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  1. Hardware
August 9, 2017

Intellectual Property Education Lags the U.S. Economy

IBM's Chief Patent Counsel, Manny Schecter looks at the lack of IP education in the U.S.

By Ellie Burns

Have you ever watched an episode of the television show Shark Tank? Contestants attempt to attract investments in their businesses by marketing them to moguls (the “sharks”). Innovation and entrepreneurship are strong themes. Virtually every contestant with a new product is asked about patent protection. Contestants lacking patent protection almost always fail to secure investments.

Just what is a patent and why is a patent important? A patent is a government grant of the right to exclude others from exploiting an invention for a limited time in exchange for teaching the public how to make and use the invention. Teaching the public about an invention enables others to create improvements without having to first recreate the invention, advancing the pace of innovation. Meanwhile, the patent enables the inventor to prevent others from undermining a hard-earned competitive advantage. As a result, young businesses are better able to compete against more mature competitors in possession of greater resources who might otherwise freely replicate the patented invention.

Intellectual Property Education Lags the U.S. Economy

Manny W. Schecter
Chief Patent Counsel, IBM

While it is clear that venture capitalists like the sharks recognize the importance of patents, how many Shark Tank viewers actually understand the significance and value of a patent? The public appears to be growing increasingly aware of IP. But few people other than lawyers have a deep understanding of patents or the other types of IP or their importance to the economy. Any experienced IP professional can relate a number of stories based on misunderstandings about IP by those outside of the IP profession. This happens despite the bombardment of IP most of us encounter on a daily basis.

A patent is just one form of intellectual property (IP) that we come into contact with regularly. Other forms of IP include trademarks, copyrights, and trade secrets, all of which help secure venture capital investments. All forms of IP are intangible assets that similarly promote creativity and innovation – the foundation of our economy. For example, similar to the way patents aid young businesses, trademark protection prevents others from using the branding logos of non-profit organizations and copyright protection prevents pirating of movies and software. How many people understand all of the different forms of IP and how they promote our innovation economy?

Our children encounter IP starting at a young age. Children might first experience IP when enjoying (the trade secret recipe) of a Coca-Cola under the (trademarked) McDonalds’ golden arches, viewing a (copyrighted) Disney movie, or using the incalculable number of (patented) inventions incorporated into a cellphone or small computer. At some point we all become aware of copyright notices. For example, in the first few pages of a book or near the title or in the credits of a movie and we are all presented with licenses including terms governing IP rights upon first launch of software and video games. Does that mean we all understand IP?

Not at all. Have you ever used Facebook, Twitter, Instagram or other forms of social media? Do you think you own emails you send or content you post? What does it even mean to “own” anything in this context? Can others redistribute what you post without your permission? Why was it improper for Napster to stream music and yet ok for Spotify or Pandora to do so? Have you ever shared photos taken by others without first seeking permission? Are the rules for distributing videos the same for you as for the television networks? I could go on and on but you get the picture (pun intended) – we all encounter IP, even more frequently since the advent of the digital economy and social media, but few of us really understand IP.

READ MORE: IBM sets US patent record with cognitive computing, cloud and AI inventions

So, the obvious question is just how do we improve our IP knowledge? IP is a field of law, just as are bankruptcy, environmental, mergers and acquisitions, real estate, tax, etc. Many lawyers have awareness of IP but most lawyers lack deep training about or experience with IP. Given that, how can we expect the rest of the public to know much about IP? How many educators can adequately explain IP to their students? How many schools teach IP at all? Many law schools obviously do. Some business and engineering schools provide a modest, optional introduction (often just a mere lecture) but is that enough and what about the students that miss out? Few parents can adequately explain IP to their children curious enough to inquire. What then?

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Quite simply, we must incorporate IP content into school curricula. The next question is where in the curricula? Everywhere. IP is not as fundamental as reading, writing, or arithmetic but just as we provide education to improve financial literacy we must do the same with IP. Today’s students learn more and more advanced math as they progress through grade school.

The same should be true for IP. We can make IP relevant for younger students by explaining why it is not “cool” to copy just as we now teach that science, technology, engineering, and math (STEM) is not just for nerds, but have application in our everyday lives. As students progress, we can go beyond science fairs and invention conventions and provide education about the importance of IP to entrepreneurship. When students eventually learn about business and economics, we can teach the role of IP in the business models of different industries.

Intellectual Property Education Lags the U.S. Economy
China “gets it.” That is why an IP curriculum was launched in some Chinese grade schools in 2015. The curriculum spans both elementary and high schools, and is expanding to more schools every year. The Chinese IP curriculum includes courses specific to IP, not mere anecdotes and book reports about inventors. The US must do the same to remain competitive.

IP is important to businesses of all ages and sizes, although some are better prepared than others to address IP matters. For example, larger companies are likely to have in-house IP counsel, but small companies often have employees with little or no IP training overseeing their IP matters and the cost of support from law firms may be too high.

Companies of all sizes frequently require their employees to sign an agreement governing the ownership and handling of IP. This is particularly true in IP intensive industries, which account for about 30% of all employment.

The agreement is typically presented to new employees for their signature on or about the first day of employment – it is among the first issues many young adults encounter upon entering the work force and yet most students have not been provided with any education about what they are asked to sign or the commitments they are expected to make.

In many professions employees are expected to generate IP and respect the IP of others (e.g. patents for scientists and engineers, trademarks for marketing and graphics designers, and copyrights for authors, musicians, and programmers). Companies rely on the aforementioned agreements and employees’ understanding of IP to prevent departing employees from absconding with company innovations. Competitive advantage would otherwise be short-lived. Are we adequately preparing our young people to take on these responsibilities when they enter the workplace?

IP is also an industry in itself. Annual revenue attributable to the licensing of IP exceeds $100B. IP is frequently the subject of international trade disputes and treaties, demonstrating IP’s importance to the US.

Consider, for example, the General Agreement on Tariffs and Trade (GATT), the North American Free Trade Agreement (NAFTA), and the Trans-Pacific Partnership Agreement (TPP). Some countries even have strategic IP plans. For example, China has had a series of 5-year strategic IP plans IP is not just important, it is the primary asset of many companies. The portion of company value in intangible assets has grown considerably in recent decades and is now said to exceed 80%.

It is thus not enough that we teach IP in grade schools, we must teach more advanced IP subjects to our college students to better prepare them for professional careers. IP education must be deliberate, not merely extracurricular. In a competitive world it is imperative that we improve IP awareness and education. Today’s students are tomorrow’s entrepreneurs, business professionals, and leaders.

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