The Canadian Chamber of Commerce's IP lobbying arm, the Canadian IP Council (members include CRIA and major pharmaceutical companies), will release a new set of recommendations for Canadian IP reform tomorrow. Based on their past comments, it is reasonable to expect that the report to claim that Canadian IP law is outdated and that combating counterfeiting and piracy will require WIPO ratification, new criminal provisions, and stronger border measures. As evidence, the report will claim that a conservative estimate of the costs of Canadian counterfeiting is $22 billion per year. As discussed last week, notwithstanding opposition from local chapters like Hamilton, the Chamber has emerged as a leading lobby group with regular meetings, the promotion of ACTA, and repeated claims about the scope of Canadian counterfeiting.
While no one should be supportive of counterfeiting, the reality is that there have been numerous arrests in recent weeks, suggesting that Canadian law is not exactly powerless to combat counterfeiting. Moreover, data from the U.S. Customs and Border Protection Service indicates that Canada is not a major source of counterfeit goods as we did not rank among the top ten sources of seizures in 2008. Most troubling, however, is the Chamber's consistent reliance on unsubstantiated data that has no credibility.
The $22 billion counterfeiting claim comes from an Ontario Chamber report which concluded:
The US Chamber of Commerce estimates that counterfeiting and piracy costs the US economy approximately $250 billion per year. Given that the GDP of the Canadian economy is approximately nine per cent of the US economy, the cost of counterfeiting and piracy in Canada is approximately USD $22.5 billion.
In other words, no actual studies or evidence – simply an estimate based on a U.S. estimate. But where does the U.S. estimate come from? As a detailed Ars Technica article noted last year, it too is fictional. The number can apparently be traced to a single 1993 Forbes article that suggested that counterfeiting cost U.S. business $200 billion without any supporting evidence. Over the years, that figure has been regularly repeated (and now used by Canadian groups) without any supporting evidence.
In fact, the only significant study on counterfeiting in recent years comes from the OECD which estimated global counterfeit trade at $200 billion. Even using the Chambers own assumption that Canadian counterfeiting can be approximated by the size of our economy, Canada represents three percent of world trade or $6 billion in global counterfeiting – about one-quarter of the Chamber's claims. That illegal activity should not be ignored and the recent round of arrests provide ample evidence that Canadian law enforcement authorities are taking the issue seriously and currently have the legal provisions to do the job.