Commerce Department Says IP is Good for the Economy
- Oct 21 2016 |
- Category: News
Do intellectual property rights promote economic growth in the U.S?
In October, the U.S. Department of Commerce issued a report demonstrating that intellectual property promotes economic growth. The study, an update of the department’s 2012 report, looked at 81 industries including manufacturing, the arts, science and information technology. In sum, the Intellectual Property and the U.S. Economy: 2016 Update found that IP-intensive industries account for $6.5 trillion, or 38.2 percent, of the gross domestic product. These industries are also responsible, directly and indirectly, for a total of 45.5 million jobs.
“This report demonstrates the critical importance of innovation and intellectual property in creating jobs and maintaining America’s competitive edge in the global economy,” said U.S. Secretary of Commerce Penny Pritzker in a press release.
The Economic Value of IP Rights
The report comes at a time when there is a growing narrative that intellectual property rights create monopolies, hinder innovation, and stifle competition. There is also increasing uncertainty as to whether software patent claims are patent eligible in light of a recent string of district court rulings. Nonetheless, these findings show that IP rights are tangible assets, and are made more valuable by being traded in the market place. Moreover, IP rights provide creators with access to needed capital to monetize their innovations which ultimately creates jobs and fosters economic growth.
In particular, the report found that much of the job creation was attributed to trademark-intensive industries. Of the 45.5 million jobs created , 23.7 million or 85 percent were directly related to trademark oriented enterprises, while industries focused on copyrights are responsible for 5.6 million jobs, and 3.9 million jobs are held by patent-intensive industries. In addition, these industries also foster a variety of supply-chain jobs that bring goods and services to the market.
Contrary to the argument that IP rights breed monopolies and stifle competition, many experts agree that IP rights lead to the development of a variety of products that ultimately offer consumers more choices, particularly in patent-intensive markets such as pharmaceuticals. Moreover, if a monopoly develops, antitrust laws are designed to restrict the degree to which IP holders can exercise those rights. In the end, IP rights and free market enterprise go hand-in-hand because patents, trademarks and copyrights are goods that can be exchanged.
In short, the Commerce Department’s 2016 report finds that intellectual property rights foster economic growth. First, individuals and business are incentivized to invent and create. Further, IP rights provide them with leverage to capitalize on their innovations whether by gaining access to venture capital, engaging in mergers and acquisitions, IP licensing arrangements or portfolio development. In the final analysis, free markets provide innovators with a path to prosperity, and their rights are best protected by engaging the services of a leading intellectual property law firm.