Feds Say We Need Stronger IP Laws Because Grocery Stores Employ Lots Of People

from the but-think-of-the-poor-can-stackers dept

You may recall that, back in April, we criticized a Department of Commerce/US Patent and Trademark Office "study" that claimed it was trying to "better understand" intellectual property by adding up all the jobs in "IP-intensive" industries. We had significant concerns about the report, in particular the reasoning behind the methodology of how it chose "IP-intensive" jobs (and why it thought that had anything to do with stronger IP laws).

The folks over at KEI have put the problems of the report into plain view by digging into the details of the methodology, and realizing that the vast, vast majority of these "IP-intensive" industries are actually coming from the trademark side of things. Now, that's fine, but trademark is an entirely different issue than copyrights and patents. And, even if we dig into the trademark side of things some big questions are raised about the methodology. For example, in counting up all these jobs, what "IP intensive" industry employs the most people? Grocery stores.

According to the report, the number one IP intensive industry in terms of employment is “grocery stores,” with 2.5 million jobs. The six industries with more than a million jobs are the following:

1. Grocery stores, 2.5 million
2. Depository credit intermediation, 1.7 million
3. Computer systems and designs,. 1.6 million
4. Insurance carriers, 1.4 million
5. Management and technical consultants, 1.2 million
6. Clothing stores, 1.1 million

These are just a few of the industries the Department of Commerce calls IP-Intensive: Oil and gas extraction, Residential building construction, Grain and oilseed milling, Dairy product manufacturing, Lessors of real estate, Gambling industries, Household and institutional furniture, Pulp, paper, and paperboard mills, Sporting goods and musical instrument stores, Travel arrangement and reservation, etc.
Now, we can argue over just how much grocery stores rely on IP protection, but I think most normal people would agree that even if we abolished IP laws, grocery stores would likely still exist. Would they employ a different number of people? Possibly, though I'm not sure the difference would be significant. The simple fact is that even if grocery stores do benefit from trademark law, the number of jobs at grocery stores that exist because of trademark laws is minimal. And yet all of them are counted towards this total number -- which is regularly being touted by the entertainment industry as proof as to how important stricter IP laws are.

But, you might be saying, you know what's missing from the list above? Yes, that's right: the entertainment industry. In fact, as KEI points out, the only sector in that list above that can "honestly" be described as "IP-intensive" is "computer systems and designs," and if you look, those were some of the folks arguing most vociferously against copyright law expansions like SOPA and for patent reform that reduced the impact of patents. To use those jobs as evidence of the need for a stronger IP regime is downright misleading.

KEI points out that when you look at the number of jobs in the industries that people normally think of as relying on IP, the numbers are much smaller... and even then are potentially misleading in terms of the need and reliance on actual IP laws:
Industries like these overwhelm the statistics on jobs for the more legitimate choices, such as Sound recording industries (just 36.4 thousand jobs), or Software publishers (259.8 thousand), making it seem as though the IP-Intensive industries are truly enormous employers.


It was also pointed out that while the Software publishing sector was a high wage sector, it was a relatively small employer of the professionals in its key occupations. For example, less than 5 percent of computer programmers work for Software publishers. What do the other 95+ percent of computer programmers do? Quite a few build applications and services than use various open source free software platforms, which are both inexpensive and easy to customize.

And, where is the growth for employment? For the computer, mathematical science occupations, the rate of growth is three times higher outside of the Software Publishers Sector than inside the sector. So what can USPTO or the Economics and Statistics Administration tell us about the relationship between IP and employment? Not much, other than grocery stores, insurance companies and oil companies use a lot of trademarks, and not many people work in the sound recording industry.
The report itself explicitly states that it is not designed to be used to support any particular policy. Yet since it's come out, and despite this ridiculous methodology, it is regularly cited by the MPAA, the RIAA and supporters of things like SOPA and ACTA as "proof" that we need these laws. In fact, Jamie Love from KEI notes that right after the event where they discussed these problems with the methodology of the report, and the fact that all these grocery store employees have been unwillingly drafted to claim they need more IP laws to protect the small number of jobs under the RIAA umbrella, he went to a meeting where a US trade official used the report to claim that it showed we needed to adopt ACTA:
After we left the TACD plenary where the IP and employment report was discussed, the TACD IP Policy Committee met with four US IP/Trade agencies, and three Directorates of the European Union. The meeting began with a US trade official telling us about this new employment study that showed the need for ACTA. No kidding. And, we will certainly continue to hear about this report, with very little understanding of how it was put together.
Before the report came out, the White House had reached out to me, and said that since they knew I was interested in these issues, they could set up an interview with the "economic experts" who put together the report. I tried to take them up on the offer. The response was so ridiculous and so embarrassing for the Department of Commerce that I have actually emailed them back asking them to make sure they really wanted me to run a story based on what was said. I'll have a follow up story soon, either with that response or (hopefully) with a more substantive discussion, should they reconsider.

Filed Under: acta, department of commerce, grocery stores, kei, methodology, sopa, uspto
Companies: mpaa

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  1. identicon
    Anonymous Coward, 7 Jun 2012 @ 2:36pm

    Re: Most government reports are designed to support a view...

    It is actually an interesting discussion. My experience in writing reports on subjects is that generally, the specific things you are starting out basing your research on, will colour the results.

    The problem in reports are bad data and bad assumptions. You start out with only basic knowledge of the specific subject and though you have an idea about what to expect and how to find Wallie, you really do not know exactly how to show your findings. In social science you get huge variance based on questionaire-design and method of calculating derivative effects. In natural science you get outliers, variance and systematic errors based on flaws in experimental design.

    Any scientific discipline has those problems and how you structure your work and report is essential in eliminating as much of that bias as possible. Unfortunately, the abstract is one of the primary places in the report, where bias and preconceptions run rampant. Another is discussion, which is a significant part of what most other people will see of the report if you make a presentation.

    My point is that: Sure they are probably mostly unbiased in their treatment of data. However, they will never be able to avoid personal bias in the result communication and that is all that matters.

    If you like a challenge: Find the EP legal service report on ACTA, the legal scolars opinion from 2010 and the report created for the Greens and look at what parts of ACTA they bring forth for closer analysis and see their objective statements on them. They are almost the same.
    Their discussion, conclusions and abstract? Almost no agreement there...

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