David Kappos, who can be the agency's critic or its biggest cheerleader, spoke here Tuesday.
The director of the U.S. Patent and Trademark Office told an audience of lawyers, business folks and inventors in St. Paul on Tuesday that the nation's patent system is in deep need of an overhaul.
Those words, spoken at William Mitchell College of Law by David Kappos, the new director of the patent office, offered a kind of tonic for many attending, and certainly for anyone who has attempted to navigate the troubled patent system.
Kappos, who assumed office in August, is alternately the agency's most-probing critic and its chief cheerleader. In an interview, he repeatedly made the connection between a highly functioning patent office and the creation of new jobs and a healthy economy.
But serious challenges confront Kappos, an engineer and lawyer by training and trade. He inherited an office that has a $200 million budget shortfall and a backlog of some 750,000 patent applications.
"It's a huge problem because every one of those applications represents American jobs that aren't being created," he said in an interview with the Star Tribune. "People's inventions are sitting there, waiting for action."
At the same time, Kappos considers his office to be woefully understaffed and "moribund" from a technological standpoint to handle the 460,000 patent applications that are expected to be filed this year. On this matter, he has some real-world experience -- Kappos came to his current job from computer giant IBM, where he was vice president and assistant general counsel for intellectual property law, responsible for Big Blue's intellectual property worldwide.
The patent office now has about 7,000 examiners who comb through ideas, big and small, that bubble up from the nation's populace, as well as from its biggest industries.
"We can't hire to backfill for people retiring or leaving; the agency is actually shrinking," he said. Last month Kappos told a congressional subcommittee that he hopes to hire a total of 1,000 patent examiners in fiscal 2011and 2012.
Interestingly, the office is fully funded by the fees it generates from patent and trademark applications. However, its budget appropriation (of about $1.9 billion) is capped by Congress. So the patent office will collect between $146 million and $232 million more than it is appropriated in fiscal 2010.
In addition, Congress is contemplating patent reform, an issue that Kappos delicately says he's "watching closely."
Kappos admits these issues "keep me up at night." So far, he's introduced several measures aimed at streamlining the office. The previous way of reviewing patents, for example, called for three departments within his office to review an application -- now it's down to one. He'd like to hire more people, but Kappos says he's also "looking at the way employees are incented, rewarded, coached, mentored and trained."
Sense of urgency
Mindful that he was speaking in the motherland of medical technology, Kappos reinforced the need for an efficient and predictable patent process to spur innovative technologies. "We understand the needs of the medical technology industry in particular, to get patents issued more quickly since many times funding of small companies is contingent on having a patent issued," he said.
This was likely music to Robert Kieval, the founder and chief technology officer for the Brooklyn Park-based start-up CVRx Inc. The privately held company, which is developing a pacemaker-like device to treat high blood pressure and heart failure, has 14 issued U.S. patents for its intellectual property, but more than 50 patent applications pending.
"From the time you apply for a patent to the time you're granted a patent, assuming you're granted one, it could be three to five years," Kieval said. When investors consider pumping money into a start-up like CVRx, they want the certainly of knowing its intellectual property portfolio is protected, he said. Lack of certainty could result in a lack of investment.
With the second title of under secretary of commerce for intellectual property, Kappos is also President Obama's chief adviser on intellectual property matters, and says he has the president's ear.
"He gets it," Kappos said.
When asked why he would leave the corporate world for such a daunting challenge, Kappos jokes, "there are times I ask myself that question. Certainly my wife does."
But in the end, he said, "if you get one chance in life to do something ... that advances an interest beyond any particular person or agenda and have a positive impact on millions of people and our country -- well, I'm game."
Janet Moore • 612-673-7752