Remarks delivered at the U.S. Chamber of Commerce: Driving American Innovation Policy Conference
Director of the U.S. Patent and Trademark Office Andrei Iancu
February 25, 2019
As prepared for delivery
Good morning everyone. Thank you, President (Mark) Becker for that gracious introduction and for hosting us here at Georgia State University. Thank you also to the AIPLA, the Georgia Chamber of Commerce, and the Global Innovation Policy Center at the U.S. Chamber of Commerce for co-sponsoring today’s event.
It’s great to be in Atlanta, and great to be at Georgia State University, recently ranked by U.S. News & World Report as the second most innovative university in the nation. The topic for today’s conference, “Driving American Innovation,” is of critical importance. Increasing American innovation is, in fact, key to securing our country’s continued leadership in the global economy. America’s economic prosperity reflects, and in large part depends on, its global and long-standing leadership in technological innovation.
While the United States remains the world’s innovation leader, maintaining the status quo is not enough. That’s because today, the competition for innovation and the technologies of the future are increasingly worldwide. Indeed, from the smallest countries to the largest, and so many in-between, the entire world is now engaged in the innovation ecosphere. Certainly, if that competition is fair, it is generally good for the world and the advancement of the human condition. The more people inventing, the faster the pace of innovation. But it also indicates that, no matter how well we are currently doing—and we are, in fact, doing quite well—we must still step up our game.
But what exactly does it take? What do we need to do to increase the pace of innovation in the United States?
This is a complex issue, of course, and there is not a single answer. At a minimum, and in order to ensure that our nation remains at the forefront of technology, I think that we must: first, provide a more reliable and predictable legal framework to incentivize and protect innovation; second, broaden the innovation ecosphere—geographically, demographically, and economically; and third, inspire more people to innovate. There are, of course, other issues—such as funding and the like—but they are, to some extent, beyond the USPTO’s purview, so let me focus here on the three I just mentioned.
First, we must work to ensure a more reliable and predictable legal framework that stimulates innovation. When confidence in our system increases, more investors will invest, more inventors will invent, and the pace of innovation will advance.
Just over a year ago, I was sworn in as director of the USPTO. Almost at the same time, the U.S. Chamber published its 6th Annual International IP Index. The American patent system, which in prior years was deservedly ranked as the number one system in the world, fell to number 12 in that study. Shortly after, I spoke at a U.S. Chamber event, much like this one, but in Washington, D.C. In my remarks, I observed that we were at an inflection point with respect to the patent system, and that as a nation we could not continue down the same path if we expected to maintain our global economic leadership.
At that time, I also committed that we would not continue down the same path. “This administration,” I said, “has a mission to create sustained economic growth, and innovation and IP protection are key goals in support of that mission.” And so, I said last year that we must focus on increasing the reliability of the patent grant, and specifically focus on patentable subject matter pursuant to Section 101 of the patent code, and post-grant procedures, such as IPR, that were established by the America Invents Act (AIA). And that is exactly what we’ve been focusing on for the past year.
On patentable subject matter, we all know that recent judicial decisions have introduced a degree of uncertainty to the application of the law. And this, in turn, has led to confusion for applicants, attorneys, and our examiners who wrestle with these issues every single day. So, the USPTO has been working hard to clarify patentable subject matter under Section 101—of course, within our statutory authority and judicial precedent.
As many of you know, over the last year, we’ve issued guidance to examiners regarding the “conventionality” analysis in the second step of the Mayo/Alice framework, “method of treatment” claims, and just last month, a revised framework that synthesizes the law and streamlines the 101 analysis at the USPTO. Our examiners have welcomed this new guidance—our new analytic framework has already proven to dramatically simplify and clarify the analysis. Going forward, our framework might also help further the discussion in other branches of government.
We have also initiated a number of changes over the past year with respect to post-grant proceedings. Among other things: we updated the Trial Practice Guide for the first time in 6 years; we published two new standard operating procedures; we changed the claim construction standard in post-grant proceedings at the PTO to match the standard used by district courts and the ITC; and most recently, we published a proposal for an improved claim amendment procedure in AIA trials.
In one of the new standard operating procedures, we created a Precedential Opinion Panel (POP), which governs precedential and informative decisions of the Board. This panel will help to increase consistency on issues of exceptional importance to the agency.
Also, our new claim amendment proposal is designed to ensure that post grant proceedings are not all-or-nothing. It’s not in the interests of the patent system as a whole to invalidate a patent entirely if the specification actually describes patentable subject matter and appropriately scoped claims can be drafted. Therefore, the amendment process should allow the patent owner a meaningful opportunity to draft narrower claims. The public comment period for this amendment proposal recently ended. We are now working to address the comments and hope to publish a revised approach soon.
We believe all these changes will, collectively, provide more predictability, reliability, and transparency in post-grant proceedings at the USPTO.
The U.S. Chamber of Commerce’s Global Innovation Policy Center seems to agree. In this year’s study, the U.S. moved up from a tie for number 12 to a tie for second place in the patent rights rankings. The 2019 Chamber report cited our post-grant reforms as a basis for the improved rankings this year.
But much work remains. In order for us to continue our worldwide leadership, we must continue to improve our IP system. We must especially keep working on patentable subject matter and Section 101. Towards that effort, I hope that other authorities will also help us further clarify this important area of law.
Turning to the second critical point for advancing American innovation, we must work to broaden the innovation ecosphere.
For instance, most innovation in the United States to date has been geographically concentrated in discrete pockets, leaving large populations of Americans under-represented. Industry, academia, and governments—local, state, and federal—can work together to advance innovation hubs in a broader array of geographies around the United States.
This is already happening, and it is a wonderful thing to see. For example, I recently spoke in Fargo, North Dakota, at a tech conference organized by Senator Hoeven and Governor Burgum. They’ve done a wonderful job bringing industry, academia, and government together to create a technology hub. Among other things, their Center of Research Excellence provides hubs of research and development on the campuses of North Dakota's colleges and universities, partnering with private companies to generate new business opportunities.
These are efforts we must encourage, support, and replicate where possible. Here in Georgia, for example, the USPTO is helping the University of Georgia plan and coordinate its 2019 STEM Institute, which will take place on March 27th. Co-sponsored by the University’s Office of STEM Education and Office of Research, the mission of the daylong program is to create an entrepreneurial environment on campus for students, faculty, and pre-service teachers. Additionally, the USPTO is working with the recently launched Georgia Intellectual Property Alliance to structure programs for Georgia educators and students to support their overall mission of creating IP literacy.
In addition to geographic reach, we must also broaden our demographic reach. For example, although women constitute over half of the population of the U.S., their participation in the IP system lags far behind their male counterparts. In the United States, less than 25 percent of the STEM workforce comprises women. And the participation of women as inventors named on U.S. patents is even lower.
Indeed, according to a USPTO study released earlier this month, women inventors comprise only 12 percent of all inventors on patents granted in 2016.
If we are to maintain our technological leadership, the United States cannot continue to compete with one hand tied behind our backs.
On the other hand, as disappointing as these numbers are, they point to significant potential: A recent Harvard study found that increasing invention rates among women, minorities, and children from low-income families can quadruple the rate of U.S. innovation.
The USPTO, for its part, targets education and outreach to engage more girls and women in STEM. We must not forget that the wonder of discovery and the thirst for innovation begins at a young age, and it should be met before it is too late. That’s why the USPTO collaborates with a variety of organizations in novel outreach programs.
For example, the USPTO partners with the National Inventors Hall of Fame (NIHF), which offers unique STEM and invention education programs to over 160,000 students annually. Participants range in age from preschool to high school, all across the nation, including here in Georgia. More than 50,000 underserved students nationwide receive scholarships to attend NIHF’s invention education programs. And more than 40 percent of NIHF’s Camp Invention participants are girls. Further, just recently we hosted over 200 students at USPTO headquarters for a “Girl-Powered Invention and Entrepreneurship Day.”
Additionally, the USPTO holds a two-day Women’s Entrepreneurship Symposium to connect women entrepreneurs, and all others interested, with education, information, and resources to help start, build, and grow a business using their intellectual property. The symposiums are held in cities across the nation and feature successful women inventors and entrepreneurs.
Although each one of these efforts may seem small, they can add up to stimulate the spark of creativity in a child, or encourage a woman entrepreneur, leading to great advances in this and future generations. But we all must do more. As an agency, and as a country, we must work together to broaden the innovation ecosystem, and to solve the so-called “lost Einstein” problem.
In today’s highly competitive global economy, it is increasingly more important to ensure that all Americans who are willing to work hard, persevere, and take risks have the opportunity to innovate, start new companies, succeed in established companies, and ultimately achieve the American Dream. In other words, we need all hands on deck.
Finally, and the third critical component needed to drive American innovation, we must inspire people to innovate. In my remarks to the U.S. Chamber last year, I said that we must create a new, pro-innovation, pro-IP dialogue. For too long, I explained, the words surrounding our patent system have been overly focused on its faults. A successful system cannot be defined by its faults. Rather, a successful system must be defined by its goals, aspirations, and successes. We have so many successes to which we can point.
Indeed, the tremendous progress that our nation has made over the last two and half centuries is due largely to American innovation. And though lots of factors have gone into that success, I believe that the uniquely-important and history-defining factor is the United States Constitution, and the inclusion in it of IP rights. Our constitutional patent system has given rise to a spark of ingenuity and development the magnitude of which humanity has never before known, including electricity and the telephone; the automobile and the airplane; recombinant DNA, DNA synthesis, and cancer treatments; the microprocessor and the smartphone. And so much more. And all of it was done with American patents.
Edison, Bell, and the Wright Brothers; Boyer and Cohen and Caruthers; Frances Arnold, Ted Hoff, and Steve Jobs. These are inventors whose work we should celebrate. And theirs are the stories that we, at the USPTO, have been telling. This is how we inspire the next generation of inventors.
Take, for example, Elijah McCoy, the child of former slaves who had fled to Canada from Kentucky on the Underground Railroad. Born in 1843, McCoy enjoyed tinkering from a very early age. With the financial support of his parents, who recognized their son’s abilities, McCoy traveled to Scotland at the age of 15 to study mechanical engineering. Upon his return home during the Civil War, prospects for black engineers were bleak, and the only job McCoy could find was that of a locomotive fireman and oiler for the Michigan Central Railroad.
Responsible for ensuring that the train was well-lubricated, McCoy created a device in his home-built machine shop that automatically dripped oil when and where needed, thereby eliminating the need for a lot of starting and stopping. For his “Lubricating Cup” invention, McCoy was issued U.S. patent no. 129,843 on July 23, 1872, and it proved so effective that soon, McCoy’s competitors were copying his designs. Indeed, people began asking if a given lubricator was a copy or was "the real McCoy."
By the time McCoy filed his 45th patent in 1915—notably, at the age of 72—engines were running at much higher temperatures, and lubrication had become increasingly difficult. So, he invented a graphite/oil lubricator and formed the Elijah McCoy Manufacturing Company to produce it. Today, lubricators have become so commonplace that they can be found in any engine.
American history is filled with remarkable stories of inventors who worked hard, took risks, persevered, dared to go where others would not, and ultimately overcame tremendous odds to succeed. This is, in fact, the story of America. And it is an inspiration.
Turns out, invention is synonymous with America. Indeed, in invention I see America; and in inventors, I see the American character.
Invention ties our storied past to our bright and promising future. Invention is about trying new things, taking risks, and venturing into the unknown when nobody else would. As the Pilgrims did when they came to these shores against the highest risks. And as the Pioneers did as they ventured west into lands unknown. As the women’s suffrage movement did, and as the civil rights struggle did.
At every turn, through every century since our existence, Americans have defined our history through our willingness to reinvent ourselves while maintaining allegiance to our foundational principles of individual freedom and democracy. Time and again, we resolve our struggles through innovative ideas and brand new solutions. And even when we fail, our history reminds us that we have always been willing to try again—and again, and again—to do, and to be, better. This has been the path of American history, and this is the path of invention.
And this will also be the path of America’s future. For as glorious as our past has been, I believe our future will be even brighter. We stand today on the cusp of truly remarkable technological and scientific advancements: artificial intelligence, quantum computing, autonomous vehicles, biotechnology, and so much more. American innovation will ensure that the future is ours.
In invention, I see America. I see her past, and I also see her future. We should use it to inspire. And in inventors I see the fundamental traits of the American character: grit, imagination, perseverance, and the willingness to take risks.
If you need another example, look no further than local inspiration, Dr. Lonnie Johnson, who happens to be here in the audience today.
Although he currently lives and works in Atlanta, Lonnie grew up in Mobile, Alabama, at the height of the struggle for civil rights in the 1960s. Like many inventors, he exhibited remarkable curiosity and an unquenchable thirst for exploration from an early age. Unfortunately, some of Lonnie’s curiosity came at the expense of his family’s possessions, like their lawnmower, which he transformed into a go-kart, or his sister’s doll, which he reverse-engineered so he could understand how its eyes closed.
Then there was the time that Lonnie nearly burned his family’s kitchen down while making rocket fuel.
During his senior year of high school, Lonnie entered a robot he created into a fair held by the University of Alabama Junior Engineering Technical Society. And Lonnie won first place!
After receiving a bachelor’s degree in mechanical engineering and a masters in nuclear engineering, Lonnie joined the Air Force. By the early 1980s, Lonnie had what he called “a fun day job” working on spacecraft at NASA's Jet Propulsion Lab, but in the evenings, he went back to his childhood roots and enjoyed tinkering on his own projects.
One of those projects was a new type of refrigeration system that worked on water instead of chemicals. While performing some experiments, Lonnie jerry-rigged a nozzle and hooked it up to the bathroom sink. After seeing the nozzle shoot a powerful stream of water across the sink, he knew he was on to something.
On May 27, 1986, Lonnie Johnson received patent number 4,591,071 for his most famous invention: the Super Soaker. As most of you know, this is one of the most powerful and most popular toy water guns out there. All told, it took him eight years, including “seven years of frustration and false starts,” as he put it, before the Super Soaker reached the market under license to toy companies. To date, Larami Corporation and then Hasbro have sold about 200 million Super Soakers, netting the companies about $1 billion in sales. And it all began with some stick-to-it-iveness and a patent.
“It was just one discouraging event after another,” Johnson noted in a recent interview with the USPTO.
“The most important thing above anything else is perseverance. I think sticking to it and not giving up is what makes the difference.”
Perseverance, not giving up, grit. These are the fundamental traits of the American character, from the Pilgrims of Plymouth Landing to Elijah McCoy, to Lonnie Johnson and the rest of today’s inventors. I don’t at all believe that it is a coincidence that invention flourished in the United States to a level never before seen in human history. As it turns out, the traits needed to invent coincide with our national character.
Plus, our Founders had the remarkable foresight to create a constitutional framework that combines fundamental freedoms with protections for property, including intellectual property. This has proven to be the secret sauce needed to foster innovation.
For it is here that we are truly free. Free to imagine, and free to try. Free to succeed, and free to fail. Free to work hard, and free to reap the fruits and the dignity of that work.
It is this unique American combination of character, freedom, and intellectual property rights that enabled American innovation to date, and that will inspire the inventors of the future. And it is this unique American system that we must protect and keep in mind as we drive America’s innovation policy. We must continue to encourage the sparks of inventors’ ideas to grow into the flames of world-changing innovation.
This is what drives American innovation. By inspiring people to innovate, broadening our innovation ecosphere, and stabilizing our legal framework, the United States will continue to be the number one economy for intellectual property and lead the world in the technologies of the future. I look forward to continuing our work together in support of that great endeavor.
Thank you again for the invitation to participate in this important discussion.