IP Theft Up In First Half Of Year: Report

Counterfeits and intellectual property (IP) theft cost companies millions in the first half of 2006, according to a report released Tuesday.

An estimated 760 copyright and trademark intellectual property thefts in 69 countries between January and June 2006 cost companies nearly $700 million, up 7 percent from the year-ago period, according to Gieschen Consultancy's 2006 Mid-Year Counterfeit & Piracy Intelligence Report.

The study, based on statistics from the Business Action To Stop Counterfeiting And Piracy (BASCAP), a joint initiative with the International Chamber of Commerce, ranks the United States at the top of the list, citing 205 violations and $51.7 million in losses.

The United Kingdom ranked second, with 116 reported violations costing $31.1 million. Next is India, with 87 incidents at $2.5 million; Malaysia, 52 incidents costing $5.9 million; and China, 43 incidents at $5.3 million.

But the U.S. and the U.K. are the most active in publicly battling counterfeiters and pirates, educating citizens through reporting raids, seizures and investigations. Other countries with high IP theft rates, such as China and Russia, tend to report less information to the public, according to the report.

The BASCAP Intelligence Report indicates the Internet is used as marketing tool in 1 of every 7 reported investigations. The study indicates manufacturers of fake goods are increasingly finding new ways to exploit Internet marketing to reach consumers, retailers, and distributors. Tools include trade boards, auction sites, spam, and click-through ads.

The report indicates 392 brands were counterfeited in the first half of 2006. The majority were of fake goods were from sellers purporting to be Louis Vuitton, Nike, Microsoft, Gucci, and Prada.