Words Matter: A Proposal to Change the Vocabulary of IP

When the Center for Strategic and International Studies recently hosted a forum on IP, innovation, national security and geopolitical competition, there was an active discussion about the role of IP – intellectual property – in achieving those other outcomes. An interesting debate emerged over the words that describe those IP functions, suggesting that policy can be ill-served by some habitually used, but perhaps not descriptively accurate, vocabulary. The upshot: words matter.

Here, in my view, are a few too frequently used and usually misleading words. They misrepresent the IP system and are even less relevant to the economics of innovation and creativity. The use of these words has real-world consequences, as pharmaceutical company AstraZeneca found when its lawsuit contesting government price controls was dismissed.

Counsel for AstraZeneca argued that the government’s decision to impose price controls on innovative pharmaceutical products, “eliminates incentives for AstraZeneca to further innovate new uses…, which in tum will narrow patient access to new treatments” (emphasis added). The judge pounced on this word choice, declaring, “A loss or diminishment of an incentive to do something, however, is not a concrete injury,” and dismissed the case for lack of injury and standing.

A more accurate way to describe the impact of price controls, which effectively nullify the company’s underlying IP rights, would have been to say, “This policy diminishes the present value of AstraZeneca’s past investments in the reference medicine as well as the company’s overall R&D pipeline, and constrains the company’s ability to allocate further resources to continuing innovation.”

Fortunately, there are better word choices available. Here are a few terms I propose should be permanently “out” and potential replacements that I believe would help to counteract anti-IP narratives. The literal meanings or dictionary definitions of these words are less important than how they are commonly understood.

OUT:      Reward (Synonyms: Bonus, Prize)

Even when promised in advance of the result, a reward is generally understood to be a discretionary bonus. This is distinctly different than a “right” that is consistently and reliably available whenever the necessary conditions are met.

IN:           Right (Synonyms: Title, Claim)

Defined as, “Something that one may properly claim as due.” Also, “the property interest possessed under law or custom and agreement in an intangible thing….”

The description of a patent, copyright or trademark as a reward, incentive or monopoly can skew perceptions of these rights. Indeed, those words are often deliberately used to mischaracterize or even stigmatize the intellectual property system as a whole.

As legal rights, established and protected by law, founded in the U.S. Constitution, patents, copyrights and trademarks are not discretionary, and they are not rewards. They are rights available to anyone who meets the conditions in the law, just as any other ownership right. For these legal tools to successfully promote innovation and creativity – or in the words of the Constitution, “to promote progress in science and the useful arts,” they must provide legal certainty, the very opposite of discretion.

OUT:      Incentive/Incentivize (Synonyms: Induce, Incite)

Provides “a stimulus, a motive, a goad, or a bonus.”  Also, “To make someone want to do something… especially by offering prizes or rewards.”

IN:           Enable (Synonyms: Facilitate, Empower, Equip)

“A person or thing that makes something possible.” IP rights enable allocation of resources to long-term, resource-intensive, high-risk investments.

If IP rights aren’t rewards, neither should they be considered incentives. Incentives create a reason to do something one would be disinclined to do otherwise. President Obama’s “Cash for Clunkers” program was an incentive to trade in gas guzzling cars. Innovation and creativity, by contrast, are their own motivation. It’s frankly offensive to suggest that scientific researchers seek disease cures because they want patents. By the same token, no one ever buys a car because they hope for a title to it – no, they want to drive!

IP rights document ownership. They establish a public record of exclusive ownership to an intellectual work product. The strength – its clarity, predictability, and enforceability – of the private property right vested in a patent, copyright or trademark enables investment that would otherwise be unsustainable.

This is no different than investment in other assets whose value to their creator or purchaser depends on the exclusive right to their use. Ask yourself how much you would pay for a vehicle if you had to leave it on the curb with the keys in the ignition. Or a house if you could return home to find others legally living there.

OUT:      Monopoly (Synonyms: Cartel, Syndicate, Oligopoly)

“A single seller in a market or sector with high barriers to entry, such as significant startup costs, whose product has no substitutes.” Does an exclusive ownership right represent a monopoly? More below.

IN:           Ownership (Synonyms: Title, Proprietorship)

“The act, state, or right of possessing something.”

IN:           Exclusive/Exclusivity (Synonyms: Incompatible, Undivided)

“Unable to exist or be true if something else exists or is true.” “Excluding or having power to exclude others, or something that is limited to possession, control, or use by a single individual or group.”

Monopoly is a trickier concept because its definition remains vague. In the context of IP rights, however, it should be clearly understood that an exclusive right to a particular solution to a problem, or a given creative expression, does not represent a “monopoly” on solutions to that problem or to a particular form of creative expression.

Today, there are multiple cures on the market for Hepatitis C. Competing semaglutide products vie for weight loss market share. This despite patent rights that cover each of these breakthrough innovations. By the same token, Disney’s copyrights on “The Little Mermaid” in no way represent a monopoly on moviemaking, or even on movies about mermaids. And your exclusive right to your vehicle is no obstacle to either widespread automotive production or the car ownership of others!

Change the Conversation

The habitual – and I believe largely unthinking – use of the words “reward,” “incentive,” and “monopoly” among IP professionals has contributed to fundamental misperceptions of IP rights and the IP system. These contribute to systemic misunderstandings of the economics of innovation and creativity. Dropping these words from our IP vocabulary will make policy discussions more accurate and understandable for policymakers, economists, and the public, and better policy decisions will result.

Image Source: Deposit Photos
Author: Irina_drozd
Image ID: 440156482