Thursday, August 21, 2014

Assumptions in recent trademark studies slammed.  "How Many Jobs Does Intellectual Property Create?"  Here is the link to a paper by Eli Dourado and Ian Robinson from George Mason University.

The challenge here is to a USPTO & Economics and Statistics Administration report, "IP and the US Economy: Industries in Focus" and the USCOC Global IP Center campaign called "IP Creates Jobs for America."  The authgors take issue with some of the claims about how powerful IP is in the US economy with respect to job creation and the inpact of infringement on revenue losses.

How many jobs does Intellectual Property create?  It is a complicated response- some are easy to indentify, others not so much.  In today's global economy,  IP is the only remaining competitive advantage.  It is the Safe Harbor if managed appropriately.  (That is, the owner has to be diligent in protecting it from infringement, piracy.)  That in itself, frequently means new jobs that do not create new output, but protects what exists.

As to jobs created by IP, the authors suppositions and examples tend to reinforce the the assumption that they are academics who never worked in private industry.  Jobs, as they say, are not ends in themselves, but, how is that relevant?  Jobs are created to meet defined needs in many areas of an enterprise.  A janitor's job would rarely be associated with IP but an electrical engineer hired into Bell Labs would be expected to have some involvement with IP in his/her career.  Which, or both, is the IP counted job?

IP, be it a utility or design, trademark or an instruction set for a new dance, is a result not a precurser.  Are those associated jobs counted as IP or is it 'when' they are counted?  Most jobs are filled based on need and relevant skill sets.  The newly hired patent attorney is an immediate count.  The new IP data base manager and the new retail store phone salesman who just handled a defective product?

The authors state that "it is fallacious to equate employment within an IP intensive industry with an economic benefit of IP."  Huh?  Why then does IBM get more patents every year than any other enterprise and how do they annually gain nearly a billion dollars in royalty revenues?

To summarize, IP is the only Safe Harbor left and it would be irresponsible of leadership not to protect it by any and all means.  And, dealing with infringement to recoup some lost revenue is a valid cause for job creation that does not result in economic gain but minimizes loss.  The authors should claim valid skepticism  in job numbers based upon what appears to be oversimplifying assumptions.  Rather than levy criticism at the results, it would have been far more meaningful to scrutinize the assumptions.

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