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Split of total estimated trade losses due to copyright piracy (Source: IIPA)

Per capita U.S. dollar loss due to copyright piracy (Source: DailyTech)

Estimated per capita loss against GDP (PPP) per capita (Source: DailyTech)
Canada is the world's largest piracy offender per capita

Last week, the International Intellectual Property Alliance (IIPA) submitted recommendations to the Bush administration in its “Special 301” review of copyright piracy and market access problems around the world. The IIPA report recommended that 16 countries be placed on a “Priority Watch List,” for piracy offenses. Canada, Mexico and Israel joined China and Russia as countries severely plagued by piracy.

“The annual Special 301 process continues to be the primary means for the U.S. copyright industries to advise U.S. government agencies about the principal impediments to adequate and effective protection in global markets,” noted Eric H. Smith of the IIPA. “Many of the key markets around the world that are infected with high levels of copyright piracy or deny effective market access to copyright industries.”

At first inspection of the figures released by the IIPA, the $2 billion estimated trade losses due to copyright piracy in China and Russia are more than double that of any other nation. Smith comments, “China and Russia are again this year the two countries that are of the greatest concern to the copyright industries, as they were in 2006. While there have been developments in both these key markets over the year, the bottom line is that piracy levels have not come down at all or only marginally, and some problems have grown worse.”

Upon further examination, however, we find that there is more to the Priority Watch List than just raw loss numbers. For example, China leads all nations in piracy with an estimated $2.2 billion lost due from piracy -- but China is also the world’s most populated nation. Could it be that China’s piracy problem is explained by its huge populace? After all, it would be easy to say that China is the world’s biggest consumer of rice because it has the most citizens. While China’s population has a strong role to play in the country’s rice consumption levels, it would be erroneous to attribute the statistic to just a single factor. There are usually several forces at play to explain statistics, as in the example presented with China and rice, culture can be one of them. One raw statistic alone, such as rice consumed or dollars lost, is meaningless without context.

Taking a deeper look into the IIPA’s figures to bring some weight and context behind its estimates show that the Priority Watch List numbers from the Special 301 report are imperfect. Aside the fact that dollar estimates are not an exact science, the IIPA’s lists do not include any figures for the motion picture industry’s losses, has incomplete data for entertainment software and books and features no data for the music industry in Canada. Out of the five categories of copyright piracy, the IIPA only has complete data for business software.

Plotted below is the IIPA’s estimated total business software trade losses due to copyright piracy during 2006 against population and gross domestic product (GDP) at purchasing power parity (PPP).


2006 Estimated Total Losses (U.S. dollars millions)*


Loss Per Capita (U.S. dollars)

GDP (PPP) Per Capita (U.S dollars)***




































Costa Rica










Saudi Arabia















Dominican Republic




















*International Intellectual Property Alliance
**Latest data available on Wikipedia and CIA Factbook
*** International Monetary Fund, World Economic Outlook Database, September 2006

The table is sorted according to dollars lost per capita, and it’s immediately apparent as to why the IIPA is so critical of Canada. Not only does Canada have the greatest loss per capita at $16.78, but its citizens also have the greatest purchasing power. While the IIPA may be concerned about its loss per capita from Canada, the report the coalition filed expressed frustration with Canadian legislation. The IIPA says that pirates have taken advantage of the gaps in Canadian law to become a “leading exporter” of camcorder bootleg movies and modchips for video game consoles.

On the other hand, China, the world leader in dollars lost from piracy, only manages $1.68 lost per person. Of course, incidents of piracy are likely to be spread very unevenly in a nation with huge disparity between urban and rural areas. The IIPA also points to China as a large exporter of pirated goods to Eastern and Western Europe.

The IIPA has spelled out exactly what it believes China must do, including taking deterrent “criminal” actions against pirates instead of fines, which the coalition believes are meaningless. “So far, it is clear that the Chinese government has not devoted sufficient resources to combat rapidly advancing Internet piracy and needs to further clarify underlying legal rules and enforcement procedures, as well as to expand the opportunity for U.S. copyright based industries to offer legitimate materials to the Chinese public,” the IIPA wrote to the Bush administration.

Russia, the other leader in piracy, stays near the top of the list with $14.80 lost. The U.S. government announced in November 2006 a joint program with Russia to fight piracy. The IIPA acknowledges the development, but continues its disparaging tone, saying, “Despite the repeated efforts of industry and the U.S. government to convince the Russian government to provide meaningful and deterrent enforcement of its copyright and other laws against optical disc factories and all types of piracy -- including some of the most open and notorious websites selling unauthorized materials in the world, such as -- little progress has been made over the years in convincing Russia to take the  enforcement actions that could reduce these high piracy levels.”

Despite Israel’s relatively low $98.4 million loss, its smaller population results in a per capita loss of $13.86. The IIPA’s main concern, however, appears to be the Israeli government’s inaction and indifference to U.S. copyright laws. Specifically, the IIPA is dissatisfied with a bill that “would discriminate against foreign producers of sound recordings specifically, and potentially violate Israel’s bilateral obligations to the United States.”

Mexico places fourth on the list of loss per capita at $9.25 and an overall third in terms of overall losses at over $1 billion, but even then, the country’s ranking may be under rated. Going back to the IIPA’s 2005 report, Mexico posted the highest numbers for movie piracy at $483 million—nearly double that of China. The 2006 IIPA report does not include any information about motion pictures, underscoring the potentially incomplete nature of the coalition’s statistics.

Nevertheless, the IIPA has gathered its stats and focused its attentions on the black markets and reigning governments of Argentina, Canada, Chile, China, Costa Rica, the Dominican Republic, Egypt, India, Israel, Mexico, Russia, Saudi Arabia, Thailand, Turkey, Ukraine and Venezuela.

“The unwillingness of the countries identified in our submission to curb high rates of piracy – in most countries, through more effective and deterrent enforcement – saps the U.S. economy of the high-paying jobs and strong growth rates that make this sector critical to the health of the U.S. economy,” said Smith.

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RE: This makes me laugh!
By masher2 on 2/20/2007 6:36:33 PM , Rating: 2
> "If one skips out on a haircut or hotel bill ..there will be a difference in the amount of services (labor) rendered by the barber and hotel ..."

You're straining to justify here. If you skip out on a hotel bill, you're guilty of theft of services-- whether or not the hotel incurred any labor costs during your stay. If you steal a car, then return it, you're guilty of grand larceny-- even though the owner may not have even noticed it missing.

As for claiming that in an IP theft, if you have no financial loss, you've "lost nothing", this is again incorrect. You've lost the most basic element of property rights-- control over usage. If you own a home, you control who can stay in it. If you own a car, you control who uses it. Without that control, your ownership rights have been comprised...finanncial loss or not.

RE: This makes me laugh!
By Oregonian2 on 2/20/2007 9:07:15 PM , Rating: 3
Didn't read a dang thing I wrote did you? Who the hell is trying to justify anything? Do you equate murder and Grand theft? Why not, both are illegal! If I try to explain how those are DIFFERENT illegal acts will you accuse me of trying to justify one of them? That's exactly what you're trying to do. Read what I wrote.

You also are playing straw man. You "say" what I said (WRONGLY) then attack your incorrect quote.

Your control comment is a good one, but not relevant to my explaination of how illegal copying is a DIFFERENT illegal act from thievery.

RE: This makes me laugh!
By Oregonian2 on 2/20/2007 9:24:57 PM , Rating: 2
It's stealing, plain and simple. It fits both the legal and the ethical definition.

Let me put it another way. If IP copying is "stealing" "plain and simple", why do lawmakers waste the time passing laws making IP copying illegal when there already are laws making stealing illegal?

RE: This makes me laugh!
By isaacmacdonald on 2/20/2007 11:50:18 PM , Rating: 3
You've captured my thoughts well. I'm not sure I'd bother to say it's not "theft" in some general sense, but this variety of piracy is clearly distinct from property theft and even theft of services (cited earlier in this thread).

What's peculiar here is that people seem to completely miss the point of drawing the distinction. This has nothing to do with justifications or morals. It has everything to do with correctly quantifying the problem, and forming intelligent policy to rectify it.

Far too much time is consumed expressing moral outrage ("It's wrong and you know it!"). Such expressions should be relegated to footnotes as they offer absolutely nothing of value when it comes to understanding the macro scale.

RE: This makes me laugh!
By lldsi a e8 ba on 2/21/2007 4:19:50 AM , Rating: 4
You're debating with masher2, what do you expect? For a real challenge, try to get him to acknowledge that he's wrong about something. That'd be a dailytech first as far as I know.

RE: This makes me laugh!
By masher2 on 2/21/2007 9:04:04 AM , Rating: 2
> "For a real challenge, try to get him to acknowledge that he's wrong about something. That'd be a dailytech first..."

All one has to do to get an admission of error from me is to prove me wrong. In fact, someone did so just last week:

RE: This makes me laugh!
By masher2 on 2/21/2007 9:01:17 AM , Rating: 2
> "Who the hell is trying to justify anything? If I try to explain how those are DIFFERENT illegal acts will you accuse me of trying to justify one of them? "

You misunderstood the context of the word "justify". You were trying to justify your original argument, not (as far as I know) the theft of IP.

"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer

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