The 10 Things Every Practitioner Should Know about Anti-Counterfeiting and Anti-Piracy Protection

By Olson, Bradley J.; Graham, Michael R. et al. | The Journal of High Technology Law, July 2007 | Go to article overview

The 10 Things Every Practitioner Should Know about Anti-Counterfeiting and Anti-Piracy Protection


Olson, Bradley J., Graham, Michael R., Maltbie, John, Epperson, Ron, The Journal of High Technology Law


Abstract

This article discusses the global problem of counterfeiting and piracy and the ensuing negative impact on the global economy. The main thesis proposes that companies are not faced with the issue of "if' their goods will be counterfeited or pirated, but rather it is a matter of "when." Strategies are presented that every corporation and practitioner in the legal field can use to combat the growing counterfeiting and piracy problem. Recommendations include identifying and registering intellectual property. This discussion is followed by practical guidance as to how to utilize the federal and international agencies that already have programs in place to combat the international flow of counterfeit and pirated goods. Various federal civil and criminal statutes are discussed in depth, presenting both their strengths and practical shortcomings. Pending U.S. federal legislation is discussed to provide an overview of powerful statutory tools still in the developmental stage. Pending legislation may be further modified by trade associations and private lobbying interests to strengthen the impact needed to help reduce the ever-increasing international counterfeiting and piracy problem.

I. Counterfeiting and Piracy Pose a Substantial Threat to Intellectual Property and International Trade

Global intellectual property theft and commerce in pirated and counterfeit goods continue to grow to alarming proportions, creating a threat to economies worldwide. (1) Counterfeiting has evolved from a localized cottage industry concentrating on the copying of high-end designer goods into a sophisticated black-market industry involving the manufacturing and sale of counterfeit versions of an unimaginable number of products. (2) Counterfeiting on such a global scale has a broad negative effect on companies that produce legitimate goods. (3) Consumers are also harmed when they unwittingly purchasing counterfeit goods. (4) Governments are harmed by the decrease in tax revenues and future investment. (5) One example of the serious nature of counterfeiting is the significant increase in the manufacturing and distribution of counterfeit pharmaceuticals. (6) This presents special concerns because of the safety risks to the public. (7) The Office of the U. S. Trade Representative states in their 2006 annual report that the proliferation of counterfeit pharmaceutical manufacturing in China and Russia is steadily on the rise, and similar increases are occurring in many more countries. (8)

Likewise, the U.S. Chamber of Commerce estimates that intellectual property theft costs domestic companies between $200-$250 billion a year in lost revenues and has resulted in a loss of 750,000 jobs in the United States. (9) Counterfeit goods make up an estimated five to seven percent of the total world trade, resulting in lost economic opportunities domestically and abroad. (10) The problems of counterfeiting and piracy go beyond the mere manufacturing, distribution, and sale of unauthorized goods. (11) Nearly all industries are affected, from apparel and footwear, high-tech industrial goods, medicines, automotive, food and beverages, and cosmetics to copyrighted works, including entertainment and business software, movies, music, and books. (12)

The U.S. Commerce Department also estimates that the U.S. automotive industry has been particularly hard hit by counterfeiting, as that industry could conceivably hire an estimated 200,000 additional workers if the sale of counterfeit auto parts were curtailed. (13) Counterfeiting and piracy have eliminated jobs in heavy manufacturing industries such as farm and industrial equipment, consumer goods industries such as clothing and footwear, and pharmaceuticals. (14)

Few industries have been harder hit by piracy than the software sector. The Business Software Alliance (BSA) estimates that worldwide, 36% of the software installed on computers in 2003 was counterfeit. …

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