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TABLE 5-6 U.S. Industry Estimates of Worldwide Sales Losses Due to Weak Intellectual Property Protection, 1986

Industry

Aggregate Estimated Loss by Responding Firms

Number of Firms Reporting

 

($ millions)

No Loss

Loss

Total

Aerospace

120

2

5

7

Building materials

739

0

6

6

Chemicals

1,334

2

18

21

Computers and software

4,130

6

25

31

Electronics

2,288

6

11

17

Entertainment

2,060

0

12

12

Food and beverages

86

2

8

10

Forest products

665

0

7

7

Industrial and farm

equipment

622

1

9

10

Metals and metal products

29

1

6

7

Motor vehicles and parts

2,194

0

4

4

Petroleum refining

1,295

3

6

9

Pharmaceuticals

1,909

0

10

10

Publishing and printing

128

0

11

11

Rubber products

511

1

4

5

Scientific and photographic instruments

5,090

1

6

7

Textiles and apparel

251

0

11

11

Other

151

0

8

8

Total

23,845

26

167

193

 

SOURCE: International Trade Commission (1988).

protection. A questionnaire was sent to a nonrandom sample of about 700 firms, most of whom were members of the Fortune 500. Of the 431 firms responding to the questionnaire, 269 reported that intellectual property (patents, copyrights, trademarks, trade secrets, mask works, proprietary technical data) was of more than nominal importance to their business in 1986, and 167 firms reported that their aggregate losses in sales in 1986 were in excess of $23 billion. Non-R&D-based industries such as entertainment were included in the study. The biggest sales losses were reported by the scientific and photographic instruments, computer, and electronics industries (Table 5-6).

According to the respondents, about $2 billion of sales were lost in the United States because of U.S. imports of infringing goods, about $6 billion of U.S. exports were lost because of inadequate intellectual property protection, and about $3 billion in royalties and fees were lost. Because these figures pertain to only part of the sample, they would obviously seem to be underestimates of the total impact on the sales of U.S. firms in 1986. For



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