Our National Security Depends on Intellectual Property
The National Institutes of Health (NIH) has just rejected a petition that asked the federal government to misuse a decades-old law. This petition sought the government to impose de facto price controls on a widely available medicine.
This rejection is welcome news. The law in question, the Bayh-Dole Act, was passed in 1980 to incentivize the commercial development of discoveries arising from federally funded research for the benefit of the public and the economy. Abusing this law would have negative ripple effects throughout all U.S. industries, threatening America's global economic competitiveness and ultimately our national security.
The petition to NIH related to a provision in the Bayh-Dole Act that permits the government to “march in” to a company that had exclusive rights to a patent that came from federally funded research, and to re-license that patent to others. The catch is that this power must only be used to meet statutory criteria, like having the product successfully introduced into the marketplace. It was never intended as a means to set prices on widely available commercial products. The law's authors explicitly said so in 2002.
Nevertheless, the petition's backers wanted Uncle Sam to use march-in authority to control the price of a drug initially discovered with the help of taxpayer funds. The NIH was right to reject their misguided proposal.
But the most pressing objection to misusing the law isn't one of legislative intent. Rather, it's that bowing to calls to weaken intellectual property rights under the Bayh-Dole Act would stifle cutting-edge innovation in the United States. In effect, we'd be voluntarily ceding ground to America's rivals in critical technologies, who already steal hundreds of billions of dollars’ worth of U.S. IP every single year.
The Founders clearly understood the economic and strategic importance of strong IP protections. After all, they took the unprecedented step of establishing IP protections in our Constitution.
IP-intensive industries support millions of high-wage American jobs. In the manufacturing sector, for instance, every $1 billion in exports supports more than 4,800 U.S. jobs. IP-intensive industries account for 44% of U.S. economic output, and support around 63 million jobs, according to the most recent analysis from the U.S. Patent and Trademark Office.
Congress and the Biden administration have worked hard to create more of these kinds of jobs. Last year's CHIPS and Science Act, for example, is intended to fuel job growth through historic investments in groundbreaking research, cutting-edge innovation, and critical infrastructure.
Protecting IP is imperative from a national security and geostrategic standpoint, too. Weakening existing protections would add to the damage already being done by great power rivals intent on helping themselves to hard-earned American discoveries.
IP theft is a serious drain on America's military strength and readiness. China, Russia, and other competitors often seek IP relating to America's economic and national security., Theft affects sectors including artificial intelligence, communications, biotechnology, and advanced manufacturing. Letting our adversaries continue to steal our IP will make the United States more vulnerable to attacks on our critical infrastructure and economic leadership.
Stopping the scourge of foreign IP theft will require a two-pronged approach. First, we need tougher enforcement of the tools available to combat IP piracy. Consider the International Trade Commission -- the government agency charged with investigating violations of IP rights by our trade partners. In one recent case involving electric vehicle batteries,, the ITC found that a U.S. manufacturer's trade secrets had been infringed, and it helped shut the infringement down.
Punishing IP raiders is just one side of the equation, of course. Beating back our rivals' efforts to out-compete America through illegal means will also require promoting historic levels of innovation here at home. That starts with heartily rejecting any effort to weaken domestic IP protections, which affords innovators the incentive they need to carry out risky R&D, and investors the incentive they need to fund it.
On the same day, the NIH rejected the petition to misuse Bayh-Dole, two cabinet agencies launched a new interagency working group effort to delineate when Bayh-Dole's march-in powers should be used. Worryingly, the agencies' announcement suggests that price might be a factor in future march-in determinations.
That's alarming, since the Bayh-Dole Act applies to all market sectors, not just biopharmaceuticals. Misusing the law would set a precedent for government-imposed price controls across all industries, causing investment in high-risk R&D and innovation to crash.
Attacks on IP go far beyond Bayh-Dole. The Biden administration is currently considering a wrongheaded proposal at the World Trade Organization to expand an existing COVID-19 vaccine patent waiver to include therapeutics and diagnostics. Accepting this proposal would be a mistake, as it could make America reliant on other nations' biopharmaceutical sectors when the next pandemic inevitably hits.
The United States should fight to keep our IP out of the hands of unscrupulous foreign governments and other malicious actors. At the same time, policymakers need to uphold the robust IP protections that have kept the United States prosperous and strong since the Nation’s founding.
Walter G. Copan, PhD, is vice president for research and technology transfer at Colorado School of Mines, and senior adviser with the Center for Strategic and International Studies and co-founder of its Renewing American Innovation project. He previously served as director of the National Institute of Standards and Technology (NIST).
