World IP Day & Why Intellectual Property is Key to Economic Growth at Home and Abroad

Michi Iljazi

April 22, 2014

United States Trademark and Patent Office (USPTO)

Saturday April 26 marks World Intellectual Property (IP) Day.  Protecting intellectual property is an important mission of the federal government.  In fact, the Founding Fathers thought protecting intellectual property was important enough to include it in the Constitution.  IP plays an important role in daily commerce, not just in the United States, but also around the entire globe. The Taxpayers Protection Alliance (TPA) supports IP, and has focused recently on two particular aspects, one dealing on the domestic side and another that lies overseas. The common factor that makes these issues of IP so important is how they impact taxpayers and economic activity and why IP is something that should be on the radar for everyone not just this week, but all year round.

First, let’s take a look here in the US and in particular in Washington D.C. at what is happening regarding intellectual property. Right now, there is a debate that has been lingering in Congress regarding patent reform and more specifically how to combat ‘patent trolls’. Just a few weeks ago, TPA welcomed Tim Lee from the Center for Individual Freedom to discuss in detail why the issue of ‘patent trolls’ was something that was worthy of attention on the ‘Taxpayer Watch’ podcast. Lee emphasized that the real focus is on the litigation and how to reform the current rules that have been established within patent litigation. The Senate Judiciary Committee is currently crafting a bill that may indeed attack the problems that the current patent litigation system contains. On the TPA podcast, Mr. Lee laid out that the rules seem to leave little responsibility on those bringing litigation forward, and that the reforms that are needed should ensure that both plaintiffs and defendants are operating on a level playing field in the judicial system with respect to patent litigation. This is a major sticking point in the negotiations within the Senate Judiciary Committee right now, and it is part of the reason that the bill has yet to move into markup phase. Just as members recessed for Easter, Kate Tummarello of The Hill detailed the situation that Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) has been facing:

Observers say Leahy is facing pressure from both sides. House Republicans — who passed a bipartisan patent reform bill late last year — want to put serious limits on patent litigation, which the GOP says is a needed change that would help foster technical innovation.

Patent reform should be a top priority for Congress, and earlier this year that belief was expressed in a coalition letter spearheaded by Digital Liberty that TPA signed onto, noting, “in an economy, which is increasingly supported by knowledge-based products, the health of our patent system is vitally important to American competitiveness in both national and international arenas.”

TPA has also been very concerned with IP activities overseas; particularly in the tobacco industry. There are several attempts around the world that aim to undercut free market principles and the core values of IP regarding how entrepreneurs make a living in the tobacco industry.

One country that has been of particular interest (and concern) is Ireland.  Ireland is a country that has been a great example for how to structure a tax code to welcome business and encourage investment.  However,  in January, TPA sent a letter to Taoiseach (Ireland’s equivalent of Prime Minister) Enda Kenny, and the Irish government, in order to urge them to not adopt plain packaging regulations, as they seem headed in that unfortunate direction.

There are very good reasons why the letter was sent and why TPA continues to fight against any efforts where ‘plain packaging’ is coming on the horizon. More than a year ago, Australia began implementation of plain packaging regulations that prevent “tobacco advertising and promotion of tobacco products and tobacco product packaging by making it an offence to sell, supply, purchase, package or manufacture tobacco products or packaging for retail sale that are not compliant with plain packaging requirements.” The most important metrics the impact of the regulations were detailed in a report which showed a clear failure of original intent, as well as a negative impact on both illegal tobacco trafficking and revenue generation:

  • Australia’s illegal tobacco market has risen to around 13% since the introduction of plain packaging just under a year ago, costing taxpayers nearly $1 billion in revenue.
  • Consumption of tobacco has not decreased since plain packaging took effect in December 2012, the first time since 2009 that consumption did not decline year over year with more and more turning to the illicit trade and to branded illegal products.
  • The level of illegal consumption of tobacco reached record levels, growing from 11.8% to 13.3% over a one-year period from June 2012 to June 2013, the key driver being the increase in black market cigarettes.

There is still much more work to be done regarding the choice that Ireland faces on ‘plain packaging’ and there may be other fights ahead internationally, but TPA will continue to highlight the negative impact that these anti-free-market rules bring to countries and economies that embrace them. Intellectual Property is a driving force behind innovations and global commerce. As technologies continue to evolve and countries continue to advance economically there should be much more focus on preserving the best standards for IP not just here in the United States, but all around the world.