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Michel: China gets help from its friends – on the Supreme Court



China is overtaking America in a variety of high-tech industries — thanks to some inadvertent help from the U.S. Supreme Court.

According to a brand-new report from the Australian Strategic Policy Institute, the communist nation has outstripped America in 37 out of 44 key technologies, including advanced aircraft engines and hypersonics, 5G and 6G, and quantum communications.

This Chinese high-tech renaissance is no accident. It springs from the regime’s deliberate policy of incentivizing research and development, both through subsidies as well as extremely strong patent protections. In recent years, the Chinese government has greatly strengthened IP laws and established new IP courts and tribunals across major cities. Authorities tasked with patent-related disputes completed nearly 50,000 cases in 2021, up almost 20% from the year before.

With this robust patent system, China has seen an explosion of innovation. In 2021, Chinese researchers filed 1.59 million patent requests — more than twice the number of American filings, and nearly half the global total.

By contrast, America is weakening patent protections. The Supreme Court has steadily expanded the number of inventions that count as unpatentable “laws of nature, natural phenomena, and abstract ideas.” Many of these decisions have stymied crucial tech innovations.

In Mayo v. Prometheus, for instance, the Court classified certain diagnostic tests as unpatentable “laws of nature.” A similar ruling in Association for Molecular Pathology v. Myriad Genetics denied patents to genetically modified gene sequences.

Both decisions rocked the biotech industry. Mayo reduced venture capital investment for in vitro diagnostics technologies by about $9 billion over four years, according to one study.

Another study found that, in the wake of Mayo and Myriad, half of U.S. university technology-transfer offices surveyed had decided against developing molecular tests.

Artificial intelligence has taken a hit, too. In Alice Corp., the Supreme Court ruled that certain computer-implemented inventions, machines, and processes are “abstract ideas” — and, thus, ineligible for patenting.

The justices of the Supreme Court have good intentions. But they lack the training and expertise to craft U.S. innovation policy. That job belongs to elected officials in Congress and the White House.

Congress can start by passing Senator Thom Tillis’s (R-NC) Patent Eligibility Restoration Act, introduced in 2022. The bill would address problems with Mayo, Myriad, and Alice Corp. by ensuring it is possible to obtain patents for gene therapies and, potentially, AI.

Other measures fall to the executive branch. The Biden administration must uphold the original intent of the Bayh-Dole Act — which grants universities and small businesses IP rights to their inventions, even when they have accepted federal funding.

Since 1980, Bayh-Dole has facilitated more than 480,000 inventions, more than 117,000 patents, and more than 200 drugs and vaccines. Researchers have expended nearly $82 billion developing products as diverse as artificial lungs, Google’s search algorithm, and cellulosic ethanol.

But lawmakers and activists are urging Biden to weaken IP protections under Bayh-Dole. They want the administration to use the law’s “march-in provision” — which outlines cases when the government can relicense patents for federally-funded products — to forcibly crank down drug prices.

Biden has refused their request. It is crucial that he continue doing so. Stripping biotech firms of their patent rights would only drive the United States further from parity with China.

The administration should also defend IP protections at the World Trade Organization, which wants to waive patent protections on COVID-19 treatments and diagnostics. Member states — including China — would then be able to reproduce U.S. medical innovations without the developer’s permission.

The waiver would cripple America’s innovation system. It would teach drug developers that they cannot rely on the government to support patenting protections — and motivate them not to invest in lifesaving products. The United States needs more investment, not less.

China — along with the European Union, the United Kingdom, and Japan — have recently strengthened their patent laws. If we want to reclaim the mantle of the world’s tech leader, we will need to follow suit.

Paul Michel served on the United States Court of Appeals for the Federal Circuit from 1988 to his retirement in 2010, and as its chief judge from 2004 to 2010. He currently serves on the board of the Council for Innovation Promotion.

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