OPINION:
The United States is in the midst of a tech investment boom. Whether it is for artificial intelligence, advanced manufacturing, clean energy or biotech, companies are pouring record sums into developing the next generation of technologies right here at home. Overall, U.S. tech spending is set to hit $2.7 trillion this year.
In biotech and biopharma alone, firms have announced nearly $500 billion in new U.S.-based research and manufacturing investments, an almost 1,500% increase over last year’s announced totals. These investments have already led to tens of thousands of new jobs. They also are bringing labs and factories to dozens of states.
If policymakers want to maintain this momentum in the years ahead, they will need to implement a series of bipartisan reforms to strengthen the intellectual property system.
Innovation is a high-risk, high-cost endeavor. In biotech, for instance, it takes $2.6 billion, on average, and often a decade or more of work to develop just one successful medicine. Without a predictable system of IP protections, this kind of investment would be unthinkable because the risk of having one’s revolutionary new treatment stolen by competitors would be far too great.
The same is true across the tech sector, including cutting-edge semiconductor designs and next-generation energy breakthroughs. Patent protections provide inventors with the certainty of a set period during which their intellectual property is protected, allowing them to invest boldly, attract capital and commercialize new technologies.
Unfortunately, the U.S. patent system has eroded in recent years. Several Supreme Court rulings have narrowed the scope of patent eligibility for certain products in critical fields, such as medical diagnostics and software, thereby chilling investment in these areas. Court rulings have also made it more difficult for innovators to obtain court injunctions that prohibit patent infringers from continuing to use stolen technology.
Inventors are also facing increasing threats from the Patent Trial and Appeal Board, an administrative law body within the U.S. Patent and Trademark Office, which allows almost anyone to challenge patents and has effectively destabilized the patent system. Originally intended as a streamlined venue for resolving patent disputes, the board has been weaponized by certain companies to drag out costly litigation, drive up costs and make it impossibly expensive for competitors to assert their IP rights.
Other recent proposals could likewise cause investors to rethink the hundreds of billions of dollars in investments they are planning. Examples are Commerce Secretary Howard Lutnick’s suggestion that the federal government should confiscate half of universities’ patent licensing royalties, as well as efforts to decrease federal funding for basic research.
If America is to remain ahead of China in tech innovation, including biotech innovation, policymakers need to restore strong IP rights, which are essential to fostering America’s innovation ecosystem and U.S. competitiveness globally. Several bipartisan bills in Congress would do just that.
The Patent Eligibility Restoration Act, for instance, would provide much-needed clarity on the issue of what types of inventions are patent-eligible, giving investors the confidence they need to make big bets on promising new technologies.
The PREVAIL Act, meanwhile, would eliminate duplicative and costly patent challenges that allow the same patent to be contested in multiple venues, restoring fairness and predictability for inventors. The RESTORE Patent Rights Act would make it easier for inventors to once again obtain court injunctions, as they could for most of American history.
America has led the world in innovation thanks in large part to the integrity of our patent laws, our unrivaled research universities, and a market-based system that rewards those who take big risks inventing lifesaving and life-changing technologies.
Our dominance is far from guaranteed. Unless lawmakers commit to strengthening this system, investment will fall and rivals such as China could usurp the United States as the world’s top source of progress.
• Anne Pritchett, Ph.D., is a senior associate at the Center for Strategic and International Studies’ Renewing American Innovation Project and the founder of Pritchett Policy Associates.
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