A Dynamic Patent System and the Power of American Innovation

IP has never been more important to the evolution of our increasingly knowledge-based economy. Not more than a few decades ago, a company's most valuable assets were tangible. Now, through online e-commerce, anyone can take an idea, a process, designs, algorithms, or brand, and expand into global markets and even create new industries. That's why it is critical that we enforce our IP rights and protect American innovations, which are protected by intellectual property rights.

Five years have passed since President Obama signed into law the Leahy-Smith America Invents Act, the most sweeping overhaul of our nation's patent system in a generation. It didn't take long for the impact of this legislation to be felt. The acceptance of the "first inventor to file standard" established further consistency between the filing processes of the United States and other countries, thereby easing the ability for our domestic inventors to grow globally. Additionally, the implementation of this historic act by the U.S. Patent and Trademark Office offered both the agency and applicants the ability to connect during the rulemaking process, not just in Washington, D.C., but in offices across the country. Such changes help to ensure that the U.S. intellectual property system remains the globe's gold standard.

The AIA was passed by a bipartisan majority in Congress with the intent of making it easier and faster to usher new products to the market, export those products globally, and create American jobs. Such an issue could not be of greater importance in today's modern economy. Today, the USPTO and the Economics & Statistics Administration released a report on IP-intensive industries - a continuation from a report issued in 2012. Among other observations, this report will show that IP-intensive industries directly accounted for 27.9 million jobs in 2014, up 0.8 million from 2010, and they indirectly supported 17.6 million more supply chain jobs throughout the economy. In total, IP-intensive industries directly and indirectly supported 45.5 million jobs, nearly one-third of all U.S. employment. At the same time, the share of our national Gross Domestic Product attributable to IP-intensive industries increased from 34.8 percent in 2010 to 38.2 percent in 2014.

Because of the AIA, the USPTO was permitted fee setting authority and, working with Congress, the ability to retain all fees collected. Such budgetary control allowed the agency to collect what it needed to hire more examiners and bring state of the art IT resources to the agency, thus reducing the patent application backlog of newly filed applications by 28 percent since its all-time high in January 2009. The average total wait time for patent application processing has decreased by almost six months -- and for those who use our accelerated examination option called "Track One," they can have their examination completed within a year. All told, the fruits of American innovation are getting to the global marketplace faster, accelerating the virtuous cycle of innovation and job creation that powers our economy.

The USPTO also implemented new proceedings to provide a speedier and less expensive alternative to district court litigation on the issue of patent validity. While still growing, the AIA-authorized Patent Trial and Appeal Board has received nearly 5,300 petitions for these new trial proceedings since its inception - more than three times the number expected - and is issuing high quality rulings in these cases without missing a single statutory deadline and having a respectable affirmance rates by the reviewing court.

Further, based on input from stakeholders, we have refined the PTAB rules a number of times, and we continue to remain open to additional enhancements within our congressional mandate that make the proceedings even more effective and fair - all with the goal of improving the quality and certainty of patent rights in our system.

When everyone in a sector shares the common understanding about the scope and extent of a patent's rights, it becomes easier to raise capital and make core investments in research and development. That's why, after the successful implementation of the AIA, the USPTO introduced an enhanced patent quality initiative -- further embracing this Agency's 200+ year commitment to quality and ensuring that issued patents have the highest possible degree of clarity and consistency. High quality patents provide clarity and certainty which enable businesses to advance technologies with confidence and help curb questionable business models that leverage patents for abusive litigation practices. Thanks to a talented workforce, including newly appointed Deputy Commissioner for Patent Quality, the USPTO has the focus, structure, and resources to support American innovators by concentrating on enhanced patent quality.

From my perspective as Director of the USPTO, we have built together, our workforce and our engaged stakeholders, a stronger patent system. As a computer scientist, I am thrilled that the AIA has been a catalyst to create a more truly "open system" and brings the public into closer dialogue and cooperation than ever before. I am proud of the work that's been done to establish pro bono programs across the country for financially under-resourced independent inventors and small businesses. Likewise, our four new regional offices in Dallas, Denver, Detroit, and the Silicon Valley bring a robust collection of services, resources, outreach events, and personnel into the heart of our nation's most innovative communities across the country.

Together, we have boosted the power of American innovation through a more open and dynamic patent system. The AIA has allowed the USPTO to open the doors of opportunity to more Americans than ever before. However, our work is never done. The USPTO remains ready to continue to adapt to changing case law, engage with our stakeholders to find new ways to improve, build a diverse and impressive workforce, and be a leader in good governance. In the years ahead, this agency will continue to ensure that it works for the benefit of all Americans, and we look forward to doing so together.