Intellectual property crime 'more lucrative than drugs for criminals'

Dubai conference told gangs make a fortune from fake goods and copyright breaches, which they often use to fund other criminal activities

Counterfeit Louis Vuitton and Chanel handbags. Dubai Police have received almost 1,300 reports about intellectual property crimes since 2019. Andrew Henderson / The National

Criminal gangs are making more money from intellectual property crimes than drug trafficking, a Dubai conference was told on Tuesday.

While buying a counterfeit handbag or watching sporting events on non-official streams might initially seem harmless, with the only losers being companies already so rich they would never notice, the reality is very different, Dubai Police said.

They warned that money raised through the sale of fake items is often used to fund other nefarious activities, not least drug trafficking.

Intellectual property (IP) crimes have created a revenue in recent years of $43 billion in the EU alone, said a senior police official.

This far exceeds the $28 billion from drug-related activities.

“Crimes related to intellectual property are becoming more dangerous than drug-related crimes. There needs to be global legislation and amendments on laws to face IP crimes, now we are in the metaverse and AI era,” said Maj Gen Dr Abdul Quddus Al Obaidly, assistant commander-in-chief for quality and excellence and head of the Emirates Intellectual Property Association (EIPA) at Dubai Police.

“The digital revolution presents new challenges in the IP crimes such as the ownership of patent rights created by AI or trademarks in the new virtual world.

“Organised crime [gangs] use social media to promote their fake goods.”

He made his comments during an address at the Middle East North Africa IP Crime Conference in Dubai on Tuesday.

Funding other crimes

A major issue with IP crimes is that the revenue is often used to fund other criminal activities, said Dr Jorge Garate, from the excellence and pioneer department at Dubai Police and a member of the EIPA.

An IP crime is one in which somebody manufactures, sells or distributes counterfeit or pirated goods for commercial gain.

Maj Gen Dr Abdul Quddus Al Obaidly, assistant commander-in-chief for Quality and Excellence and head of the Emirates Intellectual Property Association (EIPA) at Dubai Police. Photo: Dubai Police.

This includes patents, trademarks, industrial designs or literary and artistic works.

“IP crimes include electronics, luxury products, accessories, pharmaceuticals, vehicle parts, recorded music, movies and more,” Dr Garate said.

Dubai Police have received almost 1,300 reports about IP crimes since 2019, with officers arresting almost 1,340 suspects. The estimated street value of the fake products was Dh8.7 billion.

Protecting intellectual property rights is gaining greater importance amid global economic changes related to digital rights, said Ahmed Musabih, director general of Dubai Customs.

“Dubai Customs dealt with around 333 intellectual property disputes that involved 15 million counterfeit items, with a value of Dh73.4 million last year,” said Mr Musabih.

Major sports event are another target of criminal gangs who often broadcast illegal coverage of football and boxing matches, said Malek Hannouf, chairman of the Gulf Brand Owners group.

The UAE updated its legislation and increased the punishments in 2021 to crack down on the manufacture and distribution of counterfeit items.

Caught in the act

A case study of how police caught a woman selling fake designer handbags was presented at the conference.

The police operation started with 10 counterfeit handbags sent from the UAE that were seized upon arrival in Canada in 2022.

“We managed to get the name of the sender and tracked the social media platforms used to sell the products. A woman was doing live broadcasts on Facebook, promoting the products,” said Mr Hannouf.

He said police traced her from her social media and arrested her in her Sharjah apartment, where she was storing thousands of fake designer bags.

“Police seized thousands of fake bags from different brands in her apartment. The street value of the bags was estimated to be Dh20 million,” he said.