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Intellectual Property Helps Drive Innovation Financing

American businesses around the country can attest: protection of intellectual property (IP) provides important incentives for inventors and attracts the financing and capital investment necessary to stoke the fire of innovation. In fact, over 130 years ago, the ‘father of invention’ Thomas Edison used his breakthrough invention, the incandescent electric light bulb, to attract investment for his startup – General Electric. Today, intellectual property remains an important tool that can help businesses, large and small, couple creativity with capital to spark innovation that promotes economic growth and societal development.

Last month, the World Trade Organization (WTO) held its regular dialogue on intellectual property and innovation at the WTO TRIPS Council. The dialogue gathered WTO members from Japan to Brazil, India to Chile, and Australia to Canada to implement a first-of-its-kind initiative, highlighting the vital role IP plays in attracting capital and investment to fuel innovation. Organized by the United States, the European Union, Singapore and Switzerland, the initiative underscored the important linkage between IP and financing for capital-intensive R&D, and how increased respect for intellectual property rights can not only increase access to, but also lower the cost of, investment for innovative businesses and startups.

Throughout the meeting, member countries exchanged experiences and best practices to promote innovation and the enabling environments that support its financing. Representatives from the United States shared stories on the critical role of investors, like banks, stock markets, venture capital, and angel investors in the innovation life cycle, from early research and development to later-stage manufacturing and commercialization. These stories shed light on how IP protection can reduce the financial risk associated with innovation, and enhance the economic and social benefits achieved with R&D investment. 

Simply put, intellectual property, innovation, and finance form a virtuous triangle, with strong benefits to the businesses and the communities they serve. Each facet is mutually benefiting, and our government continues to play a critical role in facilitating the necessary incentives to promote IP, innovation, and financing to increase economic prosperity, support development, and unlock opportunity across America.