Measuring Counterfeiting and Piracy

Cancun, 1 – 3 December 2009

Piotr StryszowskiStructural Policy DivisionDirectorate for Science, Technology and IndustryOECD

The views expressed are those of the author in his private capacity and do not necessarily represent those of the OECD or its Member governments.

The OECD Project

Economic Impact of Counterfeiting and Piracy

Phase 1: Counterfeit and pirated products

• Tangible products that infringe trademarks, copyrights, patents or design rights.

• Report published in May 2008

• Quantitative update published in November 2009

Phase 2: Digital piracy

• Digitally transmitted pirated products (i.e., piracy not involving hard media).

• Report published in June 2009

Phase 3: Other IPR infringements

• Yet to be scoped and funded.

Measurement

Measurement needs rigorous methodologies• Magnitude – issue of measurement unit (volume, value,

number of seizures)• Effects – on employment, profits, growth, etc.

Data is hard to find• activities are illicit and clandestine• existing data is sparse, incomplete and inconsistent

So far measurement of counterfeiting and piracy is a data driven exercise (not methodology based)

OECD Project of counterfeiting an piracy

Phase 1: Counterfeit and pirated products

Tangible products that infringe trademarks, copyrights, patents or design rights

Co-operation with governments, business (e.g. BASCAP), civil society and international institutions, (WCO, WIPO, Interpol, at global and regional level )

Surveys undertaken (governments, industry, customs authorities with the assistance of the World Customs Organisation, WCO)

Methodology developed to assess the magnitude of the problem in international trade, principally using statistics on customs seizures

• Global scale• All industries (HS categories)

Magnitude of the problem

Customs data

Customs data

Customs data

Customs data

“T.R.I.C.”matrix

Trade data

Absolutefigure

Indices products,

economies

Magnitude of the problem (index)

Seizures of imported counterfeit and pirated products from the top 20 source economies

Region of top 20 source economies

Number of source economies in region

Seizures (% of total)

Asia (excl. Middle East) 12 69.7Middle East 2 4.1Africa 2 1.8Europe 2 1.7North America 1 1.1South America 1 0.8

Top sources 20 79.2

Magnitude of the problem (index)

Seizure Rate of Goods by Harmonised System Chapters

million USD pct

1 61,62 Articles of apparel and clothing accessories 30.6 247,851 2.82 85 Electrical machinery & equip. & parts, telecommunication equip., sound recorders, television recorders 26.8 1,264,702 14.33 42 Articles of leather, saddlery & harness, travel goods, handbags, articles of gut 7.9 34,777 0.44 64 Footwear, gaiters, & the like 5.4 64,153 0.75 24 Tobacco & manufactured tobacco substitutes 5.4 24,346 0.36 91 Clocks & watches & parts thereof 4.0 22,974 0.37 95 Toys, games & sports equip., parts & accessories 3.7 70,264 0.88 90 Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments & accessories 1.9 293,642 3.39 48 Paper & paperboard, articles of paper pulp 1.6 128,237 1.510 94 Furniture, bedding, cushions, lamps & lightning fittings, illuminated signs, nameplates & the like,… 1.5 119,531 1.411 71 Pearls, stones, prec. metals, imitation jewelry, coins 1.3 165,441 1.912 96 Miscellaneous manufactured articles 1.2 17,567 0.213 65 Headgear & other parts 1.2 4,738 0.114 84 Nuclear reactors, boilers, machinery & mechanical appliances, computers 1.2 1,212,512 13.715 33 Oils & resinoids, perfumery, cosmetics or toilet preparations 1.0 49,240 0.6

Top 5 product headings 76.1 1,635,828 18.5All product headings above 94.6 3,719,972 42.1

World tradeNo. HS Description of HS chapter

Seizure pct.

Magnitude of the problem (absolute number)

Up to US$ 200 billion of international trade could have been in counterfeit or pirated products in 2005

The figure does not include – domestically produced and consumed products– non-tangible pirated digital products

If added, the figure could be several hundred billion dollars higher

Earlier figure of 5-7% of world trade lacks rigorous foundation and could not be confirmed or disproved

Magnitude of the problem

“T.R.I.C.”matrix

NEW Trade data2000-2007

Absolutefigure

Indices products,

economies

• Update of quantitative Phase I results (November 2009)

• Trade data 2000-2007

Magnitude of the problem (absolute number)

Trade in counterfeit and pirated goods grew steadily over the period 2000 – 2007

It could amount to up to USD 250 billion in 2007

USD 0 bn

USD 50 bn

USD 100 bn

USD 150 bn

USD 200 bn

USD 250 bn

USD 300 bn

2000 2001 2002 2003 2004 2005 2006 2007

Magnitude of the problem (absolute number)

The share of counterfeit and pirated goods in world trade is also estimated to have increased from 1.85% in 2000 to 1.95% in 2007.

These figures do not include domestically produced and consumed products, or non-tangible pirated digital products.

1.65%

1.70%

1.75%

1.80%

1.85%

1.90%

1.95%

2.00%

2.05%

2000 2001 2002 2003 2004 2005 2006 2007

Improving data collection

• This study has highlighted just how poor data really is.• Governments and industry can help by maximizing the

value of data by ensuring that it is– systematically collected– comparable– Comprehensive

• The reporting framework developed by the World Customs Organization (WCO) offers a useful template by other law enforcement agencies and industry

• Many cited estimates of the scope and magnitude (and especially impact) of counterfeiting and piracy appear to be guesswork.

Piotr StryszowskiDirectorate for Science,

Technology and Industry

for further information

>>> Contact us

OECD2, rue André-Pascal75775 Paris CEDEX 16France

Email: Piotr.Stryszowski@oecd.orgPhone: (+33) 1 4524 9130Fax: (+33) 1 4430 6257Website: www.oecd.org/sti/counterfeiting