The growing importance of intellectual property (IP) in knowledge-based economies has generated concerns about the potential adverse effects of counterfeiting and piracy on governments, rights holders and consumers. A recent OECD study entitled The Economic Impact of Counterfeiting and Piracy attempted to quantify the scale of the effects due to these illicit activities. This study focused on the infringement, through counterfeiting and piracy, of trademarks, copyrights, patents and design rights, to the extent that they involved physical products.
Based on the framework developed in the study, this short report updates the quantitative results of that study by utilising more recent international trade statistics for the calendar years 2000 to 2007. This report does not, however, update the customs interception data on which the original framework was constructed and relies on the same, aggregated customs interception data (i.e. for 1999-2005). A methodological note describing the updating process in more detail is included in the full update report.
The OECD study concluded that international trade in counterfeit and pirated goods could have accounted for up to USD 200 billion in 2005. The updated estimates, based on the growth and changing composition of trade between 2005 and 2007, suggest that counterfeit and pirated goods in international trade grew steadily over the period 2000-2007 and could amount to up to USD 250 billion in 2007 (see figure below). The share of counterfeit and pirated goods in world trade is also estimated to have increased from 1.85% in 2000 to 1.95% in 2007. As in the original study, these figures do not include domestically produced and consumed products, or non-tangible pirated digital products.
Evolution of trade in counterfeit and pirated products (upper limit)