World IP Day: Economic Benefits of Intellectual Property            

by | Apr 26, 2024 | Intellectual Property

Films and video games aren't the only things threatened by piracy. Patents for innovative inventions and life-saving medications also stand at risk.

World IP Day, Friday, April 26, offers the opportunity to reflect on the importance of intellectual property rights to a healthy, functioning society.

Strong IP protections are vital not only for responding to pandemics and putting natural materials to constructive use for humankind’s benefit; they’re also integral to a strong job market and economic growth.

The U.S. Patent and Trademark Office documents the tremendous blessings that IP-intensive industries bring to the U.S. economy. IP-intensive sectors accounted for 41% of domestic economic output in 2019.

IP-intensive industries provide 47 million U.S. jobs and support another 15.5 million jobs that supply those sectors—totaling 62.5 million or 44% of U.S. jobs. IP-intensive industries typically pay higher wages and provide employer-sponsored health insurance and retirement benefits.

The Bayh-Dole Act, which outlines specific instances in which—and only in which—the government can “march-in” and take over licensing of patents, “has yielded four decades of practical benefit from otherwise wasted government grants.”

The Bayh-Dole Coalition has shared a graphic touting economic benefits from academic technology transfer, 1996-2020. Some of the highlights include:

  • $1.9 trillion toward U.S. gross industrial output;
  • $1 trillion in gross domestic product;
  • 5 million jobs;
  • 17,000 startups.

IP rights make the world go ’round. However, in recent years, we’ve seen how threats to intellectual property are threats to American innovation and our global leadership in fields like health care, AI, quantum computing and biotechnology.

A strong culture of IP rights is critical to the jobs available to Americans as well as innovations in biomedical sciences and creative industries that power our everyday lives.

Imagine, for a moment, you’re a filmmaker. You and your crew—actors, writers, costume designers, caterers, and more—have worked for months to make a movie. Your movie then gets illegally uploaded to the Internet on pirate websites while the feature film is still in theaters.

Some people will avoid paying ticket prices to see in theaters what they can illegally stream online, virtually for free. Your studio loses money, and perhaps it can’t pay all of the people who made your film possible—including you. This puts your (and your collaborators’) next project in jeopardy.

That’s the reality for a world without strong protections for IP. Films and video games aren’t the only things threatened by piracy. Patents for innovative inventions and life-saving medications also stand at risk. Recent measures at the World Trade Organization and the World Intellectual Property Organization damage the security and strength of patents.

At the WTO, waiving the TRIPS Agreement for COVID-19 vaccine IP, then considering expansion of the waiver to IP of COVID diagnostics and therapeutics has threatened related patents by “set[ting] a reckless precedent for foreign expropriation of U.S. companies’ IP.” This WTO effort, led by South Africa and backed by the Biden administration, hinders innovation and opens the floodgates to future waivers of IP rights.

IP made the successful worldwide response to the pandemic possible. Waiving IP rights to invaluable medications and therapies doesn’t help efforts—domestic or foreign—to respond to COVID-19 or future crises.

In fact, the U.S. International Trade Commission last year conducted a thorough, months-long investigation that provides no basis for expanding the TRIPS waiver to COVID diagnostics and therapeutics. The USITC found no indication that waiving TRIPS IP protections further is warranted. Rather, IP facilitated collaboration, making supply of COVID vaccines, diagnostics and therapeutics available, including to poor countries.

WIPO is supposed to support secure, reliable IP rights and to promote adoption of these property rights worldwide. Yet, WIPO recently proposed mandatory patent disclosure requirements on genetic resources. This proposal would weaken IP rights by requiring a patent applicant to disclose the source or origin of traditional knowledge and genetic resources used in an invention.

Rather, WIPO would cause the cost and burden on innovation to increase. It would force innovators to limit the scope of their discoveries to domestic genetic material. Such a restriction would foreclose access to the full breadth of what our planet has to offer for scientific and medical breakthroughs. A slower, less predictable, more expensive patent application process would follow. And that would discourage ingenuity and quash productive economic activity in the United States and elsewhere.

Clearly, it’s critical to America’s economic success, our job market, our emergency responsiveness and our continued leadership in innovation that we protect IP rights. Without strong IP protections, all that progress and innovation goes out the window.

James Edwards, Ph.D., is executive director of Conservatives for Property Rights (@4PropertyRights) and patent policy advisor to Eagle Forum Education and Legal Defense Fund. The views expressed are his own.

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

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