Governments 'must do more to fight counterfeiting and piracy'

Global counterfeiting and piracy will continue to grow at a shocking rate over the next five years, hitting a level of $1.9trn to $2.8trn by 2022, says a new report.

Factor in the impact of these illicit activities to global economies in terms of lost revenues and job losses and the impact the world's economy by $4.2trn and cost more than 5m people their jobs, says the report from the International Chamber of Commerce (ICC) and the International Trademark Association (INTA).

The report - The economic impacts of counterfeiting and piracy – also concludes that governments "must do a better job to support the central role that intellectual property plays in driving innovation, development and jobs," according to Jeffrey Hardy, director of the ICC's Business Action To Stop Counterfeiting and Piracy (BASCAP).

The report builds on findings of an often-cited Organization for Economic Cooperation and Development (OECD) and European Union Intellectual Property Office (EUIPO) report, which estimated that trade in counterfeit and pirated products accounted for as much as 2.5 per cent of global trade in 2013.

Breaking down the forecast, it predicts the total international trade in counterfeit and pirated goods will swell from $461bn in 2013 to $991bn in 2022, with digital piracy of movies, music and software rising from $213bn to somewhere between $384bn and $856bn.

Total domestically produced and consumed counterfeit and pirated goods – in other words those that don't enter international trade – will reach $524bn-$959bn from a 2013 estimate of $249bn-$456bn.

Aside from millions of job losses from the displacement of legitimate economic activity, foregone economic growth will rise from $30bn to $54bn over the period as a result of this activity, says the report.

Whilst acknowledging that it is hard to get a reliable picture of the scale of counterfeiting and piracy as the perpetrators operate outside the law, "we've attempted to examine the measurement of this illegal activity in a more comprehensive way than has been done to date," said Amar Breckenridge, senior associate at Frontier Economics," which compiled the report.

He added that others can now use the methodologies "for more completely and accurately estimating the economic and social impacts of counterfeiting and piracy."

Erosion of IP rights is associated with poorer standards of governance and transparency, reducing incentives to invest or innovate, impacting on the long-term growth path of a country and reducing efficiency, says the report.

"The unchecked growth of counterfeiting and piracy already has created an enormous drain on the global economy," said Etienne Sanz de Acedo, chief executive of the INTA.

"This illegal business activity deprives governments of revenues for vital public services, forces higher burdens on taxpayers, dislocates hundreds of thousands of legitimate jobs and exposes consumers to dangerous and ineffective products."