The U.S. economy runs on startups. For all of America’s mega-corporations, it’s young firms that create most of our new jobs during periods of economic growth. Those startups depend on America’s famously strong laws protecting their inventions and intellectual property. The only way someone with a big idea but minimal resources can out-compete established firms is through government protection of their innovations.
Today, we are failing in that responsibility. Our laxity is empowering predators foreign and domestic — endangering not only the next Apple, Microsoft, or Facebook, but our entire economy.
For years, the greatest threat to American intellectual property has been China. Chinese IP piracy became endemic — totaling an estimated $600 billion in costs to the U.S. per year. A CNBC survey of American corporations found that one-third had experienced IP theft by Chinese pirates. Testifying before Congress, Facebook CEO Mark Zuckerberg said, “I think it’s well documented that the Chinese government steals technology from American companies.”
More telling than Zuckerberg’s acknowledgment was the strange equivocation by other Big Tech executives at the hearing. The CEOs of Apple, Amazon, and Google — individuals famous for their breadth of knowledge and laser focus on their businesses — all shrugged and testified only that they hadn’t personally seen any Chinese IP piracy.
There is a reason those firms might not want to shine a light on IP theft: it’s a valuable part of their own business models.
In January, the U.S. International Trade Commission issued a ruling finding that Google infringed on five patents belonging to Sonos, a company that makes smart speakers. The story is a worst-case scenario for a startup. Sonos developed one of the most advanced wireless audio systems in the market — a product so impressive that Google wanted to partner with the company. Sonos alleges that early in the partnership, Google lifted Sonos-patented technology for Google’s own audio equipment.
Sonos was no fluke. Google faced 48 patent infringement lawsuits in 2021. But Google is not the only perpetrator.
In 2020, a federal jury ordered Amazon to pay $5 million to Texas-based Vocalife for infringing on its patents. Apple was recently ordered to pay $300 million in damages to Optis Wireless Technology for infringement.
It’s no accident that the number of IP lawsuits rose in 2020 for the first time since 2015, and court awards rose to $4.67 billion from just $1.5 billion in 2019.
It makes holding China to account much harder. If the richest and most powerful businesses in America are ignoring our intellectual property laws — why shouldn’t our global adversaries?
The issue here isn’t complicated: When laws against theft aren’t enforced, thieves are going to steal. Slaps on the wrist aren’t going to deter pickpockets in Beijing, Silicon Valley, or anywhere else. Congress has to tighten up our IP laws and stiffen penalties, and the Justice Department needs to ramp up enforcement while there are still startups left to save.
One noteworthy aspect of the American Dream is that the most important businesses of 20 years from now are probably ones we haven’t heard of yet. In order for them to lead us into the future, the government must protect them from foreign adversaries and Big Tech.
One of the keys to America’s growth from 1776 to becoming the world’s strongest, most robust and innovative economy within a little more than 100 years is that our Constitution placed importance on both traditional land property rights and intellectual property rights.
Early in America’s history, land-oriented property rights caused our vast nation to be developed productively and efficiently. That fueled economic growth and helped “ordinary” Americas provide for themselves and accumulate some measure of wealth.
But as ideas, inventions and innovation became the primary engine to drive the economy, our nation’s focus on protecting intellectual property helped “ordinary” Americans not only provide for themselves, but also created a vibrant economy where “ordinary” Americans could aspire to and achieve the American dream.
Our Nation’s Founders were wise to include protecting intellectual property rights as one of Congress’ enumerated powers. And the First Congress was wise to create a system for copyright, patents, and the protection of intellectual property rights. That laid the groundwork for America to become the world’s greatest economic power.
The United States has been a leader in innovation since the early 19th century. This is because as a nation, we have respected intellectual property rights and thus incentivized and encouraged innovation. When there is economic and regulatory freedom and when property rights are respected, private enterprise will invest billions of dollars to innovate and create new technologies to solve real-world problems and provide valuable goods and services to the public.
But even something clearly good, useful, and productive can be misused and distorted and become a negative. Such is the case in the intellectual property rights arena. For example, the U.S. Patent and Trademark Office — combined with judicial activism — has created an untenable situation where design patents have morphed into a situation that does more to prevent innovation and stop competition than to protect or encourage real innovation.
Design patents have historically covered the design of an entire patented product. But now, unelected bureaucrats and some unelected judges have changed the concept of a design patent to mean that individualized parts of the larger patented product are also covered. One area where this causes consumers real problems and imposes real costs is with automobiles.
The morphing of the actual meaning of a design patent has allowed automobile design patents to mean that even parts like headlights, taillights, fenders and bumpers are covered by the patent. This means that consumers cannot buy alternative or competing parts. That means repairs cost more and consumers have fewer choices.
This problem was highlighted by the Consumer Federation of America’s Jack Gillis who testified before Congress:
“[C]ar companies are now using design patents, not for the important and legitimate protection of the overall design of their vehicles, but to prevent competition when it comes to getting the parts we need to repair our vehicles.”
Our patent system has traditionally served America well. In fact, it has served the entire world well. It fueled tremendous innovation and creativity and it provided tremendous competition which provided Americans with jobs, economic security, helpful products and medicines.
But the world has also benefited. The medical cures that were innovated in America under our system of intellectual property rights now cure diseases all over the globe.
But when unelected bureaucrats distort the law and the system and unelected judges stop adjudicating the law, but instead undertake to rewrite it, America’s system of constitutional government is subverted. Congress has the sole power to create our patent laws.
The Patent and Trademark Office has the power to implement those laws, but not to rewrite them. And judges have the power to apply the law and facts to disputes and to adjudicate them. But judges do not have the power to rewrite laws and essentially act as a super-Congress.
When the Patent and Trademark Office and judges act outside their authority, it is the American consumer who suffers. But those who have the resources to lobby bureaucrats and to fund endless litigation stand to benefit when our laws are bent and morphed to benefit them.
If your car needs a repair or if the hard drive on your computer needs to be replaced, the question is: Should the government be working to make it so that you cannot get the part you need except from one source? Being forced into one option means that option will be more costly and over time the quality will decline.
Competition forces all competitors to offer as much as they reasonably can for the best possible price. A lack of competition means that a single-source provider can provide whatever quality it likes and charge whatever it can get away with.
Unless Congress does something to stop the abuse of design patents and prevent partial-product or fragmented design patents from essentially eliminating aftermarket parts, consumers will face a shrinking set of options and costs will rise and even insurance premiums will rise. Congress needs to exercise its constitutional power to fix our patent laws.
If the richest and most powerful businesses in America are ignoring our intellectual property laws, why shouldn’t our global adversaries?
By Deseret News•
The U.S. economy runs on startups. For all of America’s brand-name mega-corporations, it’s young firms that create most of our new jobs during periods of economic growth.
Those startups, in turn, depend on America’s famously strong laws protecting their patented inventions and other intellectual property. The only way someone with a big idea but minimal resources can outcompete established firms is through proper government protection of their innovations.
Today, we are failing in that responsibility. Instead, our laxity is empowering predators foreign and domestic — endangering not only the next Apple, Microsoft, or Facebook, but our entire economy.
For years, the greatest threat to American intellectual property has been China. As our economy became more globalized and digitized, Chinese IP piracy became endemic — totaling an estimated $600 billion in costs to the U.S. economy per year. In 2019, a CNBC survey of American corporations found that nearly one-third of respondents had experienced IP theft by Chinese pirates in the past decade. Testifying before Congress in 2020, Facebook CEO Mark Zuckerberg said, “I think it’s well documented that the Chinese government steals technology from American companies.”
More telling than Zuckerberg’s acknowledgment, however, was the strange but unmistakable equivocation by the other Big Tech executives at the hearing. When asked the same question, the CEOs of Apple, Amazon and Google — individuals famous for their breadth of knowledge and laser focus on their businesses — all shrugged and testified only that they hadn’t personally seen any Chinese IP piracy.
While many, including the U.S. Attorney General, slammed them for “kowtowing” to Beijing, there is another reason those firms might not want to shine too bright a light on IP theft: it’s become a valuable part of their own business models.Report ad
Early this month, the U.S. International Trade Commission issued a final ruling finding that Google infringed on five patents belonging to Sonos, a company that makes smart speakers. The story is a worst-case scenario for a startup innovator. Over a decade ago, Sonos developed one of the most advanced wireless audio systems in the market — a product so impressive that Google wanted to partner with the company on it. Sonos alleges that early in the partnership, Google lifted Sonos-patented technology for Google’s own audio equipment — and continued doing so for future products despite Sonos calling the tech giant out for infringement.
Sonos’s experience was no fluke. Google faced 48 patent infringement lawsuits in 2021.
That’s more than any other company, but Google is certainly not the only alleged perpetrator.
Sonos has accused Amazon of stealing the same technologies for use in its Echo audio systems. Additionally, in 2020, a federal jury ordered Amazon to pay $5 million to Texas-based Vocalife for infringing on its patents to make Echo. Meanwhile, Apple was recently ordered to pay $300 million in damages to Optis Wireless Technology for patent infringement.
It’s no accident, then, that the number of IP lawsuits rose in 2020 for the first time since 2015, and court awards rose to $4.67 billion from just $1.5 billion in 2019.
It also makes holding China to account much harder. After all, if the richest and most powerful businesses in America are ignoring our intellectual property laws — supposedly some of the strongest in the world — why shouldn’t our global adversaries?
The real issue here isn’t complicated: When laws against theft aren’t vigorously enforced, thieves are going to steal. That’s true as much for sophisticated IP infringement as it is for the wave of organized shoplifting in California today. With billions of dollars at stake, slaps on the wrist or gentle nudges aren’t going to deter highly motivated pickpockets in Beijing, Silicon Valley, or anywhere else. Congress has to tighten up our IP laws and stiffen penalties, and the Justice Department needs to ramp up enforcement while there are still innovative American startups left to save.
One noteworthy aspect of the American Dream is that even in a mature $20 trillion economy, the most important businesses of 20 years from now are probably ones we haven’t heard of yet. In order for them to lead us into the future, however, the federal government must protect them and their intellectual property from the racketeering operations that too many foreign adversaries and Big Tech elites have turned into.
The advertised purpose of the “Endless Frontier Act” is to increase high tech competition with China. This, of course, is a goal that every American should be able to get behind. However, the advertised purpose of the bill, as laudable as it may be, is not actually what the bill will do. In other words, the “Endless Frontier Act” was sold under false pretenses and using fabricated promises.
If the Senate were serious about helping America win the high tech competition with China, it would do a number of important things, including, but not limited to: (1) protect our nation’s intellectual property from theft and abuse by the Chinese; (2) make our tax code more competitive; (3) allow research and development costs to be deducted more easily thus encouraging capital investment in high tech solutions; (4) review and reform our regulatory regime that in many cases is outdated and hindering the development of new technologies and making us less competitive.
But the Senate isn’t considering any of that. Instead, their so-called plan is to spend about $110 billion in taxpayer dollars via government grants to promote new technologies to be administered by the National Science Foundation. In other words, a government agency with a horrific record of waste, fraud and abuse is going to decide what technologies look most promising and then hand out taxpayer dollars to give them a boost. This sounds like the Solyndra scandal on steroids.
So in an era when our national debt has been rapidly increasing at unsustainable rates, we are going to borrow even more money from China and become even more indebted to China — all for the purpose of being more competitive with China. Let that sink in.
But the problem doesn’t end there. The truth is the National Science Foundation (NSF) has a horrible record of waste. The NSF has funded a project to develop a robot that could fold a towel in 25 minutes. A child could fold a whole load of towels in 25 minutes, but for this stupidity you paid $1.5 million. They’ve funded studies of shrimp running on a miniature treadmill. That wasted $500,000 of your hard earned dollars. They’ve spent millions studying what motivates individuals to make political donations. They’ve spent millions studying if athlete’s perception that the basketball rim is as large as a hula-hoop, or that a baseball is as large as a grapefruit, or a golf hole appeared as big as a manhole cover impacts the athlete’s performance.
As Senator Rand Paul (R-KY) highlighted on the floor of the Senate, the NSF spent $700,000 that had been allotted to study autism to listen to a tape of Neil Armstrong’s first moon walk. They wanted to determine if he said “one small step for man …” or “one small step for a man …” It took them a year and $700,000 of your money to determine that they couldn’t tell. And that was money that was supposed to be spent on autism. The NSF also spent half a million dollars developing a climate change themed video game to help children feel more alarmed.
Government is inherently wasteful. For example, our government spent over $40 million building a natural gas station to refuel cars that run on natural gas in Afghanistan to help them reduce their carbon footprint. Yet Afghanistan is a nation where the annual income is about $800 and often cook their food on open fires, and few drive any sort of car, much less a natural gas powered car. Any high schooler could have told you that building a natural gas station in a nation that doesn’t have many cars is a dumb idea.
Government has funded studying whether you and I are more or less likely to eat food that has been sneezed or coughed on by someone else. You and I could answer that question for free. We’d prefer food that hasn’t been sneezed on — even before the pandemic. But government bureaucrats spent $2 million to get the same answer.
So now we are going to rely on these same government bureaucrats to make sure we compete in the high tech arena with the Chinese and we will borrow the money that these bureaucrats decide to spend from the Chinese. What could possibly go wrong?!
I have grown to expect liberals to gladly fund such utter foolishness from our paychecks. But it isn’t just them, there were 19 Republicans who voted for this insanity: Blunt (MO), Capito (WV), Collins (ME), Cornyn (TX), Crapo (ID), Daines (MT), Graham (SC), Grassley (IA), McConnell (KY), Murkowski (AL), Portman (OH), Risch (ID), Romney (UT), Rounds (SD), Sasse (NE), Sullivan (AK), Tillis (NC), Wicker (MS), and Young (IN).
Those who voted for this bill will undoubtedly defend their vote telling you that they want America to compete and win against China in the high tech arena. We all would like that! But let’s try something novel. Let’s do things that would actually help our innovators innovate; and help our businesses and industries compete and win. Also let’s not put a wasteful and often silly government agency in charge of the program. Instead, let’s unleash America’s entrepreneurial and innovative spirit. And let’s not borrow the money from the very nation we claim to be trying to out compete.
Is China weakening US intellectual property protection?
There is a global effort afoot to get the United States to suspend intellectual property rights (IP) for any and all COVID-19 medical innovations. Interestingly, China is a big backer of this global effort and has been using the World Trade Organization (WTO) to put pressure on the US. The Biden Administration fairly predictably is now backing the China backed pressure campaign. The communist Chinese state-controlled media has praised President Biden for giving into “global pressure.”
The US can certainly help the rest of the world deal with the COVID virus. Humanitarian efforts are about helping save lives, not giving the Chinese regime billions in intellectual property. The US now has a surplus of vaccines and we have the supply chain and the manufacturing set up to continue pumping out the vaccine for the rest of the world. If China and others wanted access to the vaccine as quickly as possible, that’s already available to them — all they need to do is ask.
But stealing the IP of those who invested billions in developing it won’t help the rest of the world because it would take them a year, or two, or more to set up the manufacturing process and organize the supply chains to replicate what the US is currently is able to do. If nations need help to deal with the virus, it isn’t in a year or two — it is now. So what the WTO and China are pushing for won’t help them solve any immediate problem or save lives. But it will help the communist Chinese regime access billions in research and development which they can use to undercut American jobs and innovation for decades to come.
So that’s how you know the global effort isn’t about helping vaccinate the world. It is about stealing the IP rights of American innovators. China has made a living stealing American IP and it has not only harmed us economically, but it has also endangered our national security. And one thing that the Chinese regime is very good at is using every tool at its disposal to weaken America and seek its own long-term advantage. If we don’t wake up to this, we will live to regret it.
If people are interested in helping those around the globe get vaccinated, let’s do that. But why is stealing IP part of that discussion? Especially, since it won’t provide any vaccinations for a year or more from now. But will be used by hostile regimes to undermine American innovation and American jobs.
The bottom line is that suspending intellectual property rights is bad policy. It does nothing to help those around the globe who need a vaccine right away. And it also undermines American medical innovation, and American jobs. Plus, under our Constitution, the government may not unilaterally take the property of its citizens without just compensation. The Constitution specially provides for the protection of intellectual property. And that is why America has been the world’s greatest engine of innovation. Let’s not kill the goose that lays golden eggs.
The very reason American pharmaceutical companies were able to provide vaccines so quickly to deal with the COVID-19 virus is because our system of intellectual property told them that investing billions of dollars in finding a cure was a good idea. If we remove that, future innovations and future discoveries will be far less likely. If we hope to continue to find new earth-breaking cures for cancer, Alzheimer’s, diabetes, etc, and new vaccines for the next horrible disease, we had better keep our intellectual property protections strong.
There is a why the United States leads the world in innovation — we’ve historically had the most robust intellectual property protections. As we’ve allowed those protections to slide, we’ve seen our innovation advantage start to slide as well. So rather than abrogating IP rights, we should be strengthening and reinvigorating them.
This global initiative to pressure the US into voluntarily destroying its system of intellectual property protections would be very costly — not only the US, but to the entire world because our innovation ultimately benefits the entire globe. Let’s hope Congress puts a stop to this foolishness. The Biden Administration has already caved in and signaled its willingness to compromise American law and American strength. Sure, America can, and should help the rest of the world. No one is suggesting that we hide the vaccine or prevent it from other nations or peoples. But using the pandemic as an excuse to kill off American IP protections and violate US law is akin to a beggar demanding access to your home equity loan when asking for help to buy dinner. You offer him a nice meal, and he says, “No, I want your home equity loan! Don’t you want to help a guy down on his luck?!” Beware, it’s a scam!
By Red State•
While the rest of the country enjoyed their Thanksgiving dinners and began their Christmas shopping, the big brass at Google had a lot to think and worry about over the long weekend.
You may recall that earlier this year, Google was the recipient of a bipartisan grilling in Congress over its predatory business practices. The big tech goliath was unable to offer up even a semblance of a convincing defense, leading some to speculate that an antitrust bust-up was awaiting on the horizon.
Over the past few months, those rumblings have turned into reality.
First, in October, the Department of Justice announced a formal antitrust lawsuit, putting the full weight of the federal government on Google’s neck. Then, last week — just two days before Thanksgiving — a bipartisan coalition of state attorneys general announced plans for a second lawsuit, which may come this month (a third antitrust suit spearheaded by Texas is also in the works). It is very likely that by next summer, every state and federal division of the judicial branch will be pursuing the breakup of the search engine giant.
But it may be the Supreme Court, traditionally the final stop on legal journeys, that strikes the first blow.
Observers may recall that back in October, the Supreme Court heard oral arguments in a copyright infringement case regarding the shady origins of Google’s Android software. The lawsuit’s gist is that Oracle claims Google sticky-fingered Java source code developed by its subsidiary, Sun Microsystems, to build up Android OS — a multi-billion-dollar revenue generator that runs on millions of smartphones.
Consider some of the most damning details.
According to the lawsuit, Google stole what it refused to buy after Sun offered Google a three-year license to use its code. The deal would have cost Google $100 million. Google decided that, as Woody Woodpecker used to say, free was a much better price.
This is an interesting argument. If Google initially sought permission to use Sun’s code, it implies that Google knew perfectly well the code wasn’t just theirs to take. One doesn’t ask permission to use the public sidewalk. One does ask permission to borrow the neighbor’s car — and if the borrower takes it for a drive without permission, everyone understands what that is.
The Supreme Court appears to understand this point very well, which doesn’t look good for Google.
As Justice Brett Kavanaugh put it: “You’re not allowed to copy a song just because it’s the only way to express that (particular) song.” In other words, the fact that Stairway to Heaven by Led Zeppelin is the only song that sounds like Stairway to Heaven doesn’t mean that people who didn’t write it have a right to record it and sell it just because they like the way it sounds.
If they did so, everyone would understand a theft had occurred, and the thief would be held accountable.
Justice Neil Gorsuch made the point that the existence of one avenue, however popular it may be, doesn’t prevent creators from finding new ones. The fact the Led Zeppelin wrote Stairway to Heaven and made a lot of money selling albums in no way prevented Stone Temple Pilots from writing Plush and selling lots of albums of their own.
Gorsuch’s reasoning explains why other mobile operators managed to create their products without using Java at all. Java wasn’t the only way into town, so to speak, as Google claims; the tech giant just refused to find a new path.
While we likely won’t know the official decision until the summer, Google is likely sweating bullets.
It’s one of the wealthiest companies in history, but it’s facing an unprecedented level of legal pressure due to two decades of bad behavior. From the outside looking in, it appears the courts are circling the wagons.
Consumers need not worry. None of the services Google provides are irreplaceable innovations or at threat of disappearing in the case of a breakup. It’s even possible that, with the market’s largest digital predator subdued, a breakup would lead to a flurry of new digital services.
The only people who have to worry are Google shareholders and employees. They’re looking at legal cases and potentially billions in losses. Those prospects would dampen anyone’s holiday season.
For a variety of reasons, the U.S.-China rapport established by Richard Nixon has cooled considerably over the past few years. Some experts believe a return to what seemed to be a mutually beneficial status quo is possible once the Trump-era trade war comes to an end.
That’s a fantasy. The relationship between the two superpowers has been on the decline for some time, largely due to unfair trade practices on the part of the Chinese. They do not play fair and no amount of waiting on the part of the U.S. will cause them to change their stripes.
China makes billions by forcing U.S. companies to turn over valuable intellectual property in exchange for entry to its markets. Refusal to cooperate cuts off access to more than a billion potential customers. If America’s leaders aren’t demanding a change, a demand backed up with action, then what incentive is there for Beijing to change its policy?
Most American businesses have been advised by policymakers to wait. They’re stuck, hoping for relief — from international trade organizations to which the Chinese belong (thanks to the U.S. insisting they be admitted) or from U.S. politicians. Nothing will happen unless the pressure on Beijing is maintained.
When President Donald Trump talked about bad trade deals, he usually didn’t mention the World Trade Organization, the U.S. International Trade Commission, and the other multi-national and U.S. governmental bodies that are supposed to referee disputes. Maybe he should have, so that what these organizations accomplish – or more importantly fail to accomplish – will get the scrutiny needed.
Changes must occur. The ITC, for example, continues to show itself to be toothless. It’s failed to be tough on the non-practicing business entities known as “patent trolls” that exist almost solely to make the potentially lucrative charge that deep-pocketed entities have infringed on intellectual property rights so how can we expect tough action from them against China.
Patent trolls are a serious problem and a danger to economic growth and to consumers. They hinder innovation and can force higher prices on consumer technology and other goods now considered critical to life in the 21st century. Yet the ITC refuses to crack down on them, leaving China well-positioned to benefit from the mess they cause.
The commission is currently considering claims lodged by the Irish patent troll Neodron that its patents were infringed upon by major global tech companies including Apple, Microsoft, and Dell. It wants the ITC to grant an exclusion order baring these companies from selling all their major touchscreen mobile devices in the U.S. market.
What’s happening has been likened by some to extortion, with the productive companies being pressured to pay the complaining troll off rather than leave things to the ITC to decide.
Imagine if the ITC decides the issue in Neodron’s favor. The cost of smartphones, tablets, computers, and other devices covered by its order would immediately skyrocket to provide the rents Neodron is demanding. According to some estimates, nearly 90% of smartphones and tablets currently available in the U.S. market would disappear, be replaced by devices from China. The range consumers have when choosing a device would be narrowed while the prices for what they could buy would rise.
China already has a clear lead in developing and deploying 5G wireless devices. Given the critical technology race between the U.S. and China over who will dominate in 5G, how can a U.S. agency even consider a litigation outcome that forces U.S. consumers to buy their 5G devices (as well as their other touchscreen devices) only from China?
Tensions between the world’s two largest economies are already heightened, in part because the U.S. accused China of sponsoring criminal hackers trying to gain access to private data from biotech firms around the world working on coronavirus vaccines and treatments. The FBI said the Chinese government was acting like “an organized criminal syndicate.”
Neodron’s complaint to the ITC places the proverbial thumb on the scale for the Chinese and the technology they manufacture. If they win it would devastate the U.S. tech sector while helping Chinese tech companies gain a greater share of the global market, probably permanently. Like all patent trolls, Neodron’s claim cannot justify this kind of disproportionate and devastating result.
The ITC doesn’t have to go along with this. They can institute policy revisions that will thwart the efforts of Neodron and other patent trolls like them to use the ITC for monetary gain. Those changes should be made now before any more damage is done. There are bigger fish to fry.
Under our current law, federal charges can be brought for arson when a person willfully and maliciously sets fire to a building, structure or vessel. Federal bank robbery charges must include evidence that a person, by force or intimidation, takes or attempts to take something of value belonging to a bank, credit union, or any savings and loan association. And if a new bipartisan bill from two senators were to be enacted, a prima facie case for “unfair or deceptive” conduct would require the government to show that a person…filed for a patent.
Yes, we’ve somehow reached the point where inventing something is only OK if you don’t plan to protect that invention with a patent. Maybe the next step will be to outlaw invention altogether, but I suppose we can be thankful we’re not there yet. For now, Senators John Cornyn (R-TX) and Richard Blumenthal (D-CT) have proposed a new law where if you have discovered a way to help some sick patients and then invest capital in new research that may have the effect of helping additional sick patients, you are presumed liable under the antitrust laws if that new investment leads to a patentable invention.
To ground us in reality — sometimes you have a medicine that helps a group of people get better. In those cases, it should not only be legal, it should be encouraged to pursue additional research to see if that medicine can be improved further, or help people fight other diseases.
After making such an investment, can you hope to argue your way out against the government antitrust enforcers? Good luck with that, since you are starting with presumed guilt. But perhaps it would be wiser, before you undertake resource-intensive research, to check in with the newly installed innovation czars at the Federal Trade Commission. In this way, the FTC will decide who lives and who dies. It’s a reincarnation of the Obamacare death panels, only with FTC bureaucrats instead of bureaucrats appointed by the Department of Health and Human Services.
Companies would also be well advised to study what disease areas are most likely to elicit the sympathy or personal interest of FTC commissioners or their immediate family members and tailor their R&D budgets accordingly. If your research turns out to be insufficient to meet the FTC standards for a substantial benefit, you may not only have wasted your money, you may have committed an antitrust violation.
But what about the Constitution? Well you see, our nation’s founding fathers clearly were unaware of the all-knowing powers of the Federal Trade Commission when they specified a right to one’s own inventions (your Intellectual Property) as the only individual right described in the text of the Constitution. And the icing on this big-government cake is that the FTC can bring this new charge in their kangaroo court of FTC administrative litigation, where the FTC acts as prosecutor, judge and jury.
This bill claims to be about prescription affordability (it is titled the Affordable Prescriptions for Patients Act, or APP Act), but nothing in it makes prescriptions more affordable. The most likely direct effect on pricing will be the cost of parking near the FTC, while diminishing the property rights of American innovators. Antitrust lawyers will certainly derive some benefit, but that could increase their hourly rates if demand for their services goes up. So maybe the APP acronym is really for the Antitrust Practitioners Paradise created by this legislation.
To show support for the promotion and protection of intellectual property rights, the National Center has joined with over 50 organizations in a coalition letter to Congress. This letter lays out the importance of IP in creating American opportunity and competitiveness.
By sharing this set of guidelines and beliefs with lawmakers, the coalition hopes to encourage Congress to show respect and vigilance for this important part of the nation’s economic engine.
In addition to the National Center, other free-market organizations that signed the letter include the American Legislative Exchange Council, Americans for Tax Reform, Frontiers of Freedom and Independent Women’s Voice. Jesse Jackson’s Operation PUSH Coalition has also signed on.
Addressed to the entire 116th Congress, the letter notes that the U.S. Constitution addresses the need to protect intellectual property in Article I, Section 8. This proves the Founding Fathers’ recognition that “the best way to encourage creation and Continue reading
Today Americans for Tax Reform, along with a number of center-right organizations, sent a letter to members of the House of Representatives in support of the Music Modernization Act, which will update copyright law benefiting America’s creative community.
The Music Modernization act ensures that music creators get paid for their work, and makes it easier for streaming services to find and compensate artists. The Act will also create protections for sound recordings that were made before 1972 that currently do not have federal copyright protection. This helps the creators of these works receive long overdue royalties.
Congressman Doug Collins (R-GA) introduced the Music Modernization Act in December. The Bill is pending in the House Committee on the Judiciary. Continue reading
by Bill Gertz • Washington Free Beacon
China’s Communist Party recently authorized an aggressive program of stealing U.S. science and technology information by recruiting Americans in the tech sector with access to trade secrets, according to an internal Party directive.
The directive outlines a secret program authorized by the general office of the Communist Party of China (CCP) Central Committee of stepped up technology collection beginning in late 2016 and carried out by an intelligence unit called the United Front Work Department.
The document is an approval order from the Central Committee for a “working plan on strengthening the intensity of United Front Work in the area of science and technology of the United States in 2017.”
“The united front work targeted on the areas of science and technology of the United States is an important measure of our party to deeply divide western hostile forces, to maintain social stability, to ensure national security, to comprehensively advance the rapid development of our own science and technology and economy, to accelerate the construction of national defense modernization, and to consolidate the overseas united front,” the document states. Continue reading
December 18th, 2017
The Honorable Robert E. Lighthizer
Office of the U.S. Trade Representative
Executive Office of the President
600 17th Street, N.W.
Washington, D.C. 20006
Dear Ambassador Lighthizer,
“Intellectual property is a driving force in today’s global economy of constant innovation. It is the wellspring of American economic growth and job creation. With the rise of the digital economy, it has become even more critical that we protect intellectual property rights and preserve freedom of contract rather than create regulatory barriers to creativity, growth, and innovation. …We call for strong action by Congress and a new Republican president to enforce intellectual property laws against all infringers, whether foreign or domestic.” Continue reading
Washington D.C. – Yesterday, a broad coalition of free-market and center-right organizations released a statement regarding a pending decision of Korea’s Seoul High Court, Korea’s court of last resort. The decision will be whether to stay the Korea Fair Trade Commission’s (KFTC’s) overbroad ruling against Qualcomm, Inc., the aggrieved party in the proceeding.
Below is the statement released by the coalition:
“We are troubled by the prospect that the Seoul High Court might fail to stay the KFTC’s grossly overbroad extraterritorial remedies against Qualcomm. Such a ruling by the Court would explicitly condone the KFTC’s intrusion upon U.S. sovereignty, resulting in far-reaching implications harmful to free trade, the United States economy, and intellectual property as a whole.
Earlier this year, the KFTC took the extraordinary step of seeking to impose a one-size-fits-all approach to how patents around the world are licensed. This unprecedented remedy is a bald-faced attempt to slash the value of a U.S. company’s global patent portfolio and shield Korean domestic companies from American competition.
“The KFTC’s extraterritorial remedies go well beyond protecting Korean consumers and purport to dictate the terms upon which a U.S. company can license its intellectual property—even well outside Korea’s borders. Such remedies result in a major transfer of patented technology from U.S. to Korean companies, severely undermining U.S. leadership in innovation and economic growth. This will adversely impact every company in the United States that holds a patent of any kind.
“As the U.S. embarks upon a review of its trade and investment relationship with Korea, we urge the Trump Administration to demand assurances from the highest levels of the Korean government that all U.S. companies will be protected from the KFTC’s extraterritorial overreach. Anything less is a direct attack on our economy, our intellectual property, and our sovereignty.” Continue reading
A Chinese company, Ant Financial, largely owned by the government of China, is intent on taking over MoneyGram, a leading US-based financial payments company. This planned acquisition raises serious questions as to whether ownership of MoneyGram would be part of China’s strategic plan to obtain sensitive personal and financial information of Americans and westerners worldwide as well as to undermine American economic strength. This acquisition should be stopped for that reason.
The Committee on Foreign Investment in the United States (CFIUS) exists to review the national security implications of foreign investments in US companies. CFIUS is comprised of representatives from a number of US agencies or departments — including the Departments of Defense, Homeland Security, State and Commerce. CFIUS can block foreign sales and investments that would result in a foreign power acquiring assets and intellectual property that would harm America’s national security.
There are a number of important national security and strategic reasons that CFIUS should reject Ant Financial’s proposed takeover of MoneyGram. Continue reading
Frontiers of Freedom President, George Landrith, released the following statement on the Register of Copyrights Selection and Accountability Act:
“Frontiers of Freedom applauds the introduction of the Register of Copyrights Selection and Accountability Act. This legislation — which has strong bipartisan support in both the House and Senate — is an important, positive and necessary first step towards a more effective and modernized US Copyright Office.”
“As it is currently organized, the Copyright Office structure is more than 120 years old and designed for a time when intellectual property rights were just beginning to be widely recognized as an important economic driver. Now, copyright dependent industries account for 5.5 million jobs and contribute more than $1.2 trillion to GDP. The time for modernization is now. This legislation begins that important process.”
“This legislation provides that the head of the US Copyright Office, known as the Register of Copyrights would not merely be a staff position at the Library of Congress, but rather would be nominated by the President of the United States and confirmed by the US Senate, thereby elevating the Register to better reflect important economic sector the Office administers
“This is an important and needed first step to make the US Copyright Office work more effectively. America has led the world in creativity and innovation. That has fueled our economic health and strength. Moving forward, intellectual property will play an even bigger role in our economy and it makes sense that the Copyright Office should be prepared to facilitate that growth. A predicate to the continued success of the creative economy is an independent Register who understands and appreciates the importance of intellectual property in a vibrant, modern economy. It also ensures that the Register is accountable to the People through their elected representatives.”
“This legislation begins this important modernization process and is supported by leaders in both political parties and in both houses precisely because it is clearly what is needed to strengthen our creative and innovative economy.”
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