U.S. Chamber Releases Study on Intellectual Property in the Global Sports Economy

Thursday, June 21, 2018 - 3:15pm

WASHINGTON, D.C. — The U.S. Chamber of Commerce’s Global Innovation Policy Center (GIPC) today released a new study, “Leveraging Intellectual Property in the Global Sports Economy,” which outlines the central role of intellectual property (IP) in the modern sports industry.

The report illustrates the economic impact of counterfeiting and piracy in the sports industry, and it outlines four key findings:

  • The modern sports industry depends on and cannot exist without IP rights
  • A modern sports industry requires a broad menu of IP rights to thrive
  • Physical counterfeiting poses a real threat to the sports industry and to consumers
  • Online piracy of sports broadcasting is mushrooming, but governments struggle to keep up with the threat

Sport is a vibrant sector of the innovation economy, not to mention a powerful tool for shared human progress,” said David Hirschmann, president and CEO of GIPC. “With the surge in trends like dangerous counterfeit goods and illicit piracy apps and devices, it is more important than ever to strengthen our system of IP rights and incentives. We hope governments will view this report as a call to action to strengthen their IP systems and become better players and teammates on the sports stage.”

The report examines the interplay between IP rights and the sports sector — a broad, multi-layered industry that includes teams and leagues, broadcasters, and manufacturers and suppliers of sporting goods, apparel, and sportswear. The breadth of the industry necessitates a broad approach to IP — including patents, trademarks, design rights, and trade secrets protection — to generate economic value and fuel job creation.

The report also documents the detrimental effects of IP infringement on the sports sector, looking at the economic impact of three specific types of infringement:

  • Physical counterfeiting of sporting goods and sportswear
  • Pirating of sports broadcasting events
  • A new generation of piracy enabled by the proliferation of set-top boxes

Given the rise in online shopping, and with rates of e-commerce increasing by double digits annually, levels of physical counterfeiting of sporting goods and sportswear are growing exponentially. The report estimates that the direct economic impact of counterfeiting on the global sporting goods and sportswear markets is almost $50 billion each year. Accounting for the indirect effect on related services, the overall impact of counterfeiting is an estimated $84 billion each year.

In examining the economic impact of piracy, the report focuses on China as a case study, examining how gaps in its current IP framework hinder its ability to effectively fight piracy of sports broadcasting. Despite growing consumer interest and match attendance, the proliferation of online piracy is stifling China’s domestic soccer league; paid subscriptions amount to less than 10 percent of the league’s overall revenue, compared to 50 percent in other, more mature markets.

Set-top boxes are creating a new battleground of online piracy, according to the report, due to a plug-and-play set up that allows consumers to illicitly intercept sports broadcasts. This can occur without a consumer’s awareness, since the interface of pirated set-top boxes mimic the user experience provided by legitimate cable companies.

Overall, the report illustrates how sport, while not often discussed in economic or commercial terms, is a quintessential intangible asset.

The full report is available online here.

The Chamber’s Global Innovation Policy Center is working around the world to champion innovation and creativity through intellectual property standards that create jobs, save lives, advance global economic and cultural prosperity, and generate breakthrough solutions to global challenges.

The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.

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