WASHINGTON – U.S. Senator Chris Coons (D-Del.), a member of the Senate Judiciary Committee, today delivered opening remarks at a hearing entitled “Intellectual Property—Driver of Innovation: Making Our Lives Healthier, Safer, and More Productive” in honor of World Intellectual Property Day (Wednesday, April 26).

Audio and video are available here.

Senator Coons’ opening remarks are below:

I'd like to begin by thanking you for holding this hearing on the important issue of intellectual property and how it is a driver of innovation that helps make all of our lives healthier and safer and more productive. 

This is a great way to honor World Intellectual Property Day. I also want to thank Chairman Grassley for serving as the lead co-chair of the Congressional Trademark Caucus, which works to highlight the real and growing problem of counterfeit goods and their impact on the health and safety of Americans. Now that we've officially re-launched the Caucus for this Congress, I look forward to having more events together to draw attention to the real problems caused by counterfeiting. 

We are here today to celebrate the role that intellectual property plays in fostering innovation and entrepreneurship in our country, a topic that's quite important to me. I've seen firsthand, growing up in Delaware, the value of intellectual property for individuals and businesses. I grew up in a neighborhood where most of the heads of household were DuPont engineers and many were patent holders, and that was sort of the mark of who was most respected in my community. I know that may be a little unusual in American neighborhoods, but I thought it was typical. And I went on from there to work for an innovative materials science company that relied on the full spectrum of IP protections—from trade secrets, to copyrights, to trademarks, to patents—to protect the value of its inventions and its innovation. 

I look forward to hearing from this terrific panel of witnesses about how IP has helped our country achieve its goals and how you are contributing to a strong and robust IP system. I thank you for your time and testimony today. 

I'll take a step back, first, and look at how IP affects our country. You heard from the Chairman a number of compelling statistics. I'll mention that the Department of Commerce estimates that IP-intensive industries contributed to about $6.6 trillion in value added to our GDP and that we have a trade surplus in IP of about $85 billion due to the licensing of IP rights. 

The grant of a patent increases the likelihood of a startup company getting venture capital by more than 50 percent, and over five years, having an issued patent increases startup employment growth by a third and sales growth by 50 percent. Having a patent that you can defend is absolutely essential to startup businesses in America.

At the beginning of this Congress, we also, though, have to be mindful of some worrying signs that the U.S. is losing the competitive edge that it has long enjoyed by having a very strong IP system. The most recent Global Intellectual Property Index released by the U.S. Chamber of Commerce ranked the United States as tenth in the world for the strength of its patent system. In every previous year we were ranked first. 

Census data released late last year found that back in 2014, the creation of new startups was at or near a forty year low, and the share of venture capital around the world dedicated to the U.S. fell to 50 percent, down from 80 percent two decades before. Just in the last few years, two of our main global competitors, China and India, have doubled their shares of the global VC market.

These statistics in total paint a worrisome picture of the state of our legal framework that supports innovation—that intersection between patents and venture capital that is so critical to launching and growing new businesses. 

There are other concerns I've heard repeatedly from industry and from the IP community that a number of recent changes have weakened our IP system. Supreme Court decisions and federal rules changes have made it harder to enforce patents and weakened available remedies. Cases have called into question whether patents should issue at all in medical diagnostics and computer software, some of the most competitive areas of our economy. There's real uncertainty created by post-grant administration proceedings at the USPTO that can undermine confidence, particularly in technology-intensive startups. 

In sum, these and other legal developments trouble me because I think a strong IP system, as the Chairman also said, is one of our country's greatest inheritances. Article 1, Sec. 8 of our Constitution specifically sets forth a clause about the importance of patent rights and of strengthening intellectual property.  Our Founding Fathers signaled their recognition of the value of incentivizing invention and innovation by the inclusion of this clause and the original Patent Act of 1790. They laid groundwork for a strong IP system in part because many of them were themselves inventors. We need to take care that we don't lose that inheritance. 

The challenges we face today, as a nation, need the attention our greatest innovative minds.  For their innovative solutions to these challenges to become real-world products and services, we need a strong IP system. Although I have concerns about the strength of our IP system, I'm heartened by the knowledge that fostering innovation and entrepreneurship remains a strong bipartisan issue. We can work together in a way that restores our unquestioned leadership in world IP. 

Chairman Grassley's work on the Congressional Trademark Caucus is but one of many examples of bipartisanship on this issue, and another one on this Committee is the leadership of Senator Hatch, with whom I worked to co-sponsor the Defense Trade Secrets Act, and which was signed into law last year. 

As we look to maintain America's competitive edge, it's important that we have hearings like this one, celebrations of World IP Day, to remind us that protecting America's innovations and invention is one of the most important things we can be doing. 

It will allow us to reclaim our role as the gold standard in intellectual property globally, and it will serve to make our lives healthier, happier, and more productive.

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