Monday 16 November 2009

But how much does piracy really cost?

Last Monday Intellectual Property Watch posted this item on a subject very close to my heart. Penned by Catherine Saez, "Panel Calls For Disclosure Of Industry Methodology Assessing Losses To Piracy" raises the issue of greater transparency in the evaluation of piracy and assessments of broader social implications -- decades after industry victim self-assessments of loss were first offered as arguments for tougher laws and more cogent means of enforcing them. According to Ms Seaz's report:
"Co-organised by the International Centre for Trade and Sustainable Development (ICTSD) and the Social Science Research Council (SSRC), the event presented the findings of recent research on piracy and IP enforcement in developing countries. The event was held during the 2-4 November World Intellectual Property Organization (WIPO) Advisory Committee on Enforcement.

SSRC presented a research project focused on copyright piracy involving 25 researchers in seven countries and aimed at providing empirical research on piracy.

Industry research has “owned” the debate for a number of years, said Joe Karaganis, program director for media and democracy at SSRC. In the field of copyright, research is difficult and requires a global network, which is accessible by the copyright industry.

The research project seeks to bring the developing country perspective into a serious debate on developed country losses, primarily losses in the United States due to piracy outside the US.

Karaganis noted that piracy also has obvious social benefits, which explains its persistence. In developing countries, piracy is often the primary means to access media goods.

SSRC has concerns about the integrity of industry research, said Karaganis, although there are genuine and valuable research projects in the industry. There is a need for industry research to be documented, to know the inputs used by industry and its methodology, he said, as more transparency in the process would add credibility to the results. SSRC recommended that WIPO put pressure on industry to display their research methodology. ...

In organising this event, ICTSD said it considered Recommendation 45 of the WIPO Development Agenda, which calls for members “to approach intellectual property enforcement in the context of broader societal interests and especially development oriented concerns,” in accordance with Article 7 of the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement".
IP Finance will be watching this debate closely, since this author feels that transparency is valuable on both sides. If, for example, the figures are clearly demonstrated to relate to loss of sale of legitimate product at the factory gate, at wholesale level or at retail prices, the sums are very different. Likewise there are issues of potential double-accounting when the same counterfeit item incorporates a multiplicity of IP rights. It is also helpful to look at the loss to the revenues and the damage caused to the fabric of society by the importation, purchase and consumption of counterfeit goods. The cost-benefit analysis is quite different in respect of different types of goods: fake fashionwear is one thing, useless HIV medicines are another.

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