Biden Executive Order’s Approach to SEPs Sells Out American Small Businesses and Innovators

By Arvin Patel
August 15, 2021

“There is a critical balance that must be struck when it comes to SEPs. Unfortunately, the Biden administration seems intent on putting its thumb on the scale in favor of giant manufacturers over innovators.”

https://depositphotos.com/6496641/stock-photo-looking-at-the-opinion-section.htmlPresident Joe Biden’s recent executive order was billed as “promoting competition in the American economy,” but is a prime example of why one should always read the fine print.

Rather than boosting the technology and innovations that spur American competitiveness in the global marketplace, the Biden administration is pushing a directive that reinforces the dominance of technology giants like Apple and Google.

Part of the executive order addresses the complex but essential way we protect those who develop standard technology – such as the shared technologies that make mobile communication possible across multiple networks.

Standards enable critical technologies such as 5G, the Internet of Things, video transmission, artificial intelligence, and autonomous vehicles. Nations that develop these technologies and the standards they are based on will have a significant advantage in gaining the lead in the next industrial revolution.

Standard Essential Patents (SEPs) protect these technologies – and those who developed them. They are critical to encourage the private sector to invest the resources necessary to enable innovation in these technologies. Without the private sector, the United States will fall behind China and other emerging economies.

There is a critical balance that must be struck when it comes to SEPs. Unfortunately, the Biden administration seems intent on putting its thumb on the scale in favor of giant manufacturers over innovators. Buried deep within the Biden administration’s recent executive order are instructions for the Attorney General and the Secretary of Commerce to examine weakening existing protections for SEPs  – a huge blow for competitiveness, and massive windfall for global technology companies. Specifically, the Order contemplates revising the current position “on the intersection of the intellectual property and antitrust laws, including by considering whether to revise the Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments issued jointly by the Department of Justice, the United States Patent and Trademark Office, and the National Institute of Standards and Technology on December 19, 2019.”

This approach has been tried before. The Obama/Biden administration instituted policies that weakened the value of SEPs, arguably contributing to America’s position behind China and Europe in the race to 5G. These policies were reversed in 2019 in a move that was greeted positively by many Democrats and Republicans who understood the importance of incentivizing innovation.

Protecting SEPs also helps protect the big ideas that often come from smaller developers trying to compete with the established giants. Without reliable patent protection, it is very difficult for innovative small and medium enterprises to take on the corporate giants that can run them out of business by simply copying their inventions and then outcompeting through sheer size. This is precisely how Big Tech became so big.

When standards patents are weakened, it is the organizations that use them for their own manufacturing who benefit the most, like Google, Apple, and Samsung. These companies can and should be paying fair value for the innovations they utilize but did not develop. With weaker patents, these corporate giants will pay less, or perhaps nothing. In turn, startups and other innovators will be unable to compete and Big Tech companies will only grow larger. This has been the trend for years, and this latest executive order helps to solidify it.

President Biden’s drive to help Big Tech comes at a critical moment. With plans such as “Made in China 2025,” China has made it known that it is seeking to control the key technologies of the future, underscoring the need for the United States to accelerate technology development and incentivize more private sector investment in R&D and innovation. The Biden administration talks constantly about the need for this, and about taking on Big Tech, yet they are doing the exact opposite with their approach to patents.

As 5G networks and infrastructure continues to be developed and deployed, the United States is now at greater risk of falling behind relative to other countries. It is the most advanced, affordable innovations that rightfully become part of the standard technology, and innovators in other countries will soon have greater incentives to develop them.

Since our founding, American innovators have been critical to the U.S. economy and its competitiveness. But instead of protecting these critical national resources, the Biden administration is now selling them out.

Image Source: Deposit Photos
Image ID: 6496641
Copyright: stuartmiles

The Author

Arvin Patel

Arvin Patel is Chief Operating Officer of Intellectual Ventures’ Invention Investment Fund and an inventor and leading voice on entertainment innovation and policy. Patel has overseen R&D and IP for some of the world’s leading companies, driving technology investments, and creating non-traditional strategies to develop products and services.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 12 Comments comments. Join the discussion.

  1. Anon August 15, 2021 2:43 pm

    1984

  2. Pro Say August 15, 2021 7:56 pm

    “Executive Order on Promoting Competition in the American Economy”

    Reminds one of that old adage that the headline giveth . . . and the fine print taketh away.

    1984 is alive and well in the “we secretly love Big Tech” Biden administration.

  3. CharlieSeattle August 15, 2021 10:35 pm

    …thumb on the scales??

    The CCP, Wall Street, The US ?hamber Of ?ommerce and ?orporate Ameri?a bribed ?ongress to write the laws that made it legal to screw over America and allow the greatest transfer of jobs, wealth and intellectual property in modern history to an avowed enemy, Communist China, making them the threat they are today.

    ?ongress and ?orporate America are the real enemy!

  4. Anon August 16, 2021 8:54 am

    As they say, politics makes strange bedfellows.

    (hint: follow the money)

  5. PTO-indentured August 16, 2021 11:49 am

    Caring enough — to lead the very least

    How the US PTO becomes in-effect the China PTO — easily within a few years.

    Simply because we continue to have decision-makers (including courts at all levels) gaga over a mere handful of oligarchs — thought to be US companies, who in reality are multinational corporations owing little to no loyalties to our nation.

    What better reason to further imperil American small businesses and innovators.

    (hint: follow the money i.e., who profits — exclusively)

  6. Steve Sheldon August 16, 2021 12:37 pm

    Unsurprising that one of the biggest NPEs in the business is against change that would prevent parties that make RAND promises and then not following through on those promises. Fixing that issue does nothing to impact innovation or small companies, it merely makes it more difficult for NPEs to unfairly extract revenue from companies that actually create something for society, namely goods and services that are desired and purchased by society. This is something that hits smaller companies especially hard so any suggestion that having laws the protect NPEs is good for small businesses is laughable. It could be argued, probably successfully, that from a pure economic basis there is no value for society in allowing NPEs the ability to prosecute patent lawsuits at all so anything that helps reduce the NPE tax is a positive change for all business but especially small businesses.

  7. Anthony Ghosn August 16, 2021 1:55 pm

    This appears to me as another purposeful underminning tactic against the innovative climate here in the US. The centerist Democrats and centrist Republicans need to band together regarding foundational issues like Standard Esscential Patents and other matters of equal weight and importance.

  8. PTO-indentured August 17, 2021 10:17 am

    Sheldon @6

    So if irrationally feared ‘NPEs’ invent things that are clearly an improvement over — or dare we say, even ‘disruptively’ advance the fields of their inventions — and do so in a way the entire brain trust of any or all monolithic corporations combined have been unable to do, then we must presume the following illogical non-sequiturs:

    “from a pure economic basis there is no value for society in allowing NPEs the ability to prosecute patent lawsuits at all so anything that helps reduce the NPE tax is a positive change for all business but especially small businesses.”

    “This is something that hits smaller companies especially hard so any suggestion that having laws the protect NPEs is good for small businesses is laughable.”

    Just exactly what is your understanding of an NPE?

    And, to NPEs (and their investors) in the meantime: the beatings will continue until your — no incentives-to-you — morale improves. Eat efficient infringement to survive.

  9. Shawn Ambwani August 18, 2021 5:20 am

    I think NPEs are perfectly fine if they are either asserting valid patents or innovating in a way which benefits society. Problem is no one can define innovation. I can pretty well define an NPE. You can’t say one is an innovator and one is not if there is no common understanding on it.

  10. PTO-indentured August 18, 2021 10:05 am

    No one can define innovation? A ‘common understanding’ (inclusive of a practical one) certainly would not rule out innovation including: invented things that are clearly an improvement over — or dare we say, even ‘disruptively’ advance the fields of their inventions — and do so in a way the entire brain trust of any or all monolithic corporations combined have been unable to do.

    And YES, NPEs can do this, are and have been doing this, and can continue doing this — in spades — particularly where Big Corps fail to do so over and over again.

    The real problem, our decision-makers congress, and courts at all levels — in whose hands the fate of US innovation lies — are so gaga over a paltry few oligarch multinational companies they think are innovators (versus incrementalists), that they no longer can see the forest for the trees. Practical discernment ‘has left the building’ — and in its stead — a recognition of US innovation, however evident, remains a mirage.

  11. Anon August 18, 2021 1:15 pm

    Patents are MEANT to be fully alienable property, and as such, the holder of the property has ZERO to do with anything.

    Way back when (when the “Oh Noes Trolls” mantra was at its initial manic height), the 271 Blog undertook a study of the so called ‘bad patents’ of Trolls and found that the actual facts of the matter were opposite the propaganda – that trolls actually had higher quality patent portfolios than non-trolls because of the vetting action of trolls in purchasing the property.

    Be aware of – and beware of – the unremitting “Trolls” propaganda.

  12. Jacek August 31, 2021 3:33 pm

    Is owning property in the U.S. a crime?
    Unless you have preferred skin color/pardon Unless you are from a preferred group of owners?
    New kind of economic racism where the BAD owner is when they come from a new class of undesirables (NPE)?
    Is a dollar in my hand less valuable because I do not fit the preffered description of an outstanding citizen?
    Like in India, propaganda of BIG TECH created a class of undesirables (NPE) who can be lawfully robbed by more outstanding citizens (Google, Facebook, etc.)?
    THEY ARE LEGAL ENTITIES. Not a Mob underground organization. The mob is actually BIG TECH undermining the future of this country.

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