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The Biden administration’s proposal to invoke so-called “march-in” authority to seize the rights to patents developed in any part with federal funding would undermine the American innovation economy, the NAM told the federal government Tuesday.

What’s going on: A proposal put forth in December by the Biden administration would allow the government to seize private-sector patents for products it considers too costly. 

Why it’s important: “Undermining manufacturers’ [intellectual property] rights would have sweeping ramifications for innovation in the United States and America’s world-leading innovation economy,” the NAM told the Biden administration.

• “In particular, start-ups and small businesses would bear the brunt of the drastic changes proposed by the administration, as … government march-in would disincentivize early-stage entrepreneurship and dissuade much-needed capital formation from outside investors.”

The background: The Bayh-Dole Act, passed in 1980, allows recipients of federal research dollars to license groundbreaking technologies to private-sector companies to commercialize them.

• “Prior to the act’s passage, the government held approximately 28,000 patents—yet fewer than 4% of those patents were licensed to the private sector. This is because private-sector participants viewed these patents as ‘contaminated by government funding,’” according to the NAM.
• Bayh-Dole includes a narrow “march-in” provision that allows the government to step in to ensure consumer access to certain products during times of crisis—but march-in “has never previously been used during the 44 years since the law’s enactment,” the NAM said.
• Allowing march-in based on the price of a product or technology “would hinder industry collaborations with research universities and laboratories across the country, stymieing manufacturers’ efforts to develop the products and technologies of the future and bring them to the public.”

Read the full story here.