ITC Report Highlights Severe Economic Consequences of Intellectual Property Theft in China, Says BSA

International Trade Commission investigation finds up to 2.1 million US jobs at stake

WASHINGTON, May 18, 2011 /PRNewswire-USNewswire/ -- Rampant intellectual property theft and restrictive indigenous innovation policies in China cost the US economy up to 2.1 million jobs, an investigation by the US International Trade Commission has found. Conducted at the request of Senate Finance Committee Chairman Max Baucus (D-Mont.) and former Ranking Member, now Senior Committee Member Chuck Grassley (R-Iowa), the yearlong investigation underscores how the widespread theft of business software products in China harms all sectors of the US economy, not just software makers.

"The ITC report confirms what the software industry has long known: The Chinese practice of ignoring the intellectual property rights of US innovators harms our nation, puts a drag on our economy and siphons jobs away from Americans," said Business Software Alliance President and CEO Robert Holleyman, who testified before the ITC during its investigation. "The report establishes in clear terms that these practices harm every innovative American industry. We look forward to working with the Senate and the ITC to find meaningful and effective ways to preserve the rights of American innovators in international markets."

"Software piracy and other forms of intellectual property theft are like boulders that set off an avalanche of economic harms," Holleyman said. "This report confirms that multiplier effect and quantifies its impact."

"The vast majority of the software being used in China is unlicensed — including four out of five programs installed on personal computers there," Holleyman said. "That unfairly skews trade and competition, because software is an essential tool of production. When companies in a high-piracy country like China dodge overhead costs by stealing the software they need to run their operations, they gain an unfair competitive advantage over companies in low-piracy rate countries like the United States. That undercuts legitimate product sales and stymies job creation."

"I applaud Senators Baucus, Grassley and Hatch for asking the International Trade Commission to undertake this investigation," said Holleyman, "and I commend the ITC for its thorough work."

"China has made a series of commitments in negotiations with US officials to stamp out software theft," Holleyman continued. "But the towering piracy rate there remains stagnant, the commercial value of it continues to rise, and US software companies are seeing very little in the way of new sales even though China's PC market is surging. This situation is untenable. Rapidly lowering software piracy is critical to maintaining healthy bilateral relations between the world's two biggest economies.

About BSA

The Business Software Alliance (www.bsa.org) is the world's foremost advocate for the software industry, working in 80 countries to expand software markets and create conditions for innovation and growth. Governments and industry partners look to BSA for thoughtful approaches to key policy and legal issues, recognizing that software plays a critical role in driving economic and social progress in all nations. BSA's member companies invest billions of dollars a year in local economies, good jobs, and next-generation solutions that will help people around the world be more productive, connected, and secure. BSA members include Adobe, Altium, Apple, Autodesk, AVEVA, AVG, Bentley Systems, CA Technologies, Cadence, CNC/Mastercam, Compuware, Corel, Dassault Systèmes SolidWorks Corporation, Dell, Intel, Intuit, Kaspersky Lab, McAfee, Microsoft, Minitab, PTC, Progress Software, Quark, Quest Software, Rosetta Stone, Siemens, Sybase, Symantec, and The MathWorks.

SOURCE Business Software Alliance

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