The Economics of Counterfeit Trade (eBook)

Preface 5
Dedication by the Authors 7
Acknowledgments by the Authors 8
Contents 9
Introduction 14
1.1 Overview 14
1.2 Definitions 15
1.3 Roadmap of the Book 16
The Global Growth of Counterfeit Trade 20
2.1 Introduction 20
2.2 History of Counterfeiting 20
2.3 Measuring the Counterfeit Market 22
2.4 The Growth of the Counterfeit Goods Market 24
2.5 Effects on the US 26
2.6 Products Counterfeited 28
2.7 Large and Small Firms Affected 30
2.8 Reasons for the Growth of Counterfeit Goods 32
2.8.1 Low Cost High Technology = Low Investment, High Profits 32
2.8.2 Globalization and Lower Trade Barriers 33
2.8.3 Consumer Complicity 34
2.8.4 Expansion of Channels and Markets 35
2.8.5 Powerful Worldwide Brands 37
2.8.6 Weak International and National Enforcement 37
2.8.7 High Tariffs and Taxes 38
2.9 Conclusions 38
The Supply of Counterfeit Trade: The Problem Countries 40
3.1 Introduction 40
3.2 The Leading Sources of Counterfeit Goods 40
3.2.1 US Customs Seizures 42
3.3 Specific Countries 44
3.3.1 Russia 44
3.3.2 Argentina 47
3.3.3 Chile 47
3.3.4 Egypt 48
3.3.5 India 48
3.3.6 Israel 49
3.3.7 Lebanon 50
3.3.8 Thailand 50
3.3.9 Turkey 51
3.3.10 Ukraine 51
3.3.11 Venezuela 52
3.3.12 Paraguay 52
3.3.13 Mexico 53
3.3.14 Brazil 54
3.4 Notorious Markets 55
3.5 Extra-Country 56
3.6 Conclusions 57
Modeling the Intellectual Property Rights Environment 58
4.1 Introduction 58
4.2 Proposed Framework 58
4.2.1 Level of Consumer Complicity 59
4.2.2 Level of Pirate Activity 60
4.2.3 Level of Host Country Enforcement 61
4.2.4 IPR Actions Targeted at Consumers, Distribution Channels, Host Governments, International Organizations and Pirates 62
4.2.5 The Model 63
4.3 The Research Study 64
4.4 Assessment of Managerial Perceptions 65
4.5 Managerial Insights Regarding the IPR Environment: Key Findings 72
4.6 Conclusions 73
The Demand for Counterfeit Trade: Consumer Complicity 75
5.1 Introduction 75
5.2 Measuring the Demand for Counterfeit Goods 76
5.3 Conceptual Model of Consumer Complicity to Purchase Fake Goods 78
5.4 Marketing Variables that Influence Consumer Complicity 79
5.4.1 Demographics of Consumers 79
5.4.2 Attitude Towards Counterfeiting 81
5.4.3 Cultural Values 82
5.4.4 Ethical Perspective 82
5.4.5 Product Attributes 82
5.4.6 Shopping Experience 83
5.4.7 Social Marketing Communications 84
5.5 Conclusions 86
The Use of Anti-piracy Marketing Techniques to Educate the Consumer 87
6.1 Introduction 87
6.2 Overview of Social Marketing Concepts 87
6.2.1 Public Agenda 88
6.2.2 Media Agenda 90
6.2.3 Policy Agenda 90
6.3 Setting an Agenda to Change the Public Judgment of Counterfeit Trade 90
6.4 Anti-Counterfeiting Advertisements 92
6.4.1 Previous Advertisements 93
6.4.2 Role Models 94
6.4.3 Peer Pressure 96
6.4.4 Education 96
6.4.5 Fear 97
6.4.6 Quality of the Product 98
6.4.7 Negative Association with Suppliers 100
6.4.8 Rewards Through Whistle Blowing 101
6.4.9 Blog Rebuttals to Advertisements 102
6.5 Conclusions 104
Changing Trade Policy: The EU and US Bolster Protection of Intellectual Property Rights 105
7.1 Introduction 105
7.2 US IPR Enforcement Initiatives 105
7.2.1 Strategy Targeting Organized Piracy 107
7.3 European Commission Taxation and Customs Union 108
7.4 IPR Enforcement Initiatives in the European Union 109
7.4.1 Retaliation: Understanding the New Enforcement Directive in the EU to Pursue Counterfeiters 110
7.4.2 Seeking Retribution: The European Commission Develops Action Plan to Deter Pirates 112
7.4.3 EU–US Action Strategy for the Enforcement of Intellectual Property Rights 113
7.4.4 Operation Infrastructure 114
7.4.5 EU Third-Country IPR Enforcement Strategy 115
7.5 Conclusions 116
Government and Industry Led Operations to Curb Counterfeit Trade 118
8.1 Introduction 118
8.2 Multilateral Organizations that Govern IPR 118
8.2.1 World Trade Organization: TRIPS 119
8.2.2 World Intellectual Property Organization 120
8.2.3 Organization for Economic Cooperation and Development 121
8.2.4 The International Criminal Police Organization 122
8.3 Industry Associations that Govern IPR 123
8.3.1 International AntiCounterfeiting Coalition 123
8.3.2 Business Software Alliance 124
8.3.3 Software Information Industry Association 126
8.3.4 Motion Picture Association of America 126
8.3.5 Recording Industry Association of America 128
8.3.6 International Federation of Phonographic Industry 130
8.4 Conclusions 131
The Special Case of China 132
9.1 Introduction 132
9.2 The Growth of the Chinese Economy 133
9.3 Estimating the Size of the Chinese Counterfeit Market 135
9.4 History of Intellectual Property in China 137
9.5 IPR Enforcement 140
9.6 Recent Events 144
9.7 Information Sources 145
9.8 Conclusions 146
Internet Piracy: The Virtual Marketplace for Counterfeit Goods 148
10.1 Introduction 148
10.2 The Growth of Counterfeits in the Virtual Marketplace 148
10.3 Ethical Perceptions of Internet Piracy 151
10.4 Pirates on the Virtual Sea 152
10.4.1 The Warez Scene 153
10.4.2 Internet Sites 154
10.5 US Government-Led Sting Operations to Curb Internet Piracy 156
10.5.1 Operation Buccaneer 156
10.5.2 Operation Digital Gridlock 157
10.5.3 Operation Higher Education/Operation Fastlink 157
10.5.4 Operation Site Down 158
10.6 Enforcement Issues Related to Electronic Piracy 158
10.6.1 Digital Millennium Copyright Act 159
10.6.2 No Electronic Theft Act (1997) 160
10.6.3 College Opportunity and Affordability Act of 2007 161
10.7 Conclusions 163
Managerial Counterattack: Traditional and Novel Anti- counterfeiting Strategies 164
11.1 Introduction 164
11.2 Firms must Act to Protect Their IP Rights 164
11.3 Suggestions from Researchers and Authors 165
11.3.1 Using Technology 166
11.3.2 Developing a Plan 167
11.3.3 Summarizing the Existing Literature 168
11.4 Effectiveness of Recommended Actions 168
11.4.1 Frequency of Actions Used 168
11.4.2 Effectiveness of Actions 170
11.5 Organizing to Fight Counterfeit Product 171
11.6 Recommended Action Program 173
11.7 Conclusions 176
The Future: Will the Piracy Paradox Persist? 177
12.1 Introduction 177
12.2 The Growth of Counterfeit Trade 177
12.3 Source Countries 178
12.4 The IPR Environment 179
12.5 Consumer Complicity 179
12.6 Anti-piracy Marketing Techniques 180
12.7 Actions by the EU and US Governments 180
12.8 Government and Industry Led Operations 181
12.9 China 181
12.10 The Internet 182
12.11 Management Actions 182
12.12 Future Research 183
12.13 The Outlook 185
References 187
Index 199