At 11:30 am on Monday, March 7, 2011, Secretary of Commerce Gary Locke spoke at the Asia-Pacific Patent Cooperation Forum hosted by the United States Patent and Trademark Office. Immediately after his remarks I was granted an exclusive interview with Secretary Locke. The interview was originally scheduled for 10 minutes, but as you can see from the transcript below the interview went long. In fact, Secretary Locke was gracious enough to talk about a range of issues for more than 25 minutes.
During my interview with Secretary Locke we spoke about patent reform efforts in the United States Senate, what patent reform might look like from the House of Representatives, his management style and how to motivate individuals to achieve transformative change. What you will not read, however, is about his much anticipated appointment as the new U.S. Ambassador to China. ABC News first broke the story that President Obama would nominate Secretary Locke to become Ambassador to China after the close of business. This interview wrapped up at approximately 12:30 pm, some 6 hours before Locke’s impending nomination as the Ambassador to China became public knowledge.
When I first heard about the news that Secretary Locke will leave the Department of Commerce I was disappointed. Secretary Locke strikes me as a thoughtful person, extremely energetic, motivated to succeed and the type of person we need in government. He is knowledgeable and detail oriented, but he does not micro-manage, preferring rather to select competent professionals for key positions and then working with them to achieve lofty goals. His CEO-like approach to running the Department of Commerce has helped to transform the Patent Office, and he will be missed. I’m sure he will make an excellent Ambassador, but I have to wonder about the future of the Department of Commerce and the Patent Office. Whoever becomes the next Secretary of Commerce will have some big shoes to fill.
Without further ado, here is my exclusive interview with Secretary of Commerce Gary Locke.
QUINN: Thank you Mr. Secretary for taking the time to chat with me.
LOCKE: My pleasure.
QUINN: I know you are very busy, particularly with patent reform on the agenda so I thought maybe we could start there. It seems as if we are now closer to patent reform than we have been over the last 5 years. Do you have any feelings about whether we are going to get it across the finish line this time?
LOCKE: I am very, very hopeful and really optimistic. I have been talking and meeting with the Senators, Democrats and Republicans, and have also conferred with House Members, from Congressman Conyers to Chairman Smith, so we are really keeping our fingers crossed. We are also engaging regularly with the stakeholders. We are really trying to forge consensus and compromise, so we are very, very hopeful.
QUINN: I don’t want to jinx it, but it looks as if things are going to be good in the Senate this week, and then it seems attention turns to the House. So the question becomes whether the House will produce something close enough to what the Senate has produced. What are you hearing on the House side. Does it look like they are going to be producing something similar.
LOCKE: I think with some of the amendments that were made in the Senate bill, removal of some of the contentious issues because the Courts have already made incredible progress in those areas, some people were feeling there was no need to deal with issues such as venue and damages. Now that we are looking at post-grant review I think there is a little bit further discussion with respect to some of the issues on post-grant review, I’m still hopeful that we will be able to get agreement. Of course, we are waiting to see when the House Chairman will unveil his proposal representing the House. There are a lot of discussions going on among the House members, Democrats and Republicans, representing a variety of stakeholder groups and industries and sectors. Maybe by the time this goes to print, or you blog it, it will be moot, but to the extent that the House can unveil its proposal before the Senate takes final vote then there is an opportunity to merge the two bills as closely as possible, which would only hasten the prospects of final passage.
QUINN: Are you hearing that this may be a possibility?
LOCKE: That may be a possibility. There is a lot of discussion, but you often hear a lot of different rumors out there on the Hill. I have had conversations with Chairman Smith and he would like to try and unveil the House version of the legislation as quickly as possible.
QUINN: Did any of the votes last week surprise you? By that what I mean is there seems to be overwhelming support in the Senate for moving patent reform ahead. I think the Manager’s Amendment passed 97 to 2 and then the vote against Senator Feinstein’s first to file change was 87 to 13, it seems there is enormous bipartisan support here. Has that surprised you at all?
LOCKE: No. I think that in the past, a year ago, we were hoping this could come on to the Senate floor for a vote, but trying to find the time was problematic. In the intervening time we have been able to meet with more of the stakeholders, whether its pharma or the tech community, just trying to reach greater, stronger consensus. For instance, on first inventor to file, we did some research on that issue. We know there was some concern among the independent, small inventors who were concerned that first to file would really harm them. In the research we showed, in the last 7 years there were nearly 3 million patent applications and that in only one case would an independent inventor have been worse off under a first to file instead of first to invent system. And there are ways in which folks can protect themselves and be the first to file for a really nominal fee. We got that information out and I had several Senators say “that was very, very helpful.”
QUINN: Yes, I think that really helped carry the day, because what are you really fighting over if it only affects one person?
QUINN: But you probably know in the independent inventor community, and maybe it’s a fringe, maybe it’s not a fringe, sometimes it is hard to tell because at these moments in time people ramp up their opinions. What would you say to those folks who say this change from first to invent to first to file is really just going to benefit large corporations?
LOCKE: Well, again, because it has only affected one independent inventor in the last 7 years, that argument just doesn’t hold water. Moving to first to file would create greater predictability and ultimately lower the cost for small inventors and small companies because they don’t have to pay huge fees in order to contest or defend against claims by other folks that they truly don’t deserve the patent because they were not the first to invent. By contrast, under the first to invent system, if someone did want to challenge you, it costs a lot of money to do an interference proceeding, so we really think going to the first to file system is actually better and more cost effective for small innovators and everyone else.
QUINN: It is probably a lot easier for them to understand as well.
LOCKE: Very, very clear. The rules are very straight forward. First to file.
QUINN: I thought maybe I would shift gears a little bit away from patent reform. Having observed the Patent Office for a number of years and the Department of Commerce in general, I can’t help but notice that you seem to have come in with a different management style. One that I would characterize, and I’d like to get your thoughts on this, as more of a CEO mentality; running it like it is a business, putting good people in positions. For example, here at the Patent Office you have Nick Godici coming back as a special advisor. David Kappos takes over. You bring in Sharon Barner as Deputy and then she leaves and you bring in Teresa Rea. Maybe a two-part question. How do you get such highly qualified people to leave very high paying private sector jobs, and what type of management style do you bring?
LOCKE: First of all, I think it is an incredible tribute to the dedication to public service that we have in our top managers here. Obviously, they come from very successful practices or jobs in the private sector, they take huge cuts in pay to have a stint here at the Patent and Trademark Office, but they are dedicated. David himself is an engineer and a lawyer and obviously cares about it, and it is an opportunity to serve. Obviously, people are well aware of the problems we have had over the years here at the Patent and Trademark Office. We had a lot of people expressing interest in serving, so I am really gratified by that.
Early on I made it a priority, even before I was sworn in as Commerce Secretary, that we had to make some big changes here at the Patent and Trademark Office. When the President announced my nomination and before I was confirmed, for about that one month period, I cannot tell you how many e-mails I got from employees at the PTO complaining about the low morale. I got more e-mails from employees than from any other bureau at the Department of Commerce. As soon as I got here, within a few days after I walked into the Office, in that first week, I picked up the phone and I called the heads of our two labor organizations here and said, “Hi, this is Gary Locke, Secretary of the Department of Commerce, can I speak to SO and SO.” They said, “so you are calling on behalf of the Secretary?” I said, “No. I am the Secretary. I’d like to chat with you and set up a meeting as quickly as possible in my office.” They said they have never been in the office of the Secretary of Commerce ever before, and these folks have been working for the organizations and the PTO for more than 25 years. So we knew that we had to change the atmosphere and the morale here at the Patent and Trademark Office if we were to reduce the backlog.
And then I was interviewing folks for the Under Secretary and determining which person I would submit to the President and recommend that he appoint as our Under Secretary here and I asked all the candidates — we have a backlog of roughly three years — so I asked people, “With the average time to granting a patent being a little over three years what do you think of a goal of 12 to 18 months?” If they said not doable or not worth trying, I found a way to end the interview within about 5 minutes. I very much believe in metrics and high stretch goals. It is better to have a high stretch goal and achieve 70% of that goal than to have a mediocre goal and achieve 90% of that goal.
QUINN: But you have to realize that is a very different way of thinking compared with most government folks.
LOCKE: Well, that is how I operated the State of Washington. For instance, the average waiting time to renew a driver’s license in our licensing office was 1 hour and I brought the managers in of each of the offices after I became Governor and I said what are the issues and the management challenges that you have? What are the projects or the systems that you have that interface with your stakeholders, your customers or the public that then become almost the story of, or face of, government? What are the gripes that your constituents have about your operations? What sticks into the craw of your constituents and consumers? So the licensing office said, and I knew it, it is standing in line for an hour waiting to renew your driver’s license. This office is practically the face of government. So if we are going to show this is a new day and public employees are dedicated, that we can be nimble like the private sector, we have to substantially reduce the waiting time. So I asked them, “What do you think would be substantial improvement?” They hemmed and hawed and then they came back in a few minutes and said “20%.” I said, “Wow, that is great, but let me think about that.” A 20% reduction off of 60 minutes is 12 minutes. So we are going to have to stand in line for 48 minutes. I said, “I don’t think that is good enough guys. How about a goal of 12 minute wait time.” That is an 80% reduction. If you set a really high goal you have to almost blow up the entire system and start all over from scratch and that is what the folks here are doing at the PTO. And that is what we are doing in a whole host of agencies. In the Economic Development Administration the average wait time for a grant, for a port project improvement, for a business scientific park collaboration with a college or university or even safe drinking water treatment plant, it is 180 days. So if we reject the application and they have to go back and reformulate, get new partners, tweak the application, that may bring them back to 180 days again. You are talking about the possibility of having a grantee wait 360 days. My gosh. As of January 1, applicants know within 20 days of the quarterly deadlines if their project was selected for funding through the competitive process.
LOCKE: Census. Everybody said it was going to be an unmitigated disaster. They said, “Locke, there is nothing you can do to change it, just accept it.” I said we are not going to accept it, so we set measures of success. Definitions of what would be a successful census and we compared everything we were doing against those metrics.
QUINN: And you came in under budget, right?
LOCKE: 25% under budget. Same thing with the digital television conversion. The Congress was very concerned about whether the public was aware of it so they extended the deadline and gave the Commerce Department an extra $650 million to accomplish the public awareness campaign, as well as give out coupons to help defray the cost of converter boxes. So I met with our folks and said, “How do we measure success?” They said, “We are cranking out the coupon requests for converter boxes.” That is not a measure of success, the measure of success is whether households are able to make the transition without losing television coverage. What is our goal? We hemmed and hawed for about three weeks and finally established our metrics, our definition of success. Then we looked at everything we were doing and where we were spending the money in order to accomplish that goal. So at the end of the day we had 99.5% of the households successfully making the transition without losing television coverage, whether for their favorite television show or news broadcast, and it was either because they got cable, were already on cable, they had satellite or they got a converter box. In the end we returned around $500 million back to the treasury.
So, with the Patent and Trademark Office, it’s the same thing. I meet with David every few weeks. We go over all these metrics and we keep refining them, saying here are your metrics but where did you hope to be at this point in time. You don’t want to wait until the end of the year to figure out that you missed your targets. So we need to figure out where we think we are going to be throughout the year and measure your progress against that. And again, we are setting very lofty goals. I keep telling him that I am promising the President that we are going to be able to process these patents within a year. So David finally came back and said, “OK, we will do it for all those who want it.” So that is why we have this proposal out for public comment that for a slightly extra fee, and under the patent reform legislation we will be able to offer a discount for the small inventors. So basically for an extra $4,000—and even less for small inventors — we are going to make sure you are going to get a patent decision within 1 year. This is especially valuable for small innovators who can’t go out and get financing and funding for their great idea, and they can’t start the business and can’t start producing or manufacturing that product unless they can show financiers and funders that they have a patent. For the big companies “patent pending” might cut it, but it is like going to the bank and saying I need a loan to refurbish my factory but can you wait three years before I show you I have title to the property. You need that patent and that is why I am so insistent that we have got to reduce the time it takes to determine a patent. It is like the supermarket. You have the regular line and you have an express line. In fact, under our Three Track Proposal if you want to slow it down, because maybe you are seeking FDA approval, you don’t need it in a really short time, so we will actually allow you to pay a lower fee for less than average processing time. I believe in those metrics and that is the only way we can motivate, as well as measure our progress.
QUINN: What is your secret then? It seems as if you approach this is in such a common sense way. What is the secret that you bring. I have heard other people talk about getting a call and the Secretary of Commerce is actually on the other end of the line. Is that the personal approach, the motivation? How would you describe it so that maybe other people who want the kind of success you have shown, how do they achieve that to become a successful leader?
LOCKE: I really believe in picking top notch people and then sitting down with them, and making expectations very, very clear and insisting that they involve their employees. You know the top managers are political and they come and go. If processes and systems are to change for the better permanently you have to involve the line staff, the career people, so that they have ownership in it. It is one thing for the top political people to sketch out, like the drawing of an office tower or skyscraper. You sketch it out on paper, but the actual details and the engineering are done by others. You have to enlist the career people to fill in the blanks, because if they have ownership they will believe in it and they will carry it through. So I believe in choosing and hiring great people, making sure that we set high goals and enlist the career folks and the entire organization and then that we constantly measure and then back them up. One of my models is that we cannot expect perfection. Mistakes are going to happen, we are not going to meet all of our goals, and that is okay. As long as people are acting reasonably in good faith and ethically. We are not perfect as parents, we are not perfect as when to buy and sell stock and not every baseball team can win every single one of their games. Someone wins, someone loses. So we have got to accept that we are not going to meet all of our targets at first, pat them on the back and say, “Great job, let’s try it again.”
QUINN: One final question, to those people who are looking for work and hoping we will see a boom in the tech sector like we have in previous years, previous decades, to get us out of this funk, what message do you send to them? The people who talk around their tables, looking for work, what word of encouragement would you have for them?
LOCKE: Actually, we have seen in previous economic down cycles, whether in recessions or downturns in the economy, and I have seen it in my state of Washington, people who were laid off by Boeing, engineers and others and just tinkerers took the opportunity to start their own business. I have a great idea, I am really going to go out there and try and commercialize this and start a new company. We are seeing that even now in this recession. Sure, a few years ago at the height of the recession applications were down from what we thought, but even though times are still tough a lot of people are saying, “I am going to strike out on my own, I have a great idea, I’d like to create a new company and manufacture or produce this product or service.” That is why we are having patent applications going up now for most of this year, so far in the last several months 7%. So this is a great time, and with the patent reform legislation that is being contemplated and considered now we are actually going to streamline the system. It is going to give the Patent and Trademark Office fee-setting authority, we want to turn around and use that to beef up our IT systems, hire more examiners and also, one of my goals for quite some time is to have regional offices. Of course, David and his team have made some reforms, and we are really focusing on that face to face dialogue between the applicant and our examiners instead of just passing paper back and forth and talking past each other, or writing past each other. We are actually having them talk and confer, either on the phone or face-to-face to figure out what are the issues, the hang-ups, around the application so we can determine whether the patent application should be granted or denied much faster. I think that with all the changes both within the Patent and Trademark Office, in terms of speeding up things as well as improving the quality, and then the tools given to us by the patent reform legislation, including first to file, that is actually going to provide greater predictability and less cost ultimately to the innovation community, including those who are striking out on their own.
QUINN: So is it fair to say that you really are trying to lay the groundwork for organic growth from very small enterprises, letting them have the certainty and foundation to build?
LOCKE: Yes. America is an incredibly innovative country and innovative society, and a lot of people who are working for different companies have a lot of ideas. A lot of people are saying, “I don’t want to work for this company any more, too many ups and downs in the business cycle, I want to try and establish my own company.” Or they say, “I have this great idea, I’m going to spend some time trying to get a patent on it and commercialize it.” We in the Department of Commerce are focusing on speeding up the commercialization of R&D occurring in our Colleges and Universities, to even our Federal Labs, to get it into the marketplace faster. I come across so many examples and stories of breakthrough ideas, incredible ideas, that if patented and commercialized could really be game changers in terms of our personal health, to even alleviating migraine headaches to products that people just say, “Why didn’t I think of that?” It just makes such common sense and would really make life much more pleasant and even efficient, and even save companies money. We just have to get those great ideas into the marketplace faster and that is why we have to focus on overhauling the operations of the Patent and Trademark Office, and David and his entire team including line staff and labor, the labor unions have been really great about embracing these changes, to the management staff. They are making the changes and the patent reform legislation will only enhance those efforts.
QUINN: Well, I could keep going, but I don’t want to monopolize your time. I really appreciate you taking the time to speak with me.
LOCKE: You are welcome.- - - - - - - - - -
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About the Author
Gene Quinn is a Patent Attorney and the founder of the popular blog IPWatchdog.com, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.