EXCLUSIVE — Sen. Joni Ernst (R-IA) is calling on the Biden administration to explain its plans to protect small businesses as it explores “march-in rights” when it comes to seizing patents developed using federal funds.
The Biden administration is looking to expand its authority under the Bayh-Dole Act, which authorizes the Commerce Department to create standard patent rights clauses to be included in federal funding agreements with small businesses and nonprofit organizations, including universities. March-in rights refer to the federal government’s ability, under the law, to “march in” on patents on inventions created using taxpayer funds and require the patent holder to share the federally funded patent with other applicable businesses or groups.
Ernst, the ranking member on the Senate Committee on Small Business and Entrepreneurship, said in a statement to the Washington Examiner that she is leading the letter to tell the Biden administration “to keep their hands off our small businesses.”
“The Biden administration never fails to shock in the lengths it is willing to go to trample on American innovation in favor of socialist policies,” the Iowa senator said. “This radical proposal would signal to small business owners and entrepreneurs that the government can simply strip them of their intellectual property, undermining our country’s world-leading research and development ecosystem and stifling new ideas that support our economy.”
Though these rights have never been exercised, some agencies, such as the National Institute of Standards and Technology, are looking to reactivate the march-in rights as a “check” on entities such as pharmaceutical companies, per the Federal Trade Commission. In a letter shared exclusively with the Washington Examiner, Ernst and other Senate Republicans on the committee expressed concerns to Health and Human Services Secretary Xavier Becerra and Commerce Secretary Gina Raimondo about how the government’s interpretation of march-in rights could affect small businesses and innovation.
“Broad exercise of march-in authority under the Bayh-Dole Act could disincentivize small businesses from competing for federal research and development (R&D) dollars, discourage commercialization, and stifle America’s innovation ecosystem at large,” the letter, provided exclusively to the Washington Examiner, reads.
Ernst writes that the proposed framework for march-in rights “envisions federal agencies standing ready to snatch and license out intellectual property” developed by both large and small businesses. The members claim this framework could punish small businesses that wish to “progress with their invention beyond federal dollars to commercializing their patented technology.”
“Further, without the promise of secure ownership of intellectual property for those who acquire patents through the SBIR-STTR programs, fewer small businesses will be able to help federal agencies innovate to meet our nation’s critical technology goals,” the GOP committee members wrote. “Research efforts are likely to fail without the ingenuity and work ethic of the small business community.”
Ultimately, the members said the Biden administration’s exploration of these march-in rights could interfere with small businesses’ commercial success. They fear that small businesses relying on the federal government to “seize their intellectual property” and not commercialize it, opting to license it to others to bring goods and services to the market instead, will keep startups from achieving funds through small business innovation awards.
“While this risk of march-in is not new, the Biden Administration is making a true mistake if it puts this authority in practice and even expands the scope of allowable justifications as is proposed under the draft framework,” the members wrote.
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The letter was signed by Ernst and Sens. Marco Rubio (R-FL), Ted Budd (R-NC), Todd Young (R-IN), James Risch (R-ID), John Kennedy (R-LA), and Tim Scott (R-SC). They are asking Becerra and Raimondo to provide information on how the interests of small businesses will be protected in the march-in rights framework by Feb. 20.
The public and small businesses “deserve clarity on how this proposed framework would impact their efforts to pioneer new technologies,” the members concluded.
