Posts Tagged: "innovation policy"

Certain innovations—known as enabling technologies—provide the foundation for progress across a range of industries. Enabling technologies include mobile wireless, the laser, CT scanners, the microprocessor, artificial intelligence, and freight containerization. Such technologies drive wealth creation throughout the economy. However, the difficulties associated with monetizing this type of IP, which I explore in this article, mean that private enterprise tends to underinvest in new enabling technologies. Public policy needs to be more supportive, and firms need to be willing to support more blue-sky projects. As a nation, we are harvesting the fruits of old enabling technologies without investing sufficiently in new ones. We are eating our seed corn.

Assuming America wants paradigm-shifting, truly disruptive innovation we need to recognize the need to incentivize the risk-takers and those that provide the capital to those risk-takers who dare to challenge the status quo. This means policies, laws and rules that foster innovative activities from smaller entities who are most likely to innovate. With an eye toward policies, laws, rules and actions that would most benefit innovators, their endeavors more attractive to investors and more feasible to pursue, the U.S. should adopt policies, laws, rules and actions including…

The myopia associated with chasing quarterly earnings isn’t the only short-sighted predilection giant tech companies display. Affirmatively weakening the patent system in order to avoid upstart competitors who are lean, full of ideas, and willing to take risks to succeed is not just myopic, it is plain stupid. Sure, copying the work of others today may make business sense when trying to beat or meet earnings expectations, but expecting others to continue to invest, innovate and take risks when what they produce is simply copied is naïve to the extreme.

In the absence of a discernable IP policy, America achieved leadership through laws and courts that supported inventors, and commerce, and that encouraged risk-taking. But the world is now flatter than we could have imagined. If America hopes to remain at the innovation forefront, it needs to rely not only on the ingenuity of its inventors and creators, but on the leadership and vision of government and businesses… Despite the incredible success of several Internet companies — and, some believe, because of it — U.S. IP dominance is in quantifiable decline. Compounding the problem is China, which is now able and willing to fill the void. It has been widely reported that China is a better place than the U.S. and most other nations to obtain patent injunctions and receive a fair hearing in court. Despite this, many U.S. businesses and consumers, impatient with IP rights and cavalier about the impact of IP theft, have come to act with much same attitude the Chinese did before they learned better.

For a many years, the pied pipers of the anti-patent lobby whistled the patent troll melody and Congress, desperately in need of a glorious bipartisan victory, pushed and ultimately passed inventor killing legislation… For whatever reason, 2016 represented the year that Congress itself, or at least enough Members of Congress, got serious about considering the negative effects of pandering to the anti-patent lobby. Those effects are now clear and the stage is set to turn it back. Of course, we can anticipate there will be new pushes for patent reform in 2017 and beyond. Perhaps some of those attempts at patent reform will be from the pro-patent side, but we need to remain vigilant because the anti-patent lobby has not and will not go away.

By outsourcing manufacturing to the lowest bidder abroad not only have we destroyed the working middle class in America, but also we are also increasingly turning over our last economic advantage – our intellectual property… While there is nothing wrong with negotiating better, smarter trade deals, what America really needs is smarter manufacturing policies. After all, what exactly are better, smarter negotiators going to do if the United States remains an inhospitable climate for business, with extraordinarily high tax rates, unreasonable environmental regulations and loopholes that only the richest corporations can take advantage of? How could we ever reclaim widespread manufacturing in the United States if the deck is stacked against the industry?

Congressman Pence worked mostly on patent reform bills via the Republican Study Committee, a well-known group of House Republicans focused on inserting conservative views into public policy including respect for the Constitution and private property rights… During the time Pence served as Governor of Indiana, Purdue University soared to a record numbers of new patents, record numbers of technology licenses and record numbers of start ups based on Purdue University innovations… In July, Governor Pence signed an Executive Order establishing the Indiana Economic Development Corporation as the entity that will coordinate all efforts on behalf of the State of Indiana to accelerate innovation and entrepreneurship. Perhaps most interesting, the Order specifically acknowledges that increased innovation helps make communities more vibrant and spurs economic growth, higher wages and job creation.

In the past decade, economic growth, wage growth, business investment and productivity growth have declined dramatically. Economists have discovered that productivity growth alone explains the dramatic development of industrial economies. Yet, the causes of productivity growth are unclear, with capital, labor and technological contributions. My central thesis is that productivity growth is strongly correlated with a strong patent system. Consequently, I will show that the attack on patent rights starting about 2005 is correlated to the decline of productivity growth. The patent system is designed to induce business investment in technology R&D. In effect, the macroeconomic analysis of productivity growth rests on microeconomic phenomena of decisions made by entrepreneurs to risk capital on technology projects in the expectation of a reward.

Superbugs have powerful friends in high places. SCOTUS’s patent eligibility criteria emanating from Mayo/Alice’s mysterious “laws of nature” and credible reports of unremitting turndowns by USPTO applicants portend hard times commercializing much of this research, which means its development and testing may never make it to licensed distribution. In Congress, deficit scolds roll back much needed NIH funding while solons clamor for more military weapons that have long outlived their usefulness. Even sexy pandemics like Ebola, Pan Asian Flu, and Zika and competing with Biden moonshots and precision medicine initiatives are forced to forage for the fiscal nourishment they need to compete and commercialize their critical research.

It is also important to recognize that the social, political and economic impact of strong protections for intellectual property cannot be overstated. In the social context, the incentive for disclosure and innovation is critical. Solutions for sustainability and climate change (whether natural, man-made or mutually/marginally intertwined) rely upon this premise. Likewise, as we are on the precipice of the ultimate convergence in technologies from the hi-tech digital world and life sciences space, capturing the ability to cure many diseases and fatal illnesses and providing the true promise of extended longevity in good health and well-being, that is meaningful, productive, and purposeful; this incentive must be preserved.

Clinton’s proposal for accomplishing this goal would be twofold: (1) to reduce excessive patent litigation through additional patent reform; and (2) strengthening the operational capacity of the USPTO by allowing the USPTO to keep and spend all the fees it collects. “You are looking at a 14-page detailed document. There is a lot of thought put behind this agenda,” explained Todd Dickinson, former Director of the United States Patent and Trademark Office under President Bill Clinton who was reached by telephone for comment. Not surprisingly, Dickinson has has been an advisor to the campaign regarding intellectual property matters. “Other campaigns will be hard pressed to match the depth and thoughtfulness of these proposals.”

We’re in the business of transforming early stage, publicly funded research into useful products. The odds against success are long as commercialization requires years of hard work, a lot of money and some luck. We’d like to think that this effort is universally appreciated. Many in this profession ignore the public policy debates swirling around, thinking that no one will believe our critics or that someone else will defeat them. That’s a serious mistake.