On World IP Day, Appreciate IP's Economic Benefits

World Intellectual Property Day, Friday, April 26, offers the opportunity to reflect on the importance of intellectual property rights to a healthy, functioning society.

Strong IP protections are vital not only for responding to pandemics and putting natural materials to constructive use for humankind’s benefit; they're also integral to a strong job market and economic growth.

The U.S. Patent and Trademark Office documents the tremendous blessings that IP-intensive industries bring to the U.S. economy. IP-intensive sectors accounted for 41% of domestic economic output in 2019.

IP-intensive industries provide 47 million U.S. jobs and support another 15.5 million jobs that supply those sectors—totaling 62.5 million or 44% of U.S. jobs. IP-intensive industries typically pay higher wages and provide employer-sponsored health insurance and retirement benefits.

The Bayh-Dole Act, which outlines specific instances in which—and only in which—the government can "march-in" and take over licensing of patents, "has yielded four decades of practical benefit from otherwise wasted government grants."

The Bayh-Dole Coalition has shared a graphic touting economic benefits from academic technology transfer, 1996-2020. Some of the highlights include:

• $1.9 trillion toward U.S. gross industrial output;

• $1 trillion in gross domestic product;

• 6.5 million jobs;

• 17,000 startups.

IP rights make the world go 'round. However, in recent years, we've seen how threats to intellectual property are threats to American innovation and our global leadership in fields like health care, AI, quantum computing and biotechnology.

A strong culture of IP rights is critical to the jobs available to Americans as well as innovations in biomedical sciences and creative industries that power our everyday lives.

Imagine, for a moment, you're a filmmaker. You and your crew—actors, writers, costume designers, caterers, and more—have worked for months to make a movie. Your movie then gets illegally uploaded to the Internet on pirate websites while the feature film is still in theaters.

Some people will avoid paying ticket prices to see in theaters what they can illegally stream online, virtually for free. Your studio loses money, and perhaps it can't pay all of the people who made your film possible—including you. This puts your (and your collaborators') next project in jeopardy.

That's the reality for a world without strong protections for IP. Films and video games aren't the only things threatened by piracy. Patents for innovative inventions and life-saving medications also stand at risk. Recent measures at the World Trade Organization and the World Intellectual Property Organization damage the security and strength of patents.

At the WTO, waiving the TRIPS Agreement for COVID-19 vaccine IP, then considering expansion of the waiver to IP of COVID diagnostics and therapeutics has threatened related patents by "set[ting] a reckless precedent for foreign expropriation of U.S. companies’ IP.” This WTO effort, led by South Africa and backed by the Biden administration, hinders innovation and opens the floodgates to future waivers of IP rights.

IP made the successful worldwide response to the pandemic possible. Waiving IP rights to invaluable medications and therapies doesn't help efforts—domestic or foreign—to respond to COVID-19 or future crises.

In fact, the U.S. International Trade Commission last year conducted a thorough, months-long investigation that provides no basis for expanding the TRIPS waiver to COVID diagnostics and therapeutics. The USITC found no indication that waiving TRIPS IP protections further is warranted. Rather, IP facilitated collaboration, making supply of COVID vaccines, diagnostics and therapeutics available, including to poor countries.

WIPO is supposed to support secure, reliable IP rights and to promote adoption of these property rights worldwide. Yet, WIPO recently proposed mandatory patent disclosure requirements on genetic resources. This proposal would weaken IP rights by requiring a patent applicant to disclose the source or origin of traditional knowledge and genetic resources used in an invention.

Rather, WIPO would cause the cost and burden on innovation to increase. It would force innovators to limit the scope of their discoveries to domestic genetic material. Such a restriction would foreclose access to the full breadth of what our planet has to offer for scientific and medical breakthroughs. A slower, less predictable, more expensive patent application process would follow. And that would discourage ingenuity and quash productive economic activity in the United States and elsewhere.

Clearly, it’s critical to America’s economic success, our job market, our emergency responsiveness and our continued leadership in innovation that we protect IP rights. Without strong IP protections, all that progress and innovation goes out the window.

Force-Feeding U.S. Electric Vehicles . . . Despite The Downsides

The Biden administration’s electric vehicle mandate has come—in the form of an Environmental Protection Agency emissions rule.

Biden’s EPA leaves no doubt that forcing internal-combustion-powered vehicles off the road is the ultimate goal. The rule dictates that no more than 30% of vehicles sold in 2032 may run on gasoline. The bureaucrats do this by throttling down the amount of tailpipe emissions. Car manufacturers will have to build four EVs for every internal-combustion vehicle by 2032.

The ugliest of ugly faces of the Administrative State hath spoken—and it denies consumer choice and competition, market-based production and product offerings. The iron fist of Big Government has slammed the table.

The U.S. government forcing private-sector companies to stop providing the types of vehicles American consumers want certainly is un-American and violates property rights on multiple levels.

How do we know that consumers don’t want EVs? The few early adopters pretty much all have EVs. And they’re wealthy. Which is critical because most EVs sold in the United States are Teslas or other luxury brands. Less than 8% of last year’s U.S. vehicle sales were EVs—which means more than 90% of 2023 autos sold were gas-powered or hybrid.

Car dealers see EVs occupy valuable space on the lot and in the showroom. EVs lose money for auto companies. What are selling are gas-engine trucks and cars and hybrids, which run on both electric and gas power.

Why don’t most Americans want EVs? They’re expensive. Charging their batteries costs more than a tank of gas, and is a lot slower. Their maintenance and repairs cost more. Resale value remains uncertain; used car lots have many EVs that they can’t unload.

EVs are less dependable. Consumers complain that EVs’ features such as door locks and window switches stop working, while batteries die faster in cold weather and some won’t charge. A Dallas doctor told the Wall Street Journal the family Tesla “often requires a full night of charging at home, and even then, its range on a single charge often fell below estimates displayed by the vehicle.” EV models have had recalls due to one malfunction or defect or another.

And there’s greater risk of EVs catching on fire.

A Consumer Reports survey last fall reported 79% more problems with EVs than consumers have had with vehicles powered by internal-combustion engines.

Then there’s the fraud of EVs being “environmentally friendly.” Mining the minerals and manufacturing the batteries cause particulate emissions, while the heavier, battery-operated EVs degrade roads, which pollutes.

EVs draw an unfair share of the electricity infrastructure, risking energy security and reliability while increasing energy consumption.

Holman Jenkins writes: “Norway has seen no decline in oil consumption related to EVs, though users receive thousands of dollars in annually recurring subsidies and EVs accounted [in 2022] for 64% of new-car sales.

“The reason is increased use and ownership of gas-powered cars, especially for trips that EVs aren’t suited for.

“Now comes an update from the natural-resource consultants Goehring & Rozencwajg that . . . [d]espite some of the greenest electricity on Earth, a Norwegian still needs to get 45 years of use out of his imported EV battery (expected life 15 years) to offset the global CO2 cost of producing it.”

Jenkins, an astute Journal columnist, shines the light on what Al Gore might call “inconvenient facts” for his and Biden’s hypocritical ecosanctimony. Consider: “[T]he vehicles you and I drive, while large in number, sit parked 95% of the time and play a minor role in U.S. transportation emissions.

“It elides the fact that U.S. transportation emissions themselves are a small and shrinking share of global emissions.

“On the friendliest assumptions, the Biden plan would reduce global emissions by 0.18%. But the friendly assumptions are false because . . . every electric vehicle doesn’t displace a conventional one, every electric mile driven doesn’t displace a gasoline mile.”

Then there’s the economics. They suck for EVs and steal from internal-combustion vehicle buyers. Established automakers lose tens of thousands of dollars on each EV they sell. So those companies hike the prices on popular, selling autos. Jenkins notes that “GM has been enjoying some highly profitable quarters thanks to five-figure markups on pickups.” News flash: It’s not just GM robbing Peter to pay Paul.

EV startups are burning money, and each sale comes at a loss. Many if not most could go bankrupt before the Biden EV mandate can save them.

This charade has become Detroit’s game, thanks to Obama, Biden, Califoney and ecozealots. These criminals are more Rube Goldberg than Milton Friedman. The damage they’re inflicting on Americans at such an exorbitant fiscal and social cost to achieve a negligible 0.18% reduction in global emissions is unconscionable.

The Piracy Website-Blocking Solution

Digital commercial piracy costs the United States economy at least $29.2 billion a year. That is, if commercial piracy websites paid for the content they’ve illicitly streamed, creators of music, movies, TV shows and other digital content would have earned about $30 billion more yearly.

At a recent hearing of the House Intellectual Property Subcommittee, site-blocking garnered bipartisan support. Subcommittee Chairman Darrell Issa (R-Calif.), Rep. Zoe Lofgren (D-Calif.) and other lawmakers agreed that as technology has changed since the Digital Millennium Copyright Act, there’s a great need for antipiracy measures.

The entertainment industry accounts for $230.5 billion in exports annually, Adam Mossoff writes in a Heritage Foundation report. "The creative industries are a major driver of economic growth and jobs, adding $1.8 trillion to the U.S. gross domestic product (GDP) and employing 9.6 million Americans in 2021.” This isn’t chump change.

"Copyright piracy, like a squatter in one’s home or a digital thief continually stealing money from one’s bank account or credit card, undermines a creator’s rights to liberty and property to live, work in a profession, and make a living," Mossoff says.

This form of copyright infringement on such a commercial scale is hardly a victimless crime. It’s missing from paychecks and tax revenue, and deprives writers, artists and creators working on the next creative endeavor.

Commercial-level, global piracy affects the livelihoods of millions of people. It steals from those holding U.S. jobs in film and TV, for instance. These range from studio executives to hairdressers, theater owners and all sorts of off-camera roles across the country.

Currently, under the 1998 Digital Millennium Copyright Act, it’s costly and time-consuming to fight piracy.

"We spend . . . hundreds and millions of dollars to develop notice and takedown systems to send millions of notices to various [user-generated content] sites. Individual artists and creators often don't have the ability and resources to do that, so it is a very difficult situation for individual creators, and that is something that has often been discussed with respect to the DMCA," said hearing witness Karyn Temple, senior counsel at the Motion Picture Association.

There’s hope, though. Some 34 nations are seeing effective, efficient results stopping digital piracy. These countries plus another 12 have enacted laws that enable website blocking.

The Information Technology and Innovation Foundation’s report on site-blocking says site-blocking countries include Germany, India, Australia, Sweden, Ireland, the Netherlands, Israel, Italy, Portugal and the United Kingdom, among others.

The way it works involves judicial process and oversight. Copyright owners obtain injunctions that ask Internet service providers to block access to piracy websites that mass-distribute copyright-infringing content.

Most of these laws block both the primary site and secondary sites that mirror the contents of the primary site; this is called dynamic blocking injunction. This approach ends the whack-a-mole multiple injunctions route. Some site-blocking laws go after streaming live events.

Over the past decade, European courts have developed a mature legal framework for site-blocking. ITIF finds its principles instructive: “Piracy sites such as The Pirate Bay make acts of communication to the public and thereby are liable for copyright infringement. . . . The Pirate Bay’s central role in facilitating piracy means it is not protected by the same legal provisions that protect websites for being held responsible for user-posted content (i.e., a legal safe harbor). . . . There was no doubt that The Pirate Bay’s activities were carried out with the purpose of obtaining a profit.”

To be clear: This illicit practice is big, illegal business involving thousands of websites worldwide. The players are big-time criminal enterprises. The sites provide illicit access to stolen commercial digital contents. There’s no censorship or viewpoint discrimination involved here; it’s all about stopping international criminals from making big money off of stolen goods.

These laws block some 18,000 illicit sites globally, and that’s just for movies. Many other blocked sites illegally provide music, video games and other intellectual property-protected content.

Research in several of the countries with site-blocking laws shows that this approach, especially dynamic and live blocking, effectively cuts off access to illegal streaming and downloads.

"The U.S. is now the outlier globally when it comes to site-blocking systems and the protection of the rights of creators in the digital fruits of their labors," with more than 40 countries using some form of site blocking, Mossoff says.

The studies also show that site-blocking changes consumer behavior. Australian studies give an excellent example.

ITIF reports: “Users will visit a piracy website if it is a top search result ahead of legal options, but if they only find legal options, then that is where they will go. This survey and the MPA study support the case for broad and consistent blocking of major piracy sites, and working with search engines to stop them from providing easy access to piracy sites.”

Thus, blocking access through court-issued injunctions and carried out through ISPs has proven to be a highly effective remedy against this form of copyright infringement on a commercial scale. And site-blocking doesn’t stifle free speech.

To date, there’s no U.S. site-blocking law. There needs to be.