OPINION:
Small-business owners, both Democrats and Republicans, are losing confidence in Washington’s willingness to protect their ideas, designs and formulas from theft.
This loss of confidence isn’t surprising, given that the Biden-Harris administration has waged an unprecedented campaign to weaken intellectual property rights for the last 3½ years.
IP protections encourage risk-taking and innovation. They provide inventors and entrepreneurs with exclusive rights to their creations for a set period of time — and, in so doing, protect those creations from theft by competing firms.
Just as with traffic rules, IP protections serve their purpose only when firmly and consistently enforced. But President Biden and Vice President Kamala Harris have made enforcing these protections harder.
Early in their administration, they supported nullifying intellectual property rights for COVID-19 vaccines. This did nothing to increase the vaccine supply but set a worrying precedent that will hinder our ability to develop effective vaccines for future pandemics.
At the behest of radical senators such as Bernie Sanders and Elizabeth Warren, the administration has also telegraphed a plan to abuse Section 1498, an old statute that allows the government to appropriate certain patented designs (usually for products with military applications) and then compensate the patent holders retroactively.
Senators have urged the administration to invoke Section 1498 to confiscate prescription drug patents and authorize generic manufacturers to produce cheaper copies. This interpretation of Section 1498 has no legal grounding whatsoever. Yet the administration has deliberately declined to dismiss the idea out of hand, thereby introducing uncertainty into the biotech sector.
Worst of all, the administration is twisting a law called the Bayh-Dole Act to empower bureaucrats to rescind patents on any product developed with federal funding — all because they arbitrarily deem that product too expensive.
This plan would destroy our nation’s decades-old technology pipeline between universities and the private sector, which has contributed nearly $2 trillion to U.S. gross industrial output since 1996 and supported the formation of over 17,000 startups.
Without an aggressive effort to fortify IP rights, our economy could lose its most essential sources of ingenuity, entrepreneurship and growth. As of 2019, IP-intensive industries supported over 62 million jobs, accounting for over 40% of domestic economic activity.
Without the assurance that IP protections provide, countless new businesses would struggle to raise capital. Many aspiring startups and small companies would never get off the ground, and many inventors would never be able to turn their best ideas into tangible products.
The Biden-Harris attack on IP only further hobbles American innovators’ attempts to thwart Chinese IP theft. As part of its strategic push for technological dominance in fields such as artificial intelligence, quantum computing and alternative energy, the Chinese government has run roughshod over American patents for years, routinely helping itself to IP from American firms. One recent analysis pegged the cost of IP theft to the U.S. economy at as much as $600 billion a year. The problem has gotten so bad that FBI Director Christopher Wray recently characterized China’s chronic IP violations as “a threat to our way of life.”
He’s right; foreign governments see patent infringement as an acceptable strategy for gaining an economic edge. Sadly, small businesses will bear the most immediate costs from this breakdown in our IP system.
We urgently need policy changes to restore reliability, enforceability, and fairness to our patent system. Two bills currently before Congress, the PERA and PREVAIL acts, include important reforms to strengthen IP protections.
We must also urge candidates from both parties to adopt pro-IP platforms this election season. If Washington doesn’t consider the best interests of small businesses, the ensuing damage may be irreversible.
• Karen Kerrigan is president and CEO of the Small Business and Entrepreneurship Council (sbecouncil.org) in Washington.
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