KERRIGAN: IP Protection Matters to Small Businesses

By SBE Council at 23 October, 2024, 11:15 am

In a recent interview on the Center for Individual Freedom's IP Protection Matters podcast, SBE Council President & CEO Karen Kerrigan explains how strong intellectual property (IP) protections are critical for startups and small businesses, and how bad policy proposals like the push for expanded government "march-in" powers under the Bayh-Dole Act would disincentivize investment in medical advances and new technologies, the bulk of which are pursued by individual entrepreneurs and small businesses.

Listen to the full interview here. Or access it via Apple Podcasts or Spotify.

See highlights of the interview below and read the full transcript here.

INTERVIEW HIGHLIGHTS

On the importance of strong intellectual property (IP) protections for small businesses and start-ups…

Kerrigan: It is extraordinary. The bulk of firms in this country that have patents, create patents and want to protect their patents are small businesses. Small businesses and entrepreneurs are the fount of innovations and discoveries, whether it's patents, trademarks, copyright or trade secrets. And as entrepreneurs and business owners have become more sophisticated and they have more tools at their disposal - whether it's technology tools or digital tools - they are creating new things and new ways of doing things, including new methods or processes. Protecting these patents is critical to these businesses as it really does create the sustainability, the defensibility and their value over the long term.

On the importance of IP protections for the ability of small businesses and start-ups to raise capital to compete in the marketplace…

Kerrigan: For start-ups, having that patent and that protection…is so critical to raising money. We see this on Shark Tank. You get the Sharks asking the startup: "Is this an invention or is this a creation…is it protected? Is your IP protected? Do you have a patent, or have you applied for a trademark? Is your trade secret protected?" So yes, for small businesses that want to grow and want to compete with bigger businesses and employ more people - these businesses are really important for the vibrancy and the competitiveness and growth of our country - protections for patents, trademarks, copyrights and trade secrets have become even more critical to that end.

On the Bayh-Dole Act's impact on small businesses and start-ups…

Kerrigan: The bipartisan Bayh-Dole Act, going on more than 40 years now, really has been one of those programs that has had extraordinary impact on start-up activity and innovations. … There were great ideas that were coming up in university settings that were sitting on the shelf. Because of Bayh-Dole and the IP protection given to those inventions, there have been over 17,000 startups that are directly tied to the Bayh-Dole Act.

On efforts to expand government "march-in" rights under Bayh-Dole to invalidate existing patents…

Kerrigan: Now we have the Biden Administration wanting to turn back the tide under the guise of lowering drug prices, and saying if the price of a drug is too high and this drug was created using some type of government grant or government support, that we're just going to march in, take back and invalidate that patent. What many people don't understand is that it is not just about drug prices. That in and of itself would be bad. Taking back a patent for a drug, because, as we've argued in a lot of our papers and up on Capitol Hill, the biopharmaceutical industry is dominated by small to mid-size businesses. Individual entrepreneurs and small businesses are creating the new drugs of tomorrow. This will not only disincentivize and really harm the development of life-saving drugs, but this applies to all inventions, all creations, all technologies that were developed using government grants as seed money. So this is pretty dangerous…there was nothing ever in Bayh-Dole saying that if we deem a price to be unreasonable, and that's not even defined in this guidance, that we will take back this patent - that we will seize or invalidate this patent.

Listen to the full interview and read the entire transcript here.

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