How A Biden Administration Would Shape IP Policy

Law360 (October 19, 2020, 3:33 PM EDT) --
Charles Barquist
Charles Barquist
Maren Laurence
Maren Laurence
While the outcome of the presidential election is of course unknown, and reporting about the campaigns is dominated by more controversial topics, it is nevertheless worthwhile to consider the implications of a Joe Biden-Kamala Harris administration on intellectual property law and policy.

Democratic presidential nominee Joe Biden's "Build Back Better" agenda offers insight into the priorities and policies that would affect intellectual property rights.

In particular, a Biden administration would likely have the greatest impact on trade secret law and seek to strengthen international trade secret enforcement. At the same time, however, Biden proposes to cut back drastically on the use of noncompete clauses and no-poach agreements, policies that may weaken trade secret protections domestically.

Stronger Protection of Intellectual Property From Foreign Actors

The Biden campaign advocates for stronger international enforcement to confront foreign efforts to steal American intellectual property. Biden's campaign singles out China's government and other state-led actors on assailing American creativity and promises a coordinated and effective strategy to confront foreign efforts to steal American intellectual property.

The Biden campaign also cites China for dramatically increasing cyberespionage against U.S. companies and proposes new sanctions to cut off companies guilty of technology theft from access to U.S. markets. Details about precisely what the coordinated and effect strategy would comprise are lacking, however.

Some of that strategy may be seen in a bill introduced in the Senate in 2018 by Democratic vice presidential nominee Kamala Harris that is intended strengthen the United States' ability to combat economic and industrial espionage. Called the Deterring Espionage by Foreign Entities through National Defense Act, the bill would increase the damages available for trade secret theft, extend the statute of limitations, and expand the extraterritorial scope to include offenses committed abroad.

At least until the details of Biden's strategy emerge, U.S. companies will have to continue to rely on existing civil remedies to protect themselves against foreign attacks.

Biden's proposals also include plans to address false advertising by cracking down on companies that falsely label products as "made in America" even if they are coming from other countries such as China.

Biden would seek to strengthen enforcement by the Federal Trade Commission, including the imposition of penalties that it says the administration of President Donald Trump has failed to require.

For U.S. companies importing goods that may be mislabeled, now would be the time to make sure labeling is accurate in order to avoid penalties under a tougher enforcement regime.

Potential Weakening of Some Trade Secret Protections at Home?

While increasing enforcement for trade secret and false advertising law internationally, the Biden plan may somewhat weaken trade secret protections here at home. Biden's platform calls for legislation to eliminate employee noncompete clauses, "except the very few that are absolutely necessary to protect a narrowly defined category of trade secrets."

The intent is to improve employee mobility and wages, but, depending on the details of any proposed law, the ability to use such agreements to protect trade secrets may be impaired. Consistent with the stated goal of aiding employees by making it easier to change jobs in search of better conditions, Biden would also seek an outright ban all no-poach agreements.

U.S. firms should consider beginning now to review their employment contracts and policies and revise noncompete clauses to be narrowly drawn and focused as specifically as possible on protectable trade secrets of the company. And with no-poach agreements already receiving scrutiny from antitrust regulators, companies should carefully review the justification for any agreements they may have in place.

Biden's Support for Patent Rights

Biden's platform is silent on any plans for the patent system. During Biden's tenure as vice president, the Leahy-Smith America Invents Act of was enacted with the support of President Barack Obama's administration. That legislation is generally viewed as strengthening patent rights, but it does not appear that Biden played an active role in getting the bill through Congress.

Biden clearly recognizes the importance of patents in promoting innovation. For example, he was the moving force behind the Cancer Moonshot Program in 2016, which, among other things, included a plan for accelerated examination of patents on cancer immunotherapy. Biden also promoted a 2011 program to license U.S. Department of Energy patents for nominal fees as part of America's Next Top Energy Innovator challenge.

Biden has been largely supportive of patent rights in pharmaceuticals. As vice president, he often opposed other countries' efforts to require compulsory licenses to drug patents. Biden's health plan promises to reduce drug prices, but weakening patent rights is not one of the tools he is proposing. Biden would, however, work to avoid manipulation of the patent system in a way that would increase drug prices. For example, Biden supports legislation that would accelerate the development of generic drugs by ensuring access to samples of patented medicines.

Companies that have used the patent system in ways that have been alleged to be anti-competitive, such as using so-called patent thickets, evergreening or product hopping, should be prepared to defend strategies that may be under increasing scrutiny in a Biden administration.

Copyright and the Internet

As with patents, Biden's campaign website does not have any specific proposals relating to copyrights. Biden has, however, weighed in on the controversy over Section 230 of the Communications Decency Act, which generally provides immunity for website operators that publish content provided by third-party users that may, for example, violate copyrights.

Biden appears to be more animated by the protection that the law provides to dissemination of false and misleading information than a concern about protecting copyright owners, and he has called for the law to be revoked immediately. Biden would replace the provision with one that would hold social media companies accountable for knowingly platforming falsehoods. Social media firms, many of which are already under fire for amplifying disinformation, may be forced to redouble efforts to filter inaccurate and misleading material posted by users

Conclusion

With the growing pressure to secure American intellectual property from foreign adversaries, it is clear that increasing the nation's ability to protect trade secrets and other intellectual property will be a priority in a Biden administration. Companies and individuals may see an increase in trade secret misappropriation cases as the scope and opportunities widen — both domestically and internationally.



Charles Barquist is a shareholder and Maren Laurence is an associate at Maschoff Brennan.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

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