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An American Innovator and Property Rights

Updated: Mar 9, 2019

Private property rights are inherent rights like life and liberty. They’re critical to an individual’s, a company’s and a nation’s flourishing. Thanks to private property rights secured under our Constitution, America and Americans have flourished and built a nation with the greatest economy, the most innovation and the highest standard of living.

Many Americans have coupled private property rights with hard work to turn a vision into reality. Sometimes their names are attached to the fruits of their labor: the Mayo Clinic, Goodyear, Eli Lilly, Ford Motors. Other great inventors and innovators haven’t a namesake. Some spawn entire new industries, others revive mature sectors.

In the 1980s, a visionary inventor, Cornell and MIT-trained electrical engineer Irwin Jacobs, cofounded Qualcomm. The startup’s CDMA technology revolutionized cellular telecommunications and became the industry standard for 3G communications. His R&D-centric company moved on to standard-setting for 4G. His endeavors created billions of dollars in wealth and tens of thousands of new jobs.

Qualcomm couldn’t have risen to the top of the world and lead the 5G tech race now were it not for patents and IP providing the right to exclude others from using its inventions without a license. It achieved its leadership position through excellence in innovation that wins standards-setting on the technological merits and through an outsized commitment to R&D.

Paradoxically, individuals like Dr. Jacobs prosper from property rights, yet society benefits tremendously from the new products, processes, jobs, industries and wealth stemming from those property rights in action.

Qualcomm has set technological standards in the wireless industries for three decades. Today among its 130,000 patented inventions are those that make smartphone features such as GPS, app stores and power conservation function well.

The battle over core 5G technologies involves two firms: Qualcomm and China’s Huawei. Implementers’ devices will merely ride on the platform these innovators provide. The company — and its country — that prevails has near- and long-term economic and national security ramifications. Economically, 5G could lead to $1.3 - $1.9 trillion in U.S. economic output by 2035, IHS Markit estimates.

For security, CFIUS concluded when assessing Broadcom’s takeover bid, “[W]eakening of Qualcomm’s position [i.e., ‘reducing long-term investment, such as R&D’] would leave an opening for China to expand its influence on the 5G standard-setting process,” leading to “substantial negative national security consequences for the United States.” Huawei has long been identified as a national security risk, and now faces renewed scrutiny (and criminal charges) over the vulnerabilities its role in 5G poses.

Qualcomm deserves to exercise its private property rights, commanding market-based rates for licensing its patents, winning standards for their technological superiority and hopefully securing the global lead in 5G, for America’s economic and national security sake.

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