Worldwide Market for Counterfeit Goods: $650 billion
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The Numbers:
Global sales of counterfeit medicines, 2005: $32 billion
What They Mean:
The British Parliamentary records for the hearings of 1785 find angry complaints about intellectual property rights violations. One witness is typical of many angry clothing-designers:
"Mr. William Kilburne being examined, said, That he is a Callicoe Printer, at Wallington in Surrey -- that he draws his own Patterns -- That his Patterns have been copied to his great Injury -- That out of the Number of Patterns he has drawn, several have not succeeded, and when any of them have pleased the public, base and mean Copies have been made immediately, to his very great Loss..."
Two centuries later, piracy and counterfeiting seem to be growing. Medicine is a typical, if especially alarming, example. The World Health Organization guesses that 25% of the medicines sold in developing countries (and perhaps 8%-10% of medicine sold worldwide) are counterfeit, implying a $32 billion international counterfeit medicine business. One result: five years ago, the Shenzhen Evening News reported that phony pills poison 192,000 Chinese men, women and children annually. Counterfeiting rates are low in rich countries, but the U.S. Food and Drug Administration was nonetheless investigating 58 counterfeit medicine cases in 2004 -- up from fewer than ten cases a year during the 1990s -- and the European Commission has found at least 170 different counterfeit medicines circulating in Europe. Counterfeit perfumes and cosmetics may be less scary, but are at least as repulsive; the U.K.-based Anti-Counterfeiting Group reports that seized counterfeit perfumes have contained ingredients ranging from pond-water to urine. Such groups compile lists of thousands of seized counterfeit products: clothes, auto parts, movies, DVDs, shoes, razors, musical recordings, sunglasses, teabags, batteries, electrical cords and many more.
Copyright industries, especially vulnerable to piracy, are also especially energetic in calculating piracy rates and financial losses. The International Intellectual Property Association's 2006 report surveys 68 countries with especially high piracy rates, and suggests a $15.8 billion piracy toll, twice the $8 billion estimate for 2000. This survey does not include countries with low piracy rates but high estimated financial losses; the Business Software Alliance's 2006 software piracy report, which does, estimates that 35% of the software working on world computers is pirated, and that the value of the pirated software is the equivalent of $34 billion in sales. The Motion Picture Association of America, meanwhile, finds $6.1 billion in worldwide piracy losses in 2005, equivalent to a quarter of the $23.2 billion in international box office receipts.
Reliable statistics on counterfeit sales are less easy to find. The U.S. Customs Service's seizure of $100 million worth of counterfeit goods at ports each year is a firm number, but only a tiny fraction of the counterfeit trade. (Customs' most recent survey traces 69% of its seized counterfeits to China.) The International Chamber of Commerce in Geneva believes worldwide sales of counterfeit goods is $650 billion a year, including local sales of counterfeit goods as well as exports. Assuming this figure is roughly accurate, the counterfeit business is equal to nearly half of America's $1.3 trillion in goods and services exports; all of the $600 billion in Latin America or Japanese exports; or half the global energy trade.
Further Reading:
Counterfeits:
Copyright piracy:
And:
William Kilburne's experience in the 1780s may carry some warning for counterfeit-heavy countries hoping to move up the economic ladder -- he believed that "by the Exportation of mean and inferior Copies to Foreign Markets, the Credit and Sale of our Manufactures are greatly diminished." A brief summary of Britain's 1785 copyright hearings: http://www.jstor.org/pss/871159
Book recommendation -- Illicit, by Moses Naim (editor of the Carnegie Endowment's Foreign Policy magazine), looks at the criminal side of the global economy, covering IPR piracy and counterfeiting, sex trafficking, drug dealing, and black-market weapons trade: http://www.amazon.com/gp/product0385513925/
/qid=1150207002/sr=2-1/
ref=pd_bbs_b_2_1/103-0121343-8787055?s=books&v=glance&n=283155