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The Innovation Economy: Unleashing Intellectual Property to Fuel Growth and Create Jobs - Remarks by Director Kappos at the Center for American Progress

By: Michael A. Leonard II


On June 2, 2010, FoundPersuasive's Michael Leonard attended the Innovation Economy discussion at the Center for American Progress. USPTO Director David Kappos commented on the role of intellectual property in promoting innovation and economic growth. The Director announced that the country stands at a critical juncture economically and intellectual property is essential to economic success in the United States. Director Kappos noted that the U.S. must provide a sound envionment that allows small businesses to protect their IP and to secure capital. A sound national IP policy will lead top the creation and success of more new companies. American history has been driven by innovation and a key to economic success lies in IP protection that creates value for innovation. Director Kappos repeatedly referred to IP as "the currency of innovation" and provided insight into how he believed IP could strengthen the U.S. economy.

Impact of Intellectual Property on Small Businesses

Director Kappos noted that there is a connection between the IP system and funding for small businesses. Timely and high quality patents are critical to small businesses and are essential to attracting capital to bring new technology to the marketplace. Investments in intangible assets exceed those in tangible assets by 20% in the United States. The Director further noted that patents foster the movement of ideas to manufacture.

Role of the USPTO in Promoting Job Creation

Harvard Business Review called the USPTO "the biggest job creator you never heard of", according to the Director. However, the USPTO backlog is hampering job creation. The Director indicated that backlog is a top priority because it could be costing the U.S. economy "billions". He alleged that the backlog can be reduced by focusing on improved quality processes and reforming the USPTO to match the high pace and focus of innovation. Director Kappos wants to offer private sector business practices and market-driven services (particularly with respect to processing speed) at the USPTO. One example of such an initiative is the acceleration of review of green technology patent applications.

Giving Applicants more Control over Examination Priority

Director Kappos stated that one goal of the USPTO is to give Applicants control over the priority in which applications are examined. Along this vein, Director Kappos indicated that an announcement will come tomorrow (June 3, 2010) regarding a new program for examining patent applications.

Technology Development and Transfer by Universities Needs to be Improved

The Director noted that diffusion-based transfer leads to greater funding for universities and a greater benefit to the economy. New technologies account for approximately 3/4 of post-WWII economic growth in the United States, and the Director noted that research conducted at universities is vital for fostering innovation and creating jobs. Bringing university-inspired technologies to the marketplace is key. The purpose of IP protection of research-based inventions is to prevent appropriation to low cost labor markets. The Director indicated that technology transfer models are currently in a state of flux and universities need not sacrifice the exchange of knowledge for research funding.

The Present Intellectual Property System in the U.S. is not Optimal

The Director commented that today, we have not realized the full potential of our IP system since the system has lain dormant while the amount and complexity of new technology has grown by leaps and bounds. Appropriation and misappropriation of IP leads to the loss of U.S. jobs. The Director commented that "it is incumbent upon us to develop a robust intellectual property policy." Clearly, improvement of the system will be an ongoing, and unending, process.

Summary Comments

The Director stated that we must provide an environment that allows small businesses to protect their IP and to secure capital. A sound national IP policy will lead to creation and success of more companies. The Director again reiterated that the focus should be on IP as "the currency of innovation."