Blundering Toward the Demise of American Innovation
By Brian P. O'Shaughnessy
The American inventor is under attack, and it's coming from our own government. Lawmakers harp about patents as "monopolies" that purportedly prop up prices; the executive supports a grand technology give-away as pandemic relief; and the judiciary has confused the concept of a "patent-eligible" invention, and whittled away at the inventor's exclusive right.
The U.S. patent system affords an exclusive right to inventors who bring forth new and useful discoveries -- things that did not exist, and, were it not for our patent system, might not ever exist.
This market-based incentive, revolutionary at its inception, and devised to preclude a grant of monopoly, has given rise to innumerable useful inventions, and made ours the most innovative nation on earth.
Destabilizing the property right that encourages discovery plays into the hands of unscrupulous actors -- both public and private -- and promotes the theft of IP, taking with it the incentive to innovate.
On Capitol Hill, lawmakers urge use of an obscure provision of the Bayh Dole Act to "march-in" on IP rights in the name of drug price controls. Bayh Dole allows universities to own inventions derived in any part from federal funding, and to license them for development. Prior to Bayh Dole, only the feds could do that, and very few inventions were licensed. Bayh Dole decentralized IP licensing. But the feds reserved a "march-in" power if a licensee failed to develop a useful product. Lawmakers now want to distort that power to make successfully developed products cheaper. But, that's not how the law reads, and Senators Bayh and Dole specifically said so.
With good reason. To do so would kill the virtuous cycle by which universities give birth to startups, and develop basic research into useful products. This generates revenue for the university, and supports its educational mission. It's a win for the university, the startup, and the public, but it rests, precariously, on the reliability of IP rights.
The NIH recently acknowledged this, refusing to march-in on the drug Xtandi for purposes of price control. Every prior administration faced with such a request, both Democrat and Republican, has done the same.
Meanwhile our executive branch is undermining IP rights by supporting international waivers of IP rights on COVID technologies. IP rights made a rapid response to COVID possible. Innovators relied on IP to collaborate and produce enough COVID vaccine to inoculate everyone on earth, and did so in record time. Nonetheless, despite a consistent tradition of advocating for IP rights, our executive now favors a reversal. This would be an enormous give-away of IP, much of which was invented here in the U.S.
Even the judiciary is chipping away at inventors' rights. Because of judge-made law, inventors don't have a reliable body of law defining patent-eligible inventions, or an exclusive right to their inventions. This has created a patchwork of conflicting decisions compromising IP rights, and diminishing innovation.
The U.S. patent system is a powerful economic engine. It promotes the progress of useful arts, and has produced innumerable valuable inventions. Weakening that system, even for laudable short-term goals, will bring that engine sputtering to a halt.
Brian O'Shaughnessy is Board Chair of the Bayh-Dole Coalition. This article originally appeared on InsideSources.com.
