Earlier this week, I posted on how the Canadian IP Council, the Canadian Chamber of Commerce’s IP lobby arm, floated false claims about the scope of counterfeiting in Canada in an attempt to bolster claims for increased border measures. That was followed by a post yesterday on Professor Edward Iacobucci’s debunking of the Chamber’s report on Canadian patent law, which he found to be deeply flawed. In response to my first post, the IP Council’s Chris Gray tweeted responses that the Chamber does not want individual travellers searched and that its claim of $30 billion in losses from counterfeiting in Canada comes from a recent International Chamber of Commerce report.
The retraction on border searches of travellers is good news, though the Chamber should seek to publicly correct the Globe and Mail, which reported otherwise. Moreover, given that some of its members have publicly stated their opposition to the de minimis provision in the Anti-Counterfeiting Trade Agreement – GlaxoSmithKline has said the exclusion of traveller’s luggage “sends out an entirely inappropriate message” – its position on the issue may not be cast in stone.
Even more notable is the suggestion that the Canadian Chamber of Commerce is now basing its $30 billion counterfeiting claim on the 2011 International Chamber of Commerce report.
In a follow-up email (which I noted would be used for a blog post), Gray indicated that the Chamber had previously used the U.S. Chamber’s estimate of $250 billion in counterfeiting costs to estimate that the Canadian figure is $22.5 billion, since the Canadian economy is approximately 9% the size of the U.S. economy. That $250 billion figure was rejected in the U.S. GAO report, which noted:
a number of industry, media, and government publications have cited an FBI estimate that U.S. businesses lose $200-$250 billion to counterfeiting on an annual basis. This estimate was contained in a 2002 FBI press release, but FBI officials told us that it has no record of source data or methodology for generating the estimate and that it cannot be corroborated.
If it is now basing its numbers on the ICC report, it has massively overstated its claim since the ICC report actually produces a far lower number for U.S. counterfeiting. The report estimates U.S. counterfeiting imports at between $46 billion and $58 billion. It also estimates U.S. domestic production of counterfeits at between $12 billion and $14 billion. That leads to a total estimate of between $58 and $72 billion in counterfeits for the United States (there is an additional estimate for digital counterfeiting, which is irrelevant for border measure issues). Using the Chamber’s approach that estimates Canada at 9% of the U.S. number, the Canadian estimated figure for tangible counterfeits would be between $5.2 and $6.5 billion (adding the digital counterfeiting would add another $750 million – $2.5 billion). The roughly $6 billion figure points to a serious issue, but it is a far cry from the $30 billion the Chamber touted this week.
The Canadian Chamber of Commerce has now cited a figure based on numbers the FBI rejects ($22.5 billion), a figure the RCMP won’t support ($30 billion), and when pressed on the issue, points to yet another source that upon review indicates it massively overstated its claim. Gray now admits that counterfeiting estimates are difficult to quantify, yet it is the Chamber that embarrasses itself by regularly citing dubious data to garner media attention and lobby for legislative reforms.