Internet a factor in counterfeiting

25 Oct 2006

CALGARY: According to the 2006 Mid-Year Counterfeit & Piracy Intelligence Report just released by Gieschen Consultancy, over the first six months of 2006, a total value of US$699.3 million of counterfeit and pirated goods, specifically intellectual property theft, were discovered from 760 incidents in 69 countries. Major links to drugs, weapons and deaths were uncovered and a detailed analysis reveals the Internet is becoming a major factor in this illicit trade. Top brands counterfeited are also reported.

The report is derived from BASCAP's Daily Counterfeit & Piracy Intelligence Report statistics, compiled over the first half of 2006.

Counterfeiting and piracy affects consumers, businesses, governments and impacts economies in a negative manner. According to Glen Gieschen, counterfeit intelligence manager, "This activity has major implications upon job creation and sustainability, consumer health, safety and security, and is driving serious criminal activity into this seemingly innocent crime.

"The greatest misconception about counterfeiting is that the impact is negligible; however, the truth is far different. Consumers who are unaware they are purchasing fake products and those who are actively seeking them have consumed adulterated drugs and died, installed fake products in their vehicles which reduce its life or cause bodily injury when they malfunction."

Gieschen continues, "We have documented an endless number of instances where these bogus items result in serious problems, large and small for consumers. Recently, counterfeit airline parts were discovered in Russia which, as a passenger, is a concern. When seizures are made of bootleg music, software, and films, it is becoming a frequent occurrence to discover illegal drugs and weapons. In some cases, phoney items are sold by illegal immigrants to support their families and fund causes in their homelands. When you purchase these items, you have no idea of the type of people you are supporting, where these funds are going and for what purpose."

The report also analyses the use of the Internet in networking and organising the activity of counterfeiters in addition to providing unregulated and competitive advantages which legitimate businesses are unable to use through trade boards, spam, auctions and cyber outlets.

The report's conclusions are based on data obtained from actual counterfeit and piracy activity:

Countries, such as China and Russia, export more counterfeit goods than they seize domestically.
The US and UK are more effective at enforcing intellectual property rights than other countries.
5% of all intellectual property theft is linked to other serious criminal activity such as drugs, thefts, and weapons offences.
Counterfeiters are now cross-selling different brands with different types of fake goods and in some cases are dealing illicit items with the counterfeits.
14% of counterfeit investigations now involve the use of the Internet.
The Internet is being used by all types of counterfeiters to network and organise their activity.
Trademark and copyright goods are counterfeited in nearly equal proportions.

To view the 2006 Mid-Year Global Intellectual Property Counterfeit & Piracy Report, go to www.goldsec.com/PR/06-10-24-2.htm.

To subscribe to the BASCAP Counterfeit & Piracy Intelligence Reports, go to www.bascap.com/news/index.html.