IP Law- which includes patents, trademarks, and copyrights- plays a critical role in allowing inventors to take their innovative technology to the market place. In addition, it enhances the competitiveness of enterprises, whether they seek to commercialize new products or provide service based on improved technologies.
Regardless of these benefits, the figures speak for themselves. America’s IP-intensive industries contribute USD 5 trillion to the economy and are responsible for 40 million domestic jobs. The unique ability of the IP-intensive industry to cause economic progress is felt on an international scale as well. In the European Union (EU), 42% of total economic activity (5.7 trillion Euros annually) is generated by IP-intensive industries. In Japan, large companies like Sony, Toyota, and Canon have been filing an increased number of patent applications and undergoing more IP-intensive research and development expenditures. This industry leads to impactful contributions to Japan’s GDP, as well as the international economy.
In the United States specifically, American creativity keeps the United States competitive, while the USPTO system provides incentives for inventors to share their inventions. The American affinity for an invention is ingrained in the United States Constitution. Article 1, Section 8 of the Constitution provides Congress with the power to enact legislation governing copyrights and patents. It states: “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.”
Types of Intellectual Property Protection
The three key types of protections within IP Law are patents, trademarks, and copyrights.
Patents grant their owners an exclusive right over the invention claimed in an issued patent application for up to twenty years. A key aspect that distinguishes patents from other forms of IP protection is that a set of patent claims must enable a consumer of ordinary skill to reverse-engineer and utilize the invention. How to patent an idea?
First you have to figure out what kind of patent you want to get. There are three types of patents: utility, design, and plant. Utility patents are both the most common type as well as the most difficult type to obtain.
A trademark is a word, name, logo, symbol, device, or any combination thereof. Companies, enterprises, and entrepreneurs use trademarks in branding as a method of identification for goods or services. Trademarks allow prospective customers to consider the reputation of a seller of goods or a provider of services.
A copyright protects artistic works such as literature, music, films, software, etc. Copyright protection provides the owner of the work with the exclusive right to reproduce and distribute copies, prepare derivative works, as well as perform or display the work publicly.
IP Protection and the U.S. Economy
One of the biggest effects that the USPTO IP protection system has on the U.S. economy is seen in its ability to facilitate the process of bringing new products to the market. This exclusivity is one of the biggest rewards that U.S. inventors receive for publishing their inventions.
Specifically, patents provide an incentive for inventors to invest in costly research and development (R&D) by providing the opportunity to reap the rewards of their innovations. If they didn’t have the incentive of exclusivity, they would most likely keep their inventions to themselves.
According to J.D. Houvener, a patent attorney serving Houston, “Think about it from the perspective of an inventor: why would you invest hundreds of thousands in research and development to bring a product to market that you expect to earn money from, only to have your product immediately ripped off by copycats? Absolutely not, unless you have the resources to waste.”
Without exclusivity, larger companies would dominate because they have the resources to continuously cover a patent cost without the fear of copycats.
In this way, patents contribute to the economy by allowing inventors to monetize their ideas and incentivize them to bring their products to market. This creates a never-ending economic cycle where companies create and sell products for consumers to choose from in the marketplace, and consumers signal their choice with their purchasing power. Trademarks and copyrights play a big role in this process by allowing companies to brand their goods and services and allowing consumers to know who they are buying from.
Two specific sectors demonstrate the power of IP protection on innovation: technology and academia.
First, over 50% of all patents issued by the USPTO cover software-related innovations. This is significant because a substantial amount of U.S. commerce is software-dependent, and this dependency leads to associated innovation in the field. In 2016, the U.S. software market was valued at nearly USD 200 billion. The potential here for jobs, growth, and development cannot be understated.
Second, in the academic sector, the numbers are just as impressive. From 1995 to 2015, academic patent licensing contributed nearly USD 1.33 trillion to U.S. gross industry output, USD 591 billion to the gross domestic product, and supported 4,272,000 American jobs.
Overall, IP protection is critical for the U.S. economy. Without the USPTO systems startups, entrepreneurs, inventors would not bring their products to market because the big companies would rip them off immediately. Business development would slow, innovation would decrease, and consumers would have less to choose from in the marketplace.