Biden's March-In Rights Proposal Risks CHIPS Investments

Did you know that universities create, on average, three new start-ups that produce two new products every day? This collaboration between private businesses and public universities has made the U.S. the unquestioned leader in a variety of technological sectors and has generated unparalleled economic growth and prosperity, bolstering U.S. economic output by up to $1.9 trillion.

Two years ago, Congress enacted the CHIPS and Science Act, landmark bipartisan legislation supported by the Chamber and the broader business community. This legislation invests $53 billion in America’s semiconductor industry, strengthens supply chains, enhances domestic research and development (R&D) capabilities, and bolsters national security.

While much of the public reporting on CHIPS and Science Act investments has been on semiconductor manufacturing, the legislation also makes enormous investments in next-generation semiconductor technologies and lays the foundation for America’s science agencies, the National Science Foundation (NSF) and the National Institute of Standards and Technology (NIST), to strategically invest in other critical innovations of the future such as advanced communications, AI, and quantum. 

While the U.S. government is making great strides to advance these investments, other parts of the Administration are inadvertently undermining it through the threat of intellectual property confiscation.

Standing Against Property Confiscation

Standing Against Property Confiscation

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Creating a Collaborative Ecosystem of Public and Private Sector Partners

The university tech transfer ecosystem is critical to the success of the collaborative R&D investments the Administration is imagining and the public wants. This ecosystem is governed by the Bayh-Dole Act, which, at its core, serves as a legal framework for the world’s greatest collaboration engine. Before the Bayh-Dole Act, almost all federally funded discoveries sat on the proverbial shelf collecting dust. This landmark law facilitates the partnership of universities and other nonprofit organizations by allowing them to license innovations to the private sector.

Success of CHIPS and Science R&D Programs Requires Public-Private Partnerships

Government funding alone is insufficient to create new innovations. Instead, the private sector will need to partner with federal, state, and local governments to effectively deploy the infrastructure and capabilities necessary to create new products and services. Innovation is not and never has been a government research lab; instead, it’s an ecosystem composed of public and private actors working together to leverage their unique strengths, resources, and talents to invent the products and technologies of the future.

The Threat of Intellectual Property Confiscation

Unfortunately, the Administration's proposal to seize the property of private companies could be used in the future to limit the success of programs like the CHIPS and Science Act’s R&D efforts. Under the Administration’s property confiscation proposal, unelected, unaccountable bureaucrats in government will be allowed to seize a company’s intellectual property if they decide, for whatever reason is politically popular at the time, that they do not like how a company is using that property. This radical policy upends more than 40 years of bipartisan precedent and is discouraging private businesses from entering partnerships with entities that receive federal funding.

Bottom Line

The Administration’s goal to invest in innovation across the country is admirable, and one that any American who is excited about the technologies of the future should support. That success, however, depends on robust engagement and partnership with private businesses that bring all the strengths of our free enterprise system to the table. The Administration must signal to the private sector that their partnership — and investments — will be secure and protected. To achieve this, the Administration must withdraw its march-in proposal and reaffirm support for the legal frameworks that have enabled the U.S. to become the world’s innovation leader.

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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Matt Furlow

Matt is the Senior Director and Policy Counsel for the Chamber's Center for Technology Engagement Center.