Intellectual property theft crippling U.S. business says report
August 6, 2012
• Fraudsters are often based in China
• ‘Counterfeiting and piracy have become increasingly widespread’
Intellectual property theft is throttling America’s economic growth and the country’s ability to create jobs, says a new report from the Congressional Joint Economic Committee.
The thievery attributed to counterfeiting and piracy is causing significant revenue losses for corporations, consumers and taxpayers, the report says.
“Counterfeiting and piracy have become increasingly widespread, especially from China, hampering innovation and competitiveness and costing America jobs at a time when far too many are looking for work,” says U.S. Sen. Bob Casey, D-Pa., chairman of the Joint Economic Committee. “As our economy continues to recover, we must fight to alleviate roadblocks to growth like IP infringement, so that our businesses grow and create jobs.”
Protecting intellectual property is crucial for protecting and creating American jobs, says the report, noting that IP-intensive industries account for nearly 20 percent of the U.S. workforce and a third of GDP (as of 2010), economic activity that is at risk from theft and cheating. IP-intensive industries have higher wages, contribute more to trade and generate greater sales per employee than non-IP intensive industries.
Not only are jobs and businesses harmed by IP infringement, consumers are put at risk by lower quality counterfeit goods, the report says.
Some of the counterfeits include medication that could pose potential health and safety risks.
IP theft has risen in recent years, the report finds. The amount of cases investigated by the United States International Trade Commission rose by 80.6 percent in 2010 and 23.2 percent in 2011. While the problem is worldwide, China accounts for the vast majority of pirated goods seized at the U.S. border, says the report.
Small businesses, often said to be the backbone of the nation’s economy, can lack the budget and resources to adequately defend themselves against IP theft or pursue enforcement action against losses, the report notes. While small businesses represent 79 percent of all businesses in the country, only 10.5 percent have issued IP theft complaints.
Resolution of infringement complaints is also hampered by a lengthy process. Nearly one-third of all submitted cases to the U.S. ITC took over a year to resolve, the report says.