How Much Does IP Theft Cost?

A new government reports sheds light on the impact of intellectual property theft on the U.S. economy. Counterfeiting and piracy erode the returns on innovation and slow economic growth because of the negative impacts on companies, consumers and governments, according to the Congressional Joint Economic Committee.

The report notes that intellectual property infringement harms companies through lost revenue, the costs of intellectual property protection, damage to brands, and decreased incentives to innovate due to the fear of theft.  One estimate found that the average company lost $101.9 million in revenues and incurred costs of $1.4 million in identification and enforcement of intellectual property rights.

According to the report, the problem is getting worse. Investigations of foreign infringement of domestic intellectual property rights have risen in eight of the last ten years, from 17 cases in 2002 to 69 cases in 2011. In addition, the number of cases investigated by the United States International Trade Commission (U.S. ITC) has also grown dramatically, rising by 80.6 percent and 23.2 percent in 2010 and 2011, respectively.

Other findings from the report include:

  • While the problem is worldwide, China accounts for the vast majority of pirated goods seized at the U.S. border.
  • Small businesses often lack the budget and resources to adequately defend themselves against IP theft or pursue enforcement actions when facing losses. While small businesses represent 79 percent of all U.S. businesses, only 10.5 percent have issued IP theft complaints.
  • Resolution of infringement complaints is also hampered by a lengthy process. Nearly one-third of all submitted cases to the U.S. ITC took over a year to resolve.


The White House has released a high-level strategy paper on combating international intellectual property theft in an effort to reduce the theft of IP.  The report promises to leverage new counter-espionage laws, such as the The Foreign and Economic Espionage Penalty Enhancement Act of 2012, which increased penalties for economic espionage and corporate trade-secret theft.

On the public-awareness front, the report points to government website, a consumer-information portal for spotting counterfeit products and learning about ongoing anti-theft initiatives.

How I Can Help

As this report highlights, IP theft and infringement can have a serious impact on U.S. businesses. If you would like to make sure you have the right protections in place.  I can help you in planning and protecting your ideas, here and elsewhere in the world.   So, if you or know someone that can use my help, please contact me for a free 30 minute consultation by sending me an email or call TOLL FREE at 1-855-UR IDEAS (1-855-874-3327) and ask for Norman.

– Ex astris, scientia –

I am and avid amateur astronomer and intellectual property attorney.  As a former Chief Petty Officer in the U.S. Navy, I am a proud member of the Armed Service Committee of the Los Angeles County Bar Association working to aid all active duty and veterans in our communities.  Connect with me on Google +