- The Washington Times - Sunday, September 28, 2008

ANALYSIS/OPINION:

COMMENTARY:

In the global market, America has long maintained a competitive advantage in innovation and intellectual property (IP).

Intellectual property drives this economy to the tune of $3.5 trillion, accounting for half of all U.S. exports and employing nearly 18 million workers. These are high-wage jobs that are ensured and protected due to IP protections that allow for stability in the industry.

Yet this vital industry continues to be under attack. When most people think of counterfeiting and piracy, they think of a college student sitting in a dorm room illegally downloading the latest Madonna album or a tourist snatching up that fake Louis Vuitton bag in New York City. However, the problem is not just limited to fashion and entertainment. Counterfeiting is an international gold mine that includes fake copies of prescription drugs, alcohol, auto parts and food.

Everyday products from every industry can and are being copied. This has drastic consequences for the U.S. economy. Counterfeiting and piracy puts an estimated $250 billion dent in the economy and costs the United States nearly 750,000 jobs. With signs pointing to an economic downturn, steps need to be taken to protect a critical, yet fragile industry.

A bill now moving through the Senate provides the needed weaponry to strengthen U.S. copyright and trademark laws against the illegal sale of counterfeit and pirated goods. The “Enforcement of Intellectual Property Rights Act of 2008,” sponsored by Senate Judiciary chairman Patrick Leahy, Vermont Democrat., and ranking member Arlen Specter, Pennsylvania Republican, builds on previously introduced Senate bills and the House “PRO-IP Act,” which passed with broad bipartisan support (409-10). S.3325 provides the necessary tools to enforce already enacted federal laws. It creates an IP enforcement coordinator within the White House who will be able improve efficiency by coordinating all the various agencies responsible for stopping counterfeiting and piracy. These expanded efforts will help reduce the threat to the U.S. economy by increasing domestic and international IP enforcement and coordination.

Illegal trading of counterfeited goods not only deprives the copyright owner compensation for his work, but also deprives the state of lost revenues from legitimate U.S. businesses. With the economic growth spurred from the enactment of this legislation, the bill pays for itself. For every dollar this bill invests, the federal government will see three new dollars in taxes from lawful sales of copyrighted products, according to the economics firm, LECG. Additionally, LECG estimated that, after three years, a decrease in the loss of sales due to these crimes by as little as between 5 percent and 10 percent would create at least 174,000 new U.S. jobs per year. The United States would also see a $27 billion increase in economic output over that same time.

The rest of the world looks to the United States as a model for property rights protections and we continue to require strong IP enforcement provisions as a key part of negotiating free trade agreements. Intellectual property rights can boost trade and foreign direct investment not only in the America but in the developing world as well.

As highlighted in the 2008 edition of the International Property Rights Index (IPRI), people in countries that protect their physical and intellectual property enjoy a GDP per capita up to ninefold those without legal protection. Passage of this legislation would send a clear message to our trading partners that we are serious about protecting our creators and innovators while promoting prosperity around the world.

Americans work in a society where individual freedom, economic expansion and job creation depend on securing property rights. When creators and innovators risk having their property effectively expropriated, nobody wins. Creators face a disincentive to invest in their creative endeavors and society loses out on the opportunity to benefit from their works.

Economic growth only occurs when property, in all forms, is respected and protected. It is imperative for public health, safety and economic growth that the Senate moves quickly to improve intellectual property rights and enforcement.

Grover G. Norquist is president of Americans for Tax Reform. Kelsey Zahourek is executive director of the Property Rights Alliance.

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