Patents and the U.S. Economy

Insights

Patents and the U.S. Economy

September 30, 2013

History has shown us that patents and intellectual property are vital to a successful economy in the U.S.

For this month’s News You Can Use, we have gathered a few stories which highlight the benefits of patent laws—both past and present—to support this point.

  • To commemorate Constitution Day earlier this month, the U.S. Chamber of Commerce’s We the IPeople: When 27 Words Translate into 40 Million Jobs celebrates Article 1, Section 8 of the Constitution, which 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.” Intellectual property serves as the lynchpin for the U.S. economy, supplying nearly two-thirds of exports and more than one-third of GDP, and providing a foundation for 72 of the most diverse and innovative industries in the world. The fact that the tech entrepreneurs, artistic visionaries, and at-home inventors of today are not only thriving, but driving the U.S. economy, is due in large part to the Founding Fathers’ foresight 226 years ago. “As much as IP was part of our past, it will be even more so in our future.”
  • September 16 marked the second anniversary of the America Invents Act, when the U.S. made the first substantial changes to patent law in more than 50 years. Microsoft published an infographic Intellectual Property Drives U.S. Economic Growth as a reminder of why IP protection matters: because America’s IP-intensive industries contribute $5 trillion to the economy and are responsible for more than 40 million American jobs.
  • Jon Dudas, former undersecretary of commerce and director of the USPTO, and David Kline, author of Rembrandts in the Attic, contributed a piece to Forbes titled Thank the Founding Fathers for the Open Market in Patents. The Founding Fathers believed that the U.S. economy needed a “kick-start,” so they looked at the British patent system for a model to determine the course for the U.S.’s patent system. When they saw the high fees and working requirements that were needed to obtain a patent in Britain, the Founding Fathers decided to design a system that would “stimulate the inventive genius and entrepreneurial energy of the common man … even those without the resources to commercialize their own inventions.” The authors go on to argue that non-practicing entities (NPEs) should not be lumped together under the term “patent troll” by explaining that the laws written by the Founding Fathers both anticipated and encouraged NPEs. “Even though most startups companies, universities, and technology licensing firms don’t manufacture products themselves, they still produce enormous value for the U.S. economy,” according to Dudas and Kline. You can read more about IV’s take on this issue, from co-founder and vice chairman, Peter Detkin, in his recent post, Why the Polite Term for “Trolls” is Also a Misnomer.

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