In 2019 the international trade in counterfeit goods and pirated products was worth USD $464 billion and represented up to 2.5% of world trade.[1] Closer to home, research conducted by the UK Intellectual Property Office (IPO) in 2020 showed that counterfeiting and piracy costs the UK economy approximately £9 billion annually and result in the loss of around 80,500 jobs each year[2]. [CC1]
In 2024 the Organisation for Economic Co-operation and Development (OECD) published an update to its previous studies evaluating the importation of counterfeit goods into the United Kingdom and the impact of this activity on consumers, industries, and the UK government[3]. The report makes for sobering reading:
- Global trade in counterfeit and pirated products that infringed UK trademarks accounted for as much as GBP £12.1 billion in 2021 (p.5).
- Between 2017-2019, the volume of counterfeit goods imported into the UK steadily increased, reaching a peak value of GBP £8.3 billion in 2019. In 2020 there was a rapid decline, and the value of imported fakes fell to GBP £897 million. This can potentially be explained by the COVID-19 pandemic, which caused significant disruption to supply chains (most counterfeit products are smuggled into the UK via air transport, express courier services, or postal services). However, by 2021, the value of counterfeit goods imported into the UK had returned close to its previous levels at GBP £7.1 billion (p.17).
- The COVID-19 pandemic also may have affected the types of products being produced by counterfeiters. Between 2017-2019 the most frequently seized counterfeit products entering the UK were ready-to wear items, including clothing and footwear. But in 2020-2021 it was counterfeit electrical machinery and electronics that were most frequently seized, an increase thought to reflect the increase in everyday activities being confined to the online realm (p.12-13). The sector most targeted by IP infringement between 2017-2019 was the ready-to-wear sector, with the report making particular reference to the seizure of Burberry brand clothing and shirts from English football clubs. In 2020-2021, perfumery and cosmetics were most affected (p.26).
The OEDS’s report highlighted the need for the need for “better enforcement and proactive monitoring by online marketplaces” (p.29), on which point it has been clear for some time that counterfeiting and IP infringement are not limited to sales on market stalls and in the back of pubs. A 2016 study looked at the sale of counterfeit goods on Instagram and concluded that 20% of 750,000 posts about top fashion brands featured counterfeit or illicit products[4]. The most affected brands were Chanel, Prada, Louis Vuitton, Fendi, Rolex and Cartier, all elite luxury brands with a real incentive to protect their hard-earned reputations from the damaging effects of counterfeiting.
Impact and Effect
The damage caused by counterfeiting extends far beyond direct financial losses. When consumers unknowingly purchase counterfeit products, they often associate poor quality with the legitimate brand, causing unfair reputational damage that can take years to restore. This reputational impact can be particularly devastating for luxury brands and established manufacturers who have invested heavily in building brand value and consumer trust.
Health and safety concerns represent another critical dimension of the counterfeiting problem. In sectors such as cosmetics, pharmaceuticals, electronics and toys counterfeit products pose direct risks to consumer health. The environmental impact is equally concerning, with counterfeit products often containing hazardous materials and contributing to increased waste due to their inferior quality and shorter lifespan.
Perhaps most alarmingly, counterfeiting operations have become a significant funding source for organised crime. The combination of high profits and relatively low risk makes counterfeiting an attractive proposition for criminal networks, who often use the proceeds to fund other illegal activities, including drug trafficking, human trafficking, and terrorism. The trade in counterfeit goods also provides a convenient mechanism for money laundering operations.
While there is little need to further emphasise the scale of the problem, enforcement agencies continue to face resource constraints, raising concerns about the UK’s ability to combat the rising tide of intellectual property crime effectively. Responding to recent research by Which? into staffing levels and budgets for trading standards services across the country[5] the Chartered Trading Standards Institute (CTSI) accepted that there was: “no escaping the fact that our Trading Standards service is severely under-resourced”, observing that local authority Trading Standards offices have seen their budgets cut by an average of 50% since 2010[6].
The UK government through its Intellectual Property Counter-Infringement Strategy 2022 to 2027 held the stated aims of making IP crime socially unacceptable and strengthening enforcement mechanisms. In the absence of any update since the launch of the Strategy, it is impossible to say how effective it has proved to date.
Private Prosecutions
While civil litigation has traditionally been the primary route for rights holders, private prosecutions are increasingly recognised as a powerful alternative, particularly in cases where public authorities lack resources to pursue criminal action.
Private prosecutions offer several distinct advantages over civil proceedings in counterfeiting cases.
- Rights holders maintain greater control over the prosecution process, receiving consistent updates and direct communication about case progress, unlike the experience, often described as disconnected, of working through public prosecution channels.
- The UK’s robust asset recovery framework makes it an effective jurisdiction for pursuing the proceeds of counterfeiting, even when the primary operations are based elsewhere. Successful cases can lead to the recovery of funds through both compensation and confiscation orders.
- The ability to recover costs through central funds rather than from the defendant can make private prosecutions a cost-effective option.
- Perhaps most significantly, private prosecutions carry a powerful deterrent effect when properly publicised. The prospect of criminal conviction and potential imprisonment sends a stronger message to counterfeiters than civil penalties alone. This deterrent effect can extend beyond the immediate case, influencing other potential counterfeiters operating in the same arena, be it a marketplace or a social media platform.
Implementation and Risk Management
Private prosecutions work most effectively as part of a comprehensive anti-counterfeiting strategy and can complement other enforcement measures such as civil actions, customs seizures, and online takedown procedures. This multi-faceted approach allows rights holders to select the most appropriate enforcement tool for each situation while maintaining a consistent pressure on counterfeiting operations.
The success of private prosecutions in counterfeiting cases depends heavily on proper implementation and management. A well-executed private prosecution strategy typically involves:
- The early gathering of robust evidence through specialised investigators
- Careful consideration of the Full Code test
- Regular review of case progress and strategy
- Clear communication with all stakeholders
While many companies face their primary counterfeiting challenges abroad, particularly in Asia and emerging markets, maintaining strong enforcement action in the UK remains strategically crucial for several reasons. Firstly, London’s position as a global financial centre means that many international counterfeiting operations have financial links to the UK. Successful enforcement action in the UK can disrupt these financial networks, affecting operations worldwide. Secondly, a strong enforcement presence in the UK helps protect this valuable market from becoming an attractive target for counterfeiters. This protective effect extends beyond the UK’s borders, as counterfeiters often view strong enforcement in one market as a deterrent to expanding their operations into neighbouring regions. And finally, while manufacturing may occur overseas, the UK often serves as a critical distribution point for counterfeit goods entering European markets. Taking enforcement action in the UK can disrupt these distribution networks, affecting the viability of counterfeiting operations at their source.
Conclusion
The UK’s battle against counterfeiting faces significant challenges, particularly in the context of reduced public enforcement resources. However, private prosecutions offer a robust and effective alternative for rights holders.
The future effectiveness of anti-counterfeiting efforts in the UK will likely depend on the continued development of private prosecution expertise, alongside efforts to maintain and enhance cooperation with law enforcement agencies. This combined approach offers the best hope for addressing the growing challenge of counterfeiting in the UK’s increasingly complex commercial environment.
[1] OECD/EUIPO (2021), Global Trade in Fakes: A Worrying Threat, https://doi.org/10.1787/74c81154-en
[2] IPO (2020) IPO Counterfeit Goods Research, https://ipo.blog.gov.uk/2021/01/27/the-value-of-ip-crime/
[3] OECD (2024) Trade in counterfeit products and the UK economy, https://www.oecd.org/content/dam/oecd/en/publications/reports/2024/12/trade-in-counterfeit-products-and-the-uk-economy_6bb908bf/3119cd81-en.pdf
[4] Washington Post (2016) Social media and luxury goods counterfeit: a growing concern for government, industry and consumers worldwide, https://www.washingtonpost.com/blogs/the-switch/files/2016/05/IG_A2016_ST2.pdf
[5] https://www.which.co.uk/news/article/trading-standards-postcode-lottery-revealed-aP3TX4u6v2rs
[6] tradingstandards.uk/news-policy-campaigns/news-room/2025/uk-s-trading-standards-responds-to-latest-which-research/
