Methodology for Estimating the Scale and Cost of IP Infringement

The UK Intellectual Property Office (IPO) published on October 28, 2026 a new methodology for estimating the scale and cost of intellectual property infringement in the UK. The study, commissioned from Frontier Economics, responds to a recognized evidence problem: existing studies use incomparable methods and scopes, making it hard to combine results or apply them to UK policy, enforcement and resource-allocation decisions. The framework is designed as a flexible tool that can be iterated as evidence improves.

The model focuses on UK domestic consumption of infringing products, with two core infringement types. Counterfeit products are unauthorized copies of physical goods imitating branded items - typically violating trademarks and design rights - in sectors such as clothing, cosmetics, electronics and pharmaceuticals. Digital piracy covers unauthorized downloading, streaming or sharing of music, film, TV, live sports, games, software and e-publications. A residual category of wider IP infringement, including unlicensed use of patented technology, source-code misappropriation and trade secret theft, is recognized as economically significant but not yet quantifiable with available data.

Methodologically, the model runs in four modules. Prevalence is estimated two ways: an import-based approach built on the OECD's GTRIC methodology using 2016 EU-wide customs seizure data calibrated on a 27-percent fixed point for footwear imports from China, and a consumption-based approach using the IPO's Counterfeit Goods Research Survey of 5,000 UK adults across six product categories, with the Online Copyright Infringement tracker (13th wave) supplying piracy figures. Displacement rates - how far infringing purchases substitute for legitimate sales - come from consumer survey responses, split into high- and low-quality counterfeit tiers at a 30-percent price threshold. Direct costs cover rights holders' monitoring, enforcement and lost sales, consumer losses and public-sector costs, while a macroeconomic module estimates impacts on GVA, employment and tax revenues.

The authors stress that the methods are deliberately conservative and likely understate prevalence and costs; import- and consumption-based estimates are presented as a range rather than a single figure. Recommendations are staged: short-term work on UK-specific seizure adjustments and public-cost estimates; medium-term expansion of survey coverage and refinement of displacement effects; and long-term broadening of product coverage and development of investment-impact modules. For rights holders and enforcement agencies, the framework promises a common yardstick for gauging where infringement inflicts the greatest economic harm - and for targeting policy responses accordingly.

Original Link: https://www.gov.uk/government/publications/methodology-for-estimating-the-scale-and-cost-of-ip-infringement/methodology-for-estimating-the-scale-and-cost-of-ip-infringement