U.S. Commerce Department Release of Intellectual Property Study

Under Secretary of Commerce for IP and Director of the USPTO David J. Kappos

April 11, 2012

Releasing the “Intellectual Property and the U.S. Economy: Industries in Focus Report”

 Well, first of all, thank you Secretary Bryson and Deputy Secretary Blank for leading the way on this effort. It’s an exciting privilege to be leading the U.S. Patent and Trademark Office, working for two outstanding public servants and above all a president who together really get intellectual property—who instinctively understand what IP means, why it’s so important to our economy, and what IP can do to help create more jobs for the American people.

As USPTO Deputy Director Terry Rea and I have been traveling around the country in recent months, engaging the IP user community on our continuing implementation of the America Invents Act, we are reminded, time and again, that the growth, potential, employment prospects, and success of businesses of all shapes and sizes is highly contingent on the effectiveness of IP protection and the efficiency of the USPTO. And let me tell you, if there is one point on which all of the disparate voices in the IP community agree, it is that the single most important thing the USPTO can do to help is to get their new inventions to the marketplace faster and more efficiently, in turn enabling them to create new jobs and opportunity.

Deputy Secretary Blank mentioned the nine new administrative judges recently sworn in at the USPTO. This was just one of many steps we’ve taken to accelerate USPTO processes and reduce our backlogs. We have a super-fast examination program known as Track One, that offers businesses of all sizes decisions on patent applications in under 12 months, and 50% discounts for small enterprises using Track One. Since its inception we’ve received more than 3,000 Track One patent applications, and more than 1,000 entrepreneurs have taken advantage of those 50% discounts. During that time we’ve completed nearly 1,700 examinations in an average of 42.9 days and actually issued more than 40 patents under this new program.

We also created a First Action Interview program that encourages applicants to meet with examiners earlier on to work through potential issues and bring greater certainty, more quickly, to a product’s IP rights. To date about 2,900 innovators have benefited from this kind of direct communication with the USPTO. The “first action allowance rate” for those who use the program is 24.9%, significantly higher than the 11% rate for applicants not using the program and a strong boost to getting new innovations into development and the marketplace efficiently.

Under our Green Technology Pilot Program, 3,500 patent applications addressing 21^st-century energy and environmental challenges were fast-tracked and reviewed in about 10 months. And the 890 U.S. patents issued under the program is helping to meet the president’s goals of building a “green-collar” economy and making our country a leading exporter of renewable energy technologies.

Additionally, a series of international work-sharing agreements called the Patent Prosecution Highway have helped about 10,000 patent applications receive IP protection in 22 different countries—faster and at a lower cost. This kind of international collaboration is especially important in breaking down the legal barriers that exist for smaller companies trying to export their products into a global economy.

So the bottom line is that we are making progress in reducing patent pendency, accelerating the examination process, and working with our user community to ensure that they have a voice in guiding our efforts. And what today’s IP jobs report shows is that those efforts, and the larger efforts of the Commerce Department and this administration, are paying dividends in the growth of jobs and the growth of an economy that’s built to last.

There are two things in particular about the report that I would like to highlight before I turn things over: first, it uses multiple methods to analyze how companies and industries use IP in our economy. So, for instance, under one method we used, the electronics and semiconductor industries topped the list, but using a different measure, the pharmaceuticals and medical devices industries tended to be the most IP-intensive employers. And even though the ordering varied, our measures consistently identified the same set of IP-intensive industries, reinforcing the notion that the largest and most innovative industries in the U.S. rely on IP to remain globally competitive.

Second, I don’t think anyone can overstate the significance of the fact that industries using the federal trademark system most actively employ one quarter of all American workers. Moreover, the wage premium for employees in patent-intensive industries is 73% higher than in non-IP-intensive industries, and the contribution to job growth of these same patent-intensive industries has been over two times greater than the contribution of non-IP-intensive industries. And the contribution of copyright-intensive industries has been remarkably strong, providing growing job prospects to Americans consistently for the last two decades.

At the end of the day, we really couldn’t ask for better proof that policies supporting a higher-quality IP system are making a measurable difference in our nation’s economic recovery. The IP jobs report shows that America’s core strength lies in our ability to experiment, innovate, and create. Sensible government policies that encourage and stimulate that spirit of innovation, rather than hinder or ignore it can demonstrably contribute to job creation and economic well-being. It’s what led to 40 million jobs in IP-intensive industries; and it’s what led to 25 consecutive months of private sector job growth. 

And because this administration is committed to using evidence to inform policymaking, our work is far from over. We constantly measure and think about how to use the results of our analyses to put more Americans back to work. Again, it’s truly a pleasure to have worked with Deputy Secretary Blank on this report, and to be a part of such a magnificent Commerce Department team. I want to thank you all for coming out today—and we look forward to working with you to continue spawning the jobs and industries that embolden an America built to last.