How It Hurts our Economy and Why It Needs to be Addressed Head-On
The International AntiCounterfeiting Coalition (IACC) is the world’s largest non-profit organization devoted solely to protecting intellectual property and deterring counterfeiting, estimated to be a $600 billion a year problem worldwide.
Counterfeiting is big business. And it is a problem that is fueled by consumer demand. The IACC says counterfeiting has grown over 10,000 percent in the past two decades alone.
People who purchase counterfeit merchandise fund organized crime and terrorist organizations. They contribute to unemployment, create budget deficits and compromise the future of this country in the global economy.
Counterfeiters are hardened criminals. They exploit consumers, businesses, both large and small, inventors, artists and children laboring in sweatshops in Third World countries.
According to the IACC:
- Counterfeiting costs U.S. businesses $200 billion to $250 billion annually
- Counterfeit merchandise is directly responsible for the loss of more than 750,000 American jobs
- Since 1982, the global trade in illegitimate goods has increased from $5.5 billion to approximately $600 billion annually
- Approximately 5%-7% of the world trade is in counterfeit goods
- U.S. companies suffer $9 billion in trade losses due to international copyright piracy
- Counterfeiting poses a threat to global health and safety
- The Food and Drug Administration estimates that counterfeit drugs account for 10% of all drugs sold in the United States
- The Federal Aviation Administration estimates that 2% of the 26 million airline parts installed each year are counterfeit, which equals approximately 520,000 parts
Penalties for Counterfeiting
Counterfeiting also carries steep penalties. In 2008, Congress enacted and President Bush signed into law the Prioritizing Resources and Organization for Intellectual Property Act of 2008, better known as the “PRO-IP Act.”
The PRO-IP Act includes more resources and tougher penalties to fight counterfeiting including:
- An “IP Czar” – The “Intellectual Property Enforcement Coordinator,” replaced an inter-agency group that carried out the same function and is to be on a par with the U.S. Trade Representative and “Drug Czar.”
- Doubled Statutory Damages for Counterfeiting – Under U.S. law, in cases where a trademark is not merely infringed but counterfeited, the mark holder is entitled to “statutory damages,” which may be awarded without proof of actual harm. The PRO-IP Act doubles these statutory damages to a range of $1,000 to $10,000 and up to $2 million if the counterfeiting was “willful.”
- Increased Criminal Counterfeiting Penalties – In cases where an act of counterfeiting would also knowingly or recklessly cause (or attempt to cause) death or “serious bodily injury,” the counterfeiter may be imprisoned for life or up to 20 years, respectively. Examples cited by Congress include counterfeit pharmaceuticals, UL labels and brake pads.
- Expansion of Government Power to Seize Equipment – In criminal enforcement matters, equipment used in the commission of the criminal infringement may be seized and forfeited.
Intellectual Property Law Practice
The Morgan Law Firm assists companies with pursuing counterfeiters in civil actions. The Firm also has a limited criminal defense practice representing individuals and companies accused of criminal IP counterfeiting. Please read more about our Intellectual Property Law practice.
