Posts Tagged ‘legislation’

Are We Sufficiently Protecting our National Security?

Tuesday, February 6th, 2024

The answer is a resounding, “No!” For decades, we Americans have blithely ignored the long-term effects of allowing foreign investors or corporations to purchase the assets of our country in the form of companies, land, and mineral resources. We have been selling off our ability to produce wealth by allowing foreign corporations to purchase American companies, real estate, mines, and farm land. It is not just foreign companies buying our assets that is the problem ? it is the state-owned and massively subsidized companies of China that are the danger because China uses its state-owned enterprises as a strategic tool of the state. By pretending they are private companies abiding by free-market rules makes us the biggest chumps on the planet.

We didn’t let the USSR buy our companies, real estate, or farmland during the Cold War. We realized that we would be helping our enemy. This was pretty simple, common sense, but we haven’t had this same common sense when dealing with China.

Most foreign countries don’t allow 100% foreign ownership of their businesses, but sadly, the United States does not exercise the same prudence. We allow sales of U. S. companies to foreign companies unless there are national security issues, such as technologies that are utilized by our military and defense systems. We should be equally protective of our natural resources and farmland to ensure the health and welfare of all Americans.

In theory, we have the means to prohibit certain foreign investors or companies from acquiring U.S. assets that would pose a threat to our national security.  The Committee on Foreign Investment in the United States (CFIUS) is the inter-agency body charged with conducting national security reviews for certain foreign investments in the United States. CFIUS retains the authority to review a transaction that could result in foreign control of any U.S. business and has the power to regulate, approve and deny these acquisitions.  Australia, Canada, New Zealand and the United Kingdom are exempt from CFIUS reviews CFIUS submits an annual report to Congress and the most recent report was submitted on July 31, 2023.However, CFIUS has not been a member of the interagency Committee, so acquisitions of farmland were not reviewed with regard to impacting our national security.   

CFIUS reviews were expanded when the President  Bush signed H.R. 556, Foreign Investment and National Security Act of 2007(FINSA) on July 26, 2007 after the Dubai Ports World transaction passed through CFIUS without a formal investigation, leaving a surprised and angry Congress determined to avoid a repetition of that scenario.

The scope of CFIUS reviews was expanded when the Foreign Investment Risk Review Modernization Act of 2018 was passed by Congress on June 26, 2018. “The FIRRMA-amended CFIUS process maintains the President’s authority to block or suspend proposed or pending foreign “mergers, acquisitions, or takeovers” of U.S. entities, including through joint ventures, that threaten to impair the national security.”  It expanded the jurisdiction of CFIUS to address growing national security concerns over foreign exploitation of certain investment structures which traditionally have fallen outside of CFIUS reviews.

According to the IPM News article of June 27, 2023, “Chinese firms and investors own just over 383,934 acres in the U.S., less than the state of Rhode Island, and far less than how much Canada, Netherlands, Italy, the U.K. and Germany, in that order, each own. China is No. 18 on the list of foreign investors.” Sen. Jon Tester (D-Montana) who is skeptical of Chinese land ownership in the U.S., told NPR, “I don’t know that we know for sure all the foreign land that potentially is owned by Chinese individuals or folks controlled by the Chinese government…Any company and any individual living in China that comes and tries to buy land can be controlled by the Chinese Communist Party because they have that kind of control over their people.” Tester said.

What is enabling Chinese companies to go on a buying spree of American assets? Trade deficits – our ever-increasing trade deficit with China over the past 20 years is transferring America’s wealth to China and making millionaires out of many Chinese. In 1994, our trade deficit with China was $29.5 billion, and it grew to $83.8 by 2001 when China was granted “Most Favored Nation” status and admitted to the World Trade Organization. By 2004, it had doubled to $162.3 billion. After a slight dip in 2009 during the depths of the Great Recession, the trade deficit grew to a high of $418 billion in 2018. It dropped down in $352.8 billion in 2021 and $382 billion in 2022 due to the COVID Pandemic shutdowns and was $257 billion in 2023.

On January 26, 2017, Robert D. Atkinson, President of the Information Technology and Innovation Foundation, testified at a hearing on “Chinese Investment in the United States: Impacts and Issues for Policymakers” before the U.S.-China Economic and Security Review Commission.  He testified: “For many years, China has recycled the earnings from its large and sustained trade deficit with the United States into U.S. Treasury bills. But the last few years have seen a marked increase in the amount of inward foreign direct investment (FDI) from China to the United States, across a range of industries. While the underlying motivation for some of this investment is commercial, at least one-third is from Chinese state-owned enterprises, and it is likely that considerably more is guided and supported by the Chinese government, specifically targeting sectors that are strategically important for U.S. national security or economic leadership.”

As reported in The China Project article of  November 6, 2023, “Chinese ownership of American farmland came under increased scrutiny at both the national and local level after the Fufeng Group, producer of the flavor enhancer MSG, announced in November 2021 its intentions to invest near Grand Forks, North Dakota…Arkansas, Florida, Louisiana, Montana, North Dakota, Ohio and three more states have since passed legislation that restricts some land ownership for Chinese citizens or companies.

The Florida law, for example, bans Chinese owners from buying land “within 10 miles of any military installation or critical infrastructure facility” such as seaports, airports and wastewater treatment plants. The law doesn’t apply to purchases made before July of 2023, but current owners must register their property with the state by January 2024 or face fines and the risk of state authorities seizing their land.

Montana’s governor in May signed legislation that prohibits Chinese individuals and companies from buying farmland, critical infrastructure, and homes near military facilities. Other states have passed laws that put a cap on the number of acres Chinese buyers may own.”

However, on February 2, 2024, the Epoch Times reported, “A federal appeals court has issued a limited temporary block on a Florida law that bans citizens of China from buying property in the state that Florida Gov. Ron DeSantis said was needed to counteract the “malign influence” of the Chinese Communist Party (CCP) in his state.”

It is probable that the prohibition of Chinese investors and companies buying agricultural land will have to be handled at the national level, instead of by states.  On January 5, 2024, the Congressional Research Service issued a brief, titled, “Selected Recent Actions Involving Foreign Ownership and Investment in U.S. Food and Agriculture” stating “Some Members of Congress have introduced a series of bills that would amend existing federal law to impose additional requirements on and review of foreign ownership of U.S. agricultural land and/or foreign investment in the U.S. food and beverage industry…Bills in the 118th Congress that would establish additional restrictions include H.R. 212, H.R. 344, H.R. 683/S. 168, H.R. 809, H.R. 840, H.R. 917/S. 369, H.R. 1448, H.R. 3357/S. 926, S. 684, and S. 1136.”

In addition, the House Select Committee on China released a bipartisan report on U.S.-China economic competition on Dec. 12, 2023 that “includes nearly 150 policy recommendations, of which a majority are supported by bipartisan members of the CSC, geared toward strengthening U.S. economic competitiveness vis-à-vis China.”

I am happy that legislators are finally waking up to the real dangers of our relationship with China. The Communist Chinese government is not our friend. China a geopolitical rival that has a written plan to become the Super Power of the 21st Century. Letting Chinese corporations acquire American companies, especially energy or technology-based companies is the biggest threat to rebuilding American manufacturing. Protecting our food supply is also an important component of protecting our national security. Therefore, we must prohibit Chinese acquisition of American farmland. 

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What Would be The Benefits of the ONSHORE Act of 2023?

Wednesday, July 12th, 2023

The COVID pandemic proved that we cannot rely on imports of products needed to protect the health and welfare of Americans. Offshoring of manufacturing left the U.S. vulnerable to supply chain disruptions. We cannot defend our country if the products needed by the military and defense industry become unavailable because of being sourced offshore, especially in China. It’s time for all Americans to wake up to the dangers of being dependent on other countries for manufacturers goods, especially one that has become a threat to our country.

Strengthening domestic manufacturing capabilities, especially for industries of the future, is critical for economic and national security. We must forge a new path by rebuilding American manufacturing to win the international competition for good jobs, sustained economic growth, and rebuild a strong, secure domestic supply chain if we want to remain a free country.

I am glad to see that Congress is finally paying some attention to this need:  On June 8, 2023, Senator Mark Kelly (D-AZ), Senator JD Vance (R-OH), and Senator Tom Cotton (R-AR) introduced S.1915 – ONSHORE Act of 2023, a bipartisan bill to boost domestic manufacturing and strengthen supply chains that will help bring critical supply chains back to America by assisting communities of all sizes with the site development needed to attract manufacturing facilities. 

The joint press release states: “The U.S. faces a shortage of shovel-ready sites with the necessary infrastructure and workforce for companies to quickly begin construction on new manufacturing facilities. The ONSHORE Act creates a Critical Supply Chain Site Development Grant Program within the Economic Development Administration, which would assist communities, including small towns and tribal communities, with site development to attract manufactures from critical industries to build new facilities in their area.” 

Senator Vance stated, “As our nation takes the necessary steps to reshore critical supply chains and spur innovation, everyone in America should reap the rewards This bill would deploy capital broadly to ensure the foundations of tomorrow’s industry and growth are laid in underdeveloped regions. If enacted, it will deliver good-paying jobs, build vibrant communities, and strengthen supply chains—in Ohio and around the country.” 
 
Senator Kelly stated, “As we work to bring manufacturing supply chains for critical industries from microchips to critical minerals back to America, we have to maximize this opportunity by making sure there are enough sites with the infrastructure and workforce needed for new facilities. For a lot of small towns and tribal communities, the biggest barrier to attracting investment is the cost of getting sites ready for development. We’re working to fix that, which will boost manufacturing and create good-paying jobs in every corner of our states and the country.” 
 
Senator Cotton stated, “We cannot rely on other countries like China for our essential technologies. The technologies of tomorrow should be tested, researched, and made in America. This legislation will help make the necessary investments in our communities to make that possible.”

So far, the OSHORE ACT has received enthusiastic support from the International Economic Development Council (IEDC), the Global Business Alliance, the Greater Phoenix Economic Council, the Arizona Commerce Authority, and JobsOhio..

Nathan Ohle, President & CEO of IEDC said, “The ONSHORE Act will provide communities with essential resources to aid in attracting supply chain manufacturers. Economic developers across the U.S. will welcome this new initiative and IEDC urges the swift passage and implementation of the ONSHORE Act.”

Nancy McLernon, president & CEO of the Global business Alliance, said, “Site readiness is a critical consideration for international companies planning major investments in the United States… and urges all Senators to support this measure and other policies that make it easier to invest in America.”  

Chris Camacho, President & CEO of the Greater Phoenix Economic Council said, “The availability of shovel-ready sites with the necessary infrastructure and skilled workforce is a crucial factor in attracting companies to invest in Greater Phoenix and bolster U.S. supply chains. This program ensures that strategic mega sites and regionally impactful locations are properly prepared for new industrial investment. With enhanced site-readiness, the United States will be better equipped to compete globally, foster the growth of critical industries, and ensure the production of essential products domestically.”

Sandra Watson President & CEO, Arizona Commerce Authority, said, “We applaud Senator Kelly for leading on this important legislation. This ONSHORE Act will significantly strengthen U.S. competitiveness for new manufacturing opportunities, bringing more jobs and investments to Arizona.”

J.P. Nauseef, JobsOhio president and CEO, said, “I applaud the introduction of the ONSHORE Act, which will help Ohio and the rest of the United States more fully capitalize on this generational opportunity by expanding the number of sites that are ready to support major development projects.”

I can see that basic infrastructure, such as road access or water and power utility hookups, is an important factor affecting where a new manufacturing facility is built, but there are so many abandoned manufacturing sites throughout the country that I question the need for the Economic Development Agency’s Critical Supply Chain Site Development Grant Program. There are also large retail stores, such as former K-Mart stores, that could be converted to manufacturing sites by remodeling and changing zoning. The redevelopment of these sites would provide good opportunities to revive the industrial base of states hard hit by offshoring, such as Michigan, Ohio, and North and South Carolina.

In my opinion, there is a greater need for a new type of Small Business Innovation grant program to fund establishing manufacturing plants to manufacture components and systems that are no longer made in the U.S. because of being offshored to China and other Asian countries.  This type of grant would also provide new industrial investment, including in rural and tribal communities, and regions with high unemployment.  These companies would help position the U.S. to compete against adversaries like China, boost domestic manufacturing, and build resilient supply chains. 

Priority for receiving such a grant should be given to proposals that would manufacture critical components and systems needed by our military and defense industrial base.  Semiconductors and batteries are not the only critical products that need to be onshored/reshored.  Components such as capacitors, resistors, inductors, transformers, connectors, and flex circuits also need to be returned to being made in the USA.

This kind of investment will better position the U.S. to compete against international competitors like China and the European Union and ensure more critical products are made in America.  

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California’s Governor Signs Climate Bills that Would Transform State Economy 

Tuesday, October 18th, 2022

At the close of California legislative session, August 31, 2022, the Assembly and Senate passed several climate bills,  signed by Governor Newsom on September 16, 2022. These bills were part of the California Climate Commitment, “a record $54 billion investment in climate action that exceeds what most countries are spending…”

The Governor’s press release states that the California Climate Commitment will:

  • “Create 4 million new jobs
  • Cut air pollution by 60%
  • Reduce state oil consumption by 91%
  • Save California $23 billion by avoiding the damages of pollution
  • Reduce fossil fuel use in buildings and transportation by 92%
  • Cut refinery pollution by 94%”

 These bills are:

California AB 1279 – The California Climate Crisis Act, requires California “to achieve net zero greenhouse gas emissions as soon as possible, but no later than 2045, and achieve and maintain net negative greenhouse gas emissions thereafter, and to ensure that by 2045, statewide anthropogenic greenhouse gas emissions are reduced to at least 85% below the 1990 levels.”

Prior to this new law, the state was required by the California Global Warming Solutions Act of 2006” to ensure that statewide greenhouse gas emissions be reduced to at least 40% below the 1990 level by 2030.”

The very ambitious new target of AB 1279 would require much more drastic tactics to reduce greenhouse gas emissions across all sectors of California’s economy.

A coalition of about 60 chambers of commerce, agriculture, business and industry organizations from across the state opposed this bill as well as AB 2133 that is noted below because these bills would affect new housing construction, agriculture production, energy, transportation, and all manufacturing.

AB 2133) – GHG Reduction by 2030 – This bill “would have increased California’s climate reduction targets to at least 55% below 1990 levels no later than December 31, 2030…it did not receive a majority vote in the Legislature, making it the only Climate Proposal not codified into law.”

In a open letter to the California Senate, the main reason for opposing AB 2133  by the Coalition was:  “Increasing the GHG 2030 emissions reduction target from 40% to 55% below the 1990 level, would require the state to remove an additional 17 million gasoline vehicles off the road by 2030, according to data developed by CARB. Additionally, CARB data shows that CARB’s initial modeling of scenarios in this range concluded them to be “economically and technically infeasible due to the current lack of low-carbon energy infrastructure, unavailability of technology, large job loss and high implementation costs.”

SB 1020 – Clean Electricity. This bill codifies into law a state policy that eligible renewable energy resources and zero-carbon resources will provide:

  • 90% of all retail sales of electricity to California end-use customers by December 31, 2035, 95% by December 31, 2040, and 100% by December 31, 2045; and
  • 100% of electricity procured to serve all state agencies by December 31, 2035.”

To achieve these objectives, “SB 1020 requires that CARB and the California Energy Commission use unspecified programs authorized under existing statutes and employ measures to ensure that implementation of the policy does not cause increases in GHG emissions elsewhere, a concept also known as leakage”

SB 1137  – Oil and gas: operations: location restrictions: notice of intention: health protection zone: sensitive receptors.  The bill “establishes a ‘health protection zone’ of 3,200 feet between oil and gas wells and ‘sensitive receptors’ defined broadly to include residences, schools, healthcare facilities, and any building housing a business that is open to the public.”

It also requires that “all operators of oil and gas wellheads and production facilities must submit sensitive receptor inventory maps that identify sensitive receptors within 3,200 feet of the operator’s wellheads and production facilities” by January 1, 2023. “Health and safety requirements kick in after January 1, 2025, for oil and gas wellheads and production facilities currently located within a health protection zone.”

The bill also “prohibits the Geologic Energy Management Division (CalGEM) from approving any notice of intention after January 1, 2023, to drill a new well within a health protection zone, except under limited circumstances, including when it is for the purposes of plugging and abandoning a well.”

SB 905 – CCUS – This bill instructs the California Clean Air Resource Board (CARB) “to create a ‘Carbon Capture, Removal, Utilization, and Storage Program’ to evaluate the efficacy, safety, and viability of CCUS and carbon dioxide removal (CDR) technologies; facilitate capture and sequestration of carbon dioxide using these technologies; and develop monitoring and reporting frameworks to enforce the proper implementation of these activities.”

The bill “mandates that all CCUS and CDR activities be carried out in a way that seeks to minimize adverse effects on the environment and public health, promote workforce development and employment opportunities, and reduce fossil fuel production in the state, among other goals.”

It also requires “CARB to adopt implementing regulations on or before January 1, 2025, and by January 25, 2025, the state Secretary of Natural Resources, in consultation with CARB, must publish a framework governing agreement …for purposes of managing, developing, and operating CCUS and CDR projects.”

Governor Newsom has faced some criticism from environmental advocates for some of his proposals. Maya Golden-Krasner, the deputy director of the Climate Law Institute at the Center for Biological Diversity, an environmental advocacy group, stated, “Carbon capture technologies are dangerous, expensive and infeasible…It’s creating a ticking time bomb that needed to be addressed before the state goes forward with anything,” she said, referring to the potentially hazardous effects for communities living above any of these deposits.

Of course, the oil and gas industry opposed these bills, warning “that the policies would raise costs for consumers and increase California’s dependence on other countries for fuel.

“It is the California government dictating how and when we can travel and mandating the type of energy we’re using and when we can use it,” said Kara Greene, a spokesperson for the Western States Petroleum Association, a Sacramento, California-headquartered trade group that represents petroleum companies in Arizona, California, Nevada, Oregon and Washington.

“It disregards the livelihoods of thousands of Californians, who still need to drive to work, who still need to drive their kids to school, who still need to balance their household budgets.”

The irony of all of these Climate Commitment bills is that the week after the Governor signed these bills, “the California Independent System Operator (ISO)asked “Californians to not use electricity in large amounts between 4 P.M. and 9 P.M. In particular, they asked residents to voluntarily reduce their power consumption by avoiding using large appliances and charging electric vehicles during peak usage hours of 4 p.m. to 9 p.m.”  The inclusion of “charging electric vehicles” received considerable criticism because of the previously passed ban on gas-powered vehicles by 2035. 

It only took a two-week extreme heat wave to cause this crisis because “the power supply in California has been in a state of constant flux due to the policy of removing oil, gas, and coal plants at a rate faster than wind, solar, hydro, and other renewable sources of energy can replace them.”

At least, there were enough legislators who recognized the problem of the electricity grid in California that they passed SB 846  “to extend the life of the Diablo Canyon nuclear power plant, which supplies nearly 10% of the state’s electricity. Diablo Canyon’s two nuclear reactors were scheduled to close in 2024 and 2025, but SB 846 delays this timeline by five years, to 2029 and 2030, by enabling the United States Nuclear Regulatory Commission and any other state and federal authorities to renew the operator’s license for an additional five years.

All of us want less pollution to enjoy cleaner air and clean water, but not at the cost of not having enough electricity to enjoy the benefits of modern life:  lighting, air conditioning, heating, and the conveniences of electricity-powered appliances.  We also need electricity to produce food, livestock, and poultry, as well as to manufacture the wide variety of consumer goods we enjoy, pharmaceuticals and medical products to protect the health of Americans, not to mention the goods and products needed for our military defense and national security. The goal of our non-profit, Industry Reimagined 2030  to “reduce the environmental footprint by 30% by 2030 is a much more reasonable and achievable goal than California’s unrealistic climate legislation.

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Would H.R.3666 – STRONGER Patents Act of 2019 be Beneficial to Inventors?

Tuesday, March 10th, 2020

On July 10, 2019, H.R. 3666, the “STRONGER Patents Act of 2019,” was introduced in Congress and referred to the Committee on the Judiciary and the Committee on Energy and Commerce. The purpose of the Act is “To strengthen the position of the United States as the world’s leading innovator by amending title 35, United States Code, to protect the property rights of the inventors that grow the country’s economy.”

This bill is a reintroduction of the Stronger Patents Act of 2017 that never got out of committee.  It has a long list of bi-partisan co-sponsors:  Rep. Stivers (R-OH), Rep. Mr. Foster (D-IL), Rep. McClintock (R-CA), Rep. Velázquez (D-NY), Rep. Babin (R-TX), Rep. Burgess (R-TX), Rep. Hill (R-AK), Rep. Huizenga (R-MI), Rep. Joyce (R-OH), Rep. King (R-NY), Rep. Norman (R-SC), Rep. Watson Coleman (D-NJ), Rep. Suozzi (D-NY), Rep. Peters (D-CA), Rep. Gosar (R-AZ), and Rep. Davidson (R-OH).

The “Findings of Congress” in the Act make several points similar to those made in the “Findings of Congress” for H.R. 5478, the Inventor Rights Act, regarding the importance of patents as “the foundation for the exceptional innovation environment in the United States” and “an essential part of the country’s economic success.” It includes reference to the fact that “strong patent protection improves the chances of success for small companies and increases their chances of securing financing from investors.”

Of particular note, the “Findings” state that “unintended consequences of the comprehensive 2011 [America Invents Act] reform of patent laws are continuing to become evident, including the strategic filing of post-grant review proceedings to depress stock prices and extort settlements, the filing of repetitive petitions for inter partes and post-grant reviews that have the effect of harassing patent owners, and the unnecessary duplication of work by the district courts of the United States and the Patent Trial and Appeal Board;”

This “Finding” refers to the abuse of invalidating patents by the Patent Trial and Appeal Board mentioned in my blog article of February 12th about the Inventor Rights Act.

In addition, the “Findings” point out that “efforts by Congress to reform the patent system without careful scrutiny create a serious risk of making it more costly and difficult for legitimate innovators to protect their patents from infringement, thereby weakening United States companies and the United States economy.”

The Stronger Patents Act of 2019 is much more complex that the simple one-page bill for the Inventor Rights Act.  Since I am not a lawyer, I do not have the legal expertise to analyze each of the specific clauses of the Act.  However, I will highlight certain sections that are particularly beneficial to inventor rights and attempt to correct specific problems created by the America Invents Act of 2011.

For example, in “SEC. 102. Inter partes review,” the proposed amendments would help reduce the invalidation of patents that is now occurring in PTAB cases. The bill states:

“(A) each challenged claim of a patent, or claim proposed in a motion to amend, shall be construed as the claim would be construed under section 282(b) in an action to invalidate a patent, including by construing each such claim in accordance with—

(i) the ordinary and customary meaning of the claim as understood by a person having ordinary skill in the art to which the claimed invention pertains; and

(ii) the prosecution history pertaining to the patent; and

(B) if a court has previously construed a challenged claim of a patent or a challenged claim term in a civil action to which the patent owner was a party, the Office shall consider that claim construction.”

The “Burden of proof.—Section 316(e) of title 35, United States Code, is amended to read as follows:

(1) PRESUMPTION OF VALIDITY.—The presumption of validity under section 282(a) shall apply to a previously issued claim that is challenged during an inter partes review under this chapter.

(2) BURDEN OF PROOF.—In an inter partes review instituted under this chapter, the petitioner shall have the burden of proving a proposition of unpatentability of a previously issued claim by clear and convincing evidence.”

One of the important amendments in Sec. 103. Post Grant Review, adds the following new subsection: “(d) Persons that may petition.—

(2) NECESSARY CONDITIONS.—A person may not file with the Office a petition to institute a post-grant review of a patent unless the person, or a real party in interest or privy of the person, demonstrates—

(A) a reasonable possibility of being—

(i) sued for infringement of the patent; or

(ii) charged with infringement under the patent; or

(B) a competitive harm related to the validity of the patent.”

Two of the amendments to SEC. 104. Composition of post-grant review and inter partes review panels, amend Section 6(c) of title 35, United States Code as follows:

“(1) IN GENERAL.—Each appeal, derivation proceeding, post-grant review, and inter partes review shall be heard by at least 3 members of the Patent Trial and Appeal Board, who shall be designated by the Director.

(2) INELIGIBILITY TO HEAR REVIEW.—A member of the Patent Trial and Appeal Board who participates in the decision to institute a post-grant review or an inter partes review of a patent shall be ineligible to hear the review.”

SEC. 105. Reexamination of patents amends the process of requesting a reexamination, while SEC. 106. Restoration of patents as property rights states is amended to provide injunctive relief stating:

“(b) Injunction.—Upon a finding by a court of infringement of a patent not proven invalid or unenforceable, the court shall presume that—

(1) further infringement of the patent would cause irreparable injury; and

(2) remedies available at law are inadequate to compensate for that injury.”

One of the problems that this Act addresses is the diversion of fees paid to the USPTO. Currently funds can be diverted to fund other agencies and cover other government expenses.  By this Act, SEC. 107. Elimination of USPTO fee diversion, clause regarding  (a) Funding.—Section 42 of title 35, United States Code, is amended as follows:

“(1) IN GENERAL.—Fees authorized in this title or any other Act to be charged or established by the Director shall be collected by the Director and shall be available to the Director until expended to carry out the activities of the Patent and Trademark Office.”

Item “(2) ESTABLISHMENT.—There is established in the Treasury a revolving fund to be known as the ‘United States Patent and Trademark Office Innovation Promotion Fund’.”

I particularly support the addition of SEC. 109. Assisting small businesses in the U.S. patent system, which states in part:

“(b) Small Business Administration report.—Not later than 1 year after the date of the enactment of this Act, the Small Business Administration, using existing resources, shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report analyzing the impact of—

(1) patent ownership by small business concerns; and

(2) civil actions against small business concerns arising under title 35, United States Code, relating to patent infringement.

(c) Expansion of patent pilot program in certain district courts.—

(1) IN GENERAL.—Not later than 180 days after the date of the enactment of this Act, the Director of the Administrative Office of the United States Courts shall designate not fewer than 6 of the district courts of the United States that are participating in the patent cases pilot program established under section 1 of Public Law 111–349 (28 U.S.C. 137 note) for the purpose of expanding that program to address special issues raised in patent infringement suits against individuals or small business concerns.

(2) PROCEDURES FOR SMALL BUSINESSES.—Not later than 2 years after the date of the enactment of this Act, each district court designated under paragraph (1) shall develop procedures for expediting cases in which an individual or small business concern is accused of patent infringement.

While this bill addresses many of the problems caused for the America Invents Act of 2011, it does not address the most egregious provision of that Act; namely, changing our patent system from a “first to invent” to a “first to file” system.  This change has done the most damage to the individual inventor or small business entity.  While a provisional patent that is good for one year is relatively inexpensive, it is expensive and time consuming to pursue obtaining a non-provisional patent (3-5 years average).  Individual inventors have to be extremely cautious not to reveal information on their technology to prevent others from being first to file a patent for the technology they invented. 

Because of the complexity of this bill, I don’t think it has any greater chance of getting out of committee to be voted on by the whole of Congress this year than the Stronger patent Act of 2017. In fact, it may have less chance in the Democrat-controlled House with many more Republican than Democrat co-sponsors. In my opinion, I think the simple, one-page Inventor Rights Act has a much better chance of being brought to the House floor for a vote this year, and it will restore the rights of inventor to their patents.

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Baldwin-Hawley Act Would Fix Overvalued U.S. Currency Problem

Tuesday, September 3rd, 2019

The Baldwin-Hawley Senate Bill, S.2357, titled the “Competitive Dollar for Jobs and Prosperity Act” was introduced by Sen. Tammy Baldwin (D-WI) and Josh Hawley (R-MO) on July, 31, 2019. The purpose of the Bill is “To establish a national goal and mechanism to achieve a trade-balancing exchange rate for the United States dollar, to impose a market access charge on certain purchases of United States assets, and for other purposes.”

This Bill is the legislative vehicle for the Market Access Charge (MAC) first proposed in a paper titled, “The Threat of U.S. Dollar Overvaluation: How to Calculate True Exchange Rate Misalignment & How to Fix It” released on July 11, 2017 by the Coalition for a Prosperous America and written by Michael Stumo (CEO), Jeff Ferry (Research Director) and Dr. John R. Hansen, a former Economic Advisor for the World Bank, CPA Advisory Board member, and founding  Editor of Americans Backing a Competitive Dollar (ABCD).

The paper explained the problem of the dollar overvaluation, showed how to accurately calculate the dollar’s misalignment against trading partner currencies, and proposed a solution to this serious threat to America’s future by means of a Market Access Charge (MAC). Dr. Hansen’s proposal was “to initiate the MAC with a 0.5% charge “on any purchase of U.S. dollar financial assets by a foreign entity or individual…As a one-time charge, the MAC will discourage would-be short-term investors, many of whom hold dollars or dollar-denominated securities overnight or even for minutes for the sake of a tiny profit.

The MAC rate would operate on a sliding scale, geared to the value of the trade deficit as a percentage of GDP. The MAC tax would rise if the trade deficit rose, and fall as the trade deficit falls… Most importantly, the MAC would have a substantial impact on the dollar’s value, moving it gradually and safely to a trade-balancing exchange rate and keeping it there, regardless of what other countries do. If the trade deficit goes to zero, so would the MAC.”

In an email to supporters on August 13, 2019, Dr. Hansen wrote, “A major milestone has just been reached in the battle to kill the U.S. trade deficit, stop the offshoring of U.S. industry, and put millions of Americans to work at well-paying jobs…The bill’s presentation to the Senate is indeed a major milestone – but only one of many that lie between where we are today and the bill’s ultimate passage. You support and advice would be most welcome as the process moves forward.”

The Bill’s summary cites the following ”Findings” by Congress:

 “(1) The strength, vitality, and stability of the United States economy and, more broadly, the effectiveness of the global trading system are critically dependent on an international monetary regime of exchange rates that respond appropriately to eliminate persistent trade surpluses or deficits by adjusting to changes in global trade and capital flows.

(2) In recent decades, the United States dollar has become persistently overvalued, in relation to its equilibrium price, because of excessive foreign capital inflows from both public and private sources.

(3) Countries with persistent trade surpluses maintain or benefit from undervalued currencies over a long period of time. As a result, those countries overproduce, underconsume, and excessively rely on consumers in countries with persistent trade deficits for growth. Those countries also export their unemployment and underemployment to countries with persistent trade deficits.

(4) Countries with persistent trade deficits, including the United States, absorb the overproduction of countries with persistent trade surpluses, thereby reducing domestic wages, manufacturing output and employment, economic growth, and innovation.

(5) The United States possesses fiscal and monetary tools to pursue national economic goals for employment, production, investment, income, price stability, and productivity. However, exchange rates that do not adjust to balance international trade can frustrate the achievement of those goals. The United States does not have a tool to manage exchange rates in the national interest.”

The Bill defines a “United States asset” as “(i) a security, stock, bond, note, swap, loan, or other financial instrument—

(I) the face value of which is denominated in United States dollars;

(II) that is registered or located in the United States; or

(III) that is an obligation of a United States person;

(ii) real property located in the United States;

(iii) any ownership interest in an entity that is a United States person;

(iv) intellectual property owned by a United States person; and

(v) any other asset class or transaction identified by the Board of Governors of the Federal Reserve as trading in sufficient volume to cause a risk of upward pressure on the exchange rate of the United States dollar.

It excludes:  “(i) a good being exported from the United States; or (ii) currency or noninterest bearing deposits.”

In the above mentioned paper, Dr. Hansen proposed that the MAC to be “a 0.5% charge on any purchase of U.S. dollar financial assets by a foreign entity or individual…As a one-time charge, the MAC will discourage would-be short-term investors, many of whom hold dollars or dollar-denominated securities overnight or even for minutes for the sake of a tiny profit. The MAC rate would operate on a sliding scale, geared to the value of the trade deficit as a percentage of GDP. The MAC tax would rise if the trade deficit rose, and fall as the trade deficit falls…”

The Balwin-Hawyley Bill stipulates that “On and after the date that is 180 days after the date of the enactment of this Act, there shall be imposed a market access charge on each covered buyer in a covered transaction…The Board of Governors of the Federal Reserve System shall establish and adjust the rate of the market access charge at a rate that— (A) achieves a current account balance not later than 5 years after the date of the enactment of this Act; and (B) maintains a current account balance thereafter.”

However, under the “ALTERNATE INITIAL MARKET ACCESS CHARGE” clause, “If, on the date that is 180 days after the date of the enactment of this Act, the Board of Governors has not established the initial rate for the market access charge, the initial market access charge shall be established at the rate of 50 basis points of the value of a covered transaction.”

The bill concludes with a description of how the Market Access Charge should be charged, collected, and reported to the U.S. Treasury.

At the time of the CPA paper cited above, the “The U.S. dollar was calculated at 25.5% overvalued compared to itsFundamental Equilibrium Exchange Rate (FEER). However, in an article titled “Why We Need Baldwin-Hawley Currency Reform Now,” by Jeff Ferry, CPA Chief Economist, published on August 21, 2019, he writes that the Coalition for a Prosperous America estimates “the dollar is overvalued today by 27 percent.” He points out that” that an overvalued currency makes it harder for a nation’s exports to compete in world markets and easier for foreign imports to take share in its domestic market.”

Mr. Ferry explains that “…overvaluation undermines our industrial base, makes our agricultural goods less competitive and tilts the income distribution in favor of the top 10 percent. Instead of an economy built on production and employment, we get growth built on consumption and debt. In fact, the only sector that favors overvaluation is the financial sector, because it helps Wall Street bankers sell stocks and bonds around the world. On Wall Street they like to call overvaluation the ‘strong dollar.’”

He concludes by saying that “Voltaire said the world is like a giant watch: it runs automatically according to an internal mechanism. If one of the settings is wrong, the watch won’t run properly. Our economy is a huge $21 trillion watch. If an exchange rate is set too high, a national economy runs down. If an economy doesn’t invest enough in its own industry, it becomes less competitive…On the international side, the US economy has been underproducing and overconsuming for some 40 years and adjustments are needed. Right now, Baldwin-Hawley is the most crucial adjustment Congress could enact.”

As a sales representative for American manufacturers, I can testify that America’s manufacturing industry is hurt by the overvalued dollar.  It hurts the ability for American companies to export products that are competitive in the world marketplace. It even hurts the ability for American manufacturers to compete against the low prices of Chinese imports in the domestic market.  I firmly endorse the passage of this critically needed bill by Congress in this session to reduce the U.S. dollar’s overvaluation, discourage unwanted investment in the dollar, and significantly reduce America’s trade deficit.

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