U.S. intellectual property theft a multi-billion dollar business

Stealing intellectual property is no small criminal enterprise. Government officials and consumer watchdog groups estimate that American companies lose as much as $250 billion every year through theft of trade secrets.

A worldwide trade in illegally downloaded or copied movies and music, knock-off drugs and hardware and software for electronic devices drains ideas and money from U.S. businesses. Theft of intellectual property is so pervasive that the Obama administration recently called for efforts to cut down what it termed “transnational organized crime.”

MarkMonitor, a brand-tracking company, recently spent a year following 100 separate websites that sold faux products. Customers logged more than 50 billion visits on sites offering counterfeit prescription drugs, free entertainment downloads or so-called name brand products.

Willing consumers spur sales and White House officials say present intellectual property laws send the message that crime does pay. Compared to wealth generated by illegal profits, jail time and other penalties for intellectual property thefts seem so small they are not much of a deterrent.

Trade secret theft is the FBI’s domain, while U.S. Immigration and Customs Enforcement officials handle copyright and trademark violations. The agencies have their hands full because the crimes are not confined to one country’s laws or borders. Arrests are frustrated by international counterfeiters hidden deeply behind websites and the multitude of fake-product buyers clicking on from every corner of the globe.

U.S. businesses have recently started to go after idea thieves with relish. Law enforcement agencies say until recently there has been reluctance among U.S. businesses to bring intellectual property lawsuits. The fears of losing hard-won public images and stock values subdue litigation.

Another problem is the ease with which intellectual property is stolen. Sensitive data being stolen from companies is virtual, not physical, and can be transferred easily and clandestinely.

Pressure is building among Capitol Hill politicians to up the ante for intellectual-property thieves. Among the proposed solutions are penalty increases and blocking selective Internet sites and purchasing processes to stop sales of counterfeit items.

Source: The Republic, “Fake goods, stolen secrets cost U.S. firms billions,” Jim Spencer, Aug. 24, 2011