Intellectual property fraud an 'epidemic'

Violations cost local business $500m.

fraud biz 298.88 (photo credit: Courtesy photo)
fraud biz 298.88
(photo credit: Courtesy photo)
Israeli companies lost approximately half-a-billion dollars as a result of intellectual property rights violations in 2005, the Federation of Israeli Chambers of Commerce said Tuesday, confirming international concerns that the issue was already out of hand. "The phenomenon of intellectual property rights violations has reached epidemic proportions to the detriment of the Israeli economy and Israel's standing in the global community," Uriel Lynn, president of the FICC, said at the Israeli Intellectual Property Forum in Tel Aviv Tuesday. Adding to the concerns, Lynn noted that the $500 million damage figure excluded patent breaches, which were causing millions of additional dollars to be lost by Israeli companies each year. The forum called on the government to set up a ministerial committee under the Justice Ministry to guide the legislation governing intellectual property to make it more efficient and focused. The FICC said the extent of the problem was accentuated when the US Commerce Department listed Israel as one of 13 countries to be concerned about when dealing with intellectual property rights. Research prepared for the forum showed that the local recording industry lost $39m. in 2005 from stolen property while the movie industry lost $38m. and the software market lost $84m. The pharmaceutical industry, however, was the hardest hit, according to the study, having suffered damages amounting to $332m., mainly from research & development programs. The damages extend to the economy as a whole, which missed out on approximately $91m. in tax income as a result of the fraud, the FICC noted. The report also showed that 32% of pirated merchandise sales were software products, while the recording industry showed the same proportion, pirated movie sales made up 40% of the total and pharmaceutical products 10%.