You hear a lot these days about the need to protect Intellectual Property and capture innovation, but you don’t hear much about the traditional expense involved. There’s a reason for that: given the constantly evolving, “wild west” nature of today’s technical frontier, it is often prohibitively expensive for the little guy to cover all the bases and keep up with all the changes. Small businesses have had few options for affordable, comprehensive preparedness on the IP front, and in the wake of the recession, you’re likely to hear a lot more about the need to cut legal spending than you are about performing more audits and hiring more lawyers.
Companies are beginning to tackle this paradox by practicing the word on the lips of everyone from David Kappos (Under Secretary of Commerce for Intellectual Property and Director of the USPTO) to Robert L. Stoll (Commissioner for Patents, USPTO), to business leaders, to even President Obama – innovation. But what good is innovation in and of itself? The innovation our leaders want demands adequate protections in place to turn those promising innovations into business assets.
In fact, back on August 5, 2009, President Barack Obama explained:
History should be our guide. The United States led the world’s economies in the 20th century because we led the world in innovation. Today, the competition is keener; the challenge is tougher; and that is why innovation is more important than ever. It is the key to good, new jobs for the 21st century. That’s how we will ensure a high quality of life for this generation and future generations. With these investments, we’re planting the seeds of progress for our country, and good-paying, private-sector jobs for the American people.
Then again in his 2011 State of the Union Speech, President Obama actually discussed the importance of patents. In fact, nearly 20% of his speech was devoted to technology, innovation and inventors, saying at one point: “The first step in winning the future is encouraging American innovation.” President Obama went on to say: “[F]or all the naysayers predicting our decline, America still has the largest, most prosperous economy in the world. No workers are more productive than ours. No country has more successful companies, or grants more patents to inventors and entrepreneurs.” (emphasis added).
Stoll, while testifying before the U.S. House Subcommittee on Government Management, Organization, and Procurement in December of 2009, proclaimed that the prosperity of the United States long term rests upon innovation and American ingenuity. Stoll testified:
Innovation and creativity are vital to this nation’s prosperity and job growth. Our inventors and artists need well-tailored, robust protection of their creations on a worldwide basis – not only so they can enjoy the fruits of their labors but, just as important, so their creations can fuel the enterprises that generate good-paying jobs and continue to enhance productivity. In the global economy, innovation and creativity are our clear competitive advantages.
Indeed, more then 80 percent of most companies net value consists of intangible assets such as intellectual property. There is an increasing need to protect these assets in order to mitigate risk and avoid litigation. Even the most powerful companies in the world have a need for protection of their IP portfolios. In order to help defend themselves against patent litigation, Google put in a bid of $900 million for the patent portfolio of Nortel Networks which includes over 6,000 patents.
Kent Walker, a senior vice president and general counsel at Google, has also explained that, “One of a company’s best defenses against this kind of litigation is (ironically) to have a formidable patent portfolio, as this helps to maintain your freedom to develop new products and services.” And while discussing the America Invents Act, David Kappos has said, “In the past 50 years we have seen more technological advancements than at any point in history but with no comprehensive patent reform to keep up with the times. In this century, we can’t expect tomorrow’s economy to take root using yesterday’s infrastructure. In order to bring ideas to market—in order to get ideas to capture funding—we must adopt a system that is more efficient for all who use it.”
Developing new products and services is exactly what this country needs in order to remain competitive in a global economy. America must continue to invest time and effort into the infrastructure of developing innovation. Currently the government is working on the America Invents Act which aims to give empower small businesses and independent inventors in order to distribute their ideas at a quicker rate. The Act would significantly reduce fees for so-called micro-entities, and would allow the Patent Office to keep the fees it collects to reinvest in the Office rather than turning hundreds of millions of dollars over to the United States Treasury general fund. Simply said, a more efficient and quicker patent process benefits innovators, which is undoubtedly why the Obama Administration has been behind patent reform efforts and in particular efforts to get the Patent Office adequately funded.
In this competitive global economy, it will be the jobs and industries that do not exist yet that will be the key to a prosperous economy, and it will be the countries that foster the development of these industries that will benefit most in the long run. But as critical as a solid regulatory and legal environment is, it will be up to forward thinking individuals, small businesses and corporations to exploit their intellectual property assets to the fullest to compete competitively in the global marketplace.