Illicit Trade Counterfeiting, Piracy and the Swiss Economy

The Swiss economy is innovative and knowledge-intensive. Consequently, it relies heavily on intellectual property rights. Swiss industries are also export-oriented and solidly integrated in the global economy. At the same time, the threats of counterfeiting and piracy are growing, and Swiss industries are vulnerable. This report measures the direct economic effects of counterfeiting on Swiss industry and the Swiss government. It estimates the impact of the global trade in fake products that pose as "Swiss made" in terms of lost jobs, forgone profits and lower tax revenues Preface Foreword Acknowledgements Executive summary Key findings Impact on the Swiss economy 1. Introduction Why is Switzerland vulnerable to counterfeiting? Data and methodology Trade statistics Seizure data Methodology References Notes 2. An overview of global counterfeiting and the Swiss economy The scope and magnitude of the problem Where do fake Swiss products originate? Which product categories are targeted most? What are the main destinations for Swiss fakes? How are fake Swiss goods exported? COVID-19 and fake “Swiss made” The value of trade in fake Swiss goods The secondary market Impacts on sales, jobs and government revenue Impact on sales in the Swiss manufacturing industry Impact on jobs in the Swiss manufacturing industry Impact on government revenue References Notes 3. Industry analysis The watch industry Scope and volume of counterfeit Swiss watches Trade routes Transport methods The losses incurred by counterfeited watches COVID-19 crisis and trade in counterfeit Swiss watches The mechanical, electrical engineering and metalworking (MEM) industry Scope and volume Trade routes Transport methods The losses incurred by counterfeiting electrical and mechanical engineering products COVID-19 crisis and trade in counterfeit Swiss electrical and mechanical engineering products The fast-moving consumer goods (FMCG) industry Scope and volume Trade routes Transport methods The losses incurred by counterfeiting fast-moving consumer goods COVID-19 crisis and trade in fake Swiss fast-moving consumer goods The pharmaceutical industry Pharmaceutical industry – A particular context The high IP intensity Scope of infringements Consumer health risks The data challenge The trade in fake pharmaceuticals infringing Swiss IP rights holders The COVID-19 crisis and trade in fake Swiss pharmaceuticals Focus on infringements of Novartis’ IP References Notes 4. Concluding remarks Trade in fake Swiss goods: The impact on Switzerland Next steps Annex A. Methodological notes A.1. Primary and secondary markets A.2. Constructing the General Trade-Related Index of Counterfeiting for products (GTRIC-p) Step 1: Measuring reporter-specific product seizure intensities Step 2: Measuring general product seizure intensities Step 3: Measuring product-specific counterfeiting factors Step 4: Establishing GTRIC-p A.3. Constructing the general trade-related index of counterfeiting economies (GTRIC-e) Step 1: Measuring reporter-specific seizure intensities from each provenance economy Step 2: Measuring general seizure intensities of each provenance economy Step 3: Measuring partner-specific counterfeiting factors Step 4: Establishing GTRIC-e A.4. Constructing the General Trade-Related Index of Counterfeiting (GTRIC) Establishing likelihoods for product and provenance economy A.5. Calculating the absolute value A.6. Consumer detriment References Annex B. Tables and figures