Coalition Aims to Combat Biden March-In Proposal, Other IP Threats

“The proposed abuse of march-in rights violates settled principles of U.S. law and will erode the foundation of American ingenuity, endangering both innovation and economic growth.” – BASIC Coalition honorary Chair, Judge Paul Michel

BASIC CoalitionThe U.S. Chamber of Commerce today announced it is partnering with entrepreneurs and other business advocates to counter threats to innovation due to “excessive government overreach,” including the Biden Administration’s proposed framework to expand the use of so-called patent march-in rights.

The newly-launched Business Alliance to Stop Innovation Confiscation Coalition (BASIC Coalition) lists stopping the Biden march-in proposal as its top goal. The framework was announced in December 2023 by the National Institute of Standards & Technology (NIST) and the Department of Commerce when the two organizations published a draft version of a Federal Register Notice outlining proposed changes to the way agencies decide whether and when to exercise march-in rights under the Bayh-Dole Act.

The framework would significantly broaden the criteria for compulsory licensing of patented technology developed with federal funding. While Bayh-Dole contemplates march-in rights, the law strictly limits the situations in which they can be exercised and does not make any reference to pricing as a criterion for marching in. But under the proposed framework, an agency may consider “[a]t what price and on what terms has the product utilizing the subject invention been sold or offered for sale in the U.S.” and whether “the contractor or licensee [has] made the product available only to a narrow set of consumers or customers because of high pricing or other extenuating factors”. These are significant departures from previous interpretations of Bayh-Dole, which have never mentioned price as a factor.

At the time, the Chamber called the proposal “government confiscation” and accused the Biden Administration of making the “unprecedented decision to seize certain drug patents.”

Today’s Chamber announcement about the BASIC Coalition similarly characterized the framework as anattempt to exploit the landmark and bipartisan Bayh-Dole Act as a backdoor method to impose price controls.” The coalition was officially launched on Capitol Hill along with “a seven-figure ‘back-to-basics’ initiative to educate policymakers and the public on the vital role of public-private collaboration in maintaining the United States’ global innovation leadership.”

Retired U.S. Court of Appeals for the Federal Circuit (CAFC) Chief Judge Paul Michel is the honorary Chair of the new organization and said, “[t]he proposed abuse of march-in rights violates settled principles of U.S. law and will erode the foundation of American ingenuity, endangering both innovation and economic growth.”

While the participating companies were not named, the announcement said the Coalition’s partnership includes “diverse voices from the energy, technology, manufacturing, telecommunications, semiconductors, and pharmaceutical industries.”

In addition to opposing the Biden march-in framework, the BASIC Coalition will focus on countering “anti-business rhetoric…belittling public-private partnership roles in job creation, industry transformation, and economic prosperity while debunking claims that seizing patents lowers prices; advocating for policies that safeguard constitutional IP rights by fostering collaboration between public and private sectors and encouraging risk-taking and investment; and fostering collaboration between research institutions and the private sector.

The Chamber’s Global Innovation Policy Center Executive Vice President Tom Quaadman said in a statement that the march-in framework “could devastate industries and diminish [the U.S.] role as the global innovation leader.”

Since its announcement in December, the “Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights” has been criticized by members of Congress; the Bayh-Dole Coalition; academics; former Commerce Secretaries, NIST and USPTO Directors; and the generic drugs industry, among others. One of the chief criticisms of the proposal is that it will do very little to actually lower drug prices while threatening the careful balance struck by the Bayh-Dole Act in order to incentivize commercialization of federally-funded inventions.

According to the Chamber, the proposal was launched without involving Congress “behind closed doors,” which “raises serious concerns about transparency and accountability and fuels worries about potential hidden influences, further exacerbating uncertainty.”

The Chamber has filed Freedom of Information Act requests “to uncover details about the decision-making process and potential behind-the-scenes influences.”

Two FOIA requests sent in January specifically focus on obtaining information about the Interagency Working Group for Bayh-Dole referenced in the December Federal Register Notice (FRN) and, in particular, all communications between the Working Group and the Office of Senator Elizabeth Warren or the Office of Senator Bernie Sanders, as well as “any staff member, employee, or representative of Knowledge Economy International (KEI), the Initiative for Medicines, Access, and Knowledge (I-MAK), the Center for American Progress, Patients for Affordable Drugs, or Public Citizen.”

Image Source: Deposit Photos
Author: stuartmiles
Image ID: 207301958 


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