Voice of IP: US Holds Top Spot in Chamber's IP Rankings
Voice of IP: US Holds Top Spot in Chamber's IP Rankings
Also: Congress continues to voice opposition to administration's IP policies and EU rushes to advance anti-SEP proposals that likely won't become law.
This is the first Voice of IP newsletter featuring IP news that matters. The newsletter is still a work in progress and we’ll be experimenting along the way. Although this one is heavy on important policy-related developments from the last few weeks, we definitely plan to vary it up in the future. So if you have any thoughts about content that you’d find valuable or any other suggestions, please reach out.
US remains on top of Chamber’s global IP rankings
America held on to first place in the U.S. Chamber of Commerce’s 2024 International IP Index. The US dramatically fell to 12th place in 2018 but returned to the top spot in 2020 and has remained there ever since.
So the administration had reason to celebrate the news after backing a spate of controversial IP-related policies - primarily impacting innovators in the pharma space - over the last year (more on that below). However, the Chamber’s overall takeaway wasn’t quite as rosy.
Chamber’s view: “while the US took the top spot in this year's world rankings, ongoing policy tussles and looming executive actions from the Biden Administration put this standing at risk.”
Why it matters: America’s standing in the rankings have had a major impact on IP policy. Since the Chamber’s members include almost all significant American businesses, it represents the views of those that make the most important decisions regarding how and whether to invest based on the state of America’s IP system. So although not everyone agrees with the ranking’s methodology, the rankings are at the very least an important indicator of those views.
America falling to 12th place in the 2018 rankings provided - if not helped spur - former Director Andrei Iancu with the justification needed to successfully push pro-patent policies at the USPTO in his first year. When the US went up to 2nd place in the rankings the next year because of those policies, IPWatchdog’s Gene Quinn reported that Iancu jokingly thanked the Chamber for the anniversary present.
View from here: the administration is unlikely to change course due to Chamber’s warnings about the US falling from first place again. However, the warnings are likely to be enough to slow down its efforts to reach an accord IP waivers at the WHO and implement march-in rights under the Bayh-Dole Act in an election year. That’s a win in Washington.
Senators Coons and Tillis continue to lead Congress’s opposition to IP waivers and march-in rights
Background: after Senator Leahy retired last year, Coons took over as chair of Senate’ subcommittee on IP this congress and renewed his close with ranking member Tillis.
New efforts: in a pair of strongly worded letters at the end of last month, the senators and bicameral, bipartisan congressional leaders warned the White House about the dire consequences of supporting IP waivers at the WHO and march-in rights under the Bayh-Dole Act.
IP waivers letter: “such a provision may lead companies to refrain altogether from developing new pandemic-related products and instead choose to invest in other areas that do not involve the same legal risks. If such a policy had been in place ahead of the COVID-19 pandemic, it could have prevented innovations critical to ending the global public health emergency.”
March-in rights letter: “[u]nder the proposed framework, entrepreneurial startups and small companies across industries—from green technology and precision agriculture to advanced computing and semiconductors—would be subject to march-in petitions challenging their pricing decisions by rival businesses and even our foreign competitors and adversaries, who could use this tool to cast a cloud over the companies that drive our economy.”
This letter was signed by 28 members from the House & Senate, including Congressman Darrell Issa - chair of House’s IP subcommittee.
EPO and USPTO heads expresses grave concern re EU’s SEP proposals
EU’s rush: innovators enjoyed a newfound appreciation for America’s deliberative form of government after watching the EU parliament voting 454 to 83 in support of proposals to upend enforcement of standard essential patents (SEPs) in Europe.
Since being released less than a year ago, the proposals have faced a barrage of criticism as being unnecessary and misguided. In part, the proposals would task a European agency - EUIPO - that now primarily handles trademark registrations to make extremely complicated technical determinations regarding whether patents are essential to a standard.
Proponents of the proposals have mostly offered vague anecdotes and hypotheticals about small & medium entities engaged in licensing negotiations to justify the proposals. When I talked to IAM founder Joff Wild last year on Clause 8, it seemed that the proposals were almost completely doomed in their current form. However, for now, the process has continued apace. Wild, who now heads communication for “Europe’s biggest and oldest patent pool administrator” Sisvel, publicly shared that EU officials refused to even meet with Sisvel regarding the proposals. This would be an unimaginable approach by government officials in the US on domestic IP issues.
Criticisms from patent officials: it seems the EU policymakers didn’t bother consulting public officials who actually have experience dealing with patent issues either.
Head of the European Patent Office (EPO) Anotnio Campinos: "the proposal fails to meet the Commission’s own procedural standards of ‘Better Regulation,’ namely legislation that is evidence-based, and built on transparent consultation of all stakeholders and thorough impact assessments.”
USPTO Director Kathi Vidal echoed those concerns more diplomatically: “international ramifications of any regional specific enforcement of rules must be carefully scrutinized to ensure the consequences are known and fully appreciated, and that they do not disrupt the ability of all of our countries to innovate and implement in ways that support economic prosperity and national security.”
Flashback: during my most recent conversation with Vidal, she explained that the administration made a decision to withdraw all SEP policy statements in ‘22 out of concern that “other countries would use them against US industry to say, oh, look what your government is saying.” A prescient outlook that didn’t stop EU’s proposals.
Calm view from here: EU parliament’s rushed, lop-sided first vote on the proposals “does not make it a foregone conclusion that anything along the lines of the Parliament’s position will be passed into law at the end of the process,” writes Florian Mueller - Europe’s savviest observer of SEP-related developments.
The proposals will now be considered by the EU Council, which requires a qualified majority of member states but usually aims to reach unanimous agreement. As Wild predicted, that means there’s almost no reason to think that agreement will be reached before EU’s June elections or that the effort will restart under new EU leadership thereafter. In other words, EU’s bureaucracy, cumbersome processes, and reliance on consensus are likely to save the day for SEP proponents.
By the way, Mueller’s new publication IPFray - like its predecessor FOSS Patents -is a must-read for those that want to keep up with SEP developments in Europe and around the world.
Clause 8 podcast preview…
New episode coming out later this week with a top Capitol Hill IP staffer. We discuss how a potential Section 101 might be reached and some surprising developments on that front.
Are you an MEP who thinks the process with regards to the EU SEP proposals has been perfectly fine? An in-house counsel who thinks I’m missing an important IP story? Are you Morgan Chu and want to share the story about how you ended up representing Elon Musk v. OpenAI? Please email me at eli@VoiceOfIP.com or find me on Signal at eli.92.