Measuring IPR infringements in the internal market

Development of a new approach to estimating the impact of infringements on sales

by Stijn Hoorens, Priscillia Hunt, Alessandro Malchiodi, Rosalie Liccardo Pacula, Srikanth Kadiyala, Lila Rabinovich, Barrie Irving

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Abstract

Trends of globalisation, the integration of markets and the rise of the Internet economy have made that violations of intellectual property rights (IPRs), such as counterfeiting or Internet piracy, have become more widespread. While there is no shortage of estimates of the scale and impacts of these infringements, there is little consensus on their accuracy or reliability. In absence of a robust evidence base, it is difficult to debate the effectiveness of government efforts to regulate IPRs or address the impacts of infringements.

This study was set up to assist the European Commission in the development of a methodology that would quantify the scope, scale and impact of IPR infringements on the European economy. In this report we offer the ‘building blocks' for such a methodology that strives to be consistent, robust, feasible and reliable in measuring the scale of this phenomenon.

Based on an extensive review of the literature, we propose a methodology for measuring trends of the lost revenues due to IPR infringements in markets of counterfeited products. While the methodology presents a promising approach to the problem, a number challenges remain and it needs further testing. The report offers a number of suggestions for next steps to take this approach to the next level.

Table of Contents

  • Chapter One

    Introduction

  • Chapter Two

    Defining IPRs and their infringement

  • Chapter Three

    The drivers, scale and impacts of IPR infringements

  • Chapter Four

    What existing methods can teach us

  • Chapter Five

    Testing a new approach for estimating the scale of IPR infringements

  • Chapter Six

    The challenges of measuring IPR infringements

  • Chapter Seven

    Applicability of the model to unauthorised use of protected content

  • Chapter Eight

    Next steps towards measuring IPR infringements

  • Appendix A

    A detailed review of approaches to measure IPR infringements

  • Appendix B

    Non-technical description of a new method to measure IPR infringements

  • Appendix C

    Road map for implementing additional pilots of the RAND Model

Research conducted by

The research described in this report was prepared for the European Commission, Internal Market and Services Directorate-General and conducted by RAND Europe.

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