by Don C. Brunell
President, Association of
Washington Business

If you came home after dinner and a movie to find your front door kicked in and all your valuables stolen, youd be horrified and call the police. Burglary is a crime covered by specific laws. When the perpetrators are caught, chances are theyll go to jail
A recent report published by the FBI says that property crimes like burglary cost our economy $16 billion in 2005. As large as that figure is, it pales in comparison with losses sustained by U.S. businesses from the foreign counterfeiting of American products. These phony goods also known as knockoffs cost the U.S. economy 750,000 jobs and as much as $250 billion a year.
Counterfeiters are making big bucks. These international crooks are hard to catch, and many nations turn a blind eye to them.
The potential profit from counterfeiting operations far exceeds those raked in by drug dealers. For example, a drug dealer might pay $47,000 for a kilogram of cocaine, and he can double his money by selling it on the street. For the same $47,000, according to the U.S. Chamber of Commerce, a software pirate can buy 1,500 counterfeit copies of Microsoft Office software and sell them for $423,000 a nine-fold return.
Piracy is especially widespread in the intellectual property arena computer software, movies, video games and music. MarkMonitor, an online software protection company, estimates that a record $199 billion in counterfeit goods will be sold online this year. That compares with $84 billion sold last year.
Sometimes, the crooks do get nailed. In March, Raymond Griffiths, a British national living in Australia, was extradited to the United States to stand trial. He was the ringleader of the criminal group known as DrinkOrDie, one of the oldest Internet pirating firms.
DrinkOrDie was founded in Russia in 1993, but it took more than a decade for a multi-national task force to bring Griffiths to justice. Meanwhile, Griffiths and his gang known by the screen name Bandido, illegally copied and distributed more than $50 million worth of counterfeited software, movies, games and music.
Money is not the only issue. Peoples lives are being endangered, as well. Counterfeit pharmaceuticals have been a growing problem since as far back as 1993, when the U.S. Food and Drug Administration issued a recall of 20 million doses of fake Lipitor, a medication used to control high cholesterol. According to the World Health Organization, one in 10 prescriptions sold annually in the United States are knockoffs.
In addition, six auto parts dealers in New York City were recently busted for selling faulty knockoff brake pads, ignition coils and sway bars worth an estimated $700,000.
Can we stop this rampant worldwide crime wave?
A good start would be to strengthen our states anti-counterfeiting and piracy laws, an effort thats currently in its formative stages. The Association of Washington Business is partnering with state Attorney General Rob McKenna and the U.S. Chamber of Commerce to create a statewide anti-counterfeiting task force and education programs for businesses, consumers and lawmakers.
Enforcing the law is one thing; putting teeth into it is another. Both are important. A big problem right now is that criminal penalties are too low to dissuade people from counterfeiting and pirating. For example, Griffiths is looking at a maximum sentence of 10 years in prison and a $500,000 fine a mere slap on the wrist. With Griffiths as a role model, other crooks might decide that the gamble is worth it. He and his gang made a cool $50 million before getting caught. Thats a pretty good return on investment.
We have to get tougher on counterfeiters and insist that our global trading partners do the same. Addressing state and federal anti-piracy and counterfeiting laws is crucial for American consumers, workers and businesses-and we need to do it now.