1 June 2010Patents

An interview with David Kappos, USPTO

As the primary stakeholders of the United States Patent and Trademark Office (USPTO), US politicians and citizens have a lot riding on how it is managed. Job-making innovation is a key objective of the US government, and as the US economy slowly improves, the unemployed section of the US public will soon demand a fresh supply of new jobs.

The onus is on IP practitioners to work with the USPTO as fast and efficiently as possible, and it is the responsibility of David Kappos, as director of the USPTO, to develop the agency into a helper of IP practitioners, rather than a hindrance.

The time has come for the USPTO to improve dramatically its focus on championing the importance of innovation globally and diversity within the agency itself, says Kappos. Innovation must be underlined as critical to the health of nations, yet it cannot survive in the hearts and minds of the global public in its current form.

Kappos says: “The agency must focus on the role of championing the importance of innovation to millions of Americans—and frankly billions of citizens of the world—and acting as a leader, develop an understanding and an appreciation on the part of children and adults alike. Billions of people need to understand that innovation is really important and invention is really cool. To be an innovator and an inventor is to lead the world to really great things.”

As bold a mission as that is, it cannot be accomplished without also addressing the need to break down barriers that may have arisen in the minds of the public. Diversity must be championed at the USPTO, especially in the leadership of the agency, in order to develop a diverse constituency in the innovation community, says Kappos.

“Anybody can be an innovator, so I want to make it a mission for this agency to reflect that in our workforce and to develop the innovation community on a global basis, where every child all over the world—no matter what background they come from and what they look like—views themselves as [having the potential] to be an innovator.”

The USPTO would also like to have the US seen as the gold standard of patent systems, raising the bar for other patent-granting authorities. “What we’re doing now, and what we’re trying to demonstrate in the US by undertaking patent reform, is global leadership that moves the world’s most powerful economy to the gold standard of patent systems. We will be challenging our trading partners and other patent-granting authorities to move themselves to the gold standard of inventor-friendly IP-related systems," he says.

To ensure that this new innovation mentality is instilled nationally, and indeed internationally, the USPTO has to lead by example, by getting rid of the old and bringing in the new. Kappos took office in order to change everything at the USPTO, he says. His previous corporate role at IBM—he was vice president and assistant general counsel for IP—provided an array of skills that have proved useful in his governmental role.

“At a big company, you get to develop skills in teaming, collaboration and having influence among groups of people that you don’t directly control. You’ve got to be able to manage a wide range of issues, everything from the deepest substance such as deciding how to handle a certain case, trademark or patent area, all the way over to leading culture change and developing diversity. I learned all of those things for 26 years at a large corporation and I’m just practising them now, here at the USPTO.”

Together with the senior team brought in at the agency, including deputy director Sharon Barner and administrator for external affairs Arti Rai, Kappos has gone about fundamentally changing the USPTO. He says:

“We’ve set about changing the culture, changing the management system, changing the employee performance system, changing the way we look at policy, changing the way we hire and promote people, and changing our information technology system.”

“The agency must focus on the role of championing the importance of innovation to millions of Americans."

As an organisation, the agency employs around 10,000 employees, 7,000 of whom are examiners. These are the people who “pay the bills”, says Kappos, so they are really the only place to start to bring about a significant change in culture.

He says: “We knew from the very beginning that we had to change the system that motivated and dictated the way examiners’ work gets credited from day to day, so we immediately threw it all away and created a brand new system, and that’s a major change in culture because it sends very different messages to examiners about what’s important.”

The examiner count system is the process that judges both the timeframe a patent examiner has to complete a patent examination and how much credit is given for each stage of an examination. It has been present at the USPTO for decades, so it was alarmingly out of date. It also encouraged a laid-back approach to application examining that was difficult for both the agency to manage and the examiners to live with, says Kappos.

The new system encourages a quality service that underpins the USPTO’s mission to guarantee innovation. “The new system creates and reinforces a culture of the examiners engaging with applicants and other examiners, by having interviews, having discussions, picking up the phone and being responsive.

"The new system generates a culture of quality, sending the message to examiners that we want them to spend more time understanding, searching for prior art, thinking about the technology deeply, carefully going through the specification and doing a good job of examining patent applications the first time through," he says.

Ultimately, the new system sends a message and creates a culture of effectiveness. He says: “It rewards examiners for joining the issues, for looking past all the little unimportant distractions and driving straight into the core issues about patentability. Is the invention novel? Does the invention have an inventive step?

"The new system alone has completely reset the table in terms of the motivations, the messages, the management direction and therefore the culture imperatives that are literally bearing down on examiners every hour of every day.”

A report recently issued by the Department of Commerce suggests that 76 percent of start-up managers from innovative businesses believe that venture capital investors take patents into consideration when making funding decisions. The need for timely patents to attract investment comes at a time when the backlog of patent applications at the USPTO stands at more than 700,000.

Kappos says: “The backlog is unacceptably long. We’re already making some progress on changing the situation, and although we’re far from having a trend that’s adequate to declare that we’re on the road to recovery, we’re seeing some green shoots that indicate that the actions we’re taking are starting to turn an inflection point in our backlog.”

Despite this progress, there is still work to be done. Kappos believes that there are three components to fixing the backlog issue—processes, people and tools. He says: “The processes need to be fixed, and we’ve done a lot of that already. We blew up the management system and we re-engineered it, we did the same around all levels of the agency, and we’ve already fixed most of the management incentive processes that needed to be addressed.”

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