The Benefits of Intellectual Property Protection
If there is one thing about which libertarians are never likely to agree, it is whether intellectual property—patents, copyrights, trademarks, and trade secrets—should receive the same legal protection as physical property.
Without wading too deep into the philosophical debate, but showing my colors as an IP advocate, let me share some new research published by the U.S. Chamber of Commerce’s Global Intellectual Property Center (GIPC) on the benefits of legal protection of intellectual property.
Published on February 10, Infinite Possibilities ranks 38 countries by 30 indicators of strength of IP protection. The indicators measure both law and enforcement: Countries which do not enforce IP rights, despite the letter lf the law, are marked down. Most of the indicators are straight forward: Longer patent, copyright, or trademark terms are better; strong enforcement mechanisms are better; and treaty obligations protecting intellectual property invented in other countries are better.
The report does not attempt to determine causality between strong IP protection and social or economic outcomes. Indeed, 30 indicators are likely far too many to use for such an analysis. Nevertheless, the report does determine a number of positive correlations between strong IP protection and a number of other beneficial indicators. For example, the correlation between countries’ scores and
- access to venture capital is 0.81;
- number of researchers in research and development is 0.80;
- access to the latest technologies is 0.83;
- access to video-on-demand and streaming TV is 0.64;
- private sector spending on research and development is 0.75;
- share of workforce in high-value, knowledge-intensive services.
I could go on, but I am sure you get the drift. Some libertarian critics complain that IP protection is the result of innovation, not its cause; and the legal framework is a consequence of rent-seeking rather than the government’s desire to promote innovation.
This chicken-and-egg question may be beside the point: It is very difficult to envision innovation continuing at the current rate if innovative industries lose the protections for which they advocate. Infinite Possibilities shows there are no innovative and prosperous countries today that do not have strong IP protections.
