Posts Tagged: "US Economy"

If you were buying patents in 2015, you likely did better than any previous year. The patent market, and, in particular, the brokered patent market, continues to be a robust market for buying and selling patents. Prices are down unless an EOU is available. Sales rates are up, and sales are tending to happen earlier. Caselaw impacted the market but not as much as you might have expected (Alice impacted fintech patents much more than software patents). With an estimated $233M in patent sales, we think the patent market will continue to provide interesting opportunities for both patent buyers and sellers.

The U.S. cannot win a trade war based on raising tariffs. Rather than engage in a trade war that the U.S. can’t win, why not embrace smarter manufacturing policies? when we outsource manufacturing we are handing over the follow-on innovation that will take place on the factory floor. Therefore, by outsourcing manufacturing to the lowest bidder abroad not only have we destroyed the working middle class in America, but we are also increasingly turning over our last economic advantage – our intellectual property. How long will the United States be able to remain one of the world’s leading economies if we continue to outsource that follow-on innovation that takes place through the manufacturing processes?

In a 2014 Heritage Foundation Legal Memorandum, I highlighted the growing problem of trade secret misappropriation faced by American business, and explained that an appropriately crafted federal law would help American victims recover damages for theft of their trade secrets, make it easier to stop thieves before they leave the country, and thereby strengthen the American economy, without undermining federalism.…

“At the end of the day innovation is important,” Jung explained before he lamented the fact that the United States “seems to be making it harder and harder to be competitive globally…” Jung ended his presentation by pointing out that in 1820 the United States contributed only 1.8% of world GDP, but that thanks to an innovation economy the United States peaked at about 30% of world GDP, “predominantly driven by invention-driven industries like automotive, like aerospace, like pharmaceutical and so on. These were all based on key inventions that the US dominated the landscape on. That’s clearly not going to be the case going forward. It’s going to be much more distributed across many different countries, which is why I think, again, diversity is going to be the key.”

EDWARD JUNG: ”At the other end of that value chain you now have some of the most valuable companies in the entire world in places like China. What stops them from taking all of the value they’ve been able to derive from their over one billion population base, which well capitalizes them, and coming in and competing in the US? The US has not seen so many threats to their industry come from outside the US as opposed to within the US so in that sense I think that’s a whole new set of interesting problems to think about. I’ve actually had encounters with Chinese companies asking if there was some kind of, you know, hidden trick in the way we appear to be opening our market for them to freely come in without any IP barriers. For example, in pairing software and IP and so on and so forth.”

Today, copyright drives innovation in the creative industries and in other industries as well, providing tremendous economic benefits to our economy. The outputs of the creative industries serve as the inputs that spur the creation of many innovative goods and services. Authors collaborate with technology partners not only to distribute their works, but often to create them. Sometimes storytelling itself leads to scientific discoveries and technological innovation. More and more frequently, the presumed distinction between creators and innovators is vanishing as individuals and firms simultaneously generate creative works and innovative technology.

Abraham Lincoln once called the patent system one of the three greatest advances in human history, along with the discovery of America and the printing press… The result is a patent system in crisis, which threatens our economic future. Small businesses received 30 percent of U.S. patents in 2000. Last year the number plummeted to 19.5 percent. Small companies undertake the risk and expense of developing breakthrough technologies that made us the most prosperous nation in history. When they lose confidence in the patent system the country will suffer.

Google, now Alphabet Inc., is one of the world’s most valuable companies but employs only a tenth of the number of workers of past giants of industry like AT&T and General Motors did about a half century ago. But we need to point out some obvious problems with the theory that technological innovation is dealing irreparable harm to the American workforce. Simply stated, you cannot ignore the reality that technological innovation is a net creator of jobs, from those who create the innovation, to those who market and sell the innovations, to those who install and maintain the innovations. Focusing only on the low income workers who will be displaced by robotics, for example, creates an inaccurate picture that significantly distorts the workplace realities. Further, it is those innovation based jobs that are the high paying jobs that our economy most wants and which will pay livable wages.

Unfortunately, we are going through another period where many see the triumvirate of big government, big business and big labor guiding an economy stuck at a 2% growth rate as preferable to the messy “creative destruction” of free enterprise capitalism. The emphasis on making sure the existing economic pie is fairly distributed rather than grown leads to increased hostility to the intellectual property system. We see arguments that patents harm rather than stimulate innovation and hear how much better it would be if they were placed in the public domain or licensed non-exclusively to be more fair. Many have forgotten that our prosperity is the result of inventions that in just a few decades created a standard of living previously unimaginable.

you continually hear from Members of Congress, Staffers and those giant companies pushing for weaker patents that the goal of the bill is nothing more than to keep small business owners from getting sued for using pieces of equipment that they purchased. The truth, however, is far different. The small businesses that Congress claims they want to protect are just political pawns in a much larger game of chess. The people funding the effort to enact further patent reform are not small businesses; rather they are Google, Cisco, J.C. Penney, and other giant corporations. The interests important to these giant corporations are driving the push for more reform, not a deep-rooted concern for the plight of American small businesses.

The exact terms of a patent box will vary depending on what the drafter is trying to promote. For example, the tax preference could require that the profits be derived only from a patent secured in that country or that the patented product be the result of domestic R&D. The Boustany-Neal draft legislation is called the “innovation box” and would impose an effective tax rate of 10% on all innovation box profits by creating a deduction equal to 71% of a corporate taxpayer’s innovation box profit.

As the new academic year starts in earnest we can be sure that the all too familiar attacks on the patent system will reemerge, as they always seem to do. Patent critics, who are not averse to making provably false claims, seem to believe that if they repeatedly say something that is false enough times it will miraculously become true. Hard to pin down, patent critics will deflect reality with thought experiments based in fiction and fantasy. They demand what we know to be true is actually false, as if we are in some parallel, bizzaro universe where up is down and white is black.

Innovation is the lifeblood of a prosperous economy. Sound patent policy, which encourages the nexus between risk and ideas (especially for small entrepreneurs), makes invention profitable. The U.S. patent system enables that dream by protecting the market an invention creates long enough for the inventor to gain a toehold against competition, and by creating a property right capable of attracting critical investment to bring the invention to market and grow the business. Don’t let H.R. 9 or S.1137 kill this can do American spirit of innovation.

Starting before World War II and continuing throughout the 1950s, 60s and 70s, short sighted and now discredited government antitrust policies, coupled with judicial hostility toward patent enforcement and patent licensing, converged to reduce the enforceability of patents and to restrict the ability of patent owners to license their inventions. The result: foreign competitors began to capture entire industries that should have been dominated by U.S. companies that had pioneered the relevant technologies.

I recently received an inquiry from an IPWatchDog reader, posing several questions about the links between intellectual property protections, innovation and job creation. (Thank you, Marcus!) The interrelated nature of IP, innovation and jobs is essential to economic prosperity and important enough to explore again. Marcus:   I’m curious about two positions that are taken in your writing. First, you state…