Accessibility links

US Business, Political Leaders Target Product Piracy

U.S. business leaders say counterfeiting and piracy of copyrighted and patent-protected products have cost the U. S. economy more than $200 billion a year and 750,000 jobs. Mike O'Sullivan reports, they say fake goods threaten U.S. competitiveness and have a major impact on such cities as Los Angeles.

Pirated batteries and brake pads, counterfeit watches and DVDs. They are easily found in Los Angeles. A recent Gallup Poll showed that one in four local residents bought pirated goods last year, in places like Santee Alley, a lively downtown bazaar for bargain hunters.

The narrow lane is filled with stalls where vendors sell cheap clothes, handbags, athletic shoes, sunglasses and electronics. Some carry labels or logos of Chanel, Coach, Rolex or other high-end companies, but they are counterfeit.

Another study found that global counterfeiting and piracy have cost this city, home to the entertainment business, more than 100,000 jobs a year, and billions of dollars in lost revenue.

Movie industry losses account for more than half of the city's lost income.

But Jack Kyser, an economist with the Los Angeles County Economic Development Corporation, says piracy has an impact beyond the entertainment sector.

"And it hits almost everybody. The motion picture and TV production industry, of course, is the largest one, but you have sound recording, which means music, the apparel industry, pharmaceuticals, aircraft parts. It is a whole long list," he said.

In a large warehouse near the Los Angeles port, Customs and Border Protection agents search incoming cargo for suspected fakes, which come mostly from Asia.

Officer Susan Ponce says they often find counterfeits.

"It can be from shoes to wearing apparel, to toys, to handbags," she said.

Officials say enforcement is part of the solution. In a recent raid of Santee Alley, police confiscated fake brand-name goods that would have been worth $10 million if they had been genuine.

Authorities must also convince consumers that buying counterfeit products and downloading pirated music and movies from the Internet are a form of theft.

Los Angeles mayor Antonio Villaraigosa hopes to reach the youngsters.

"Education is critical," said Villaraigosa. "We want to focus on schools and universities, focus on youth, really send the message that this has a negative impact on everyone."

Technology is also reducing digital piracy. New devices such as night-vision scopes help the movie industry locate people who tape movies in theaters.

But Andy Lamprey of the security firm Andrews International says miniature recorders and cell phones with movie cameras make that job difficult.

"Often-times, we will restrict cell phones from coming into the theater. Other times, they are allowed into the theater and that ups the vigilance that we have to maintain in order to protect a piracy," said Lamprey.

Congresswoman Diane Watson, who chairs the entertainment industry caucus in Congress, says this is a global problem affecting many industries, in every country.

"And so we need to join in a global partnership to protect our products, and we need to have you in all the other countries of the world help us in this endeavor," she said.

She says piracy and counterfeiting hurt business and consumers, and reduce competitiveness in the global marketplace.