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USPTO/Commerce Dept. Distortions: “IP Contributes $5 Trillion and 40 Million Jobs to Economy”

USPTO 5 trillion propagandaThe website of the USPTO this morning is triumphantly proclaiming that “IP Contributes $5 Trillion and 40 Million Jobs to Economy.” This is pure Intellectual Properganda. The link is to a US Commerce Department report “Showing Intellectual Property-Intensive Industries Contribute $5 Trillion, 40 Million Jobs to US Economy”. The USPTO says “A new report demonstrates intellectual property is widely used in the economy and the industries that use it most intensively account for a large share of economic activity for jobs, new products and services, and the prospect of longer and better lives.”

Got that? Not IP–but IP-intensive industries. That is, the private companies in certain industries generate $5 trillion and 40 million jobs–and yes, they happen to use IP since the state inflicts this system on them. How bad is this logic? Sure, IP is widely used. Companies have no choice but to waste billions of dollars acquiring patents to use for defensive reasons, which helps them form oligopolies that reduce competition, innovation, consumer welfare, and prosperity.1

Yes, they “use” IP. And they also pay taxes and are subject to a host of unconstitutional federal regulations. Just because an industry subject to and regulated by IP (and other regulations) generates $5T does not show that IP itself contributes $5T to the economy. This is such obvious propaganda. In fact, IP imposes huge costs on the economy and these industries–likely on the order of hundreds of billions of dollars a year, or more,2 plus the devastating financial costs of copyright, not to mention the police state being foisted on us in the name of copyright.3

This argument makes the mistake of equating correlation with causation, just as similar arguments for IP do, such as: Postwar Japan prospered because it had a patent system; countries with the most IP are the most prosperous; America’s prosperity and growth since its inception is due to its patent and copyright systems.

If the USPTO and Commerce Dept. are stooping to such strained arguments in favor of IP, maybe it’s a sign that they know they are on the ropes–and also of how desperate they are, how little real ammunition they really have.

Add this to the list of Absurd Arguments for IP.

Update: Related Techdirt posts by Mike Masnick:

See also Maggie Wittlin, Lisa Larrimore Ouellette & Gregory N. Mandel, “What Causes Polarization on IP Policy“, citing this post:

“Polarization over IP evidence is seen over even an elementary question: Does IP protection provide a net contribution to the U.S. economy? For example, after a report from the U.S. Patent & Trademark Office (“USPTO”) concluded that the most IP-intensive industries contributed $5 trillion and forty million jobs to the U.S. economy in 2010,28 these figures were both touted as a signal of IP’s economic importance29 and derided as misleading.30 One response even claimed that the study “actually suggested that IP-intensive industries are having a decreasing impact on the U.S. economy.”31 The report itself stated that it “does not contain policy recommendations and is not intended to directly advance particular policy issues,”32 but it has been wielded to support contradictory positions in the IP policy wars.33

31 Innovation in America: The Role of Copyrights, Hearings Before the Subcomm. on Courts, Intellectual Property, and the Internet of the H. Comm. on the Judiciary, 113th Cong. 15 (2013) (statement of the Computer & Communications Industry Association) [See docs here, to-wit: Hearing Record: Hearing Transcript [PDF]]

32 ECON. & STATISTICS ADMIN. & U.S. PATENT & TRADEMARK OFFICE, supra note 28, at vi.

33 See also Ouellette, Patent Experimentalism, …at 121 & nn. 228-30 (discussing the report and suggesting that the USPTO is not the best source for new IP evidence due to perceived bias).”


  1. Controls breed controls, Monopolies breed monopolies; Nortel Patents Sold for $4.5 Billion to Consortium Which Includes Apple; Apple vs. Microsoft: Which Benefits more from Intellectual Property?; Patent Cross-Licensing Creates Barriers to Entry. []
  2. See, e.g., Software Industry Needs 2 Million Patent Attorneys and $2.7 trillion per year to avoid infringing software patents; Costs of the Patent System Revisited. []
  3. Patent vs. Copyright: Which is Worse?; The Ominous PROTECT IP Act and the End of Internet Freedom; Masnick on the Horrible PROTECT IP Act: The Coming IPolice State; ACTA, Executive Agreements, and the Bricker Amendment; As Countries Sign ACTA, Many Finally Admit Their Copyright Laws Will Need To Change; US, EU, Canada, Japan, Australia & Others To Sign ACTA This Weekend, Despite Legal Concerns; SOPA and Section 1201: A Frightening Combination. []
{ 11 comments… add one }
  • Kevin Carson April 20, 2012, 2:44 pm

    Completely and utterly stoopid. Any monetized activity that otherwise would be free, by definition, adds that amount of money to the economy, because GDP is simply a measure of total money expenditures. Broken windows, anyone?

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