The International Trademark Associationtoday released a new study estimating the impact of trademark counterfeiting andinfringement on worldwide sales in the apparel and footwear industries.
The International Trademark Associationestimates that in 1995, the apparel and footwear companies that participated in the studylost 22 percent of their sales or $2.1 billion due to trademark counterfeiting andinfringement activity. Counterfeit products can significantly damage companies not onlythrough loss of sales, but also by involuntarily associating them with inferior and unsafeproducts.
"Trademark counterfeiting is one ofthe fastest growing and most far-reaching economic crimes worldwide," said Maxim H.Waldbaum of Sidley & Austin in New York, a member of the International TrademarkAssociation’s Board of Directors. Mr. Waldbaum chaired the Association’sAnti-Counterfeiting and Enforcement Committee in 1996-1997, when the "Economic Impactof Trademark Counterfeiting and Infringement: Estimation of the Impact of TrademarkCounterfeiting and Infringement on Worldwide Sales of Apparel and FootwearIndustries" study was commissioned.
The study was conducted using aneconometric model designed by WEFA, Inc. a leading economic consulting firm, to measurethe impact of counterfeiting and infringement in 40 countries on trademark owners from theperiod 1991-1995. The level of trademark protection available in each country was measuredusing a "Trademark Protection Survey" covering issues such as registration,maintenance and enforcement of trademark rights. Actual sales and quantity data from INTAmember companies in the apparel and footwear industries were then analyzed with regard toa trademark protection variable, to determine the amount of sales lost in each country dueto inadequate protection of trademark rights.
Mr. Waldbaum said that the study indicatesthe "…high price that trademark owners must pay because of inadequate trademarkprotection. This representative sampling of companies in one industry lost a staggeringone-fourth of their sales on average due to trademark infringement and counterfeiting, yetmany countries still lack the will or the resources to address the problem."
The study concludes that "trademarkowners are not the only ones who suffer when countries lack strong protection fortrademark rights. A country’s economic growth is affected by the degree to which companiesfeel confident that their valuable intellectual property assets will be protected."
"Counterfeiting activity can havesevere consequences for a country’s global competitiveness, economic growth andinvestment, and job creation, particularly in developing countries" said Mr.Waldbaum.
Among the International TrademarkAssociation member companies that provided sales data for the study are: Anne Klein,Caterpillar Inc., Fila U.S.A., K-Swiss, Inc., Lands’ End, Inc., Levi Strauss & Co.,NBA Properties, Reebok International, and The Timberland Company.
From an economic standpoint,"counterfeits lead to loss of sales revenues, jobs, taxes and customs duties, alsothreaten the health, safety and welfare of consumers, and in the end, have a substantiallynegative effect on national, state and local economies," Mr. Waldbaum added.
The International Trademark Associationworks to promote trademarks as essential to global commerce. With more than 3,500 membersin 120 countries, the International Trademark Association leads the way in shaping publicpolicy on trademark and related intellectual property issues, and helps to educatebusinesses, the media and the public on the importance and proper use of trademarks. TheAssociation is committed to working with national and multilateral governmentalorganizations to advance anti-counterfeiting policies worldwide.
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