Remarks as Prepared Kathi Vidal
Under Secretary of Commerce for Intellectual Property and
Director of the USPTO
2022 SelectUSA Investment Summit
Jun 28, 2022
Thank you to everyone attending this session. The SelectUSA Summit is extremely exciting, and important. I am glad the U.S. Patent and Trademark Office — the nation’s Innovation Agency — is participating in this year’s Summit.
We all know that innovation is a main driver of the U.S. economy. The protection of intellectual property is the primary reason companies are willing to invest in new plants and equipment, and new jobs.
The presence of a strong innovation ecosystem goes a long way in attracting companies to a local community, a state, or a region. We know this from years of experience. Our traditional innovation hubs in Silicon Valley, Rt. 128, Research Triangle Park, Austin, Texas, among others, have been successful in attracting investment.
The recent decision by Boeing to relocate its headquarters to Arlington, Virginia, was based in large part on the fact that Virginia Tech is opening a $1 billion “Innovation Campus” in the area near Boeing’s new headquarters. The campus is focused on educating graduate students in computer science, artificial intelligence, quantum computing, cyber, and computer engineering. The state of Virginia is investing $375 million in the new Innovation Campus.
This is an important model, but not the only model for attracting investment, since technology and innovation are spreading throughout the country.
At the USPTO, we recently studied the impact that artificial intelligence is having on technology development in the United States and the world. We used an artificial intelligence program to analyze all of our patents. We found that 80,000 of our utility patent applications in 2020 involved artificial intelligence. This was a 150% increase from 2002. AI now appears in 18% of all utility patent applications we receive, and in more than 50% of all the technologies that we examine at the U.S. Patent and Trademark Office.
But here is the key finding from our study of AI in patents: Artificial intelligence is increasingly important in innovation in all industries, and from all regions of the country. Twenty-five percent of those submitting AI patent applications are individual inventors, and they are located well beyond the technology hubs.
For instance, we found that in Oregon, patentees are using AI in fitness training and equipment. In North Dakota, AI is being used extensively in new agricultural inventions. Maine and South Carolina are active in AI used in digital data processing adapted for businesses. In Montana, AI is being incorporated into inventions for analyzing the chemical and physical properties of materials. Wisconsin leads in AI applied to medical instruments and processes for diagnosis and surgery. And in Iowa, Kansas, Missouri, Nebraska, and Ohio, we found that AI technologies are contributing to new inventions in telecommunications.
It means that we can capitalize on the innovation taking place in all of the different industries located in all the different regions of our country. It is not necessary to be in the traditional tech hubs to attract new investment.
At the U.S. Patent and Trademark Office, we have also found that industries based on innovation and the protection of intellectual property generate almost $8 trillion in U.S. GDP, and account for 44% of all U.S. jobs. Workers in patent-intensive industries earn almost $1,900 per week. That is 97% higher than the average weekly wage of workers in non-IP intensive industries.
We also know that startup companies that have a patent are far more likely to be successful in raising funding for new product development and expansion of production than those that have not secured intellectual property protection. When used as collateral, a patent increases venture capital funding by 76% over three years, and increases funding from an initial public offering by 128%. The approval of a startup’s first patent application increases its employee growth by 36% over the next five years. After five years, a new company with a patent increase its sales by a cumulative 80% more than companies that do not have a patent.
These are staggering figures. They provide clear evidence of the need for patent protection. They indicate how important patents are to local economic development, and the health and wellbeing of our nation as a whole.
They also provide you with a good reason to look at the U.S. Patent and Trademark Office as your innovation partner. The USPTO has offices in every region of the country.
Our IP specialists are there to help economic development offices, the science and technology institutions, and the individuals and businesses in your state take advantage of intellectual property protection through patents and trademarks. They are there to help your universities license the technologies that attract industry and investment.
There are some basic myths about the patent system that need to be addressed in order for states and regions to benefit from the IP system that was created in 1790 by our Founders.
The most common myth is that a company can focus on developing its business now and get their patents later. The truth is, they only have a limited window of time to file for a patent. Before they publish or share their idea, or release a product using the invention, it is important that you guide them to the experts who can consult with them about patenting.
The Second Myth is a company or an individual cannot afford to get patents. Truth is, they can’t afford not to. If an entrepreneur or researcher receives a patent on a new technology, it provides them with 20 years of market protection to invest and develop that invention for commercial gain. Without a patent, they have no market power. We provide deep discounts on our fees for individuals and small inventors. The Pro Bono Patent Program has already matched more than 3,400 inventors and small businesses with patent practitioners who have helped them file almost 2,000 patent applications.
Myth Number Three is: An inventor has to make something to get a patent. The truth is, they do not. And it is best to patent early, even before they make a product. The don’t want to trigger an event that will prevent them from getting a patent. They can also use the patent for tech transfer and for licensing.
Myth four is people can only patent groundbreaking ideas. The truth is, most patents are on incremental advances.
Another myth is that because it can take a while to get a patent, then a patent doesn’t have much value. The truth is, there are benefits of “patent pending” — for funding and for keeping competitors out of their space.
Patents and trademarks are essential to the success of our country. In order to grow our economy, and stay globally competitive, we must promote invention and patenting more than ever before.
The USPTO is here to help you spread the word on the importance of innovation to the economic growth of your local communities, your states, your regions, and the country at large. We are here to help your industries stay competitive, and stay healthy. By working together, the future is promising.