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Incentivizing Innovation: The Imperative of Intellectual Property Protection

Intellectual Property
Rod Hunter

Last summer marked an anniversary—the quasquibicentennial, for logo- philes—of a seminal event in U.S. history, and it passed almost completely un- noticed. On 31 July 1790, the newly established U.S. government awarded its first patent to an inventor, Samuel Hopkins, who had created a new process for the manufacture of potash, a key ingredient used in fertilizer.1 In the intervening 225 years, millions of patents have been approved by the U.S. government and by governments around the world. And while every patent is different, they all build on the same basic idea: individuals and institutions can invest resources knowing that if they create a valuable new product or process, their efforts will be rewarded with a grant of temporary exclusivity.

Intellectual property (IP) protections are fundamentally about encourag- ing the innovation that drives human progress. And these protections have been extraordinarily successful—contributing to rapid increases in global living standards over the past two centuries. Intellectual property continues to fuel debate, but it is more important than ever for governments throughout the world to focus on preserving—if not strengthening—IP protections. Doing so will ensure that people can continue to invest in research and development and share their discoveries with the world.