Intellectual Property (IP) are laws that are put in place to protect and enable people to earn recognition for their inventions, literary and artwork (World Intellectual Property Organization, 2022). This property can range from the invention of the lightbulb to symbols on T-shirts. For Intellectual Property to belong to someone, they must own either a patent, trademark, service mark or copyright.
There are three distinct types of patents, (1) Utility patents granted to anyone who discovers or invents a process, the machine, or useful improvement. (2) Design patents are granted to anyone who invents an original design. (3) Plant patents granted to anyone who discovers and asexually reproduces a new plant. Trademark or Service mark gives the rights to certain marks; this prevents others from selling or making goods under a mark that can be remarkably similar (the United States Patent and Trademark Office, 2022).
Most Intellectual property influences the United States economy; when that merchandise is counterfeit or sold outside of legitimate businesses, revenue is lost. That revenue over time causes a loss of profits, which leads to the loss of jobs within the United States (US Customs and Border Protection, 2021). It is estimated that theft of Intellectual Property costs the United States about $600 billion a year in losses (Associated Press, 2017).
Businesses provide tax revenue through sales taxes, corporation tax, and income tax from employees. These taxes go to bolster public roads, improve schools, lead to increases in infrastructure such as hospitals or police services, and aid in stimulating job growth. However, due to counterfeit goods being sold through the US economy, it is estimated that by the end of 2022, up to 5.4 million jobs will be lost (International Chamber of Commerce, 2017).
Not only do counterfeit goods harm the United States economy, but they can lead to significant safety and health issues. Most counterfeit items circulating are made from low-quality materials or have not been appropriately vetted for consumption. In 2020 alone, over fourteen percent of counterfeit products seized were pharmaceuticals, seven percent personal care products, six percent automobile products. In total, the United States seized 149,632,409 dollars' worth of counterfeit merchandise in health and safety seizures (US Customs and Border Protection, 2021).
US Immigration and Customs Enforcement (ICE) states that some of the most dangerous counterfeit goods are counterfeit airbags within automobiles. This fails to function correctly and can cause an explosion of metal shrapnel during a crash. Counterfeit lithium batteries that can explode due to extreme heat, counterfeit helmets, or baby carriers that more leisurely break, cosmetics that can cause severe skin or allergy reactions, and prescriptions drugs that either do not contain the active ingredients needed or less of the ingredient leading to overdoses (ICE, 2021).
Intellectual property theft led to economic loss, safety, and health concerns, but it affects national security. According to David Hirschmann, CEO of Global Intellectual Property Center, “Criminals trafficking in illicit trade threaten America’s prosperity and may jeopardize the health and safety of unwitting consumers.” (US Customs and Border Protection, 2017).
Counterfeit goods threaten national security by inserting flawed products into critical infrastructure supply chains and increasing funds for transnational criminal organizations (Homeland Security, 2020). In 2009, the ICC Business Action to Stop Counterfeiting and Piracy (BASCAP) study estimated a one percent increase in crime due to theft, which resulted in sixty billion US dollars per year (International Chamber of Commerce, 2017). Over eighty-five percent of contraband seized in 2020 arrived from China; this includes counterfeit medicines about ninety-seven percent come from China, Hong Kong, Singapore, or India. At the same time, many counterfeit opioids coming out of China are laced with fentanyl (Homeland Security, 2020).
China is also the primary producer of counterfeit electronics, which creates “Trojan chips” that contain viruses or malware; by pushing these counterfeit chips into the United States, China could spy on critical infrastructures and gather trade secrets to sell to United States enemies (Homeland Security, 2020)
Intellectual property is a crucial mark in pushing the United States economy; not only does it allow the individual the rights to their invention, but it allows businesses to profit, create revenue, and increase jobs. This leads to taxes and profits going back into the economy and improving the infrastructures needed to maintain the homeland. Counterfeit goods coming into the supply chains send that money towards criminal organizations that can use those funds for terrorist activities such as human trafficking or the drug trade. Also, the counterfeit items are not properly vetted and can cause many safety or health issues to individuals using them. When it comes to national security, these counterfeit goods allow our secrets to be sold and criminals to profit, increasing the United States' efforts to maintain secure borders and citizens' safety.
ICE. (2021, October 27). Counterfeit Goods: A Danger to Public Safety. Retrieved from Counterfeit Goods: A Danger to Public Safety: https://www.ice.gov/features/dangers-counterfeit-items
International Chamber of Commerce. (2017, July 6). 5 ways counterfeiting hurts society and what we can do about it. Retrieved from ICC: https://iccwbo.org/media-wall/news-speeches/5-ways-counterfeiting-hurts-society-and-what-we-can-do-about-it/
U.S. Customs and Border Protection. (2017, June 7). CBP Launches "The Truth Behind Counterfeits" Campaign to Inform Travelers of the Dangers of Counterfeit Goods. Retrieved from U.S. Customs and Border Protection: https://www.cbp.gov/newsroom/national-media-release/cbp-launches-truth-behind-counterfeits-campaign-inform-travelers#:~:text=Counterfeit%20products%20pose%20criminal%2C%20financial%2C%20and%20consumer%20safety,smuggling%2C%20and%20trafficking%20in%20illeg
U.S. Customs and Border Protection. (2021, December 22). The Truth Behind Counterfeits. Retrieved from U.S. Customs and Border Protection: https://www.cbp.gov/trade/fakegoodsrealdangers#:~:text=Economic%20Impacts%20Each%20time%20you%20buy%20a%20counterfeit,and%20the%20loss%20of%20U.S.%20jobs%20over%20time.
United States Patent and Trademark Office. (2022, January 24). General information concerning patents. Retrieved from USPTO: https://www.uspto.gov/patents/basics/general-information-patents
World Intellectual Property Organization. (2022, January 27). What is Intellectual Property? Retrieved from WIPO: https://www.wipo.int/about-ip/en/