Foreign Infringement of Intellectual Property Rights: Implications for Selected U.S. Industries

Abstract

The primary purpose of this paper is to review foreign IPR infringement issues affecting selected U.S. industries, with a particular emphasis on patent, trademark, and copyright infringement. Although the review is primarily based on qualitative information, some attempts to measure the effects of IPR infringement quantitatively also are reviewed. To provide background and context for the analysis, the authors discuss the problem of foreign IPR infringement for U.S. industry; describe certain U.S. trade laws and international agreements that attempt to address such infringement; review examples of inadequate foreign patent, trademark, and copyright protection and their implications for selected U.S. industries; and describe U.S. private and public sector efforts to address such problems. The paper finds that (1) intellectual property protection is essential to encouraging creative expression and the development of new products in a number of industries; (2) the development of intellectual property-based products is generally far more expensive than their manufacture or duplication; (3) inadequate IPR protection leaves firms vulnerable to infringement, causing them to risk their investment and reputations; (4) foreign IPR infringement results in billions of dollars in lost revenues for U.S. industries; (5) current estimates likely understate the actual cost of infringement; and (6) more rigorous empirical research is needed to confirm the actual amount of U.S. industry losses due to inadequate IP protection.