This
week marks the bicentennial of the creation of the U.S. Patent
Office. In fact, tomorrow night at the Library of Congress I will
host a reception and dinner to be attended by nearly 40 inductees
of the National Inventors Hall of Fame--the pioneering inventors of
our time.
While our anniversary celebration is
unlikely to generate many news stories, its significance should not
be underestimated. For 200 years, the U.S. Patent and Trademark
Office (USPTO) has served as the clearinghouse for American
innovation and for promoting intellectual property (IP) rights here
and abroad. In turn, these rights--the basic right to benefit from
a product of one's thoughts and ideas--have played a critical role
in America's evolution into the most technologically advanced,
economically vibrant power on earth.
The
celebration of the legacy of the USPTO and America's IP system,
however, comes at a time of great challenge for the agency and for
intellectual property rights generally. An explosion of patent
filings and increasingly complex technology threatens to overwhelm
the USPTO. The time it takes for a patent application to make it
through our agency now averages two years, and without significant
changes to the way applications are processed, those average delays
will soon reach three to four years. In some complex and critical
areas of technology the delay already easily can stretch to three
or four years. The failure to provide quality examination and
processing in a timely fashion greatly disadvantages U.S. inventors
and businesses.
As
the USPTO confronts these challenges, the very tenets of the U.S.
intellectual property system also are under assault in some
quarters. A lack of a clear understanding of how intellectual
property works--and just what it protects--is manifesting itself in
increasing efforts to undermine the rights of IP owners and weaken
American IP laws. From the wholesale pirating of copyrighted music
that began with the likes of Napster, to the Senate's recent
passage of legislation undermining pharmaceutical companies' patent
rights, we seem to
have forgotten the wisdom of our Founding Fathers and the
importance of protecting intellectual property.
I
mention the Founding Fathers because, as a student of history, I
continue to be amazed at the wisdom of the authors of our
Constitution. When the Founding Fathers created our new Republic,
they carefully drafted our Constitution to be limited in scope and
federal authority. However, as they painstakingly crafted the
institutions of our new government--the presidency, the courts, the
Congress--they also saw fit to include a clause in Article 1,
Section 8 anticipating the establishment of a patent system and the
protection of intellectual property.
With
their attention focused on the birth of a new Republic, why did the
Founders feel the need to deal with what appears to be, at first
blush, an obscure area of law? The answer is as important to our
generation as it was to theirs. They understood that our young,
agrarian colony would never grow to be an economic and
technological giant unless there was an incentive for inventors to
create and for other inventors to study and improve upon those
creations. From this foresight came the American systems of
patents, trademarks, and copyright protection, which give inventors
and authors the ability to enjoy, for a limited period of time, the
exclusive economic benefits of their genius.
In
1790, President George Washington signed the bill laying the
foundation of the modern American patent system. That same year,
the first U.S. patent was granted, and the examiner of that patent
was none other than Secretary of State Thomas Jefferson. In 1802,
the U.S. Patent Office formally was created, and since that time
our office has issued more than 6 million patents and registered
more than 2 million trademarks.
For
over two centuries, America has profited immeasurably from the
strength of our IP system. Today IP-based enterprises represent the
largest single sector of the American economy--almost 5 percent of
the gross domestic product--and employ over 4 million Americans.
More than 50 percent of U.S. exports now depend on some form of IP
protection. Perhaps even more telling, American IP exports are
greater than the exports of the automobile, agriculture, and
aircraft industries combined. Around the world, a high correlation
exists between a country's economic strength and the vitality of
its IP protection. While no single cause explains economic growth,
it's no accident or coincidence that the United States is the
established global leader in both of those categories.
Everyone--whether they are an intellectual
property owner or not--is a beneficiary of that wonderful gift that
the Founders provided in the Constitution.
But
as Paul Harvey says, here's "the rest of the story."
USPTO CHALLENGES/STRATEGIC PLAN
The
bad news is that the USPTO has become a victim of its own success.
As the years go by and as innovation rapidly accelerates,
technology does not get easier. Technology becomes much more
complex. Nonetheless, the Patent and Trademark Office is still
essentially operating under the same model that it was back in
1802.
On
the walls of my office over in Crystal City, all along the
corridor, you see all of these beautifully framed pieces of art.
But it's not the traditional type of art that one sees on the
wall--the Renoirs and prints of Picasso and so forth. It's the art
that accompanied patent applications one or two centuries ago that
didn't just make a profit for their inventor, but truly changed the
quality of life for mankind. Everything from the plow, to the
cotton gin, to the light bulb ... the list goes on and on.
The
amazing thing about those pieces of art, those applications, is
that we can frame them on a wall because they were basically one
page. There was a sketch of what this new invention will do and
there was a description of how it worked.
The
technology of today doesn't allow us to hang too many patent
applications on the wall. They have become far more complex, and
some of them come to our office on CD-ROMs with the equivalent of
millions of pages of data.
Because our system was not designed to
handle the longer and more technical and more complex applications
of today--and because we have not had the funding to keep up with
the hiring and training necessary to process these in an efficient
and timely manner--we have developed an incredible backlog at the
agency. Today, it has reached a crisis mode.
This
year we expect to receive about 340,000 new patent applications.
Those applications will get in the back of a line and take their
place among the 420,000 pending applications that are already
waiting to be examined.
As I
mentioned earlier, it currently takes on average two years to move
a patent application through our office. If the status quo
continues, that will soon skyrocket to three or four years--and the
quality of those patents will suffer.
President Bush understands the problem our
agency faces. He submitted a budget request to Congress that would
give us a 21 percent increase, at a time when every non-homeland
security, non-national defense agency would receive an average of
about a 2 or 3 percent budget increase. The President, Secretary
Evans, and some in Congress have also been supportive of my efforts
to fundamentally reform the agency and move it away from an 18th
century one-size-fits-all bureaucratic model into a market-driven
21st century paradigm.
When
the President and the Secretary of Commerce asked for my help in
reengineering a better Patent and Trademark Office, we reached out
to the private sector--our customers--to identify their needs and
hear their ideas. We initiated an aggressive top-to-bottom review
of the agency to identify new innovative ways to improve quality
and reduce pendency. Based upon that review and those discussions,
we put forward a comprehensive plan--the 21st Century Strategic
Plan--to transform the agency into an Information Age,
e-commerce-based organization that responds rapidly to changing
market conditions.
The
plan will boost productivity and substantially cut the size of the
USPTO's inventory while ensuring that the patents issued and the
trademarks registered are of the highest quality. It is built on
the premise that American innovators need to obtain enforceable IP
rights here and abroad as seamlessly and cost-effectively as
possible. A patent office that makes too many mistakes--granting
poor quality patents and taking years to issue patents--will starve
the engine investing in new technology, more skilled jobs, and
better products and services for the American consumer.
These reforms will require change and, as
you know, change is not easy in this town. We need Congress to
provide us with the funding and statutory changes necessary to
implement this new strategy, and we will need our customers to
discard some of their outmoded, wasteful filing practices. And when
I say we need Congress to give us "the funds," I'm not talking
about taxpayer dollars, because the USPTO is fully funded by user
fees.
Negotiations on all of these issues are
ongoing, and I am hopeful that we will be able to come to an
agreement on a plan to reform the Patent and Trademark Office.
Doing so will be an essential part of shoring up our nation's
intellectual property foundation.
And
any potential crack in this foundation is a threat to the economic
house that has been built upon it. An objective observer would
agree that cracks have begun to appear.
On
the copyright front, peer-to-peer file sharing systems--the second
generation Napsters of the world--have enabled thousands, millions
of individuals to steal copyrighted music. At the same time,
pharmaceutical patents are being challenged globally in the name of
"access" to medicines.
There seems to be a growing sentiment in
some quarters that intellectual property rights aren't as important
as other, more tangible property rights--and that, therefore, some
degree of infringement is perfectly fine. This is a dangerous
approach.
Just
as we evict squatters and jail purse-snatchers, we need the same
moral sense of right and wrong when it comes to intangible property
rights--the patents and copyrights that are the basis for
protecting new inventions, new technologies, new creations. Just
take a look around and see who is creating wealth, what wealth is
created, and how important that created wealth is to our balance of
trade, our prosperity in a global economy.
If
we ourselves do not respect the laws that protect creations such as
software, databases, motion pictures, and other media, what makes
us think that a much more IP-hostile world beyond our shores will
be lesser thieves and lesser pirates? If we do not ensure effective
patent protection for new pharmaceuticals, what incentive will
there be for industry to fund the research and development that
results in life-saving, silver bullet drugs in the first place?
We
know all too well that history repeats when lessons go unlearned.
Here, the lessons are clear. We cannot selectively respect property
rights, and we cannot selectively repudiate those rights because it
suddenly becomes convenient, "trendy" or politically expedient.
CONCLUSION
My
signature was affixed to over 150,000 new patents this year. My
hope is that each signature executed helped to facilitate a better
and more prosperous country that utilizes great innovations for the
betterment of mankind.
This
modern day application of the Founders' ancient dream for America
cannot be realized without a greater understanding of why creative,
intangible property--intellectual property--merits the same respect
and reverence recognized in the rule of law for one's home or
automobile. Without a better understanding of IP and its role in
our economy, the vitality of our existing IP laws--and therefore
our technological advancement--is at risk.
Intellectual property is the principal
engine for the creation of wealth in our society, and I suspect
that will become even more the case in this new century. We must
not allow the canons of our constitutionally based intellectual
property protections to be discarded. Our Founding Fathers' wisdom
remains relevant--and the stakes they identified for our nation
remain high.
--The Honorable James E. Rogan is Under
Secretary of Commerce for Intellectual Property and Director of the
United States Patent and Trademark Office.