“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.”
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.
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