IP Policy Roundup | Edition 16

Coalition Updates

• On January 31, C4IP Co-Chair Andrei Iancu and former NSCAI Director of Research and Analysis Rama Elluru published an opinion essay in Reuters centered on the intersection of artificial intelligence and intellectual property.
  • “Plenty of thorny issues surround AI adoption. Policymakers should start by tackling patent laws and rules head-on. Leaders in both the tech and life science industries, who are often at odds over IP policy, are united in support of bringing clarity to these issues. Now is the time.”

• On January 29, C4IP Co-Chairs Andrei Iancu and David Kappos published an opinion essay in STAT underscoring why the Biden administration should not support a WTO petition to strip IP protections from Covid-19 treatments and diagnostics.
  • “If officials ultimately endorse this proposal, it could seriously jeopardize America’s economy and national security. Proponents claim that intellectual property waivers are necessary to expand access to shots, therapeutics, and diagnostics in the developing world. But there’s no evidence to support these claims.”

• On January 25, C4IP board members and retired federal judges Paul Michel and Kathleen O’Malley published an opinion essay in the Detroit News focused on how the Biden administration’s proposed changes to Bayh-Dole’s march-in rights are at odds with the letter of the statute and would damage our innovation economy.
  • “Misusing the Bayh-Dole Act to impose price controls would not only be a legal travesty but would have disastrous repercussions for America’s high-tech industries and overall economic competitiveness.”

• On January 24, C4IP Co-Chairs Andrei Iancu and David Kappos’s remarks from the January 23 Senate Judiciary Subcommittee on Intellectual Property hearing — on the Patent Eligibility Restoration Act of 2023 (PERA) — were featured in an IPWatchdog article.
  • Iancu: “All human invention is the manipulation of nature towards practical uses by humans on this planet. We can exclude nature itself but any human intervention and manipulation, that is what human innovation and engineering is and it should be eligible for a patent.”
  • Kappos: “[T]he IP system has never been about what’s now but what’s next. Ultimately, the innovation that’s not created because the patent system isn’t there to incent it is the innovation whose price is infinite.”

• On January 24, C4IP Co-Chairs Andrei Iancu and David Kappos and Board Members Judge Kathleen O’Malley and Judge Paul Michel published an opinion essay in Euractiv illuminating the effect that the European Commission’s ill-advised proposal for standard-essential patents (SEPs) has already had in emboldening China to unilaterally set its own licensing rates, wreaking havoc on established international agreements.
  • “The idea that government bodies, rather than industry participants, should control the licensing of essential patents has emboldened China. Mere weeks after the Commission put forth its proposal last year, Beijing unveiled its own proposal for unilateral rate-setting for essential patents…For European policymakers to tacitly condone and copy China’s approach would be enormously self-defeating.”

• On January 24, C4IP and the Bayh-Dole Coalition co-hosted a briefing on the Bayh-Dole Act and the Biden administration’s recently proposed framework on march-in rights. C4IP Co-Chairs David Kappos and Andrei Iancu and Bayh-Dole Coalition Executive Director Joe Allen spoke at the event, alongside Kate Hudson of the Association of American Universities and Charles Crain of the National Association of Manufacturers. You can access the full recording of the event and photos here.

• On January 23, C4IP sent a letter to Member of the European Parliament Adrián Vázquez Lázara advocating against the European Commission’s proposed regulatory changes for SEPs, which would diminish high-tech innovation and advantage China at the expense of Europe and the United States.
  • “If Europe enacts its proposed SEP approach, it would validate China’s governmental model of top-down, unilateral global IP regulation. This will place European and American industries at an overwhelming disadvantage in emerging fields vital to future economic leadership and jobs.”

• On January 23, C4IP sent a letter to President Biden, Commerce Secretary Raimondo, and United States Trade Representative Katherine Tai urging vocal opposition to the European Commission’s SEP proposal and calling attention to how the proposal has already emboldened China to overrule established SEP licensing practices.
  • “Efforts to impose government control over SEP licensing — whether in China or Europe — threaten continued technological innovation. U.S. leaders must stop this shift toward balkanized technology spheres.”

• On January 22, C4IP Chief Policy Officer Jamie Simpson was quoted in an Axios article on how uncertainty around the patentability of artificial intelligence innovations has made the passage of the Patent Eligibility Restoration Act even more urgent.
  • “In contrast [to the United States], AI is being patented in China and Europe. While there might be broader conversations about what AI should do for society, as a baseline, we should make sure we have the same protections that exist elsewhere in the world.”

• On January 22, C4IP Co-Chair David Kappos and board member Judge Kathleen O’Malley were featured guest speakers at an event hosted by the USC Gould School of Law Center for Transnational Law and Business. They discussed the implications of the European Union’s new policies for SEPs for U.S. economic competitiveness.

• On January 18, C4IP Executive Director Frank Cullen appeared on FOX 2 in Detroit to discuss the growth of STEM industries in Michigan and how patent reforms, such as the Patent Eligibility Restoration Act and PREVAIL Act, would help to increase local jobs in STEM and promote the commercialization of groundbreaking inventions.
  • “You have to have a way to commercialize your invention if you want to bring it to the public, and right now there’s confusion in the marketplace because of some court decisions and also some well-intentioned legislation that unfortunately has created problems when it comes to [patent] eligibility…and how you can defend your patent if someone wants to challenge it.”

• On January 17, C4IP Co-Chair David Kappos’s comments from the Bayh-Dole Coalition’s December webinar — on the Biden administration’s proposed march-in framework would severely disadvantage small businesses — were featured in an article in Tech Transfer Central.
  • “This [framework] is going to be, ‘Let’s help the biggest companies have an easy time getting access to intellectual property after it’s been de-risked by the little companies.’…The little companies aren’t going to get capital in the first place…if there’s no guarantee of an exclusive position.”

• On January 14, C4IP Co-Chairs and former USPTO Directors David Kappos and Andrei Iancu published an opinion essay in The Hill dissecting the effects that the Biden administration’s proposed framework on Bayh-Dole march-in rights would have on technological innovation across the board.
  • “The White House claims [the framework] would reduce drug prices. But its proposal extends far beyond drugs, and will stifle investment in climate change, sustainable agriculture, advanced computing, energy, medicines and all other technologies that benefit millions across the globe.”

• On January 11, C4IP published a full-page advertisement in the Wall Street Journal urging opposition to the proposed expansion of the TRIPS waiver and showcasing the letter on that issue that C4IP sent to President Biden in December, which was signed by 47 former government officials, technology transfer administrators, and other innovation policy experts.

• On January 9, C4IP Chief Policy Officer and Counsel Jamie Simpson appeared on the SEP Couch Podcast to discuss the vital role of SEPs in U.S. IP policy, including the actions that U.S. regulators should take on the issue and the recent regulatory proposal by the European Commission that could destabilize the established SEP system.

• On January 9, C4IP board members and retired federal judges Paul Michel and Kathleen O’Malley published an opinion essay in Bloomberg Law focusing on how the Biden administration’s proposed framework for march-in rights would stifle the development of life-saving drugs at universities and federal laboratories.
  • “If President Joe Biden succeeds in changing the law to permit unlimited violations of private patent rights, countless promising medicines and other technologies will never reach the public.”

• On January 5, Merrill Matthews, a resident scholar at the Institute for Policy Innovation, published an opinion essay in RealClearHealth exploring how the Biden administration’s proposed framework for march-in rights would exacerbate ongoing prescription drug shortages by cutting even further into pharmaceutical investment.
  • “Washington is alarmed, and rightly so, about shortages of generic drugs. Yet policymakers keep working to undermine the intellectual property protections and profit motive that drive drug development.”

• • On January 4, retired federal judge and C4IP board member Paul Michel published an opinion essay in Law360 underscoring how the TRIPS waiver proposed at the WTO would advance China’s interests while decimating U.S. jobs and innovation in biotechnology.
    • “The Biden administration has already demonstrated a willingness to play hardball with China in other sectors to protect American industry…It makes no sense for the administration to turn around now and give China free access to proprietary American inventions.”

Government Rundown

• U.S. Senators Warn Against TRIPS Waiver in Letter to President Biden: On January 25, a group of 14 U.S. Senators — Chris Coons (D-DE), Mike Crapo (R-ID), Tom Carper (D-DE), Thom Tillis (R-NC), Mazie Hirono (D-HI), John Barrasso (R-WY), Kyrsten Sinema (D-AZ), Marsha Blackburn (R-TN), Jon Tester (D-MT), Tim Scott (R-SC), Maria Cantwell (D-WA), James Lankford (R-OK), Mark Warner (D-VA), and John Cornyn (R-TX) — sent a letter to President Biden imploring him to oppose a World Trade Organization (WTO) proposal that seeks to waive IP protections for COVID-19 diagnostics and therapeutics. While expressing gratitude for President Biden’s global COVID-19 efforts, the senators cautioned that “such a waiver would not improve global access to these medicines and would have significant adverse consequences for American manufacturers, innovation, and global competitiveness.” (1/25)
• Senate Committee on the Judiciary, Subcommittee on Intellectual Property Hearing: The Patent Eligibility Restoration Act – Restoring Clarity, Certainty, and Predictability to the U.S. Patent System: On January 23, the Senate Subcommittee on Intellectual Property held a hearing to discuss the Patent Eligibility Restoration Act. Subcommittee Chair Chris Coons (D-DE), who co-authored the bill with Ranking Member Thom Tillis (R-NC), presided over the hearing, while C4IP Co-Chairs Andrei Iancu and David Kappos testified as witnesses. (Senate Judiciary Committee, 1/23)
• House Committee on Energy & Commerce, Subcommittee on Innovation, Data, and Commerce Hearing: NIL Playbook: Proposal to Protect Student Athletes’ Dealmaking Rights: On January 18, the House Subcommittee on Innovation, Data, and Commerce held a hearing to discuss a proposal to protect college student-athletes’ name, image, and likeness (NIL) intellectual property rights. National Collegiate Athletic Association (NCAA) President Charlie Baker, Missouri Valley Conference Commissioner Jeff Jackson, and Arizona State University professor Dr. Victoria Jackson testified alongside student-athletes from Radford University, UCLA, and the University of Michigan. (House Energy & Commerce Committee, 1/18)
• House Committee on Oversight, Subcommittee on Cybersecurity, Information Technology, and Government Innovation Hearing: Toward an AI-Ready Workforce: On January 17, the House Subcommittee on Cybersecurity, Information Technology, and Government Innovation held a hearing to discuss how the government can support the U.S. workforce in developing the necessary skills to make efficient use of emerging AI technology. Witnesses included Carnegie Mellon University professor Dr. William Scherlis, IBM Client Partner and Senior Executive Timi Hadra, former Yale University President Dr. Richard Levin, and George Washington University cybersecurity research director Dr. Costis Toregas. (House Oversight Committee, 1/17)
• National Institute for Standards and Technology Webinar: Inside CHIPS Metrology: Research that Accelerates Innovation: On January 16, the National Institute for Standards and Technology’s CHIPS Metrology Program hosted a webinar to discuss how it supports the CHIPS for America initiative’s development of high-tech microelectronics, such as semiconductors, through research into systems of measurement. The event featured NIST researchers Ann Chiaramonti Debay, Joshua Martin, Jeff Shainline, and Ran Tao, along with their various CHIPS Metrology projects. (NIST, 1/16)
• U.S. Patent and Trademark Office Event: Women’s Entrepreneurship Series: Leading women leading change: On January 10, the U.S. Patent and Trademark Office held an event at the Consumer Electronics Show (CES) in Las Vegas, Nevada, where USPTO Director Kathi Vidal led a panel discussion about how to empower women founders in tech. In addition to Director Vidal, EMD Electronics Executive Vice President Katherine Dei Cas, Salesforce Senior Director Suezette Robotham, and Google Director of Global Business Development Sonia Wadhawan comprised the other members of the panel. (USPTO, 1/10)

Fact Check

Claim: During a January 23 Senate Judiciary Subcommittee on Intellectual Property hearing, Richard Blaylock — on behalf of Invitae Corporation — claimed that “PERA as introduced would stifle innovation and harm patient care in the fields of diagnostic genetic testing and precision medicine.”

Correction: The Patent Eligibility Restoration Act (PERA) is an essential reform to foster continued innovation and American leadership in high-tech industries like biotechnology. Over the past decade, a series of Supreme Court decisions have deemed broad categories of innovation, such as artificial intelligence and medicines that make use of human genes, ineligible for patent protection.

As a result, investor confidence in these inventions has plummeted. One survey of investors found that patent eligibility was an “important” factor in their decision-making and that “reduced eligibility has had a negative impact in every industry, but particularly in the biotechnology, medical device, and pharmaceutical industries.” Additionally, reduced patent protection erodes incentives for companies to enter into partnerships and encourages seeking trade secret protection over patent protection — which means that the public will not have the benefit of the disclosures that come with patents.

Opponents of the Patent Eligibility Restoration Act have asserted that the legislation would overstep important and longstanding exemptions to patent eligibility, such as abstract ideas, natural processes, and unmodified human genes. This is false. The text of the bill enumerates the conditions under which an invention may not be patented, which include when natural materials and genes have not been “altered by human activity.” In reality, the legislation would serve only to clarify the specific bounds of patent eligibility with respect to emerging technologies, such as artificial intelligence, that were not considered when existing laws were written.

The Patent Eligibility Restoration Act would incentivize innovation and investment in the technologies of the future. This is an essential intervention given that the United States is rapidly ceding ground to China in advanced fields such as AI and biotech. Moreover, the simplicity of the changes that would be made by the legislation has been understated. Criticisms of PERA seem to stem from misunderstanding of its effects, despite the fact that the bill’s text is clear and concise. Far from being a controversial and radical change, PERA is a common-sense reform that every American innovator should feel comfortable supporting.

Bottom Line: This claim is false.

Inside Look: What’s Happening in Congress

As Democratic and Republican members of Congress continue to weigh legislative priorities during the 118th Congress, top of mind for those who follow intellectual property policy are:

• The Improving Efficiency to Increase Competition Act: On January 12, Senators Thom Tillis (R-NC) and Chris Coons (D-DE) introduced legislation intended to reduce the administrative burden on universities and other institutions that receive federal research grants so that they can focus more intently on producing new innovations. Specifically, the legislation would direct the Government Accountability Office (GAO) to conduct a study on intellectual property reporting requirements under the Bayh-Dole Act, which vary between federal agencies. Such a study will offer important insights into how the government can make the reporting process more efficient and remove barriers that may have inhibited the development of new inventions.
• The Prohibiting Adversarial Patents (PAPA) Act: In September 2023, Representatives Scott Fitzgerald (R-WI), Mike Gallagher (R-WI), Darrell Issa (R-CA), and Blaine Luetkemeyer (R-MO) introduced legislation that raises a number of concerns. With the well-intended goal of protecting U.S. national security, the PAPA Act has the potential to trigger significant unintended consequences. These include potential retaliatory moves by China and other nations to suspend or render unenforceable patents owned by American companies, further enabling theft of American IP overseas. The actions called for by the bill could also violate U.S. treaty obligations, which would in turn embolden other nations to violate IP-related treaties in various ways. In addition, confiscating patents, or rendering them unenforceable, violates basic principles of property, and therefore could weaken the concept of patents as property rights. These and other considerations are of the utmost importance as U.S. lawmakers study the full scope of the PAPA Act. C4IP stands ready to work with Members of Congress to address the threat posed by foreign entities, while maintaining the integrity of the U.S. patent system.
• The Stopping Harmful Offers on Platforms by Screening Against Fakes in E-Commerce (SHOP SAFE) Act: In September 2023, Senators Chris Coons (D-DE) and Thom Tillis (R-NC) introduced legislation designed to protect online consumers from harmful counterfeit products. By establishing trademark infringement liability for e-commerce platforms that allow the sale of dangerous counterfeit items, requiring brand owners to notify platforms of their mark(s) in advance, and providing safety from liability to platforms that appropriately vet and remove counterfeit sellers, the SHOP SAFE Act will protect American families as well as businesses and IP holders.
• The Patent Eligibility Restoration Act of 2023: In June 2023, Senators Thom Tillis (R-NC) and Chris Coons (D-DE) reintroduced legislation aimed at restoring patent eligibility for important categories of inventions – including life sciences diagnostics, gene therapies, and computer-implemented inventions – as well as resolving questions regarding the scope of patent eligibility. In so doing, the Patent Eligibility Restoration Act will foster the development of next-generation technologies across innovative industries.
• The Promoting and Respecting Economically Vital American Innovation Leadership (PREVAIL) Act: In June 2023, Senators Chris Coons (D-DE), Thom Tillis (R-NC), Dick Durbin (D-IL), and Mazie Hirono (D-HI) – joined by Representatives Ken Buck (R-CO) and Deborah Ross (D-NC) on the House side – introduced legislation that will eliminate redundant patent invalidity challenges and safeguard Americans’ right to participate in a fair and accessible patent system. The PREVAIL Act contains important reforms to the Patent Trial and Appeal Board, which will return the body to its original purpose of providing an efficient alternative to district court litigation, and will curtail the practice by patent infringers of forcing inventors to defend their patents repeatedly and in multiple fora.
• The Interagency Patent Coordination and Improvement Act of 2023: In January 2023, Senators Dick Durbin (D-IL), Chris Coons (D-DE), Thom Tillis (R-NC), and Chuck Grassley (R-IA) introduced the Interagency Patent Coordination and Improvement Act of 2023. The bill would create an interagency task force to share patent filing information and technical assistance between USPTO and FDA officials. IP experts warn that interagency entanglement could weaken the patent system by inserting officials from multiple federal agencies – without patent law expertise – into the examination process. They submit that it is premature to implement such substantial changes without conducting a thorough evidence-based study.

Celebrating American Innovation

Inventor Spotlight

This month, C4IP is recognizing John Kellogg, whose invention of the first breakfast cereal transformed American nutrition.

John Harvey Kellogg was born in Michigan in February 1852. Kellogg learned early on to value healthy living, which ultimately led him to pursue a career in medicine. He studied at the University of Michigan Medical School and later at Bellevue Hospital Medical College, where he earned his M.D.

In 1876, a year after graduating from medical school, Kellogg moved back to Michigan to become superintendent of a sanitarium in Battle Creek. There, he embarked on a mission to help his patients lead healthier lives, which he did by inventing a variety of new foods and exercise equipment. One of these, the cereal flake, was conceived as a softer and more digestible alternative to bread. Kellogg created the flakes by boiling and flattening grain, then baking it into a crispy flake — an innovative process that he patented in 1896. In all, Kellogg registered roughly 30 patents in his life, which included methods for making peanut butter and soy milk as well as numerous medical devices.

Aided by his brother W.K. Kellogg — who founded the eponymous food company in 1906 — John Kellogg’s cereal flakes became his most influential invention, pioneering an entirely new category of food. In 2021, the global market for breakfast cereal was estimated to be worth over $36 billion. Seven in 10 American households eat cereal. Health is cited by Americans as the number one reason for eating cereal, demonstrating that Kellogg’s invention successfully achieved its goal. Meanwhile, Kellogg’s continues to be one of the most prominent companies in the cereal industry, with over $430 million in annual sales, 30,000 employees, and a market capitalization of over $18.5 billion.