Remarks by Director Michelle K. Lee at University of California, Los Angeles School of Law Luncheon

UCLA School of Law Luncheon

Director of the U.S. Patent and Trademark Office Michelle K. Lee


July 28, 2015

11:30 a.m. to 1:00 p.m.

Thank you, Dean Moran, for that kind introduction. It’s a real pleasure to be back in my home state of California. Although I was born and raised in the Silicon Valley and spent the majority of my career in Northern California, I’m always delighted to visit Southern California and Los Angeles in particular.

So much of the innovation going on in the Bay Area is tech-focused, while Los Angeles has a broader mix of innovation in all areas of intellectual property—especially copyrights and trademarks, which I’ll touch on shortly. But whatever part of California we come from, we can all take justifiable pride in the UC system because of its preeminent role in education and research. And its leading role in capitalizing on its research in the form of intellectual property, specifically patents, in the global marketplace.

A recent study by the World Intellectual Property Organization, or WIPO, found that the UC system led every university in the world in the number of international patent applications.  The UC system even held its own against some of the largest multinational corporations in the world. In fact, it was the only academic institution ranked in the top 50. A lot of those UC patent applications—and issued patents—are generated here at UCLA, a shining star in the UC system.

The competitive drive of this school extends to sports as well. I know I don’t need to tell you that—your Bruins have won 11 NCAA men’s basketball titles, more than any other school. That competitive drive here—a determination to strive for even better performance—is a strong part of the ethic I bring to the U.S. Patent and Trademark Office. It’s at the core of my agency’s mission to foster innovation, competitiveness, and economic growth.

But I see that competitive spirit outside of our country as well. In May, while I was meeting with Chinese officials in Beijing, Vice Premier Wang Yang told me his country wants to move up the value chain, from a manufacturing-based economy of inventions developed elsewhere, to an innovation-based economy with technologies developed in China. This is understandable. But it’s also a challenge to which we should take heed: as China and other countries move up that value chain, we will have more and more competition. We cannot afford to stand still as other nations seek to catch up. And we all have a role to play in that effort—private industry, government, and especially our nation’s universities. An example of that effort—which Walter Isaacson describes in colorful detail in his book, The Innovators—is when Google founders Larry Page developed a ranking algorithm, PageRank, for nodes in the web, with the help and support of Stanford University. While experimenting with their improved search engine, Page and his fellow graduate student, Sergey Brin downloaded a cache of the whole Internet and almost crashed Stanford’s entire IT system. You can imagine how that didn’t go over so well at the university. Nevertheless, Stanford stuck by their two students, the system survived, and the startup that grew from the effort did as well, to the benefit of many millions of users today. And we all know the Internet itself was born in universities, by academic researchers funded by the U.S. government.

I’m no stranger to such research myself, having been a graduate student in computer science and electrical engineering at MIT before I went into IP law. During that time I had the good fortune to work in MIT’s Artificial Intelligence Laboratory, and later at Hewlett-Packard’s Research Lab in the Silicon Valley. Now engineers like to break things down into numbers, so indulge me for a moment: According to the Association of University Technology Managers, in 2013, U.S. university research led to the issuance of more than 5,000 patents. Universities executed more than 5,700 license agreements and options with companies for their patents.  That patented research led to the creation of about 750 new companies and more than 700 new commercial products.

Now contrast that with 25 years ago, before the passage of the 1990 Bayh-Dole Act that permitted universities to commercialize their inventions: The annual rate of patents issued to U.S. universities was less than 250, about 5% of today’s total. At the same time, the U.S. government was sitting on about 28,000 patents, of which less than 5% had been licensed for commercial use. So universities—empowered by the historic Bayh-Dole legislation—have made significant contributions to the U.S. economy over the last quarter-century. That should come as no surprise when you consider that in 2012, university expenditures accounted for 53% of all basic research, according to the National Science Foundation. So, it is not surprising that many ground-breaking and market-disrupting innovations originated from basic research conducted by universities.

As it happens, however, universities also contribute to nearly 20% of all applied research. According to a study by the Biotechnology Industry Association, between 1996 and 2013, U.S. university licensing activity contributed $181 billion to the U.S. Gross Domestic Product, supporting close to 1.5 million person years of employment and more than $400 billion in gross output. So universities, without question, are a fundamental component of America’s innovation engine.

Patents help provide universities with the means to transfer their research to industry for development into commercial products and services.  This sort of commercial activity leads to new jobs and growth in our economy. My agency, the United States Patent and Trademark Office, has an important role to play in that process as well: to grant in a timely manner the highest quality patents possible, so companies and individuals have the information they need to make informed business decisions and attract investment. So they can best calculate how to invest limited research and development dollars, and when to license a patent. And, of course, so universities can transfer their technology to industry for commercialization.

And so we’re constantly striving to improve our own operations, and to encourage improvement across the U.S. patent system—not out of any crisis of faith in the system, which is already the best in the world, but to make it even better. We’ve launched an Enhanced Patent Quality Initiative to focus on improving patent quality, from initial application to final approval. And we’re working with Congress on legislation to curb abusive patent litigation practices, increase the transparency of patent ownership information and level the playing field for all innovators.  

Our goal is targeted and balanced legislation on the President’s desk that will reduce incentives for abusive litigation practices without undermining the ability of patent owners to enforce their rights when needed. And it is critically important that we get that balance right between maintaining strong patent protections that provide necessary incentives to innovate, and ensuring a more efficient, streamlined and equitable way of handling patent disputes. Intellectual property protection that is too strong can disincentivize innovation just as easily as IP protections that are too weak.

But of course while patents get far more attention in the news these days, we’re busy in other areas of intellectual property as well—including the trademarks and copyrights that have been a vital part of L.A.’s economy since the dawn of the motion picture and entertainment industries. I’ll be touring Fox Studios later today, and haven’t had the heart to tell my daughter about it yet. Like most children, she’s a big fan of the instantly recognizable and trademarked characters in their movies.  That kind of branding is an integral part of the entertainment industry and frankly every business’s strategy—whether it’s their name, their logo, a tag line, or some other recognizable words or symbols of their making. By protecting their brands with trademarks, businesses are able to help prevent confusion or manipulation of consumers as to the origin or maker of the products they purchase. Our trademark team at the USPTO is working hard to issue of timely and high quality marks to our registrants, and they are doing so successfully, with an average time to registration of under 11 months, beating our target goal of 12 months!  .

Less well known is our agency’s role in helping guide copyright policy, which I know is an issue of particular interest here in Los Angeles. Copyrights are essential to the writers, musicians, filmmakers, photographers, sculptors, and other creators who make-up the lifeblood of our culture. Their work shapes how we see ourselves—and how the world sees us as well.  And their influence extends beyond our borders. Our copyrighted works continue to be at the forefront of the global creative marketplace. And that marketplace is increasingly digital, which means that copyright policy needs to take into account the specific opportunities and challenges posed by the internet, which provides creators with new channels of distribution and infringers with new channels of distributing infringing works.

In order to identify and address the leading public policy and operational challenges in the digital economy, we—with our colleagues at the Department of Commerce—started work on the most comprehensive analysis of the copyright legal landscape since the Clinton Administration.  We’re now finalizing a White Paper that will contain policy recommendations on three key issues in copyright law in the digital age: The appropriate calibration of statutory damages; The application of the First Sale doctrine to digital transmissions; and the legal status of remixes. The goal, as with patent reform, is balance: In this case, to demonstrate that our copyright framework provides strong and effective protection, with exceptions enabling uses of copyrighted works in the public interest. And with appropriate enforcement mechanisms for the digital environment, along with safeguards for cybersecurity, privacy, and freedom of expression.  So we’ve been busy in all areas of intellectual property, striving to find new and creative ways to advance, promote, and protect American innovation and creativity.

As I said earlier, UCLA’s competitive drive—its determination to strive for even better performance—is an inspiration to me as head of the U.S. Patent and Trademark Office. I’m also inspired by innovative members of the UCLA community like Kumar Patel. His invention of the carbon dioxide laser, which in turn led to the development of precision laser scalpels in surgery, has saved countless lives.

In 1996, Dr. Patel received the National Medal of Science, and in 2012, he was inducted into the National Inventors Hall of Fame. He received his most recent patent that same year, for a remote optothermal sensor. And at age 77, he is still inventing and patenting today.  I mention him because, after retiring from Bell Labs, where he invented the laser, he became the Vice Chancellor for Research here at UCLA. He also taught in my field of electrical engineering. It doesn’t surprise me that such a renowned inventor would seek to continue his career in an academic environment like UCLA’s.  Dr. Patel is a role model for us all—not only of someone continually striving to do better—but as an excellent example of the critical link between research, academia, industry, and intellectual property. So I want to thank Dr. Patel for his great work, and the law school and government relations office for inviting me to speak here today.

There is so much more to talk about, but fortunately we have some time today for a good discussion. I look forward to hearing your questions!

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