Earlier this evening President Barack Obama delivered the 2011 State of the Union Address to a live audience in the House Chambers at the Capitol. Not surprisingly, President Obama mentioned “innovation” repeatedly. The use of the “innovation” rhetoric is to be expected any more from our elected leaders, but it is typically little more than rhetoric. Perhaps that is how this speech will ultimately go down in history, but I must confess near complete shock that President Obama did utter the word “patent” during his speech this evening.
Political leaders any more also throw about the grossly overused term “intellectual property,” with near reckless abandon, so it would not have been surprising to hear the term in the State of the Union. Of course, the term “intellectual property” is almost always used to refer to copyrights and trademarks, counterfeiting and piracy. “Intellectual property” is rarely, if ever, used by politicians to refer to patents, inventions and innovative technologies. So it was perhaps even more remarkable that during the Obama State of the Union there was no mention of the term “intellectual property.” Instead President Obama focused on the “hard IP” — patents. 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.” He even cited Thomas Edison and the Wright Brothers!
After the initial niceties, and the recognition of the absence of Congresswoman Gabrielle Giffords, President Obama dove into the substance of his speech by speaking in an empathetic way about the loss of jobs, some to the technology revolution and many others to China and India. He said: “the world has changed. The competition for jobs is real. But this shouldn’t discourage us.”
President Obama moved quickly to point out: “for 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) I have to confess, I didn’t catch the word “patents” when he uttered it. I guess I was too ready to be cynical. Perhaps it isn’t the greatest shout-out that it could have been, but the nod to patents in a speech of 6,862 words is certainly noteworthy, particularly in light of what would come.
After discussing the need to rise up to “meet the demands of a new age,” President Obama hit the innovation core of his speech:
We know what it takes to compete for the jobs and industries of our time. We need to out-innovate, out-educate, and out-build the rest of the world. We have to make America the best place on Earth to do business. We need to take responsibility for our deficit, and reform our government. That’s how our people will prosper. That’s how we’ll win the future. And tonight, I’d like to talk about how we get there.
The first step in winning the future is encouraging American innovation.
None of us can predict with certainty what the next big industry will be, or where the new jobs will come from. Thirty years ago, we couldn’t know that something called the Internet would lead to an economic revolution. What we can do – what America does better than anyone – is spark the creativity and imagination of our people. We are the nation that put cars in driveways and computers in offices; the nation of Edison and the Wright brothers; of Google and Facebook. In America, innovation doesn’t just change our lives. It’s how we make a living.
Our free enterprise system is what drives innovation. But because it’s not always profitable for companies to invest in basic research, throughout history our government has provided cutting-edge scientists and inventors with the support that they need. That’s what planted the seeds for the Internet. That’s what helped make possible things like computer chips and GPS.
Just think of all the good jobs – from manufacturing to retail – that have come from those breakthroughs.
No innovation speech from the President would be complete without mentioning clean energy and green technologies. The President did not disappoint:
We’re issuing a challenge. We’re telling America’s scientists and engineers that if they assemble teams of the best minds in their fields, and focus on the hardest problems in clean energy, we’ll fund the Apollo Projects of our time.
At the California Institute of Technology, they’re developing a way to turn sunlight and water into fuel for our cars. At Oak Ridge National Laboratory, they’re using supercomputers to get a lot more power out of our nuclear facilities. With more research and incentives, we can break our dependence on oil with biofuels, and become the first country to have 1 million electric vehicles on the road by 2015.
Now, clean energy breakthroughs will only translate into clean energy jobs if businesses know there will be a market for what they’re selling. So tonight, I challenge you to join me in setting a new goal: by 2035, 80% of America’s electricity will come from clean energy sources. Some folks want wind and solar. Others want nuclear, clean coal, and natural gas. To meet this goal, we will need them all – and I urge Democrats and Republicans to work together to make it happen.
I’m not sure how we will be able to get 80% of our electricity from clean energy sources by 2035, and if we do I have a suspicion that we will heavily rely on nuclear energy and need to get building more nuclear power plants, but who knows what is possible if we truly dedicate ourselves to allowing the ingenuity of the American inventor to be unleashed, which of course will require an unleashing of the Patent Office.
In the Republican response to President Obama’s State of the Union Address Congressman Paul Ryan pointed out: “Depending on bureaucracy to foster innovation, competitiveness, and wise consumer choices has never worked — and it won’t work now.”
It is difficult to know exactly what Congressman Ryan was referring to here, at least based on his brief response to the President’s message. It seems clear, however, that there is a different vision between Democrats and Republicans. Democrats favor a top down approach where the government is the maestro, or some might even say puppeteer. The Republicans favor a bottom up approach where the government is limited, sets rules and gets out of the way. Ryan said as much when he said: “a renewed commitment to limited government will unshackle our economy and create millions of new jobs and opportunities for all people, of every background, to succeed and prosper.” Ryan would later say: “Limited government and free enterprise have helped make America the greatest nation on earth.”
Thus, it would seem that the parties largely agree on the importance of fostering innovation, but the Democrats favor government spending, or investment if you like, to promote the innovations that are deemed preferable, such as clean energy and green technology. The Republicans, however, would favor the fostering of innovation and competitiveness in a way that doesn’t require additional government spending to promote research and development necessary.
Missing from the speeches of President Obama and Congressman Ryan was any reference to the United States Patent and Trademark Office. I don’t believe Congressman Ryan was suggesting that the Patent Office should play no role in fostering innovation, because such a statement would be utter nonsense.
The Patent Office needs to play a vital role in fostering innovations, whether we follow a Democratic path where there is top down government spending to promote certain technologies or we pursue a Republican strategy to create a business friendly climate that fosters private investment in the development of technologies. This is true because regardless of the government involvement, regardless of University research or the research done at Federal Laboratories, the private sector is essential. It is the private sector that takes the core, basic, incredibly valuable pure science done in Universities and Federal Laboratories and turns it into products and services that create new businesses, new industries and thousands upon thousands of new jobs.
Now if we can just get both sides of the isle to realize that innovation cannot and will not be fostered in the United States unless and until the Patent Office is resourced properly. Thankfully, the Patent Office is user fee funded, so there is no need to give the Patent Office taxpayer dollars to get itself in order. Since 1992 Congress has siphoned off nearly $1 billion of Patent Office user fees and diverted them for other purposes. Apparently, those in Congress think government revenue is government revenue so it doesn’t matter that it was to pay for services promised.
So far during Fiscal Year 2011 the Patent Office is collecting more than $1 million a day that it is not allowed to spend because the USPTO budget is locked into Fiscal 2010 levels. So as the demand for a U.S. patent continues to grow, as the Patent Office continues to generate more work, they are burdened by this work without the benefit of the revenue necessary to perform the services promised. Essentially the Patent Office is turning into something of a ponzi scheme; an innovation ponzi scheme. Unfortunately, it is the U.S. economy that suffers because of the technologies on the shelves that cannot get reviewed in any technologically relevant time frame.
President Obama’s speech, at least the innovation portion, was very welcome indeed. Now we just need to have words translated into action and policies pursued that will ensure that American innovation can thrive. That will review America’s innovation agency, the United States Patent and Trademark Office, to play a role. For that to happen Congress needs to stop viewing the USPTO as a revenue generating piggy bank and realize that the diversion policies of the past two decades are largely responsible for our innovation malaise.