Obama Pledges 3% of GDP to Science Research

Just about 10 days ago, on April 27, 2009, President Barack Obama gave a speech at the National Academy of Sciences.  In this speech the President pledged “3 percent of our GDP to research and development.”  With a GDP of $14,075.5 billion, that would equate to research spending of $422 billion.  As  you can imagine, this announcement was received with plenty of cheers.  Oddly, however, the word “patent” was absent from President Obama’s speech. If the Obama Administration really wants to foster innovation then they need to significantly raise the budget of the Patent Office and give the USPTO the tools and ability to issue patents in a technologically relevant time frame.  Unfortunately, with such a bold proclamation of re-dedication to science, the absence of the word “patent” may be prophetic.  I certainly hope not though.

There remains a lot of unspecified spending needed to reach 3% of GDP. What President Obama identified in terms of specific funding includes:

• $150 billion over ten years to invest in sources of renewable energy as well as energy efficiency.
• NASA development of  new space-based capabilities to help us better understand our changing climate.
• Increasing funding for the National Institutes of Health including $6 billion to support cancer research.
• States making strong commitments and progress in math and science education will be eligible to compete later this fall for additional funds under the secretary of education’s $5 billion Race to the Top Program.

Here are some of the highlights of the speech, at least in so far as I could tell:

[T]here are those who say we cannot afford to invest in science, that support for research is somehow a luxury as moments defined by necessities. I fundamentally disagree. Science is more essential for our prosperity, our security, our health, our environment, and our quality of life than it has ever been before.

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A half century ago, this nation made a commitment to lead the world in scientific and technological innovation, to invest in education, in research, in engineering, to set a goal of reaching space and engaging every citizen in that historic mission.

That was the high water mark of America’s investment in research and development. And since then, our investments have steadily declined as share of our national income. As a result, other countries are now beginning to pull ahead in the pursuit of this generation’s great discoveries.

Now, I believe it is not in our character, the America character, to follow. It’s our character to lead. And it is time for us to lead once again. So I’m here today to set this goal. We will devote for than 3 percent of our GDP to research and development. We will not just meet, but we will exceed the level achieved at the height of the space race through policies that invest in basic and applied research, create new incentives for private innovation, promote breakthroughs in energy and medicine, and improve education in math and science.

This represents the largest commitment to scientific research and innovation in American history. Just think what this will allow us to accomplish.

Solar cells as cheap as paint. Green buildings that produce all the energy they consume. Learning software as effective as a personal tutor. Prosthetics so advanced that you could play the piano again. And expansion of the frontiers of human knowledge about ourselves and the world around us.

We can do this. The pursuit of discovery half a century ago fueled our prosperity and our success as a nation in the half century that followed. The commitment I am making today will fuel our success for another 50 years. That’s how we will ensure that our children and their children will look back on this generation’s work as that which defined the progress and delivered the prosperity of the 21st century.

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Vannevar Bush, who served as scientific adviser to President Franklin Roosevelt, famously said, basic scientific research is scientific capital. The fact is an investigation into a particular physical, chemical, or biological process might not pay off for a year or a decade or at all. And when it does, the rewards are often broadly shared, enjoyed by those who bore its costs but also by those who did not.

And that’s why the private sector generally under-invests in basic science and why the public sector must invest in this kind of research because while the risks may be large, so are the rewards for our economy and our society. No one can predict was new applications will be born of basic research, new treatments in our hospitals or new sources of efficient energy, new building materials, new kinds of crops more resistant to heat and to drought.

Rather than looking back to FDR or JFK, President Obama needs to only look back as far as President Ronald Reagan to see what is possible when a President takes interest in the future of innovation.  When Reagan took Office he sent a clear message to the Patent Office that he wanted to get the average time a patent application remains pending down to 18 months.  Today, that would be an extremely welcome message coming from the President because it would shave some 14+ months off the average pendency of a patent application.  President Reagan also ordered the acceleration of superconductivity related innovations, as part of a national strategy to make sure that the U.S. did not concede a leading role in this developing technology to Japan.  This forward thinking approach to innovation by President Reagan leveraged the Patent Office, and President Obama could learn well from this lesson.  We can reach 18 months pendency, and the President can have a positive impact on innovation through forward thinking administrative patent policies.

One strong signal that President Obama could make with respect to the importance of the patent system is to appoint someone who has patent experience.  For too long now the appointment of Director of the PTO has become a political position, rather than a position for someone capable of handling the challenges of shepherding the American innovation system.  Right now many in the industry believe that President Obama has selected his appointment to lead the Patent Office, and his selection is going through the vetting process.  I have heard rumors that at least one candidate has refused the job when it was offered, although I am not going to name names here.  I personally believe the leading candidate is now David Kappos, who is a Vice President and Assistant General Counsel at IBM.  The purveyor of Patently-O, Professor Dennis Crouch, also suspects it may be Kappos who stands ready to be nominated.   I can’t speak for Professor Crouch, but I personally have no inside information on the appointment of Kappos, although he fits the bill with respect to someone who is knowledgeable, comes from an important constituency for both the Patent Office and the President, and with patent reform breaking down in Congress once again this appointment could appease the tech sector in lieu of getting the legislative reforms they want.

Still, even if President Obama appoints Kappos or someone else with patent experience, he needs to take a leadership role.  Having the federal government pump money into research and development is fine, but not the end-all-be-all.   The success of the Bayh-Dole legislation, which grants colleges and universities rights to the innovations they create, has been a huge success.  The federal government provides seed money for basic scientific research, which is then licensed out to industry, with funding coming back to universities.  This model works, but it works because of the existence of a patent system that secures exclusive rights.  There is nothing wrong with government believing in science, but what will make it worthwhile is when there are exclusive rights that attract industry and investors.  Therefore, any investment in scientific research makes sense if and only if there is a private structure capable of capitalizing on the groundwork that has been laid.

The Patent Office needs help.  I believe that over the last several months there have been strides made that will pay dividends in the future.  We cannot, however, ignore that previous political appointments have caused damage to the patent system.  I am not typically a proponent of throwing money at a problem, because that usually doesn’t fix the problem.  In this situation, however, the government needs to give the Patent Office more funding so they can hire more quality people, engage in greater training, hire more attorney clerks for the Board of Patent Appeals and hire support staff and trainers to really assist examiners do a better job.

Mr. President, doubling the Patent Office budget from $2 billion to $4 billion would go a long way.  During recent budget debates your Press Secretary, Robert Gibbs, explained that signing a $410 billion budget bill with over 8,000 earmarks totaling $8 billion was about as good as can be expected.  There was even joking that $8 billion was a rounding error in Washington.  Sadly, that is probably true.  So one-half of that “rounding error” given to the USPTO should hardly be missed, and would do a lot of good!