IPO Sends Letter on IP Law and Policy to President-Elect and Vice President-Elect

By Donald Zuhn --

Last month, Intellectual Property Owners Association (IPO) President Daniel J. Staudt sent a letter on behalf of the IPO to President-Elect Joe Biden and Vice President-Elect Kamala Harris "to recommend that intellectual property (IP) law and policy be priorities in your administration."  The letter states that:

The IP system is fundamental to the nation's economic growth and job creation and to our global competitiveness.  The importance of innovation is clearer than ever at this moment in our nation's history as we face challenges such as the coronavirus pandemic and related economic instability, the climate crisis, and the need to ensure diverse and inclusive representation of viewpoints.

With respect to the COVID-19 pandemic, the letter notes that "[t]he ability to leverage and build upon scientific research conducted over many years, made possible by the IP system, enabled industry to expedite the vaccine development process."  The letter also points out that developments with respect to personal protective equipment and innovative computer-implemented technologies that have allowed us to stay connected during the pandemic were also the result of years of investment in innovation.

As for the climate crisis, the letter states that "IP is an integral part of developing new global environmental policies aiming for a more sustainable lifestyle based on green technologies," and expresses support for the incoming administration's pledge to invest $400 billion in clean energy and innovation.

The letter also declares that "[c]losing the diversity gap in innovation is also vitally important to our economic growth and global competitiveness," noting that women, people of color, and other minority groups are vastly underrepresented in the patent system.  The letter points out that recent "scholarship indicates that increasing participation in inventing by underrepresented groups could increase U.S. GDP by as much as 4.4%," and suggests that "[i]t is imperative that the public and private sectors work together to close this gap and harness our country's potential to innovate at greater levels than ever before."

Included with the letter is an Appendix providing several IP issues that "threaten sound innovation policy in the U.S. and worldwide," including clarifying patent subject matter eligibility; protecting trade secrets; ensuring predictable legal systems for all industries and technologies; addressing counterfeiting and trademark infringement; and providing high quality, enforceable IP rights and predictable legal systems in the U.S. and abroad.

With respect to subject matter eligibility, the letter notes that the IPO "continue[s] to believe that legislative action is needed" to address Supreme Court decisions that have "detrimentally affected areas such as precision medicine & artificial intelligence and risk[] a chilling effect on further developments and investment in these critical technologies."  On the issue of trade secret protection, the letter states that "[i]nadequate protection of trade secrets abroad harms not only companies whose property is stolen, but also the country where the theft occurs, because companies are then less likely to form joint ventures and make high-value investments in those countries."

The letter also argues that unfounded assertions continue to be made that IP rights constitute a barrier to innovation in order to justify compulsory licenses and forced technology transfer.  In particular, the letter states that:

IPO members continue to witness concerted efforts to weaken intellectual property rights in the name of development, access to health, and environmental concerns.  Intellectual property rights have been unfairly portrayed as a barrier to technology transfer based on arguments that they limit availability of technologies and make them more expensive to secure.  The threat of intellectual property erosion, however, actually increases the cost of technology and slows its adaptation and deployment.

The letter notes that the IPO continues to strongly oppose compulsory licensing of intellectual property rights with respect to all industries and technologies, adding that "[a]lthough IPO recognizes that compulsory licenses of IP rights may be legally permissible in limited and rare situations, IPO believes that licensing of IP rights is best accomplished through voluntary efforts."

The Appendix concludes by touching on the issue of backlogs and other bars to securing IP protection, noting that "[i]ncreasing global competition drives IPO members to innovate faster than ever before, and in many cases product life cycle times are becoming extremely short" (as, for example, the unprecedented short timeline in which multiple COVID-19 vaccines have been developed).  In view of shorter product life cycles, the letter contends that "debilitating application backlogs at patent and trademark offices are at odds with the pace of innovation."

Comments

[Greg DeLassus]

"[T]he IPO 'continue[s] to believe that legislative action is needed' to address Supreme Court decisions that have 'detrimentally affected areas such as precision medicine & artificial intelligence and risk[] a chilling effect on further developments and investment in these critical technologies.'"

This is very true. Regrettably, I am dubious that this Congress (or the next, or the one after that) is at all likely to fix this problem. Still and all, it is quite right for the IPO to raise the issue.

"On the issue of trade secret protection, the letter states that '[i]nadequate protection of trade secrets abroad harms not only companies whose property is stolen, but also the country where the theft occurs, because companies are then less likely to form joint ventures and make high-value investments in those countries.'"

This is probably true, but I do not really know what the Biden administration (or any other U.S. administration) can do about this. Intellectual property law is a matter for each sovereign jurisdiction to arrange to suit its own sovereign purposes. When the day comes that China decides that it is losing more from forced tech transfers than it is gaining, then forced tech transfers will end. I am dubious that forced tech transfers will cease even a day sooner on account of the U.S. jawboning China about the issue.

Besides, what is it to the U.S.A. if companies' trade secrets are coercedly disclosed? The U.S. government exists for the benefit of its citizens. Companies are not citizens, and do not behave like they think of themselves as citizens.

Companies who wish to compete in the international market must protect their own interests by prudence and cunning. It is not for the U.S. government to nurse them as if they were children.