Thursday, 8 November 2018

USPTO Director Iancu Calls for Change of Focus in so-called "Patent Troll" Debate

USPTO Director Iancu recently gave a speech in Texas concerning the debate involving innovation and patent enforcement by so-called "patent trolls" in the United States.  Notably, he lauds risk takers and innovators, and states that the patent troll narrative is designed to stifle innovation by essentially creating fear about participating in innovation.  He wants to focus on the positive stories of innovation.  He doesn’t appear to take the position that patent trolls (or patent assertion entities) do not abuse the patent system; just that we should focus on the positive by keeping in mind how far we’ve come from an innovation perspective.  He gets pretty close though.  Here’s a relevant portion of his speech:

Anyone could invent in America and everyone was incentivized by our constitutional patent system to do so. And incentivized they were. And invent they did. And the results have been remarkable.

Our constitutional patent system has given rise to a spark of ingenuity and development the magnitude of which humanity has never before known. Electricity and the telephone; the automobile and the airplane; recombinant DNA and DNA synthesis; the microprocessor, genetics and cancer treatments. And so much more. And all of it done with American patents.

Edison, Bell, and the Wright Brothers; Boyer and Cohen and Caruthers; Ted Hoff and Frances Arnold. These are inventors whose work we should celebrate. And theirs are the stories we should tell. Not scary monster stories.

Repeatedly telling “patent troll” stories is indeed odd, especially when they’re being told to the people who have been responsible for the greatest advances in human history.

The narrative must change. And, at least as far as the USPTO is concerned, it has now changed.

We are now focusing on the brilliance of inventors, the excitement of invention, and the incredible benefits they bring to all Americans and to the world.

Take, for example, Bob Metcalfe, currently a professor of innovation and Murchison Fellow of Free Enterprise at the University of Texas in Austin.

By the age of 10, Bob knew he wanted to become an electrical engineer and attend MIT. He did. And followed that up with a master’s and Ph.D. from Harvard. In 1972, Bob began working at Xerox’s Palo Alto Research Center, where he met electrical and radio engineer D.R. Boggs.

With Boggs, Bob invented what came to be known as the Ethernet, the local area networking (LAN) technology that turns PCs into communication tools by linking them together. Today, more than a billion Ethernet-based devices are shipped every year. And then, in 1979, at the height of his career, Bob took a huge risk and left the comfort of Xerox and founded 3Com Corporation.

An inventor on many U.S. patents, Bob was awarded the National Medal of Technology by President George W. Bush in 2003 for his leadership in the invention, standardization, and commercialization of Ethernet. And in 2007, he was inducted into the National Inventors Hall of Fame.

Bob told us recently: “Rapid execution and patents are probably the two major defense mechanisms against the vicious status quo, which is out to crush you.”

Innovation and IP protection have indeed always been America’s mechanisms for progress in the face of the “vicious status quo.”

Take as another example Susann Keohane, IBM Global Research Leader for the Aging Initiative, another Texas-based inventor. Her inventions combine cognitive technology, the Internet of Things, and other emerging technologies to improve quality of life for people with disabilities and the aging population.

Susann is an IBM Master Inventor who holds 114 U.S. patents. And, importantly, she told me she is working on more!

This is the American patent system. These are the heroes who have taken risks to make something new and to change the world. Theirs are the stories that must drive our patent policies.

Because in this country, we want people to take risks. Like Susann and Bob, we want folks to leave their comfort zones and step into the forests of discovery and innovation. We want folks to step out of their lanes and try big, bold, new things. And scaring them with ugly monster stories does precisely the opposite; it drives towards policies that inhibit innovation.

Remarkably, in what I believe amounts to Orwellian “doublespeak," those who’ve been advancing the patent troll narrative argue that they do so because they are actually pro-innovation. That by their highlighting, relentlessly, the dangers in the patent system, they actually encourage innovation. Right!

After hearing about the Big Bad Wolf eating Little Red Riding Hood and her Grandma, would kids be more eager to go into the woods and more eager to take risks? Come on! What encourages more innovation? Susann Keohane, Bob Metcalfe, Thomas Edison, the Wright Brothers, Frances Arnold—or scary monster stories?

What encourages more folks to take risks and become entrepreneurs and inventors? Is it stories highlighting the success of risk-taking and the personal and public gratification of invention, or is it stories highlighting green monsters under bridges and the faults in the patent system?

Look, people are free to express any point of view, and they can certainly advocate for weakening our patent system. But they should be up front about it. Those who spend their time and money relentlessly preaching the dangers of monsters lurking under the innovation ecosystem, and who work exclusively to identify only faults in the system, are unconvincing when they argue that they are doing so for purposes of increasing innovation.

Certainly, innovation and entrepreneurship are risky. And certainly every system has faults, and we must be vigilant about identifying and eliminating abuses when they arise. I am personally committed to doing so. But for any system to be successful, it cannot focus exclusively on its faults. Successful systems must focus on their goals, successes, and aspirations.

Focusing exclusively on selected, known problems has damaging consequences.

Tuesday, 6 November 2018

The Issue with China and the United States: What to do about the theft of industrial trade secrets?


The Washington Post Editorial Board recently published an opinion piece, titled “The U.S. must take action to stop Chinese industrial espionage,” which strongly condemns China’s alleged theft of trade secrets.  The Editorial Board pointed to the recent indictment concerning DRAM trade secrets allegedly stolen from Micron, a U.S. based company.  The piece notes that a worker from Micron joined a state-supported Chinese company along with other employees--carrying with them trade secrets.  The editorial ends with the statement that, “In the end, China will only respond to compulsion.”  This is a powerful indictment of China from one of the leading newspapers in the United States.  The editorial can be found, here.  
The question is what are the next steps to exercise “compulsion."  This situation is somewhat different than the Chinese government requiring the disclosure of trade secrets for essentially market access to China. Indeed, even for non-state owned Chinese companies, my understanding is that the Chinese government is involved in technology development even in early stages and exercises a veto power over the direction of technology development. Recently, the Chinese government announced a ban on all new computer games in China.  As I've mentioned in a prior post, this could be a case of rogue Chinese employees attempting to become wealthy who may not be acting with express approval of the Chinese government; although perhaps with tacit approval of the government or willful blindness of the government.  Of course, this ultimately is to the great benefit of China.  However, what is our response?  That is the very difficult question the editorial does not address.  We all know there is an issue.  
Moreover, the problem with trade secrets is that once they are disclosed it is very hard if not impossible to put them back in the box.  Once we've lost it; it's likely lost irrevocably.  And, I don't think putting a few people in prison is going to provide much general deterrence to similar behavior.  Will we start seizing assets--does it matter from whom?  That seems unlikely to be smart--our interests are so intertwined now.  As I've mentioned before, will we attempt to ban all Chinese citizens from working or studying in the United States?  Is that in the best interest of our country?  That may not stop the bleeding of information through cybertheft.  More tariffs?  Does that work?