Why is the US patent system working against US interests?

Originally published on The Hill
Julie Burke, Ph.D.

Julie Burke, Ph.D.

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For decades, numerous U.S. administrations have taken steps to decelerate China’s technological development and economic growth.

It hasn’t worked.

In August, President Biden issued an executive order restricting U.S. investments into several Chinese technology sectors related to military, intelligence, surveillance and cyber-enabled capabilities. Last week, an annual Pentagon report revealed a rapidly expanding Chinese military. And according to a recent study that received funding from the U.S. State Department, China now outperforms the U.S. in 37 of 44 critical technology areas. Those include artificial intelligence (AI), defense, space, robotics, advanced materials, energy, biotechnology and critical quantum tech areas. The study also cited a high risk for a Chinese monopoly in advanced optical communications, drones, swarming, collaborative robots and synthetic biology, among others.

The true Achilles’ heel is an ongoing failure to address weaknesses in the U.S. patent system that are giving China a technological advantage.

In 2011, China joined the U.S. Patent Prosecution Highway (PPH), a fast-track examination path whose motto is “faster IP rights, reduced costs.” It shortens the average examination period from 17 months to three. To become eligible, an applicant must have substantially similar claims approved by a PPH member institution or country.

Since then, Chinese entities have been awarded increasing numbers of U.S. patents in the very same technological areas Biden’s executive order targets.

Patents are the golden ticket to increased market share. Once a Chinese entity is issued a patent by the U.S Patent and Trademark Office (USPTO), it can legally stop American companies from making and using the patented technology in the U.S. Some have even gone so far as to invalidate existing American patents in related technologies.

So why are we awarding so many patents to Chinese inventors, especially those with ties to the People’s Liberation Army?

The Department of Defense keeps a list of “Chinese military companies” operating directly or indirectly in the U.S. One company, Semiconductor Manufacturing International Corp. (SMIC), made a record $1.5 billion profit manufacturing chips for U.S. semiconductor-design companies. Others on the Defense Department’s list include Huawei, China Telecom, Inspur, China Electronics Technology Group Corporation (CETG) and SZ DJI Technology Co.

These same companies are recent recipients of U.S. patents in the areas of drones, electric batteries, advanced robotics, nanoscale materials, neural learning, AI algorithms, hardware accelerators and other technologies that strengthen China’s military.

It’s not just companies. Members of the Seven Sons of National Defense, a group of Chinese institutions and universities known for their affiliation with the People’s Liberation Army, are also recent recipients of U.S. patents. One school, Northwestern PolyTechnical University, was given the green light on Aug. 8 for patenting technology using AI to develop combat maneuvers for unmanned aerial vehicles. Another patent was approved by the USPTO in November 2022 for an application by the Nanjing University of Aeronautics and Astronautics to use AI in order to improve technical combat indicators like flight speed, stealth and maneuverability for aircraft parts. That patent breezed through the PPH examination process in a mere 14 days.

It’s hard to understand how awarding patents to Chinese companies and organizations with known ties to the People’s Liberation Army is in the interest of U.S. national security or economic and technological advancement. I’m not the only one concerned: Brig. Gen. Robert Spalding, an expert in Chinese economic competition, cyber warfare and political influence, told me, “it is absolutely vital for U.S. competitiveness and national security that we decouple China from our patent process.”

To be sure, the law already authorizes the USPTO to withhold patents that the Department of Defense considers detrimental to U.S. national security.

But in my experience, patent examiners are under far too much pressure to issue China-filed patents quickly — particularly those expedited under the PPH or other fast-track programs. Moreover, in 2021, when the USPTO was under congressional review to improve patent quality, it actually lowered patent quality requirements in the patent examiners’ performance and appraisal plan.

A bill introduced by Senate Majority Leader Chuck Schumer (D-N.Y.) earlier this year calls for limiting the flow of advanced technology to the Chinese government — but it doesn’t go quite far enough. Another bill, introduced in September by Rep. Scott Fitzgerald (R-Wis.), would require the USPTO to mandate disclosures in patent applications that have ties to China and other foreign adversaries. Congress should act immediately to pass both of these pieces of legislation and also prohibit issuing U.S. patents to Chinese entities on the Department of Defense’s watchlist — regardless of whether or not those patents are eligible for the PPH or other fast-tracked programs.

The USPTO’s ongoing issuance of patents to watchlisted Chinese entities speaks to an alarming disconnect between the administration’s national security goals and the USPTO’s actions. Additional restrictions would strengthen U.S. national security, help prevent China from obtaining a monopoly in highly sensitive areas and ensure the U.S. regains its competitive edge as a leader in military technology.

The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only.


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