State of Innovation

Patents and Innovation Economics

Trade Deficits, The Economy, and Intellectual Property

Donald Trump is fond of saying that China is stealing our economy from us and he attributes this to China manipulating its currency.  Here is an article, Counterfeit Chinese Parts in US Military Weapons, that would appear to support his point of view.  The article explains that counterfeit Chinese parts are found in U.S. military weapon systems and the implication is that this is happening even more widely in the US economy.  Pat Choate’s excellent book Hot Property: The Stealing of Ideas in an Age of Globalization, documented this problem.  Counterfeit products are not the result of currency manipulation but lax enforcement of intellectual property rights.  Our politicians talk a lot about protecting our intellectual property, but ten years ago they required U.S. inventions be published for all the world to see and steal at 18 months from filing a patent application.  They passed the America Invents Act this year which made it easier to challenge patents issued in the U.S. and effectively eliminated the one year grace period.  Congress is a bunch of hypocrites when it comes to intellectual property, they only want to protect Hollywood and software copyrights. They have done everything in their power to undermine our inventors, who are much more important to our economy than Hollywood.

The U.S does have a legitimate complaint with China, but it is not currency manipulation it is the theft of our Intellectual Property – particularly our inventions.  Here is what Congress should do to revive our economy and protect our inventors.

1) Repeal the publication requirement for patents

2) Demand that China and other countries require reciprocity for patents. This means that if you receive a patent in the U.S. it is enforceable in China and vice versa without the cost of filing a patent application in every country around the world.  The present situation with respect to patents is exactly the position that existed with respect to copyrights in the 1860s.  We realized that it made no sense for copyrights and it makes no sense for patents to only apply in each country.

3) Fully fund the Patent Office.  It now takes from 3 to 10 years to obtain a patent.  This is severely hurting our technology startup companies.  When combined with the publication requirement it has allowed China and the rest of the world to steal our technology.

4) Apply tariffs to those sectors of Chinese goods that have consistently violated U.S. intellectual property rights.



November 10, 2011 - Posted by | -Economics, copyrights, Innovation, Patents | , , ,

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