American Innovation at Risk: The Administration's Confiscation Proposal

The United States is the undeniable leader in turning ideas into products that drive progress and change the world. But a pending proposal from the Biden administration will allow the federal government to confiscate private property of American companies, contaminating the innovation well and striking down the ability to address the nation’s most pressing challenges.

From Mind to Market: The American Way

Thanks to the Bayh-Dole Act, the American innovation ecosystem is one of the most collaborative in the world. Under the Bayh-Dole Act, researchers at universities and other non-profit organizations can accept federal funding for early-stage research into a promising idea; then, if the early-stage research can be leveraged into something novel, like a new technology or medicine, the researchers can patent their discovery and license the rights to themselves or another entrepreneur or company to continue development. The early-stage research funded by the government, although typically small in comparison to later private investments, has worked in conjunction with the creativity and financial contributions of the private sector to produce tens of thousands of products that have transformed and saved lives.

The Economic Impact of Public-Private Partnerships

Manufacturers of a wide range of innovations—from clean energy solutions to next-generation semiconductors—rely on strong public-private partnerships to bring their products to market. Bayh-Dole has enabled the technology we use to remove ammonia from our drinking water, make car wheels more lightweight, create touch-screen technology, and even engineer Honeycrisp apples. It’s therefore no surprise that Bayh-Dole has sustained more than 6 million jobs and added nearly $2 trillion to the U.S. GDP since its passing more than 40 years ago.

The Threat of Innovation Stagnation

A new Biden administration proposal would subject all these Bayh-Dole innovations and countless more to the arbitrary threat of property confiscation. Essentially, if this proposal is enacted and the government deems a product too costly, it could confiscate the patent and grant a license to a competitor. Such a risk of property seizure would likely deter researchers from accepting federal funds, as the path to licensing and commercializing their work would become fraught with uncertainty. The threat of property confiscation will cause researchers to be hesitant to accept federal funding, knowing that their research will be difficult to license and commercialize. Worse still, those who do take the risk may struggle to attract private-sector partners, who are essential to advancing these discoveries to the next level. In short, this property confiscation proposal will cause the business of innovation to become untenable, jeopardizing America's position as a global leader.

The Cost of Curtailing Innovation: A Future of Missed Opportunities

The impact is easy to predict, and it’s completely devastating. Prior to Bayh-Dole, just 4 percent of the 28,000 patents that were partially funded by the federal government were licensed to the private sector and brought to market. If the Administration puts its “march-in” plan into action, energy solutions, telecommunications technology, and the next great supercomputer could join the 96 percent of promising ideas left behind in the laboratory. The result: research and manufacturing will dry up in the U.S. and show up at our competitors’ front doors.

The Bottom Line

The Biden Administration must withdraw its plan and recommit to protecting the intellectual property rights of researchers, universities, and American businesses. American researchers and manufacturers need confidence that the government will not confiscate their property. Otherwise, cutting-edge innovation won’t happen here, and Americans will be deprived of life-changing results.

About the authors

Brad Watts

Brad Watts is the Vice President for Patents and Innovation Policy at the U.S. Chamber of Commerce's Global Innovation Policy Center (GIPC). He works with U.S. Chamber members to foster a political, legal, and economic environment where innovators and creators can invest in the next big thing for the benefit of Americans and the world.

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