“If the administration and Congress are concerned about U.S. competitiveness, they need to push back.” – ITIF
Earlier this week, the Information Technology and Innovation Foundation (ITIF) released a report that offers a rebuttal to nine claims it identifies with the “anti-IP progressive orthodoxy.”
Prominent progressive senators, including Senators Bernie Sanders (D-VT) and Elizabeth Warren (D-MA), have turned up the heat on pharmaceutical companies’ drug pricing and IP policies. While members of Congress on both sides of the aisle have criticized big pharma, the ITIF report identifies other “anti-IP advocates” to rebut including the Electronic Frontier Foundation (EFF), Public Knowledge, Joe Stiglitz, Dean Baker, and Arjun Jayadev.
The ITIF report promotes the narrative that intellectual property rights are foundational to the United States as a nation and economy. However, the ITIF argues that anti-IP advocates are trying to persuade the Biden administration to move away from this traditional position.
“Progressives have launched an assault on IP rights in U.S. domestic policy, international forums, and trade agreements. If the administration and Congress are concerned about U.S. competitiveness, they need to push back,” said Stephen Ezell, vice president of global innovation policy at ITIF, and author of the report.
The ITIF report identifies nine arguments that it associates with the “anti-IP progressive” policies. The institution that the ITIF most prominently ties to this movement is the Electronic Frontier Foundation (EFF).
According to the EFF, “after decades of ever more draconian statutes and judicial decisions, our intellectual property system has veered far away from its original purpose… Ideally, intellectual property law…is supposed to embody a balanced incentive system.”
The nine anti-IP arguments identified by the ITIF are:
- Information should be free.
- IP doesn’t help small businesses.
- IP harms consumers.
- IP does not benefit the U.S. economy.
- Weak IP overseas helps the U.S. economy.
- IP harms developing nations.
- IP makes it harder for developing countries to acquire technology.
- IP limits innovation in developing nations.
- Requiring IP in trade agreements is wrong.
A significant chunk of the ITIF report is dedicated to offering a rebuttal to these arguments.
On small businesses, the ITIF wrote, “without IP protection, SMEs and individuals cannot adequately prove their innovation is worth the risks associated with investing in a small or new venture.”
The report attempts to counter economist Joseph Stiglitz on this point, who wrote, “Intellectual Property Rights generate monopoly power that can be used to leverage further monopoly power.” Stiglitz cites Microsoft which “has so much monopoly power and has obtained such a dominant position” from its “abusive, anticompetitive practices.”
While Stiglitz calls himself a “progressive capitalist”, the ITIF characterizes his argumentation as reminiscent of Xi Jingpeng’s “socialist market economy with Chinese characteristics.”
In addition to small businesses, the ITIF report makes the claim that current IP policies are beneficial to the U.S. economy as a whole. It cites Department of Commerce data which found that IP-intensive industries account for about 38% of the country’s GDP.
The ITIF report also argues that robust IP protections in the United States benefit U.S. workers and the economy, citing Department of Commerce statistics that show IP-intensive industries support at least 45 million jobs and contribute more than $6 trillion (38.2% of) U.S. gross domestic product (GDP).
Next, the ITIF report takes issue with anti-IP advocates’ argument that current IP rights hurt middle and lower-income countries. The report again quotes Stiglitz, who wrote, “the economic institutions and laws protecting knowledge in today’s advanced economies are increasingly inadequate to govern global economic activity and are poorly suited to meet the needs of developing countries and emerging markets.”
While the report’s author admits “there is some truth to that,” and “giving them free IP…would help them,” the ITIF wrote, “that doesn’t make it right.” Instead, they suggest, “if the developing nations imposed stronger labor and environmental rights and stopped trying to compete solely on low-costs, they might have a stronger argument.”
The report also argues that anti-IP advocates weaken the United States’ position to influence global economic policy and trade agreements. Broader than these advocates, the ITIF also rebuts the Biden administration, which it claims has done little to place IP in trade policy.
“With this, the United States signals to the world its intent to abdicate IP policy leadership,” wrote the ITIF.
In addition to its rebuttal, the ITIF also offers policy recommendations to reengage internationally and improve domestic IP rights.
In order to reengage internationally on the IP front, the report lays out four key areas where policymakers can work with foreign governments and institutions. The ITIF promotes opposing IP waiver proposals, organizing a united front against China, adding IP rights to trade agreements, and leading discussions on IP rights related to emerging technologies.
On the domestic front, the foundation argues policymakers should pass website blocking legislation, harmonize royalty rights with European countries, improve IP education, and stop legislation that it believes will weaken IP rights.
“It’s not too late for U.S. policymakers to reverse course and once again assert a leadership role in advancing international IP best practices,” argued Ezell.
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