Intellectual Property Is Personal | Citizens Against Government Waste

Intellectual Property Is Personal

The WasteWatcher

On February 26, 2015, Citizens Against Government Waste (CAGW) held a briefing on Capitol Hill to discuss intellectual property (IP) rights, including copyrights, patents, brand recognition and trademarks.

The Founding Fathers recognized the importance of encouraging and protecting intellectual property rights by including it in Article I, Section 8 of the Constitution.  It was their vision that enabled and encouraged major technological advances such as the telegraph in 1835; the phonograph in 1877; the lightbulb in 1880; air conditioning in 1902; television in 1927; the cell phone in 1973; and the microprocessor in 1973. 

Speaking before a packed room in the Rayburn House Office Building, House Judiciary Committee Chairman Bob Goodlatte (R-Va.) opened the event by discussing his plans to move forward with reforms on a series of intellectual property issues through a thoughtful, cooperative process that will involve all stakeholders.  He specifically discussed the Innovation Act, which passed the House last Congress, and has been reintroduced in this Congress to help cut down on litigation by so-called “patent trolls.”

The chairman was followed by a panel that was moderated by CAGW President Tom Schatz and included the U.S. Chamber of Commerce’s Global Intellectual Property Center (GIPC) Director of U.S. Intellectual Property Policy, Kasie Gorosh; the designer and founder of Liz Fields, LLC, Liz Khodak; and Information Technology and Innovation Foundation (ITIF) Director of Global Innovation Economy Stephen Ezell.

Ms. Gorosh led off the discussion by noting that intellectual property (IP) generates 34 percent of the U.S. Gross Domestic Product (GDP), and that IP-intensive jobs create 40 million U.S. jobs, two-thirds of U.S. exports, and $5.8 trillion in U.S. output.  In contrast, Ms. Gorosh stated that the transactions generated by rogue websites cost nearly 750,000 American jobs and $250 billion in revenues lost each year.  She noted that the GIPC had recently released its third annual Global IP Index, which provides an overview of how different nations are performing in the protection of IP, and the U.S. slipped from the number two position in enforcement to number four.  

In addition, Ms. Gorosh explained the importance of protecting brands and trademarks around the globe by strengthening efforts to prevent illegal sales of counterfeit goods over the Internet, as well as providing funding for law enforcement to protect consumers against counterfeit goods that might cause them harm.  She also briefly discussed the impact of plain packaging on brand recognition, and the potential for governments to expand plain packaging beyond tobacco products to other consumer goods that bureaucrats may deem may be harmful to consumers, such as soda, candy, potato chips and other products. 

            Ms. Khodak shared her very personal story about the impact of counterfeiting on the Internet on her budding wedding and bridesmaid design business.  As soon as her dresses were made available for sale on the Liz Fields website, counterfeiters immediately began to copy the designs and sell inferior dresses at a steep discounted price.  Ms. Khodak had issued countless takedown notices, but for every website that she was able to have taken down, several more popped up to replace it. 

Ms. Khodak’s story reflects an ongoing battle faced by entrepreneurs and creators on a daily basis.  Ms. Khodak’s personal fight against counterfeiters ended when she signed a licensing deal for her brand and trademark to a larger company.

            Mr. Ezell brought up his work on the adverse impact of the increasing level of state-sanctioned IP rights theft or infringement in countries like China and India, as well as the overall impact of counterfeiting worldwide.  According to Mr. Ezell, the total value of trade in counterfeit goods has now reached $1.8 trillion, with 80 percent of the infringing goods coming into the U.S. from China.  He said counterfeit goods cost the American economy as much as $250 billion per year, and in 2009, cost the nation nearly one million U.S. jobs.

            Wrapping up the event was Motion Picture Association of America Executive Vice President of Global Policy and External Affairs Joanna McIntosh.  According to Ms. McIntosh, core copyright industries including movies, music, and creative arts added more than $1.1 trillion in value to the U.S. gross domestic product in 2013, accounting for 6.71 percent of the economy.  More than 1.9 million Americans are directly or indirectly employed by the motion picture and television industry, which pays out $111 billion in wages and $15.9 billion in sales, state income, and federal taxes each year.

However, Ms. McIntosh pointed out that a large challenge facing the industry is how easy content can be stolen, replicated, transmitted, and distributed online globally.  According to Ms. McIntosh, 24 percent of Internet traffic is estimated to be dedicated to infringing content.  As part of her multi-media presentation, Ms. McIntosh encouraged those seeking safe places to view movies and television shows to use websites such as, which provides hundreds of links to legal content without supporting counterfeiters and pirates.

The briefing was part of ongoing efforts by CAGW to follow up on its December 2014 book, “Intellectual Property:  Making It Personal,” which cited the impact of IP theft at an individual level.  The books chapters describe the impact of counterfeit drugs, the economic effects of copyright infringement on the music and video industries, the importance of protecting trademarks and brands, efforts to improve patent rights and licensing, and, the hazards of counterfeit electronics and software entering the marketplace.

Intellectual property touches everyone.  Without the protection of IP, as found in the Constitution, the light bulb, the telephone, the cell phone, and the microchip might never have been invented.  Strong IP protection is fundamental to keeping the engine of ingenuity on track for generations to come.  Through education efforts such as the Capitol Hill briefing, legislators and the general public will become better aware of ways to protect themselves and the economy against counterfeiting and IP infringement.

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