“Fakes,” or counterfeit products, are a growing menace that deplete resources, threaten jobs and endanger lives. 

A report compiled by the Organization for Economic Cooperation and Development (OECD) says that imports of counterfeit and pirated goods are worth nearly half a trillion dollars a year, or around 2.5% of global imports. That is about the entire GDP of Austria, or of Ireland and the Czech Republic combined.

The U.S., Italian and French brands have been the hardest hit, and “many of the proceeds going to organised crime.” The 2016 report was co-authored by the EU’s Intellectual Property Office. China also is in the top 12 (see graph below).

Five-percent are Fakes

“Trade in Counterfeit and Pirated Goods: Mapping the Economic Impact” puts the value of imported fake goods worldwide at $461 billion in 2013, compared with total imports in world trade of $17.9 trillion.

Up to 5% of goods imported into the European Union are fakes, the report stated. Most originate in middle-income or emerging countries, with China the top producer.

“Transit points include economies with very weak governance and having a strong presence of organized crime or even terrorist networks (e.g. Afghanistan or Syria).”

“Given the fundamental economic importance of IP, counterfeiting and piracy must be directly targeted as a threat to sustainable IP-based business models,” concludes the OECD report.

China may be making great strides in domestic patent protection (see China is Poised to Overtake the U.S. as the Leading Patent System) with low injunction hurdles and high respect for foreign-held rights, but as of 2013, it was responsible for almost two-thirds of global counterfeits, based on the percent of seizures documented.

Missing: Content and Invention Theft

Ironically, the Trade in Counterfeit and Pirated Goods: Mapping the Economic Impact, does not mention content sharing or copying, copyright violations, as a global threat.

It also does not address the economic impact of products being falsely sold as original that are infringing other businesses’ patents.

For those interested, the 2017 OECD Global Anti-Corruption and Integrity Forum will be held this year in Paris, March 30-31. For more information go here.

 

Image source: OECD report