Op-Eds
Biden’s shortsighted patent attacks threaten American innovation
The Biden administration is quietly advancing a proposal that could devastate America’s high-tech economy. The White House says the plan is about “beating Big Pharma.” But in reality, it would decimate investment across a variety of sectors. The proposal functionally rewrites a 1980 law known as the Bayh-Dole Act, which allows universities to patent promising discoveries they make with the support of federal grant funding and then exclusively license those patents to a private sector partner for further development and commercialization. Prior to Bayh-Dole, the government retained patent rights on federally funded research and did not grant exclusive licenses for those patents. In practice, few companies were willing to risk millions of dollars to commercialize early-stage technologies if they did not hold exclusive licenses. As a result, very few inventions made it from the lab to the marketplace. After Bayh-Dole, innovation took off. The law has added around $1.9 trillion to U.S. output over the last three decades and has led to the creation of thousands of inspiring start-up firms. Hundreds of products — ranging from medicines and vaccines to battery technologies and electronics — are available to consumers thanks to Bayh-Dole. The law’s authors included a minor failsafe provision called “march in” allowing the government to step in and relicense federally funded patents if a university is making no effort to license the patent, or if a licensee is making no effort to bring the discovery to market. It is this never-used march-in clause that the White House now says can be used as a magic wand to slash the cost of prescription medicines and other consumer goods. The administration’s new guidance encourages agencies to revoke exclusive patent licenses if bureaucrats think the resulting products are too expensive. As someone who spent over 20 years on the federal bench adjudicating patent cases, I can assure you that these bureaucrats are mistaken. March-in was intended as a protection against exceptional cases, not as a broad tool for government intervention. Sens. Birch Bayh (D-Ind.) and Bob Dole (R-Kansas) clearly stated that their legislation does not permit government price setting for products that are widely available on the market. Every president since Jimmy Carter has deferred to Bayh and Dole’s interpretation of their own law, but President Biden evidently believes that his predecessors were mistaken. Yet the Biden administration’s efforts to twist decades-old laws to achieve political wins may not end with Bayh-Dole. Legal filings suggest that the administration is also advancing a radical reinterpretation of Section 1498, a World War I-era statute ...
Why Is The US Helping China Undermine Global Innovation?
C4IP Co-Chair and former USPTO Director Andrei Iancu, along with Mark Cohen, the former director of UC Berkeley’s Asia IP Project, recently published an opinion piece in the International Business Times focusing on China’s secretive policy of issuing anti-suit injunctions, which puts innovative American companies at a major disadvantage when fighting patent theft from Chinese competitors. The anti-suit injunctions, which China has begun issuing regularly in patent lawsuits, require alleged cases of infringement by Chinese companies to be tried in Chinese courts. As Iancu and Cohen point out, this prevents victims from America and elsewhere from receiving fair compensation — and is a blatant violation of international law. They also note that the Biden administration, unlike most of America’s allies, is turning a blind eye to this practice — a worrying development that allows China to continue intruding on U.S. sovereignty and weakening global IP protections for its own benefit. Cohen and Iancu conclude: “We must work with our allies to hold China to basic standards of transparency, due process and non-interference with the parties and courts of our own legal systems… If we don’t act soon, the next time a U.S. lawyer wants to try a patent dispute he may have to travel to Beijing.”
Biden administration proposal threatens innovative research at universities across the country
UCLA just purchased a 700,000-square-foot property in Westwood that it’s planning to remodel into a state-of-the-art research park for quantum science, immunology, immunotherapy, and other high-tech fields. UCLA has billed the park as the “future home of discoveries that will change the world.” Despite such visionary local leadership, however, policymakers in Washington are poised to scuttle innovation at universities across the country. The Biden administration plans to reinterpret a decades-old law, the Bayh-Dole Act, that is at the heart of university-based research and development. The proposal would affect patents on any invention arising from federally funded research. It asserts the federal government’s supposed authority to “march in” and effectively seize patents when officials think a product’s price is too high. In essence, the federal government wants to control the price of university-based innovations. Doing so would blow up the “technology transfer” system that turns breakthrough discoveries into real solutions. Products on the chopping block include life-saving therapies and quantum computers. This would set us back to before 1980, when the government maintained control over all patents associated with federal funding. Because Washington had neither the capacity nor incentive to commercialize these inventions, and universities cannot make and sell products on their own, publicly funded breakthroughs rarely yielded tangible benefits. Bayh-Dole solved this problem by allowing universities and other federally funded research institutions to retain patent rights for their discoveries. That enabled them to partner with private businesses that bring their inventions to market. In turn, universities collect royalties that support more students and more research, creating a continuous cycle of innovation. Bayh-Dole unlocked the vast innovation potential of America’s universities. Before Bayh-Dole, federally funded research had produced roughly 30,000 patents, but the government had licensed fewer than 1,500 for commercialization. In comparison, 2022 alone saw nearly 17,000 patent applications filed for federally funded discoveries and almost 10,000 licenses executed. The Act supports millions of jobs, has helped launch over 17,000 start-ups, and has contributed around $2 trillion to U.S. output. UCLA’s new research park helps illustrate Bayh-Dole’s influence. Google, which supported UCLA’s acquisition of the site, was founded to commercialize a patented search engine algorithm from Stanford University. Meanwhile, it was a revolutionary drug developed by UCLA faculty that sparked the launch of the field of cancer immunotherapy, a primary focus of the new park. Private sector partners are critical for bringing such university innovations to market, and they rely on patents to justify their ...
China’s surging innovation investments are a wake-up call to Congress
C4IP Co-Chairs and former USPTO Directors David Kappos and Andrei Iancu just published a new opinion piece in The Hill, which draws from C4IP’s newly released Congressional Innovation Scorecard to explain how the U.S. can fix the growing disparity between its R&D spending and China’s. The scorecard found that a supermajority of Congress — nearly 70% — had only a “passing interest” in policies that would strengthen IP rights. Kappos and Iancu argue that this apathy is letting IP rights wither away — with domestic jobs and U.S. tech leadership disappearing as a result. However, Kappos and Iancu also identify an easy fix. If lawmakers embrace IP issues and back bipartisan proposals like the PREVAIL Act and Patent Eligibility Restoration Act, it would incentivize innovation and investment into new technologies, helping America regain its status as the world’s leader in innovation. Kappos’ and Iancu’s call to action is clear: “For the sake of countless American companies and workers, it’s time for Congress to wake up, step up and champion robust IP rights.”
Congress needs to clean up the Supreme Court’s mess on patents
Last week, C4IP board members and former federal judges Paul Michel and Kathleen O’Malley published an opinion piece in The Hill highlighting the dire need to pass the Patent Eligibility Restoration Act. The piece traces the origins of the current “crisis of patentability” back to a pair of Supreme Court cases in the early 2010s. Judges Michel and O’Malley explain how the limits imposed on patentability in these cases have set a restrictive precedent that now makes it difficult for inventors to predict whether their high-tech creations will be protected by IP rights. There is a solution, however. The Patent Eligibility Restoration Act would set clear standards for patentability and extend patent protection to important fields like medical diagnostics, promoting investor confidence in cutting-edge research. As the judges explain: “[T]he inherent ambiguity of decisions like Alice and Mayo put lower courts into an impossible position — and the costs to innovation and the economy continue to mount. Congress can end the damage by passing PERA without delay.”
The European Parliament could destroy the continent’s tech sector
Former USPTO Director and C4IP Co-Chair David Kappos published an opinion piece this week in the Brussels Times advocating against the European Parliament’s proposal to micromanage standard-essential patent (SEP) licensing, which would represent a massive blow to European tech innovators if adopted. Kappos explains how the European Parliament’s proposal, which would task bureaucrats with managing licensing fees for SEPs, would upend the efficient, established system under which companies themselves determine fair licenses. He argues that this top-down approach would favor large firms while disempowering smaller companies. Moreover, it would validate China’s efforts to unilaterally set SEP licensing rates, which threaten innovation across the entire world. With these potential consequences looming, Kappos urges European lawmakers to reject the proposal when they vote on it later this month. “Approving the proposal – which is designed to solve a problem that the European Commission’s own study admitted does not exist – would harm European companies without any offsetting benefits for consumers. Parliamentarians would be wise to reject it – before the damage is irreversible.”
