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  • Ashley N. Baker

Economic Competitiveness and the Defense of Intellectual Property

In an effort to address concerns surrounding the weakened state of patent holder rights, the regulatory state, and the future of the United States as leader in technological innovations, the Committee for Justice joined a group of organizations in publishing a memo encouraging lawmakers to take actions against threats to economic growth.

The memo reads as follows:

Over the last few decades, we have seen America lose its global status as a manufacturing powerhouse. Millions of jobs have moved to China, Mexico, India and elsewhere, turning too many American communities into ghost towns. Harmful regulatory policies, high corporate taxes, and trade cheating have all contributed to this harmful trend.

Not only have we ceded ground to much of the world on manufacturing, but harmful policies and an increased hostility to our nation’s Intellectual Property foundations have underminedAmerican leadership in innovation and technology. According to U.S. Chamber of Commerce’s International IP Index this year, the US has dropped from 1st to 10th place (tied with Hungary) in the protection of “patents, related rights and limitations.” This is the first year that the US had not been in first place in this annual index.

Patent protection was enshrined in our Constitution and has set us apart from the rest of the world in protecting property of all kinds. It is the main reason that the U.S. has led the world in innovation. But in recent years, a combination of bad legislation, troubling Supreme Court decisions, anti-patent rhetoric at all levels of our government have weakened the U.S. patent system — once the crown jewel of our economy. Many inventors and venture capitalists are now beginning to look at Germany, England — and even China — as better environments to protect their innovations.

We cannot afford to lose our role as the world’s innovator. This is particularly true because IP-intensive industries accounted for 38% of our GDP in 2014. President Reagan faced similar challenges after taking office. Then, America’s global economic leadership was threatened by Japan, so Reagan set up a high-level commission and advanced policies to bolster our industrial competitiveness. A blue-ribbon commission appointed by President Reagan found that “inadequate protection of intellectual property rights” was “among the reasons for [a] decline in the U.S. comparative advantage in high technology.”

In response, the administration took steps to strengthen our IP and patent protections, among other important steps. Partnered with pro-growth tax cuts and paring back needless regulation,the Reagan administration reversed much of the decline, and the U.S. continued its economic leadership in the high-tech space.

America now finds itself in a similar situation, and must once again act quickly to reverse the decline. While America then faced the challenge of Japan threatening our economic and innovation leadership, today we are being challenged by China and South Korea, among others.

The conservative movement stands resolute in calling for the implementation of an agenda to reverse our decline in industrial and innovative competitiveness. That agenda includes:

Tax cuts and reforms. The U.S. has one of the highest corporate taxes in the world and a tax system that is complex and burdensome. Cutting the corporate rate and simplifying the code will encourage more businesses to do business in the United States, allow the return of capital to the U.S., and spur economic growth.

Regulatory reform. Our economy has been burdened by over-regulation at every level,imposing costly mandates on businesses, consumers and entrepreneurs. The Trump administration has already begun to roll back many of these costly regulations, sending important signals to the markets and to entrepreneurs — and they must continue to do more. This is especially the case when it comes to the Consumer Financial ProtectionBureau (CFPB). Since its creation in 2010, the CFPB has used its far reaching and unchecked regulatory powers to levy billions of dollars in penalties against businesses.This has created further economic uncertainty as consumers have become saddled with higher costs and fewer choices when it comes to accessing financial products and services. Permanent regulatory rollback at the congressional level would bring even more certainty and confidence than executive orders (which can be reversed by future administrations).

Patent protection. The administration, Congress, and the courts need to take steps to reverse the declining protection of patents and the anti-patent rhetoric that has infected government at all levels. The administration needs to staff key agencies with individuals who understand the important role of patents, and stop administrative action that make it easier to invalidate them. The Patent Trial and Appeal Board (PTAB), for instance, is an administrative tribunal created after previous congressional reform and has been labeled a “patent death squad” with the sole purpose of invalidating patents. In addition, U.S.officials must stand strong against attempts by other nations to bolster their domestic companies by undermining the IP protection of U.S. companies. Congress needs to reject harmful legislation that would undermine patent rights and only push legislation that strengthens those rights. Finally, the courts must put an end to the hostile decisions that make it harder for innovators to protect their Constitutionally protected property rights.

Enforcing trade deals. While there are differing opinions on trade, we are united in the belief that the U.S. must stand up for the enforcement of existing trade agreements and ensure that we are not being taken advantage of. The administration must insist that our trading partners live up to the terms of our agreements and not undermine them through lack of due process, illegal subsidization, forced technology transfer, dumping, and other forms of cheating.

A pro-growth, pro-innovation, pro-enforcement and anti-regulatory agenda is critical to reversing many of the destructive policies of the last eight years (and in many cases longer). The leaders of our movement urge our elected and appointed officials follow the lead of President Reagan by taking strong action to combat the threats to our industrial and innovation competitiveness. We must remove any question that the United States of America can lead the world on innovation, manufacturing and economic growth.

Download a PDF copy of the memo here.


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