Coalition of Academics Sends Letter Opposing Biden Administration’s March-In Rights Proposal

Today, a letter signed by a coalition of top academics opposing the Biden Administration’s efforts to exercise march-in rights under the Bayh-Dole Act of 1980 was sent to the White House. Signed by academics in fields including law, economic policy and sciences, the letter warns the Biden Administration that its efforts to drive down drug pricing by seizing patent rights will “undermine fundamental principles that have made the American IP system the golden standard for supporting domestic innovation.”

A growing topic during recent Congressional debates, march-in rights under Bayh-Dole took on a new focus in early December when the National Institutes of Standards and Technology (NIST) and the U.S. Department of Commerce released a draft framework of factors that federal agencies should consider for the exercise of authority codified at 35 U.S.C. § 203 that would compel patent owners holding rights to federally-funded inventions to license those rights to “responsible applicants.”

Academics Add to Concerns Voiced by Senator Tillis, GIPC, Bayh-Dole Coalition

Opposition to the Biden Administration’s march-in rights policies has grown more earnest due to the likely impact on the commercialization of federally-funded inventions. Two weeks after the draft framework on march-in rights was published, U.S. Senator Thom Tillis (R-NC) sent a letter to the White House asking the Biden Administration to consider the negative impacts of march-in rights on the certainty required for further private investment in federally-funded research. This month, the Bayh-Dole Coalition formally asked NIST to withdraw its draft framework, while the Global Innovation Policy Center at the U.S. Chamber of Commerce filed Freedom of Information Act (FOIA) requests to obtain communications from the interagency working group drafting the framework.

As the undersigned academics in today’s letter point out, the innovation-chilling impacts of compulsory licensing under march-in rights will not be limited to the pharmaceutical industry, where the Biden Administration expects its efforts to have the most impact. Instead, the march-in rights framework would impact patent rights to any federally-funded invention, which could impact downstream licensing in information technology or other tech sectors that rely heavily on federal funding for research & development.

“Many critical sectors of the United States’ supply chain will be threatened if patent owners are compelled to license IP rights on federally funded inventions. History indicates that increased risks to the property rights that drive private investment and small business growth will unreasonably limit availability of the invention to the public by eliminating incentives to innovate.”

Patent and intellectual property (IP) rights play important roles in the innovation economy, these academics acknowledge, and they benefit good faith actors “who have faith in, but no proof of, their product’s value in the marketplace.” Misguided attempts to control drug pricing by compelling patent licenses will not just threaten a vital component of the U.S. economy but will also enable bad faith actors to petition the government to use march-in rights on their competitors. The academics argue that this could allow unscrupulous companies to “price-gouge in unprecedented ways,” stagnating the U.S. economy while failing to achieve the cost reductions in drug pricing expected by the Biden Administration.

Today’s letter is signed by 14 experts in fields from IP to health care to economic policy. The undersigned academics include Richard Epstein, Laurence A. Tisch Professor of Law, New York University School of Law; Adam Mossoff, Professor of Law, Antonin Scalia Law School, George Mason University; Michael C. Munger, Director of Philosophy, Politics and Economic Program, Duke University; Marc L. Busch, Karl F. Landegger Professor of International Business Diplomacy, Georgetown University; Reza Moradinezhad, Professor of Computer Science, Drexel University; and Gail Clifford, Assistant Clinical Professor, City of Hope.

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