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Global IP Infringement’s Significant Cost to the U.S. Economy

“Abdominal pain comes first. After three days, the kidneys fail. After five days, neurological dysfunction leads to paralysis and breathing difficulties. Patients who survive will be dialysis-dependent for the rest of their lives. But in the end, most will die.” That’s from ITIF Trade Policy Analyst Michelle Wein’s gripping monograph, The Devil Wears Counterfeit Prada—And Sells Fake Glycerin: The True Cost of Global Trade in Illicit Goods, which leads by describing the mass poisoning of 100 Panamanian children in 2006 caused by Chinese exports of counterfeit glycerin that was really poisonous diethylene glycol. Unfortunately, that’s just one example: each year, approximately 1 million people around the world die from counterfeit drugs, which account for 30 percent of global drug sales. And that’s just the damage from one category of counterfeited products. It doesn’t even count the damage caused by counterfeit foods, pet medications, electronic products, or the over 1,800 cases of suspected counterfeit electronic parts recently found across a wide range of U.S. weapons systems, according to a 2012 Senate Armed Services Committee report. In fact, the total value of the global counterfeit goods trade now tallies $1.8 trillion

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Using Data To Fight Counterfeit Goods

Whether advertised on seedy websites or peddled on Manhattan’s Canal Street, counterfeit goods remain a serious problem for U.S. businesses and consumers. Despite the efforts of companies and government agencies alike, the International Chamber of Commerce estimates that the total value of counterfeit and pirated products produced worldwide could reach $1.5 trillion, or around 2 percent of the global economy, by 2015. Counterfeit goods, such as fake pharmaceuticals, tainted baby formula and substandard tires, present numerous safety and reliability concerns for consumers and organizations around the world and drives prices up for consumers purchasing legitimate goods.

Until now, illicit counterfeiting operations have had the advantage, as they have been able to exploit the Internet and other technologies to market and distribute their goods more efficiently, especially goods produced in developing countries. In addition, the manual monitoring practices that companies have relied on to identify counterfeits is cost-prohibitive on the Internet. However, new opportunities to leverage data and data analytics may shift the balance of power back to legal businesses and law enforcement officials by allowing them to detect, track, prioritize, investigate and report potential counterfeit goods more efficiently than

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