Giachino (00:05.0610 - 00:38.0650)
Welcome to IP Protection Matters. I'm your host, Renee Giachino. Today we are joined by Stephen Ezell, the VP of Global Innovation Policy and Director of the Center for Life Sciences Innovation at the Information Technology and Innovation Foundation. A little bit of a mouthful, but easy to find at itif.org. We'll be talking today about why the U.S. must lead the world as a champion for strong IP rights. Thank you so much for joining me today. I appreciate it.
Ezell (00:39.0259 - 00:40.0520)
It's my pleasure, Renee.
Giachino (00:41.0169 - 00:44.0779)
Tell us first a little bit about what's going on at ITIF.
Ezell (00:46.0340 - 01:13.0860)
We're a nonprofit, nonpartisan Washington, DC based science and technology policy think tank. And our mission broadly is to advocate for public policies, laws and regulations that drive innovation-based economic growth in countries across the world, including the United States. And we work in a range of high-tech industries, from life sciences and clean energy to biotechnology and the information economy.
Ezell (01:14.0139 - 01:47.0879)
And throughout all that work we recognize that it's very difficult to achieve innovation without the protection of ideas and that's why intellectual property is so important, not only for the U.S. economy, but for the global economy. Our mission as a think tank is to create conditions that enable there to be more innovation for the world. For there to be more innovation for the world, we have to recognize that robust intellectual property rights are a key ingredient in making that happen.
Giachino (01:48.0830 - 02:27.0190)
So you must be very busy these days, because certainly there are a lot of folks and a lot of critics who are trying to unwind the wonderful work that's been done at least since the Bayh-Dole Act was passed over 40 years ago. There are a lot of arguments out there for weakening IP rights and they seem to have even been gaining traction unfortunately in the United States with an increasing number of policymakers buying into the progressive economic narrative that IP only benefits big firms while it's harming workers and harming consumers - whether that's both at home or abroad. Fact or myth there, Stephen?
Ezell (02:28.0580 - 03:27.0000)
Well, it is true that there are an increasing number of those in Washington, DC and in civil society groups across the world who are pushing a narrative that intellectual property only benefits big enterprises or developed nations. But in our view, that is not true. In fact, in our view, the difference in the future is not going to be between whether you're a country in the north or the south, whether you're developed or developing country. The key question, if you're a member of the world in the future is going to be whether or not your government understands that actually robust IP rights are vital to economic growth in your own nation. That's where the divide is going be. A lot of developing countries like Costa Rica have rejected that narrative that IP is only a tool for the north, and they're seeing robust rates of economic growth because they have embraced intellectual property rights.
Giachino (03:28.0020 - 03:56.0649)
When you were giving a brief introduction about ITIF you talked about the myriad and, quite frankly, expansive number of things in our daily lives that people don't always think about as needing IP protection. Can you break it down a little bit for us to help folks better understand why we should care about IP protection and why IP protection matters?
Ezell (03:57.0029 - 05:02.0000)
Well, you mentioned the Bayh-Dole Act earlier. This was legislation passed in the early 1980s that gave universities the right to the intellectual property that stemmed from a federal funding of research with federal R&D dollars. The Bayh-Dole Act has been instrumental in the ability of universities then to license that technology to entrepreneurs and startups so they could spin out the university-developed technologies. And in fact, since the early 1980s there have been over 15,000 start-up companies, over 100,000 patents created through that process. Patents have been issued on everything from Honeycrisp Apples, MRI technologies and medical imaging. A number of household brand name drugs for everything from colds to diabetes have come out of this process.
Ezell (05:03.0000 - 05:53.0530)
So intellectual property rights touch everything from the life sciences to information technology. That's just on the physical side of the equation. When we look at copyright and trademark protections in the software or the music industry - artists, movie developers and photographers all depend on the protection of their content. If you think about it, software depends on source code every bit as much as a drug depends upon a novel molecular compound. So, intellectual property rights fundamentally underpin every advanced technology industry that we benefit from today.
Giachino (05:54.0000 - 06:08.0000)
I have been hearing a little bit about and I think you’ve written about something called alternatives to IP. Can you explain that term to me? What is that?
Ezell (06:08.0630 - 07:52.0890)
A good example of that would be a concept that some civil side proponents are pushing called delinkage. This is the notion to disconnect IP rights from the innovation or the discovery process, particularly in drugs. So a good example would be that former presidential candidate Senator Bernie Sanders has called for kind of replacing the entire current R&D and IP-based, private sector-driven life sciences model in the United States with a totally government-run, prize system. ... So, the way we would discover and create drugs in the future would be for the government to award prizes to those who come up with these innovations and that ff we were to go down that route and get rid of the current private sector-based drug discovery model, that this would be sufficient in creating the drugs the world needs.
Our view is that approaches like that will not work. Prizes, for instance, are useful. They can be a component and can play a part. We should use prizes, but to completely embrace delinkage here to completely replace the IP system we have, in our view, would be a fallacious approach to ensuring society has the innovative drugs we're going to need in the future.
Giachino (07:53.0200 - 08:03.0829)
So then how do we address China's continuing and growing IP threat and theft, I think you could also call it in a lot of instances?
Ezell (08:08.0109 - 09:16.0303)
Well, I think there are two parts to that question. Yes, absolutely. When we are dealing with China, we are dealing with a government that has implemented a state-sanctioned, state-directed and supported effort to pilfer as much intellectual property from the rest of the world as they possibly can. IP theft is real. It impacts every country in every industry. I think the way we deal with that, number one, is that we should do a better job of coordinating with like-minded countries on combating Chinese cyber espionage.
Like in the defense community, we have something called the Five Eyes that exchange defense intelligence information between the U.S., New Zealand, Australia, Canada and the UK. We should create a Ten Eyes for industrial espionage intelligence. So among like-minded countries and when we know that China is trying to steal IP, we can push back on that. That's point number one.
Ezell (09:16.0440 - 10:16.0700)
Two, we’ve got to do a much better job of ensuring that when Chinese enterprises are trying to bring products into our country that are leveraging from stolen IP that we block that product. There is a whole part of the U.S. Trade Law called Section 337, which remedies for stolen IP. Right now, it is all product by product. It's rolled aluminum right now. We should say if a Chinese company is trying to sell such a product in the United States, that company and all of its products are entirely blocked from access to our market. So move it from a simple product line to the company line.
Secondly, with that allied approach I mentioned earlier, now communicate that information among other countries and say that Chinese company cannot sell any products into any of our countries. I think that would help greatly.
Ezell (10:11.0759 - 11:12.0030)
I think the other thing we have to recognize, though, on the flip side is that in a lot of cases, China has actually substantially strengthened and improved its intellectual property laws. To be sure ... it is really interesting because it's predominantly Chinese companies in China that are the beneficiaries of this enhanced IP law, and foreign companies are having a very difficult time with those same IP rules applying to them.
But if we look at a case like data exclusivity for biologic drugs, we have 12 years [of exclusivity] right now in the United States. There are debates about shortening that. But China has actually now come up to that level of the United States. So the point that is even China, as large of a scofflaw as they are, even they are coming to the recognition that, at least domestically for them, they have to enhance the quality of their own IP laws if they want more innovation currently.
Giachino (11:13.0000 - 11:21.0159)
Is this something that we should be addressing more? And do we address it in enough in our trade agreements?
Ezell (11:24.0200 - 12:27.0766)
It's certainly something we need to address more in our trade agreements. This whole debate is about the meritoriousness of intellectual property as the path to economic growth. We're also seeing this play out more broadly with U.S. trade policy. The reality is that this Administration has not negotiated a new FTA. It has pursued such efforts like the Indo-Pacific Economic Framework trying to strengthen the ecosystem around trade. Currently we appear to be dealing with an Administration that really has not embraced trade policy as a tool for advancing innovation and advancing U.S. economic growth, because this Administration views that issue the same way it views IP. It views trade policy as just being a thing to benefit the large corporations, like they say is the case with IP.
Ezell (12:27.0766 - 13:02.0869)
In our view they are wrong for two reasons. One, because if you care about American workers as this Administration professes to do, you need to recognize the reality that you cannot help American workers unless you help American corporations succeed in the global economy. You cannot help them do that unless you're giving them the ability to sell their products and services across global markets. So here's a case where IP and trade policies should go hand in hand to service both the needs of the American worker/consumer, as well as the American Corporation.
Giachino (13:04.0229 - 14:06.0000)
You recently authored a very comprehensive report titled, “Losing the Lead: Why the United States Must Reassert Itself as a Global Champion for Robust IP Rights.”
And in there you outline some fantastic recommendations for U.S. policymakers to reengage on international IP policies. I think you've already made the case that we probably aren't going to see anything like that happen, certainly not in the remainder of the current Administration's term. It remains to be seen what may happen post November. But regardless of that, can you hit on ... what are some of those recommendations? What are you looking to see come out of Washington over the course of the next couple of weeks or months? Maybe more realistically we’re talking about years.
Ezell (14:07.0869 - 15:05.0299)
Whichever administration comes next or comes in the future, we think there are many areas in which intellectual property policy can be effectively advanced through trade policy. In the digital world with the advent of artificial intelligence in algorithms, there needs to be a set of effective IP rights applied to tenable protection measures of source code algorithms. So layering in IP for the digital economy would be one very important area of focus for trade policy.
Website blocking. Four dozen countries around the world have now put in place website blocking policies to make it much easier to go after pirate sites and pirated content online. That would be another area as well.
Ezell (15:05.0320 - 16:20.0679)
Aside from the promulgation of IP-oriented trade rules, another area we should really double down on is our investments in building IP capabilities in developing countries. We used to, through the U.S. Patent and Trademark Office, much more robustly fund intellectual property attaches in our Embassies across the world to work with developing countries on capacity building in their nation’s infrastructure - building of the courts and the patent system. So reanimating our investments in those types of programs to help developing nations enhance their IP regimes would be a good idea.
A different report called “A Way Forth for IP Internationally” really documents the wonderful work that the UK Intellectual Property Office has done, particularly amongst those commonwealth countries, which have a very specific set of programs and individuals who are working with those nations to develop capacity building around IP, which the United States should definitely do more.
Giachino (16:21.0799 - 16:43.0960)
Our guest is Stephen Ezell, VP of Global Innovation Policy and the Director of the Center for Life Sciences Innovation at the Information Technology and Innovation Foundation (itif.org). Stephen, before I let you go, can we play a quick little game of true or false? True or false: information should be free,
Ezell (16:53.0109 - 18:08.0000)
False. Of course, those who are creating novel content should have the ability to have protections attached to that data. But I do want to be clear that one of the nice things about data and information is that it is different than oil. Oil is a discreet thing whereas data, which with appropriate protection for privacy, can be shareable and reproducible. So it's not a declining asset the same way that oil would be. Information should not be free, but certainly we should be doing all we can to ensure that the power of information and knowledge to drive innovation forward globally is driven forward as far as we can.
Things like MOOCs, Massive Open Online Courses. If you're anybody in the world, you can go and see every single course that's offered at MIT. That's an incredible use of information. And in that case, with appropriate IP rights, it is made freely available across the world. So actually to the point of your question, IP can help information be free in that way.
Giachino (18:08.0000 - 18:13.0000)
True or false: IP doesn't help small businesses?
Ezell (18:13.0000 - 18:15.0000)
That is false.
Giachino (18:15.0819 - 18:21.0079)
I think you've already answered that one as well. True or false: IP harms consumers?
Ezell (18:21.0000 - 18:23.0000)
That is false.
Giachino (18:23.0329 - 18:33.0160)
True or False: IP does not benefit the U.S. economy. I think you've made a great case that this is most certainly false. So we'll move on to the final question.
Ezell (18:33.0170 - 18:41.0829)
On that point, IP-based industries now account for 41% of U.S. GDP and account for 44% of U.S. employment.
Giachino (18:43.0119 - 19:04.0579)
Can you repeat those numbers again? I think it's critically important for people to understand the impact that it's having. We talked in the beginning about the impact that it can have on your everyday life, whether it's a recipe you're following that's been trade protected in some way or a song that you're listening to. Repeat those numbers again.
Ezell (19:05.0979 - 19:25.0089)
So when you look at the impact of either creativity-based industries like movies or the technology-based industries like drugs, these industries collectively account for 44% of total U.S. employment and 41% of U.S. gross domestic product.
Giachino (19:28.0439 - 19:34.0510)
Final true or false question. Weak IP overseas helps the U.S. economy.
Ezell (19:34.0000 - 19:36.0000)
That is false.
Giachino (19:37.0000 - 20:25.0594)
It certainly is false.
Thank you so much for your time today, Stephen. I think you've done a great job in helping us better understand why IP protection matters, why it's important for us to engage on this issue and to be talking about this issue. We certainly know that the critics have loud voices and they've got folks with big ears who are listening to them. So we want to make sure that the biggest threats that we are seeing in the IP arena, that we are working to address those, whether that's in or outside of Washington, in or outside of the United States. Again, I applaud you and the wonderful work that you are doing at ITIF. Thank you so much for your time today. If you've got any parting thoughts, I'll leave the mic open for you.
Ezell (20:25.0834 - 20:30.0824)
I'll just say it's my pleasure to join. It's an important mission and I wish you success.
Giachino (20:31.0114 - 20:33.0750)
Thank you so much for your time today. We appreciate it.