Piracy and Counterfeiting Undermine IP Protection
Piracy refers to the willful infringement of copyright protection and counterfeiting refers to the willful infringement of trademark protection. Both are serious issues that infiltrate the country with no known means to curb them. Prevention of both has been discussed by numerous scholars with various outcomes, none of which have provided any novel means to protect trademarks and copyright owners from the large scale violation of their rights. This paper discusses some of the measures adopted by Governments and International Organizations to prevent the same but more importantly to alert the consumer of his role in the prevention of piracy and counterfeiting.
The US chamber of commerce has estimated that IP makes up more than half of all U.S. exports, driving 40% of the country’s growth. Therefore, it is daunting to hear the statistics from the FBI and US Customs and Border Protection, which distinctly state that IP theft costs the U.S. economy $250 billion per year and has resulted in the loss of 750,000 jobs. It is also been said that Fortune 500 companies each spend an average of $2 to $4 million annually to combat this problem.
The OCED, an international organization took upon themselves a project in 2005 to curtail counterfeiting and piracy. The project was an expansion on an earlier publication on the economic impact on counterfeiting published in 1998. The study is said to outline a ‘rigorous methodology to estimate the incidence of counterfeit and pirated items in world trade’. Another international organization, the USEU, constituting a partnership between the US and the EU, are united in one of their common goals, to impede piracy and counterfeiting. At the USEU summit in June 2008, they affirmed their recognition of “the need for further cooperation on preventing and fighting international piracy, especially in the framework of the UN.”
Even at the national level, there have been changes made to address this issue. As recent as October 2008, with the firm support from the Motion Picture Association of America and the Recording Industry Association of America, US President George W. Bush signed a PRO-IP bill that would trigger harsher penalties and greater protection of copyright works in the United States. In support of the bill, Tom Donohue, CEO and President of the U.S. Chamber of Commerce stated that, “By becoming law, the PRO-IP Act sends the message to IP criminals everywhere that the U.S. will go the extra mile to protect American innovation”. Reuters reports that the crux of the bill is to create an “intellectual property czar who will report directly to the president on how to better protect copyrights both domestically and internationally”.
Despite the studies being conducted across the world by international organizations and laws passed at the national levels to fight the battle against counterfeiting and piracy, the situation does not seem to have improved. Counterfeiting and piracy is still largely prevalent in our economy and this raises the serious question as to whether the problem may never be solved.
Most pirated and counterfeited products are usually digitally transferred intellectual property such as software related goods, movies, music, games etc and luxury consumer goods such as watches, jewellery, sporting goods etc. The ordinary consumer cannot afford the high end prices for the original product and would rather pay a lower price for a pirated or counterfeited product.
According to investigation conducted in Atlanta, by Gallup Inc., a research group, 41% of the state’s consumers in the age group of 18-24 stated that they purchased a counterfeit or pirated product in the last 12 months. The report also states that out of all those purchasers who obtained counterfeit or pirated products in the last 12 months, 80% attributed the easy availability of the goods as the influencing factor in their purchase.
In this lies the root of the trouble for as long as there is market for pirated and counterfeited goods, the trouble remains. Therefore, the only possible way of eradicating this plague of IP theft lies in the choices of the ultimate consumer. Hence the need for widespread education to consumers of such pirated and counterfeit goods on his/her role to combat this issue.
According to the Gallup report, “majority of Americans greatly underestimate the economic impact of counterfeiting and piracy on the economy – 56.3 % of those surveyed believe the total economic impact is only between $1-50 billion” A vast majority of the public therefore need to be educated on the magnitude of the catastrophic effect of this plague. Apart from the millions of workers without jobs and the billions of dollars lost, counterfeit and pirated products are sub standard products that have not been adequately tested and FDI approved which can therefore be dangerous to the consumer, posing mild to life threatening safety risks. Extensive seminars and educative programs need to be held in schools, universities and on site work places to inform the public of the adversity caused by purchasing counterfeit and pirated goods. The only hope for eradicating this criminal market is to create more awareness on this issue where it matters most – in the mind of the consumer of the infringing product