By Emma Reynolds MP,

for Politics Home magazine – http://www.politicshome.com/

Wow! Stuff, a toy company based in my constituency, is a Wolverhampton success story. It is currently one of the fastest growing privately owned businesses in the UK. It has won accolades, including National Business Awards, for its growth and marketing strategies. Their exciting and innovative toys have taken the USA, France and Germany by storm and the company is targeting 40 more countries over the next three years.

The company has developed substantial intellectual property but has fallen victim to counterfeiters. WOW! Stuff estimates almost two million counterfeit copies of its award-winning Air Swimmers toys have been sold worldwide. It has already spent hundreds of thousands of pounds in taking the manufacturers and distributors of these counterfeits to court in a bid to fight the fakes.

Wow! Stuff is not alone. Some £19 million worth of counterfeit toys are seized in Europe each year, with many looking more and more like the genuine articles they are illegally replicating. Around 6.7 million counterfeit toys were seized in Europe in 2010, according to the European Commission’s 2010 Annual Report on EU customs enforcement of intellectual property rights. Not only do those companies affected lose millions in potential revenue, fakes can be difficult to identify, and when they are spotted, expensive lawsuits can last months, or sometimes years, before counterfeiters are brought to justice.  As a result, inventive companies can lose the motivation to invest further in innovation.

The main sources of origin for counterfeit toys are China, Hong Kong and the UAE. Counterfeiters in these countries incur no product development costs and can therefore undercut the companies selling the original product. It is clear that some retailers are knowingly selling these fakes in order to increase their profit margins or to offer a lower price than their competitors.

What can be done to combat the counterfeiters? I’ve written to the intellectual property minister, Lord Younger, and, more recently, to the Prime Minister’s newly appointed intellectual property adviser, Mike Weatherly MP, to urge the Government to urgently improve the law against toy fakes. I support calls by Wow! Stuff for the Government to give companies the right to ‘fast-track’ legal processes to prevent counterfeiters from delaying court action. Intellectual property in the creative industries accounts for almost 8% of UK GDP; many of these companies are small and medium sized businesses who simply can’t afford expensive legal fees. Protecting that innovation is vital for pioneering businesses like Wow! Stuff and the jobs and investment they create and sustain.

November 2013