EU consultation aimed at addressing IP infringement in business supply chains

The Commission has launched a consultation in a bid to gather information on supply chain management practices with the future aim of setting out new guidance on due diligence against "infiltration" into supply chains of infringing products.

The consultation invites businesses to detail how many "formal collaborative relationships" they have with suppliers allow them to monitor the supplier's supply chain and whether they have ever identified IP rights infringement in their own supply chains.

Companies are also encouraged to disclose whether they "use a track and trace technology" as part of their "supply chain auditing practices and/or to protect the IP in its products and processes". Businesses that use such technology are asked to explain whether they think it is "effective to protect IP assets" and whether they will "continue to invest in its implementation and deployment".

The Commission has also asked businesses whether they use "authentication technologies". It said those technologies "facilitate the distinction between licit and IP infringing products and/or sub-standard products" because the technologies enable companies to "uniquely identify" their own product and their own IP rights. Authentication technologies include digital or physical fingerprinting and package seals, it said.

"Due to their extreme complexity globalised supply chains have become over the years vulnerable to various forms of disruptions, one of them being the infiltration of intellectual property (IP) infringing and sub-standard products," the Commission said. "Managing supply chains in a transparent and holistic manner would result in reducing this risk of infiltration and could thereby allow for greater integrity, quality and customer confidence in the origin of IP intensive products."

"In this context, the integration of IP into IP intensive companies' supply chain management and the use of certain monitoring tools and risks assessment procedures could highly benefit IP protection," it said. "The results of the consultation will allow for the mapping and the promotion of best practices as well as the elaboration of EU supply chain integrity scheme(s) composed inter alia of a 'due diligence toolbox' for the attention of IP intensive companies."