U.S. Chamber Says March-In Rights Guidelines Threaten Future of Quantum Research in America

Yesterday, the U.S. Chamber of Commerce published a blog post urging the Biden Administration to change course on its policy proposal regarding the exercise of march-in rights under the Bayh-Dole Act before it threatens U.S. dominance in quantum computing. The U.S. Chamber’s publication is the most recent outcry from industry voices against the federal government’s expansion to march-in rights, which has proven very controversial in the nine months since the Biden Administration announced that it was considering exercising those rights to control prices on inventions developed through federal funding.

Last December, the National Institute of Standards and Technology (NIST) and the U.S. Department of Commerce announced proposed guidelines for federal agencies to follow when considering the exercise of Bayh-Dole Act march-in rights. Almost immediately, the announcement resulted in blowback from the U.S. Chamber, which called it an “unprecedented decision” that contradicts the law and risks future medical innovation, and Joseph Allen, Executive Director of the Bayh-Dole Coalition who has noted that the guidelines would impact all federally funded inventions, not just medical innovations.

Quantum Reauthorization Bill Puts Focus on Trillion-Dollar Computing Sector

According to the U.S. Chamber’s recent post, the quantum computing sector could grow in value to $1.3 trillion USD by the year 2035. Establishing American dominance in this nascent field requires effective partnership between federal agencies funding research and private companies commercializing that research, according to co-authors Brad Watts, Vice President of the U.S. Chamber’s Global Innovation Policy Center (GIPC), and Jordan Crenshaw, Senior Vice President of the Chamber Technology Engagement Center (C_TEC).

By giving the U.S. government the ability to break licensing agreements to these federally funded inventions in response to pricing considerations, the march-in rights guidelines announced by NIST and the Department of Commerce would undermine the certainty that private companies need to enter into licensing agreements, the U.S. Chamber contends. This would slow innovation in a sector that is expected to have far-reaching impacts on pharmaceutical development, machine learning and even national security.

Increased funding for quantum computing research earmarked by recently passed Congressional legislation creates a greater risk that the march-in rights guidelines could discourage commercialization activities. The U.S. Chamber notes that it has supported passage of the National Quantum Initiative Reauthorization Act, which would direct billions of dollars worth of federal funding into quantum computing projects, including those leveraging artificial intelligence (AI) technologies. The reauthorization bill comes six years after the National Quantum Initiative Act was first passed, earmarking $2.6 billion of total federal funding for distribution by 23 federal agencies. While the reauthorization bill was passed out of committee last November, it has yet to proceed towards a full vote on the floor of the U.S. House of Representatives.

Major Quantum Computing Projects Should Be Supported by Certainty in Patent Rights

Public opposition to the Biden Administration’s revamped march-in rights guidelines started forming almost immediately after the proposed framework was introduced late last year. A request for public comments issued by NIST and the Department of Commerce along with the new guidelines revealed widespread dissent from academics, former highly ranking Executive Branch officials, and even a former general counsel for the Federal Trade Commission. Those responding to the request for comments noted the wide-reaching impacts of the proposal, which are not limited to federally-funded pharmaceutical innovations, and the likelihood that those guidelines would risk innovation in critical areas of technology that Congress is trying to develop by passing legislation funding research in those sectors.

Those threats to American dominance in critical technology sectors are also fomenting opposition to the march-in rights guidelines from lawmakers in Congress. In early February, letters from the Republican membership of the Senate Small Business Committee, along with a letter signed by a bipartisan coalition of 28 Senators and Representatives, raised concerns about the deleterious impact of government-sponsored compulsory patent licensing on business interests and American innovation. The bipartisan lawmaker coalition further pointed out Congressional testimony from Senator Birch Bayh, one of the driving forces behind passage of the Bayh-Dole Act, establishing that the law would have to be amended for the federal government to consider reasonable pricing of federally-funded inventions as a reason to march-in and seize patent rights.

The U.S. Chamber ended its blog post urging President Biden to withdraw the new march-in rights proposal to encourage the public-private partnerships necessary to support America’s innovation ecosystem. Such action would support major research projects in quantum computing, like the 300,000-square-foot quantum research center being built by PsiQuantum in Chicago. Referencing that project, the U.S. Chamber notes that now is the time to support patent protections in quantum computing to encourage commercialization, not threaten developers in the space with the prospect of compulsory licensing.

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Author: stuartmiles
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