The Government Accountability Office (GAO) this week issued a “Report to Congressional Committees: INTELLECTUAL PROPERTY, Observations on Efforts to Quantify the Economic Effects of Counterfeit and Pirated Goods.” Congress required this report via the PRO-IP Act, passed into law in October of 2008.
The Act “directed GAO to provide information on the quantification of the impacts of counterfeit and pirated goods.” As part of that directive “GAO (1) examined existing research on the effects of counterfeiting and piracy on consumers, industries, government, and the U.S. economy; and (2) identified insights gained from efforts to quantify the effects of counterfeiting and piracy on the U.S. economy.” GAO’s examination included IPI’s economic analysis and study “The True Cost of Copyright Industry Piracy to the U.S. Economy”
GAO’s report makes clear the economic challenges posed by the theft of intellectual property. Several substantive economic studies were examined and were found to be, in the way of all economic analysis, sufficiently illuminating when it came to making clear that real economic harm does—surprise, surprise—result from theft, even if an exact accounting of total harm is difficult to ascertain.
This makes sense, and IPI has been making this same argument for several years. Criminals are not likely to file with the IRS to declare their ill-gotten gains, and in fact many industries are reluctant to disclose the full extent of theft and counterfeiting for various reasons.
The polemic hyperbole of those who support IP theft, or at least do not find it problematic, is also mentioned in the report, apparently as a means to provide “balance,” but nothing more and notably no economic studies cited to support any of the unsubstantiated claims, such as that theft actually is good for the economy.
The ultimate finding is that counterfeiting and piracy is a significant problem and it does negatively impact our economy and hence each of us. “Each [economic] method has limitations, and most experts observed that it is difficult, if not impossible, to quantify the economy-wide impacts. Nonetheless, research in specific industries suggests that the problem is sizeable, which is of particular concern as many U.S. industries are leaders in the creation of intellectual property.”