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Three Steps to Protect US Intellectual Property
The U.S. Supreme Court, June 25, 2014 in Washington, DC. (Win McNamee/Getty Images)

Three Steps to Protect US Intellectual Property

Harold Furchtgott-Roth

If there were ever any doubt about America’s diplomatic priorities, those doubts were erased last week: Protecting intellectual property is not a top priority.

When it chooses, our government has a substantial capacity to mold world opinion. Witness last week’s UN meeting of more than 100 heads of state in New York. The United States helped shape the agenda, and President Obama chaired a special session of the Security Council to address terrorism. America helped frame many issues, but intellectual property was not prominent among them.

America’s carefree attitude towards property rights suits a great many countries that consume, and all too often pirate, intellectual property. The averted glance to theft benefits the thief. But the outcome hurts those countries, individuals, and businesses whose livelihoods are in large part based on intellectual property. Those individuals and businesses are concentrated in the United States. No nation creates more intellectual property. No nation suffers more from its piracy.

President Obama could take serious steps to define, protect, and enforce intellectual property. It is the treasure of the 21st century, and America must be the guardian of that treasure, perhaps our greatest resource. Businesses and countries that scoff at American intellectual property should know of adverse consequences. One possible consequence would be to condition access to American markets, including those for finance and securities, on certified compliance with American laws, including intellectual property.

Intellectual property is one of the few areas in which America dominates world markets. It is well past the time that an American government enhanced that advantage rather than debased it. Here are three possible steps to enhance the value of American intellectual property, both at home and around the world.

  1. Enforce intellectual property in America. Piracy is not a priority in this administration or any previous administration. That needs to change. The Department of Justice has prosecuted companies for all manner of wrongdoings, but rarely intellectual property theft. Little will focus the attention of wrongdoers as much as federal prosecution of piracy.
  2. Enforce intellectual property outside the United States. Piracy is rampant in many parts of the world. Businesses that engage in piracy outside the United States need to understand that the American government will go after them abroad, as well as in the United States. We do that with foreign banks under the Foreign Account Tax Compliance Act. We can do it with intellectual property as well.
  3. Punish governments that facilitate piracy. Piracy is not just about rogue companies; it is about rogue governments that harbor pirates. Many governments and their citizens take full advantage of American markets, ranging from finance to medical services. Those governments should know that America is no longer indifferent to their citizens’ piracy. American markets may be foreclosed to citizens and companies of countries that are chronic scofflaws.

Damages to America from piracy are calculated not only in lost economic activity and growth, lost federal revenues, lost innovations, lost creations, or even in the lost magnetism of attracting the world’s best and brightest. The harm from piracy is everywhere, its measure beyond simple computation.

Other countries have innovators and artists and also lose from piracy. But the losses to America are particularly large and poignant because we are the largest creator of intellectual property in the world and because our innovators and creators are largely left to fend for themselves.

Some governments would favor companies generating intellectual property. Not ours.

For decades, our government has spoken eloquently about intellectual property but has not elevated it to a preeminent status. Other issues always overshadow intellectual property.

Of course the U.S. Trade Representative’s Office files many reports about protecting intellectual property. The Office prepares lists of offending countries and Out of Cycle Reviews of Notorious Markets. The reports are factual, but they do not begin to capture the entire economic harm to America from piracy. Nor do they seem to steer American diplomacy at the highest levels.

We do not even defend our intellectual property against governmental abuses abroad. When hostile foreign governmental authorities threaten our companies, we cave. They bring legal and regulatory actions against American companies, including Apple, Facebook, Google, Microsoft, and Qualcomm, to name just a few. The legal and regulatory problems can disappear, or so the companies are told, with a combination of cash, cooperation with the foreign government, and a debasement of intellectual property.

All of which brings us back to the United Nations. If America benefits from UN conferences, President Obama can convene one on intellectual property. But property rights would likely change little, if it all, for the better.

It is difficult to look at America from afar and see a country that takes intellectual property very seriously. Intellectual property fades as an issue in American diplomacy. Piracy of copyrighted works is all too common on the Internet. Even if this administration, or a future administration, were suddenly to take international intellectual property protection more seriously, a foreign government might ask: “Why should we protect American intellectual property any more than your government protects it?” Which is to say: “Not much.”

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