US Chamber Of Commerce Makes Up Things About Intellectual Property

from the why-do-people-trust-this-stuff? dept

We had just been discussing how the US Chamber of Commerce (currently losing some big name members for its troubling connection to reality on certain topics) was misinterpreting some stats about patent laws to push for stronger protectionism, and along comes an opinion piece by Mark Esper, the Chamber of Commerce's executive VP of its "Global Intellectual Property Center." Take a wild guess what he argues for? You got it! Stronger intellectual property all around. The problem is that the editorial is riddled with factual and logical errors that aren't just sloppy, but are almost laughable.

The legal rights that governed IP for generations provided a known system of incentives that both fostered and spread innovation. It was the inducements built into our free-enterprise system, coupled with the talents and hard work of entrepreneurs, which moved this nation forward. It worked back then, and it will work now.

This is actually entirely unsupported by the evidence. Studies have shown -- repeatedly -- that no causal relationship has been shown between IP rights and innovation. Furthermore, it's pretty laughable to pick a gov't granted monopoly and claim that this is an "inducement built into a free-enterprise system." IP is the opposite of free enterprise. It's a gov't-granted monopoly. Also, in the paragraph above, he's talking about IP post World War II. What he skips over is that after that period, both patent law and copyright law were greatly expanded, such that they barely resemble what was seen following WWII (especially copyrights).

Six decades later, nearly half the U.S. economy is driven by industries that depend heavily on intellectual property rights. If we are to jumpstart a second economic renaissance, then we must begin by protecting and stimulating the lifeblood of America's economy: its ideas.

Well, beyond the lack of evidence that IP stimulates ideas, every time we talk about IP stifling ideas, IP system defenders rush onto this blog to remind us that neither copyright nor patents are supposed to protect "ideas," but rather "expressions" or "inventions." Someone should inform Esper of this.

The counterfeiting and piracy of American goods cost the U.S. economy over $200 billion annually, and the loss of hundreds of thousands of jobs. This growing problem, coupled with the fact that some foreign governments are working to weaken IP laws that protect American patents, threatens to slow down innovation by undermining the incentives that foster it.

Where to start? Well, how about that $200 billion number? It's made up. Almost entirely. Both the GAO and the OECD looked into the numbers bandied about by the Chamber of Commerce and other lobbying groups and found (oops) that they were exaggerated, sometimes by an order of magnitude or more.

As for the claim that "foreign governments" are trying to "weaken IP laws?" Again, totally made up. Around the globe, almost all of the efforts have been for strengthening, not weakening IP laws. And, again, studies have shown that stronger IP laws do not correlate to greater innovation, and often the reverse.

This is occurring at a time when industries that rely on IP, such as pharmaceuticals, IT, and entertainment, employ 18 million Americans, and are expected to exceed the national average when it comes to future job growth. At the same time, workers in IP-based industries are projected to earn approximately $7,000 more than their counterparts in non-IP lines of work.

This assumes, entirely incorrectly, that those jobs don't exist in the absence of IP. Unfortunately, the evidence is again totally against Esper. Countries that had no patents on pharma goods, such as India and Italy for many years, still had incredibly thriving pharmaceutical industries. In fact, Italy's pharma industry shrunk after it put in place patents for pharma. So, the idea that stronger patents are needed to protect jobs? There doesn't seem to be any support for that.

In short, America's future depends on intellectual property

See, this is a neat trick. He's assuming that all intellectual output relies on IP laws. That's not true. America's future may depend on innovation, but that's not the same as saying it depends on stronger IP laws.

Our IP is valued at over $5 trillion -- more than the GDP of any other country. Intellectual property also accounts for more than half of all U.S. exports, helping drive 40 percent of U.S. economic growth. In 2006 alone, IP exports contributed $37 billion to our trade balance, demonstrating the power of IP in the global marketplace.

Ah, the use of funny math. Again, this involves some number games, whereby lots of things that have absolutely nothing to do with patent, trademark or copyright law are "counted" as being included in these numbers. The fact that much of it would have happened anyway, even with no such laws, is totally ignored.

In every state in the union, IP has played an integral role in molding the economy. Take President Obama's home state of Illinois, for instance. Illinois is ranked sixth in the nation for patents, and creative industries have contributed to over $1 billion in local wages. It is home to 144 university-based and 71 federal research centers, and features eight premier research and technology parks that grow the high-tech companies and jobs of the future.

Nice job pandering to the President. Of course, again, note the implicit (but false) assumption, that it's IP laws that are entirely responsible for this output. Note the implicit (but false) assumption that the research coming out of those universities and research centers are due to IP laws.

Intellectual property is woven into the fabric of our lives and the nation's economy, and has played a critical role in all the major advancements that have made the 20th century one of the most defining times in human history. It is the author of great American moments, from the Apollo program and the PC, to the Internet and iPods, and all the great songs, stories and movies in between that have shaped our culture.

Again, falsely attributing all of those to IP laws. Amusingly, of course, the internet had almost nothing to do with IP laws, and the only time IP has become involved in internet infrastructure, it's been to hold back innovations. And iPods? The thing (well, its predecessor, the Diamond Rio) that the recording industry tried to sue out of existence using IP laws? Yeah, that's not a very strong argument to put forth. The PC's success was actually based on the fact that much of it was built upon open standards and widely shared and copied technology, rather than being locked down by IP laws. The Apollo program I'm less familiar with from an IP standpoint, but seeing as it was a gov't program put forth due to a challenge from President Kennedy and funded by the US gov't, there's is no indication that it required patents as incentive for that particular innovation...

We cannot take IP rights for granted. Rather, we must strengthen IP enforcement and continue promoting innovation and creativity, and the laws that protect both. The next economic renaissance needs to happen now, and strong IP rights will help usher in this new era of job growth and economic revitalization.

Stunning. Right after naming a bunch of innovations that happened because of looser IP restrictions, you suddenly insist that we need stronger IP enforcement? Have you no shame?

I haven't paid much attention to the US Chamber of Commerce, but does anyone actually take them seriously when they spew nonsense like this? Update: Add Apple to the list of big name companies leaving the US Chamber of Commerce. Time to start paying attention to reality.

Filed Under: copyright, intellectual property, lobbying, mark esper, patents
Companies: us chamber of commerce