The Economic Effects of Intellectual Property Right Infringements

Cost‐Benefit Models of Stakeholders in the Global Counterfeiting Industry and Marketing Response Strategies

“…To reiterate, Feinberg and Rousslang (1990) advanced the possibility that losses to legitimate firms caused by counterfeiters may actually be smaller than the combined VOLUME 15 • NUMBER 2 • SUMMER 2007 Lyn S. Amine and Peter Magnusson 77 benefits to consumers and all those involved in counterfeiting. This raises an interesting moral question of which perspective to adopt, that of the supply-side or the demand-side.…”

“…. Feinberg and Rousslang (1990) advanced a non-traditional view of counterfeiting. In an attempt to quantify losses to brand owners compared to benefits to infringers and consumers, Feinberg and Rousslang found, surprisingly, that overall benefits to society may actually exceed losses to IP owners.…”

Intellectual Property and Unfair Trade: Market Response to ITC Actions

“…Feinberg and Rousslang (1990) used 1988 I T C survey data to estimate lost industry profits. They concluded that for firms reporting expenditures on protection of intellectual property rights, lost profits represented about 1.6% of total sales (compared to estimated pre-tax profits of 6% of sales for US manufacturers).…”

“…The present study has a more narrow focus than does the Feinberg and Rousslang (1990) work, in that consumer surplus, volume of trade, welfare effects or other standard trade measures are not examined. However, the quasi-judicial nature of 337 proceedings, in which information is released to the market at predictable points during an investigation, suggests that standard equity capital market valuation techniques may be useful.…”

Normative Concerns in the International Protection of Intellectual Property Rights

“…A striking feature of this debate is that so little is known about the expected effects on economic welfare of a GATT agreement that would raise levels of protection in developing countries. There is little doubt that firms that create IP would realise significant benefits from stronger and more harmonised international protective regimes, though there are few available estimates of the extent of these gains (United States International Trade Commission 1988; Canadian Ministry of Consumer and Corporate Affairs, 1990; Gadbaw and Richards, 1988;and Feinberg and Rousslang, 1990). Essentially no evidence exists of the expected welfare impacts on other important actors in the intellectual property arena.…”