George Mason University Antonin Scalia Law School

How IP Helps Individuals

the word "inspiration" typed on a typewriterThis is the second in a series of posts summarizing CPIP’s 2016 Fall Conference, “Intellectual Property and Global Prosperity.” The Conference was held at Antonin Scalia Law School, George Mason University on October 6-7, 2016. Videos of the conference panels and keynote address, as well as other materials, are available on the conference website.

The second panel of CPIP’s 2016 Fall Conference discussed the positive impact of intellectual property (IP) on people’s lives. Day or night, wherever we are, IP is around us—from movies, music, books, smartphones, and computer tablets to essentials like transportation, clothing, food, and medicines—each involving some aspect of IP. Yet we rarely think of how these products are brought to us, or more importantly, the ways in which they have changed our personal and professional lives.

The panelists, Prof. Kristina Lybecker (Colorado College), Ken Stanwood (WiLAN), Howard Rachinski (Christian Copyright Licensing International), Stephen Bock (Church Music Publishers Association), and Prof. Mark Schultz (Southern Illinois University School of Law, Center for the Protection of Intellectual Property) revealed how intellectual property benefits individuals by creating jobs, promoting cultural diversity, and bringing innovative products, services, and medicines to marketplaces worldwide.

Prof. Kristina Lybecker discussed how intellectual property helps individuals by promoting innovation, job creation, and international trade. She presented an international competitiveness index showing that the most innovative economies have the strongest IP regimes. The opposite is also true, and economies with weaker IP protection are less innovative and competitive on a global scale. Comparing data from the top-30 countries that comprise nearly 80% of the global economy, including the U.S., U.K., France, Japan, Australia, and Singapore, Lybecker showed that the correlation between innovation and IP protection is indeed very strong.

Likewise, intellectual property contributes significantly to jobs, wages, and trade. Lybecker presented data showing that there are 55 million jobs in the U.S. supported by IP-intensive industries, representing 46% of all private sector employment. These industries contribute $5.8 trillion to U.S. output each year, accounting for nearly one-third of total GDP. Wages in IP-focused industries are 30% higher than in other sectors, and 74% of U.S. exports come from IP-related industries. Lybecker noted that stronger IP regimes attract greater foreign direct investment and R&D spending, which increases the spread of technology and spurs market growth.

Finally, Lybecker discussed the strong correlation between drug availability and IP rights in the pharmaceutical industry. Data shows that countries with the strongest IP protection enjoy the quickest launches for new medicines and the greatest availability of treatments and cures for their populations. The U.S., for example, has the strongest IP protection for both pharmaceutical products and processes, and it is a global leader in pharmaceutical innovation.

Ken Stanwood from WiLAN highlighted the role that intellectual property in the wireless sector plays in improving people’s lives. WiLAN invented a fundamental technology that is used in the Wi-Fi physical layer that was a significant stepping stone toward broadband cellular technologies like smartphones. Since then, wireless IP has created new markets and provided better access to existing markets. For example, wireless communications and GPS technology enable popular services such as Uber and Car2Go.

Stanwood discussed how wireless IP empowers women in developing countries. For instance, Grameen Bank’s “village phone” program provides microloans to women in Bangladesh to purchase cellphones that are then shared with others in their villages. Not only has this program improved the lives of individual women by increasing their role in the family, but it has also created social and economic benefits for the entire community by providing better access to health care, education, and business transactions.

The introduction of the portable eye examination kit in Africa was another of Stanwood’s examples of how wireless IP improves people’s lives. A special portable camera attached to a smartphone enables schools, remote health providers, emergency medical workers, nurses, and general practitioners to perform various eye exams for afar, including pupil assessment, retinal evaluation, cataract examination, and even to diagnose cerebral malaria.

Howard Rachinski and Stephen Bock discussed how IP in the church music industry benefits congregations. With over 350,000 churches in the U.S. and 2.18 billion Christians around the globe, the industry is massive both in publishing and consumption. Before the digital age, publishers distributed hymnals to churches while paying royalties to songwriters and copyright owners. Congregants sang only those songs found in the hymnals, which could often be decades old. The digital age, however, changed this paradigm, and people now want a larger variety of songs. This change in music consumption has brought many challenges.

Rachinski and Bock noted that the entire church music industry reconsidered its practices and searched for new ways to empower worship by facilitating access to legal content. Christian Copyright Licensing International (CCLI) contracted with copyright owners to aggregate their rights and make them available to churches for an affordable annual fee. CCLI currently works with 250,000 churches in 40 countries to provide more than 100,000 licensed songs of worship. Not only has this licensing scheme ensured the very survival of the church music industry, but it has also enabled more Christians to become professional songwriters.

Prof. Mark Schultz discussed how IP helps bring products to consumers. Organizations like the Gates Foundation often talk about how hard it is to bring medicines to people. In some places, vaccines are delivered on the backs of camels and donkeys. The World Health Organization estimates that nearly 2 billion people around the globe have no access to medicine. And yet, Schultz noted, some products are available in every corner of the world. For example, Coca-Cola sells 2 billion servings of its products daily across the globe.

Indeed, Schultz pointed to Coca-Cola as a valuable case study on international network distribution and asset management. The protection of its brand allows Coca-Cola to secure returns on investment, protect its good will, and prevent copying of its products. Coca-Cola reduces costs by working with nearby distributors to produce, bottle, and ship its products locally. Finally, Coca-Cola has a network of local stakeholders (licensees, distributors, and consumers) who are interested in genuine products being delivered to the market. Schultz noted that the system works best when the local IP system is stable.

Lastly, Schultz turned to the evidence establishing the correlation between strong IP rights and economic growth. He referred to one economic index that demonstrated a positive relationship between patent protection and importations into developing countries. Likewise, Schultz discussed the index he created with Prof. Douglas Lippoldt illustrating that the strength of the trade secret system has positive effects on exports. They found that stronger IP regimes lead to the delivery of more pharmaceuticals and the introduction of more technological services.

Together, the five panelists gave concrete examples of the critical role of IP in helping individuals both domestically and internationally. Not only does IP create jobs, new markets, and business opportunities, but it also enables access to healthcare, medicines, education, and technologies. A strong IP system bolsters innovation, invites investment, and brings products to people. With the right IP strategy, companies can continue innovating and making a positive impact on people’s lives.