish to avoid liability can claim they have registered sites for non-commercial use.

The Swedish Police asked LEGO about the threat posed by 3D printers, to which LEGO answered that there is a risk that accessories may be printed, such as war materials, that LEGO do not produce.

The UK IPO explained the creation of the new IP unit in the City of London Police, which bridged the previ-ous gap in enforcement provision and focuses specifically on counterfeit and piracy of digital matter. They explained that money laundering regulations enable the Police to act in many IPC cases but called for support from right holders in the supply of accurate information. They underlined the work carried out with advertisers in order to reduce revenue streams on infringing sites and liaison with the UK domain registrar, in order to remove registration from infringing sites. In effect, the unit acts as a gate keeper by overseeing the actions of intermediaries.

WIPO agreed with LEGO concerning the massive threat posed by advancing technology and huge expan-sion of domain names on the Internet. WIPO has been involved with ICANN, but with very limited success as they have not responded to most of WIPO’s suggestions. ICANN manages a domain name system and is a private company based in California. Their policy - which is a private company contractual policy - will decide what is and what is not an online infringement, in practice. In today’s web reality, the Google terms of service determine what can be enforced in practice, rather than national laws. To conclude, WIPO un-derlined the need for the public sector to work very closely with the private sector – this is a necessity due to the reality of the situation. EUROPOL confirmed that EC3 is working with ICANN, but ICE stated that they have no working relationship with ICANN.

Sky Deutschland explained that more sophisticated illegal content used in streaming makes the activity increasingly desirable. They underlined the need to present clear and comprehensive evidence about cybercrime to prosecutors in order to secure convictions. However, they asserted that if a European effort was attempted, there would be logistical and legislative obstacles posed by the fact that 95% of infringe-ment cases are cross-border and therefore hard to take action against within one Member State. They discussed the online shadow economy created by intermediaries who dedicate their business to support-ing online counterfeiting and piracy by providing the equipment such as hardware and software needed

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to carry out the crime. It is important to note that some business models intentionally and solely exist to support illegal activity.

The Police Service of Northern Ireland consolidated the comments concerning the shadow economy theo-ry, and suggested that Enforcement should talk more about economics in their public awareness schemes - that every EUR or USD which is lost to the criminals, is one EUR or USD that could otherwise be rein-vested in health, education and law enforcement. Key messages to the Public, supported by academic studies relaying figures showing the jobs saved and taxes saved in comparison to the route taken by the money gained by the counterfeiter, could have a real effect. The shadow economy funds serious organised crime, prostitution and child labour – and this message needs to be relayed to society.

Conclusions

Presentations and feedback throughout the conference underlined the large role played - even if involun-tarily - by intermediaries including advertisers, payment platforms, hosts, domain registration companies and transport companies in facilitating the sale of counterfeit goods.

Participants discussed practical ways to reduce revenues associated with online piracy. Illegal streaming sites offer the opportunity to view content without charge, and it is clear that their revenue is created via advertising. It was agreed that work could be done alongside the Advertising Industry through the formula-tion of agreements in order to reduce advertising on illegal websites. The successful, collaborative work carried out in the UK by the City of London Police IP Crime Unit (PIPCU) with advertising agencies and right holders was highlighted as a best practice example that could be rolled out.

Enforcement experts from Europe and the US underlined the need to use the most relevant legal and fiscal tools available in order to assure convictions. In the absence of civil actions, the application of tax evasion and money laundering legislation has proved effective across both continents.

It was noted that there is increasing cooperation and dialogue with the Chinese authorities, including intervention against illegal streaming.

The overriding message from both the private sector and Enforcement was the necessity for systemic and collective work in order to frustrate and dissuade IP infringers. Right holders called for a clear legal basis; a harmonisation in legislation, and a collaboration in efforts on a global scale. The conference highlighted the need to commit to strong communication and an ongoing dialogue on a daily basis by both Enforcement and right holders, in order to create a global, proactive and common strategy - against a global, proactive and common enemy.

The Director of the Observatory closed the day and the conference by thanking all participants for their comments and work carried out over the three days, and explained that a conference report would be dis-seminated shortly. He added that, according to the responses captured in the IP Perception Study, IP is legitimate for 96% of EU citizens and more than 80% of EU citizens say it is important to reward creativity

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and innovation. Conversely, a significant amount of the population - especially young consumers - are ready to enjoy content illegally gained. This cultural attitude poses a major challenge and is a main focus of the Observatory when working on awareness raising through the preparation of campaigns at European level.

The Director drew attention to the IP Enforcement Summit which will be held in London in June, hosted by the OHIM and the UK IPO. Furthermore, in November a conference will take place in Alicante, focus-ing on the Internet as a facilitator for IP crime. He explained that the event will be held in association with EUROPOL and with major input from EUROJUST and judges, which will offer as many opportunities for networking, discussion and sharing best practice as the conference he then closed.

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ANNEX1. Digital Piracy Workshop Co-chaired by the Cypriot National Police and AAPA

▐ The need for an understanding of the technical issues used in digital piracy including illegal stream-ing. It was suggested that security vendors could assist by giving the information needed by pros-ecutors and judges to fully understand the methods used by those involved.

▐ The issue of cross-jurisdictional cooperation was raised – at present, it takes up to two years to receive the information requested. For example, Sweden operates a voluntary disclosure system. Participants called for more effective and timely ways to gather information cross-jurisdiction.

▐ The role of private sector when working with the public sector – their role must be fulfilled for En-forcement to act.

▐ The role of intermediaries, including advertising companies must be addressed on a practical level and the example of successful cooperation between media buyers in the UK was discussed - could this model be developed by the European Commission by extending the current MOU with inter-mediaries?

▐ The legal bases for successful action were noted - the general agreement was that convictions were generally achieved through the application of money laundering provisions, which also serves as a deterrent to counterfeiters. It was noted that in some countries, the right holder must make contact with the infringing site and to secure a conviction - the counterfeiting must be proven as an intentional act.

▐ The conclusion expressed by all was that better cooperation between countries, right holders and legislators was needed, in addition to better understanding of the Cybercrime Convention by En-forcement and prosecutors.

2. Digital Piracy Workshop Co-chaired by the Swedish Police and UEFA

▐ It was noted that politicians in Denmark have been overwhelmed by communications from Danish citizens regarding their wish to allow illegal streaming.

▐ A portion of the generated revenue from large sporting competitions organised including UEFA Champions League has been spent on policing illegal streaming, which could have been rein-vested in grassroots level development.

▐ Injunctions simply do not work during the timescale of live sporting events such as a 90 minute football game.

▐ Streams can be embedded within domains. The main platform for peer to peer streaming is Sop Cast in China. In 2014, any member of the Public can access the content of a streaming site with-out any payment or contract. Ninety five percent of live streams are delivered using UGC methods versus 5% of peer to peer streams, and the more participants, the better the quality. The UGC can

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link this up to make the content available on social media. In 2012/2013 there were 22,000 UGC illegal streams. The systems for streaming are now much more simple to use. Videos on these sites are often supplied by parties within a different territory, which results in difficulties in enforce-ment. Advertising, especially syndicated advertising provides revenue for the streaming site. It is important to remember that this activity is carried out in order to make money from unauthorised use of content.

▐ Some compliant UGC sites respond to takedown notices, but many non- compliant sites do not pro-vide tools to take down and do not reply. Rogue hosts provide faulty tools for takedown and block to certain IP addresses, including enforcement addresses. If the hosts do reply, they generally do so at the end of a match, so infringement has fully occurred. Some streamers are very confident and state that they disregard all DMCA notices to takedown - Canadian confident illegal streamers are a prime example.

▐ The issue of cross-border enforcement makes the issue complicated – legislation within the EU does not offer a unified or harmonised solution, and outside of EU jurisdictions, the situation is more complicated. Sites target certain countries but the servers and suspect reside in another country - with different legislation. Mass litigation will not alter the streaming landscape.

▐ A clear legal framework was called for, in order to have a practical impact as many cases are taken no further despite detection of streaming equipment by the Police.

▐ In China, Shanghai authorities spoke to Sop Cast who actually shut down the entire streaming site for hours. This was not due to a legal measure, it was thanks to cooperation with the authorities.

▐ Operation “In Our Sites” was flagged as an example of best practice but it was noted that in some states there is no legal framework to seize sites.

▐ In cases of illegal use of content for football games, it must be clearly and publicly stated that copy-right infringement has occurred, not only the infringement of neighbouring rights.

▐ It was agreed that Enforcement can do more when assisted by rights holders who make a com-plaint.

▐ When approaching Cybercrime, it was agreed that it is best treated as a traditional crime, using normal investigative tools in order to secure evidence.

▐ Many agreed that “following the money” approach - by chasing the advertisers, donations and involving the tax authorities works in practice.

▐ Many expressed the need to lobby to fill the gaps in current legislation.

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3 Counterfeit of Sporting Goods Workshop Co-chaired by ICE and EUROJUST

“Following the money” is now an accepted approach and most participants agreed that counterfeiters are more affected by the loss of money than seized products. It was emphasised that counterfeiting is an international problem and therefore, understanding the approaches and methods used by other countries is often a key to success. On occasions, gaining such an understanding and building cooperation is not easy, and an example was given about how attempts to engage EUROJUST and EUROPOL had proved to be unproductive.It was highlighted that often, financial and money laundering investigations can take time and during the process, situations can change quickly. An example was given of how money from counterfeiting in the US ended up in China with little chance of return. In such cases, it was proposed that it might be preferable to hand the details of an investigation over to the receiver country, where money had been transferred. In such cases, simply getting the proceeds out of the hands of the criminals could prove to be the simplest and most effective option for many authorities. Education, awareness and intelligence sharing is vital and both the US and the UK have been involved in developing such strategies for many years, particularly in building understanding for consumers, enforcers and rights holders. Intelligence led approaches are also essential. The UK has introduced an intelligence hub at the IPO which acts as a successful point of contact for cooperation.In terms of building understanding and cooperation, Turkey raised the fact that increased involvement by rights holders is vital, in order to train enforcers to detect fakes. The WCO has developed its IPM system to ensure closer engagement and information exchange between Customs and Industry, but more work needs to be done to stem demand. Media is an important vehicle in building understanding and awareness. ICE is working hard to improve the messages it directs at the Public, and has put a consumer affairs officer in place. Moreover, online banners are used when illicit sites are taken down, which have proved to be successful. In addition, many participants felt that more publicity is needed to explain that counterfeiting is a crime – and increasingly, its roots sit in organised crime. Media also needs to be used to encourage cooperation and build political will. However, a precursor to this must be that enforcement authorities identify real success factors and publish results alongside private sector partners. However, it was accepted that some sectors can be reluctant to publish details on counterfeiting of their products due to the fear of losing public trust. It was agreed that wide institutional frameworks have more advantage than individual agreements. Both the UK and Hungary have frameworks that encourage cross-sector government and enforcement partnerships, which have led to agreed strategies and actions on policies and operational practice.

▐ It was agreed that no country has perfect legislation. The common complaint was that in general, Enforcement has to wait until industry takes a lead, but would like to take a more proactive approach. Legislation is slow and cumbersome whilst the technology enabling counterfeiters moves so fast.

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▐ Some countries felt that the government ask right holders to devote a lot of resources in order to back up their claims and evidence.

▐ Technologies like X-ray enable Customs to scan incoming parcels but often, Customs cannot see the brands inside until the whole shipment is opened, as infringing items are hidden well inside containers of legal goods.

▐ Importantly, a benchmarking project in 4 countries, (Poland, Czech Republic, Italy and Hungary), focused on how to tackle counterfeits sent via small consignments. They found that couriers hold all details including addresses, weight and price in electronic format so the senders could be easily tracked.

4. Counterfeit of Sporting Goods Workshop Co-chaired by The Scottish Police and the UK IPO

▐ Best practice was shared from the success story of the UK Olympics, which highlighted key el-ements including identifying the relevant legal framework, surveillance and early detection of counterfeit goods, allowing time to find a relevant solution, cooperation between right holders and Enforcement, communication in a common language which helped to form a strategic thread and which resulted in vital current and accurate intelligence between partners.

▐ It was noted that evidence led action results in timely and more effective action.

▐ It was agreed that consumer awareness is an issue that must be approached - from the bottom up - possibly through social media sites in order to influence all ages of consumers.

▐ It was suggested that Enforcement must look at and use the current legislation, notably administra-tive powers and policy in order to seize goods and hit the criminal where it matters – in the pocket. Effective convictions will help to increase public confidence in Enforcement.

▐ The emerging trend of virtual currency such as Bitcoin which is hard to track and without a bank to monitor the transactions poses more problems regarding Internet sales, which offers anonymity to the criminals.

▐ It was agreed that all partners should share best practice rather than replicating all the work carried out before – through a collaborative and a collective effort.