Joe Grogan, in his recent op-ed, “The UK Flirts with Another Attack on U.S. Tech,” warns that the United Kingdom government’s recent consultation, which proposes that the state intervene in setting royalty rates for standard essential patents (SEPs), represents a serious threat to U.S. innovators and global innovation incentives. He argues that this move would hollow out the licensing model that funds advances in telecom and AI, tilt the playing field toward domestic UK implementers, undermine transatlantic trust, and hand a win to authoritarian regimes like China that seek to set global patent standards themselves.
In his op-ed, Joe writes:
“Such meddling would undercut American innovators while handing British implementers an enormous windfall. If Starmer allows this initiative to advance, Washington will rightly view it as an economic assault on par with Britain’s misguided Digital Services Tax – a measure that has already strained transatlantic trust and drawn sharp opposition from U.S. trade officials.
In the UK’s consultation document, the most alarming measure on the table is the creation of a “rate determination track” within the Intellectual Property Enterprise Court. Ostensibly, this would offer a “simpler” route to determine “the correct license rate” for SEPs. But once the government begins dictating what constitutes a fair return for intellectual property, innovation ceases to be a competitive asset and becomes a regulated commodity. As seen in other markets, such interference nearly always drives rates downward, stripping value from inventors and transferring it to domestic licensees.
The notion of state‑mandated royalty setting directly undermines one of the primary incentives for companies to invest in early‑stage research. SEPs are not abstract legal constructs – they represent thousands of hours of engineering work, billions of dollars in at‑risk capital, and the trust that parties operating in a global market can negotiate licensing terms free from state coercion. If governments start dictating those terms, the risks escalate and the rewards diminish, prompting firms to redirect investment elsewhere.”
Read the full article at www.townhall.com.