Collaborative Innovation - a Global Call for Enhancing Work Sharing

Under Secretary of Commerce & Director of the USPTO David Kappos

May 18, 2011

Global & European Initiatives for Work Sharing Conference - Budapest

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

Remarks as prepared for delivery


Good morning everybody and thank you for that kind introduction.

It's a distinct pleasure to participate in this important conference on global work-sharing standards, particularly because of what this represents. We meet at a time where countries around the world are facing generational challenges, and yet our willingness to convene here today underscores that with 21st century issues 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 and thank Dr. Miklós Bendzsel and the Hungarian Intellectual Property Office for putting together an event of this scale, especially one that promotes an ethic of world-wide citizenship vis-à-vis global collaboration. That's why I'm honored to join so many distinguished officials from the European Patent Office, the World Intellectual Property Organization, and the EU Commission. 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.

All of us stand at an important crossroads in each of our country's evolutions. Determined to accelerate economic recovery and growth, we represent governments that strive on a daily basis to do more while working with limited resources. 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 remain grounded in the essential truth: That technology and innovation-through clear, consistent, and balanced intellectual property protection-will write the next chapter of global growth and social progress.

That is why today's conversation 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 will not only allow us to identify barriers that impede innovation; they will also empower us to work toward collectively building an IP system that accounts for the evolving costs and benefits of a globalized world.

We live in a world where information and commerce increasingly reach far beyond any of our borders. And as technological advances present new opportunities, they also present new challenges. Technologies that are becoming a part of everyday life-from computers to mobile phones to life-saving drugs-are also becoming more cross-disciplinary. Great new products have one foot in nano-tech, another in software, and another in the biological sciences. These kinetic realities demand intelligent engagement and a smarter infrastructure to keep up.

And as innovators seek to tap markets abroad, it is imperative that the international patent system provide a cost-effective way to obtain reliable patent rights in multiple jurisdictions. Given these modern realities the public must have confidence that the patent system is striking the right balance between incentives to innovate and access to those new innovations. 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. Patents are the premiere global currency for creating value for services and products, for innovators of all sizes and in all countries. But if we don't keep up with a digital and commercial system that moves ideas & products across borders instantaneously-we risk devaluing that currency.

Because our IP systems are so varied and our patent laws so fundamentally different, patent offices around the world are repeating the same work done by one another, ultimately wasting billions of dollars a year, clogging the pendency pipeline and leaving the patent system, ironically, as the laggard among commercial legal regimes. In the name of devising real solutions to cut down workflow redundancies and reduce backlogs-we must collaborate. Only through collaboration can we fulfill the societal goal of our patents 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 practices-basic principals we agree define a 21st century patent system that optimizes technological progress. That's why multilateral agreements like the Patent Cooperation Treaty, and bilateral relationships through the Patent Prosecution Highway (PPH) are so vital. When an applicant's claims are being processed in different regions of the world, these work-sharing frameworks enable offices to utilize one another's search and examination results-thereby avoiding duplication of work and expediting the process of review. Not only do these programs have proven success rates, but they save many millions of dollars of applicant expense, tens of thousands of examiner hours, and millions of dollars between patent offices, annually.

With respect to the PPH program, because of the successes we've had in recent years, we've dropped the petition fees, and are working to simplify the petition process further. 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. Such multilateral collaboration provides applicants with greater efficiency-both faster disposed and fewer actions per disposal. These efforts ease the burdens on our offices, while also allowing inventors of all sizes to more efficiently tap into overseas markets-expanding their reach and innovation potential.

Now I know some skeptics doubt these benefits and question how work sharing can improve the quality of an examiner's work. And in a survey of 200 cases, there were no instances where the scope of invention as claimed in one office was narrowed or more office which was outside of the PPH process. Furthermore, in 94% of the cases, additional prior-art was in the second office. And the PPH cases had error rates lower than the error rates for comparable non-PPH applications. So as one would expect when a smart professional in a second office gets to build on the work of a smart professional in a first office-quality vastly goes up for patents that travel the PPH.

And how did we measure quality compliance across these 200 cases? We conducted independent second examinations on each one, through our Office of Patent Quality & Assurance. The very same OPQA whose approach to measuring quality was recently endorsed by a report commission by the EPO! So the facts show, when looking at all patent applications that pass through the PPH framework, there really is an increase in the quality of patent examination. 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 on the earlier work, and do so efficiently because critical issues have already been discussed and resolved.

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 backlogs no longer keep us up at night. If we can eliminate repeated work, and free up resources for higher quality patent reviews, we ultimately generate the economic lift that comes from moving ideas to the market place more efficiently.

But in order to make that goal a reality and leverage work sharing programs to overcome barriers to growth, the leaders in this room need to own our role in the international IP community. We need to lead in finally harmonizing our substantive patent laws. Because until we remove the basic incompatibilities in our underlying legal systems, work-sharing will remain hampered at best.

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, and the existence of global competition, supply-chain-value systems. The search for an innovator and inventor-friendly system is not as simple as convenience. But it is the right search for our economies and for this century.

And let me assure you that the United States is ready, willing and able to make some bold moves to build a better framework for cooperation. 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 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 from large businesses to small inventors-that create so many jobs and so much opportunity-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.

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. Because, the stresses on our systems not only stifles our operations as we stare at escalating filings and backlogs, but they also impede our ability to fertilize new products and services that address modern social challenges.

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. And in particular, I note that the EU is proceeding using an approach you call "enhanced cooperation." We call this a coalition of the willing.

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. In the words of the participants, taken from the Agreed Statement of the meeting: "The time for substantive harmonization is now. We are operating in a global economy, business innovation is happening across borders. The IP system needs to be supportive of this new reality." So from Beijing to Bangkok and Budapest to Geneva, have no doubt about it, the will to enhance our collaborative capacity exists-the will to finally harmonize our patent laws exist.

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 all 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.

And it must not fall back into the bad habits that led to where we are today: debates about the agenda; bureaucratic bickering; lack of senior level commitment and engagement; quid pro-quo horse-trading; blocking tactics. Enhanced cooperation-an invention of the EU-is proven effective and must be a guide for harmonization discussion. We cannot permit an unproductive choking of progress. The world's innovation community, and the world's challenges, demands that we succeed in harmonizing our patent laws now.

Yet, beyond harmonization and beyond patent reform, and indeed beyond PPH-our determination for robust work-sharing vehicles stems from the fundamental fact: that granting higher quality patents more efficiently, truly empowers innovators to engage the global marketplace and unleash their creativity. That's why at USPTO we're also working towards implementing a range of other innovation-friendly, applicant-friendly programs programs, as well.

From our Track One initiative, that will speed up examination to 2 months from filings for those in need of hastening the 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 planned humanitarian initiative that will reward applicants who include benevolent values 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.

All these efforts are anchored by the desire to more effectively match the rate & pace of the patenting process to the rate & pace of invention, along with the rate & pace commercialization. That's really what all of our efforts must be about. So the onus is on the world's IP leaders-here today-to decide whether we want to enhance and accelerate progress, or continue to 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 work-sharing capabilities.

And 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 and practice be our guide.

To paraphrase from Winston Churchill: "Seldom before have so many depended so much on the efforts"

Thank you.