White Paper – Intellectual Property by P. Mohan Chandran

White Paper – Intellectual Property by P. Mohan Chandran Protecting IP is crucial to the survival and long-term growth of any business enterprise or the overall development of a nation. Innovation is the essence of IP. Without protection to IP, invention of new products, methods, designs, literature, etc., wouldn’t be possible. In a country like India, IP protection assumes paramount importance as IP theft in various forms has reached stupendous heights. For instance, music piracy is primarily concentrated in India, apart from other countries such as Russia, China, Turkey, Pakistan, Middle East and African countries. In 2004, sales of pirated music in India exceeded the legitimate market. In India, about 120 million pirated CD-Rs were sold in 2004. CD-R piracy is significant and highest in India, among other countries in Latin America and Southern Europe. In 2005, police seized more than half-a-million pirated CDs in a single day in a raid conducted in Patna (Bihar). According to the Global Piracy Report 2004, India is among the top 10 countries (8th) with high piracy levels, with a piracy rate of 56%. The legal market value of loss due to music piracy in India is estimated at about $153 million per annum, while the pirate market value is $88 million. Moreover, 38% of automobile parts in India are not genuine, while counterfeits cause about 15% loss to the FMCG industry.

According to authentic sources, IP theft costs the US companies approximately $300 billion every year. The annual loss for the California economy due to counterfeiting and piracy is estimated to be about $34.5 billion. Gieschen Consultancy, which provides counterfeit intelligence analysis and security research relating to IP, estimated that $396 million was lost in IP in the first quarter of 2005. This included counterfeit items worth $141 million and $255 million in IP theft. According to a CSI-FBI Computer Crime and Security Survey that examined hundreds of large US companies in 2004, the total IP losses, which included theft of proprietary information, was estimated at more than $11 million. Similarly, in 2002, UK lost ₤10 billion in counterfeiting and piracy.

US estimated that in 1991, China lost about $400 million in trade due to poor IPR practices. In 2003, pirated software in the US accounted for 22% of all software, while in Russia it accounted for 87% of software installed. In 2004, the loss to global music pirate market went up to US $4.6 billion from US $4.5 billion in 2003. In August 2005, a jukebox company in Chile was raided for piracy, which resulted in a loss of $500,000.