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• D. Statistics

• Intellectual Property Policy

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• Theft of Intellectual Property

• Consultant's Report

D1. Because of the clandestine and mobile nature of the facilities used to manufacture pirate and counterfeit goods, and of the persons involved in producing and distributing such goods, it is inherently difficult to obtain any reliable statistics as to the extent of piracy and counterfeiting of goods in New Zealand and overseas.

D2. Research is currently being conducted by various international governmental and nongovernmental organisations to quantify as far as possible the extent of piracy and counterfeiting. Possibly amongst the more reliable statistics are those suggested by the International Chamber of Commerce, the Anti-Counterfeiting Group, and the Business Software Alliance.

D3. Converted to New Zealand dollar values, statistics that have been put forward have been along the following lines:

1. The worldwide trade in counterfeit products including software adds up to 5-10% of total worldwide trade i.e., a total international counterfeit trade of approximately $300-$600 billion.
2. The worldwide trade in counterfeit branded goods is of a total of around $200 billion.
3. In 1996 counterfeit music sales were worth $4 million, being 5% of total sales of music and 21% of the total number of units (for example CDs and cassette tapes) of all recorded music sold.
4. Recent figures from Business Software Alliance, released June 1998, estimate revenue loses to the worldwide software industry due to piracy at $23 billion during 1997, with about 40% of all new business software applications installed globally being pirated.
5. Of the 3% of all imported goods actually inspected by the United States Customs in 1994, there were found $74 million worth of counterfeit goods.
6. A 1998 study made on behalf of the International Trademark Association showed that 22% of all sales worldwide of apparel and footwear of a number of American corporations were lost to counterfeiting.
7. In the European countries 100,000 jobs have been lost due to the manufacture, distribution and sale of counterfeit goods.

D4. [Deleted]

D5. There can be conflicting figures depending on the nature of the study, and the foregoing figures can only be regarded as illustrative.

D6. It is clear that pirate and counterfeit goods comprise a major part of international trade.

D7. Corresponding figures for New Zealand are difficult to obtain. To date New Zealand Customs have not prepared a formal report on Determinations and other activities under the border protection measures in the Copyright and Trade Marks Act.

D8. Preliminary figures from the New Zealand Customs Service show that some 15,000 items of counterfeit clothing have been forfeited to the Crown (with the consent of the importers concerned) since January 1995, and that of course was only in respect of trade marks of just 13 different proprietors who had filed notices of their clothing trade mark registrations with Customs.

D9. New Zealand Customs have located other brands of clothing and other goods which they believe to be counterfeit but which they are unable to detain because the proprietor of the trade mark in question has not yet registered its trade mark with Customs.

D10. New Zealand Customs does not have the power to invite voluntarily forfeiture under the Copyright Act, and has no corresponding figures for Copyright Notices. Also, there are much fewer Copyright Notices than Trade Mark Notices lodged. High Court proceedings were lodged in respect of Determinations under copyright in respect of cartoon characters and packaging products which both led to a satisfactory settlement.

D11. The film and video industry believes that the estimated losses due to piracy in New Zealand are $16 million, some 4% of all motion picture videos sold.

D12. The study by the Business Software Alliance estimates that the piracy rate of software in New Zealand is 34% and the piracy losses here amount to $40 million. Possibly half of these losses are due to counterfeit trading and the other half due to end-user piracy.

D13. Comparable piracy rates from the foregoing figures for the countries specifically included in this study are as follows (where available):

D14. Persons involved in enforcement, such as the Police, Customs, lawyers, and intellectual property owners, are aware of the vast amount of pirate and counterfeit product available in New Zealand. This is openly sold through markets and other avenues where it is difficult to identify the persons involved, and where the cost of enforcement is considerably more than the value of counterfeit products offered by each individual perpetrator.

D15. It is common ground amongst all concerned that there is quite inadequate resource available to Customs and the Police to take action against retailers and other distributors of all such pirate and counterfeit product, even given the current limitations in New Zealand law. There have therefore been very few prosecutions for pirate and counterfeit activity in New Zealand, and this in turn is another reason why there is little statistical material here.

D16. There have been a number of ANTON PILLER civil orders executed, but most are subject to confidentiality undertakings, which means that they also cannot be used as statistical sources.

D17. There has been no evidence counterfeit pharmaceuticals being offered for sale in New Zealand and this no doubt is because of the restrictions under the Medicines Act.