ORLANDO, FLORIDA / AGILITYPR.NEWS / September 19, 2023 / Intellectual Property Rights (IPR) and International Trade Protection (ITP) and Protecting the U.S. Consumer

CALL TO ACTION: Trade in counterfeit and pirated goods threatens America's innovation economy, the competitiveness of our businesses, the livelihoods of U.S. workers, and, in some cases, national security and the health and safety of consumers.

STAT/ FACT FOR ACTION: As of 2018, counterfeiting is the largest criminal enterprise in the world, with domestic and international sales of counterfeit and pirated goods totaling between an estimated $1.7 trillion and $4.5 trillion a year—a higher amount than either drugs or human trafficking. Around 80 percent of these goods are produced in China, and 60 percent to 80 percent of those products are purchased by Americans. Both statistics provide a general sense of the significant impacts such illicit trade has on the U.S. economy, U.S. business interests, and U.S. innovations. Imports of counterfeit and pirated products into the EU amounted to as much as EUR 121 billion (6.8 % of EU imports, up from 5 % in 2013).

ANALOGY: Counterfeit products range from high-end consumer luxury goods such as watches, perfumes or leather goods, to business-to-business products such as machines, chemicals or spare parts, to common consumer products such as toys, pharmaceuticals, cosmetics and foodstuffs. Unauthorized representation of a registered trademark carried on goods identical or similar to goods for which the trademark is registered, with a view to deceiving the purchaser into believing that he/she is buying the original goods.

A SURPRISING WIDESPREAD ISSUE - COUNTERFEIT GOODS

While it’s easy to downplay the issue of fake goods, it turns out that the data is pretty clear on the subject – and counterfeit goods are finding their way into consumer hands in all sorts of ways.

More than 25% of consumers have unwillingly purchased non-genuine goods online – and according to a test by the U.S. Government Accountability Office, it was found that two of every five (2 IN 5) brand name products they bought online (through 3rd party retailers) were counterfeits.

Some of the most common knockoff goods were as follows:

• Makeup – 32%
• Skincare – 25%
• Supplements – 22%
• Medication – 16%

Aside from the direct impact on consumers and brands themselves, why does this matter?

THE IMPORTANCE OF SPOTTING FAKES

Outside of the obvious implications, counterfeit activity can open up the door to bigger challenges as well.

• Economic Impact On a macro scale, the sale of counterfeit goods can snowball into other issues. For example, U.S. accusations of Chinese manufacturers for stealing and reproducing intellectual property has been a major driver of tariff action.
• Unsecure Information Counterfeit merchants present higher risks for credit card fraud or identity theft, while illegal download sites can host malware that steals personal information
• Criminal Activity Funds from illicit goods can also be used to help bankroll other illegal activities, such as extortion or terrorism.
• Unsafe Problems It was found that 99% of all fake iPhone chargers failed to pass critical safety tests – and 10% of medical products are counterfeits in developing countries, which can raise the risk of illness or even death.

The issue of fake goods is not only surprisingly widespread in the online era, but the imitation of legitimate brands can also be a catalyst for more serious problems.

As a consumer, there are several things you can do to increase the confidence in your purchases, and it all adds up to make a difference.

OVERVIEW

This brief article provides several discussions related to the context of intellectual property rights (IPR) protection and enforcement in the context of U.S. trade policy.

Here are some key points and insights related from this article for consideration:

IPR as a Key Component of U.S. Trade Policy: Intellectual property rights protection is a significant element of U.S. trade policy, and the United States plays a leading role in global IPR trade. Congress has a constitutional responsibility to legislate and oversee IPR matters in U.S. trade policy.

Global IPR Trade: The U.S. is actively involved in global IPR trade negotiations, and since 1988, it has included IPR protection as a principal objective in U.S. free trade agreement (FTA) negotiations.

Types of IPR: Intellectual property rights encompass various forms, including patents, copyrights, trademarks, trade secrets, and geographical indications (GIs). These rights aim to encourage innovation by granting exclusive rights to creators for a specified period.

Impact on the Economy: IPR is considered crucial for U.S. innovation, economic growth, and international competitiveness. Many U.S. industries rely on IPR protection, and it contributes significantly to the economy.

IPR Infringement: IPR infringement is challenging to quantify due to its illicit nature. The digital environment has presented new challenges with online piracy and counterfeit goods trade being significant issues.

U.S. Trading Partners' IPR Regimes: While some U.S. trading partners have improved their IPR laws and enforcement, concerns persist, including lax enforcement, high levels of digital piracy, and gaps in trade secret protection. China's policies, in particular, have raised concerns.

Trade Policy Tools for IPR: Trade policy tools, such as the TRIPS agreement and FTAs, have been used to advance IPR protection internationally. TRIPS sets minimum standards for IP protection and addresses enforcement procedures and remedies.

U.S. IPR Trade Objectives: Congress has consistently included IPR protection as a principal objective in trade promotion authority (TPA). Recent TPAs have added objectives related to addressing cyber theft, protecting trade secrets, and fostering innovation and access to medicines.

IPR in U.S. Trade Agreements: U.S. FTAs, including the USMCA, contain IPR commitments that build on TRIPS. The U.S.-China "phase one" agreement addressed technology transfer and IP enforcement issues but left some concerns unresolved.

Other IPR-Related Trade Tools: Additional tools, like the "Special 301" reports, Section 337 investigations, and customs seizures, are used to address IPR concerns and enforce rights.

Congressional Role and Priorities: Congress has a significant role in shaping U.S. trade policy on IPR. It may consider renewing Trade Promotion Authority (TPA) to modify trade negotiating objectives related to IPR and evaluate the effectiveness of existing remedies.

Multilateral Issues: Congress also oversees and influences U.S. engagement in multilateral IPR agreements, such as the TRIPS COVID-19 waiver, which raises questions about its impact on global access to COVID-19 treatments and U.S. technological competitiveness.

CONCLUSION:

In summary, IPR is a fundamental component of U.S. trade policy because it protects American innovation, fosters economic growth, maintains competitiveness, and ensures that trade relations are conducted fairly and in accordance with international norms. Effective IPR protection benefits American businesses, consumers, and the overall economy, making it a key consideration in trade negotiations and agreements.