New Congressional Report: IP Theft Is Hurting American Industries and Innovation

by Howard Gantman 08/08/2012 13:41 (UTC-08:00) Pacific Time (US & Canada)

A new report from the Congressional Joint Economic Committee this week sheds some light on the increase in intellectual property theft in recent years and underscores the damage it’s doing to businesses all across the US economy.

Noting the many negative consequences of intellectual property theft on American industries, the report summarizes that, “Foreign infringement of intellectual property harms businesses by raising their costs, lowering revenue, and eroding profits.”

As an organization whose mission is to advance the business and the art of filmmaking – an intellectual property-intensive industry by nature – we’re obviously troubled by this ongoing problem.  And it’s only gotten worse over the last decade.

Investigations of domestic intellectual property theft emanating from foreign countries have increased in eight of the last ten years, according to the report.  And the increase in theft is more pronounced when you look at the hard numbers – in 2002, there were only 17 cases but in 2011, 69 investigations were brought. 

With almost 20 percent of American jobs in 2010 coming from industries that are IP-intensive, it’s not hard to imagine the widespread negative impact of intellectual property theft.  What is more, these industries accounted for more than a third of the nation’s gross domestic product (GDP) in 2010, one of the most significant measures of a country’s economic health and growth.

And the effect on companies’ bottom lines is huge.  The report cited one estimate that “the average company lost $101.9 million in revenues and incurred costs of $1.4 million” to identify and enforce intellectual property rights, “leading to an average decline in profits of $46.3 million.”

Perhaps most importantly, the report states that protecting intellectual property “is critical to ensuring that firms pursue innovation.”  It’s hard to think of a more urgent reason to work to stem this endemic problem.

Whether it’s the software design for a new smartphone, a lifesaving drug, or the next great American film, this report underscores how critical it is that we identify solutions that will protect the intellectual property of our country’s creators and innovators.

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