David Kappos, Director of the United States Patent and Trademark Office, spoke this month at the National Minority Enterprise Development Conference. His comments were encouraging but regrettably pointed to the lack of minority-owned businesses using the USPTO to their advantage.
His speech began by citing our nation's long-established strength has been to pave the way to innovation through the creation of new technologies, products and services, and even brand new industries.
"In fact," Kappos states, "technological innovation is linked to three quarters of our Nation's post-WWII growth rate. And between 1990 and 2007, compensation for jobs in innovation-intensive sectors increased by two and a half times the national average."
He continues that our American leadership and the health of our economy "must fix squarely on innovation." He supports that by pointing to the Obama Stimulus Plan, which has devoted 3 percent of the GDP to Research and Development, representing the largest investments in scientific research and innovation in American history. So one would ask how quickly can the government get these needed funds into the hands of university researchers and independent inventors?
While his speech discussed the importance and role of minority business and inventors in the innovation process, it did not clearly lay out the path for Intellectual Property realization. The USPTO is going through its own transformation. Both independent inventors and university constituencies have criticized it as a bottleneck to the review and securing of patents. Under Kappos, all this will change - but how quickly and at what cost to the current controls in place to protect faculty and independent inventors?
Minority inventors and university researchers have always held a special place in the history of our country. They have revolutionized existing industries and made critical contributions to new and ever-expanding industries and technology. Kappos cites that, "America's immigrant and minority innovators have led a revolution in creating the bio-medical industry." He also highlights case examples, like Mark Dean, an African-American inventor and researcher at IBM who was responsible for inventing the Industry Standard Architecture Bus (ISA),an innovation critical to the development of the information technology and digital communication revolution. Kappos emphasizes this achievement, "has brought unprecedented commerce, economic growth, and prosperity to our nation."
He goes on to stress that economic security for innovation depends on the needed protection for Intellectual Property, which in turn allows inventors to capture with certainty investment and value from their creativity.
Further, Kappos dispels a major misconception in our nation by saying, "IP is not about legal complexities or techno-speak-IP is about business strategy."
He goes on to say, "Intellectual Property protects good will and brand equity-just think of Coca-Cola, GE, and Microsoft. IP also protects creative works that are the lifeblood of the entertainment industry-think of your favorite song, blockbuster film, or best-selling book."
His key messages focused on the protections that inventors and small businesses share. He reminds the audience that investment in research and development needs to be protected with enforceable patents that enable individuals and companies to secure investment without fear that their innovative products and services will be misappropriated by others.
He supports his position with a series of case examples: from an inventor working on solar power exchange to a small business who creates cutting-edge biotherapeutics to treat cancer, inflammation, and autoimmune disease. "Because they used the IP system to protect their ideas they can grow their businesses. Mr. Workman's company (GoBe Solar, a division of Arrowhead Connect) is now responsible for 900 jobs right here in the United States."
Without patents you cannot secure funding easily as your investors do not have the undisputable and defensible certainty of their investment. Patents are fundamental to successfully launching start-ups and growing small businesses, which Kappos emphasizes, "create two out of every three American jobs."
These examples and more were provided to the conference to demonstrate how securing patents for your IP can fuel innovation in the modern knowledge economy: "from idea, to funding, to development, to the marketplace. Patents play a role at each step along the way."
However, a recent study by the National Science Foundation suggests a disparity in science and engineering has translated into a legitimate world gap in innovation. Further, the study suggests that while African-Americans and Hispanic-Americans account for about 23% of the population between ages 18-24, they earned only about 16% of science and engineering degrees in 2006, a disparity that emphasizes the educational divide.
Kappos references, "just over 1 in 10 of the nearly 19 million scientists and engineers employed in the U.S. are underrepresented minorities-this includes African-Americans, Hispanic-Americans, Alaska Natives, and Native Americans. And beyond the classroom, we see this gap manifested in Intellectual Property participation."
He also points to a 2009 Kauffman Foundation survey of new businesses that reports, "by the fifth year after founding, minority-owned technology companies hold fewer patents and copyrights than comparable non-minority businesses." In fact, the Kauffman survey data shows that minority-owned firms that hold patents hold only 2 patents on average compared to the 8 patents held by their non-minority counterparts.
"These findings are consistent with work we've done inside the United States Patent and Trademark Office-looking at the youngest of firm," confirms Kappos. He goes on to mention that while Asian-American owned companies are currently patenting at a rate three times higher than non-minority owned businesses, "all other minority-owned businesses seeking patents are almost ten times lower than their non-minority counterparts."
Kappos later suggests that this is not only a concern to the USPTO, but to American innovation. While he quotes several additional influencers such as industry sectors or advanced technologies, his primary message stayed on track. Kappos punctuates the fact that business, community, and government leaders must take on responsibility to ensure that minority businesses "dramatically increase their use of Intellectual Property and participate in the U.S. innovation system if we are going to see progress come from every segment of American life."
The USPTO commitment will be met through the creation of a new senior position on its Patents team, reporting to the Commissioner of Patents. This new position will include responsibilities focused on encouraging participation and increasing the critical role of minority businesses in the IP system.
"And to do so, we need your help. Our businesses, entrepreneurs, and community leaders-that's all of you in this room-must play an active role in spreading the word and leading by example. We need you to create opportunities to educate."
Kappos closes his speech with a call-to-action giving importance to the entrepreneurs and business leaders at the conference. He encourages that through Intellectual Property education, these leaders can help enable minority businesses participate in IP and increase their rate of patents to become consistent with non-minority businesses.
"Increased minority participation in the IP system will lead to the creation and success of more innovative American companies. And it will ensure that minority communities can leverage IP to safeguard economic well-being and create strong businesses."
"We all know, strong businesses stand as a beacon for students' aspirations of what they may become and what they may do with their lives."