President Obama originally released his Strategy for American Innovation: Driving Towards Sustainable Growth and Quality Jobs in 2009, and has since issued several updates. However, the core theory remains the same:
“The key to our success – as it has always been – will be to compete by developing new products, by generating new industries, by maintaining our role as the world’s engine of scientific discovery and technological innovation. It’s absolutely essential to our future.”
The heart of Intellectual Property (IP) is the development of new products, the generation of new industries, scientific discovery, and evolving technological innovation. IP rights were created to serve as a base incentive for the development of new products, the generation of new industries, scientific discovery, and evolving technological innovation. So in light of the recent economic events, the question becomes how can IP rights be used to ensure the future growth and success that President Obama calls for? How can IP rights be used to combat the economic challenges now faced nationally and abroad? Does the role of IP in the future differ from its traditional role?
IP rights encourage companies and individuals to invest, time and money, in the development of new products, the generation of new industries, scientific discovery, and evolving technological innovation by providing time-limited monopoly rights. This transaction is an exchange-for-bargain. The public reaps the benefits of the new inventions, but pays in the form of a limitation upon the free exchange of ideas and information because the inventor gains the time limited ability to exclude others from using, making, and selling their invention. Thus, IP focused companies inherently spend more funds on research and development because it is the company’s IP rights that gives the company value and creates profit.
Dr. Nam Pham of NDP Consulting compared 27 IP focused American companies with 27 non-IP intensive American companies and found that the IP driven companies hire more employees, of all skills levels, while the non-IP companies were cutting jobs. Moreover, the average wage for employees working for IP driven companies is 60% higher than counter-parts at non-IP companies. As such, President Obama has rightfully brought new light to the powers of Intellectual Property.
As new light is shined on IP, the traditional rationales for IP rights will stay the same; however, it need be recognized that we are entering into a new era of globalization. For the President to be successful in fulfilling the goals he outlined in his 2009 strategy release, reforms need be made in light of ongoing globalization, the statutory reforms of the Leahy-Smith America Invents Act is evidence of such.