Tuesday, May 08, 2007

Cost of Piracy Overestimated Says OECD, Underestimated Says ICC

Steve Whitehouse of Thomson Financial reports about an unpublished Organisation for Economic Cooperation and Development (OECD) study which puts trade losses in 2005 at up to 200 billion US dollar, considerably lower than the 600 billion US dollars estimated by the International Chamber of Commerce. Read Whitehouse's article via Forbes.com here.

US officials estimate the costs for companies [1] around the globe. of China’s counterfeit and piracy exports as between US $ 50 [2] and 60 billion [3] a year.

However, objective statistics about IP in China are a great challenge for scholars. That's why IP Dragon proposed to use the Enforcement/Infringement ratio, for it does not give absolute figures, but at least gives an indication of whether the situation improves or deteriorates, read more here.

China is not the only one to blame for its lack of transparency. Trade associations and lobby groups have their own agenda. Some argue that Business Software Alliance has misrepresented the facts [4] or that Motion Picture Association of America claims a right to misrepresent the facts [5].

[1] This excludes the lost tax revenues for governments, lost employment, and extra costs for health and safety.
[2] “U.S. officials say its exports cost legitimate producers worldwide up to $50 billion a year in lost potential sales,” Associated Press, ‘China’s piracy hurting its own industries’, July 7, 2006, available at: http://www.msnbc.msn.com/id/13617619.
[3] “International companies are losing more than $60 billion a year because of piracy in China, according to the U.S. government,” ‘U.S., EU to Fight Counterfeits From China, Russia’, Bloomberg, June 19, 2006, available at: http://www.bloomberg.com/apps/news?pid=10000100&sid=aTSjqiimKzYc&refer=germany.
[4] “BSA or just BS”, Economist, May 19, 2005, available at: http://www.economist.com/business/displaystory.cfm?story_id=E1_PJJPQNS.
[5] Ryan Singel, “Copyright Groups Continue Fight Against Anti-Lying and Spying Bill-Updated”, Wired Thread Level, April 11, 2007, available at: http://blog.wired.com/27bstroke6/2007/04/copyright_group.html.

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