INTA: Piracy Will Cost More Than the GDP of Australia

Ridiculously over-inflated numbers are nothing new for rights holders. Many in the past have pointed out the errors of the methodology such as one download does not mean one lost sale. Rather than correct the methodological errors, some rights holders seem to choose to double down on these lofty numbers as seems to be the case in a recent INTA (The International Trademark Association) press release.

Note: This is an article I wrote that was published elsewhere first. It has been republished here for archival purposes

The press release begins with what is typical of what rightsholders say: that copyright infringement will make you sick and is a threat to your health and well being. In addition to this, it praises all the domain takedowns of people’s website domains:

The International Trademark Association (INTA) commends the National Intellectual Property Rights Coordination Center (IPR Center) Operation in Our Sites (OiOS) initiative for its advancements in combating online intellectual property theft and protecting consumer health and safety. OiOS serves as an effective enforcement effort, addressing the challenges in online anticounterfeiting and anti-piracy efforts.

The OiOS’s most recent operations, American Icon and Trans-Atlantic 2, identified and stopped counterfeiting and piracy in 177 domestic sites and 151 foreign sites for a total of 328 domain names. These operations were conducted with IPR Center partner agencies, the US Department of Justice Computer Crime and IP Section (CCIPS), as well as with enforcement agencies in four countries and Europol.

Of course, such seizure’s also led to the takedown of legal websites Daja1 and Rojadirecta. Rather than mention the failures of such mass seizures, INTA simply throws out a number and suggests that it’s a success. Again, nothing really out of the ordinary with that.

The press release merely focuses on the bootlegging, or physical piracy operations as if that was the only thing that was targetted:

In recent years, the availability of fake products over the Internet has made anticounterfeiting efforts even more challenging. Some websites are open about the counterfeit nature of their products, but many promote their products as highly discounted genuine items, which trick consumers into buying fake goods.

This is a rather confusing comment given how much praise they were showering the mass dragnet operations just a paragraph or two ago. It is almost as if to admit that such operations were actually ineffective in the end. The press release then slams the anonymity of the Internet:

Efforts by law enforcement officials to catch these criminals are hampered by the anonymity provided by selling on the Internet. The Fall 2012 MarkMonitor Shopping Report on online apparel and luxury goods shopping behavior found that “one in five bargain hunters in the U.S. and Europe mistakenly shopped on e-commerce sites selling counterfeit goods while looking for deals online.”

By exactly what means is anonymity hampering things? The press release doesn’t really say. Was it selling things with the use of Tor? Was it selling things with the use of a VPN? Was it that law enforcement didn’t know how to perform a DNS look-up? We really do not know since it’s simply a vague statement. The press release then get’s into numbers it claims shows the extent of the alleged problem:

The losses suffered by industry and the economy to trademark counterfeiting are substantial and continue to increase. In many industry sectors, fake products ranging from medicines and food to cosmetics and apparel continue to pervade marketplaces across the globe. OiOS reports that the total global economic impact of counterfeit and pirated products is $650 billion annually, and this number could grow to $1.77 trillion by 2015. According to the U.S. Department of Commerce, over 40 million American jobs and two-thirds of U.S. exports depend on IP—intensive industries.

This is probably the most problematic paragraph in the whole press release. $1.77 Trillion is such a high number, it should be treated with a grain of salt just on the face of it. According to Wikipedia, that’s more than the GDP of Australia which is pegged at $1.542 trillion. Wikipedia also points out that Australia has the 12th highest GDP in the world. It’s reminiscient of the RIAA effectively saying that one month of torrents costs more in losses than the GDP of France.

The other problematic part of this paragraph is the use of “IP-intensive” industries. As we pointed out last year, IP-intensive industries counts just about every industry you can imagine. Here’s what we found out what IP-intensive industries are back then:

IP-Intensive industries are: Oil and gas extraction, Residential building construction, Grain and oilseed milling, Sugar and confectionery product manufacturing, Dairy product manufacturing, Other food manufacturing, Beverage manufacturing, Footwear manufacturing, Pulp, paper, and paperboard mills, Converted paper product manufacturing, Printing and related support activities, Basic chemical manufacturing, Resin, rubber, and artificial fibers, Agricultural chemical manufacturing, Pharmaceutical and medicine manufacturing, Paint, coating, and adhesive manufacturing, Soap, cleaning compound, and toiletries, Other chemical product and preparations, Plastics product manufacturing, Cutlery and handtool manufacturing, Other fabricated metal product manufacturing, Ag., construction, and mining machinery manufacturing, Industrial machinery manufacturing, Commercial and service industry manufacturing, HVAC and commercial refrigeration, Metalworking machinery manufacturing, Turbine and power transmission equipment manufacturing , Other general purpose machinery
manufacturing, Computer and peripheral equipment, Communications equipment manufacturing, Audio and video equipment manufacturing, Semiconductor and electronic component manufacturing, Electronic instrument manufacturing, Magnetic media manufacturing and reproducing, Electric lighting equipment manufacturing, Household appliance manufacturing, Electrical equipment manufacturing, Other electrical equipment and components, Motor vehicle manufacturing, Household and institutional furniture, Medical equipment and supplies manufacturing, Other miscellaneous Commercial equip merchant wholesalers, Druggists’ goods merchant wholesalers, Grocery and related product wholesalers, Grocery stores, Clothing stores, Sporting goods and musical instrument stores, Electronic shopping and mail-order houses, Newspaper, book, and directory pub, Software publishers, Motion picture and video industries, Sound recording industries, Radio and television broadcasting, Cable and other subscription programming, Satellite telecommunications, Other telecommunications, Other information services, Depository credit intermediation, Other financial investment activities, Insurance carriers, Lessors of real estate, Lessors of nonfinancial intangible, Specialized design services, Computer systems design and related services, Management and technical consulting, Scientific research and development, Advertising, PR, and related services, Other professional and technical services, Business support services, Travel arrangement and reservation, Outpatient care centers, Performing arts companies, Independent artists, writers, and performers, and Gambling industries.

Essentially, the term was created to inflate the alleged problem to silly levels. The problem is already being inflated by orders of magnitude to manufacture a problem of epidemic proportions. The press release then ends with the following:

While the Internet is an important marketplace for legitimate business, it is also a magnet for criminal theft of IP, which siphons billions of dollars annually from innovative industries, robs workers of manufacturing jobs, and leaves consumers vulnerable to fake and otherwise unsafe products.

Counterfeiting is a global challenge that requires interagency cooperation at an international level. The successful and sustained efforts of initiatives like OiOS are critical to ensure that consumers and businesses are protected from online counterfeiters and pirates. INTA commends OiOS and the agencies involved for their strategic and collaborative approach.

These two paragraphs are mostly hot air. Again, that’s par for the course from these kind of entities. The last paragraph seems to just throw in the word “pirates” as if to say that buying counterfeit Gucci bags is the same as torrenting a music album (which it really isn’t).

At the end of the day, this is just another example of how you can’t treat some of these corporations seriously. They push phony numbers, then they inflate them by using blatantly deceptive means. One could ask them to tell the truth for a change, but to this day, that seems to be far too much to ask.

Drew Wilson on Twitter: @icecube85 and Google+.

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