products. Governments may lose tax revenue and find it more difficult to attract investment because infringers generally do not pay taxes or appropriate duties, and often disregard product quality and performance.
An example which can serve to illustrate the extent of the economic harm arising from such trademark counterfeiting comes from India. In September 2013, the International Chamber of Commerce and the Federation of Indian Chambers of Commerce and Industry published a study which analyzed seven key industry sectors that are vulnerable to counterfeiting, piracy, and smuggling, e.g., automotive parts, alcohol, computer hardware, mobile phones, packaged foods, personal goods, and tobacco products. The study concluded that, in 2012, rights holders suffered a 21.7 percent, or an approximately $11.9 billion, loss in sales in India as a result of trademark counterfeiting issues. Collectively, according to the study, the Indian government's economic loss associated with these illicit activities totaled approximately $4.26 billion.
Industry reports the following trends in counterfeiting and piracy:
- Many countries provide penalties that fail to deter criminal enterprises engaged in global copyright piracy and trademark counterfeiting operations. Even when such enterprises are investigated and prosecuted, the penalties imposed on them in many countries are low, and therefore, rather than deter further infringements, such penalties only add to the cost of doing business.
- Online sales of pirated and counterfeit goods have the potential to surpass the volume of sales through traditional channels such as street vendors and other physical markets. Enforcement authorities, unfortunately, face difficulties in responding to this trend. Online advertisements for the sale of illicit physical goods are ubiquitous.
- The continued increase in the use of legitimate express mail, international courier, and postal services to deliver counterfeit and pirated goods in small consignments, makes it more challenging for enforcement officials to interdict these goods.
- The practice of shipping products separately from counterfeit labels and packaging to evade enforcement efforts that target the completed counterfeit item continues.
- Media box-based piracy, whereby storage devices, often with capability to play high definition content, are loaded with large quantities of pirated works or are configured to facilitate the user's access to websites featuring unlicensed content, is growing in popularity, reportedly in China, Hong Kong, Indonesia, Malaysia, Taiwan, Thailand, and Vietnam. In 2014, Hong Kong Customs conducted a raid against a syndicate selling preloaded media
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