“The scientists get the patents,” US commerce secretary Howard Lutnick tells Axios. “The universities get the patents. And the funder of $50 billion [in research leading to the patents], the US government, you know what we get? Zero. … The United States of America taxpayer should get half the benefit.”
Put that way, it doesn’t sound so wrong, does it? But in reality, it’s piling a third bad idea on top of two others.
Explaining why “intellectual property” in general and patents in particular — the bottom layer of the poisonous three-layer policy cake — are bad ideas is a book-length, not op-ed length, endeavor. Suffice it to say that “intellectual property” ISN’T property, but rather a pernicious system of government-granted monopolies on ideas. If you want to dig into that claim, I recommend N. Stephan Kinsella’s book Against Intellectual Property (available free online from though, oddly, copyrighted by, the Ludwig von Mises Institute).
The middle layer is using taxpayer money to fund university research, then allowing the researchers and universities to patent, and realize revenue from, the results of that research.
It’s here that Lutnick is absolutely correct: If the government funds research, the taxpayers who funded the research should be the beneficiaries. The proper way to accomplish that is to put all results of government-funded research in the public domain. Goods produced using the research would be price-competitive because no single manufacturer would enjoy a monopoly on their production.
Lutnick’s proposal for a new top layer is bad all around.
The choice for universities would be to spend less on innovative research (incentivizing innovation is the go-to excuse for defenders of patent), charge more for the licenses on their patents, or (most likely) some combination.
Taxpayers still wouldn’t enjoy any choice in the matter. The combination they’d get out of the deal would be fewer new, worthwhile products AND higher prices for those products.
As for the federal government, the revenues would likely be a wash at best. University patent revenues come to low single-digit billions of dollars per year. 50% of that would come to a fraction of what the federal government spends per DAY … and would likely be more than offset by the economic disincentives to innovation and production.
If the feds won’t eliminate patents and government research funding, they should at least eliminate any and all combinations of the two, rather than demanding their own taste of the racket’s revenues.
Thomas L. Knapp (X: @thomaslknapp | Bluesky: @knappster.bsky.social | Mastodon: @knappster) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.
PUBLICATION/CITATION HISTORY