By Kristina M. L. Acri
Congress is on the verge of unintentionally crippling Colorado’s flourishing tech sector.
Lawmakers recently proposed a bill that would overwhelm the U.S. Patent and Trademark Office with mountains of paperwork, slowing the patent approval process to a crawl. Since firms in every high-tech industry depend on patents to protect their new ideas and products from being stolen by rivals, this would hurt companies across the country.
The damage would be particularly severe here in Colorado, which boasts some of the most innovative cities in the nation. Technology Magazine recently praised Boulder as the world’s most rapidly growing tech hub, with companies in biotech, machine learning and AI. A decade ago, the Brookings Institute ranked Boulder among the top five cities for patent filings per resident.
In Denver, tech companies are attracting venture capital flows at a record pace. Statewide, more than 60% of private-sector employees work in sectors that depend heavily on intellectual property protections.
If the Senate proposal — known as the Medication Affordability and Patent Integrity Act — is passed, it could bring this prevailing dynamism to an end.
The sponsors of the bill say they aim to uphold patent integrity. But despite their good intentions, the bill would do just the opposite.
The underlying problem is that the law would require biotech companies to give the U.S. Patent and Trademark Office all the complex pharmaceutical data they already submit to the Food and Drug Administration (FDA) as part of the drug approval process.
The U.S. Patent and Trademark Office is already drowning in paperwork. The agency takes 25 months to assess the average patent application, and there’s currently a backlog of 800,000 submissions. The agency simply can’t take on millions more documents.
That’s only part of the problem. Unlike the FDA, which has one of the most rigorous standards of drug evaluation in the world, the U.S. Patent and Trademark Office isn’t equipped to certify medical data. Patent examiners are trained to assess the “novelty” and “nonobviousness” of products — not the intricacies of drug formulations or manufacturing methods. With this new burden, the agency would likely process all patents at an even slower pace, limiting what biotech companies can accomplish and stopping new innovations from reaching consumers.
Legislators claim the bill is necessary to stop drug companies from deceiving patent authorities. But there’s no evidence that this commonly occurs. Besides, the U.S. Patent and Trademark Office already has the power to retroactively invalidate patents filed by applicants that relied on deception.
Making matters worse, the bill would vastly increase the opportunity for cybercrime and espionage. Trade secrets like advanced drug formulations, manufacturing systems and clinical trial data would traverse more communication channels. The U.S. Patent and Trademark Office has already experienced two significant hacks in the last two years. And, it’s possible that sensitive information could be accessed through the agency’s mandatory public dissemination and disclosure process. All of this would invite intellectual property theft by foreign adversaries.
Creating a two-tiered system — with new reporting requirements imposed only on the biotech sector — would reverberate far beyond the life sciences, causing uncertainty across tech industries about whether the government will really protect patents.
The United States built its thriving tech sector thanks to an effective patent system that rewards bright ideas. Colorado innovators depend on it. The proposed law would uproot it. Innovators in the Centennial State, many of them small startups, can’t afford the additional bureaucratic burden. Congress would be wise to strike the proposed bill before it devastates our tech industries and undermines American global competitiveness.
Kristina M. L. Acri née Lybecker, PhD, is a professor of economics at Colorado College, where she chairs the department of economics and business, and a Senior Fellow at the Fraser Institute.
This post was originally published on here
