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The Biden administration’s proposal to invoke so-called “step-in” powers to seize patent rights for any federally funded development would harm the U.S. innovation economy, NAM told the federal government on Tuesday.
How is this going: A proposal introduced by the Biden administration in December would allow the government to seize patents on private-sector products it deems too costly.
Why it’s important: “Sabotaging the manufacturer’s [intellectual property] rights will have broad consequences for American innovation and America’s world-leading innovation economy,” NAM told the Biden administration.
- “In particular, new startups and small businesses will bear the brunt of the significant changes proposed by the government, as… government involvement will dampen incentives for early-stage entrepreneurship and hinder much-needed capital formation from outside investors.”
background: The Bayh-Dole Act, passed in 1980, allows recipients of federal research funds to license breakthrough technologies to private companies to commercialize them.
- “Prior to the passage of the bill, the government held approximately 28,000 patents, but less than 4% of these patents were licensed to the private sector. According to NAM, this was because private sector players believed these patents were “tainted by government funding.” .
- The Bayh-Dole bill contains a narrow “step-in” provision that allows the government to step in to ensure consumers have access to certain products in times of crisis, but step-in “has never been used in the 44 years since the law was enacted,” NAM said.
- Allowing product- or technology-based price entry “would hinder industry collaboration with research universities and laboratories across the country, hindering manufacturers’ efforts to develop future products and technologies and bring them to the public.”
What we are doing: Last month, the Non-Aligned Movement launched a seven-figure advertising campaign to oppose the proposal.
- NAM said the government should “provide certainty to manufacturers and other stakeholders in the innovation economy by firmly and unequivocally withdrawing the proposal and making it clear that the government will not implement any of its recommendations.”
The last word: “Undermining the United States’ world-leading patent system will result in reduced innovation and significant economic losses, disproportionately affecting small manufacturers,” said Charles Crain, NAM’s vice president of domestic policy.
- “The administration’s proposed intervention would raise concerns about government price controls on a wide range of technologies—fundamentally reshaping how life-changing innovations are developed, financed, and commercialized in the United States. The administration must resolutely and unequivocally withdraw this action. Radical and flawed proposal.”
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