License! Magazine

October 25, 2000

SURVEY FINDS ROYALTY AUDITS ARE RARE, PIRACY RAMPANT

A survey conducted by the London-based international forensic accounting and investigative consulting firm Kessler International found that few firms in the licensing industry conduct royalty compliance audits and that piracy is rampant.

The Kessler survey, released on the eve of the Brand Licensing London trade show, included more than 500 companies worldwide and covered issues of intellectual property theft and royalty fraud.

Almost 50% of the companies surveyed said that their property has been pirated or counterfeited within the last year.
The survey also found that just 15% of the firms in the survey conducted yearly audits, 85% have not conducted an audit in more than a year, and 71% have never conducted an audit.

Of the companies in the survey that did conduct audits, 25% discovered major discrepancies requiring litigation to resolve.