The Biden administration has unveiled a radical proposal to reshape the underpinnings of America’s innovation economy.
Through the lure of federal research dollars and a sweeping reinterpretation of a 44-year-old bipartisan law, the forces of the ideological left within the administration seek to impose price controls throughout the American economy, effectively holding private industry hostage to its demands.
At the center of this power grab is a provision of the Bayh-Dole Act of 1980, pioneering legislation widely credited with launching the modern American innovation economy. Bayh-Dole ingeniously aligned the private-sector profit motive with the public good by allowing universities and small businesses to own and license patents emerging from federally funded research.
The act’s design trusted decentralized markets — not central planners — to transform patented discoveries into beneficial products. This incentive-based structure catalyzed America’s scientific leadership and directly sparked bold innovations in fields as disparate as computing and agriculture to medicine and transportation.
The provision of Bayh-Dole that progressive activists have long sought to wield as a cudgel against private industry is known as ‘march-in’ authority, which allows the government to take over a patented product if one of four narrow triggers is met. Legislators included it as a stopgap to deter anyone from acting on the hypothetical impulse of acquiring a patent in order to prevent it from being developed into a product.
This hypothetical has never materialized, so the government has never once marched in.
This is not surprising. Companies will commercialize patented products or license other companies to do so if there is money to be made. This fundamental principle of capitalism is somehow lost on the Biden administration, which now wants to seize patents if the price of a product is ‘unreasonable,’ whatever that means.
But Bayh-Dole has no trigger that is even remotely related to a product’s price. Nor has any administration, Democrat or Republican, since the statute passed 44 years ago ever interpreted it to include a bureaucrat’s judgment that a product costs too much.
Until now.
In a bizarre and lawless document that seems to reflect the far-left’s capture of the Biden administration, the White House unveiled in December a proposal to use the threat of march-in to dictate prices on any product derived from federally funded research.
The door would be open for bureaucrats to seize patents and ruin entire businesses if they disagree with the market price of anything, from microchips and surgical devices to implantable biomaterial and agricultural technologies.
By proposing something so radical, the Biden White House has gone public with a road map allowing de facto nationalization of all discoveries arising from federally funded research institutions, many of which emerge from the nation’s leading universities. The administration envisions scrutinizing licensing agreements through a political lens, micromanaging the economy under the guise of assessing the ‘fairness’ of prices.
No field escapes unscathed. In one scenario within the guidance, administrators suggest that insufficient market availability of vehicle safety communication devices warrants seizing patents and taking over the business. The guidance has no limiting principle and would apply even if the government invested a dollar while private industry invested millions on an invention.
In defending the draft guidance, Biden’s Federal Trade Commission egregiously mischaracterizes the Bayh-Dole Act as a ‘statute designed to safeguard public health needs against patent holders’ private interests.’ This distortion wrongly implies that private interests are inherently contrary to public ones.
Government takeover of private industry, in the name of protecting public need, is un-American and strains far from our founding principles: the Federalist Papers recognized that for both patents and copyrights, ‘The public good fully coincides in both cases with the claims of individuals.’
Americans have always known that private incentive aligns with public good. The administration would upend this fundamental principle.
The door would be open for bureaucrats to seize patents and ruin entire businesses if they disagree with the market price of anything, from microchips and surgical devices to implantable biomaterial and agricultural technologies.
The true scope of the administration’s gambit goes beyond even economics. Property rights become a pawn the progressive left is happy to sacrifice to advance its sweeping agenda. One group writing in support of the proposal urges that in assessing a march-in petition, bureaucrats analyze a company’s commitment to collective bargaining and diversity quotas.