Global IP Perspectives and Strategies
Acting Under Secretary of Commerce for IP and Acting USPTO Director Teresa Stanek Rea
Global IP Perspectives and Strategies
4th Global Forum on Intellectual Property
August 27, 2013
Thank you for that kind introduction. I am delighted to be here today with distinguished colleagues from Japan, Spain, Singapore, and the International Trademark Association.
One principle I am sure we all agree upon is that intellectual property is a key driver of innovation. We see that in the United States, particularly among start-up firms capitalizing on IP to enter established global markets and create new markets. A recent study by the Kaufmann Foundation found that in the U.S. information and communications technology sector—a leading contributor to U.S. exports and job creation—there has been a 210 percent increase in new-firm growth, compared to a slight decline in new-firm growth across the entire economy. IP is a major reason why.
In our increasingly interconnected global economy, IP-driven U.S. innovation feeds innovation abroad, just as our entrepreneurs benefit from your innovation. This is a 21st-century reality. We are not living in a zero-sum world, but a win-win world. The Obama administration recognizes this reality. The U.S. now has 20 free trade agreements that reach 700 million people, but our economic interconnection extends far beyond those agreements.
The U.S. Department of Commerce—the parent agency for the U.S. Patent and Trademark Office—has launched a new program called SelectUSA to help foreign firms better understand U.S. rules and regulations—including IP—while encouraging investment in U.S. markets. You are welcome to attend the first-ever SelectUSA summit on October 31st and November 1st in Washington, D.C., where we are bringing together a wide range of global CEOs, U.S. economic development leaders, and government officials.
Of course, the USPTO has already been quite busy promoting a robust international IP system. We have been busy the last two years implementing the America Invents Act, or AIA, the most significant reform to U.S. patent law in more than a century. The AIA contributes to a more internationally harmonized, more predictable, and more flexible patent system for the United States, responsive to 21st-century realities.
Perhaps the biggest change to our patent law was the transition from a first-to-invent system to a first-inventor-to-file system, which went into effect on March 16th. This change better aligns U.S. patent law with patent systems throughout the world. The new system simplifies the process of acquiring rights while also supporting innovators large and small as they acquire venture capital, begin manufacturing their innovations, and seek out both domestic and foreign markets. The AIA also provides tools to facilitate speedier processing of patent applications, which is critical as we continue the central mission of reducing our backlog, which has declined 18 percent since 2009, despite a continuing growth in filings, 7 percent this year alone.
Our Track One program helps decrease application pendency by giving inventors a fast track to a final decision. We are currently averaging a mere six months for the entire process. This compares to an overall total pendency of 29.5 months for patent applications not filed through the Track One program, though I would note that the overall pendency for regularly filed applications is still down from nearly 36 months just two years ago.
Patent quality will continue to improve with the pre-issuance submission provision in the AIA for third parties to submit prior art. We have received more than 900 submissions since this rule was implemented last September. And do not forget our new post-grant administrative review proceedings. Since last September we have received more than 450 submissions for inter partes reviews and covered business method reviews. We have also received one petition for post-grant review. Our judges are hard at work processing these proceedings to completion in less than a year, far faster than the federal court system. By resolving disputes about patent rights earlier, with greater efficiency and less cost, we add greater certainty to the American patent system.
As to our international cooperative efforts, our partnerships with IP offices around the world are key to providing higher quality examinations faster, with more predictability and a reduced cost. Take our Patent Prosecution Highway program, or PPH. When one PPH partner office finds one or more claims allowable in an application, the applicant may request fast-track examination at another PPH partner office of a corresponding application containing claims that correspond to those found allowable. By reusing the search and examination results from the first office, the second office can avoid duplication of work, speed up its examination of the corresponding application, and improve examination quality.
The bottom line is that with PPH, practitioners and applicants save money, and who can object to that? Our stakeholders report a potential savings per case of about $10,000, more in certain cases. But there are other benefits. The PPH is a portfolio management tool—it provides a vehicle for obtaining a global portfolio of patents more expeditiously. The PPH program—which began as a small pilot between the USPTO and the Japan Patent Office in 2006—now includes 26 offices around the world, including Singapore’s as well as Japan’s and Spain’s.
From the inception of the program the USPTO has received more than 18,000 requests from patent applicants seeking to make use of PPH, with about 100 new ones each month. The USPTO is now partnering with 11 current participating PPH offices on a planned January 2014 launch of a pilot project to test out a new, common PPH framework. The tremendous growth of the PPH is a testament to its value, but its current structure presents certain challenges. Bilateral arrangements between offices often differ slightly with respect to scope and other details, so the Patent Prosecution Highway is really a series of parallel highways. This is not conducive to a harmonized global IP system. So we plan to replace these bilateral arrangements with a common framework. This should be seamless for PPH system users, and easy to adopt for those not yet participating.
Another means by which we cooperate internationally is through the IP5, which includes the USPTO and the patent offices of Europe, Japan, Korea, and China. Our shared goal is to enhance global cooperation, which the offices have defined as “the elimination of unnecessary duplication of work among the IP5 Offices, the enhancement of patent examination efficiency and quality and guarantee of the stability of patent right.” Two key IP5 projects are the Cooperative Patent Classification and the Global Dossier.
On January 1st of this year the USPTO and the EPO launched the Cooperative Patent Classification. Incorporating the best classification practices from both offices, it improves patent searching for users worldwide. The CPC enables patent examiners and patent system users throughout the world to conduct more efficient prior art searches and, compared to the current U.S. Patent Classification System, to conduct more targeted searches, with more focused results. The USPTO and the EPO share resources and maintain the system collaboratively. Both offices will make revisions on a regular basis to refine the hierarchy and to accommodate new developments such as emerging technologies. The Korean IP Office, or KIPO, recently agreed to classify some of its patent documents using the CPC, particularly technologies for which filings have been especially active at KIPO.
The Global Dossier is also a significant undertaking, one of the IP5’s most promising initiatives. The Global Dossier will be a virtual environment in which stakeholders will have secure, one-stop access and one-portal management of a global portfolio of patent applications. This eliminates the need to file duplicate documents in multiple offices. Participating patent offices will use the Global Dossier as well. From filing through prosecution, the Global Dossier will provide patent offices with a single portal through which their examiners can view the work results of other offices. This began as an IP5 project, but we are considering expansion to a number of other offices through cooperation with WIPO.
Our emphasis on international cooperation with a focus on IP5 cooperation stems from the dramatic ways the patent landscape is changing. International filings for patent protection, which can be considered an indicator of technological innovation in major economies, have been driven by growth in Asia. WIPO reports, for example, that patent applications in 2010 under the PCT showed a geographic shift in innovation activity from North America and Europe to Asia. In 2010, Asian applications accounted for 39 percent, North America accounted for 28.3 percent and Europe for 13.9 percent.
Patent filings are also increasing in the ASEAN region, most notably in Malaysia, Vietnam, Singapore, and the Philippines. Much of the surge in patent filings in Asia is led by China, where filings have been rising exponentially for years. Besides China, Japan and Korea, India has also been steadily increasing their filings each year, starting around 3,400 in 2001 to over 15,000 in 2011. Comparing globally, Thomson Reuters reported in 2011 that with domestic applications included, China had become the top international filer, ahead of the U.S. and Japan. The State Intellectual Property Office (SIPO), an integral member of the IP5, grants three kinds of patents: invention (similar to the USPTO utility patent), utility model, and design patents. SIPO examiners substantively examine invention patents. Utility model and design patents are reviewed for formalities only. While these utility model patents have no substantive examination, they are however included in the overall patent filing statistics.
In its quest to increase its innovation capabilities, the Chinese government offers an array of incentives, including patent subsidies, to individuals and companies to increase the number of patent applications. There are concerns, however, that while subsidizing patents might increase the number of applications, it gives little indication of the quality of the patents being granted. We are working closely with SIPO and other offices, including the JPO and KIPO, to look at utility model patent systems.
This is also why much of the international focus at the USPTO has been on Asia, where we have several IP attachés positioned in important locations. They include Peter Fowler, our IP attaché in Bangkok who covers the ASEAN region, and two (soon to be three) IP attachés in China, and another one in New Delhi. Our Asia IP attachés are supported by a team of USPTO attorneys with specific expertise and knowledge about ASEAN, China and India. They and our colleagues in other U.S. government agencies—including the Department of State, Office of the U.S. Trade Representative, and Department of Commerce—work together on numerous Asia-focused bilateral trade and IP dialogues to ensure that as Asia continues to grow and develop, the interests of U.S. companies and rights holders are protected.
Let me conclude by focusing on another important new mission of the USPTO in implementing an Obama administration priority. This past June, President Barack Obama addressed abusive litigation by patent assertion entities, or PAEs, with a series of executive actions that, together with calls for congressional action, will help focus inventors on innovation rather than litigation. The USPTO is implementing four of the president’s five executive actions. We will promulgate rules designed to ensure public access to patent ownership information.
A study by the White House Council of Economic Advisers and the National Economic Council—“Patent Assertion and U.S. Innovation”—spelled out how a lack of such information puts those accused of infringement by a PAE at a disadvantage. The USPTO has long been focused on this problem, and earlier this year—before the president’s initiative was launched—collected public feedback to guide our next steps.
The USPTO has also begun providing revised training for patent examiners to improve their examination of functional claims and ensure improved claim clarity. Those guidelines can be found on the USPTO website. We will also be adding to our website a new section—written in plain language for everyday citizens—that will provide useful information for anyone who receives an infringement allegation. The administration and the USPTO want to be sure everyone—including people not well versed in IP law—understands their rights and the actions they can take.
We are also committed to increased stakeholder outreach. We recently announced another public meeting by our Software Partnership, at which we will discuss among other topics PAEs and their role in the software community. This meeting on October 17th at the University of California School of Law in Berkeley will be our third such roundtable this year by our new Software Partnership.
We will also be conducting other forms of outreach, and engaging with the academic community on further empirical research on PAEs and the innovation environment. You can find the administration executive actions and updates on our work in these areas on our website, and we will continue to provide updates on our Director’s Blog.
Once again, let me state how pleased I am to be representing the USPTO and the Obama administration here in Singapore today at this impressive Global Forum. I look forward to a vigorous discussion on our increasingly interconnected and interdependent global IP system. Thank you.
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