A Rogue Farm Trade Group Threatens to Destroy Farm Property.

We are at a pivotal moment. China now leads the United States in 37 of 44 technologies critical to our national security and economic growth. These technologies range from artificial intelligence to crop seeds, and everything in between, including technologies key to the Broadband Equity and Access Deployment (BEAD) program.

Ironically, Burton Eller, Legislative Director of The National Grange, purportedly a grassroots trade group supporting farm issues and the rural public interest, believes that International Trade Commission (ITC) threatens BEAD. To avoid that presumed danger, Eller advocates to destroy rural manufacturing and private property rights.

The International Trade Commission Helps Rural Manufacturing

The ITC was established in 1916 initially to put some math behind tariffs. Congress changed its role over time adding a tribunal with power to issue exclusion orders used by U.S. customs to stop the importation of products that infringe on U.S. patents. 

Farmers and ranchers – people who work with their hands and solve problems – are among the most prolific inventors. They invent solutions to problems, patent inventions, manufacture products, and sell them to others experiencing the same problem. Farmer inventors create many rural manufacturing jobs. 

For example, my cousin, a Minnesota farmer invented and patented a crop sprayer system that self-balanced its sprayer arms as it crossed a bumpy field. This kept sprayer arms from knocking down the crop. It’s still being manufactured in rural Detroit Lakes, Minnesota. Also, my dad, a farmer, once started up a small magazine-style marketing company for farmer-invented manufacturing companies. There were hundreds of these small farm-related manufacturing companies across rural Minnesota and North Dakota providing jobs to rural communities. 

For over 200 years, the vast majority of all things invented came from U.S. inventors. This is because the U.S. patent system protected an invention as a personal property right. A patent grants an exclusive right for an invention to the inventor, just like your deed does for your land.  Patents are collateralized to attract investment in startups just like your deed is collateralized for your mortgage.

Mr. Eller doesn’t explain that when a farmer invents something, patents it, and then manufactures it, the ITC uses its power to grant exclusion orders to keep foreign knockoffs out of U.S. markets thereby protecting that farmer’s manufacturing company from unfair foreign competition. The ITC provides tremendous help to America’s farmers and rural communities by promoting rural economic growth and U.S. based manufacturing.

U.S. Multinationals moved Manufacturing to China

Because farmers work on a farm, they typically invent things that improve farming. If they did not farm, they would not experience farming problems and would not invent things to address them. 

Over the last twenty years, Big Tech, automotive, farm machinery, and so many other industries have moved their U.S. manufacturing overseas, primarily to China. This has gutted U.S. manufacturing, often devasting rural economies.

While Mr. Eller correctly explains that mobile devices powered by 4G and 5G allow farmers to unlock the capabilities of next generation precision agriculture, most 4G and 5G technologies were invented in the U.S. by small tech companies and universities. Big Tech multinationals moved manufacturing of these devices to China and other countries.  So, today, mobile devices are products of China, but they are branded as a U.S. company product, for example, an Apple iPhone or Apple Watch are both Chinese products branded as Apple.  

When U.S. corporations moved manufacturing to China, U.S. workers were no longer exposed to manufacturing problems, but Chinese workers were. Naturally, the rate of inventions went up in China and down in the U.S. This betrayal by U.S. multinationals is a primary reason why China now leads in 37 of 44 technologies. 

Mr. Eller’s False Narrative

Mr. Eller is correct when he says “The ITC protects American industries from unfair import practices. […] the ITC is authorized to institute import investigations, […] to allow American businesses to challenge the imports of products claimed to violate their intellectual property rights.” In other words, if the ITC finds that a foreign manufacture infringes on a U.S. patent, it issues an “exclusion order” that stops infringing products at the U.S. border.

But Mr. Eller goes down a long debunked rathole created by Big Tech so they can strip the U.S. of technology and monopolize with Chinese manufacturing. 

Mr. Eller complains that a cartoon character he calls a patent troll exploits the ITC process. He defines patent trolls as “shell companies, often backed by hedge funds, who accumulate patents for the sole purpose of pursuing infringement litigation. They don’t want to protect an American industry making anything. They just want to try to squeeze money out of productive companies in the US who participate in the global supply chain to bring innovative products to US users.” 

As a first point of order, these companies are not U.S. companies; they are multinationals with a headquarters in the U.S., but almost all of its products are manufactured in China. Secondly, Mr. Eller avoids any explanation of how it came to be that inventors have to sue huge multinationals for patent infringement.

So here is the truth. 

A startup invents a new technology that Big Tech likes. Big Tech invites the startup in for discussions to license the patent or acquire the startup. The startup is excited to tell Big Tech engineers about their invention because they believe it is protected by patents. Big Tech engineers farm the startup’s know-how and technology until they understand it well enough. The they slam the door shut, suddenly stopping all communications with the startup. Soon the startup’s technology is incorporated into Big Tech products and manufactured in China. The Big Tech multinational uses its endlessly deep pockets and its global supply chain (the same global supply chain that Mr. Eller is talking about) to flood the market and run the startup out of business. 

This very common deceitful process is a plain old-fashioned mugging of startups by Big Tech thugs so they can steal their technology and get away with it. In most cases the startup goes out of business because it cannot compete with Big Tech’s massive markets for the stolen technology. 

That almost always sends the startup into bankruptcy. Patents are often the only asset remaining capable of returning lost investment in bankruptcy. And, because patent infringement is some of the most expensive and complicated litigation in the world, the startup’s patents are often sold to a large financial entity with the horsepower to fight these huge Big Tech thugs. 

This is what Mr. Eller cynically calls “shell companies, often backed by hedge funds, who accumulate patents for the sole purpose of pursuing infringement litigation.”

The ITC is the Last Hope in the Gutted U.S. Patent System

Since 2006, the U.S. government  gutted the patent system. Prior to 2006, courts regularly granted injunctions upon a finding of infringement. In other words, if you stole someone’s patented technology, the courts would stop you from making, selling, offering for sale, or importing it. So, you knew that everything  you invested in the stolen technology was at risk if the inventor could prove infringement. 

But in a 2006 case called eBay v MercExchange, the Supreme Court created a test that effectively means that you must have a product on the market and the ability to distribute that product at the level of the infringer before it would grant an injunction. Now, if you steal it and flood the market, running the startup out of business, you get to keep what you stole, because a defunct startup has no products on the market.

ITC exclusion orders are the last possible way that an American inventor can protect their inventions from theft. While these orders only apply to foreign manufactured products, since U.S. manufacturers betrayed U.S. workers and U.S. innovation by moving their manufacturing to China, it is substantial.

Mr. Eller argues that Congress needs to reform the ITC with the Advancing Americas Interest Act (AAIA) to help rural communities. But he does not explain that this legislation would end exclusion orders thus enabling huge multinationals to strip U.S. manufacturers of their technologies and manufacture them overseas. 

Mr. Eller is dead wrong. The AAIA would do grave damage to rural communities. Rural communities across the country would suffer as small manufactures would go out of business and manufacturing jobs, that are the life blood of small rural communities, would move to China.