This Constitution Day, the Democratic presidential candidate is committed to government price controls and to marching in on the patents of products developed from the findings of federally supported basic research.
She said so in 2019, and the Biden-Harris administration she is part of has set up a price controls regime for drug price-setting and proposed a technology-neutral price-based patent heist scheme.
Thus, this Constitution Day holds special import for our nation’s future, given these and other recent assaults on our form of government. Court-packing threats. Attacks on the Senate filibuster. Regulations designed to destroy established energy industries. An Administrative State that snubs the rule of law, due process, fairness and individual rights. Bureaucracies abrogating the separation of powers.
The Founding Fathers would be shocked to see how little regard Americans seem to have for the democratic republic they carefully crafted. The Founders expressed awareness of, and devoted attention to fashioning, a federal structure that would constrain the new government. States, branches of government and separated powers were intended to prevent any “long train of abuses” like that endured at the hands of the British Parliament and King George III.
To achieve success, Constitutional Convention delegates had to reach many compromises on issues, many of which were contentious or complicated. For instance, in balancing large-state and small-state equities, the solution provided states representation in the House based on population, while each state has equal representation in the Senate.
One of the noncontroversial matters considered was James Madison’s and Charles Pinckney’s proposal to include among Congress’s powers the authority to write federal patent and copyright laws. This power became Clause 8 of Article I, Section 8. The measure “secures” the private property rights of authors and inventors in their creative and inventive works.
The intellectual property clause specifies these IP rights as “exclusive” and “for limited times.” This combination of exclusivity and limited duration facilitates achieving the Founders’ stated purpose for the clause: “[t]o promote the progress of science and useful arts.”
Madison’s and Pinckney’s IP proposal was adopted 12 days before the Constitution was approved. There was no debate and no opposition to it. Yet George Mason law professor Adam Mossoff notes how unique was the IP clause in Article I Section 8: “No country’s founding document had done this before.”
When the new Constitution went to the states for ratification, the “father of the Constitution” James Madison, John Jay and Alexander Hamilton explained its contents in a series of essays, the Federalist Papers. Madison briefly discussed the IP clause in Federalist 43.
“The utility of this power will scarcely be questioned,” Madison wrote. In other words, secure, exclusive property rights to the fruits of one’s intellectual labor would surely achieve the goal of incentivizing pursuits that advance knowledge and practical inventions.
Moreover, he pointed out, “The public good fully coincides in both cases with the claims of individuals.” That is, the newly formed nation and its citizens benefit from the new knowledge and the inventions that expand America’s economy, improve the standard of living, and create wealth and new industries.
For a limited duration, creators and inventors enjoy exclusive ownership rights to the new property they have created. Meanwhile, the public derives benefits from these fruits of ingenuity.
The brilliance of this win-win model is lost on those who would distort core features of the U.S. Constitution.
Government price controls, such as those enacted in the Inflation Reduction Act, create imbalance in the IP clause’s promise of secure private property rights. Price controls and extortionary taxes undermine the constitutional IP framework, which over more than two centuries has proven extraordinarily fruitful.
Likewise, misuse of the Bayh-Dole Act’s “march-in” rights to “snatch” patents throws IP rights into uncertainty. The reckless Biden-Harris plan to misuse march-in rights based on product price—which is not one of the four narrow, specified grounds—throws licensing federally funded inventions into turmoil. Already this proposal is causing inventions tied to federally funded basic lab research to be regarded as toxic, tainted, too great a risk to assume.
On the promise of exclusivity and the free market, decisions are made about private investment, research and development, years before there’s a product, a price or a market.
In fact, most inventions never get to market or earn enough revenue to cover their costs. The most successful inventions and creative works are often the most valuable.
This Constitution Day, we should consider how the Constitution’s IP framework has served our nation extremely well. We must enter the fray against the live threats to the successful U.S. innovation model. If these threats take root, we have much at stake to lose. And the loss will take generations to recover from.
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