How to keep our most valuable weapon from China

America is the most technologically advanced superpower in history, but China is nipping at our heels.

A recent 20-month investigation by the Information Technology and Innovation Foundation concluded that Chinese innovation is “much stronger than previously understood.” The report describes China as “a fire-breathing dragon on government-provided steroids,” poised to conquer the world’s tech industry within a decade.

U.S. policymakers have not been blind to China’s rise, or the need for smart reforms to maintain our economic lead. In 2011, I co-authored the Leahy-Smith America Invents Act, the most significant reform of the U.S. patent system in decades. Our goal was to modernize the patent system so that it would more efficiently and more effectively incentivize innovation in the United States.

I believed strongly then, and I believe even more strongly today, that the patent system is a critical tool not just for the American economy, but for American national security as well. But as ITIF’s investigation demonstrates, our patent system must be made even stronger in order to match China’s growth.

China’s ambition, laid bare in its Made in China 2025 plan, is to overtake the United States as the world’s innovation hub. Beijing’s strategy is a two-pronged assault: widespread theft of intellectual property, which costs our economy up to $600 billion annually, and a massive investment of government resources into research and development.

China’s IP theft is unfolding in labs and offices across America. Right here in Texas, Huntsman Corp., based in The Woodlands, is battling to protect its innovative, eco-friendly textile dye from Chinese copycats. When Huntsman sought justice in Shanghai courts, it faced a review panel that included an engineer from the very company it was suing. The legal process became a farce, a rubber stamp for continued theft. And in 2016, Chinese nationals were caught pilfering genetically modified corn seeds from Iowa farms. From textiles to agriculture, from Silicon Valley to the Heartland, no industry is safe.

The combined effect of this rampant IP theft and the Chinese government’s support for R&D has allowed China to take the lead in 37 of 44 critical technology fields, including artificial intelligence, quantum computing, hypersonic weapons and renewable energy. Dominance in these fields would bring economic benefits, for sure, but it would also lead to military superiority.

Consider the technologies on the horizon: AI systems that can predict and neutralize global threats, quantum computers capable of breaking any encryption, advanced materials for next-generation military equipment, and biotechnology that can enhance human capabilities. The nation that leads in these fields will set the rules for the rest of this century.

That’s why protecting our intellectual property isn’t just an economic issue. It’s a matter of vital national security. We are in the midst of a new Cold War, being waged on a battlefield of ideas. In this war, America’s most potent weapon is our intellectual property system.

I had hoped the America Invents Act would set a foundation for the United States to entrench and widen its technological lead. But it has become clear to me that changes in the patent system in the years since the law passed, including the way the law has been implemented, has had the opposite effect, allowing China to narrow the gap. That’s why three initiatives under consideration in Congress are so crucial.

• The Promoting and Respecting Economically Vital American Innovation Leadership (PREVAIL) Act moves the post-grant review system closer to what we always intended it to be — a cheaper, quicker alternative to patent litigation — by making changes that eliminate the opportunity for ill-intended infringers to game the system. While there should be a quick and cost-effective way to weed out patents the United States Patent and Trademark Office got wrong, a well-functioning patent system requires secure and stable patent rights. The PREVAIL Act restores balance to the patent system.
• The Patent Eligibility Restoration Act responds to the calls by numerous judges for Congress to provide clarity in the law of patent eligibility. As it stands now, hundreds if not thousands of inventions that are patented and being developed in China, Germany and elsewhere are deemed unpatentable under U.S. law. This is highly damaging to the United States maintaining its technological edge in the long run.
• The Realizing Engineering, Science, and Technology Opportunities by Restoring Exclusive (RESTORE) Patent Rights Act returns to patent owners the fundamental right to exclude anyone else from using the patent, the very definition of what a patent is.

Together, these bills will move our patent system to where I believe we should be, with stable and secure patent rights and a reasonable but not limitless administrative alternative to patent litigation.

There has been far too much discussion of the cost of patent litigation to accused infringers and nowhere near enough of the cost to the United States of weakening all patents and the patent system itself. Considering that the stakes are nothing less than ceding U.S. technological preeminence, this approach is incredibly counterproductive.

Congress should pass these bills. Our national security depends on it.

Lamar Smith represented the 21st District of Texas in the U.S. House of Representatives from 1987 to 2019.

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