Where, Oh Where, Can My Patent Be; The Government Took It Away From Me
The Biden administration has indicated that it is preparing to seize some patents from Big Pharma. An opinion piece in the Dec. 11, 2023, Wall Street Journal1 notes that the Biden administration is rewriting laws to allow it to take control of drug patents, an ambush it calls it, if the patents are not being sold at low enough prices. This “power” is based on a 1980 law that was not intended for this purpose.
This is a dangerous precedent that could, among other things, lead to significant injury to our economy. The WSJ article also noted that the assumed “power” might also be used to take control of patents in other industries. As noted in the WSJ article, “the Administration’s plan would let the government seize patents of other products such as semiconductors, artificial intelligence, nuclear energy and lithium-ion batteries, and any inventions that result from the $200 billion in funding from last year’s chips bill.” And finally it notes that “[s]tealing IP is now part of Bidenomics.” It should be noted that the patents under duress are those where the government has participated in funding the research that resulted in those patents. It was also noted, however, in the case of the drug patents, the funding from the drug companies was 60 times the amount the government contributed.
It should be emphasized that none of this has happened yet, but it certainly could. As long as that threat is out there, valuators, especially those who have a heavy concentration in IP, should be on the alert. It would seem that, whether you are valuing patents or valuing companies in industries where the patents are a significant part of the value of the company, you should be asking now and researching the probability of the government seizing those patents and what impact that might have on the value of the company or the value of the patent.
1 The Editorial Board, "Biden Ambushes Pharma Patents," Dec. 11, 2023, print edition.