The Economic Threat From Counterfeiting

A few weeks ago PSFK read that the LVMH group – which includes Louis Vuitton, Dior, Givenchy and Celine – is also planning to take on the imitators”>news in the UK’s Telegraph about LVMH’s decision to fight the counterfeiters. The task may be a little harder than the luxury group thinks, according to another report in the international Herald Tribune.

According to the paper the $600 Billion Counterfeiting business is "out of control" and argues that the business is an economic threat due to the stifling impact on innovation and entrepreneurs.

Almost every successful product – pharmaceuticals, toys, spare parts
for cars and aircraft, software, entertainment products, clothes,
cosmetics and fashion accessories – is being copied. All regions are
now both production and consumption areas, and almost no country is
unaffected by the problem.

 

Intellectual property theft has become a sophisticated industry using high technology, the Internet, and the networks and know-how of organized
crime. Counterfeiting and piracy are more profitable than narcotics but
without the risks; they are becoming the number one crime of the 21st
century. Combating them has become a priority for society, and not just
for intellectual property right holders.

 

Knowledge-based industries are the keystone of the economic strategies
of many countries at different stages of economic development.
Developed countries need them to create jobs; developing economies need
them to move up the value chain.

 

Intellectual property theft stifles innovation and deters honest local
entrepreneurs from investing in product and market development,
especially in knowledge-based industries. The most affected victims of
intellectual property theft are often small local entrepreneurs who are
successful enough to be copied, but who do not have the resources or
know-how to defend themselves.

 

Producers of reputable products are reluctant to manufacture in
countries where intellectual property theft is rife. Such countries
lose out on outsourcing and employment opportunities, as well as on
foreign direct investment and transfer of know-how and technology.

IHT Report