New Orleans Entrepreneur Week

Under Secretary of Commerce for IP & Director of the USPTO David Kappos

March 13, 2012

New Orleans Entrepreneur Week

Draft Remarks as Prepared for Delivery

Good afternoon everybody and thank you so much for that introduction.

Let me begin by saying that I'm tremendously honored and excited to be in Louisiana, and New Orleans in particular. More than any other community of Americans in my lifetime, the people of the Pelican State and the Crescent City have defined what it means to persevere in the face of tragedy, and to rebuild in the face of ruin, bigger and better than ever before.

With a common sense of purpose, responsibility and resolve, you came together to reconstruct homes; to restore the culture of music and art that forms the soul of this city. You led the way toward a better future with innovative approaches to fight poverty and improve health care; to reduce crime and create opportunities for youth. Because of what you did here economic output is up, jobless rates are down; Forbes calls you the "Biggest Brain Magnet" of 2011, and the Wall Street Journal now ranks New Orleans among the top 100 metro areas to do businesses. That's all because of you.

And that's why I'm humbled to participate in New Orleans Entrepreneurship Week-an event that pulls together the next generation of our country's great creators and thinkers, doers and makers.

Now the story of what's happening in New Orleans-and what all of you at this summit represent-is much like the story of our country itself. And it's why the United States is fundamentally different from every other advanced economy: We're startup people. We break the norms. We're innovators and we're willing to take chances on big ideas. It's what sets us apart. In fact, as I understand it, The Idea Village itself was sketched on the back of a cocktail napkin at a local bar, in an attempt to stop the brain drain the State of Louisiana was facing after Katrina.

That's who we are as Americans. That's what we have always been about. Whether we're tinkering with equipment in a garage, or writing new lines of code in a dorm room, such innovative solutions to the social challenges of our time are what have always guided our nation's progress. And in an increasingly globalized world, that innovative drive embodies the source of American competitive advantage in the 21st century.

This is especially critical because we stand at a crossroads in our country's economic evolution. Determined to accelerate the pace of growth, government and businesses alike strive on a daily basis to do more with less. And not only do the novel ideas of New Orleans entrepreneurs have the potential to move the pulse of an industry or transform the welfare of a community, they can also attract critical resources and capital for additional research and development, creating a host of new markets and new opportunities.

It's the story of startups like Classroom Blueprint, which is transforming the educational landscape of New Orleans by enabling teachers to seamlessly share best practices in classroom design and curriculum setup through user-friendly online platforms. Through tagging, social media, and one-click sharing applications-Classroom Blueprint is creating a self-sustaining community that is tackling traditional challenges in K-12 education and inciting an entrepreneurial spirit in teachers to share and adopt new techniques.

Innovation is also embodied in the story of Shopcurl, a new site that used cutting-edge web technology to helps brick and mortar businesses in New Orleans expand their customer base and minimize costs-all through the power of Twitter.

Independent ventures such as these-and many others by entrepreneurs here this week-help create two out of every three new jobs in our country. And your willingness to take risks and roll the dice on a new cause, a new idea, or a new invention is what the Obama Administration supports to the fullest. To optimize the ability of entrepreneurs to thrive, the United States Patent and Trademark Office, the Department of Commerce and the Obama Administration are working aggressively to reduce barriers to development and accelerate success.

First and foremost, the capacity for growth of any inventor or entrepreneur rests in her ability to attract funding, raise capital and spur additional research and development, and ultimately production. That's why our Administration is taking concrete actions to improve the environment for high-growth innovation through the Startup America Initiative. By building partnerships with the private sector, the Department of Commerce and the Small Business Administration match up to $2billion for private funds that invest in early-stage R&D, invest in businesses in underserved communities, and invest in small entities that face difficult challenges in accessing capital.

These nationwide partnerships not only help break down barriers that independent entrepreneurs may face in seeking funding, they also encourage and incentivize direct partnerships between venture capital firms and small companies in order to expand the vibrant ecosystem of startup growth in cities like New Orleans. And a strong U.S. Patent and Trademark Office is pivotal in toppling impediments to growth. Many patent-reliant industries-including alternative energy and green-technology companies participating in New Orleans Entrepreneur Week, and the Ideal Village's "Big Idea" challenge-require timely and high-quality patents to foster research and secure resources. That's why the USPTO is rebuilding the country's intellectual property policies in order to create a more efficient and cost-effective patent system.

Aiming to simplify the process of securing IP rights, President Obama signed the America Invents Act into law just six months ago, enabling small and independent inventors to move their ideas to the marketplace faster, while reducing the need for cost-prohibitive litigation that all too often ties up ideas and stifles innovation. By building out a 21st century U.S. Patent and Trademark Office, we're bringing online the resources necessary to offer pro-bono programs to under-resourced businesses seeking legal advice; accelerated patent examination options with big discounts for small businesses; IP assessment tools to help businesses realize patent strategies available to them; Small Business Innovation Research grants; and a more dynamic IT infrastructure giving businesses a more streamlined and efficient user experience when interacting with the office.

In 2010 the USPTO was described in Harvard Business Review as the "biggest job creator you never heard of." And as our country seeks to regain the eight million jobs lost during the recent recession, the USPTO is a great place to start. Countless inventions that can spark new businesses are right there-sitting in our backlog of unexamined patent applications. And under the America Invents Act we're making tremendous progress in reducing that backlog-a top priority for both me and this Administration.

Now in the area of software we can have a different discussion. Because, many of the brilliant tech applications being showcased at New Orleans Entrepreneurship Week are rooted in open source development models, and debate continues about the extent to which patents are in the interest of your products or services. As a long time champion of open source software, and open development models more generally, I fully understand this issue. I've lived it, and in fact in the private sector I've personally spearheaded efforts to address it.

But let me be clear: The patent reform law we're working hard to implement recognizes business models like open source, where we can do with fewer marginal patents. In fact, it creates a new right for open source innovators to submit documents including code-directly to the patent office at no cost, over the Internet, to ensure our examiners are not granting patents covering concepts you have already put into practice. The legislation also makes it much easier and less expensive to challenge and remove patents we've granted by mistake.

And even beyond legislation, we've already implemented improvements inside the USPTO to ensure we take a good, hard look at software-related patent applications. We are giving our examiners more time to carefully review these cases. And we have deployed a comprehensive set of examination guidelines specifically fine-tuned to software related inventions.

This is the first time in the history of the USPTO that we have put such extensive focus on improving our handling of software-related inventions and we're doing it to ensure all software development business models will flourish. And we are working on new, dynamic approaches in our patent laws-including the way we implement them-to enable all business models to thrive and nurture in open development models, so they are not placed in conflict with the intellectual property system. We want startups of all nature, patent-oriented or not, to put their finger on the pulse of where American innovation is headed, and the social demands that are left to be addressed.

Beyond funding and a supportive intellectual property system, close collaborations and peer-to-peer partnerships are also essential for startups to learn best-practices and tricks of the trade. Groups like YCombinator in Silicon Valley and the Idea Village right here in Louisiana are offering dynamic forums to test new ideas and tap into a network of professional support. That's why Startup America is expanding entrepreneurship education through additional mentorship programs that grow networks of support between large companies, investors and your businesses.

"DC-to-VC" summits through the country are pairing together startups with federal leadership to address emerging opportunities in improving our nation's healthcare delivery. These forums are connecting venture capitalists, entrepreneurs, and health practitioners so that ventures developing new diagnostic tools or therapies can solicit the funding they need to distribute their products. Additionally, with an eye towards encouraging investments in our innovation and manufacturing sector, the President also announced on Friday the new National Network to Accelerate Innovation.

By establishing a network of 15 "Institutes for Manufacturing Innovation," the effort will commit $1 billion to create a national network that connects representatives from industry, universities, community colleges and federal agencies-and ramps up investments in budding regional innovation clusters like New Orleans. By educating new companies on commercialization and development strategies, the effort also seeks to bridge the gap between research and scalable development in focused technology areas. While the initiative is a collaboration between agencies in the federal government, its mission fundamentally speaks to what New Orleans entrepreneurs work towards everyday-to fertilize outside-the-box ideas and grow good job opportunities right here at home.

In truth, what these government collaborations, startup initiatives, patent reform efforts and funding programs strive to do is keep up with a new reality: In a single generation, revolutions in technology have transformed the way we live, work and do business. Today, just about any company can set up shop, recruit talent, and move its products wherever there's an Internet connection. Meanwhile, nations like China and India realized that with some changes of their own, they could compete in this new world. And so they started educating their children earlier and longer, with greater emphasis on math and science.

So, yes, the world at times can appear staggeringly different, and the competition for jobs is real, and it is global. But there is a resounding note of optimism in America, and it is on full display this week here in Louisiana. Your creativity, passion, hustle and determination is employing more individuals than ever, in industries that just a few years ago we did not even know existed.

On the heels of an idea you are creating new ways to organize the information in our lives; communicate with friends and family; find a great place to eat the best "Po'Boy" sandwiches in town; and streamline the process by which we get our news. And in perhaps the largest display of nobility ever seen in business, many of you are harnessing the power of your technologies to serve those most in need. Companies participating this week like Tierra Resources are working wetland restoration for coastal businesses in Louisiana-and MATTER L3C is building out a platform for philanthropic efforts affecting social change to raise awareness and fundraise for their cause.

Such efforts must be applauded. Because while developing tools in the name of cause-based enterprising may still require investment capital, it has the more important ability to inspire through human capital. That's why the USPTO is proud to play a role in accelerating socially conscientious technologies through our recently launched Patents for Humanity program. By rewarding companies who bring life-saving technologies to underserved regions of the world, this 12-month pilot program is highlighting positive examples of humanitarian actions while demonstrating that philanthropy can be compatible with business interests and balanced patent rights.

Ladies and gentleman, a changing world requires new partnerships and new solutions. As the government invests in the building blocks of innovation through new infrastructure and new research, we can establish an environment ripe for private sector investment and competitive markets. Boosts in R&D investment, public-private partnerships, and cause-based technologies are all essential to 21st century business. And the Commerce Department and USPTO are helping make these improvements a reality.

As I've outlined today, we must provide an environment that allows small businesses to attract capital and grow based on their ideas. For these businesses to flourish, we must provide timely and high quality access to IP rights. We must also work together to make sure the entrepreneurial drive showcased this week is alive and well in startups willing to test new frontiers. Ongoing dialogues, expanded public-private partnerships, and a robust, balanced intellectual property system are vital to America's future. And together, we can help make New Orleans a place that stands for what we can do in America-not just for what we can't do. Ultimately, that must be the legacy of Katrina: not one of neglect, but of action, invention, and determination.

And if this continues to be reciprocated with good government policy, we can support one another to preserve American excellence in out-building, out-innovating and out-hustling our economic competitors. Thank you.