Regulatory Reform

Intellectual Property: The Innovation Economy’s Engine for Growth and Job Creation

Intellectual Property (IP) is work or an invention resulting from creativity and innovation and can be used to define anything from a piece of art to the latest technological gadget.  Intellectual property rights (IPR) have always been part of the American legal landscape and were so important to the Framers that they enshrined them in Article I, Section 8, Clause 8 of our Constitution.

To promote the progress of science and useful Arts, by securing for limited Times to Authors and Inventors the Exclusive Right to their Respective Writings and Discoveries

The Framers realized that protecting IPR was vital to encourage invention, creativity, and innovation, and the U.S. has relied on ingenuity to drive our economy ever since! According to the World Intellectual Property Organization over one fifth of all patents issued in 2006 were granted by the U.S. Patent Office, and the U.S. Chamber’s Global Intellectual Property Center (GIPC) found that over one-third of U.S. gross output originated from IP-centered companies and accounted for 74% of U.S. exports. Twenty-first century America is as cognizant as the Framers of the importance of protecting IP and has enacted laws making our nation second to none in protecting IPR.

IP also creates high-paying American jobs! A recent GIPC study “IP Creates Jobs for America” has a state by state breakdown of what IP means in your state with state-specific statistics illustrating just how significant IP’s effects are from coast to coast. The study results indicate that wages in IP-intensive industries are 30% higher than similar jobs in non-IP industries. These jobs are found in numerous business sectors, including fashion, automotive, medical, energy, entertainment, electronics, biotech, consumer goods, and green technologies and account for 55 million U.S. jobs and over 45% of total employment.

Globalization presents a number of challenges to IPR including the counterfeiting and piracy of American IP. In 2011, Business Software Alliance estimated that over half of the world’s computer users have used pirated software. Additionally, some national governments and large numbers of non-state actors do not enforce IP protections or do not have them at all.  While testifying to the Senate Finance Committee last March US Trade Representative, Ambassador Ron Kirk observed that over 90% of Chinese government software is pirated. Inside ALEC underscores the importance of trade frameworks with strong IP provisions.

Recognizing this threat to our nation’s economy, ALEC’s International Relations Task Force has a body of policy calling for the protection of IPR. We support the negotiation of high standard trade agreements with strong IP provisions; understand the threat that rogue internet sites pose to consumer health and safety as well as IP; and recognize the roles that all stakeholders including government at all levels, NGOs and the private sector can play in IPR protection.  Some of these ideas are explored in Inside ALEC’s “Theft is Not a Free Market Principle” and “America’s Economic Freedom Depends on Protecting Our Intellectual Property.”

Innovation drives our economy and the protection of the IP underpinning innovation is the key to spurring economic growth nationally and, of course, in the states.  In order to reap IP’s benefits we must protect IPR.


In Depth: Regulatory Reform

In his first inaugural address, Thomas Jefferson said that “the sum of good government” was one “which shall restrain men from injuring one another” and “shall leave them otherwise free to regulate their own pursuits of industry.” Sadly, governments – both federal and state – have ignored this axiom and …

+ Regulatory Reform In Depth