Intellectual Property Crime: The Urgent Need for Global Attention
| Author | Sanmit Ahuja |
| DOI | http://doi.org/10.1111/j.1758-5899.2010.00023.x |
| Date | 01 October 2010 |
| Published date | 01 October 2010 |
Intellectual Property Crime: The
Urgent Need for Global Attention
Sanmit Ahuja
Chief Executive, eti Dynamics
In the last couple of months I have spent considerable time
with police officials in India. I am worried, very worried
about the conversations I have had with them which were
largely centred around the state of the informal economy,
in which Intellectual Property (IP) crime plays a huge part.
The most unsettling linkage is the one between the pro-
ceeds of IP crimes and terrorist activities. A senior police
officer with whom I have had extensive discussions on the
subject acknowledged some recent reports that many ter-
rorist organisations now source their funding through IP
crimes. According to him the terrorist outfits or organised
criminal networks do not operate in a vacuum but very
much in the real world. They need an interface with real
commerce in order to fund their nefarious activities. These
organisations are becoming increasingly sophisticated and
are beginning to control the majority of IP crimes that are
taking place, particularly in developing countries.
The officer claims that in his state alone (India has 28
states) rampant music piracy results in a massive loss to the
economy. He estimates that the size of the informal music
sector is at least 12 times the size of legitimate industry.
He does not stop there and quotes many more examples
from fake designer goods to more serious instances, such as
counterfeit drugs, food products and adulterated petrol,
which have major health and safety implications.
This analysis of the situation in India also applies to
other high-growth countries as well as some Organisation
for Economic Cooperation and Development (OECD)
countries. Most global surveys however frequently cite the
BRIC (Brazil, Russia, India and China) nations as the
worst IP offenders. The BRIC economies are playing a
major role in global economic growth and weak IP regimes
in these countries are a cause of major concern for compa-
nies that sell products into these markets.
What is the socioeconomic impact of IP crime?
IP crimes do more damage to a nation than is apparent on
the surface. This grand larceny has a huge impact on the
nation’s economy and society as a whole, notwithstanding
its role in fuelling crime generally. The World Health
Organisation (WHO) states that approximately 10 per cent
of all pharmaceutical drugs in the world are counterfeit,
rising to 60 per cent in certain poor and developing
nations. In India, consumer watchdogs point to thousands
of cases of adulteration in the food and beverage industry.
According to a report the daily sales of a particular brand
of Scotch whisky are greater than its monthly worldwide
sales. This is only possible if the real bottles have counter-
feit liquor in them. As a result the empty bottles of this
particular brand have a major resale value of 250 rupees
each (approximately 4 US dollars).
There are thousands of other cases that can be cited but
the net result of each of them is a lose-lose situation for all
stakeholders:
1. The industry loses major revenue streams because of
pirated and counterfeit goods.
2. As a result the government also suffers major loss of tax
revenues.
3. The creators and owners of IP, which may be different
entities from different nations, are not remunerated.
4. The consumers get poor value for money or in other
cases are cheated outright.
5. Due to the overall lack of monies collected, the IP eco-
system does not develop effectively.
6. The lack of an effective IP regime in a country is a
major deterrent to any R&D or IP related investments
coming into the country.
What is IP crime?
In order to deal with IP crimes the stakeholders must first
understand the subject matter in great depth. A textbook
definition states that an unauthorised use of someone’s
intellectual property that includes copyright, patent, trade
mark or design constitutes an IP infringement.
Most people think of music CDs and film DVDs when
they think of IP related crimes. Sadly, this is largely the
media’s doing, by providing more than their fair share of
coverage to branded goods and products that supposedly
evoke a greater public reaction. The less reported and more
serious crimes are in the areas of food products, everyday
consumer goods, automobile parts and manufactured goods.
Global Policy Volume 1 . Issue 3 . October 2010
Copyright 2010 London School of Economics and Political Science and John Wiley & Sons Ltd. Global Policy (2010) 1:3 doi: 10.1111/j.17 58-5899.2010.00023.x
Practitioner Commentary
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