Product Piracy Plagues Global Companies

Compiled ByTraci Purdum According to a survey by PricewaterhouseCoopers, nearly one-fifth of businesses worldwide have fallen victim to product piracy in the last two years. The Product Piracy Survey 2003 also found that 61% of those companies reported repeated incidences of these crimes. While the largest concentration of crimes (61%) occurred in South and Central America and Africa, other countries should not let down their guards. "This is a large, growing problem, particularly in the software industry where piracy of intellectual property is so easy and can cause unlimited economic damage," says David Marston, U.S. lead partner of PricewaterhouseCoopers Licensing Management Practice. "Any company which licenses its intellectual property and has global distribution is at a high risk. There are a number of countries where piracy is culturally accepted, very easy to commit and very difficult to get caught." Indeed, the study reports that 34% cases of detected piracy were discovered accidentally. Only 26% were detected by security measures and 22% by internal or external audit. "When piracy occurs, it is often as a result of missing inventory that has been copied and distributed license-free," says Marston. "This is not easy to detect unless companies do a regular and systematic reconciliation of products sold. What we do know is that once the market or channel knows that specific companies are policing their intellectual-property rights, this in of itself can act as a deterrent to piracy."