Ambassador Nealon’s Remarks at the Intellectual Property Rights Conference

San Pedro Sula, Cortés

It is a pleasure and a privilege to be here to kick-off such an important and useful intellectual property rights event. It is impressive to see such a diverse array of participants from the public and private sectors, including a number of prominent U.S. companies. This speaks to relevance of this issue and the collective commitment to confronting it.

We are here to learn more and share ideas on stopping the theft of intellectual property rights. According to an academic study that looked at more than 70 countries, economies with higher rates of intellectual property rights violations tend to have lower growth rates. When business is disrupted, and governments are unable to guarantee the ability to produce legitimate capital, people become less productive, leading to lower economic growth, slower job creation, and less tax revenue.

Intellectual property rights also play an important role at the micro-economic level. They both guarantee that owners, creators, and legitimate business receive the benefits they deserve for their work and protect consumers from faulty counterfeit products. For businesses, lack of protection means lost profits and brand dilution; for consumers, it means wasting money on lower quality products that may not work and, in the case of counterfeit medicines and airbags, even putting your life at risk.

Legal frameworks and law enforcement infrastructure are important for protecting intellectual property rights. In the United States, it is included in Article 1 of the U.S. Constitution. And we are not alone. In fact, much of the world has committed to protect intellectual property since 1994, under the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

As we all know, pirated goods and services are ever present and readily available around the world. Counterfeit clothing, CDs, DVDs, and cosmetics can be found on countless street corners. Illegal download sites can be found throughout the internet. Counterfeit pharmaceutical products can be found in both legitimate pharmacies and informal market stalls. They rob those owners and their employees of legitimate business and income.

It is important to highlight that intellectual property rights protect consumers as well. When someone buys a pirated DVD or CD on the street, there is only the word of the vendor selling the item illegally that it is what he or she says it is. There are no guarantees that the product does not contain viruses, which could damage domestic electronic equipment with no recourse to replace or repair it. Pirated electronic products could also help cyber-thieves steal your personal and financial information.

What should scare everyone is that counterfeit products can harm public health. It is estimated that approximately 50 percent of the pharmaceuticals available through illegal websites are counterfeit. Some of you may recall that in Panama in 2006, over 100 people died from taking medicines made with counterfeit glycerin. The Panamanian government worked for several years to track down all products containing the poisonous ingredient, but not before many innocent people died. Automobile parts may make vehicles unsafe, aircraft parts may fail in flight, or electrical components may catch fire. Because these products are often technical in nature, average consumers are incapable of determining whether the goods they purchase pose a risk or the nature of the risk.

The trade in counterfeit goods also strengthens and enriches criminal organizations. The same supply chains that move counterfeit clothing and electronics also facilitate arms trafficking, human trafficking, and drug trafficking. Purchasing counterfeit goods perpetuates local, regional, and global illegal trafficking systems and the organizations that benefit from them.

As intellectual property crime becomes more of a global phenomenon, successfully countering it requires coordination at the local, regional, and international levels. The breadth and the depth of this problem are too much for a single agency or even a single government to tackle on its own. This conference is a great opportunity for all of you, government officials, business owners, and international representatives to ask questions, to share experiences, and to build useful ties in the important fight against intellectual property theft. Thanks for having me and enjoy the rest of the event.