Consumers Understand IP

A new report was released today by The American Consumer Institute, detailing the views and opinions held by American consumers on the issues of intellectual property (IP) protection and pirated goods. The study surveyed 1,000 US adults on their thoughts ranging on issues from innovation and creativity to corporate espionage and trade secrets to the selling of pirated goods online.

Overall, the survey shows that an overwhelming majority of Americans see IP as a good and necessary thing to protect, and that they realize the detrimental effect that counterfeiting can have on the economy. It shows a sound understanding of the need for innovation and rewarding of creativity.

In addition to the survey, the report comes with some interesting data points to show the job losses and economic losses to industry that counterfeiting and piracy can inflict on an economy. According to the survey, counterfeiting costs US businesses over $200 billion each year and accounts for over 750,000 in lost jobs.

Worldwide, it’s just as bad as it’s estimated that $1.7 trillion in counterfeit goods will be marketed globally by 2015.

These economic problems ultimately harm the consumer, as the study shows, and consumers know it, as the survey shows. Ninety percent of respondents said they understood the harm counterfeiting causes to the economy, with 91% saying that there should be strong laws and enforcement in place to protect IP.

The survey also delves into specific areas where counterfeiting and piracy have harmed not only the economy, but also where it could do serious harm to health or national security. Counterfeit medicine is a serious problem as it jeopardizes the health of consumers—and consumers understand that, with 86% agreeing that it could be harmful to Americans, and 83% supporting penalties for those selling fake medicine.

These counterfeit medicines often don’t hold the ingredients they claim to possess, meaning these counterfeits could be deadly. According to the study, a counterfeit of a blood thinner known as Heparin caused 81 deaths in 2008 before it was discovered. The harm is worldwide, as cheaper medicines are in great need in developing areas, which explains why counterfeit medicines often find their ways there. In 2011, 64% of all anti-malaria drugs in Nigeria were found to be counterfeit.

Counterfeiting can also be harmful to national security, as the study shows. A Senate report recently showed at least 1,800 cases of fake military parts in the supply chain, with 70% of these parts originating in China. This is a serious problem, as many see China as a main geo-political foe. Most respondents to the survey agree, as 89% said they believe counterfeit military parts could harm national security.

Ultimately, consumers understand that IP protection is important to fostering innovation and creativity and safety, with 86% responding positively that IP protection is a good way to encourage original products and new works. They also agree that counterfeit goods harm American job creation, with 89% saying that the sale of fake goods would negatively affect the job market and 90% saying it would negatively affect the US economy.

This study and the survey results show a clear understanding on the part of consumers of the importance of protecting IP from counterfeiter, piracy and other types of fraud. I hope policymakers are listening.

Zack Christenson writes on digital tech issues for The American Consumer Institute Center for Citizen Research, an educational and research nonprofit.  For more information, visit www.theamericanconsumer.org.

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