11 Million U.S. Patents . . . and China’s Rising

The U.S. Patent & Trademark Office recently awarded the 11 millionth U.S. patent. It went to inventors of a medical device for positioning prosthetic heart valves. Arthur Daemmrich, director of the Lemelson Center for the Study of Invention and Innovation at the Smithsonian Institution, describes some of the milestones from the first patent, granted 231 years ago.

We’ve come a long way from 1790 and that first patent on an improved method of making potash. An estimated 10,000 inventions secured private patent rights from 1790 to 1836. The 100,000th patent issued in 1870.

Invention then soared further, with 900,000 more patents granted by 1911. The pace of the progress of useful arts picked up again, and the 5 millionth patent was issued in 1991. The USPTO granted the 10 millionth patent in June 2018. And now, another million patents issued in three years.

In 1899, Punch Magazine ran a comedic conversation about the coming century. Part of it read: “‘Isn't there a clerk who can examine patents?’ ‘Quite unnecessary, Sir. Everything that can be invented has been invented.’”

Everything invented by 1900? Consider that the inventors of the 19th century, which included such greats as Edison, Bell, Goodyear, Westinghouse, Tesla, McCormick and quite a number of other notables, added about a million patented inventions.

Twentieth century inventors, starting with the Wright Brothers conquering sustained, powered, manned flight, put invention and patenting on steroids. The inventors of the American Century added another 5 million patents, give or take, in 100 years. Then in the first two decades of the 21st century, about 5 million more patents came forth.

Pretty impressive.

Yet, the past two decades have seen more self-inflicted damage to our patent system’s foundations while China has ramped up stealing our inventions and intellectual property.

The Trump administration’s PTO director Andrei Iancu, Antitrust Division head Makan Delrahim and NIST director Walter Copan made several strides to reverse course. But courts, such as the Supreme Court’s antiproperty rights ruling in Oil States v. Greene’s Energy Group, have continued to drag us in the wrong direction. And Congress has done little to undo the damage to formerly reliable, enforceable patents.

A good sign, though, is growing bipartisan recognition of the danger Chinese theft of our IP poses to America’s national and economic security. The Schumer-Young Endless Frontier effort, though not perfect, aims to improve U.S. competitiveness in cutting-edge technologies in which China works to leapfrog us and grab the innovative lead.

The Republican Study Committee has produced important policy papers on issues plaguing our patent system and threatening our innovative edge. It’s also put forward legislation to act on some of these matters.

“Maintaining U.S. Tech Supremacy Through IP Protection” ties these vulnerabilities to our competitiveness from China. This paper discusses PTAB “patent death squads,” the eBay v. MercExchange barrier to enjoining infringers, Oil States’ demoting private property to a mere “public franchise,” the Google v. Oracle exception sanctioning theft of swaths of copyrighted computer code, and the Alice-Mayo framework that turns patent-eligible subject matter into the spin of a roulette wheel.

An earlier RSC backgrounder, “The Patent Trial & Appeal Board and Big Tech,” exposes how special interests have destabilized patent rights. It illustrates how Big Tech’s antipatent agenda builds the Administrative State into its plaything for wiping out issued U.S. patents through biased administrative proceedings with egregious fairness and due process failings. Read along with the latest paper, you get an indication of how weakened domestic patent rights aid and abet China’s aggressive, whole-of-society scheme.

Unless Congress acts to save Americans’ private property rights in inventions, including restoring patents' reliability and the means to enforce them, the next milestone might be subtraction of total U.S. inventions.

You may be sure that China’s patent count is skyrocketing, and it’s no longer limited to just copyist clowning.

Why Property Rights Matter, Part 3: The Growing Attack on Property Rights

The increasing encroachment of government regulations, pontificating politicians and the enforcement of “social justice” schemes has led to a loss of understanding of the terms “private property” and “property rights.”

Once, it was understood that the unauthorized entering of private property was a violation to the utmost. The property owner was justified and supported in taking necessary actions to remove the trespasser and secure that land. Today, such ideas in the new America are considered radical, old fashioned, out of touch, even reprehensible.

The homeowner can be arrested for defending against an armed intruder. The intruder can actually sue a homeowner for shooting her even as he breaks down the door intending to rob and do harm. Home protection is called violence, perhaps even racism. It’s a whole new world of compliance, fear and acceptance rather than pride, protection and prosperity in ownership.

The Green New Deal is the current name for the agenda to control living standards and obliterate private property and sound energy sources. Massive wind and solar farms bury massive amounts of land under their steel and concrete infrastructures, as private land and farms lying in their path find it nearly impossible to coexist. Driving people off rural lands and into the cities is the goal.

Inside the growing high-rise city forests, the Biden administration is preparing an all-out assault on private property ownership. In the name of climate change, Biden plans to form “denser, more affordable housing next to public transit.” This is be done by removing zoning protection for single-family neighborhoods, destroying property values as public housing complexes are moved into the neighborhood. This is already being done in Oregon and in cities such as Minneapolis, where the mayor calls single-family zoning “racist.”

Landlords are also under attack as some new policies actually forbid them from even asking if a potential tenant can afford to pay the rent. Meanwhile, more regulations on landlords are raising costs, yet forbidding them to raise rents.

Most of these programs come under such names as “smart growth” and “sustainable development.” They are enforced through community comprehensive development plans mandated by state legislatures and funded through federal grants, primarily from HUD, EPA or the Department of Transportation. Compliance with the grants dictates even more “sustainable” policy.

The most recent attack on property rights, gaining momentum across the nation, is called 30x30. The plan calls for locking away 30 percent of America’s land and waters. Under Biden’s executive order, at least 30 percent of all U.S. land would be permanently set aside and maintained in a natural state.

The 30x30 edict would prohibit such activities as energy development, forest management, livestock grazing, mineral exploration and development, and many recreational uses. This would require at least 680 million acres of land to be set aside – more land than the entire federal government currently manages.

Most of the land dedicated to achieving the 30x30 goal necessarily will be the federal land found in the 11 western states and Alaska. Forcing rural communities and businesses that depend on the use of public lands and national forests to bear the brunt of the program would be inequitable. However, there is no other alternative. The bottom line is that “30x30” is a pretext to end the productive use of public lands and national forests and to set aside massive tracts of land to remain fallow.

If these policies for community development, landlord control and confiscation of rural lands are allowed to reach their logical conclusion, eventually there will be no private property in the United States and all housing, farming and industry will simply be government programs — in a word, communism.

Tom DeWeese is President of the American Policy Center, www.americanpolicy.org.

Lies, Damn Lies and Statistical Spin

House Oversight Committee Chairwoman Carolyn Maloney recently pounced on Gilead Sciences, claiming the biopharma innovator is “charging an unconscionable price for a drug developed with millions in taxpayer-funded research.” Sen. Debbie Stabenow struck the same chord: “I intend to continue working to put an end to this and other practices that allow the drug industry to gouge families for life-saving prescription drugs.”

But Rep. Maloney and Sen. Stabenow have been loose with the facts. A Government Accountability Office report counters what the lawmakers imply about federal fingerprints on the highly effective COVID-19 treatment Remdesivir.

The truth is that Gilead spent more than a decade and significant private monies on drug discovery and development before federal agencies devoted a dime to the drug candidate. Gilead had begun patenting Remdesivir-related inventions years before a federal agency coughed up a penny. Private investment in Remdesivir is about 10 times what the government has put in.

Gilead began its privately funded, applied research in 2000. This led to Remdesivir. Between 2009 and 2013, Gilead synthesized and screened the chemical compounds in this drug candidate.

GAO reports that “. . . Gilead did not rely on any federal contributions in conducting its own research that led to the invention of remdesivir and invested $786 million in remdesivir R&D from 2000 through December 2020. Gilead representatives also told us that the company made substantial contributions to the research performed in the collaborations with federally funded scientists, which was corroborated in our interviews with others. For example, principal investigators of the NIH-funded coronavirus research told us that scientists at Vanderbilt University and the University of North Carolina at Chapel Hill worked in close collaboration with Gilead scientists. A principal investigator also noted that Gilead had dedicated substantial resources and maintained a coronavirus research team for several years prior to the COVID-19 pandemic when few others were interested in studying coronaviruses.”

The government has zero rights to the intellectual property associated with Remdesivir because Uncle Sam’s involvement led to no inventions. GAO says “remdesivir research supported or conducted by CDC, DOD, and NIH has not resulted in government patent rights, because, according to agency and university officials, the federal contributions to the research did not generate new patentable discoveries, and Gilead already had existing patents on remdesivir.”

The Defense Department’s analysis is instructive. GAO reports that DOD “determined that scientific work performed by USAMRIID scientists did not rise to the level of co-inventor status on any of Gilead’s remdesivir patents. MRDC officials told us that they reached this determination based on the following factors: (1) Gilead invented the remdesivir compound and determined that it had antiviral activity against hepatitis C virus prior to the company’s collaboration with DOD; (2) Gilead entered into its collaboration with DOD with rights to all remdesivir and other compounds it provided, and told USAMRIID scientists what the compounds should be screened for; and (3) when USAMRIID scientists performed antiviral testing of remdesivir against Ebola virus, they used standard tests and screening methods and did not come up with new types of tests or screenings.”

How much money did federal agencies put into Remdesivir’s preclinical research and clinical trials? Just $161.5 million between 2013 and 2020. Of that, the National Institutes of Health provided $109.2 million to underwrite three clinical trials. Of the NIH monies, it has provided $88.6 million over the past year for a phase 3 trial of Remdesivir’s use for COVID-19.

What did Gilead invest in development of Remdesivir? About 10 times what the government spent. “Gilead estimated its overall investment in remdesivir, as of December 2020, at $1.3 billion. According to the company, of the $786 million in R&D costs, Gilead spent $215 million on the discovery and development of remdesivir prior to 2020, of which $175 million is attributable specifically to R&D costs and $40 million to costs of supplying remdesivir for use in NIH clinical trials and other clinical and research settings. Gilead told us that in addition to the R&D costs the company spent $147 million to supply remdesivir for use in clinical and research settings and $318 million to expand remdesivir manufacturing and distribution capabilities, as of December 2020.”

The truth about Remdesivir tells us a lot about the lonely beginnings of inventive activities, the long road to invention, the years-later involvement of federal agencies, and the far greater sunk costs of private sector innovators compared with relatively modest government funds.

The real Remdesivir story illustrates how you get a quick success in a crisis. You spend a decade or so pouring in sunk costs and pursuing dead ends. Then years later, if the circumstances make it appear so, you have an “overnight” solution. In Gilead’s case, the past as prologue on COVID-19 involved tremendous private-sector investment in potential medicines for hepatitis, Ebola, SARS and MERS viruses.

The facts, which GAO ferreted out but demagogic politicians twist to fit their preconceived talking points, prove enlightening — and shed favorable light on Gilead and Remdesivir.

The late Sen. Daniel Patrick Moynihan famously said, “Everyone is entitled to his own opinion, but not to his own facts.” One wishes more lawmakers of today were as intellectually honest as Sen. Moynihan was.