On the campaign trail, Joe Biden is claiming that he has boosted American manufacturing and promoted innovation through legislation like the Chips and Science Act. Yet right now, his administration is poised to finalize a proposal that will destroy jobs and innovation on a massive scale.
Biden ran as a centrist in 2020, and that’s the way he wants to run this time. But his policies have been driven by left-wing activists, with the president unwilling or unable to impose any discipline.
Today’s White House is a place of magical thinking, where political appointees believe they can upend the entire incentive structure of innovation without adverse consequences.
This specific problem began in December, when a Biden “working group” claimed that the government has the authority — under the 1980 Bayh-Dole Act — to seize patents on any discovery stemming from federal funding when an official decides the resulting product costs too much.
You can practically hear the socialist Bernie bros of the working group clamoring to be appointed to a new federal body that gets to decide how much innovative products throughout the U.S. economy should cost.
What they are too ignorant to understand is that the Fair Price Board, or whatever they call it, will have nothing to do — because innovation will cease to be a feature of the American economy.
Think about it from the perspective of venture investors — that is, the people who take the risk of funding startups to develop and commercialize promising patented ideas. Most such projects fail, but venture capital keeps flowing in pursuit of a big reward. Would you put up funds in the knowledge that if you succeed, a squad of do-gooders in Washington can decide your product costs too much, and then relicense its patent to somebody who would be happy to reverse-engineer all the work you paid for and sell it cheaper?
It’s a one-way ticket back to the Dark Ages of American innovation — the 1970s, before passage of the Bayh-Dole Act. That was the last time the government was in charge of licensing patents from research it funded. It wasn’t pretty. Of the 28,000 patents federal agencies held prior to 1980, fewer than five percent were licensed for development.
Bayh-Dole changed the dysfunctional incentive structure by allowing universities and other research facilities to own the patents on inventions they make with the help of federal grants. The law led to a licensing boom that has brought countless innovations to market, ranging from the Google search algorithm to the technology behind high-definition TVs. Bayh-Dole has contributed more than $1 trillion to the U.S. economy, supported more than six million jobs, and helped launch over 17,000 startup companies stemming from university campuses.
Only a left-wing activist could look at a system like this and say, “Let’s blow it up because people are making money.”
The administration’s radical reinterpretation of Bayh-Dole would wreak havoc on all corners of the economy. The president of the National Association of Manufacturers — which represents thousands of companies across industrial sectors — called the new proposal a “major threat to manufacturers in America.” The Association of American Universities and other groups representing all major U.S. research universities have also urged the administration to withdraw the guidance.
As a senator, Joe Biden voted for the Bayh-Dole Act, so maybe he’ll see the light. If not, he’ll go down as the president who tried to destroy America’s innovation economy.
Anthony Zagotta is the President of the Center for American Principles.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller.
