The Global Implications of Intellectual Property (IP) PiracySSgt Damian Niolet for BSI 401

Overview

Quick Look at the Numbers How Globalization Exacerbates IP Piracy How IP Piracy is Contributing to a Global Economic Power

Shift Why this Power Shift Poses a Problem to Global Security Some Ethical Implications Why IP Piracy is Likely to Grow in the Long-Term

Quick Look at the Numbers

$3.82 billion – Software industry profits – 2004

$8.16 billion – Microsoft total revenue – 2004 Up to 90% - Microsoft software pirated in China – 2004 10 million – Computers bought in China – 2004 $165 – Average cost of Windows XP – 2004 $165 x 9,000,000 = $1.46 billion – losses to Microsoft ($1,000+$300+$1,000+$250) x 9 million ~ $23 billion

How Globalization Exacerbates IP Piracy

1 – Lack of stringent international laws2 – Lack of enforcement where laws do exist in other countries3 – The essence of globalization itself – international business4 – Hand-me-down technologies and infrastructure

How Globalization Exacerbates IP Piracy

4 – Developing countries with no ways to use the means 3 – International corporations have already done all the

work 2 – Local governments have to keep people working 1 – Different countries treat IP differently

How IP Piracy is Contributing to a Global Economic Power Shift

50 years ago China and India were petri dishes for IP piracy

Today, its estimated that 1/3 of China’s GDP is from IP piracy

China surpassed Japan in GDP in the 2nd qtr. of 2010

Why this Power Shift Poses a Problem to Global Security

An economy built on IP piracy entails a culture built on theft

If IP piracy is deemed acceptable, theft by other means may also become acceptable

Pirate corporations will gain power, influence governments, or . . .

Pirate corporations’ leaders may one day assume leadership creating a mafia like country

International borders will close as IP owners deny doing business

Some Ethical Implications

IP piracy does provide for the livelihood of hundreds of millions of peopleGlobalization’s true purposeCultural differences

Why IP Piracy is Likely to Grow in the Long-Term

Hydra concept – stricter enforcement will lead to more sophisticated pirates

Technological advances – more hand-me-downs Broadband speed and penetration – more people

connected at faster rates And finally, yet another petri dish – Africa

Sources

Robert Stoll, "Protecting Intellectual Property Rights in a Global Economy: Current Trends and Future Challenges,"

(statement before the Subcommittee on Government Management, Organization, and Procurement, Washington, D.C.,

December 9, 2009)

Stephen Siwek, “Policy Report #189: The True Cost of Copyright Industry Piracy to the US Economy,” Policy Report, (Lewisville, TX: Institute for Policy Innovation, 2007), 1-22.

Daniel Ikenson, “Manufacturing Discord: Growing Tensions Threaten the U.S. – China Economic Relationship,” Trade Breifing Paper, (Washington, D.C.: CATO Institute, 2010)

Ted Fishman, China Inc: How the Rise of the Next Superpower Challenges America and the World (New York: Scribner, 2006), 247.

Adrian Johns, Piracy: the Intellectual Property Wars from Gutenberg to Gates (Chicago: University of Chicago Press, 2009), 8.

Dr. K.G.K. Nair, and P.N. Prasad, “Development through Information Technology in Developing Countries: Experiences from and Indian State,” (Kerala, India: The Electronic Journal of Information Systems in Developing Countries, 2002) 1-13.

Henry Blodget, How to Solve China’s Piracy Problem. http://www.slate.com (accessed October 29, 2010).

China GDP Surpasses Japan, Capping Three-Decade Rise. http://www.businessweek.com (accessed October 29, 2010).

Declan McCullagh, Piracy Domain Seizure Bill Gains Support. http://news.cnet.com (accessed October 29, 2010).

Questions?