News

IP Commission Update: Costs of IP Theft and Policy Recommendations

March 8, 2017
Categories: Intellectual Property, Intellectual Property Protection, IP Protection, Trade Secret Theft

The IP Commission recently published an update to its original 2013 report: The Theft of American Intellectual Property. This update highlights new calculations of the cost of IP infringement on the US economy and also provides new policy recommendations based on the evolving environment.

The Commission is focused on documenting and assessing various impacts of international intellectual property theft on the United States, considering the role of infringers of international IP theft, and proposing US policy recommendations to mitigate damage. The update provides an overview of the costs of intellectual property theft since the publication of the original report and the legislation that has been passed to counter these damages.

The major highlights from this update include:

  • Counterfeit goods, software piracy and the theft of trade secrets cost the US economy between $225 billion and $600 billion annually.
  • Since the publication of the original report more than three years ago, the US has suffered over $1.2 trillion in economic damage.

The total cost of the three areas (counterfeit goods, software piracy, and trade secret theft) was calculated by using information from studies conducted by the Organisation for Economic Co-operation and Development (OECD), the European Union Intellectual Property Office (EUIPO), the Center for Responsible Enterprise And Trade (CREATe.org) and PwC.

The OECD and EUIPO stated the total value of counterfeit goods imported into the US or counterfeit US goods sold abroad on the low end was $143 billion in 2015. The Commission estimates that at least 20% of the total amount of counterfeit goods actually displaced legitimate sales. Therefore, the low end cost to the US economy is $29 billion.

For software piracy, the value in 2015 alone exceeded $52 billion worldwide. US companies experienced estimated losses of at least 0.1% of the $18 trillion US GDP, or approximately $18 billion.

A study by CREATe and PwC suggests that trade secret theft is between 1% and 3% of GDP, meaning that the cost to the $18 trillion US economy is between $180 billion and $540 billion.

Read the Update to the IP Commission Report here.

Download the CREATe and PwC report “Economic Impact of Trade Secret Theft” here.