Economic Analysis of the Proposed CACP Anti-Counterfeiting and Piracy Initiative by LEGC, LLC

The U.S. government has substantial anti-counterfeiting and anti-piracy efforts in place. However, according to the U.S. Government Accountability Office (GAO), these efforts could be significantly improved primarily through strong permanent leadership to foster better coordination within and among federal government agencies and between them and state, local and foreign government authorities and private industry. Based on an extensive review, the GAO has also concluded that the U.S. government's anti-counterfeiting and anti-piracy effort needs strong permanent leadership, that more dedicated resources are needed to combat counterfeiting and piracy, and that the government agencies need more efficient and effective anti-piracy and counterfeiting operations (i.e., there is a need to "work smarter.") The OECD (Organization for Economic Co-operation and Development) reached similar conclusions in its recent review of government efforts to combat counterfeiting and piracy around the world.

The Coalition against Counterfeiting and Piracy (CACP) has recently proposed a broad initiative of actions to be taken by the federal government to enhance its efforts to control piracy and counterfeiting. The measures proposed by the CACP are consistent with the GAO's recommendations. The CACP's call for prompt stronger action by the federal government reflects the fact that the losses to American companies and the dangers to American consumers resulting from piracy and counterfeiting are growing rapidly as technology makes counterfeit products harder to detect and easier and cheaper to produce.

The purpose of this report is to provide an objective evaluation of the CACP initiative by providing estimates of the expected budgetary costs of the actions it proposes and estimates of the expected benefits of these actions. Reflecting limitations on the availability and reliability of underlying data and studies, we present a range of estimates for both the costs and benefits. In both cases, the estimates we present are conservative-we believe that our estimates of costs are on the high side of the likely range and our estimates of benefits are on the low side of the likely range.

Read the report in its entirety here.