The Real Thing

Having just watched highly controversial legislation become law along painfully partisan lines and cause political fractures that may last for years, it's nostalgic to be reminded of the good old days when Congress acted less along partisan lines and more in the interests of the majority of the American people – like way, way back in 2008 when the House of Representatives passed the PRO-IP Act by a vote of 410 to 11, and the Senate passed it unanimously.

What kind of legislation passes with such a broad, bipartisan majority? Legislation that is designed to solve widely recognised problems in a way that makes sense to the American people. The PRO-IP Act was such a bill, designed to enhance intellectual property enforcement in order to protect the interests of those who work in the innovative and creative sectors of the U.S. economy, and the health and safety of all Americans.

The majority of Americans (and thus the majority of elected officials) realise that the U.S. economy is significantly and increasingly dependent on our innovation and creativity to remain globally competitive, and that it is precisely these industries that are dependent on intellectual property protection. It's a non-controversial policy issue, except among a handful of chronically unhinged activist groups.

Protection of intellectual property is not just a theoretical issue – the piracy and counterfeiting of IP goods has a real world impact on the economic prospects of American workers. Recent research by IPI estimated that the U.S. economy loses at least $58 billion in economic output each year from piracy and counterfeiting. Broken down, that is a loss of over 370,000 jobs, over $16 billion in personal income, and over $2 billion in lost tax revenue.

But beyond jobs and money, counterfeiting poses a serious threat to the health and safety of American families. Counterfeit products have made their way into the electrical wiring of American homes, into the brake pads of American cars, and perhaps most frightening, into the medicine cabinets of American bathrooms. The next time you swallow a prescription drug, don't you want to be absolutely sure that the product you're taking has been safely within a reliable distribution chain from its legitimate manufacturer all the way to your local pharmacy, and didn't come from a cement mixer in India?

Making sure we are doing everything possible to protect Americans from counterfeit products and to protect American jobs against losses from piracy and counterfeiting is an important and legitimate function of government. With everything else going on, we hope Congress and the administration can at least continue to agree on that.

Author: Tom Giovanetti, President of the Institute for Policy Innovation, in the Institutes TechByte series, 25 March 2010 This article may be republished without prior consent but with acknowledgement to the author. The views expressed in the article are the author’s and are not necessarily shared by the members of the Free Market Foundation.

FMF Policy Bulletin / 30 March 2010

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