President Biden recently warned that America is losing its technological edge. “We used to rank number one in the world in research and development,” he said. “Now, we rank number nine. China was number eight decades ago; now they are number two. And other countries are closing in fast.”
The president’s concerns are fully justified, but neither he nor Congress is addressing the problem. Indeed, both are moving in the opposite direction.
If current trends continue, our biggest geopolitical rivals will soon leave this nation in their dust in the race for technological supremacy. This will have disastrous consequences for many strategically critical technologies for years to come. The blame rests largely with politicians working systematically and intentionally to weaken the U.S. patent system — the greatest engine for technological progress ever devised.
Patents reward innovation by giving inventors exclusive rights to their own ideas and creations for a limited time, after which those inventions become available for everyone to use. Without strong, enforceable patents, there is little reason to invest billions of dollars and decades of labor in bringing new technology to the market. Why bother if a competitor, once the invention is proven to work, can steal the fruits of that effort and sell the same product without having to incur the cost of development?
If America is to retain its leadership in technological progress, it is imperative that our political leaders protect and strengthen the country’s patent system. Instead, they do precisely the opposite, even as competitor nations worldwide move rapidly to fortify and strengthen their own patent systems.
In 2011, Congress passed the misnamed “America Invents Act,” a bill that made it far more risky, expensive, complicated, and time-consuming for inventors to assert their rights against theft of their inventions. This law benefits a small number of large corporations at the expense of thousands of highly innovative startups and smaller companies.
The World Trade Organization recently suspended U.S. patent protections for COVID-19 vaccines in developing countries. This decision was made despite overwhelming evidence that it would not benefit vaccination efforts anywhere. However, it diminishes the incentives for American inventors to develop vaccines in the future. To make matters worse, the Biden administration is also considering whether to support the expansion of that initial waiver — and suspend IP protections for all COVID-19 therapeutics and diagnostics in developing nations.
Another example: 100 members of Congress asked the secretary of Health and Human Services to lower drug prices by nullifying private biotech companies’ patent licenses on certain medications. These lawmakers deliberately twist the plain meaning of a provision in the 1980 Bayh-Dole Act that allows HHS to relicense inventions not commercialized by the patent licensee. This so-called march-in provision was never intended as a mechanism for imposing government price controls on products that are already commercially available. Such uninformed abuse of our patent law only diminishes the confidence that investors and inventors once had in the patent system.
All of this comes at a time when America can least afford it. Our nation’s most formidable competitor, China, already leads the world in a number of critical technologies, including 5G telecommunications infrastructure, solar power and artificial intelligence. Moreover, China is now the planet’s second-largest life-sciences innovator. As this occurs, our politicians move to diminish the incentives for American companies to compete. Currently, several bills are pending that would further weaken U.S. patents. What are they thinking — or are they?
And at a moment when our policymakers are busy dismantling America’s patent system, other nations are strengthening theirs. China has not only boosted its administrative enforcement of patents in recent years, but it has also increased statutory damages paid to victims of patent theft. Also, China has established digital portals that simplify defending patent rights.
Japan’s government recently released a comprehensive IP plan that, among other things, aims to “radically strengthen IP strategy activities.” And in 2019 and 2020, South Korea enacted policies that bolster IP protections in ways that favor patent holders.
It’s easy to understand why other nations are taking these steps. They recognize that strong and systematic patent protection is an essential ingredient to technological advancement, and they see what Washington does not — by weakening our own patent system, we create an attractive opportunity for other countries to capture the lead in science and technology that the United States has enjoyed for decades. It is a lead we may never get back.
