Posts Tagged: "R&D"

The U.S. Chamber of Commerce released a report today predicting that proposals by the Biden Administration to impose price controls on certain pharmaceuticals will reduce the number of clinical trials “by thousands across all categories of research examined and by up to 75% in some therapeutic areas,” eventually turning the United States into a “research desert.” The report comes on the heels of a Federal Register Notice last week that proposed a framework for expanding the use of march-in rights under the Bayh-Dole Act to circumstances in which qualifying drugs are priced too high.

I was not even aware of the issue below until a CPA friend of mine happened to mention it during a friendly telephone call. But unless Section 174 of the Internal Revenue Code is restored to its previous state from prior to the 2017 Trump tax cuts, U.S. innovation will be greatly impacted. Section 174 of the Internal Revenue Code has been around since 1954. It was enacted to eliminate uncertainty in the treatment of research and development (R&D) expenditures and to encourage businesses to carry on research and experimentation.

Yesterday, the United States Patent and Trademark Office (USPTO) held a “public listening session” to hear from industry leaders on the topic of standard essential patents. The event was specifically related to the USPTO’s effort to obtain stakeholder input on questions regarding proposed international standards that were presented in a recent Federal Register Notice, as well as strategies identified in the White House’s National Standards Strategy for Critical and Emerging Technologies.

Everyone’s talking about artificial intelligence (AI), but not everyone’s talking about it the same way. The tenor of the global conversation on AI ranges from dystopian fearmongering to evangelistic optimism. It’s vital to know the prevailing mood in the territory where you plan to launch your AI-powered service, app, or consultancy. In this article, we’ll briefly tour recent legislation, ethical conversations, and economic strategies to demonstrate how varied current thinking is on this revolutionary new technology. We’ll look at the current situation in the United States, Canada, Europe, China, Japan and beyond, as countries develop the policies, guidelines and laws necessary to regulate AI innovation without stifling creativity.

Today, the Information Technology & Innovation Foundation (ITIF) published a white paper titled Innovation Wars: How China Is Gaining on the United States in Corporate R&D showing that, while the United States continues to enjoy a lead in several key sectors when surveying the world’s largest corporate investors in research and development (R&D), its largest economic rival is gaining and could achieve parity with the U.S. in about a decade.

Although the mining and metallurgical sectors are still seen as environmentally unfriendly industries, innovation in these sectors has been increasing since the beginning of the century, including in the development of green technologies. Four years ago, the World Intellectual Property Organization (WIPO) released a study measuring innovation in the mining industry with patents, “Mining patent data: Measuring innovation in the mining industry with patents”, showing a sharp increase in the number of correlated patent applications since 2005, which is a clear sign of the growth in investments in R&D and innovation made by these industries.

On January 23, the Information Technology & Innovation Foundation (ITIF) published a report entitled Wake Up, America: China is Overtaking the United States in Innovation Output, which applies innovation and industrial performance metrics for comparing relative innovation outputs from foreign technological rivals China and the United States. The report, produced by ITIF’s Hamilton Center on Industrial Strategy, is the latest indicator that China is close to surpassing the United States in terms of innovation output per capita and calls upon U.S. policymakers to develop a national economic and technology policy to restore U.S. dominance in innovation.

AUTM, which represents the academic technology management profession, just released the results of the survey of its members for 2021. Once again, the results are impressive, particularly considering that the U.S. economy was just beginning to emerge from the devastating effects of the COVID-19 pandemic…. It’s clear that despite continual attacks on the Bayh-Dole system, which allows academic institutions to own and manage federally funded inventions without Washington micro-management, our system keeps truckin’ right along, year after year, leading the world.

The muddled state of patent eligibility law has direct and significant negative consequences for U.S. R&D investment, and for innovation in key fields of medical, economic, and strategic importance to the United States and its citizens. Uncertainty reduces R&D investment, as has been well-documented, and reliable patent protection mitigates uncertainty and generates increased R&D investment. As we explained in Part I of this series, the experts overwhelmingly agree on these points.

On August 9, President Joe Biden signed into law the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act, enacting a major legislative package that will provide $280 billion in federal funding to encourage the domestic production of semiconductor products in the United States as well as fund research and development projects in advanced technological fields like quantum computing and artificial intelligence. Although the 1,000+ page bill establishes massive investments into several areas of developing technologies, it focuses very little on the intellectual property rights that are critical for protecting the new technologies that would be developed through federally funded projects.

How about some good economic news? That’s in short supply these days as the nation teeters on the brink of recession, driven by raging inflation and skyrocketing gas prices. But in good times and bad, our technology transfer system created by the Bayh-Dole Act just keeps chugging along. A just released study by the Biotechnology Innovation Organization (BIO) and AUTM, which represents the academic technology management profession, shows that academic patent licensing contributed up to $1.9 trillion to the U.S. economy while supporting 6.5 million jobs between 1996 – 2020. Even more impressively, this impact increased substantially since the last survey was released three years ago. That showed an economic impact of $1.7 trillion with 5.9 million jobs supported.

You might think the last thing the President needs as his poll numbers are plunging is pressure to make an unforced blunder crippling U.S. innovation. Under the pretext of expanding U.S. manufacturing capability, some are pushing a provision to a pending Executive Order on manufacturing allowing the bureaucracy to micromanage our technology transfer system. That’s already happened at the Department of Energy (DOE), and the disastrous consequences are just becoming apparent. This is being sold as a way of increasing domestic manufacturing capacity, which is rightly a priority of President Biden. But extending a flawed idea across all R&D agencies undermines the public/private R&D partnerships which restored our technological leadership—without doing a thing to broaden our manufacturing base.

On February 4, the U.S. House of Representatives passed a major piece of legislation known as the America Creating Opportunities for Manufacturing, Pre-Eminence in Technology, and Economic Strength (COMPETES) Act of 2022, which is the House’s counterpart to the U.S. Senate’s United States Innovation and Competition Act of 2021. While both bills are designed to improve America’s competitiveness in several key technology areas over foreign economic rivals, especially China, some IP advocates are pointing out that the bill provides little more than lip service on protecting American IP rights against Chinese infringers.