A. Yet thieves still reap a rich harvest. Inadequate protection of U.S. patents, trademarks and copyrights costs the U.S. economy $80 billion in sales lost to pirates and 250,000 jobs every year, according to Gary Hoffman, an intellectual property attorney at Dickstein, Shapiro & Morin in Washington. The computer industry loses upwards of $4 billion of revenues a year to illegal copying of software programs. Piracy of movies, books and recordings costs the entertainment business at least $4 billion annually.
B. With intellectual property now accounting for more than 25% of U.S. exports (compared with just 12% eight years ago), protection against international piracy ranks high on the Bush Administration's trade agenda. The U.S. International Trade Commission, the federal agency that deals with unfair-trade complaints by American companies, is handling a record number of cases (38 last year). Says ITC Chairman Anne Brunsdale: "Conceptual property has replaced produce and heavy machinery as the hotbed of trade disputes".
C. The battle is widening—U.S. companies filed more than 5,700 intellectual-property lawsuits last year in contrast to 3,800 in 1980—and the stakes can be enormous. In the biggest patent-infringement case to date, Eastman Kodak was ordered last October to pay $900 million for infringing on seven Polaroid instant-photography patents. In a far-reaching copyright case, book publishers scored an important victory in March when a federal court in New York City fined the Kinko's Graphics national chain of copying stores $510,000 for illegally photocopying and selling excerpts of books to college students.
D. Although the verdict is subject to appeal, the award underscores the growing importance of protecting intellectual property. That phrase may seem entirely too grand to apply to a song like If You Don't Want My Peaches, You'd Better Stop Shaking My Tree, but it actually encompasses the whole vast range of creative ideas that turn out to have value—and many of them have more value than ever. From Walt Disney's Mickey Mouse to Upjohn's formula for its anti-baldness potion, patents, trademarks and copyrights have become corporate treasures that their owners will do almost anything to protect.
E. In an economy increasingly based on information and technology, ideas and creativity often embody most of a company's wealth. That is why innovations are being patented, trademarked and copyrighted in record numbers. It is also why today's clever thief doesn't rob banks, many of which are broke anyway; he makes unauthorized copies of Kevin Costner's latest film, sells fake Cartier watches and steals the formula for Merck's newest pharmaceutical. That's where the money is.
F. One reason is that any countries offer only feeble protection to intellectual property. Realizing that such laxness will exclude them from much world trade as Well as hobble native industries, nations everywhere are revising laws covering patents, copyrights and trade names. Malaysia, Egypt, China, turkey, Brazil and even the Soviet Union have all recently announced plans either to enact new laws or beef up existing safeguards. In an effort to win U.S. congressional support for a proposed free-trade pact, Mexico last month revealed, plans to double the life of trademark licenses to 10 years and extend patent protection for the first time to such products as pharmaceuticals and food.
G. Companies are cracking down on pirates who steal designs, movies and computer programs. The battle is getting hotter—and more important. When Johnson & Johnson introduced a new fiber-glass casting tape for broken bones several years ago, executives at Minnesota Mining &