Counterfeiters' new tactics hide size of problem

Fraudsters are burning copies of games to order rather than stockpiling discs, making it 'impossible' to say how many fakes are being sold, according to the Intellectual Property Office

New tactics being employed by computer games fraudsters are making it hard for the authorities to discover how many counterfeit games are being sold and distributed in the UK, according to a government body.

The Intellectual Property Office (IPO) said in a report (PDF link) on Thursday that counterfeiters had moved from keeping stocks of products to making copies of games to order.

"[The] IP Crime Unit seized over 90,000 master games discs or computer files [in 2009/2010]," the office said in the report. "These were being used by criminals to make and sell copied games from homes, business premises, car boot sales and markets throughout the UK. It is impossible to determine how many copies were made using these discs, and this figure is not the total number of discs seized during the year."

Customs officers also confiscated a number of games and consoles as they entered the country. One Chinese company had more than 110,000 fake games seized, along with 150 knock-off games consoles.

The fakes are part of larger operations run by organised criminals, according to the IPO.

"Those engaged in counterfeiting and piracy are often found to involved in other criminality — including drugs and gun smuggling, people trafficking, money laundering and child exploitation — as it provides an easy way for them to make a profit to fund other illegal activities they are involved in," the IPO said in the report.

The IPO said that counterfeiting and piracy hurt the global economy and lead to an estimated total loss of €100bn (£83bn) per year in G20 countries.

"Industry sectors have their own estimations of the loss they incur due to counterfeiting and piracy," said the report. "British Software Alliance (BSA) and the International Data Corporation (IDC) estimate that 27 percent of software installed in the UK from 2008-09 was illegal — equating to an estimated loss to the industry of £1bn."

However, the Electronic Frontier Foundation (EFF) suggested that while many counterfeiters had links with organised crime, piracy may not prevent sales and could have the effect of marketing the software or music to a wider audience.

"Piracy and counterfeiting are often incorrectly lumped together to make piracy seem worse than it is," EFF chair John Buckman told ZDNet UK. "It is not at all clear that these copies, if prevented, would have actually led to sales... Furthermore, there is extensive academic evidence that pirated music and software leads to sales."

Independent games developer Jeff Vogel wrote in a blog post on Wednesday that piracy could be permissible if the person pirating the game cannot afford it.

In the UK, the part of the thinking behind the Digital Economy Act was that it would stymie copyright infringement. The Liberal Democrats said in April that the Digital Economy Act should be repealed, while peers said in July that the act should be the first law to be scrutinised under proposed House of Lords powers.


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