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Attitudes toward Piracy and Counterfeiting Among Foreign Consumers in Thai Markets

Attitudes toward Piracy and Counterfeiting Among Foreign Consumers in Thai Markets

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Published by Adam R. Tanielian
Abstract: A survey helps answer questions about opinions among consumers regarding intellectual property rights and infringement. 196 foreign participants were recruited in Thai physical markets where counterfeit and pirated goods were sold nearby. Results showed that participants most often felt there was a high-medium infringement problem in both Thailand and ASEAN. Opinions also indicated high-medium levels of appeal to foreign tourists, purchases by foreign tourists, and losses to companies. Economic and public threat levels were evaluated as medium to low, and quality of infringing goods was considered low. Price was the dominant motivator of purchase of infringing goods. Differences between demographic groups were found using ANOVA. Pearson correlations and other statistics were calculated. A review of literature, legal framework, and statistics accompanies presentation of data. Better enforcement and broader public awareness campaigns are recommended.
Abstract: A survey helps answer questions about opinions among consumers regarding intellectual property rights and infringement. 196 foreign participants were recruited in Thai physical markets where counterfeit and pirated goods were sold nearby. Results showed that participants most often felt there was a high-medium infringement problem in both Thailand and ASEAN. Opinions also indicated high-medium levels of appeal to foreign tourists, purchases by foreign tourists, and losses to companies. Economic and public threat levels were evaluated as medium to low, and quality of infringing goods was considered low. Price was the dominant motivator of purchase of infringing goods. Differences between demographic groups were found using ANOVA. Pearson correlations and other statistics were calculated. A review of literature, legal framework, and statistics accompanies presentation of data. Better enforcement and broader public awareness campaigns are recommended.

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Published by: Adam R. Tanielian on Jan 31, 2013
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Attitudes toward Piracy and Counterfeiting Among Foreign Consumers in ThaiMarkets
Adam Richard Tanielian
Abstract:
A survey helps answer questions about opinions among consumers regardingintellectual property rights and infringement. 196 foreign participants were recruited in Thaiphysical markets where counterfeit and pirated goods were sold nearby. Results showed thatparticipants most often felt there was a high-medium infringement problem in both Thailandand ASEAN. Opinions also indicated high-medium levels of appeal to foreign tourists,purchases by foreign tourists, and losses to companies. Economic and public threat levelswere evaluated as medium to low, and quality of infringing goods was considered low. Pricewas the dominant motivator of purchase of infringing goods. Differences betweendemographic groups were found using ANOVA. Pearson correlations and other statisticswere calculated. A review of literature, legal framework, and statistics accompaniespresentation of data. Better enforcement and broader public awareness campaigns arerecommended.
Introduction
Commercial intellectual property (IP) infringement poses problems for proprietors,investors, businesses and states. Piracy (unauthorized reproduction, distribution and sales of copyrighted material) and counterfeiting (unauthorized use, reproduction, distribution andsales of trademarks) are considered criminal offenses in every World Trade Organization(WTO) member nation. However, theory and practice on this issue are divergent. Lax lawenforcement regimes and a so-
called “development agenda” (Helfer, 2009) contribute to
widespread ignorance of commercial infringement.The importance of IP rights (IPR) is well-known among nations. World EconomicForum (WEF, 2010-2011) concluded that IPR protection is a fundamental concern ininvestment decisions leading to R&D spending and innovation. Nations with strong IPRs seecomparative and competitive advantages in high-tech and cutting edge products andprocesses, in academic and research institutions, in technical literature, and in creative arts.WEF listed IP protection in the 1st pillar (institutions) and 12th pillar (innovation) in itsannual Global Competitiveness Report. Competitiveness rankings of nations closely followthe level of IPR protection in the nation. For example, Singapore is consistently among themost competitive nations in the world due in large part to its focus on innovation and thusIPR protection.
In contrast, Thailand’s falling competitiveness ranking co
uld be partially dueto its tolerance of widespread commercial IPR infringement.
 
Inclusion of IP theory in major international organizational reports warrants expansiveresearch on the issue. Most studies about commercial infringement focus on the supply side.Relatively little is known about consumers of these illicit goods. A few studies foundperceptions toward piracy and counterfeiting are subject to economic influences. Price andculture, among social and individual psychological factors have been found to influencepurchases of infringing goods (Moores, 2003; Proserpio, Salvemini, and Ghiringhelli, 2005;Haque, Khatibi, and Rahman, 2009). Further study on the demand side of transactions isneeded to understand various aspects of the behavior.
 Research Questions
This study aims to answer several questions about foreign consumer attitudes towardpirated and counterfeit goods. Do consumers perceive there to be a problem with piracy andcounterfeiting in Thailand? And in ASEAN as a whole? Do counterfeit and pirated goodsappeal to foreign tourists? To what extent to foreign tourists estimate purchases of such goodsamong their group? What kind of public and economic threats to foreign tourists think areposed by infringing goods and the organizations which sell them? Do foreign tourists believecounterfeit and pirated goods cause direct losses to companies? What is the perceived qualitylevel of infringing goods? Finally, what motivates purchases of these goods?
 Research Design
A questionnaire is used to measure opinions among potential consumers. In thefollowing section, a brief review of literature and statistics on piracy and counterfeiting is
 presented. Potential associations with organized crime are examined. Thailand’s role
leadership role in ASEAN is considered important. A section on method precedes results,which illustrate various relationships and significant points of interest among the data. Adiscussion of the significance of results follows. Finally, conclusions
Piracy and Counterfeiting in Physical Markets
Between 5% and 7% of world trade may be in pirated and counterfeit products(Eisend & Schuchert-Guler, 2006;IACC, 2012; OECD, 1998). Including digitally piratedproducts, estimated values of counterfeit and pirated goods in 2008 topped US$650-$775billion annually, forecasted to rise to US$1.77-$1.89+ trillion by 2015(Frontier & BASCAP,2011). Between 2000 and 2007, the volume of counterfeit and pirated physical products more
 
than doubled worldwide and the market share of counterfeit/pirated products increased byabout 10%(OECD, 2009).Empirical evidence on the market volume of infringing goods is in short supply, but avariety of sources offer estimates of impacts. Job losses due to piracy and counterfeitingcould exceed 2.5 million in G20 nations (BASCAP, 2011; Frontier & BASCAP, 2011).Industries which trade in optical discs
 – 
music, film, and software
 – 
are impacted most andoffer the bulk of statistics on the issue.BSA estimated worldwide software piracy rates of 42% for 2011, when monetaryvalue of unlicensed software topped US$63bn (BSA, 2012). Between 2003 and 2010, globaltop 50 debut album sales fell 77%. Between 2004 and 2010, the total value of the globalrecorded music industry fell by 31%(IFPI, 2011). Worldwide, MPA & LEK (2006)estimated film industries lost US$18.2 billion to piracy in 2005 alone. Although the validityof estimates are sometimes questioned, and the substitution rate for pirated/counterfeit goodsunknown, it is clear that media industries are threatened by unlicensed copies.
“We can’t compete with free. That’s an economic paradigm that doesn’t work,” said
20
th
Century Fox Films Co-Chairman James Gianopulos (Smith & Telang, 2009).
Organized Crime
Studies have reported links between IP infringement, organized crime, and terrorism(UNAFEI, 2000; IFPI, 2004; Treverton et al. 2009; UNODC, 2011). UNODC(2010) reported counterfeiting as one of the main activities of organized crime, among trafficking inpersons, smuggling of migrants, cocaine, heroin, firearms, environmental resources, maritimepiracy, and cybercrime. IIPA (2012) found vendors of pirated DVDs in Bangkok frequentlyengage in other crimes such as selling child pornography.
Among emerging concerns is the fact that traditional organized crime syndicatesappear to be playing a dominant role in the production and distribution of certain types of hard goods piracy, such as optical disks. This problem seems particularly prevalent in Asiaand parts of the former Soviet Union
,” said US Deputy Assistant Attorney General Malcolm(2003) before the House of Representatives. He continued, “
These groups will not hesitate tothreaten or injure those who attempt to interfere with their operations. Throughout Asia,

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