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International Trade Administration Report Highlights Strong Markets, Persistent Piracy

chrome 3D copyright symbolLast month, the International Trade Administration (ITA)—an agency in the US Department of Commerce that measures and promotes the export of nonagricultural services and goods—released its 2017 Top Markets Report, Media and Entertainment Sector Snapshot. The report provides updates on the steady growth of the US media and entertainment (M&E) sector, which includes the core copyright industries: books, newspapers, periodicals, motion pictures, TV production, recorded music, radio and television broadcasting, video games, and software. In addition to emphasizing the solid growth and immense value added by copyright-intensive industries to the US economy, the update highlights the enduring barriers hindering the sector’s export potential, not the least of which is the continuing harmful effects of widespread piracy and copyright infringement.

The 2017 M&E report is an update to the more detailed 2016 report prepared by the ITA as a market assessment tool to help “unlock export and investment opportunities for U.S. businesses by combining indepth quantitative and qualitative analysis with ITA’s industry relationships.” Beginning with an overview of the global M&E market, the 2017 update references the 2016-2020 Entertainment & Media Outlook by PricewaterhouseCoopers, which measured global market revenues at $1.9 trillion in 2016 and predicts an expansion to nearly $2 trillion in 2017. One of the more notable movements in individual country market value came from China, which the report notes jumped into second place with a $190 billion share of the global total, followed by Japan ($157 billion), Germany ($97 billion) and the United Kingdom ($96 billion).

The United States remains firmly ahead of all other countries in market value, accounting for $712 billion—or one-third of the entire global market. Driving the US market is the unprecedented progress of the core copyright industries—or those industries “whose primary purpose is to create, produce, distribute, or exhibit copyright materials”—which grew at an aggregated annual rate of 4.8% between 2012 and 2015. The copyright industries’ growth was an astounding 127% more than the overall US economy, which grew at a rate of 2.1% over that time.

Additionally, the report describes copyright industries as significant contributors to US exports, outperforming other sectors such as chemicals, aerospace, agricultural products, and pharmaceuticals. The robust growth and output of the copyright sector reflects industries that are not only experiencing increased expansion in the digital market, but also a movement towards the convergence of media and entertainment companies that are now offering a multitude of services spanning many M&E sectors.

But despite this seemingly favorable outlook, the report warns that piracy and illegal file-sharing continue to harm the M&E sectors. Providing overviews of the top five export and licensing markets for the US digital and creative sectors—which include Brazil, China, India, Canada, and the UK—the report highlights the persistent piracy and lack of strong enforcement of copyright laws compromising international trade.

Particularly troublesome are the Indian and Brazilian markets, where growing classes of tech-savvy consumers are accustomed to high piracy rates and weak copyright enforcement. Detailing these barriers to entry, the report notes that “[c]opyright industries doing business in Brazil face significant Internet piracy, as do products in the entertainment sector, such as CDs; DVDs; and other media carrying pirated music, movies, TV programming and video games.” Facilitating this widespread infringement in Brazil and India are circumvention devices that allow access not only to movies and television shows, but also to video game consoles.

Unfortunately, infringement is also inhibiting trade with the United States’ North American neighbors. The report cautions that while Canada has a well-developed professional M&E sector that should make for efficient dealing with the US, “online infringement is high and enforcement weaker than expected.” On the bright side, recent Supreme and Federal Court rulings in Canada have shown a willingness to combat rampant infringement and enforce copyright law.

The update explains that “[d]igital trade has brought attention to widespread piracy and the importance of having solid copyright laws and enforcement actions.” It’s an important reminder that though creative industries are powering vibrant global ecosystems, sound IP laws and the willingness to enforce them are necessary to overcome the damaging effect infringement has on international markets.

 

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Innovate4Health Innovation Patents

Innovate4Health: GRIT Leveraged Freedom Chair Brings Mobility to Developing World

This post is one of a series in the #Innovate4Health policy research initiative.

innovate4healthThe World Health Organization (WHO) estimates that over 65 million people in the developing world need an appropriate wheelchair. Over 75% of people in the developing world live in rural areas, where standard wheelchairs do not work, as they are hard to mobilize over rugged terrain and rough local roads that may not be paved. Further, most wheelchairs are difficult to maintain: they are comprised of many pieces that are easy to break and hard to repair, and they are expensive to replace.

The Leveraged Freedom Chair (LFC) is a wheelchair that solves this international humanitarian problem. It enables people with disabilities in developing countries to gain mobility and independence, and it gives them the ability to navigate their environment in life-changing ways and at a viable cost. The LFC is built out of steel and bicycle parts that are commonly available in rural areas of developing countries. The parts and tools for maintenance and repair are inexpensive and commonly found. This makes it easier to repair the wheelchair at local bicycle shops or wherever spare parts may be found.

The construction of the LFC is engineered to meet the diverse challenges that arise in developing countries. The LFC uses a unique lever drivetrain which makes it both faster than conventional wheelchairs and sturdier when traveling over rough terrain. It does not use gears and derailleurs, which can be expensive and easily broken; it instead uses levers connected to the drivetrain to control velocity and speed. By using readily available bicycle parts in the production of the LFC, costs are kept down and users can maintain and repair the chairs themselves.

The lever construction is one of the high points of inventiveness of the LFC. Instead of pushing on the wheels like a regular wheelchair, LFC riders push on two levers, which are designed to be biomechanically efficient. LFC riders can shift gears by moving their hands up and down the levers. For smoother roads, riders push on a low part of the levers and shift into “high gear,” which enables them to travel 80% faster than a regular wheelchair on tarmac. For rougher terrain, riders push on a high part of the levers and shift into “low gear,” which enables them to ride over obstacles with 50% more torque than a regular wheelchair. The levers can be removed and stored on the wheelchair, which allows the LFC to be used like a regular wheelchair indoors.

The LFC was conceived and developed in 2007–2008 by four graduate students in the mechanical engineering program at MIT who then founded a company in 2012 called Global Research Innovation and Technology, or GRIT, to develop and commercialize their invention. The LFC has been in development since 2008. First-generation prototypes of the LFC were constructed in Kenya and Vietnam with community partners who were also local wheelchair producers. In 2014, GRIT secured Patent No. 8,844,959 for the LFC, a “wheelchair with level drivetrain.”

The company now manufactures the LFC in India with a local partner and sells it in bulk for $250 per chair to non-governmental organizations (NGOs) and other development organizations. The aid agencies and NGOs that purchase the chair generally distribute the LFC to users free of charge. In 2015, the GRIT management team estimated that it had shipped almost 1,200 LFCs to 17 countries, including Guatemala, Haiti, Kenya, Uganda, Tanzania, India, the Philippines, and Vietnam.

The team at GRIT runs the company as a “social enterprise,” pursuing a social mission (like a nonprofit) but also retaining the ability to make money off their patented invention. As a for-profit social enterprise, GRIT can accept money from nonprofit foundations that is congruent with its mission, but it can also raise private equity like a regular startup.

GRIT has earned numerous awards and honors for the LFC, including winning a Patents for Humanity Award from the U.S. Patent and Trademark Office in 2015.

After spending several years developing the LFC, GRIT decided to build upon its patented technology and develop wheelchairs similar to the LFC but more suited to use in first-world countries. The GRIT Freedom Chairs are somewhat sleeker in design, and have certain features that appeal to first world riders, such as a lightweight frame, optional customization, and the ability to be folded and stored in the trunk of a car. The sale of these chairs is intended in part to defray the costs of distributing chairs at or below cost in developing world countries. GRIT Freedom Chairs afford users access to previously-inaccessible terrains, and offer versatility to a broad array of riders, including American veterans. They are directly marketed in the U.S. in order to keep costs down.

People with limited mobility in developing countries face many daunting obstacles, and the lack of appropriate wheelchairs can severely limit their mobility, opportunities, access, and independence. The GRIT Leveraged Freedom Chair is an elegantly simple, inexpensive, and ingenious device that confers freedom to wheelchair users in the developing world. Its underlying technology, secured by vital U.S. patents, is also the basis of the GRIT Freedom Chair, which likewise transforms the lives of users in the developed world. Both the LFC and the Freedom Chair rely on secure property rights that enable their parent company to develop and market life-changing products that users can afford to ride, repair, and maintain. The “all-terrain wheelchair” is truly an invention with worldwide relevance and reach.

#Innovate4Health is a joint research project by the Center for the Protection of Intellectual Property (CPIP) and the Information Technology & Innovation Foundation (ITIF). This project highlights how intellectual property-driven innovation can address global health challenges. If you have questions, comments, or a suggestion for a story we should highlight, we’d love to hear from you. Please contact Devlin Hartline at jhartli2@gmu.edu.