Last week Renee Quinn attended a program about social media at Akin Gump in Washington, D.C. Someone from House Speaker John Boehner’s office was in attendance and Renee had an opportunity to do a bit of networking. The topic turned to the subject of an interview, and an offer was made to attempt to facilitate an interview with a Member of Congress on issues relating to patents and innovation.
Learning of the offer to coordinate an interview I asked Renee to attempt to secure an interview with Congressman Jason Chaffetz (R-UT). Congressman Chaffetz is one of only two Members of Congress on both the House Budget Committee and the Subcommittee on Intellectual Property, which is a subset of the House Judiciary Committee. These two Committee assignments make Congressman Chaffetz the perfect person to speak with regarding patents, innovation and the Patent Office budget.
Staffers worked with us to coordinate the interview with Congressman Chaffetz, which took place earlier today. I was told I would have 15 minutes with the Congressman, and graciously he allowed the interview to go a little long. We talked about the President’s States of the Union address, patent reform, the USPTO budget, innovation generally, manufacturing, job creation, China and more. I think many will find what Congressman Chaffetz has to say quite interesting and very encouraging. I myself found him to be well informed and refreshingly candid.
Without further ado, here is my exclusive interview with Congressman Jason Chaffetz.
QUINN: Thank you so much for taking the time to chat with me, I really appreciate it.
QUINN: I was wondering if I might be able to chat with you about innovation, patents and the Patent Office for a few moments?
QUINN: One of the things I have in my mind, and which I think is in the forefront of the minds of many in the industry, is what President talked about the other night in his State of the Union address. The President said “the first step to winning the future is encouraging American Innovation.” So far that seems rather nebulous, although it seems like it will require “an investment,” which is just more spending. Frankly, I don’t think there is much appetite for that, but we do definitely still need to encourage innovation and create jobs. So I was hoping to get your thoughts on how we can foster innovation without spending any additional monies.
CHAFFETZ: Well, a bit part of that is priorities. You’re right. There is no appetite here in Washington, D.C. to spend more money than we currently are. It’s ludicrous in my mind that $.25 out of every dollar spent in this country is spent by the Federal Government. That is not sustainable, it’s not smart and it’s not making us more competitive on the world stage and the United States has truly distinguished itself by being the creative innovator in the world. That’s always been the secret to our success in the United States and we need to continue to foster that. A lot of that, in my mind, is getting the regulations out of the way that are currently impediments to starting a business, investing in that business and hiring employees. We tend to put these onerous regulations in place so rather than spending money part of the equation is to make priorities in terms of what is actually going to grow the economy, grow jobs and create a more competitive environment, while at the same time getting rid of the regulations that will impede that sort of progress.
QUINN: What do you think about letting the Patent Office keep the user fees it collects and allowing them to reinvest in the institution. That would seem like a deficit neutral way to foster innovation and allow start-up companies to get quicker consideration, get to market quicker and attract investment to organically grow through innovation.
CHAFFETZ: The swiftness in which we are able to process the paperwork on these inventions and these ideas — it has to be a competitive advantage for the United States. We had recently a hearing about utilizing these fees within that agency. That seems to make perfect sense. It is unfair to charge a fee and then not have that go back in for the services that people are paying for, in my mind. It certainly needs to ferret itself out, but I think a growing number of people believe that. One of the impediments; one of the frustrations here is that the Patent Office itself — I don’t know how well managed it has been in the years past.
QUINN: I think you have really put your finger on something that has really concerned the Patent Bar for the better part of the last two decades. Unfortunately, for reasons I don’t know and don’t understand, a lot of times you don’t have a patent attorney running the Patent Office so you don’t necessarily get a person there that really understands what needs to be done and what needs to be accomplished.
CHAFFETZ: And that has played itself out as it relates to the IT infrastructure within the agency itself. I had a chance to grill the current leader there and I was dumbfounded by the tens of millions of dollars that has flowed out the door for the development of software and other technology support items that have never worked. Now they are saying that they are going to have to start over and so you look back over the last ten years and despite the tens of millions of dollars that have flowed out the door they don’t have much to show for it.
You still have people working in the Patent Office that don’t have a laptop or don’t even have Windows 7 as a basic operating system. They are still dealing with old technology. Consequently, those that are making submissions and applications are hindered by the lack of technology there at the Patent Office and it is very disconcerting because technology is supposed to help us, it is supposed to make us more efficient, more effective, swifter in our processing, but that is not happening at the Patent Office and that is just infuriating. I for one won’t stand for it and I’m glad that Bob Goodlatte is helping to lead because I think he recognizes the challenges and the problems there as well.
QUINN: What do you think the answer is? It seems that everyone understands the problem, but it almost seems so daunting a task and in some ways so embarrassing that the innovation agency has been allowed — in my words — to be run into the ground over so many years that we find ourselves at a competitive disadvantage.
CHAFFETZ: I think that you can look back to both the Bush and the Obama Administrations and say somebody was asleep at the wheel. Holding them accountable it was just good old fashioned poor management. The resources have been there, you have tens of millions of dollars at their disposal for the IT infrastructure and it never got done and that is inexcusable. I think we need to hold the Administration accountable for this and they need to get their act together. I was encouraged that the very first hearing we held on this issue we dove into this and we will continue as a Congress to do that.
QUINN: That is really good to hear. Do you think there is appetite in Congress for broader patent reform in general? Over the last 5 or 6 years it keeps coming up but often it is the same old ideas that can’t gain consensus and then you get into the old Washington problem where there are lobbyists on every side. It’s almost a circular firing squad arrangement where everybody is just shooting at the bill and nothing ever happens. Do you think we can expect any different in this Congress?
CHAFFETZ: Certainly in speaking with the new Chairman, Lamar Smith, and Bob Goodlatte who is leading as Chairman of the Subcommittee, there is certainly a commitment to plowing this legislation through to the finish line. They say it takes an Act of Congress to get something done and that was supposed to be difficult, and there is a reason for that. In part it’s the way the body and the institutions are set up, but this has been percolating for so long on so many fronts I think, in general, they want to get more serious about it and I think that has played itself out in that they have reorganized the Committee so now it has become its own Subcommittee. That’s a good sign. It’s not mere bureaucracy, but it’s the fact that more Members can focus on accomplishing something.
QUINN: I think that was very well received in the industry and did send a signal. What —
CHAFFETZ: If it produces results. That will remain to be seen, but I think the Chairman recognized the problem, the challenge, and this will help.
QUINN: Well, the first step to fixing something is recognizing the problem and then taking concrete steps.
QUINN: Do you have any idea what else might be on the agenda for the Subcommittee on IP?
CHAFFETZ: I better let Bob Goodlatte announce that, but we have had a series of discussions and a lot of input. We are about four weeks into it, but I think we are off to a good start.
QUINN: So we should anticipate seeing more coming out?
QUINN: An active Subcommittee?
QUINN: One of the other issues that comes up so often in the intellectual property world, where the interface between innovation, patents and business — is what can we do to regain our competitive advantage in the world? The manufacturing jobs seem to leave; have gone all over the world. With that also goes a lot of intellectual property because you invent it here and manufacture it abroad and then when you are on the floor manufacturing it there is all kinds of work-arounds and things that need to be done, so it almost seems that America losing manufacturing jobs is causing a drain on intellectual property and on innovation as well. What can we do to reverse that trend?
CHAFFETZ: A couple things come to mind. One is that we need international enforcement of intellectual property. So many industries are complaining regularly that they just don’t have the intellectual property protection enforcement in some of our more competitive countries like China and others, and our U.S. Trade Representative needs to hold a harder line and make sure that is enforced and people aren’t cheating their way around the system because those countries have become more developed and do knock things off and, consequently, our inventions aren’t worth as much as they should be in the global marketplace because these other countries don’t seem to care much about the IP regulations we put in place. The second part of that is we have to remember that manufacturing is good. We put so many rules and regulations upon businesses it is so difficult for a new substantial manufacturing plant to come on line here in the United States. That is a combination of environmental law, EPA law and the fact that we have the second highest corporate tax in the world. So somehow that needs to be adjusted.
QUINN: Do you think that will change?
CHAFFETZ: I think so. I think certainly that Republicans were swept into power under the premise that we have got to be more business friendly. If we are going to truly grow jobs in this country it’s about creating an atmosphere for those companies to thrive. Now they have been struggling at best and when you have a 39-plus percent corporate tax rate it makes it very difficult for a company to justify doing business in the United States.
QUINN: Yes, particularly when you see countries like China trying to lure away some of the most advanced high-tech industries we have with various research facilities and funding and lower corporate rates. Do you really think we are going to be able to break the log-jam with respect to that corporate tax rate issue any time soon?
CHAFFETZ: I am encouraged that the President has said he wants to get rid of the deductions and lower the rate. I think Republicans are very sympathetic to broadening the base and lowering the rate. So I hope so. I am an eternal optimist. So I hope so. I can’t promise it, but I for one know it needs to happen.
QUINN: Do you think the President and the Administration is really going to in a meaningful way look at some of these regulations and try and attack them? Because it strikes me that it is great to say, and the rhetoric is always exactly what you want to hear when you talk about innovation and business and creating jobs, but then when you have the EPA moving forward with certain regulations on the environmental front it almost seems like there is a disconnect and I wonder which government we are going to have over the next two years.
CHAFFETZ: Well the rhetoric seems to suggest that we would streamline this effort, but the actions would suggest otherwise. I haven’t seen any help any help in this regard from the Administration. I, for instance, am also on the Oversight Committee and this is a big, major theme we are going to be pursuing in the coming months. In fact we have a hearing about that this week; about the onerous regulation that is placed upon businesses and we asked the business community at large to send us examples of regulations getting in the way of their ability to thrive, but with the Administration, the bureaucracy, I really worry.
Let me give you one quick example. Since Barack Obama took office until now there are roughly 150,000 additional federal workers on the federal payroll. That doesn’t count Census, that’s not the Postal Service, that’s not uniformed military; those are just bureaucrats in place to regulate things. That is not a good sign.
QUINN: No, it’s not, and I just heard today on the radio, and I don’t know whether it is true or not, but there are on the order of one or two thousand applications at the FDA for generic drugs that have nobody to move forward with, and those are drugs that are apparently off patent that could be allowed to enter the market and would reduce costs for the average American if they could get approved. It seems mind-boggling that government is growing at such a rate but then you hear those kinds of stories.
In any event, my final question. For the average American who is struggling, looking for work, looking for good news, hoping against hope every night that they turn on the TV they are going to hear some good news about the economy. What would you say to them?
CHAFFETZ: The United States of America is still the greatest country on the face of the planet and we are facing our array of challenges, but we will persevere and overcome. I have no doubt about that. It is going to mean getting government out of the way and allowing the private sector to do what it does best and help grow our economy. Government doesn’t grow jobs, people grow jobs, and despite our government I think we can still continue to be the world’s economic and military super-power.
QUINN: Great. I really appreciate you taking time to chat with me.
CHAFFETZ: It was nice of you to invite me.
QUINN: Thank you very much.