[Ip-health] The USPTO/DOC's liberal and misleading definition of IP-Intensive industries is designed to influence policy debates

Jamie Love james.love at keionline.org
Wed Jun 6 08:08:14 PDT 2012


The USPTO/DOC's liberal and misleading definition of IP-Intensive
industries is designed to influence policy debates

Submitted by James Love [1] on 6. June 2012 - 7:07

At yesterday's TACD event, USPTO and KEI discussed the report by the
Department of Commerce's Economics and Statistics Administration and
the United States Patent and Trademark Office on Intellectual Property
and employment. The rehttp://www.keionline.org/node/1432port, titled:
Intellectual Property and the U.S. Economy: Industries in Focus, has
been widely quoted, including these bullets from its executive

* IP-intensive industries accounted for about $5.06 trillion in value
added, or 34.8 percent of U.S. gross domestic product (GDP), in 2010.

*  Merchandise exports of IP-intensive industries totaled $775 billion
in 2010, accounting for 60.7 percent of total U.S. merchandise

Wow. Sounds impressive. But where do these numbers come from? It turns
out, the government has shamelessly ramped up the employment numbers
by including a very liberal definition of IP-Intensive industries. To
follow appreciate how liberal, it is useful to spend some time on
Table 10 [2], which is found on pages 36-38 of the report. Indeed,
before you read the whole report [3], spend 10 minutes reading Table
10, and then things will begin to make more sense. More than 83
percent of all reported IP-Intensive jobs come from the trademark
sector, where the mere existence of a brand name somewhere in the
value chain makes the industry count as "ip-intensive." Most of the
jobs have nothing to do with anything remotely connected to ACTA, SOPA
or other IP policy debates.

According to the report, the number one IP intensive industry in terms
of employment is “grocery stores,” with 2.5 million jobs. The six
industries with more than a million jobs are the following:

1. Grocery stores, 2.5 million
2. Depository credit intermediation, 1.7 million
3. Computer systems and designs,. 1.6 million
4. Insurance carriers, 1.4 million
5. Management and technical consultants, 1.2 million
6. Clothing stores, 1.1 million

Only one of these, Computer systems and designs, can honestly be
described as an IP-intensive industry, in the sense that the Congress
is seeking to understand the relationship between IP and employment.

These are just a few of the industries the Department of Commerce
calls IP-Intensive: Oil and gas extraction, Residential building
construction, Grain and oilseed milling, Dairy product manufacturing,
Lessors of real estate, Gambling industries, Household and
institutional furniture, Pulp, paper, and paperboard mills, Sporting
goods and musical instrument stores, Travel arrangement and
reservation, etc. Industries like these overwhelm the statistics on
jobs for the more legitimate choices, such as Sound recording
industries (just 36.4 thousand jobs), or Software publishers (259.8
thousand), making it seem as though the IP-Intensive industries are
truly enormous employers.

And, when you look at an industry like Sound Recordings, you have to
ask, why is US trade policy so responsive to an industry of just 36
thousand jobs, and hostile to the massive and wealthy technology
sector, that is the target of SOPA, ACTA and other IP enforcement

During the presentation of the report, the USPTO was asked about the
impact of intellectual property policies on the information sector:
"if you cut the term of patent protection in half, from 20 years to 10
years, would that increase or decrease the number of jobs in the
information sector of the US economy?" USPTO said it could not answer
that question.

It was also pointed out that while the Software publishing sector was
a high wage sector, it was a relatively small employer of the
professionals in its key occupations. For example, less than 5 percent
of computer programmers work for Software publishers.  What do the
other 95+ percent of computer programmers do? Quite a few build
applications and services than use various open source free software
platforms, which are both inexpensive and easy to customize.

And, where is the growth for employment? For the computer,
mathematical science occupations, the rate of growth is three times
higher outside of the Software Publishers Sector than inside the
sector.  So what can USPTO or the Economics and Statistics
Administration tell us about the relationship between IP and
employment? Not much, other than grocery stores, insurance companies
and oil companies use a lot of trademarks, and not many people work in
the sound recording industry.

After we left the TACD plenary where the IP and employment report was
discussed, the TACD IP Policy Committee met with four US IP/Trade
agencies, and three Directorates of the European Union. The meeting
began with a US trade official telling us about this new employment
study that showed the need for ACTA. No kidding. And, we will
certainly continue to hear about this report, with very little
understanding of how it was put together.

[1] http://keionline.org/user/4
[2] http://keionline.org/sites/default/files/Table_10_IP_Report_March_2012.pdf
[3] http://keionline.org/sites/default/files/IP_Report_March_2012.pdf

James Love.  Knowledge Ecology International
http://www.keionline.org, +1.202.332.2670, US Mobile: +1.202.361.3040,
Geneva Mobile: +41.76.413.6584, efax: +1.888.245.3140.

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