House trade subcommittee urged to address weakening of US IP rights by America’s trading partners

House trade subcommittee urged to address weakening of US IP rights by America’s trading partners

Andrei Iancu, former USPTO director reportedly said, “While outright IP theft remains a concern, the greater challenge today is more subtle and systemic.”

The US house of representatives’ ways and means committee’s subcommittee on trade called a hearing titled ‘Maintaining American Innovation and Technology Leadership’ which looked at a host of regulatory and other legal burdens being placed on the tech industry trade by foreign governments to the disadvantage of American innovators and consumers. Former USPTO Director Andrei Iancu was among the panel witnesses at the subcommittee hearing who spoke to many ways that our nation’s adversaries and trading partners are weakening American IP rights and how those issues should be addressed by US policymakers.

In his opening remarks, Rep. Adrian Smith (R-NE), Chair of the House Trade Subcommittee, noted that 41% of U.S. gross domestic product contributed by IP-intensive industries is put in peril when foreign governments take action to weaken American IP.

Ranking Member Rep. Linda Sanchez (D-CA) expressed great skepticism about the timing of the hearing on American technology leadership, highlighting the recent loss of nearly 70,000 US manufacturing jobs since the beginning of Trump’s second term as well as the Trump administration’s military operations involving Venezuela.

Iancu reportedly said, “Reliable, predictable, and meaningfully enforceable IP rights are the foundation of American prosperity and global leadership,” While the US enjoys a substantial $74 billion trade surplus in intellectual property as of 2022, far outpacing China which had a trade deficit of $33 billion that same year, reduced engagement on global IP policy by American lawmakers has disadvantaged the U.S. over time. “While outright IP theft remains a concern, the greater challenge today is more subtle and systemic,” Iancu reportedly said, pointing to ostensibly neutral regulations that weaken foreign IP in favor of domestic players.

Iancu’s written statement gives several examples of foreign practices on IP that need closer scrutiny, including the European Union’s recently adopted General Pharmaceutical Legislation (GPL). As implemented, the EU’s GPL reduces periods of regulatory exclusivity for new drugs and expands research exemptions to commercial activities like pricing and reimbursement filings. Iancu also noted that several jurisdictions, including rivals and trading partners alike, have at least proposed policies on standard-essential patents (SEPs) that would dramatically increase administrative regulatory frameworks. Further, courts in the UK, China and elsewhere have issued decisions setting royalty rates that seek to dictate global licensing terms, which tends to depress patent value and weaken incentives for tech developers to contribute to standards development.

Iancu agreed with Chairman Smith’s observations of the proposed TRIPS obligations waiver and noted during the hearing that the policy did not deliver a single additional vaccine but rather discouraged IP owners from collaborating on vaccine development.

Responding to Rep. Jason Smith (R-MO) on what commitments the Trump Administration should be seeking from foreign governments, Iancu repeated that American consumers tend to pay the costs created by foreign regulation of IP. Along with urging the EU to abandon the GPL, Iancu indicated that the upcoming round of renegotiations for the U.S.-Mexico-Canada (USMCA) free trade agreement was a great opportunity for the Trump Administration to push America’s closest trading partners to increase their IP commitments on regulatory data protection for biologics, as one example of an area where Mexico and Canada lag behind the U.S., and for better adherence to those commitments that are actually made by America’s trading partners. Iancu also said that a model IP chapter with robust minimum protection standards will be of great use for U.S. policymakers when negotiating trade agreements like USMCA.