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Last Updated: Tuesday, 4 October 2005, 19:02 GMT 20:02 UK
Businesses unite to fight piracy
By Jorn Madslien
BBC News business reporter at the Bascap event in London

The battle against counterfeiters of everything from DVDs or computer software to medicine, toys and car parts is about to get serious.

Captains of industry during anti-piracy and -counterfeiting talks in London, 4 October 2005
The executives want their peers to join the anti-piracy battle

More than a dozen business executives - including Microsoft chief Steve Ballmer, Vivendi Universal chairman Jean-Rene Fourtou and GlaxoSmithKline's European president Andrew Witty - have joined forces and are urging their peers worldwide to wage war on piracy.

"Piracy remains a real problem for virtually every sector in every country in the world," insists Eric Nicoli, chairman of EMI Group and co-chairman of the cross-industry project named Bascap - or Business Action to Stop Counterfeiting and Piracy - which represents businesses that employ a million people and serve a billion customers.

In the past five years, technology has changed so much that it is now possible to "replicate perfectly pretty much any product anywhere in the world", Mr Nicoli says.

"This is having devastating effects on our businesses, the economy and wider society."

Health and safety

At its most extreme, counterfeited goods can cost lives, insists Mr Nicoli.

The fight against piracy is never-ending
EMI chairman Eric Nicoli

"There are some industries that haven't been discussed very much. One is pharmaceuticals," he says.

Worryingly he points out that the industry estimates that a tenth of all drugs are made by pirates, while more than half the drugs sold in the developing world are counterfeits and thus not subject to quality and safety checks.

"Car parts is another example where counterfeiting represents danger [to the consumer]," Mr Nicoli adds.

The toy or food industries are also hit by pirates who routinely ignore health and safety standards.

"We are particularly concerned about the risks for consumers from unsafe counterfeit products," says Nestle's chairman and chief executive Peter Brabeck-Letmathe.

Economic damage

The sub-culture of pirates and counterfeiters has grown into a $600bn beast whose growth poses a serious threat to economic development, and this is the case in rich and poor countries alike, the executives insist.

Bascap goals:
Explain how fakes and pirates harm the economy and society
Build respect for intellectual property rights
Encourage legal enforcement of intellectual property rights

"Intellectual property has become very, very important to both developed and developing nations," says Bob Wright, vice chairman of GE and chief executive of NBC Universal.

In the developed world, jobs are lost in creative industries, such as the music business or among software makers, and tax payers are hit as governments collect less taxes from retailers selling everything from perfume and cosmetics to fashion and sportswear.

"It doesn't really make any difference what business you're in," says Mr Wright. "No-one is immune here."

Poor regions of the world suffer too, though for different reasons.

"Counterfeiting and piracy pose a massive problem for the economies of developing countries," says Tariq Rangoonwala, chief executive of Home Products International.

"It is very difficult to attract foreign investment when your markets are flooded with fake products."

For this reason, "no country wants to be known as a piracy location", says Mr Wright.

Name and shame

When quizzed by BBC News, none of the executives would name any known piracy locations.

However, Bascap intends to do so once it has "robust data" to back such allegations, observes Mr Nicoli.

It plans to create counterfeiting and piracy indices, and to compile a compendium of case studies and statistics that can be shared between businesses and governments.

This, it says, would become the first global cross-industry stock take of the counterfeiting and piracy problem.

Pile of pirate CDs
There are millions upon millions of pirated CDs and DVDs in circulation

"The fact that business leaders from so many sectors have united to combat counterfeiting and piracy gives an indication of the enormity of the issue facing the global economy," agrees Mr Brabeck-Letmathe.

But first and foremost, the companies will "count on the support of governments to address the issue", says Mr Brabeck-Letmathe.

To achieve this, several countries must introduce laws that better protect intellectual property rights, while elsewhere - where legislation is already in place - enforcement would need to be improved, the executives say.

"We need an adequate legal framework and enforcement capacity," says Vivendi Universal chairman Jean-Rene Fourtou, who is also co-chairman of the initiative.

"We are very far from that even in the US, and Europe is quite worse."

Lengthy battle

But if governments need to be better educated about the effects of intellectual property theft, this is even more pressing when it comes to the counterfeiters' customers.

"The consumer who lacks education and buys a fake DVD will see no harm in buying counterfeit software," observes Mr Nicoli.

As yet, it is too early for Bascap to "be specific about any aspect of any industry", and "no-one should imagine that this will eradicate piracy overnight", Mr Nicoli says.

But Bascap is here to stay.

Says Mr Nicoli: "The fight against piracy is never-ending."


SEE ALSO
China, US bust fake Viagra ring
09 Sep 05 |  Asia-Pacific
Software pirates tap into technology
02 Aug 05 |  Technology
Software piracy 'seen as normal'
23 Jun 05 |  Technology

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