“Predictable IP rights are not merely legal protections but essential economic infrastructure.”
From left: Christine McDaniel, Pinar Gencer, Runa Shah-Qaderi, Stephanie Leparmentier.
When functioning properly, intellectual property (IP) rights enable ideas to become legally recognized assets, which can then be collateralized or licensed to attract financing, thereby fueling investment, job creation and economic expansion.
During the 2025 IPWatchdog Women’s IP Forum, I had the privilege of joining a distinguished panel alongside Christine McDaniel (Senior Economist, World Bank Group), Stephanie Leparmentier (Regional IP Counselor, French Embassy) and Runa Shah-Qaderi (Intellectual Property Manager, Cellphire Therapeutics) to explore in depth how IP functions as an engine of economic growth in the United States and globally. My remarks focused on the central role of predictable IP rights in transforming innovation into economic output.
FRAND and Standard-Essential Patents
A critical component of this system is the licensing of standard-essential patents (SEPs) under fair, reasonable and non-discriminatory (FRAND) terms. 5G technology alone is projected to contribute approximately $13 trillion to the global economy. Realizing this value and ensuring continued investment into future standards requires an environment in which innovators can expect to recover their R&D expenditures and earn a risk-adjusted return.
I presented what I refer to as the “inventor’s equation”:
Expected Value of Innovation = Present Value of (Licensing Revenues – Probability-Weighted Cost of Holdout and Delay)
When licensing frictions increase, whether through delayed negotiations, strategic holdout or rate uncertainty, the expected return on innovation decreases, discouraging future investment. Efficient, transparent FRAND frameworks reduce these costs, making R&D more economically viable. In this sense, SEP royalties should not be viewed as a “tax” on downstream implementers but rather as an essential mechanism for spreading fixed R&D costs across the implementer base. Properly structured, FRAND licensing functions as a driver of economic growth rather than an impediment.
Copyright and the Digital Economy
I also highlighted the significant contribution of copyright-intensive industries, which add roughly $2 trillion to U.S. GDP and generate a large and growing trade surplus in digital services. Weakening copyright protection or tolerating piracy would erode these gains, reduce the pool of investable creative projects and undermine one of the strongest performing sectors of the economy.
Supporting Small Innovators: Damages and Litigation Finance
While much of the panel focused on macroeconomic trends, it is essential to consider the position of small and medium-sized enterprises (SMEs). Two mechanisms are particularly important:
- Credible Damages Assessments – Reliable damages methodologies anchor price expectations and allow patent holders to demonstrate the economic value of their IP portfolios. This, in turn, enables SMEs to leverage their patents for financing and to negotiate licenses on economically rational terms.
- Litigation Finance – The Government Accountability Office’s 2024 review indicates that funders are involved in fewer than 5% of reviewed patent cases. Rather than eliminating this source of capital, targeted disclosure and ethical safeguards are appropriate policy responses. These measures ensure that meritorious claims remain enforceable and preserve the option value of patents for under-capitalized innovators.
The Long and Winding Innovation Process
The innovation process is inherently lengthy and uncertain—a “long and winding road,” to borrow from the Beatles. Reaching the point of patent issuance is only the beginning; innovators require a legal and economic infrastructure that allows them to monetize their efforts through licensing, financing and if necessary, damages awards.
In this context, predictable IP rights are not merely legal protections but essential economic infrastructure. They lower the cost of capital, direct investment toward high-risk, high-reward projects and enable both startups and established firms to contribute to sustained economic growth.