Weakening America's Patent System Will Allow China to Dominate Technology of the Future
The United States and China are engaged in a new Cold War, and China intends to win.
While China has increased its techno-totalitarianism against Hong Kong and its own citizens, a greater threat to America and the free world comes from China’s efforts to leapfrog the United States in cutting-edge innovation.
The National Security Commission for Artificial Intelligence recently issued its final report assessing how to ensure U.S. leadership in AI. NSCAI says intellectual property stands as a tool vital for our success in this contest.
The 750-page report lists several emerging technologies the commission deems “crucial to future national competitiveness.” They include “microelectronics, biotechnology, quantum computing, 5G telecommunications, autonomy and robotics, advanced manufacturing, and energy systems.”
Artificial intelligence involves advanced computing, or machine learning. AI mimics the capabilities of human intelligence, such as recognizing objects or patterns and translating language. As AI develops, it becomes what Thomas Edison called a “field of fields,” applicable in multiple ways and in multiple technologies.
AI is but one area where China pursues world dominance.
China has ramped up a multipronged, whole-of-society strategy to beat America and the West. This goes well beyond mere copying and IP theft. Other prongs include subsidies for Chinese companies, predatory pricing, import restrictions, a biased regulatory regime and economic espionage.
Its intent is to capture the global lead in AI, 5G, biopharmaceuticals, quantum computing and similarly important fields. China seeks less reliance on foreign sources, greater domestic innovation and manufacturing further up the value chain.
China’s putting its money where its plans are. It’s passed the United States in research-and-development spending and in domestic and international patent filings.
As for intellectual property and AI, the commission warns that “China is both leveraging and exploiting intellectual property . . . policies as a critical tool within its national strategies for emerging technologies.”
NSCAI notes how China has strengthened its IP system. IP there enjoys strong protections such as ready access to preliminary injunctions against patent infringers and meaningful damages for IP infringement, including 5X damages for willful infringement. China has also copied America’s Bayh-Dole Act to facilitate the transfer of university inventions for commercialization.
China has also weaponized IP. It incentivizes patent filings through quotas, subsidies and rewards for patent grants. In turn, this proliferation of patent applications “dramatically increases the quantity of prior art that must be reviewed in examining a patent application.” This could overwhelm the U.S. patent examination process and reduce U.S. patent grants.
While quantity of patent applications doesn’t equal quality, “China’s companies have been identifying too many patents as ‘standard-essential’ in standards development organizations, alleging that these patents must be practiced to comply with a technical standard.” This overdeclaring of SEPs “furthers China’s global narrative that it has ‘won’ the race to such standardized technologies as 5G . . .”
Meanwhile, U.S. courts have created exceptions “severely” limiting what is deemed patent-eligible, particularly for computer-implemented and biotech inventions. The Supreme Court has made it very hard to get injunctions against patent infringers.
Congress created the Patent Trial and Appeal Board, which has wreaked havoc on patent owners and become a weapon in infringers’ arsenal. PTAB invalidates issued patents two and a half times as often as do federal courts.
Also, government price-control advocates threaten Bayh-Dole’s tech transfer success. They’re pushing the National Institute of Standards and Technology to put in regulations what’s not in law. They demand NIST write in product price as grounds for the government to “march in” on inventions commercialized out of federally sponsored research.
“Facing uncertainty in obtaining and retaining patent protection, [U.S.] inventors pursue trade secret protection [which does] not readily promote innovation markets,” NSCAI says. “. . . [T]he long-term effects on AI and other emerging technology developments and competitiveness are concerning.”
NSCAI notes regarding the U.S.-China opposite directions: “[B]y strengthening its IP regimes, China is poised to ‘fill the void’ left by weakened U.S. IP protections, particularly for patents, as the U.S. has lost its ‘comparative advantage in securing stable and effective property rights in new technological innovation.’”
The commission urges: “America’s IP laws and institutions must be considered as critical components for safeguarding U.S. national security interests, including advancing economic prosperity and technology competitiveness.”
When you consider that not only patents on computer-implemented inventions, but U.S. patents across the board have been seriously weakened, American leadership in all emerging technologies suffers while China’s position strengthens.
This report should serve as a wake-up call for us to strengthen our patent system so we can compete in the global race for innovation on AI and other technologies. We can take steps to strengthen our patents. Members of Congress on both sides of the aisle have joined together to introduce legislation like the STRONGER Patents Act to improve our patent system.
Legislation like that would go a long way to reversing our decline and helping to ensure U.S. leadership in the world in innovation. Our national, and economic, security depends on it.