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2006 Mid Year Counterfeit & Piracy report: major links to illegal activity, the Internet, intellectual property reported

Over the first six months of 2006 a total value of US$699.3 million of counterfeit and pirated goods, specifically intellectual property theft, was discovered from 760 incidents in 69 countries. Major links to drugs, weapons and deaths were uncovered. In addition, a detailed analysis reveals the Internet is becoming a major factor in this illicit trade. Top brands counterfeited are also reported.

Calgary, 24 October 2006 – Gieschen Consultancy released the 2006 Mid-Year Counterfeit & Piracy Intelligence Report derived from BASCAP’s Daily Counterfeit & Piracy Intelligence Report statistics compiled over the first half of 2006 which focuses on intellectual property theft, citing major links to illegal activity, the Internet, and brands.

Counterfeiting and piracy affects consumers, businesses, governments and impacts economies in a negative manner. According to Glen Gieschen, Counterfeit Intelligence Manager "This activity has major implications upon job creation and sustainability, consumer health, safety and security, and is driving serious criminal activity into this seemingly innocent crime. The greatest misconception about counterfeiting is that the impact is negligible, however the truth is far different. Consumers who are unaware they are purchasing fake products and those who are actively seeking them have consumed adulterated drugs and died, installed fake products in their vehicles which reduce its life or cause bodily injury when they malfunction. We have documented an endless number of instances where these bogus items result in serious problems, large and small for consumers. Recently, counterfeit airline parts were discovered in Russia which, as a passenger, is a concern. When seizures are made of bootleg music, software, and films, it is becoming a frequent occurrence to discover illegal drugs and weapons. In some cases, phony items are sold by illegal immigrants to support their families and fund causes in their homelands. When you purchase these items, you have no idea of the type of people you are supporting, where these funds are going and for what purpose."

The report also analyzes the use of the Internet in networking and organizing the activity of counterfeiters in addition to providing unregulated and competitive advantages which legitimate businesses are unable to use through trade boards, spam, auctions and cyber outlets.

The reports conclusions are based on data obtained from actual counterfeit & piracy activity:

• Countries, such as China and Russia, export more counterfeit goods than they seize domestically.
• The United States and United Kingdom are more effective at enforcing intellectual property rights than other countries.
• 5% of all intellectual property theft is linked to other serious criminal activity such as drugs, thefts, and weapons offences.
• Counterfeiters are now cross selling different brands with different types of fake goods and in some cases are dealing illicit items with the counterfeits.
• 14% of counterfeit investigations now involve the use of the Internet.
• The Internet is being used by all types of counterfeiters to network and organize their activity.
• Trademark and copyright goods are counterfeited in nearly equal proportions.

About Gieschen Consultancy and the BASCAP Intelligence Reports

Counterfeiting and piracy are spiraling out of control. The drain on our businesses and on the global economy is now significant. It has resulted in the widespread loss of lawful employment and a massive reduction of tax revenues. The creative community is robbed of reward for effort and innovation. The incentive to invest is reduced. Consumers are increasingly being harmed by unsafe counterfeit products. All signals also point to linkages with organized crime.

In response to this threat, the International Chamber of Commerce and Gieschen Consultancy have launched the BASCAP Intelligence Reports web portal . The objective of this partnership is to provide tools to brand owners which assist in their efforts to monitor, analyze and provide the latest counterfeit and piracy intelligence to understand, formulate strategies, and fight counterfeiting and piracy.

For more information about Gieschen Consultancy, visit http://www.Goldsec.com.

For more information regarding the BASCAP Intelligence Reports, visit http://www.BASCAP.com.

Contacts

Glen Gieschen
Manager, Counterfeit Intelligence
Gieschen Consultancy
Glen@Gieschen.com
Phone 403-256-5680
Calgary, Alberta Canada