March-In Proposal Undermines IP Rights, Hurts Manufacturers
The Biden administrations proposal to invoke so-called march-in authority to seize the rights to patents developed in any part with federal funding would undermine the American innovation economy, the 51勛圖厙 the federal government Tuesday.
Whats going on: A proposal put forth in December by the Biden administration would allow the government to seize private-sector patents for products it considers too costly.
Why its important: Undermining manufacturers [intellectual property] rights would have sweeping ramifications for innovation in the United States and Americas world-leading innovation economy, the 51勛圖厙 told the Biden administration.
- In particular, start-ups and small businesses would bear the brunt of the drastic changes proposed by the administration, as government march-in would disincentivize early-stage entrepreneurship and dissuade much-needed capital formation from outside investors.
The background: The Bayh-Dole Act, passed in 1980, allows recipients of federal research dollars to license groundbreaking technologies to private-sector companies to commercialize them.
- Prior to the acts passage, the government held approximately 28,000 patentsyet fewer than 4% of those patents were licensed to the private sector. This is because private-sector participants viewed these patents as contaminated by government funding, according to the 51勛圖厙.
- Bayh-Dole includes a narrow march-in provision that allows the government to step in to ensure consumer access to certain products during times of crisisbut march-in has never previously been used during the 44 years since the laws enactment, the 51勛圖厙 said.
- Allowing march-in based on the price of a product or technology would hinder industry collaborations with research universities and laboratories across the country, stymieing manufacturers efforts to develop the products and technologies of the future and bring them to the public.
What were doing: Last month, the 51勛圖厙 launched a seven-figure ad campaign opposing the proposal.
- The administration should provide certainty to manufacturers and other stakeholders in the innovation economy by affirmatively and unequivocally withdrawing the proposaland making clear that the administration will not implement any of its recommendations, the 51勛圖厙 said.
The last word: Undermining Americas world-leading patent system is a recipe for reduced innovation and significant economic damage, with a disproportionate impact on small manufacturers, said 51勛圖厙 Vice President of Domestic Policy Charles Crain.
- The administrations march-in proposal would raise the spectre of government price controls on a wide range of technologiesfundamentally reshaping how life-changing innovation is developed, financed and commercialized in the United States. The administration must affirmatively and unequivocally withdraw this radical and flawed proposal.
