Sunday, April 18, 2010

Pro-IP Act of 2008 - GAO Report on Counterfeits and Counterfeit Statistics

Loren Yager, Director of International Affairs and Trade of the Government Accountability Office (GAO) recently issued a report to Congress that was mandated by the Pro-IP Act of 2008 titled:  Intellectual Property:  Observations on Efforts to Quantify the Economic Effects of Counterfeit and Pirated Goods.  The 41-page report is found here.

The report makes no recommendations and is a follow up of another GAO report issued in March 2008 pursuant to a directive in the Pro-IP Act of 2008 titled Intellectual Property: Federal Enforcement Has Generally Increased, but Assessing Performance Could Strengthen Law Enforcement Efforts found here.
That report made a lot of sensible recommendations to law enforcement.

But the new GAO Report debunks all of the statistics thrown around by industry relating to the amount of IP infringement and its effects on the economy.   It basically concludes that both industry and government are simply making up numbers that have no basis in fact.  It contains a good simple discussion of the government agencies involved in the issue of infringement and their relative functions.  For example, it looks at the OECD "Rule of Thumb" that 5-7% of all commerce is in counterfeits and finds no factual basis for this.  The GAO looks at other statistics attributed to governmental agencies and finds all of them to have no basis in fact.

Fake pharmaceuticals pose a particular problem that I have not studied and that have truly life-threatening consequences.  You will recall the American antihero played by Orson Welles in The Third Man and his role in fake pharmaceuticals - a crime of tremendous horror in one of the greatest films ever made.

But on the copyright end, it is really too bad that the GAO didn't count Prof. William Patry and his excellent Moral Panics and the Copyright Wars among its experts and sources consulted.  In the field of copyright Prof. Patry has gathered more empirical specifics on the economic arguments involved in copyright issues and on the effects of infringement on the U.S. economy.

In Moral Panics Chapter on How the Copyright Wars Are Being Fought and Why, Patry's section titled "Chicken Little and False Figures" - Patry performs a debunking of trade industry statistics similar to that of the GAO. He also debunks the term "pirated" goods when used as a metaphor for copyright infringement and decries industry attempts to convince Congress that downloading a song is somehow connected to terrorism.

I would like to see studies broken down by industry and arguments broken down by product.

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