5G is the communications technology poised to enable a quantum leap in mobile connectivity and computing. It promises everything from fully self-driving cars to untethered virtual reality. It seems like a natural fit for US tech leadership, right? But Washington insiders have long since concluded that America has been overtaken by foreign competitors in developing 5G. Welcome to the popular and fabricated narrative that politicians love to harp on: the US is in a 5G race and we are “losers”.
In February, the US Patent and Trademark Office released a study that pushes back this fear-mongering. In the study, the USPTO examines patent portfolios of 5G companies and introduces new datasets to challenge the narrative that other countries are running away with 5G leadership. I applaud the USPTO’s efforts to provide structure to this discussion by showing that there is no simple answer to who will “win” the 5G race.
I am very familiar with the oversimplified – and frankly, intellectually lazy – narratives that the USPTO pushes back in its study. In my most recent article, I explain why the metrics most commonly relied on to define 5G leadership, such as patent count and number of technical papers, are of little help in answering the question of which country won the 5G race “wins”.
Counting the number of patents a company has contributed to 5G is misleading as it does not reflect the technical importance of the patents counted. In fact, we have seen a rapid escalation of statements from some foreign companies that simply do not correspond to reality. Technical contributions are equally weighted, as contributions do not have to meet a minimum inventive threshold (nor be checked for accuracy) to be counted.
Assess the quality of patents
The only way to actually define a “winner” would be to get our hands dirty and assess the quality of the patent companies they contribute. So I agree with the USPTO’s conclusion that we cannot blindly rely on practical metrics that “sound nice” but are actually deeply flawed when it comes to defining a “winner” in any meaningful way. Countering these simplistic narratives, as the USPTO has done, is important to prevent inaccurate and fatalistic messages about 5G leadership from becoming the dominant view.
However, these debunking exercises, including my own, are inherently limited. They operate within a paradigm that has relative value as a guiding star. It’s time to ask the question: Why are we so obsessed with the short-sighted question of declaring which country will “win” 5G? The answer, whatever it is, is a distraction from what really matters – the transformative value of 5G and our national policy failure to incentivize US innovation in 5G.
Cellular technology is a platform that is dramatically improving our world. It has transformed entire economies, lifted millions of people out of poverty and created trillions of dollars in consumer surplus. 5G alone is estimated to unlock more than $13 trillion in new value globally. And that’s just looking at its impact through an economic lens. We can’t imagine how 5G will improve our safety, health, opportunity, entertainment and quality of life. However, as the USPTO report notes, there are only six companies, perhaps seven, that are significantly innovating to develop 5G. And how many of those companies are American? A.
What does it say about the quality of our “innovation engine” if only one American company is making this transformative technology a reality? It shows that we are not coming together to drive policies that incentivize 5G innovation.
Create incentives for innovators
The basic concept is simple: if we want to foster innovation, we must foster innovators. We do this by strengthening, not further undermining, our system that encourages investment in innovation – our patent system. This means restoring heavily eroded enforcement mechanisms so that users of standardized innovative technology are encouraged to proactively seek licenses from innovators, rather than passively-aggressively playing games or actively refusing to pay for the technology altogether.
Innovators, in turn, will be confident that their upfront costs and effort are worth the risk, and they will invest in 5G innovation and put America back on track to capitalize on the tremendous economic value that 5G will generate. We know how to do this; we just choose not to.
It’s time to stop worrying about who “wins” 5G. Our short-sighted preoccupation with relativism, aided by flimsy metrics, distracts from what really matters – crafting policies that push American innovators to focus on developing 5G technology rather than arguing about what “win” means.
This article does not necessarily represent the opinion of the Bureau of National Affairs, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.
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David J Kappos is a partner in the corporate division of Cravath, Swaine & Moore LLP. Kappos previously served as Undersecretary for Commerce and Director of the US Patent and Trademark Office.