Impact on the global economy GET REAL RECOGNISE AND REJECT by alendar


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    Impact on the global economy
    Intellectual Property (IP) crime costs the global economy an estimated US$200 billion each
    year. This does not include digital piracy and domestically produced and consumed goods
    which, clearly, would amplify this sum by several hundred billion dollars more. The counterfeit
    goods trade being a black market makes it very difficult to calculate exactly the magnitude of
    the industry in Australia and worldwide, but official figures have estimated that counterfeit trade
    represents five to seven percent of the legal market.

    It is a problem that is escalating due to the opening of huge new economies such as Russia and
    Eastern Europe and the partial deregulation of market economies, namely China. It is a
    lucrative trade which has been wholly embraced by organised crime using complex production
    and supply networks filtering down to individuals at street level. This gives the counterfeit
    goods trade an air of insignificance, particularly when the face of counterfeiting is often the
    street vendor or market stall-holder, but this impression is deceptive.

    Data from the World Customs Organization and the European Commission shows an increase of
    88 percent in the seizure of counterfeit goods entering the European Union (EU) from 2000 to
    2006. In 2000 there were almost 68 million items seized and more than 128 million in 2006.

    The report of the European Commission concludes that the sector most severely disadvantaged
    by IP crime is the data processing sector, in which the trade of counterfeit goods hits an
    estimated 35 percent of the total market. This is followed closely by the audio-visual industry
    with 25 percent, toys at 12 percent, perfume 10 percent, pharmaceuticals six percent and
    clocks five percent.

    In employment terms, these figures equate to hundreds of thousands of jobs. The EU calculates
    an annual loss of 100,000 jobs due to counterfeiting and, in the US, 750,000 jobs are estimated
    to have been lost.

    In Australia, the local film industry is hit hard by IP crime. The Australian Federation Against
    Copyright Theft (AFACT) indicates that 50,000 Australian film and television jobs are under
    threat due to piracy, which cost the domestic film industry more than $200 million in 2005. The
    illegal distribution of unauthorised copies of films rose from four percent of the total market in
    2000 to approximately 11 percent in 2005. Further to this, Australian Customs seized in excess
    of 40,000 pirate DVDs imported into Australia in 2004, a 185 percent increase on the previous

    While counterfeiting and piracy may seem harmless enough, it is an illegal industry that is
    based on corruption, exploitation, theft and fraud. It deprives the IP owner of the right to make
    a fair profit on their work, defrauds the Commonwealth of revenue and denies the consumer
    value for money because counterfeit goods are poor quality and a threat to health and safety.


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