Who Owns the Firms That Own IP?

Jonathan Band and Jonathan Gerafi have recently released at infojustice.org (March 5, 2013) a paper entitled, “Foreign Ownership of Firms in IP-Intensive Industries.”  In this paper, the authors examine the question of whether firms in IP-Intensive industries are owned by US companies or are foreign owned.  The general finding of the authors is that, in fact, many if not most firms in IP-Intensive industries are foreign owned—perhaps contrary to popular belief and the belief of policymakers.  The interesting conclusion the authors draw is that, "IP policies adopted by [the US] Congress and the [US] Executive Branch may benefit foreign corporations at the expense of U.S. consumers.” 

The report lists the following “key findings”:

Four of the “Big Six” publishers, the largest English language trade publishers, are foreign-owned. More than 80 percent of the global revenue of the Big Six is generated by these foreign-owned companies.  These foreign-owned companies publish more than two thirds of the trade books in the U.S.

Four of the five largest STM (science, technical and medical)/Professional publishers are foreign-owned.

More than 90 percent of the revenue of the five largest STM/Professional publishers was generated by foreign-owned firms.

Only seven of the world’s 50 largest publishers of all categories are U.S.-owned.

The book publishing industry in Europe has approximately twice as many employees as in the United States.

Of the top ten best-selling fiction authors in any language whose work is still in copyright, five are foreign.

A British author wrote three of the top five best-selling books in the U.S. in 2012.

Two of the three major record labels are foreign-owned. These two labels have a market share of 59 percent.

Thirteen of the twenty best-selling recording artists are foreign.

Of the 50 most popular motion pictures in the United States in 2012, 50 percent were filmed partly or entirely outside of the United States.

In 2013, the Oscar winners in thirteen of 24 categories were foreign. In 2012, the Oscar winners in eleven of 24 categories were foreign.

Seventy percent of the most recent generation of game consoles were manufactured by Japanese companies. Japanese companies have manufactured 92 percent of all game consoles ever sold.

In 2011, foreign companies obtained 7,000 more U.S. patents than U.S. companies.

In 2011 and 2012, seven of the top ten companies receiving U.S. patents were foreign.

57 percent of the global revenue of the fifteen largest pharmaceutical companies was generated by foreign-owned companies.

The majority of the employees of both the U.S. and the foreign-owned pharmaceutical companies work outside of the United States.

And the paper states that:

Since 2008, foreign companies have obtained more U.S. patents each year than U.S. companies. . . .  Additionally, in 2011 the number of patents obtained by U.S. companies grew less than 1 percent, while the number of patents obtained by foreign companies grew more than 3 percent. . . .  A total of 29,220 U.S. patents were issued to the top 10 companies; 66 percent—19,319—were granted to foreign companies.

(Hat Tip to Professor Michael Carroll at American University Washington College of Law for notice about the paper.  Professor Carroll is also the Director of the Program on Information Justice and IP).