The US Department of Commerce has issued a lengthy report identifying the sectors that generate the most intellectual property and the impact of those sectors on the US economy. At a time when the debate over IP rights rages on, the study sheds important light on the contribution of IP to economic performance – with trademarks playing a central role.

WTR has written extensively on the challenge of linking trademark activity and innovation and recently spoke to Rosa Wilkinson, director of innovation at the UK IPO, who stated: “It may seem hard to evidence but it is a simple story. Until you have a brand in which an investor - whether a bank or private investor - can believe, how can you expand? A trademark can be a great way of communicating who you are and what you stand for. It can say to potential investors that you are a business they should be involved with. It can help a business build a corporate identity potential partners want to put their trust in'.

This is certainly a tangible benefit, but one of the challenges faced when linking trademarks and innovation is unpicking its contribution from that of other IP rights. For instance, trademarks are a crucial tool in driving full value from patents, enabling companies to drive and monetise their ideas through branded products. Yet the value of innovation itself is often attributed wholly to the patent driving a product, rather than recognising the contribution of the mark in maximising its value (and extending its economic life) to the company. Certainly, when governments turn their attention to the role of IP in fostering innovation, copyright and patents are the headline grabbers, with trademarks often lesser analysed. It is therefore positive that the report, ‘The Intellectual Property and US Economy: Industries in Focus’, gives equal attention to trademarks.

The headline figures note that IP-intensive industries (essentially those most active in protecting trademarks, patents and copyrights) create 27.1 million jobs and indirectly support another 12.9 million jobs, with the average weekly wage in IP-intensive industries overall 42% higher in 2010 than in other non IP-intensive private industries.

Delving deeper, 60 of the 75 IP-intensive industries identified by the report were considered trademark-intensive, the analysis stating: “It follows that these industries would account for the majority of IP-intensive jobs (22.6 million or 83% of all IP-intensive jobs). Indeed, employment in the patent and copyright- intensive industries was significantly lower.”

Similarly, IP-intensive industries contributed $5.06 trillion in value in 2010, 34.8% of total GDP. Again, with trademark-intensive industries dominant, “this segment alone accounted for almost 31% of GDP, with $4.5 trillion in value added in 2010”.

In terms of the industries which proved most trademark-intensive, the audio and video equipment manufacturing segment led the way, with 82.5 trademarks per 1,000 employees. When taking a 10-year perspective, and ranking registration classes by trademark count to identify the economic sectors which make most use of federal trademark protection, seven industries account for more than half (53.5%) of registrations: electrical and scientific apparatus; advertising and business; education and entertainment; computer and scientific; paper goods and printed matter; insurance and financial; clothing.

The report is not the first time a national office has attempted to link trademark activity and economic output/trends. Last year, the UK IPO released its ‘Trademarks Incentive’ study, which suggested that trademarking firms have a 21% higher productivity level, with employment significantly higher in firms that are trademark active. However, it was guarded in its conclusions, concluding: “We are cautious about assigning direct causality from trademarks to performance, as many of these results were obtained using a pooled dataset of observations both across firms and through time... Nevertheless the observed positive associations indicate that trademark-active firms are different in important and valuable ways from other firms.”

While this latest study doesn’t demonstrate the tangible link between trademarks and innovation per se, it does highlight the close correlation between trademarks and economic performance. At a time when public anti-IP sentiment is apparent, evidence of the economic contribution made by intellectual property can only be a positive development.