We can’t let Washington undermine NJ’s economic engine: intellectual property | Opinion

3-minute read

• New Jersey’s economy relies heavily on intellectual property rights, particularly in sectors like pharmaceuticals and technology.
• The federal government’s Special 301 Report, which addresses global IP threats, has been weakened in recent years.
• This weakening has emboldened foreign countries to infringe on U.S. IP, potentially harming New Jersey’s economy.
• Stronger IP protections are needed to encourage investment and innovation in key New Jersey industries.

New Jersey is building the technologies that will define the 21st century. 

We’re a national leader in clean energy, with annual energy savings that surpass those of all but three other states. We’re developing breakthrough cures and treatments as the home of 13 of the nation’s 20 largest drug companies. And our new AI Hub, a collaboration between the New Jersey government and Princeton University, will soon put the Garden State at the forefront of U.S. artificial intelligence research.

Yet federal policymakers have cast a cloud over New Jersey’s bright future. For years, they’ve allowed foreign countries to erode the very foundation of our state’s economy: intellectual property, or IP, rights.

With a new administration and Congress in place, New Jersey’s representatives must take a stand in support of IP, before complacency in Washington tears down the dynamic economy we’ve worked so hard to build.

This is why NJ needs robust IP protections

IP rights are the cornerstone of technological progress. They give inventive companies the legal certainty that their ideas and breakthroughs won’t be stolen, which in turn allows them to bring investors on board. Without these protections, investors would be reluctant to commit the massive sums necessary to embark on risky, trailblazing projects.

New Jersey exemplifies the economic benefits that robust IP protections bring. Manufacturing, a field that relies heavily on patent rights, contributes over 10% of our state’s GDP. Other major sectors, like the life sciences, computer technology, and transportation, are similarly IP-intensive. In total, IP-dependent industries employ one in three New Jersey workers.

That’s why it’s so alarming that, in recent years, the federal government has been derelict in protecting Garden State companies’ IP from violations abroad.

Traditionally, federal policymakers have defended IP through something called the Special 301 Report. Issued annually by the U.S. Trade Representative, this report highlights global IP threats like piracy and patent theft, broadcasting to the rest of the world that America won’t tolerate violations of its citizens’ IP. The report also flags the economic impact of sectors that rely on IP. 

But for the past four years, the Biden administration weakened the Special 301 Report, softening its stance on numerous common IP violations, omitting some entirely, and cutting out the economic impact of IP-intensive industries.

So more than ever, foreign countries have been emboldened to steal the fruits of New Jerseyans’ hard work and ingenuity.

Look no further than the COVID-19 pandemic. Strong patent protections empowered New Jersey firms like Pfizer and Johnson & Johnson to lead the way in vaccine development, saving millions of lives. 

Yet soon afterward, despite no evidence that patents were limiting global vaccine distribution, USTR authorized countries around the world to ignore the patents on those vaccines.

In the years since, the Special 301 Report has erased all mention of the threat posed by such unilateral IP seizures, known as “compulsory licensing.” With America’s tacit approval, Colombia and the European Union are moving forward with more expansive compulsory licensing policies that threaten our state’s world-leading biopharma sector.

New Jersey companies cannot lose their ability to invest in innovation

If we don’t act soon to stop these efforts, New Jersey companies will lose much of their ability to invest in new treatments, stunting the medical progress that drives job growth here and saves lives around the globe. Bringing a new drug to market can cost upwards of $2 billion and take over a decade of research, with no guarantee of success. Undermining patent protections makes it harder for companies to justify these high-risk investments, especially in complex areas like oncology or rare diseases.

Those aren’t the only assaults on IP that USTR has permitted. Take drug price controls in Canada that undervalue innovative medicines. Or consider the restrictions on patenting imposed by countries like Argentina and India. 

By limiting U.S. companies’ ability to protect their inventions and earn revenue abroad, these policies hamstring domestic research and development, leading to less investment and fewer jobs in New Jersey’s high-tech industries.

Past Special 301 Reports took strong stands to prevent foreign countries from undermining our economy with policies like these. 

But for the last four years, USTR was silent, even as foreign IP infringement continued to mount.

New Jersey’s representatives in Congress must ensure this year’s report unequivocally condemns attacks on U.S. IP rights. Holding our trading partners accountable for violations will help safeguard our investments in medicine, renewable energy, and AI — ensuring the benefits stay with our workers and residents rather than flowing to foreign competitors.

New Jersey is leading America into the future. It’s time for Washington to do its part by backing our efforts with a strong Special 301 Report.

Sandip Shah, a visiting professor at Rutgers University, is founder and president of Market Access Solutions, which develops strategies to optimize patient access to life-changing therapies.