According to a recent study by EUIPO and OECD, small and medium sized enterprises are the most affected by counterfeiting, essentially because they tend not to secure adequate protection for their trademarks, designs and innovations, and in any case are likely to consider enforcing their rights too costly.

Risks of Illicit Trade in Counterfeits to Small and Medium-Sized Firms is a study published jointly in January 2023 by the European Union Intellectual Property Office (EUIPO) and the Organization for Economic Cooperation and Development (OECD).

The report concludes that while counterfeiting affects all categories of enterprises, its impact in terms of economic and reputational damage, as well as loss of competitive edge, is much greater on small and medium enterprises (SMEs) than on larger businesses.

SMEs at greater risk from counterfeiting

SMEs often have high quality productions enjoying excellent reputation. But whereas larger enterprises tend to secure and enforce their intellectual property rights systematically, SMEs do not protect their trademarks, designs and inventions as frequently, the geographic scope of the rights they do secure tends to be more limited and often it does not cover China and Hong Kong, which originate about 85% of goods seized for infringement of the intellectual property rights of SMEs.

SMEs also have greater difficulties in blocking the activities of counterfeiters, who are aware that infringing the intellectual property of smaller companies poses lower risks.

Italian enterprises are among the hardest hit

Italy ranks 3rd globally, after the United States and Switzerland, among states whose SMEs were most affected by counterfeiting between 2011 and 2019, according to customs seizure figures, and is in 4th place in the same ranking for large enterprises.

Little use of monitoring and other available measures

The study finds that SMEs of the European Union tend not to employ the measures used by larger companies to stop counterfeiters.

40% of European SMEs do not systematically monitor markets for infringements of their intellectual property rights, a very important activity in blocking counterfeiters quickly, thus minimising damage. SMEs rarely request customs action to prevent goods infringing their intellectual property rights from entering the European Union.

The report points out that SMEs perceive such measures as too costly in terms of time and resources, but also that they often lack appropriate information about ways their IP rights can be enforced.