Rensselaer Polytechnic Institute – Venture Summit
Under Secretary of Commerce for IP & Director of the USPTO David Kappos
April 12, 2012 – 3:30PM
Rensselaer Polytechnic Institute (RPI) – Venture Summit
Draft Remarks as Prepared for Delivery
Good afternoon everybody and thank you so much for that introduction. It’s an honor to be here alongside Dr. Shirley Jackson (President, RPI), as well as my dear friend, Judge Gajarasa of the Federal Circuit who also happens to moonlight as the Chairman of your Board of Trustees. Let me begin by saying that I’m tremendously excited to be at RPI. This is an institution that has not only prided itself in beating down Clarkson University in and out of the ice-hockey rink, but also in astutely “applying the research of science towards the common purposes of life”— so that’s why I’m pleased to participate in RPI’s Venture Summit—an event that pulls together the next generation of our country’s great creators and thinkers, doers and makers.
Now the story of efforts like the Emerging Ventures Ecosystem (EVE)—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, Richard Frederick’s very vision for EVE is rooted in accelerating the transfer of breakthroughs from RPI labs and classrooms to the marketplace, for all of us as a society to benefit from.
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 entrepreneurs right here on campus 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 & 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 Louisiana by enabling teachers to seamlessly share best practices in classroom design and curriculum through a user-friendly online platform. 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 Unchartered Play in upstate New York, which patented the idea of a soccer ball that generates electricity when you kick it. And with the power of that patent, the “Soccket” is now supplying power for electrical appliances and lighting up parts of the developing world with no established electrical grid.
Ventures such as these—and many others by entrepreneurs at this summit—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 steps 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 $2 billion for private funds that invest in early-stage R&D, businesses in underserved communities, and 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 start-up growth in places like Troy, NY. And a strong Patent and Trademark Office is also pivotal in toppling impediments to growth. Many patent-reliant industries, including alternative energy and green-technology companies participating in this Venture Summit—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 understand patent strategies available to them; and a dynamic IT infrastructure giving businesses a more streamlined and efficient user-experience when interacting with our agency.
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 8 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 our Administration.
Now in the area of software we can have a different discussion, because many of the tech applications participating in the Venture Summit 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 and 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, including open development models, to thrive and not placing them 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 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 Emerging Venture Ecosystem right here in New York 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 throughout the country are pairing startups with federal leadership to address emerging opportunities in improving our nation’s healthcare delivery. The summits in turn connect 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 announced last month a 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. By educating companies on commercialization & 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—it’s mission fundamentally speaks to what RPI students and EVE entrepreneurs work toward everyday--fertilizing outside-the-box ideas, and growing 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 today in Troy. Your creativity, passion, hustle and determination is has the power to employ more individuals than ever, in new and emerging industries. And in perhaps the largest display of nobility ever seen in business, many of you are harnessing the power of RPI research to serve those most in need. Whether it’s a more efficient way to save energy, or a creative tool to donate to philanthropic causes—your 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 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. Just yesterday I was at the White House where some of my administration colleagues and I released a report detailing that innovation industries that rely on intellectual property directly accounted for 27.1 million American jobs in 2010, and about 35% of our overall GDP. The findings point clearly to the fact that now more than ever innovation is pivotal to 21st century growth, so for these businesses to continue 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 today 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 RPI a place that stands for what is possible for our nation. This campus symbolizes new frontiers of research and thinking—so I need you to keep supporting one another, keeping building with one another, keep innovating with one another, and even consider joining many of your alums examiners at the PTO! Because ultimately it’s the creative moxie that RPI cultivates year after year that we as a nation must continue to grow and harness in order to preserve our excellence for the road ahead.