Remarks by Director Iancu at the State of Technology Conference

December 3, 2018

Remarks as prepared for delivery at the at the State of Technology Conference

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

November 30, 2018

Fargo, North Dakota

As prepared for delivery

Good morning everyone, and thank you, Eric (Piela) for that generous introduction. And special thanks to Senator Hoeven for inviting me to speak here today. Thank you also to the Fargo Moorhead West Fargo Chamber of Commerce for co-hosting this impressive conference.

I’m delighted to be here in what I understand is the sixth happiest city in the country, before this extraordinary gathering of elected officials, public and private sector leaders, and distinguished speakers.

I’m especially thrilled to be here representing the U.S. Patent and Trademark Office in a state that boasts one of the country’s very first entrepreneur outreach centers, at the University of North Dakota’s Center for Innovation. The center has a $1.3 million budget, and—remarkably—has fostered over 500 startups and attracted over $130 million in investment.

Dedicated to providing every kind of assistance necessary to inventors and entrepreneurs so they can launch new ventures, commercialize new technologies, and secure access to capital from private and public sources, the center has grown since its founding 34 years ago to become the leading rural entrepreneur facility in the nation.

It’s also worth noting that, in 2017, the Kauffman Foundation, which supports investments in education and entrepreneurship, ranked North Dakota third in growth entrepreneurship, and fourth on their Main Street Entrepreneurship index.

Given all that, it’s no wonder North Dakota is home to some of the country’s most innovative thinkers, researchers and entrepreneurs.

Like David Henderson Houston. A homesteader from Hunter, North Dakota, Houston invented a camera with roll film, and forever changed the world of photography. Born in Scotland 40 years earlier, Houston was a farmer by trade, and had always been exceptionally inventive.

In 1867, he patented his first photo camera, and after moving to Hunter in 1879, he not only improved the design for a disc plow, but also helped develop Blue Stem Seed Wheat. Houston’s main interest, though, was photography, and through a business relationship with entrepreneur George Eastman, he came up with an idea that would take the portable camera to a new level.

On October 11, 1881, Houston received patent number 248,179 for “Photographic Apparatus” described as “a camera whose inner end has a receptacle containing a roll of sensitized paper or any other suitable tissue, such as gelatine or any more durable material that may be discovered, and an empty reel, upon which the sensitized band is wound as rapidly as it has been acted upon by the light.” In other words: film on a roll.

For the sum of about $5,000, Houston sold his patent to Eastman, and soon, the first Kodak camera was introduced with the slogan: “You Press the Button, We Do the Rest.” With that, an immense business—and indeed, an empire—was built. Interestingly, it is said that Houston came up with the name “Kodak” by playing with an abbreviation of where he lived: northern Dakota or Nodak. Today, the beautiful farmhouse that Houston and his wife built is a tourist attraction at Bonanzaville in West Fargo—about six miles from here.

About a century after Houston patented his “Photographic Apparatus,” another family here in Fargo began developing a DOS-based accounting system to manage their own business dealings. Eventually, the Burgum family’s youngest son, Douglas, mortgaged $250,000 of farm land that his late father left him to invest in an accounting software company called Great Plains Software.

Though fearful of losing everything he had, Doug Burgum used that fear as a driving force for his entrepreneurial efforts. Using a down-to-earth approach of building relationships and providing excellent customer service, he gradually grew the company and by 1986, the DOS version of Great Plains was gaining prominence, and re-sellers began to sprout up around the country.

As technology evolved, Great Plains began work on a Windows-based accounting system, which was released in the early 1990s as Great Plains Dynamics. Within two years, Great Plains released two versions of Dynamics and changed the name of the higher-end Dynamics C/S+ to Great Plains eEnterprise.

All the while, Great Plains continued to build a stellar reputation for extensive product features, friendly and knowledgeable resellers, stable product code, and excellent product support. Indeed, Great Plains had a guaranteed response time—something customers and employees both loved. And it was this foundation around customer service that became Great Plains’ path to becoming one of the 100 best places to work.

On May 8, 2000, Great Plains acquired its rival Solomon Software for approximately $140 million and less than a year later, Microsoft acquired Great Plains for $1.1 billion. Seventeen years later, the Burgum Family’s youngest son—who literally bet the farm on his startup—became the 33rd Governor of North Dakota.

And then, there’s Appareo Systems, a Fargo-based product development and technology company that has become a recognized leader in the custom development and manufacture of low-cost and innovative avionics solutions for original equipment manufacturers. Founded in 2003 by Barry Batcheller, John Deere’s former Director of Technology Growth, Appareo Systems has grown to 120 employees, making it one of the biggest independent companies working in agricultural electronics.

Indeed, in 2010, Appareo Systems was named to the Inc. 500 List of the fastest-growing private companies in the United States. Moreover, it was at the time the number one fastest-growing engineering company in the country. And Appareo takes its IP seriously. With a portfolio of 25 issued patents corresponding to vehicle and avionic solutions like transponders and locators, the company has, not surprisingly, been the fifth biggest patentee in North Dakota for the last 10 years.

Barry Batcheller came to North Dakota for his engineering degrees, and stayed. He started and grew a very successful company in North Dakota. He also worked with the NDSU president to start the NDSU Research and Technology Park. It is this combination of private enterprise and academia, along with collaboration from the public sector, that sparks a successful innovation and entrepreneurship ecosystem. North Dakota has done this extremely well.

Indeed, as the stories of David Houston, Gov. Doug Burgum and Appareo illustrate, the results of our innovation and entrepreneur ecosystems over time—backed by our carefully crafted and balanced intellectual property (IP) system—have been remarkable.

Economic studies have confirmed the benefits of our IP system. For example, approval of a startup's first patent application increases its employment growth over the next five years by 36 percentage points on average. Another study estimates that patent protection motivates U.S. companies to invest 33 percent more in research and development than they would if there were no patent protection.

Innovation and IP-intensive industries are indeed critical to our economic well-being. In 2014, IP-intensive industries directly and indirectly supported 45.5 million jobs, nearly one-third of all U.S. employment. Plus, in 2014, workers in American IP-intensive industries earned an average weekly wage of $1,312, which was 46 percent higher than the weekly wages in non-IP-intensive industries in the private sector. So there is no secret to the benefits of a robust IP-intensive ecosystem.

And indeed here, in North Dakota, industry and government leaders recognize that strong innovation, entrepreneurship and investment are vital to this state’s economic future. That’s why they’ve all come together to build and sustain a vibrant and flourishing innovation ecosystem.

For example, North Dakota State University (NDSU) has the Research and Technology Park, which—through partnerships with international, national, and regional centers of excellence, as well as with high technology-based businesses and the research community at NDSU—helps develop technology-based businesses that diversify North Dakota’s economic base.

NDSU’s Research and Technology Park also has a 50,000 square foot Technology Incubator Facility that is designed to help entrepreneurs—whether they’re seasoned or just starting out— transform their ideas into successful businesses.

Additionally, NDSU’s Research and Technology Park annually hosts its Innovation Challenge, an idea competition for students. Encouraged to come with any ideas—anything that might one day become a business or at least a cause for future research—student participants develop their ideas over the course of a semester-long competition in one of three innovation tracks with prizes up to $4,000.

And then, there’s Gov. Burgum’s “Main Street ND” initiative, which is a shared vision of healthy, vibrant communities that —through fiscally responsible planning—attract the talent needed to support the state’s growing economy. Each year, the Main Street Awards—a collaboration among the Governor’s Office, the North Dakota Department of Commerce, and the North Dakota League of Cities—honor communities that are actively working to differentiate and enhance the quality of life for their present and future residents.

The North Dakota Department of Commerce also provides services in a variety of areas to assist with innovation and entrepreneurship, such as: Research North Dakota, which provides matching dollars to North Dakota’s universities and assists private partners in performing research, development and commercialization of specific projects; Centers of Research Excellence, which provides hubs of research and development on the campuses of North Dakota's colleges and universities, partnering with private companies to generate new business opportunities; and Innovate ND, which provides online entrepreneur education, coaching and mentoring from proven business owners to help entrepreneurs successful launch new businesses.

And, of course, there is this very conference, led annually by Senator Hoeven, which is meant to highlight breakthrough technologies and the local innovators creating them, and to position North Dakota as a hub of technology entrepreneurship.

Through these and other efforts, North Dakota is creating a rich entrepreneurial ecosystem that rewards the innovators in its state—those who are building companies, securing investments, creating technologies, and risking it all in the process. In doing so, North Dakota is poised to attract and retain a 21st Century workforce, helping the state compete and succeed in a global economy.

In this—and indeed in any—innovation ecosystem, intellectual property is a fundamental pillar to achieving overall success. Indeed, to raise investment, protect markets and enable the outflow of innovation to adjacent industries, a well-functioning, carefully balanced patent system is a necessity.

And its benefits are unmistakable.

Take, for example, the patented technology of dedicated researchers at NDSU that holds the promise of improving the lives of millions. NDSU pharmaceutical sciences researcher Dr. Steven Qian discovered a new approach that represents a paradigm shift in cancer treatment by leveraging the body’s natural defenses to inhibit cancer growth as well as enhancing current chemo-agents. The main anti-cancer compound developed by Dr. Qian has shown significant reduction in the size of tumors associated with multiple cancers in animals.

Dr. Qian’s discovery was critical for NDSU to enter into a licensing agreement with a company called OncoThira. Together, NDSU and OncoThira are working to optimize Dr. Qian’s approach and progress studies toward human clinical trials.

Another interesting technology developed by NDSU researchers is “Smart Paper.” Val Marinov and his team at NDSU’s Center for Nanoscale Science and Engineering patented a laser process to apply tiny silicon chips to paper. These chips then use a technology called Radio Frequency Identification that can be tracked via radio signals.

It is the goal of Dr. Marinov and his team to achieve mass production and drive down the cost of embedded microchips to a few cents per paper. Dr. Marinov and his team see potential uses of smart paper to include lottery tickets and mass transit passes, as well as election ballots and financial documents. They even envision a potential benefit of smart paper in preventing currency counterfeiting.

Protecting the fruits of the genius, imagination, creativity and determination of Doctors Qian and Marinov and all of our nation’s scientists, inventors, and entrepreneurs, is what the USPTO does.

Day-in and day-out at the USPTO, nearly 13,000 employees work tirelessly to secure intellectual property rights for the inventors and brand owners that lead to new products, employment opportunities, and a strong economy. And we’ve been doing in this since the founding of our nation, when Thomas Jefferson himself was examining patents as Secretary of State.

To better serve those in the inventor community and help them succeed, the USPTO offers a wide variety of resources for entrepreneurs, startups and small businesses, and independent inventors. For example, they can call our Inventors Assistance Center, which is staffed by former patent examiners, intellectual property specialists, and attorneys, who can answer general questions concerning patent examining policy and procedure.

Similarly, the USPTO’s Trademark Assistance Center (TAC) is available to answer questions from the public on a variety of trademark topics such as general information about registering a trademark, updates on the status of trademark applications and registrations, and answering case-specific questions about an application or registration.

Additionally, innovators can take advantage of our Patent Pro Bono and Pro Se Assistance Programs, which help financially under-resourced independent inventors and small businesses. They can also use our IP Awareness Assessment Tool to self-access their IP assets and obtain information customized to their IP needs, or use our Trademark Litigation Toolkit, which helps individuals who may have been sued or received a “cease and desist” letter over a trademark dispute.

All of these tools and many more are free and easily accessible through our newly-updated website.

Another way the USPTO supports small businesses is through our small-entity and micro-entity discounts that can reduce the cost of applying for a patent by up to 75 percent. That can make a big difference for a young startup.

Additionally, the USPTO regularly holds a two-day annual Women’s Entrepreneurship Symposium (WES) to connect women entrepreneurs, and all others interested, with education, information, and resources to help start, build, and grow a business using their intellectual property. Held in cities across the nation and featuring successful women inventors, innovators, and entrepreneurs, these events enable attendees to gain valuable insights into the importance of IP’s role in creating and developing a business, as well as knowledge of programs and resources available for their use.

Similarly, the USPTO’s China Intellectual Property (IP) Road Show is a free, one-day program that brings together experts from the U.S. government, academics, IP attorneys, and local business people who share their insights on China and IP issues, and that will benefit American companies who want to do business in China. Since 2017, USPTO has conducted more than 20 China IP Road Shows throughout the United States, ranging from larger metropolitan areas such as Boston, New York, and Chicago, to smaller cities including Iowa City, Iowa; Portland, Oregon; and Louisville, Kentucky. The next event will be held in Boise, Idaho, on December 14, 2018. Please visit the USPTO’s website for more information and details.

Last but not least, the USPTO’s regional offices exist to make our services more readily available to local communities, and their unique industry and innovation needs. In addition to our headquarters in Alexandria, Va., we have four regional offices: Detroit, Dallas, Denver and San Jose, Ca. Whether meeting with a patent examiner to discuss an application, or providing “best practice” training to the local IP bar, these “Innovation Embassies,” as some call these offices, enable innovators and entrepreneurs across the country easier access to a wider range of services offered by the USPTO with benefits for innovation.

Additionally, the USPTO works in collaboration with other Administration agencies, such as the Small Business Administration (SBA) and the National Science Foundation (NSF), to provide patent system users with information on how to leverage available resources during the filing process of an application. And, importantly, our work with these agencies is helping us increase access to underserved populations and build education and outreach resources that respond to their particular needs.

For example, in the recently-enacted Study of Underrepresented Classes Chasing Engineering and Science Success (or “SUCCESS”) Act of 2018, Congress asked the USPTO—in consultation with the SBA—to conduct a study that identifies publicly available data and literature on the numbers of patents applied for and obtained by women, minorities and veterans, and on the benefits of increasing patenting activity among these groups.

Similarly, the Small Business Innovation Protection Act that was signed into law last month by President Trump directs the USPTO and the SBA to enter into a partnership agreement to: develop high-quality training for small business concerns related to domestic and international protection of IP and how such protections should be considered in small business plans and growth strategies; leverage existing training materials already developed to educate inventors and small businesses.

In today’s highly competitive global economy, we need all hands on deck to innovate and compete nationally and internationally. This is why it’s so important that we provide an environment in which all Americans who are willing to work hard, persevere and take risks, have the opportunity to innovate, start new companies, succeed in established companies, and ultimately achieve the American dream. This is also why our work with the SBA and events like today’s conference are so critically important to the small business community and, as a result, to America’s competitiveness and prosperity.

This Administration is committed to promoting American innovation and entrepreneurship, and to protecting American IP. In part, this was symbolized by President Trump’s signature this past summer of Patent number 10 Million. This was only the second time a President signed a patent since John Quincy Adams, and it illustrates the importance of American intellectual property in today’s economy, and the Trump Administration’s commitment to it.

Indeed, during his first address to Congress in February of 2017, President Trump noted that, on our 100th anniversary, in 1876, citizens from throughout the country came to Philadelphia to celebrate America’s centennial. At that celebration, the country’s inventors showed off their wonderful creations. Alexander Graham Bell presented his telephone for the first time. Remington revealed the first typewriter; and Thomas Edison showed an automatic telegraph and an electric pen.

President Trump then asked all of us to imagine the wonders our country could know in America’s 250th year. He asked us to think about all the illnesses that could be cured, the distant worlds we could walk on, and the marvels we could achieve, if only we could set free the dreams of Americans.

That’s how I think about innovation and intellectual property. As I see it, no dream is too big if we unleash the power of innovation, and give our nation’s inventors the incentives and protections they need to succeed.

Six decades after David Henderson Houston—our inventor from Hunter, North Dakota—sold his patent to Eastman and thereby enabled the tremendous growth of the Kodak company, Edwin Land, another prolific inventor and co-founder of Polaroid, started selling instant cameras that eventually gave Kodak a real run for its money. By the time he died in 1991, Land had 535 patents in his name—at that time third on the list of U.S. inventors behind only Thomas Edison and one of Edison’s associates. Faced with severe competition, Land famously noted: “The only thing keeping us alive is our brilliance. And the only thing protecting our brilliance is our patents.” How right he was.

For we have a remarkable patent system, born from our Constitution and steeped in our history. It is a crown jewel; a gold standard. Inventors and entrepreneurs are at the heart of it, making it all possible. As Director of the USPTO, my top priorities include making sure that our patent system remains strong and effective, that our inventors and entrepreneurs thrive, and that the United States remains the market of choice when it comes to innovation and entrepreneurship.

Thank you, inventors and entrepreneurs of North Dakota, for everything you do to continue America’s technological leadership.

And thank you again, Senator Hoeven, for the invitation to participate in this wonderful event.