NSF Study Suggests IP Rights May Not be as Significant a Commercial Force as Many Believe

January 6, 2014

CopyrightA survey conducted by the National Science Foundation (NSF) in 2012 suggests that intellectual property rights may not be as significant an economic factor for many businesses as is now generally believed.  The emphasis placed on copyrights, patents, trademarks, and trade secrets varies significantly from industry to industry.  The study seems to indicate that the majority of American businesses, across a wide range of industries and markets, do not consider intellectual property rights to be an important aspect of their commercial planning and operations.

The NSF study asked companies operating in a wide range of industries to assess the importance of intellectual property rights relative to their business activities.  The participants in the survey were asked to evaluate whether intellectual property rights were “not important,” “somewhat important” or “very important” to their business activities.

Across all of the businesses surveyed, trademarks were deemed to be “not important” by 84 percent of the companies.  Eighty-five percent of the respondents asserted that trade secrets were “not important” to their businesses.  Additionally, 88 percent indicated that copyrights were “not important” to their business operations.

The NSF report suggests that even industries commonly recognized to be highly reliant upon intellectual property rights may place somewhat less significance on those rights than is widely believed.  For example, companies in the publishing industry that participated in the NSF study had a decidedly mixed view of the significance of copyrights.  Among the publishing companies surveyed, 36 percent identified copyrights to be “very important,” 25 percent considered copyrights to be “somewhat important,” and 39 percent noted that copyrights were “not important” to them.

The NSF report surveyed several industry groups that were previously identified by the U.S. Patent and Trademark Office to be significantly reliant upon patent protection.  Across those industry groups an average of approximately 20 percent of the respondents considered patents to be “very important,” approximately 9 percent found patents to be “somewhat important,” and approximately 72 percent considered patents to be “not important.”

Of course, this survey does not undermine the economic significance of intellectual property.  Products and services that apply intellectual property form an important element of the United States economy.  Intellectual property rights have clear commercial value and merit careful public policy attention.

The NSF study is important, however, as it cautions us against making overly grand assumptions about the extent to which intellectual property is viewed directly as an element of business strategy and operations.  It seems that the majority of American businesses do not directly incorporate intellectual property rights into their commercial plans or operations.

Obviously, intellectual property rights can substantially affect the success of all businesses.  The NSF study suggests, however, that many of the owners and managers running those businesses do not view intellectual property rights to be a critical factor in their daily decision-making.  In this environment, it is likely that the majority of American business operators have little real interest in legislation or other public policy initiatives directed toward intellectual property rights management.

This context can result in the development of inappropriate intellectual property rights policies if the widespread lack of interest in intellectual property rights issues among the majority of American businesses is combined with intense activism on the part of the few businesses that have based their business strategies on proprietary intellectual property.  In this setting, a small number of major companies that are reliant on proprietary intellectual property rights could skew U.S. policy in their favor and to the detriment of the majority of American businesses.  The NSF study suggests that there is a significant imbalance in interest across the U.S. business community with regard to intellectual property rights.  That imbalance could have serious negative consequences for American intellectual property rights policies.