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Global Counterfeiters are Stealing your Well-Being
For the first time in nearly a decade, new statistics update our understanding of the global counterfeit threat. The results are frightening. The Organization for Economic Cooperation and Development (OECD) finds that global sales of counterfeit or pirated products amounts to nearly half a trillion dollars annually, or two-and-a-half percent of global GDP. The study finds the problem is even more pronounced in regions such as the European Union, where counterfeit could amount to as much as five percent of all imports. In other words, one in every 20 dollars Europeans spend on globally traded products is simply stolen—or worse.
The worse for consumers is this:
The worse for business is this:
The worse for government is this:
The worst: Ultimately, the market system, including especially online commerce, which has enabled so many quality of life enhancements, breaks down because consumer trust in the market is irreparably compromised.
Counterfeit is a worsening problem. The last time the OECD issued these statistics using 2005, the dollar figure for global counterfeits was $200 billion; today, using 2013 data, the total has risen to $461 billion. The OECD found that counterfeit and pirated products plague virtually all economies and all continents. And unfortunately, the enforcement against such illicit trade is haphazard at best.
At the same time, the challenge of stopping counterfeits has become even more complex for global customs authorities. The illicit trade is no longer concentrated by container load at large ports of entry. Today, counterfeiters are exploiting the availability of international small package shipping. Knock-offs have moved from a mostly wholesale to an increasingly retail business, exponentially exacerbating the tracking problem for border authorities.
And too often, those authorities lack the tools they need to carry out their enforcement responsibilities. On the U.S. Chamber’s International IP Index, measuring IP strength in key global markets, few of the economies measured provide adequate statutory authority for an effective enforcement deterrent to counterfeiters. Among the gaps in countries’ intellectual property (IP) laws were a lack of pre-established civil damages and criminal penalties for infringement, or even the legal mechanisms for the IP rights holder to seek remedies. At the most basic level, customs authorities often lack the authority to seize counterfeit goods at the border, even if officials have the specialized training needed to identify the fakes. Beyond the legal mandate, authorities frequently lack the basic resources to fund enforcement efforts.
Thankfully, with its new global counterfeit data, the OECD has made it clearer than ever that the costs of counterfeiting and piracy are widespread and too steep to ignore. We all—consumers, business, and government—have an interest and a role to play. This World IP Day, April 26, let’s all pledge to do our part to shop carefully, collaborate productively, and enforce thoroughly to end the illicit trade in counterfeit products.
For more information on the business value and consumer protection provided by trademarks, please visit the GIPC’s Global Brand Council homepage.
ABOUT THE AUTHOR
Patrick Kilbride is Executive Director of International IP for the Global Intellectual Property Center.