Collaborative Innovation - a Global Call for Enhancing Work Sharing

Under Secretary of Commerce & Director of the USPTO David Kappos

May 25, 2011

6th Annual International Judges Conference

"Collaborative Innovation - a Global Call for Enhancing Work Sharing"

Remarks as prepared for delivery


Good afternoon everybody and thank you for that kind introduction.

It's a distinct pleasure to address the shifting legal landscape facing the IP community at IPO's 6th International Judges Conference, particularly because of what this forum represents. We meet at a time where countries around the world are facing generational challenges, and so our willingness to convene here today underscores that with 21st century legal questions being global in scope, so too must be their solutions. In that spirit, I'd like to convey the gratitude of the United States Patent and Trademark Office to the Intellectual Property Owners Education Foundation for putting together an event that promotes an ethic of world-wide citizenship and a global dialogue about the pressing judicial trends of our time.

That's why I'm honored to join so many distinguished officials from Europe, Asia, the Americas, and indeed around the world. I'm also thrilled to see so many regional experts and practitioners here; whose attendance highlights the importance of public-private partnerships in our conversation today.

First, and foremost, I want to take a moment to applaud the stewardship and public service of all of the honorable jurists here today. Courts at all levels-whether the US District Court for the Eastern District of Texas, or the Royal Courts of Justice in London, or the Tokyo High Court-are making clear progress from the bench, in addressing the vast array of issues confronting the IP bar today. On the one hand, you are deciding cases like Microsoft v. i4i in the US, that press the law forward around standards for proof of infringement, and on the other hand, you are working to re-balance areas of the law that have arguably become over-extended-as in issues of inequitable conduct and false marking that have impacted litigation in other US cases like Therasense and BP Lubricants.

While the specific case law is of course subject to debate, all vectors point to the need for a strong and well-balanced patent system. And the variety of thought-provoking cases filling dockets around the world underscores the ever-evolving nature of the intellectual property terrain. That terrain is also being shaped by technologies-from computers to mobile phones to life-saving drugs-that are not just a part of everyday life, but are also growing more cross-disciplinary.

Great new products have one foot in nanotech, another in software, and another in the biological sciences. And they are designed, developed, manufactured, distributed and used in global networks that readily transcend national borers and national patent laws. These kinetic realities are welcome, and they certainly are hallmarks of 21st century innovation-but they demand collective, intelligent engagement and a smarter infrastructure to keep up. This is critical, because we all stand at an important crossroads in each of our country's or regions' economic evolutions. Determined to accelerate development and growth, we represent governments that strive on a daily basis to do more while working with limited resources.

But let's not forget, we also represent many of the strongest patent systems in the world, which yield the most sought-after innovations of our time. So, while we all work to improve the economic outlook for our countries, we must remain grounded in the essential truth: that technology and innovation-through clear, consistent, and balanced intellectual property protection-will write the next chapter of growth and social progress.

That is why this conference is vital. Because, as we seek to strengthen our respective patent and trademark systems, to promote the development of new jobs and new industries, the conversations we have here today not only allow us to identify barriers that impede innovation, they also empower us to work toward collectively building an IP system that accounts for these evolving costs & benefits in a globalized world.

We live in a world where information and commerce increasingly reach far beyond any of our borders. And as innovators seek to tap markets abroad, it is imperative that the international patent system provides a cost-effective way to obtain reliable patent rights in multiple jurisdictions. Through global synergy and collaboration, we have a unique opportunity, right now, to meet these challenges. Because while the dynamics of our economic landscape may be shifting, the importance of IP rights is not. IP is the premiere global currency for creating value for services and products, for innovators of all sizes and in all countries.

Yet if we don't keep up with a digital and commercial system that moves ideas & products across borders instantaneously-we risk devaluing that currency. With our IP systems so varied and our patent laws so fundamentally different, innovators and patent offices around the world are repeating the same work, time and time again-millions of times per year-and ultimately wasting billions of dollars a year, clogging the pendency pipeline and court dockets, leaving the patent system, ironically, as the laggard among commercial legal regimes!

To devise real solutions that cut down workflow redundancies-we must collaborate. Only through collaboration can we fulfill the societal goal of our patent systems, to unleash millions of jobs lying in wait, and drive real growth for all of our economies. But our discussions must be rooted in global best policies and best practices-basic principals we agree define a 21st century patent system that optimizes technological progress.

The world's patent offices are working toward those best policies and practices at an administrative level, through multilateral agreements like the Patent Cooperation Treaty (PCT) and bilateral relationships through the Patent Prosecution Highway (PPH). When an inventor's patent application is being processed in multiple regions of the world, these work-sharing systems enable offices to utilize one another's search and examination results-thereby avoiding duplication of work and expediting the process of review.

The PCT of course is the cornerstone of work sharing systems. The USPTO has invested substantially in improving its PCT timelines and quality in recent years, reaching world-best status in international stage processing and making significant progress at leveling the playfield for innovators seeking to access markets abroad.

With respect to the PPH program, about 8,000 applications will have made their way through the US PPH by the end of this year, and our goal now is to streamline procedures to acquire patent rights in multiple jurisdictions, through a new iteration we refer to as PPH 2.0. With examiners in one office able to view the work product of examiners in another office, the additional information and insight provides a platform on which the second examiner stands to improve upon earlier work, and do so efficiently because critical issues have already been discussed and resolved.

This is turn inures to the benefit of inventors, patent offices, and courts worldwide, all of whom benefit from the higher quality and more timely settled rights-engendered by the PPH. The success of PCT and PPH gives us a chance to hold a critical lens up to examination standards, and envision a system where administrative protocols are ironed out and incompatible patent systems no longer keep us up at night. If we can eliminate repeated work, and free up resources for inventors, patent offices, and courts, we ultimately generate the economic lift that comes from moving ideas to the market place more efficiently.

Now, we can also engage the ideal of an improved global patent system by identifying areas of the law where further coordination and development across-jurisdictions would be helpful. In cases like Quad/Tech v. Q.I. Press Controls (Fed. Cir. 2011) where a US district court cited a German opinion in articulating a denial of preliminary injunction-or in the Olanzapine matter where divergent approaches to "novelty" determination led to EPO patent grants, then subsequent German invalidations-it is apparent that reducing differences in legal standards, can allow the justice system to offer plaintiffs and defendants alike a more consistent and thorough evaluation of patent validity and infringement.

Now, I am not arguing here for some sort of judicial work-sharing regime-yet-but I would be remiss if I did not point out that there is obvious social benefit to all the legal systems represented in this room today, to pursue common legal standards on issues relating to damages, obviousness, inventive step, and cross-border infringement-to name just a few areas of mutual interest. At the very least, standardization would allow courts to evaluate competing claims against a broader backdrop of comparable decisions, and use the totality of those perspectives in developing opinions. That's why this fall the Tokyo IP High Court in Japan will host the Joint Judicial Conference, to create a mutually supportive setting for identifying legal trends and discussing best practices in adjudicating patent rights. The USPTO is also helping to plan a similar event in Beijing and Shanghai in 2012.

Because fundamentally, when our respective legal systems can educate and inform one another, our patent system is better positioned to handle ever-escalating demands, and justice is elevated to new heights. But in order to make our judicial coordination goals a reality, and, in order to leverage work sharing programs between patent offices to overcome barriers to growth, the leaders in this room need to own our role in the international IP community. To truly enable the global innovation system to flourish, we need to lead in finally harmonizing our substantive patent laws. Because until we remove the basic incompatibilities in our underlying legal systems, our collective efforts will remain hampered at best.

And substantive patent law harmonization for the 21st century needs to start by using a different approach than the failed attempts of the past. It must begin with a global dialogue, including developed and developing countries, to gain a better understanding of our needs, issues and flexibilities. And we must learn why each of us considers a specific approach to be a best practice worthy of inclusion in the global gold standard patent architecture.

And I submit to you that the goal must be to create an innovation-friendly, inventor-friendly system-not merely the simplest possible system or the most precise possible system or even the most deterministic system. Because the search for these ideals is a false search, based on goals incompatible with 21st century innovation time cycles, business models, global competition, complex supply-chains, new innovation models, and new value systems.

And let me assure you that the United States is ready, willing and able to make bold moves to build a better framework for cooperation-both for jurists and patent offices. This spring, the US Senate passed a sweeping patent reform bill with an overwhelmingly mandate of support, 95-5. Essentially the same legislation has passed our House Judiciary Committee, 32-3. And in just a few hours, as the sun rises over Washington, DC, our House of Representatives will continue its work on the legislation. When enacted, this legislation will mark the most sweeping reforms to the US patent system in at least 60 years-arguably in over 150 years.

The legislation will transition the US from first-to-invent to the First-to-File system, eliminate the Hilmer doctrine, eliminate the best mode defenses, and move other areas of US patent law to international norms. The US is undertaking these essential reforms not as part of an international negotiation, or to gain leverage in a quid-pro-quo bargain, but because they are global best policy and best practices-because they are the right thing to do. Not only will these reforms reduce costs, they will also level the playing field for everyone, especially SME's-that create so many jobs and so much opportunity-everyone seeking to participate in the global marketplace.

Moreover, this major legislation will boost productivity by enabling greater cross-border collaboration between the USPTO and other patent offices. And it will enable the jurists with us today, to coordinate applicable decisions and benefit from one another's wisdom on a scale never before seen. The USPTO, US Commerce Secretary Locke and President Obama stand firmly behind the current patent reform effort in the US Congress and are working to ensure this legislation gains all the support it possibly can.

But beyond unilateral US patent law harmonization, we must also ask what laws best collectively promote full disclosure, early disclosure, and maximum dissemination of information-here in Europe, and beyond. And in discussing openly the work we will undertake to rationalize the world's patent laws, no longer can "harmonization" be deemed a dirty word. Instead, the 21st century commercial environment demands that we work together to address harmonization for what it is-not a battle of the developed world against the developing world-but an opportunity to place our patent systems on a much more common footing, for the benefit of all the worlds citizens.

The Council of the European Union recently took a critical harmonization step of its own through the creation of a single patent system-one that would replace the status quo of individually validated and enforceable rights in each country. While the new rules are still in the process of adoption, the USPTO applauds the EU's leadership in streamlining and strengthening its IP architecture. Not only will this reduce patenting costs for all countries, but it represents a step towards greater harmonization generally.

Inspired by the EU's bold steps, in March the United States Patent and Trademark Office hosted the Asia-Pacific Patent Cooperation Conference, as a first step of our own to restart a global dialogue. The goal was simple-to share views on patent law harmonization. And the result was a universal affirmation that harmonization discussions must resume anew. So from Beijing to Brussels, have no doubt about it, the will to enhance our collaborative capacity exists-the will to finally harmonize our patent laws exists.

And let me be clear: harmonization as I envision it is not about imposing the will of any country or group of countries onto another, or about challenging patent sovereignty in our IP ecosystem. As with any matter affecting trade interests across many nation-states, engagement must include both developing and developed members. And it must be informed by diverse viewpoints. And it must improve conditions for all participants. But it must move forward.

Enhanced cooperation-an invention of the EU-is proven effective and must be a guide for modern harmonization discussions. The world's innovation community, and the world's challenges, demands that we succeed in harmonizing our patent laws now. Beyond harmonization, a pursuit of common judicial standards & patent office administration standards-and indeed beyond PCT & PPH-our commitment to global patent system coordination stems from the fundamental fact: that granting higher quality patents, and adjudicating their scope and applicability, more efficiently, truly empowers innovators to engage the global marketplace and unleash their creativity.

That's why at USPTO we're doing our part by implementing a range of other innovation-friendly, inventor-friendly programs, as well. From our Track One initiative, that will speed up examination to 3 months from filings for those needing fast review of their technology; to the Green Tech Pilot program, that has already prioritized over 2,000 inventions built in the name of sustainable energy solutions; to our planned acceleration of applications covering export-ready technologies; to our expansion of the First Action Interview Pilot program across all technologies; to our planned humanitarian initiative that will reward applicants who include socially conscious channels in their innovation commercialization plans-the USPTO is aggressively working to build a smart, robust patent infrastructure that better utilizes our resources and yields a faster idea-to-market turnover rate.

Most recently, last Friday (May 20th) we launched the Global Intellectual Property Education Training Program Database. Because by allowing US government agencies to post in one place information about the intellectual property rights (IPR) training programs they conduct around the world, we transparently demonstrate the premium we place on issues of protection and enforcement-a vital precursor to any earnest discussion of best practices on a global stage. All these efforts are anchored in the desire to more effectively match the rate & pace of the patenting process to the rate & pace of invention, and the rate & pace commercialization.

So the onus is on the world's IP leaders-here today-to decide that we want to enhance and accelerate progress, and not sit by while the rest of the global commercial and technological system moves ahead. I believe we owe it to all of our country's citizens to accelerate all discussions aimed at optimizing our global patent system. I know the jurists in the room are already doing your part and I think you for that leadership. I hope those of us who run patent offices, and our practitioner brethren, can step up with equal vigor.

Because at the end of the day, building a system that incubates great ideas, offers the highest quality reviews, and swiftly brings the best products to the marketplace, benefits innovators and governments alike, and writes the next chapter of economic growth for us all.

I urge us all to work together, search for common ground and let best global policy & practice be our guide. And as we look back across global economic history I would close today with the call of my nation's forefathers, "E. Pluribus Unum,"-out of many, one. Because for all our differences, we are united in a public call to protect justice and innovation, for generations to come. Thank you.