Senate Finance Committee’s Hearing on TPP Needs to Address Intellectual Property Protection

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With America’s economy continuing to plod along in a sluggish recovery, policymakers are searching for ways to spur U.S. economic growth. With the U.S. running massive trade deficits, we’ve realized in recent years that in order to grow America needs to increase its exports (hence the Obama Administration’s National Export Initiative, which seeks to double U.S. exports from 2010 levels by 2015), in part by encouraging the opening of markets throughout the world to freer trade. Having real access to foreign markets is crucial—it may mean the difference between a decade of stagnation or robust growth. Right now we are poised to make this essential leap forward with the Trans-Pacific Partnership (TPP), a 12-nation trade agreement that includes Australia, Canada, Japan, and Mexico as some of the major players. If enacted, the agreement would tie nations together that comprise 40 percent of the world’s gross domestic product. But before policymakers approve the TPP, the United States needs to make sure certain critical provisions are addressed. Some of the most important issues involve intellectual property (IP) protection.

IP is fundamental to America’s economy. With 40 million workers, or 30 percent of the American workforce, employed directly or indirectly in IP-intensive industries, intellectual property is at the heart of America’s economy. Unfortunately, six of our 11 would-be TPP partners are on the U.S.  Trade Representative Office’s Special 301 Watch List, which identifies countries that do not provide “adequate and effective” protection for U.S. intellectual property rights-holders. Canada and Chile are on the Priority Watch List, while Brunei, Mexico, Peru, and Vietnam are on the Watch List. And with nations like Brazil, China, and India also watching negotiations closely, it is imperative that any TPP agreement include robust and enforceable IP protections.

One IP protection the TPP needs is to ensure 12 years of data exclusivity protection for biologics in pharmaceutical medicines. This is the established law in the United States and needs to be extended among partners in the trade pact. Regrettably the Obama Administration has proposed only 7 years of data exclusivity for biologics in its current budget, but this undermines the investment in R&D by biologics makers who invest hundreds of millions of dollars attempting to find viable treatments for our most serious ailments. To realize a successful Trans-Pacific Partnership, this provision must be included.

It is our hope that when the Senate Finance Committee convenes today, the importance of protecting IP-intensive companies engaged in international trade is foremost on its agenda.

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About the author

Stephen Ezell is a Senior Analyst with the Information Technology and Innovation Foundation (ITIF), with a focus on innovation policy, international information technology competitiveness, trade, and manufacturing and services issues. He is the co-author with Dr. Atkinson of "Innovation Economics: The Race for Global Advantage" (Yale, 2012). Mr. Ezell comes to ITIF from Peer Insight, an innovation research and consulting firm he co-founded in 2003 to study the practice of innovation in service industries. At Peer Insight, Mr. Ezell co-founded the Global Service Innovation Consortium, published multiple research papers on service innovation, and researched national service innovation policies being implemented by governments worldwide.