Undermining intellectual property won't help China; strengthening it might.

With both presidential candidates emphasizing tariffs to punish geopolitical adversaries and protect domestic industries, their campaign is placing Beijing under further scrutiny regarding intellectual property theft and cybercrime.

America should respond effectively and strategically by strengthening intellectual property protections within America – rather than attacking China’s patent system as one way of responding. Our patent system serves a vital purpose and we should strengthen it rather than weakening it further.

Last year’s Prohibiting Adversarial Patents Act would have prohibited certain Chinese firms from purchasing or registering American patents and from enforcing patents they already hold against American courts. Although removed for consideration last November due to procedural reasons, supporters could potentially revive it later on this year.

Chinese Communist Party regime’s attempts at usurping key technologies like artificial intelligence (AI) and telecom through state-backed programs is raising legitimate concern in many circles; authoritarianism policies, geopolitical interests and state surveillance programs could all potentially come under pressure by such developments.

Makes it tempting to restrict Chinese innovation by depriving CCP-backed firms protection under the world’s leading intellectual property regime and punish China for policies and court decisions which undermine American’s IP rights and facilitate theft by their firms.

But such actions would undermine America’s patent system, a hallmark of decades-long economic success and technological leadership. Patent protection protects property rights while giving innovators incentives to spend time, skill and resources creating inventions which enhance human life.

Rule of law, stability and certainty are paramount tenets; to deny property rights based on an inventor’s nationality or other immutable characteristics is absolutely unheard-of.

As innovators and entrepreneurs, this could be seen as a violation of both spirit and letter of equal protection guaranteed in the Constitution, potentially deterring inventors both domestically and overseas from seeking U.S. patents, leading them to register inventions under foreign regimes out of fear that if their rights became subject to U.S. authorities (or lobbyists lobbying them).

China may retaliate by stripping American inventors of patent rights in Chinese courts and permitting further theft. Once precedent has been set that property rights can be invalidated for political considerations, other nations could initiate attacks against U.S. inventors’ patent rights due to perceived geopolitical slights or sanctions.

Finally, it would be remiss of us not to note one key benefit of U.S. patent system: its incentive for Chinese firms to publicly announce their innovations in English so as to apply for American patents, leading them to open up more of their innovations for scrutiny by U.S. inventors and spurring further innovation from them.

Trade retaliation isn’t a zero-sum game; while weakening foreign patents could help balance out China’s political and economic interests, most everyone — especially U.S. consumers who benefit from cutting-edge innovations — stands to lose out from this action.

Congress and its next President should instead identify several blind spots which impede U.S. innovation and intellectual property from being more cost competitive against China.

Reform should start by revitalizing the Patent and Trademark Appeals Board, an administrative tribunal which adjudicates patent validity disputes. Unlike district courts where “clear and convincing” proof must exist for invalidating patents, here patents may be declared invalid on lower “balance of probabilities” standards.

Tech and manufacturing giants that don’t wish to pay royalties can use this loophole more easily invalidate owners’ patents more quickly, thus decreasing entrepreneurial R&D incentives and making it harder for innovators and inventors to attract investment capital and funding. Many American inventors in pharmaceuticals and tech are moving investments overseas where courts uphold patents previously invalidated in America – this has spurred American inventors from both sectors such as registering patents there instead.

The Patent and Trade Appeals Board allows litigation funders to bring redundant challenges that increase inventors’ litigation costs, while non-industry participants such as hedge funds can use predatory litigations against companies they do business with to depress prices with lower stock prices through such litigations. Reforming this board to better balance patent holders and challengers interests would do far more for American innovation than further weakening intellectual property protections.

American innovators may also be protected against overseas infringement through alliances of pro-intellectual property liberal democracies that form pro-IP coalitions to challenge and lobby on international fora like the World Trade Organization. Unfortunately, private parties often remain reluctant to mount challenges against Chinese firms that use government backing due to threats of sanctions from that government.

Federal support can also be withheld from intellectual property waivers such as COVID-19 vaccine pandemic-era waiver, which was advocated for by developing countries at the expense of U.S. companies but didn’t help any additional patient get immunized.

China continues to behave capriciously toward American innovators by taking measures that reduce patent royalties they owe their companies, while at the same time strengthening intellectual property protections for Chinese-registered patents in order to attract overseas inventors and drive its innovation ecosystem forward. China can only gain by weakening America’s world-leading patent system rather than try and undermine it further themselves.

Satya Marar is an expert on competition, innovation and governance with experience at George Mason University’s Mercatus Center.