Brian Krumm

Document Type


Publication Title

Mercer Law Review


Since the mid-nineteenth century, the strength of the United States economy has been driven largely by the ability of Americans to innovate.1 Beyond macro-economic growth, innovation increases per capita income and improves standards of living and quality of life.2 Furthermore, innovation begets innovation. As companies within a market innovate, pressure is placed on their competitors to innovate as well in order to protect profitability and market share. For most of the last half century, the United States boasted the strongest intellectual property system3 and was called home by the most innovative companies in the world.4 However, in the last five years, the United States has witnessed an unanticipated decline in innovative supremacy.5 In 2017, the United States fell to tenth in the world for net impact on global innovation6 and the United States’ share of global tech unicorn start-ups7 has fallen to 41%.8 This alarming decrease in innovative supremacy has fueled a groundswell of opinions on how to resolve this downward trend.

Of the potential causes for the United States’ declining innovative health, some point to federal government regulations as the major culprit. However, government regulations can have both positive and negative effects on the innovative process. Regulation directly affects the innovative process, and in turn, innovation and technical change can have a significant effect on regulation. To be successful, regulatory reform must take into account the linkages between regulation and innovation. The need for recognizing these dynamic linkages has become even more important under the Trump Administration. During his first days in office, President Trump informed business leaders that he planned to cut government regulations by at least 75%.9 This was soon followed by his issuance of Executive Order 13771,10 more colloquially known as his “2-for-1” order, which requires federal agencies to eliminate two regulations for every new regulation that is issued.11 While touted as a measure to reduce the regulatory burdens on the American people, thus promoting economic growth and innovation, the consequences of his policies, taken as a whole, may not achieve such results. This Article explores the potential effect the Trump Administration’s regulatory agenda may have on innovation in the United States.

Part II of this Article will discuss the importance of innovation as the key component to the long-term well-being of the American economy. Part III analyzes the administration’s regulatory reform agenda and its potential for achieving its desired results. Part IV explores the administration’s proposed budget cuts to agency research and development programs and the resulting consequences that such a policy could have on the country’s innovation ecosystem. Part V focuses on the future of the United States Patent and Trademark Office, including the selection of Andrei Iancu as director and the initiatives that he has proposed to improve the intellectual property management system. Part VI examines the administration’s isolationist policies and restrictions on foreign investment in the United States as a “regulation” that impacts the advancement of innovation. Part VII will conclude by proposing that, absent a comprehensive, coordinated strategy, attempts to correct perceived market failures due to overregulation may have a deleterious effect on innovation, and consequently on the economy.

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Publication Date

Spring 2019

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