Remarks by Director Iancu at the 2019 International Intellectual Property Conference

Remarks delivered at the 2019 International Intellectual Property Conference

Director of the U.S. Patent and Trademark Office Andrei Iancu

June 10, 2019

J.W. Marriott

Seoul, South Korea

As prepared for delivery

Thank you very much for that gracious introduction. It’s an honor to be here, and it is also an honor to share this stage with President Campinos from the European Patent Office.

I’m grateful for this opportunity to discuss the role of IP in innovation. Our respective countries recognize how important IP is.

The progress humanity has made over the last couple of centuries, incentivized by modern intellectual property (IP) systems, is remarkable. Human civilization has been around for thousands of years in societies across the world. Yet the state of the human condition just two hundred years ago was about the same as it was in antiquity.

But look at us now. Spaceflight and television. Electricity and telephone. Medicines, surgery equipment, and cancer treatments. Instant communications across the globe. And so much more.

The pace of human development in the modern era far exceeds all development in all of the millennia of human existence combined.

But why? Humans did not get smarter by orders of magnitude all of a sudden at the end of the 1700s.

As it turns out, I believe that a key factor has been the advent of the modern IP system. For as President Abraham Lincoln said, the patent system “added the fuel of interest to the fire of genius.”

According to the WIPO Intellectual Property Indicators 2018 publication, around the world innovators filed 3.17 million patent applications in 2017, an increase of 5.8 percent. In addition, 9.1 million trademark applications were filed worldwide in 2017, a 30 percent increase over 2016. The success of the modern IP system is clearly evident globally.

But what is it that makes this modern IP system so successful that people throughout the world are willing to invest their talent, time and finances to obtain a patent or any other form of IP? There are several answers, of course.

First, IP democratizes innovation. IP is the ultimate expression of global creativity and talent. Patents, trademarks, and copyrights encourage this creativity because they incentivize people to share their ideas. In return, those people receive the support and protection of a strong IP system that bars no one from participating. 

Second, IP promotes competition and forces technical advances. Take, for example, the story of the World’s Columbian Exposition, which took place in Chicago in 1893. More than 27 million people gathered from around the world to see this astounding display of mechanical and cultural innovations.

Spread over 600 acres, the fair was a paradise in many respects, with pristine streets, well-mannered crowds, and the most advanced sanitary and transportation systems available at the time. There were many pavilions, each larger than a football field, and there was even a large lake between them.

And although most of the world still did not have electric power systems in 1893, the grounds and surrounding neighborhoods at the Columbian Exposition were illuminated at night by giant searchlights, the largest ever made and said to be visible from 60 miles away. Large colored bulbs lit water that burst from the MacMonnies Fountain in the middle. All of the fair's walkways and neoclassical buildings glowed with lights, dazzling and delighting visitors who had never seen so many lights ignited in one place at one time. Indeed, many had not before seen any electric lights at all.

This awe-inspiring "City of Light" was the work of the American entrepreneur and engineer George Westinghouse and his company, backed by technology from inventor Nikola Tesla. Westinghouse beat out Thomas Edison and won the bid to illuminate the Exposition, and in doing so, enabled the public to observe firsthand the abilities of alternating current (or AC) power.

Westinghouse won far more than a contract bid by lighting the World's Columbian Exposition that year. He also scored the decisive victory in the "War of the Currents,” which started with the issuance of a patent 13 years earlier. 

After analyzing “no fewer than 6,000 vegetable growths” and “ransacking the world for the most suitable filament material,” Thomas Edison on October 21, 1879, completed 14 months of testing with an incandescent electric light bulb that lasted about half a day – more than 13 hours. And soon, he got a carbon-filament bulb to last 40 hours. Then on January 27, 1880, Edison was granted U.S. patent number 223,898 for his electric lamp, or light bulb, an invention he considered his "crowning triumph."

But, Edison based this patented work on direct current, or DC. Westinghouse later started to compete with his different, AC-based system, developed mostly by Tesla. And as we all know, AC became the standard through which much of the world harnesses and delivers electricity today.

So why do I tell this story? Because this famous battle between the two visions—AC vs DC—is heavy with meaning for the patent system.

First, it obviously illustrates that intellectual property incentivizes and protects original innovation, such as Edison’s, by protecting and rewarding one’s original ideas. Edison was an experienced inventor and patent owner, and the patent system acted as a significant incentive for him to invest many resources, not least of which were his personal time and effort, to develop the light bulb and electricity system.

And second, this famous story is a perfect example of the pro-competitive effect IP has.  Seeing Edison’s success, Westinghouse and Tesla were incentivized to create something new themselves. Because Edison had patents, Westinghouse and Tesla worked to create something different from Edison. Perhaps even better.

Had Edison not patented his original technology, would Westinghouse have invested so heavily in the development of an alternative, and arguably better, technology?

The combination of original and follow-on innovation is the genius of a modern patent system. It creates perpetual innovation.

And while Westinghouse, Tesla, and Edison were inventing in America, the impact of their inventions was felt worldwide and inspired countless inventors globally to further explore electrical power. We can see examples here, through Korean inventions, from the MP3 player to the wall-mounted drum type washing machine, which use DC and AC power, respectively. And so much more. For IP fosters human development with global impact.

Take, for example, Dawon Kahng. Born on May 4, 1931 in Seoul, Korea, Dr. Kahng graduated from Seoul National University, where he studied Physics. In 1955, he came to the United States to pursue his Ph.D. at Ohio State University.

After receiving his Ph.D., he joined Bell Telephone Laboratories in 1959. The research efforts of Dr. Kahng and his colleagues at Bell Labs resulted in a successful fabrication of a Metal Oxide Semiconductor Field Effect Transistor device, commonly referred to as a MOSFET. For those who may be unfamiliar with the MOSFET, look no further than your smartphones, which house billions of these tiny devices that deliver the powerful communications technology our lives depend on in this modern world. 

For this groundbreaking invention that transformed life and culture around the world, Dr. Kahng (along with his colleague Martin Atalla) was inducted into the National Inventors Hall of Fame in 2009. Like many other groundbreaking inventions, the MOSFET device co-invented by Dr. Kahng quickly spread internationally. And when technology spreads, nations experience the benefits in many ways, especially economically.

Studies have confirmed the economic benefits of a well-balanced modern IP system. This is true around the world, and it is true here in Korea. According to a recent report from the Korean Institute of Intellectual Property, a subsidiary of KIPO, IP intensive industries “generated 560 trillion won ($487 billion) or 43.1 percent of the country’s gross domestic product in 2015.”

It’s also interesting to note that, as the number of patent and trademark filings increase yearly, so does GDP. Statistics from the World Intellectual Property Organization (WIPO) reveal that the total number of patent and trademark filings in Korea in 2008 was 347,913, and the GDP in 2008 was 1.4 trillion USD. In 2017, these totals were 523,140 and 1.85 trillion USD, respectively.  The statistics point to a noteworthy correlation:  rising patent and trademark filings associate with a rise in GDP.

These trends repeat across the world. In the United States, for example, IP-intensive industries account for about 40 percent of our GDP. Wages in IP-intensive industries are about 50 percent higher than in the rest of the private sector. And for start-ups, the issuance of its first patent increases the company’s employment growth by more than 33 percent.

Clearly, this promising data gives us reason to advocate for the case of improving intellectual property rights. But for intellectual property systems to work well and support growing economies, they must be properly balanced. Importantly, the rights we issue from our respective offices must be reliable, predictable, and meaningfully enforceable. Our responsibility as IP offices is to ensure these standards, for they are what enable inventors and investors to allocate their resources rationally in the innovation ecosphere.

One way to improve the work done by each of our offices is through mutual cooperation between offices. The good news is that our respective offices do so in many ways, including through both bilateral discussions and multilateral forums. The USPTO, for example, is currently working with other global patent offices through intergovernmental forums, including WIPO, IP5, TM5, and ID5. I also encourage IP offices to continue to participate in important international conferences such as today’s symposium.

Today, in particular, I’d like to talk specifically about the significance of the IP5 forum, since this week we gather here in Korea for the IP5 Heads meetings (that will start tomorrow in Incheon). The members of the IP5 group represent the five largest intellectual property offices: the European Patent Office (EPO), the Japan Patent Office (JPO), the Korean Intellectual Property Office (KIPO), the China National Intellectual Property Administration (CNIPA), and the U.S. Patent and Trademark Office (USPTO). Thank you, Korea, for hosting this year’s IP5 Heads meeting.

The IP5 group is at the forefront of a global pro-innovation dialogue. Over the past 12 years, the IP5 offices have cooperated to implement their vision of eliminating unnecessary duplication of work and enhancing patent examination efficiency and quality. Our cooperative efforts help our respective offices to improve the search and examination of our applications and provide a solid, reliable patent grant.

They can also save our applicants money, which enables them to invest more of their money in further research and innovation. This is especially important to inventors and small to medium enterprises.

Human advancement has been consistently pushed forward by our inventors. They are our heroes. It is our inventors who will continue to push human development to even greater heights.

The world today stands on the cusp of truly extraordinary development: machine learning, unmanned vehicles, biotechnology, personalized medicine—these are but a few examples, and we are just getting started. As remarkable as the pace of innovation around the world has been until now, I truly believe that the future will be even more exciting.

And to foster those future technologies, and ensure world-wide progress and economic growth, IP offices must make available our accumulated knowledge to inventors, entrepreneurs, and researchers.

In a recent study of IP systems and economies around the world, Stanford University Professor Stephen Haber concluded that "There is nothing ambiguous about the resulting pattern: there are no wealthy countries with weak patent rights, and there are no poor countries with strong patent rights."

All of these efforts, combined with the creativity and ingenuity of global inventors, will certainly lead to a more prosperous world.  I, and the USPTO, stand ready to assist in any way we can as we continue to work together to encourage innovation and create strong IP systems worldwide.

Thank you again for the invitation to speak here today.