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U.S. Department of State

Diplomacy in Action

Why Intellectual Property Matters


Date: 11/30/2012 Description: Signed Copy of the Constitution of the United States © National ArchivesSince our founding, America has recognized and respected artists and inventors’ rights to their intellectual property. The U.S. Constitution, Article 1, Section 8, clause 8 empowers the United States Congress “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” In President Lincoln’s words, the patent system adds "the fuel of interest to the fire of genius."

Effective protection of intellectual property rights, including patents, trademarks, and copyrights, is an essential role of government in encouraging innovation. Innovation typically requires substantial investment in education, research and development, and labor to bring a new idea to the marketplace. If others can steal the idea once it is proven, undermining the creator’s ability to recoup the cost of his or her innovative investment, the incentive to innovate is reduced.

These timeless principles are especially true today in our high-tech world. When President Obama launched the U.S. Government’s Strategy for American Innovation in 2009, he said, "The United States led the world’s economies in the 20th century because we led the world in innovation. Today, the competition is keener; the challenge tougher; and that is why innovation is more important than ever. It is the key to good, new jobs for the 21st century. That’s how

Strong Intellectual Property Rights Protection:

  • Spurs innovation and job creation;
  • Turns innovative ideas, creative designs, and other intangible assets into valuable business assets;
  • Is integral to the rule of law and good governance; and
  • Promotes public health and safety by combating fake goods.

The April 2012 "Intellectual Property and the U.S. Economy – Industries in Focus" report quantifies the importance to the U.S. economy of robust IP protection and enforcement worldwide. According to the report, in 2010 IP intensive industries contributed $5 trillion (or 35% of GDP) to the U.S. economy. Those industries supported 27 million American jobs directly and another 13 million jobs indirectly through their supply chains. Merchandise exports of IP-intensive industries totaled $775 billion in 2010 (or 61 percent of total U.S. merchandise exports). The report identifies 75 industries that use patent, copyright, and trademark protection extensively; it demonstrates that America’s competitive advantage lies in IP-intensive industries, which embody Americans’ passion for innovation and creativity.


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