U.S. Chamber Competitiveness Agenda Series: Ideas That Work For Business

U.S. Chamber's Competitiveness Agenda-A Series

Chamber Safeguards Intellectual Property Rights

As part of our ongoing series, this month we examine the Chamber's efforts to protect U.S. innovation and creativity from a worldwide crime wave—intellectual property (IP) theft, counterfeiting, and piracy—of epidemic proportions.

The Challenge—Business at Risk

The intellectual property generated by U.S. companies is critical to America's prosperity and leadership in the global economy. America's IP-intensive industries employ nearly 18 million workers, account for more than $5 trillion of the U.S. gross domestic product, make up more than half of all U.S. exports, and represent 40% of U.S. economic growth.

However, IP is under attack around the world by criminal counterfeiters and pirates, anti-IP activists, and even some governments. Many leading U.S. trade partners, including Brazil, China, and India, fail to provide adequate protection of copyrights, patents, and trademarks as laid out by international conventions and World Trade Organization rules. This rampant lawbreaking hurts innovation, undercuts our ability to compete in foreign markets, subjects companies to massive liability exposure, threatens public health, and even helps fund organized crime and terrorism.

With the economy of the 21st century likely to focus increasingly on innovation and creativity, efforts to prevent the illicit use of IP will grow in importance. Because the United States is by far the largest producer of intellectual property in the world, it is incumbent upon the government to assume leadership in defending this vital class of property rights.

The Impact—A Small Business' Perspective

Dan Williams of Konarka Technologies says that the process for obtaining a patent is broken.

Nine-year-old startup Konarka Technologies of Lowell, Massachusetts, is built on innovation. The 100-employee company, which develops polymer-based, organic photovoltaic (OPV) technology for solar energy products, has more than 350 patents—from design to manufacturing.

Managing and protecting that intellectual property "is as big an issue as inventing and creating it," says Dan Williams, Konarka's vice president of business development and
marketing. "It costs several hundred thousand dollars a year to maintain that technical portfolio and manage and monitor it. For a small company, that's a lot of investment."

Obtaining a U.S. patent is a costly and rigorous process that can take years. One major issue, Williams notes, is the backlog of 750,000 patents awaiting approval at the U.S. Patent and Trademark Office (USPTO). "A U.S. patent is a valuable thing, so there are a lot of people filing in the United States," says Williams, who suggests that the administration look at ways to make the process easier and less costly. This includes hiring more staff, particularly experts who are familiar with new technology, such as nanoscience. "As industry evolves, having that kind of staff and those types of experts on board are critical." Williams also recommends that the United States continue engaging countries like China, "which doesn't have the same approach to IP as the United States."

But, ultimately, Williams says that it's up to U.S. companies to be vigilant and have a patent strategy in place, particularly when it comes to disclosing their discovery in a patent application, which can give others a chance to steal the technology. "You patent when you really believe it's a good thing to do, and other times, it may be best to hold your cards," says Williams.

The Solution—The Chamber's Plan of Action

The Chamber and its Global Intellectual Property Center (GIPC) have put in place a comprehensive, worldwide program to effectively thwart the growing threat that IP theft, counterfeiting, and piracy pose to the U.S. economy, the global business community, and consumers.

"The stage is set for the Obama administration and Congress to advance American ingenuity, innovation, and economic growth," says David Hirschmann, GIPC president and CEO. "Stabilizing the economy and protecting IP go hand in hand because our economy is built on IP-driven innovation."

In January, GIPC put forward a list of recommendations to strengthen the enforcement of IP protections. The report, which covers 11 areas, highlights reforms needed to modernize the USPTO and implement the Chamber-backed PRO-IP Act. This bill, which was signed into law last year but has not been fully funded, would increase resources for IP enforcement, improve interagency coordination, and provide additional legal tools to help reduce IP theft. GIPC is also calling for reform of the USPTO to improve the quality of patents, patent examiner retention, and the agency's relationship with the user community.

Additionally, the Chamber has joined industry leaders in launching the Innovation, Development and Employment Alliance. This coalition will work with Congress, the administration, and international stakeholders to safeguard IP rights both domestically and abroad while encouraging research and development investments, job creation, economic growth, and technological solutions for addressing climate change and meeting the world's health care needs.

Go to http://www.theglobalipcenter.com/ to learn more.