Calls to weaken U.S. IP system are short-sighted, says former U.S. Patent Office director

The Hon. Dave Kappos, who served as Under Secretary of Commerce and Director of the United States Patent and Trademark Office from August 2009 to January 2013, told an audience of more than 125 intellectual property attorneys, Akron Law faculty, and law students that efforts to diminish the strength of the nation’s intellectual property system are misguided.

The event was the January 31 dinner meeting of the Cleveland Intellectual Property Law Association (CIPLA) hosted by the Akron Law Center for Intellectual Property Law & Technology. The reception and dinner were preceded by two Akron Law faculty CLE credit presentations.

Kappos, now Partner at Cravath, Swaine & Moore LLP, told attendees that the higher prices and wealth creation that are the most visible result of patent protection garner a negative public reaction and generate populist calls to weaken the IP system.
“The anti-patent narrative capitalizes on our collective short-sightedness,” he said. “Today’s higher prices are easily lamented, while the unquantifiable potential of tomorrow’s inventions is less readily appreciated.

“The most important benefit of the IP system accrues to the public at large—the incentive created by the promise of a future patent to invest in innovation in the first place, the requirement to share it with the public, and the right of the public to practice the invention freely once the patent expires,” Kappos said.

“Not only do the profits associated with royalties allow innovators the opportunity to recoup past investments, but they are also used as fuel for future innovation,” Kappos continued. “As Thomas Edison once remarked, ‘My main purpose in life is to make enough money to create ever more inventions.’

“The one thing we can say is that there is no sustainable source of competitive advantage other than IP. The extent to which IP protections are maintained and enforced will be crucial in determining whether the investment in innovation necessary to propel breakthrough innovation will remain viable.”

It’s complicated

The “elephant in the room” in any contemporary discussion of intellectual property is China, said Kappos. IP protection is the one of the key issues for the U.S. in the current trade negotiations.

“IP is a complex and changing matter in China today,” he said.

On the one hand, he continued, despite increasing efforts by China to crack down, the theft of intellectual property continues, and the copycats are getting better at it all the time. On the other hand, as China’s biggest global companies invest more in their own IP, they are seeing the value of a robust legal regime.

In fact, Kappos said, the Chinese intellectual property legal system has matured rapidly in recent years, reflecting China’s strong desire to be seen as having a level playing field. U.S. companies seeking redress in routine IP cases are likely to get a fair hearing in front of trained judges in specialized courts.

Kappos related that he recently attended a business conference in China where he heard CEOs of prominent Chinese companies complain that they, too, were tired of getting their IP ripped off.

Upcoming IP event

“The Akron Law Center for IP Law & Technology is pleased to have hosted the CIPLA January meeting for the second year in a row,” said Ryan T. Holte, David L. Brennan Associate Professor of Law and Director of the Center. “And we were pleased at the exceptional turnout on one of the coldest nights of the winter.

“We hope that IP attorneys will mark their calendars for Monday, March 4, when we present the 21st Annual Symposium on Intellectual Property Law and Policy,” Holte continued. “This full-day CLE will cover legal updates and discussions in all areas of IP law. Our keynote speaker will be The Honorable Andrei Iancu, Under Secretary of Commerce and Director of the United States Patent and Trademark Office.”

Register now. The registration deadline is Monday, Feb. 25.