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The government has a new plan to seize patents, and it's a huge threat to innovation
The Blaze ^ | August 13, 2024 | Stephen Kent

Posted on 08/16/2024 12:31:13 PM PDT by Twotone

Over the weekend, I took my daughter and her best friend on a day trip from Northern Virginia to Hico, West Virginia. In a matter of 120 minutes, you pass from one of the statistically wealthiest areas in the United States to some of the most destitute roadside neighborhoods you’ll see in the region. The friend asked why it's like this in West Virginia, and all I could think to say in response was, “All your friends back in Northern Virginia, what do their parents do for work?” It didn’t take her long. She responded, “Oh like mostly the Pentagon, Boeing, and I know a few kids whose parents go out to Quantico.” That’s not an answer to why West Virginia is more poor, but it does explain the wealth of Northern Virginia. Connection to the federal government is an economy of its own, and the tentacles of federal money cover 61 square miles and ten counties known as the DMV.

Billions of dollars float through Virginia and Maryland in the form of federal grants for research and development related to technology, medicine, education, and much more. What that means is that there is seldom a microchip, vaccine, weapons system, satellite, or AI tool that hasn’t benefited directly or indirectly from taxpayer dollars somewhere in its development. Government funds have strings attached

While this arrangement between the public and private sectors has historically been a boon to the United States in a global economy, there is a real risk to American innovation if certain norms are busted by lawmakers looking to score political points. The federal government could seize control of most patents in AI, microchip tech, and pharmaceuticals using a legal tool known as “march-in rights.”

As recently as last week, the Biden administration is under pressure from Democratic lawmakers to use march-in rights to lower pharmaceutical drug prices. This authority, granted by the Bayh-Dole Act of 1980, empowers the government to take over patents on products developed using federal funding if those products are not reasonably available to the public.

Senators Elizabeth Warren (D-Mass.) and Angus King (I-Maine), along with Rep. Lloyd Doggett (D-Texas), sent a letter to Health and Human Services Secretary Xavier Becerra and Commerce Secretary Gina Raimondo, urging them to quickly finalize the guidance on federal "march-in rights."

These Democrats think the use of march-in rights is a straightforward way to lower consumer drug prices and would have observers believe the political upside is a mere coincidence in an election year. The norms around “march-in rights” are essential.

This power exists but has never been used before, despite several petitions for the government to do so in recent decades. Like most powers the federal government acquires, there are good reasons it came to pass. The Bayh-Dole Act was originally designed to encourage the commercialization of technological innovation by allowing universities and small businesses to retain patent rights on products developed with federal funding.

This led to the development of many new technologies and medicines ranging from a chemotherapy drug for cancer patients called Taxol to the common allergy medication Allegra and even next-generation firefighting drones.

A federal agency can theoretically leverage march-in rights and grant licenses for a product funded by taxpayer dollars if these four conditions are met:

The current licensee has failed or is unlikely to achieve the “practical application” of the invention. Action is required to address “health or safety needs.” The product is needed to fulfill “public use requirements” as stipulated by federal regulations. The product is not being predominantly “manufactured” within the United States.

It should come as no surprise that the Biden administration is not keen on letting the market determine drug prices. The Biden administration recently debuted a framework for how it might make use of the Bayh-Dole Act to start setting prices on a narrow subset of drugs. What could go wrong? (Everything.)

Most consumer drugs on the market are the result of multiple patents held by developers rather than researchers funded in part by the National Institutes of Health. The latter scenario is one with the ever-present potential of government intervention and seizure of the patent.

That potential is what spooks innovators across the most vital sectors in the American economy. In ventures where the risk is high, firms are less inclined to make major investments. A fine example of this is when the Federal Communications Commission introduced regulatory uncertainty into the broadband sector, which led to a 10% decline in private-sector investments toward broadband. Consumers nationwide saw reduced network coverage and reliability.

This can happen in the artificial intelligence space, microchips, and cloud computing. Federal dollars are everywhere in these industries. Large companies like AMD, Intel, and Nvidia receive federal funding for AI or semiconductor research and could be subject to march-in rights once the dam breaks on its use. The government might justify seizing patents if it determines that the public interest or national security is at stake.

Consider the situation if China were to finally invade or blockade Taiwan, a small neighbor that produces 90% of the global supply of advanced chip technology. This would be a real emergency for consumer products and sensitive government tech used for national security. The same goes for the global race to develop AI technology using federal funds for R&D. If AI is produced and isn’t being deployed in a way that benefits the United States during a potential foreign war, the government could step in using march-in rights on products created through the Bayh-Dole Act.

In these scenarios, with all the norms restricting the government’s use of march-in rights to seize patents shattered, you could see a dramatic decline in the vitality of American tech innovation. Even worse, you could see the government attempt to actively control these patented technologies and award them to domestic partners who will be the most cooperative with the government when pushed.

Say what you will about Apple, but it’s a company that frustrates the U.S. federal government with its dogmatic approach to consumer privacy and walled garden systems. We need more of that, not less.

With so much next-generation technology being developed in the D.C. area with government dollars as a subsidy, we must strongly resist calls in Congress to wield march-in rights inappropriately. Drug prices should be lower, but in market economies, there are better paths to take such as streamlining the approval of generics, expanding the use of Health Savings Accounts, and importing prescription drugs from foreign competitors.


TOPICS:
KEYWORDS: dmv; innovation; marchinrights; patents; seizure

1 posted on 08/16/2024 12:31:13 PM PDT by Twotone
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To: Twotone

NBD...
Communists never ever leave a stone unturned in their perpetual search for ways to add more links to the chains-of-tyranny now draped around our necks...


2 posted on 08/16/2024 12:41:52 PM PDT by SuperLuminal ( Where is Samuel Adams when we so desperately need him)
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To: Twotone

10-289.


3 posted on 08/16/2024 12:48:51 PM PDT by wally_bert (I cannot be sure for certain, but in my personal opinion I am certain that I am not sure..)
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To: Twotone

There’s a work-around for this BS and that’s assuming it’s yanked from you-boob as well as other online outlets. You can’t stop someone from sharing in-person to like minded folks. May not make any coin but the word/work is spread via the grapevine. Try and stop that.

A big giant F YOU to the facist commies of the world.


4 posted on 08/16/2024 1:03:24 PM PDT by LastDayz (A Blunt and Brazen Texan. I Will Not Be Assimilated.)
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To: wally_bert

Bingo


5 posted on 08/16/2024 1:07:23 PM PDT by Tench_Coxe (The woke were surprised by the reaction to the Bud Light fiasco. May there be many more surprises)
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To: Twotone

President Trump was going to drastically reduce the cost of insulin for diabetics but the Biden regime pulled the plug on that (too). Anyone recall how that was going to be financed?


6 posted on 08/16/2024 1:12:13 PM PDT by MikelTackNailer (Listen to me now, think about it later and cry about it some other day.)
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To: SuperLuminal

It’s government funded research, not government stealing private research.


7 posted on 08/16/2024 1:53:26 PM PDT by AndyJackson
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To: SuperLuminal

Try reading the article.


8 posted on 08/16/2024 2:39:45 PM PDT by Jacquerie (ArticleVBlog.com)
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To: Twotone

Patent Reform Act Threatens ‘Engine’ of Prosperity (China Wins)
http://www.freerepublic.com/focus/f-news/2771457/posts

In early February 1997, I received a telephone call from a longtime friend in Washington. He was calling to say that we were being recruited for a very important assignment, an assignment related to national security.

He explained that, in 1996, the Clinton administration agreed to give the People’s Republic of China a complete set of magnetic tapes from the U.S. Patent and Trademarks Office computers, containing every iota of American technology registered with the patent office in the previous 160 years.

With the information from those tapes on their computers, the Chinese would know exactly how to make everything we make. But more importantly, by tracking the long-term development of every conceivable kind of technology and extrapolating the path of development into the future, the Chinese could “leap-frog” our own technological development.


9 posted on 08/16/2024 2:53:07 PM PDT by Haddit
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To: Twotone

I am the holder of 2 patents, neither of which I own. They belong to the companies I worked for while developing the patents. That’s the law. If the federal government pays for the development of a patent they should be the owner of it.


10 posted on 08/16/2024 3:07:04 PM PDT by norwaypinesavage (Freud: projection is a defense mechanism of those struggling with inferiority complexes)
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To: Haddit

All US patents are publicly available. They’re all on the internet. That’s the idea of patents. They give the holder 20 years of protected usage, and after that time, anyone can use them.


11 posted on 08/16/2024 3:16:44 PM PDT by norwaypinesavage (Freud: projection is a defense mechanism of those struggling with inferiority complexes)
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To: Twotone

Patenting should be modified for the 3D Printing world.
We should be able to design something and put a 3D printing file online without someone stealing it and putting it online for sale as theirs.
When someone buys a printing file they don’t have to print in colors, so a QR Code won’t work.
We need something similar to a QR Code embedded in the print.
Imagine how inventive people would become if there was serious money to be made by their intellectual talent.
A printing file does have a timestamp, so it should be easy to prove who posted it first.
3D printing has greatly advanced over the last couple of years.
They are much faster, bigger, can print in multiple colors and many more plastics and are easier to use.
They still are hard to maintain.
The designer can be anyone anywhere in the world and the buyer could be anyone in the world.
You no longer have to hire a manufacturer and sales team to bring a design to fruition.
You now can hold a 3D printed part in your hand in minutes or hours.
There are many CAD programs for designing mechanical parts and assemblies.
There are many sculpting programs you can learn on YouTube.
Blender is a free sculpting program.
You can even scan a car using your IPhone.
My daughter scanned a yard gnome and it worked on her first try. I printed it.
I design 3D parts everyday just for fun.
My wife has already given me orders to design birdhouses for her friends for Christmas.
You can also order a 3D printed object online.
You can pay someone to design something for you.
I’d love to get paid to design stuff or be assured my designs aren’t going to be stolen.
It was my occupation, now it’s my hobby.
I could move out in the middle of nowhere and work from home.
People wouldn’t have to migrate to get a job in another country.
The money would go to whoever designed it, not just to China.

https://www.etsy.com/search?q=3d%20print%20file&ref=auto-1&as_prefix=3
cults3d.com
printables.com
cgtrader.com
thingiverse.com


12 posted on 08/16/2024 3:31:37 PM PDT by Haddit
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To: Twotone

So....this is private industry investing and inventing/perfecting a product or service, then the Feds can, on some best-use pretense, sieze control and award access & contracts to their best buddy contributors? For the best DEI progressive goals?


13 posted on 08/16/2024 3:43:58 PM PDT by citizen (Put all LBQTwhatever programming on a new subscription service: PERV-TV)
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To: norwaypinesavage

When China joined the WTO they were supposed to recognize trade and patent agreements but they didn’t.
When they buy an American company, sometimes they do it just to receive ownership of patents, manufacturing techniques and technologies.
Japan was doing the same thing in the 60s and 70s.


14 posted on 08/16/2024 3:44:16 PM PDT by Haddit
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To: Twotone

“You didn’t build that” - Barry Soetero


15 posted on 08/16/2024 4:47:25 PM PDT by Organic Panic (Democrats. Memories as short as Joe Biden's eyes)
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To: Haddit

Bookmarked for later.


16 posted on 08/16/2024 5:13:24 PM PDT by wally_bert (I cannot be sure for certain, but in my personal opinion I am certain that I am not sure..)
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To: norwaypinesavage
All US [and other nations'] patents are publicly available.

Yes, but it would be cumbersome to send someone to the USPTO and make photocopies of millions of patents.

They’re all on the internet.

Not in 1996 they weren't... see above.

17 posted on 08/18/2024 12:24:28 PM PDT by Moltke (Reasoning with a liberal is like watering a rock in the hope to grow a building.)
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