IP fraud grown according to global fraud report
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Intellectual Property (IP) fraud is affecting even more industries, from electronics to pharmaceuticals, and has grown significantly over the past ten years, says a new report.
The growth is due to better access to internet distribution channels and more criminal networks turning to IP fraud to finance operations, according to a report out from Kroll, a risk consulting company.
The report cites European Union Customs statistics that show a 1000% increase in counterfeit goods in Europe between 1998 and 2004. The World Customs Organisation puts the total figure of counterfeiting and piracy at $650 billion – the equivalent of 5-7% of world trade.
Both consumers and companies are affected by this trend:
- Globally 10% of prescription drugs are counterfeit according to World Health Organisation estimates;
- Electronic products are illegally copied so quickly in China that they often arrive on shelves before the original (i.e. LG’s Chocolate phone);
- Italy’s Chamber of Commerce estimates that 20% of apparel purchased there is counterfeit.
Kroll’s quarterly Global Fraud Report – Intellectual Property Fraud: how big is the problem? – provides insight into why IP fraud is growing at such speed and six steps to prevent it:
- Assess and inventory digital archives – including VPN, webmail, instant message and print logs;
- Conduct an IP audit of trade secrets and proprietary information;
- Design enforceable IP rights into products;
- Know local partners;
- Know supply and manufacturing chain;
- Share intelligence and collaborate with law enforcement and commercial owners of IP.
