Strong IP Protections Are Good for Workers, Good for the Economy

Originally Published in Industry Week

​Manufacturers continue to urge U.S. negotiators to pursue a Trans-Pacific Partnership (TPP) trade agreement that opens markets, protects intellectual property rights and enables cutting-edge innovation. Such an agreement is vital for manufacturing businesses as they seek to grow and flourish, particularly in light of current headwinds in global markets, including the strong U.S. dollar and sluggish growth abroad. Trade agreements would help to counteract such challenges.

Yet, recently some critics have suggested that strong intellectual property (IP) protections are not important to middle-class workers. This is simply not the case. Reputable studies continue to find that workers benefit from high and rising earnings from the productivity-enhancing activities fostered by IP innovation. Consider the following:

  • The U.S. Department of Commerce found in 2013 that “IP-intensive industries have been a source of high-quality jobs, with average weekly wages in these industries averaging 42 percent higher than the average for all other industries.”
  • Matthew Slaughter, Ph.D., the incoming dean of the Tuck School of Business at Dartmouth, reached the same conclusion, noting that the “IP compensation premium has been growing over time: from 22 percent in 1990 to 38 percent in 2000 to 42 percent in 2010.”

Improving the competitiveness and ensuring fair treatment of IP in the United States is clearly related to higher wages and better jobs. This is why our two organizations, the National Association of Manufacturers (NAM) and the National Alliance for Jobs and Innovation (NAJI) aggressively advocate for strong IP protection around the world on behalf of the more than 14,000 manufacturers we jointly represent that are driving the economic comeback.

But IP rights are under threat around the world. A report, published on behalf of the Commission on the Theft of American Intellectual Property by the National Bureau of Asian Research, found that stolen ideas, brands and inventions drain more than $300 billion from the U.S. economy. In fiscal year 2013, U.S. Customs and Border Protection seized counterfeit and pirated goods worth more than $1.74 billion at America’s borders. IP theft not only affects the many products from food and personal care items and medicines to auto parts and toys, but also poses serious health and safety risks to American consumers.

Stronger rules to ensure the protection and enforcement of IP rights globally would help address these great challenges to the U.S. industry and workers. While there are important protections shared by World Trade Organization trading partners, stronger standards are needed to enable America’s continued global competitiveness. Trade agreements, such as the TPP, provide just such an opportunity. It is very much in the interest of manufacturers and other IP-intensive industries in the United States and their workers to secure the highest level of protections and enforcement consistent with the high standards already in place in our nation. More specifically, that means protections for all patents, trademarks and copyrights for all products and industries; new protections to address rising challenges to trade secrets; and lengthy periods of data protection for new, innovative biological medicines that are creating lifesaving cures and producing good-paying jobs here in America.

At a time when America is seeking to level the playing field and make the global economy fair for U.S. companies and their workers, strong IP protections have never been more critical. These protections are good for the economy as well as middle-class workers.

Rob McKenna is the former Attorney General of Washington State, and also served as President of the National Association of Attorneys General. He is now a partner at Orrick where he co-chairs its national Public Policy Group.

Chad Moutray is the Chief Economist of the National Association of Manufacturers.