[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
ENHANCING PATENT DIVERSITY FOR AMERICA'S INNOVATORS
=======================================================================
HEARING
before the
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
SECOND SESSION
----------
HEARING HELD
JANUARY 15, 2020
----------
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 116-067
Available via the GPO Website: www.govinfo.gov
ENHANCING PATENT DIVERSITY FOR AMERICA'S INNOVATORS
ENHANCING PATENT DIVERSITY FOR AMERICA'S INNOVATORS
=======================================================================
HEARING
before the
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
SECOND SESSION
__________
HEARING HELD
JANUARY 15, 2020
__________
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 116-067
Available via the GPO Website: www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
38-875 WASHINGTON : 2020
HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA VELAZQUEZ, New York, Chairwoman
ABBY FINKENAUER, Iowa
JARED GOLDEN, Maine
ANDY KIM, New Jersey
JASON CROW, Colorado
SHARICE DAVIDS, Kansas
JUDY CHU, California
MARC VEASEY, Texas
DWIGHT EVANS, Pennsylvania
BRAD SCHNEIDER, Illinois
ADRIANO ESPAILLAT, New York
ANTONIO DELGADO, New York
CHRISSY HOULAHAN, Pennsylvania
ANGIE CRAIG, Minnesota
STEVE CHABOT, Ohio, Ranking Member
AUMUA AMATA COLEMAN RADEWAGEN, American Samoa, Vice Ranking Member
TROY BALDERSON, Ohio
KEVIN HERN, Oklahoma
JIM HAGEDORN, Minnesota
PETE STAUBER, Minnesota
TIM BURCHETT, Tennessee
ROSS SPANO, Florida
JOHN JOYCE, Pennsylvania
DAN BISHOP, North Carolina
Melissa Jung, Majority Staff Director
Justin Pelletier, Majority Deputy Staff Director
Kevin Fitzpatrick, Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Nydia Velazquez............................................. 1
Hon. Steve Chabot................................................ 3
WITNESSES
Ms. Andrea Ippolito, Program Director of W.E. Cornell, Cornell
University, Ithaca, NY......................................... 4
Dr. Rashawn Ray, David M. Rubenstein Fellow, The Brookings
Institution, Washington, DC.................................... 6
Ms. Janeya Griffin, Managing Member and Principal Consultant, The
Commercializer, LLC, Lancaster, CA............................. 8
Mr. Rick C. Wade, Vice President, Strategic Alliances and
Outreach, U.S. Chamber of Commerce, Washington, DC............. 10
APPENDIX
Prepared Statements:
Ms. Andrea Ippolito, Program Director of W.E. Cornell,
Cornell University, Ithaca, NY............................. 25
Dr. Rashawn Ray, David M. Rubenstein Fellow, The Brookings
Institution, Washington, DC................................ 35
Ms. Janeya Griffin, Managing Member and Principal Consultant,
The Commercializer, LLC, Lancaster, CA..................... 42
Mr. Rick C. Wade, Vice President, Strategic Alliances and
Outreach, U.S. Chamber of Commerce, Washington, DC......... 56
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
Statement of Holly Fechner, Covington & Burling LLP on behalf
of Innovation Alliance..................................... 62
Statement of Incubate........................................ 67
Statement of Susie M. Armstrong, Senior Vice President,
Engineering, QUALComm, Inc................................. 71
Success Act combined written testimonies from 24 witnesses... 81
Success Act transcript, Alexandria, VA....................... 212
Success Act transcript, Detroit, MI.......................... 304
Success Act transcript, San Jose, CA......................... 490
Success Act, Inventor letter to Hon. Velazquez............... 609
ENHANCING PATENT DIVERSITY FOR AMERICA'S INNOVATORS
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WEDNESDAY, JANUARY 15, 2020
House of Representatives,
Committee on Small Business,
Washington, DC.
The Committee met, pursuant to call, at 11:31 a.m., in Room
2360, Rayburn House Office Building. Hon. Nydia Velazquez
[chairwoman of the Committee] presiding.
Present: Representatives Velazquez, Finkenauer, Golden,
Kim, Davids, Chu, Evans, Schneider, Delgado, Houlahan, Craig,
Chabot, Balderson, Hagedorn, Stauber, Burchett, and Joyce.
Chairwoman VELAZQUEZ. Good morning. The Committee will come
to order.
I would like to start by thanking all of our witnesses for
coming today to participate in this important hearing.
As the Chair of the House Small Business Committee, I see
every day how innovation and invention drive entrepreneurship.
An important part of how we support American inventors is
through our patent system. Applying for and obtaining a patent
allows small firms to gain access to capital, find licensing
deals, and level the playing field with larger competitors--all
of which lead to jobs and economic growth.
However, women, minorities, and low-income individuals from
urban and rural America are significantly underrepresented in
the innovation ecosystem. The Institute for Women's Policy
Research reported that in 2016, less than 20 percent of U.S.
patents listed one or more women as inventors, and under 8
percent listed a woman as the primary inventor. Research also
reveals that only six patents per million were attributed to
African American inventors. Additionally, children who are born
to high-income families are 10 times more likely to obtain a
patent than children from below-median income families.
This severe underrepresentation not only hurts these
groups, but the economy as a whole. Reports show the U.S. GDP
would grow by 4.6 percent if more women and minority inventors
were included in the patent system. This is particularly
troubling for low-income communities and rural America that are
already suffering from being on the wrong side of the digital
divide. That is why this Committee held a staff briefing on
rural innovation to educate Members and staff on the obstacles
inventors and tech founders face in building innovation hubs in
rural America.
As the Chairwoman of this Committee, I am dedicated to
ensuring that every corner of America has equal access to the
patent system. Doing so is not only the right thing to do; it
makes economic sense to harness the potential of all Americans
to fully support innovation and competitiveness.
During today's hearing we will hear from experts on
barriers to entry in the patent system, how we can craft public
policy to increase diversity, and other challenges facing women
and minorities in STEM-heavy industries.
One way to improve the intellectual property system is
gathering better information on who is applying for patents.
Thanks to the leadership of the Ranking Member, Mr. Chabot, his
legislation, the SUCCESS Act, required the USPTO to look at the
participation of women, minorities, and veterans in the patent
system. That bill and its report were a great first step.
However, a key finding was that there is a limited amount of
publicly available data regarding the participation rates of
women, minorities, and veterans.
If you cannot measure it, you cannot improve it. This lack
of research and reporting on patent applicant demographic data
makes it difficult for policymakers to advance legislation that
will foster inclusive innovation.
I have mentioned many times that nearly 85 percent of SBA
loan applicants voluntarily fill out the demographic data that
is collected by SBA. This provides the Committee with valuable
insight regarding the small businesses utilizing the SBA for
access to capital.
The IDEA Act, which I introduced earlier this Congress,
builds on the SUCCESS Act by collecting patent applicant
demographic data on a voluntary basis at the application stage
and directing the USPTO to produce reports. Collecting and
reporting this valuable information will drive better policy
and help close the patent gap faced by women, minorities, and
others. It will also provide insight so that we can make smart,
targeted investments to increase the pool of inventors and
entrepreneurs.
At the same time, we must also address some of the barriers
many Americans have obtaining patents in the current system,
including increased diversity in venture capital and the tech
industry, robust support for women and minorities in STEM
education, and congressional support of the SBIR program.
Today, women received just 2.2 percent of venture capital
and under 3 percent of venture-backed founders were Black or
Latino. Further, women hold less than 20 percent of U.S. tech
jobs and only 5 percent are in positions of leadership at
technology companies. Similarly, African Americans hold less
than 15 percent of tech positions and Latinos 14 percent.
Clearly, more must be done to increase diversity.
Supporting STEM education and the SBA's SBIR program are
two other important ways to address the lack of diversity in
the technology sector. Studies show that 75 percent of girls
who have participated in hands-on STEM activities are empowered
to seek careers in technology, while government programs like
SBIR have made strides to foster participation by women and
minorities through their national road show.
I look forward to hearing from today's witnesses and
working with my colleagues on both sides of the aisle to create
meaningful policies that foster more opportunities for all
Americans to innovate, seek patent protection for their
inventions, and reap the benefits of entrepreneurship.
I now would like to yield to the Ranking Member, Mr.
Chabot, for his opening statement.
Mr. CHABOT. Thank you, Madam Chair, and thank you for
holding this important meeting today.
Today, as you indicated, the Committee will address the
need for increased diversity in U.S. patents. Intellectual
property (IP) plays a vital role in protecting creative and
innovative products and ideas. Our Nation's small businesses
represent about 96 percent of employer firms in manufacturing
industries with a high number of patents. Studies show that
small business owners with IP protections can earn over 30
percent more in revenue compared to their counterparts who have
none. Firms with IP rights also pay on average 20 percent more
in wages.
The process for obtaining these protections can be
challenging. Some small business owners are not even aware that
they should protect their innovative products and ideas with
intellectual property protections.
In the last Congress, I was involved in helping to get the
SUCCESS Act passed. This law became the starting point for this
hearing and gave the U.S. Patent and Trademark Office the
opportunity to collaborate with the SBA in order to study and
reach recommendations for how to better include women and
minorities in entrepreneurship and patent activities.
Today, we will hear from a panel of very distinguished
witnesses who will help us think about what the next steps
should be in ensuring that there is patent diversity. I look
forward to hearing what we can do to foster America's creative
small businesses moving forward.
Again, we want to thank all our panel members for being
here this morning. We look forward to their testimony and
asking questions, and I yield back.
Chairwoman VELAZQUEZ. Thank you, Mr. Chabot. The gentleman
yields back.
If Committee Members have an opening statement, we would
ask that they be submitted for the record.
I would like to take a minute to explain the timing rules.
Each witness gets 5 minutes to testify and Members get 5
minutes for questioning. There is a lighting system to assist
you. The green light comes on when you begin, and the yellow
light means there is 1 minute remaining. The red light comes on
when you are out of time, and we ask that you stay within that
timeframe to the best of your ability.
I would now like to introduce our witnesses on today's
first panel.
Our first witness today is Ms. Andrea Ippolito. Ms.
Ippolito currently serves as Executive Director of Engineering
Management Program and creator of W.E. Cornell at Cornell
University, which works to increase the number of women in
Cornell's STEM-based entrepreneurship programs. Prior to
joining Cornell, she served as the Director of the Department
of Veterans Affairs Innovators Network within the VA Center for
Innovation. In this capacity, Ms. Ippolito designed and oversaw
the creation of a $10.5 million program that provides tools and
resources to VA employees to develop innovations that improve
the experience of our veterans. Ms. Ippolito pursued doctoral
studies in the Engineering Systems Division at MIT and also
completed her M.S. in Engineering and Management at MIT.
Welcome, Ms. Ippolito.
Our second witness is Dr. Rayshawn Ray. Dr. Ray, a David M.
Rubenstein Fellow in Governance Studies at The Brookings
Institution, is Associate Professor of Sociology and Executive
Director of the Lab for Applied Social Science Research at the
University of Maryland, College Park. Dr. Ray's research
addresses the mechanisms that manufactures and maintains racial
and social inequality. Dr. Ray has published over 50 books,
articles, and book chapters, and nearly 20 op-eds on the
intersection of race, gender, and work. Welcome, Dr. Ray.
Our third witness is Ms. Janeya Griffin. Ms. Griffin is
founder and CEO of The Commercializer, a strategic consulting
firm that collaborates with entrepreneurs and institutions to
bring ideas and talents to fruition and increase economic
growth opportunities. Focusing on technology, entrepreneurship,
and inclusive innovation, Ms. Griffin is an experienced
business development strategist assisting a range of client--
from small business owners to historically black colleges and
universities, to underserved community organizations. Welcome.
Now I yield to the Ranking Member to introduce our final
witness.
Mr. CHABOT. Thank you, Madam Chair.
Our final witness will be Rick Wade, who is the vice
president of Strategic Alliances and Outreach at the U.S.
Chamber of Commerce. Previously, he worked with the Department
of Commerce Economic Development Administration and the
Minority Business Development Agency. Before joining the
Chamber he was the deputy chief of staff to former Secretary of
Commerce, Gary Locke, and a member of the White House
Interagency Task Force on Federal contracting opportunities for
small businesses. He received his B.S. from the University of
South Carolina, an MPA from Harvard University, and was awarded
honorary doctorates from Benedict College and from South
Carolina State University. We welcome you here this morning,
Mr. Wade. Thank you.
Chairwoman VELAZQUEZ. Thank you, Mr. Chabot.
Ms. Ippolito, you are now recognized for 5 minutes.
STATEMENTS OF ANDREA IPPOLITO, PROGRAM DIRECTOR OF W.E.
CORNELL, CORNELL UNIVERSITY; DR. RASHAWN RAY, DAVID M.
RUBENSTEIN FELLOW, THE BROOKINGS INSTITUTION; JANEYA GRIFFIN,
MANAGING MEMBER AND PRINCIPAL CONSULTANT, THE COMMERCIALIZER,
LLC; RICK C. WADE, VICE PRESIDENT, STRATEGIC ALLIANCES AND
OUTREACH, U.S. CHAMBER OF COMMERCE
STATEMENT OF ANDREA IPPOLITO
Ms. IPPOLITO. Thank you, Chairwoman Velazquez, Ranking
Member Chabot and members of the Committee for inviting me to
speak here today. I am incredibly honored to be here as a
citizen, biomedical engineer, entrepreneur, and faculty member
at Cornell University.
At Cornell, I focus my teaching efforts on cultivating
women entrepreneurs in the sciences, where I serve as a
lecturer in the College of Engineering and SC Johnson College
of Business. I also direct a program called Women Entrepreneurs
Cornell (W.E. Cornell) at the Center for Regional Economic
Advancement, a hub at Cornell for several entrepreneurship
programs.
In my testimony, I will focus on the challenges facing
women in obtaining patents. However, the challenges I will talk
about today also apply to other minority groups and are often
felt even more acutely by men and women of color.
Today, women make up just 12 percent of all patent
inventors. If we continue business as usual, it will take an
estimated 116 years to reach gender parity in patenting. This
is not an acceptable status quo.
Innovation is the cornerstone of our economy. We need to be
bringing more and diverse people into the innovation ecosystem
to remain competitive on the global stage. The USPTO says if
women, minorities and low-income individuals were to invent
patent technology at the same rate as white men from high-
income households, the rate of innovation in American would
quadruple.
Now, let's take a look at the barriers. It is important to
note up front that many of the barriers facing women in the
patenting process are the same obstacles that women battle in
the workplace at large--systemic gender discrimination and lack
of access to institutional resources and mentoring in the right
fields.
Women are actually making significant gain in STEM fields
and entrepreneurship, participating in these fields at greater
rates than ever before. At Cornell University, 50 percent of
all undergraduate engineering students are women. However, the
growing number of women in STEM fields has not translated to
increases in female patent inventors.
But getting more women into STEM fields is not enough. The
real gap comes from the rate of women involved in patent-
intensive fields, such as electrical and mechanical
engineering. We also see far fewer women seeking patents in
private industry than in the academic sector. Given that 85
percent of patents go to private industry, this presents a
challenge to gender parity.
So why this gap? The existing research suggests that a lack
of exposure to women in patent-producing fields is a key cause
of sluggish growth in female innovation. Basically, it is a
vicious cycle. A lack of women in these fields mean a lack of
mentors, role models, and sponsors for aspiring women inventors
seeking guidance and resources to innovate.
Speaking from personal experience, my mother was an
electrical engineer and constantly exposed me to STEM fields
growing up. Her example created a pathway for me, which I hope
to pass on to my daughter who is here with me today. If we are
serious about raising the rates of women filing for and
obtaining patents, we need to focus more resources on creating
pathways to innovation and patenting for individuals in the
academic sector and by bringing more women into patent-
intensive fields.
Part of creating that pathway is addressing the high cost
of patenting. The cost of patenting can range from $5,000 to
$20,000 depending on the complexity of the technology. For
individuals, the cost almost always falls directly on the
inventor. The cost is often a heavier burden for women
inventors due to continued gender-wage disparity and lack of
access to venture capital or seed stage investment. Note that
just 2 percent of venture capital in the U.S. goes to women-
only founders.
Women also bear a disproportionate share of the
responsibilities for child rearing and they point to child care
costs as a key barrier to pursuing patents. A 2011 study found
that patenting rates for women academics with children are
lower than men and women faculty without children. And many
academics actually increase patent activity with parenthood.
Now, there are a few ways we can start to address the
barriers facing women in the patenting process. First, the
Federal Government should consider directing resources to
establishing programs that provide onramps dedicated to
increasing women's and minority group exposure to the patent
and commercialization process. These resources should be
directed to sectors in which women are currently pursuing
patents, such as the academic sector, as well as for bringing
women into patent-intensive fields. Specifically, we recommend
that the SBA and USPTO consider a joint initiative which would
create funds for onramp programs that focus on women and
minorities.
Second, these on-ramp programs should be feeders to
existing entrepreneurship initiatives in the university,
community, or region, such as the NSF I-Corps program among
others.
And third, we need to address the cost of applying for a
patent. Tailored programs and entrepreneurship initiatives
should consider specific funding for patent support to cover
the cost of applying for parents and hiring the appropriate
legal counsel.
In conclusion, let's tackle this together to bring untapped
talent into the innovation sphere, and support more equitable
and just economic prosperity across our Nation. I would be
happy to answer any questions that you have.
Chairwoman VELAZQUEZ. Thank you, Ms. Ippolito.
Dr. Ray, now you are recognized for 5 minutes.
STATEMENT OF RASHAWN RAY
Dr. RAY. Chairwoman Velazquez, Ranking Member Chabot, and
distinguished members of the Committee on Small Business, thank
you for inviting me to testify on Enhancing Patent Diversity
for America's Innovators. I am currently a David M. Rubenstein
Fellow at The Brookings Institution and an associate professor
of Sociology at the University of Maryland. I am also the
executive director of the Lab for Applied Social Science
Research (LASSR). At LASSR, what we do regularly partner with
government agencies, organizations, and corporations to conduct
objective research evaluations and develop innovative research
products, such as our virtual reality work with law enforcement
and incarcerated people.
My comments will primarily focus on the importance of
collecting data. What are public attitudes, how do people
behave, and why is it important to collect demographic data?
A majority of Americans want to be in control of who
collects data on them, what is collected, for how long that
data are stored, and what the data will be used for. However,
context matters. For example, 90 percent of Americans view
their social security number as very sensitive, whereas, only 8
percent view their purchasing habits as being very sensitive.
About 80 percent of Americans report having awareness that the
government collects information about verbal, written, and
online communication. And people seem to be quite comfortable
with credit card companies collecting and storing data on them,
followed closely by the government. They are much less likely,
however, to be comfortable with websites they visit online, as
well as cable and cellphone companies. Over 50 percent of
Americans think that the government should be able to store
data for a few years or as long as they need to. At the same
time, however, slightly less than one-third of Americans
perceive the government will keep their data safe and private.
This is comparable to views about cellphone companies and cable
companies. Partly, this simply has to do with a decline in
public trust and social institutions. However, the public is
much more likely to trust science and medicine than other
social institutions.
So, do people actually voluntarily provide demographic
information on a survey when asked? In short, yes. My
experience collecting data is that people overwhelmingly answer
demographic questions on surveys. I have conducted surveys and
interviews with the general public; police officers; students;
families; parents; employees of companies; members of religious
organizations; protestors and march attendees, people who have
lost large amounts of weight; people living in urban, suburban,
and rural areas; people on the west coast, the south, east
coast, as well as the mid-west; and other high-risk groups. I
have conducted these surveys and interviews in-person, online,
on paper, and on tablets and other smart devices. I have asked
demographic questions verbally, too, and the response rate is
similar.
Generally, I have asked respondents an assortment of
questions ranging from questions about police-civilian
relationships to sexual assault on campus, to issues with
family and relationships. And overwhelmingly, people still
voluntarily provide demographic information. I typically ask an
assortment of questions about demographics--gender, age, race,
ethnicity, national origin, sexual orientation, education
level, household income, military or veteran status, and
disability. I have also asked people who live in their
household, what their relationship is to these people as well
as people's political and religious beliefs.
In this regard, demographic data encompasses a host of
factors well beyond race or gender. By collecting other
factors, it gives researchers the ability to conduct
statistical analyses to determine what other factors matter in
a survey.
In a typical survey, less than 5 percent of respondents
refuse to answer demographic questions. I am also the co-editor
of an academic publication, Contexts Magazine: Sociology for
the Public, and no matter how obscure the topic, rarely do
researchers report having difficulty getting respondents to
answer demographic questions.
I want to end with three points about why it is important
to collect demographic data. First, more data are normally
better because they help to eliminate false positives. For
example, the lack of demographic data may inflate the
likelihood of certain groups catching a daily disease, having
an early onset of dementia, or even whether or not they receive
a patent or not, how many times they had to apply to receive a
patent, and then what impact that patent might actually have on
their economic growth.
Oh, and the other thing, these false positives may
inadvertently funnel resources to the wrong areas. So, by not
including demographic factors, we might be misplacing resources
and efficiencies.
Second, the collection of demographic data allows for the
determination of whether or not a sample is representative.
Representation is extremely, extremely key, whether or not we
are talking about people living in urban, or rural areas;
whether or not we are talking about across different
demographic groups, veteran status, disability status, et-
cetera.
So, if a researcher is conducting a study on vaccines, for
example, a representative sample is paramount. And I think
everyone knows that there is kind of a history of this legacy
here of what happens when you do not have a representative
sample.
If there is an over or underrepresentation of certain
groups, the analysis will then likely over or underestimate the
impact of say, in this case, vaccines and other sorts of
outcomes. I also study algorithms and we have seen that
recently as well, the impact that can have in the medical
sphere.
Third, what most Americans desire more than anything is
transparency, inclusion, and equity. Demographic data help to
provide this. A lack of demographic data often leads to bad
science, does a disservice to Americans, and inhibits the
United States' ability in continuing to be innovative and
comprehensive.
Chairwoman VELAZQUEZ. Thank you, Dr. Ray.
Ms. Griffin, you are now recognized for 5 minutes.
STATEMENT OF JANEYA GRIFFIN
Ms. GRIFFIN. Chairwoman Velazquez, Ranking Member Chabot,
and members of the Committee, good morning. Thank you for this
opportunity to discuss increasing diversity within our patent
and commercialization system. I am honored to be here with you
today.
My name is Janeya Griffin, The Commercializer. I am an
advocate for intellectual property. The first time that I truly
learned about the value of patents was not in grade school or
even college. Not in history books that were part of any common
core curriculum that I was taught. It was only after college
when I met professors who had patents who looked like me did I
believed that it was possible to obtain one.
Before becoming an advocate for IP, I was a STEM graduate
from Grambling State University. The dean of my college
recognized the entrepreneur in me and encouraged me to apply
for a fellowship program called the Integrated Technology
Transfer Network. Funded by the Department of Navy through
earmarks, it took STEM students from HBCUs and taught us the
business side of things so we could speak and understand the
technical language, then translate that into a value
proposition that business people could understand.
Unfortunately, that program was defunded in 2011.
By receiving certification in entrepreneurial technology
commercialization, I was able to learn the true value and
functionality of IP and work on tech transfer projects from
several Federal labs where I evaluated patents to determine
their commercial potential. Today, I manage and sell NASA's IP.
Having said that, I am a black woman with a very unique
skillset and only have the knowledge about the patent and
commercialization system because I went through a very
specialized program that targeted STEM students from HBCUs.
This program has created inventors, small business owners, and
even directors of SBA-funded programs. The advocacy work I do
for innovators of color allows me to speak to what I see may be
the issues that the country's patent and commercialization
process is facing.
My story about patents is not unique. I have surveyed my
colleagues, clients, and professionals within this space and
the sentiments are mostly the same. Many of them, even those
who are patent attorneys, only learned about the value of IP
when they reached grad school or as they were assigning their
ownership rights to their IP over to their soon-to-be employer.
Research shows black inventors receive six patents per
million people compared to 235 of their white counterparts. So
if you combine 13 of the Nation's NFL stadiums, only six of
those seats were for black people.
It is clear that even with the invention of the Internet,
there are still huge exposure gaps in education when it comes
to people of color seeing the contributions of people that look
like them in the history books we are learning from. We should
be highlighting and elevating inventors such as Marian Croak, a
black woman with almost 200 patents who has a proven track
record of success in this field to serve as a nationwide
ambassador for patent attainment.
The diversity gap in patents is not just an inclusion
issue. It is also an exposure to generational wealth through
patent commercialization, an access issue. And if exposure to
generational wealth can be passed down through generations,
then so can exposure to generational trauma. Before we begin to
think we can solve the diversity gap, we must first understand
how it came to be. For decades, our country's laws have placed
minorities in positions where they have had to choose their
life over their IP, even at one point being considered property
themselves.
Economist Dr. Lisa Cook discusses the correlation of
declining minority patents during the Jim Crow and race riot
era, having lost over 1,000 patents. More than 100 years prior,
in 1710, the same holds true. The Meritorious Manumission Act
of Virginia gave slave owners the rights to grant their slaves
freedom in exchange for their inventions. Hence, the systemic
issues faced by minorities in the patent commercialization
systems for decades has not only created the diversity gap but
has continued to sustain it. How can we expect to increase
diversity in patenting and commercialization if historically
the system has not been built for minorities to participate or
succeed in general? Only collecting vanity metrics such as
demographics of the inventor is not going to close the
diversity gap. In fact, we should be asking how many of those
six patents per million people are actually small business
owners as ownership of a patent by a small business generates
16 new jobs. That is 16 more opportunities for minorities and
returning citizens.
The success of this great Nation is not only dependent on
our ability to invest in programs, pathways, and institutions
which make room for a greater number of inventors, but also on
how we tell the true story of the contributions of women and
minorities in almost every sector of the American economy. Why
not fund more certificate programs like the one I went through?
If we are truly focused on increasing the diversity of patents,
we must invest in education, access, and equity at the highest
level in the most marginalized communities which will ensure
this great Nation retains it's economic vitality.
My name is Janeya Griffin, an HBCU graduate, IP advocate,
and a proud black woman. Thank you for your time.
Chairwoman VELAZQUEZ. Thank you.
Mr. Wade?
STATEMENT OF RICK C. WADE
Mr. WADE. Good morning, Chairwoman and members. I am Rick
Wade, the U.S. Chamber of Commerce's vice present for Strategic
Alliances and Outreach. I am leading our efforts to create and
expand opportunities for diverse-owned businesses and
enterprises across America. I appreciate the opportunity to
testify before you this morning.
The Chamber commends the Committee for its leadership on
issues central to increasing access to our innovation economy,
particularly among women, minorities, veterans, and other
underserved communities. Through my experience both in the
public and private sectors, I have come to understand and
appreciate that diverse-owned enterprises are key contributors
to and drivers of America's economy. The Minority Business
Development Agency (MBDA) of the U.S. Department of Commerce,
estimates that there are currently 11 million minority business
enterprises nationwide which employ over 6 million people and
generate nearly $1.8 trillion in revenue. Enhanced access to
tools like the Patent System will only strengthen these
enterprises and ensure their competitiveness in years to come.
We especially appreciate the Committee's work on the Study of
Underrepresented Classes Chasing Engineering and Science
Success Act of 2018, also known as the SUCCESS Act.
Too often, underserved communities and diverse business
owners lack the information and/or resources to take advantage
of the many forms of intellectual property protections
available to them, including our U.S. Patent System. As you
well know, the SUCCESS Act directed the U.S. Patent and
Trademark Office, in consultation with the Small Business
Administration, to identify publicly available data on the
number of patents applied for and obtained from women,
minorities, and veterans, and benefits of increasing these
numbers. The act also asked for legislative recommendations on
how to encourage and increase engagement among diverse
innovators and entrepreneurs. We recognize the leadership of
USPTO director Andrei Iancu for the report and programs that
his agency has implemented to encourage more diverse
participation in our innovation economy. The USPTO report
revealed that there is a limited amount of public available
data regarding the level of participation by women, minority,
and veterans. Only approximately 12 percent of investors named
on U.S. patents are women. Clearly, this represents a serious
issue of concern but also an opportunity as minority
communities have higher shares of women-owned enterprises. The
USPTO has resources in almost every state to help new entrants
navigate the patent process, including local partnerships with
pro bono attorneys, law school clinic programs, local libraries
where inventors can get help searching USPTO databases for
previously filed patents and trademarks and other programs. The
USPTO also recently updated its homepage to include a link to
these local resources. Now with just one click, new inventors
can access a map of the United States and then click on their
state and find in one place numerous resources to assist them
in their local areas.
This year, the USPTO will launch a Council for Innovation
and Inclusiveness to develop a national strategy for promoting
and increasing the participation of underrepresented groups and
will expand its work with other Federal agencies to develop
training materials to help elementary, middle, and high school
teachers incorporate the concepts of invention and IP creation
and protection into classroom instruction.
The report also provides legislative recommendations.
Congress could authorize a streamlined mechanism for USPTO to
undertake a voluntary, confidential biennial survey of
individuals named in patent applications that have been filed.
Congress could expand the authorized uses of grants and funds
in appropriate Federal programs to include activities that
promote innovation and entrepreneurship among underrepresented
groups.
Finally, please know that the U.S. Chamber of Commerce, the
largest business organization in the world, has stepped up its
efforts to expand opportunities for diverse-owned enterprises.
Our partnership with the Minority Partnership Development
Agency in which we are working together to address issues such
as innovation, automation, access to capital and connectivity
to the global marketplace. We are convening the heads of the
Nation's diverse chambers and other business organizations to
collectively advocate for a common business agenda to include
entrepreneurship. Our NextGen partnership with Historically
Black Colleges and Universities seeks to inspire and develop
the next generation of innovators, entrepreneurs, and business
leaders. Through a grant from the W.K. Kellogg Foundation, we
are advancing a dialogue across the business community on
Kellogg's major research port, the Business Case for Racial
Equity, assessing best practices and policies that could help
close the entrepreneurial divide. From Thomas Jennings, the
first black patent recipient in 1821 for a dry cleaning
process, to current day Dr. Lonnie Johnson, who is literally a
rocket scientist, our goal must be to continue to inspire and
develop new generations of innovators and entrepreneurs.
We look forward to working with you and walking with you on
this very important journey.
Chairwoman VELAZQUEZ. Thank you very much. Quite an
impressive group of witnesses. We really thank you for
providing such insightful information.
I am going to start by recognizing myself for 5 minutes.
Dr. Ray, in the SUCCESS Act report we found that there was
no available data concerning the number of women and minority
inventors who have applied for or received patents from the
USPTO. We also know that we need to improve patent
opportunities for all underserved entrepreneurs, including
those in rural communities. How does this lack of data impact
Congress's ability to propose legislation that will improve
opportunity for underrepresented groups?
Dr. RAY. Yeah, well, a lack of data might actually lead to
a misallocation of funds or misplacement of funds. And it might
also be about an intersection between say race, gender, and
geography. So, what you might find as we know is that there is
an underrepresentation for women and minorities, but it might
be that individuals are living in particular areas. And if we
do not capture these variety of demographic questions, we will
not be able to answer these important questions.
Chairwoman VELAZQUEZ. Do you think it is important that we
collect information to track regional patterns of innovation?
Dr. RAY. Yes, I do. I mean, geography becomes a key metric
by which to look at. In fact, in a lot of research studies, zip
code is oftentimes used as a proxy for income, wealth, and
race. If we are collecting that information, we want to make
sure that we collect an assortment of these demographic
variables because a proxy can be just as detrimental as not
collecting information.
Chairwoman VELAZQUEZ. Thank you.
Ms. Ippolito, you mentioned that more women are
participating in science and engineering occupations and
entrepreneurship, but yet, this has not translated into more
female patent holders. I heard when you said the high cost of
patents might be a factor, but do you believe that there are
any other efforts needed to ensure that a more robust pipeline
of women in STEM leads to equality in the innovation economy?
Ms. IPPOLITO. Absolutely. So we recommend that the USPTO
and SBA ignite new programs to create onramp programs taking
STEM women and other minorities, to introduce them to the
patent and commercialization processes. And in these programs
they will get exposed to role models and mentors.
There was a recent study that was done by Dr. Delgado and
Dr. Murray that shows that patents from top inventors have
higher percentages of including first-time female inventors on
their patents. What is interesting about this work is that
these top inventors are both male and female. But in
particular, female top inventors tend to include more women. So
how do we include these top inventors as part of these onramp
programs as role models, as mentors to help facilitate this
process? And what is great about these onramp programs, W.E.
Cornell being one of them----
Chairwoman VELAZQUEZ. At what level should that happen?
Ms. IPPOLITO. So they should be based in universities and
in communities. Universities are the places where STEM women
and minorities are being educated, so this is a great
opportunity to expose them at that level so that they can
continue innovating beyond the university setting.
Chairwoman VELAZQUEZ. Ms. Griffin, would you like to
comment?
Ms. GRIFFIN. Yes, I do agree with Ms. Ippolito's
sentiments. Specifically, minority institutions and HBCUs
graduate the most minorities that we know today. So by working
directly with them I think that would be the best bet.
Chairwoman VELAZQUEZ. What would you say is one of the
biggest reasons why many minority entrepreneurs fail to receive
patents?
Ms. GRIFFIN. So, I will give you three: Education. Lack of
education in terms of the patenting and commercialization
process, lack of resources, and then also the lack of access.
If we are looking in terms of representation on how many
inventors we are looking at through our history books, which is
kind of what I talked about before, we do not really see too
many of them. And it is not something that is widely known. And
so we need that representation. There are so many people that I
talked to that actually did not know anything about the patent
process until they reached graduate school. So if you think
about the many patents, especially Dr. Croak. She has 200
patents. So any time before then, if she would have been
educated as a child in her early childhood years, 200 patents
from her graduate school years until now, we have lost so much
economic opportunity from that position.
Also we need more culturally competent qualified counsel,
and so by working with them they would allow us to be able to
educate our minorities in marginalized communities.
Chairwoman VELAZQUEZ. Thank you. My time has expired.
Now I recognize the Ranking Member, Mr. Chabot.
Mr. CHABOT. Thank you very much, Madam Chair.
Ms. Ippolito, in your view, what is the biggest barrier for
women who are trying to enter the patent process, and what can
we do to help?
Ms. IPPOLITO. So the two biggest barriers are exposure and
also the high cost of patenting. So we know that there is a
growing number of STEM women that are entering this field and
they are going on to the private sector. By the way, there is
an overwhelming number of patents coming from the private
sector, particularly in patent-intensive fields like electrical
engineering and mechanical engineering. So the biggest barrier
is getting exposure to these STEM women who we know are getting
this education but we are not efficiently using that talent
pool. And so if we can direct resources, programs like the ones
the panelists have talked about to educate them and expose
them, show them role models. You cannot be what you cannot see.
And so we need to bring this exposure to K-12 programs and
university settings. And then we need to address the high cost
of patenting itself with pro bono lawyers that are qualified in
those fields and we need to give them access to these networks
of lawyers to help them facilitate this process.
Mr. CHABOT. Okay. Thank you very much.
Let me go back to Dr. Wade, if I could. Or Mr. Wade; sorry.
In your written statement you had discussed the Chamber's
annual International IP Index. Are there any trends that the
Chamber sees that could either be beneficial or nonbeneficial
for the U.S. in coming years?
Mr. WADE. Well, the IP Index, you know, the Intellectual
Property Index which measures economies across some 50
countries, I mean, what it does, it shows a correlation between
intellectual property protections, patents, job creation, and
success and growth of business. That has been a consistent
trend and probably the most important trend that I think should
be the basis of even this conversation. How do we increase
entrepreneurs and innovators across diverse communities so as
to create more jobs and create the positive forces of our
economy?
Mr. CHABOT. Okay, thank you very much.
Dr. Ray, in your opinion, why do Americans give so much,
you know, the demographic data so easily to surveyors? Are
there any risks that come with that? And anything that you
would suggest along those lines? Because, obviously, you are
legitimate. How should people make sure that they are not being
tricked into something?
Dr. RAY. Yeah, that is a great question. I think when
people know why they are giving their information they are much
more likely to give it. I think when it comes to the Federal
Government, when it becomes clear why that information is being
provided. For all of the slew of publications that I have had,
I tell people. In fact, it is required at universities to do
research that we tell people why we are collecting data on them
and what we are going to use it for. And typically, people will
do that.
I think one of the other things that is extremely important
is to capture the most people at the most time. In this
particular case, at the application phase is when you are going
to get them because, I mean, if people do not get the patent,
they are going to be less likely to fill out a survey later.
They are not as incentivized. But if you get that demographic
information from the beginning, then people are much more
likely to provide it. And I think it is common place. I think
in many regards if we are talking about gender, age, even
household income, geography, race, typically people can
pinpoint what a person looks like. And even if people's age is
slightly off by 10 years or so, people kind of have an idea of
what those demographics are and people are willing to provide
them.
Mr. CHABOT. Thank you very much.
And Ms. Griffin, could you tell us something about, you
talked about the various patents that you have been involved
in. Is there any one in particular that you have that was
particularly, you think might be helpful or help other people
out there who might have a great idea and want to get a patent
for themselves to either support their family or their business
down the line or whatever?
Ms. GRIFFIN. You are asking me if I have an actual patent?
Mr. CHABOT. Yes, I mean----
Ms. GRIFFIN. No, I did not.
Mr. CHABOT. Okay. You have not yourself. Okay. Was there
anything that you were engaged in or work with that you think
are particularly interesting or that give some information to
folks that might have a good idea out there?
Ms. GRIFFIN. Patents in particular?
Mr. CHABOT. Yes.
Ms. GRIFFIN. So there are, oh, wow, a lot of different
technologies, specifically ones that are focused on actually
solving the problems within their communities. Most times what
I see when I am working with people is that they are solving a
problem that has been specifically affected by them and most
people that they know. People solve problems that affect
themselves. And so I think that specifically when we are
talking about women, issues that women face, there are many
times where there should be issues where marginalized
communities are really being focused on. So if we are talking
about artificial intelligence, if we are talking about
different ways that we can use technologies to be incorporated
into businesses that may not actually have patents or may not
have a technical person there, they should be able to use
Federal labs or institutions that actually have repositories of
patents in order to become either tech enabled or tech based.
We are now currently in our fourth industrial revolution,
and so technology is at the core of that. And so if
entrepreneurs and small business owners are not putting
technologies into their business, owning their own patents, we
are losing out on jobs lost. We are losing out on being able to
be a part of the economy that is now being created today.
Mr. CHABOT. Thank you very much.
My time is expired, Madam Chair.
Chairwoman VELAZQUEZ. The gentleman's time has expired.
The gentlelady from Kansas, Ms. Davids, is recognized for 5
minutes.
Ms. DAVIDS. Thank you, Chairwoman. To the Chairwoman and
Ranking Member, thank you for holding this hearing today.
I say this all the time, small business is the backbone of
our country, and I think what we are talking about now is
seeing small business being impacted by innovation and being
able to own the intellectual property when you are the creator.
This past October, the House passed the Women's Business
Center Improvement Act and Rep. Hagedorn and I put that bill
forward because women's business centers we think can have a
really strong impact on entrepreneurship and supporting women
entrepreneurs.
I have at least one more question so hopefully we will get
through this quickly.
Ms. Ippolito, I wanted to see if you could talk a little
bit, because you mentioned WBCs in your testimony. If you could
talk a little bit about how programs like yours or other
programs can help either feed into women's business centers or
maybe how women's business centers can improve to maybe partner
with the types of programs that you have.
Ms. IPPOLITO. Absolutely. So at Cornell, we created Women
Entrepreneurs of Cornell, or W.E. Cornell to act as a feeder
into our existing entrepreneurship initiatives. And the reason
we did that is because we did not want to cannibalize the
number of women in our entrepreneurship programs. We wanted to
increase the number of women and minorities in our programs.
So programs like W.E. Cornell that we see at other
universities as well, but we hope programs like W.E. Cornell
can scale across the country and university-based settings, in
particular in areas outside of our technology bubbles that we
often see on the coast.
But programs like W.E. Cornell can partner with the women
business centers to increase exposure of STEM women to these
services. If you build it you cannot just assume they will
come. Women need to be invited, encouraged, inspired, frankly,
to be part of this movement so that we can have a better
economy. So programs like W.E. Cornell can partner with women
business centers and we can have directed outreach to STEM
women and minorities in these programs.
Ms. DAVIDS. So that actually, so Ms. Griffin, in your
written and verbal testimony you mentioned the program, the
Integrated Technology Transfer Network Program that you
participated in and that you did not really see this type of
opportunity until much later. And I am curious how we can talk
about getting folks more knowledgeable, interested, excited
about these kinds of, about STEM, about patents, earlier on.
And not just when folks get to that college level.
And then secondarily, if you would not mind talking a
little bit about--I do not know if you are familiar with the
women's business centers or some of the other SBA programs, but
how those might partner with like HBCUs. I would be curious to
hear that as well.
Ms. GRIFFIN. Yes. Thank you.
We have to meet them where they are. And most times when we
are talking about marginalized communities, they know nothing
about what is going on outside of where they live. Right? And
so if we are to educate them on who they could be, we have to
show them people that look like them that are actually doing
it, which is why I talked about Dr. Croak. I keep bringing her
up again because we need to actually see people that look like
us to actually put it in place where we actually believe that
it can happen because it is a tangible thing.
The Integrated Technology Transfer Network Program was a
really great program and it opened up my eyes to a lot of
different things. I did not know anything about Technology
Transfer offices. I did not know that many HBCUs do not
necessarily have them or know what to do about technology
transfer. After I graduated I went back to my HBCU and I said,
hey, where is our tech transfer office? I am thinking that this
is something that is common because we were at Cal State
University San Bernardino and they did not know what I was
talking about. And so for me, I think the education around
technology commercialization and technology transfer, because
you are looking at it from a standpoint of having either
corporations or institutions that are actually licensing these
technologies that are resulting from Federal funds versus small
business owners who are actually spending their hard-earned
money and investments into patenting, prosecution, fees, and
things of that nature.
So I think those are two very different things. And when we
want to talk about licensing for small business owners, they
are actually being able to exploit and reap most of those
benefits by getting residual income from that.
Chairwoman VELAZQUEZ. Time has expired.
Ms. DAVIDS. Thank you.
Chairwoman VELAZQUEZ. Now, we recognize the gentleman from
Tennessee, Mr. Burchett.
Mr. BURCHETT. Thank you, Chairlady, Ranking Member. Thank
you all for putting this meeting together as was stated
earlier.
I have always been an inventor at heart. I still make
bamboo skateboards, actually. Bamboo and hemp, actually.
Completely biodegradable. Everybody thinks I am going to break
my neck on them but I still ride them, much to the chagrin of
my neighbors and my wife. But anyway. And I appreciate you all
being here.
Ma'am, I appreciate you bringing your daughter her. I had a
very cool momma and she actually flew an airplane during the
Second World War. She was quite a lady, and I miss her daily.
And while Daddy was off fighting the Japanese in the Pacific,
my momma did her part for the war effort and so I was blessed.
And ma'am, when you mentioned historically black colleges,
my momma taught for 10 years at Knoxville College and was in
their hall of fame, actually. So that is cool.
And you, men, I have nothing for you all today. I dig you
all being here but I especially appreciate the ladies. And I
thank you again for bringing your daughter here with you. I
have a wonderful little girl who I got when she was five. And
started dating her momma then and I adopted her since then.
Never made more money, never been broker, never been happier in
my entire life. So thank you all.
This really does not have anything to do with what you all
have said but a fellow was in my office this week that I met
earlier oddly enough and we had talked about inventions. And he
invented something that was really cool and it got stolen from
him. Went to court, got it back. But I am wondering if any of
you all have ever heard of anybody that has an approved patent
but they have not been able to maintain it because a larger
company stole their idea. I hear a lot of that from China.
Thank you, ma'am. But I was wondering if any of you all could
name any specifics real fast.
Sir, we will start with you on the end and just come this
way.
Mr. WADE. I apologize. I cannot cite any specific examples.
I would be happy to follow up.
Mr. BURCHETT. Okay. I would like that.
Ma'am?
Ms. GRIFFIN. So I will not get into specifics because I do
not know what is public information, but I have spoken with a
few people who have those same sentiments that they do feel
like corporations are, you know, once they have presented that
information to them they basically say that they are not
interested and then they see something, whether it is in the
marketing that they shared or something that is not in their
claims, right, so they begin to use the funds that they do have
access to develop around the claims that are in those patents.
And then when you are looking at an independent patent
inventor, they do not necessarily have those funds to actually
fight in litigation and to go up against big corporations. And
so there is nothing that they can do, I mean, outside of just
coming to legislation, talking to the congressmen and
congresswomen.
Mr. BURCHETT. Right.
Ms. GRIFFIN. But, yes.
Mr. BURCHETT. Thank you.
Sir?
Dr. RAY. Yeah, I will quickly say, I mean, Lonnie Johnson,
who we mentioned before, who pretty much every kid has played
with a Nerf Gun or a Super Soaker. I mean, he actually had to
litigate and go to court. And, the patents actually helped to
preserve that for him. I think that is what is key is that it
is a long, torrid history of particularly individuals who are
under resourced, women and minorities, having their inventions
stolen from them. I mean, historically, Jack Daniels is one of
those examples with Uncle Nearest. And they tried to amend from
that.
I am from Murfreesboro, Tennessee, by the way.
Mr. BURCHETT. Thank you. I appreciate the fact that you and
I are the only people in this daggum room that do not have an
accent. So thank you.
Dr. RAY. I could go along with that.
Mr. BURCHETT. Thank you.
Dr. RAY. But I mean, I think that there are several
individuals, and I think to this point, that impacts the
application process. And that is why it is important to collect
data on the front end because you have a lot of individuals who
simply will opt out of that process because of the money and
because they are worried about getting scooped from larger
companies.
Mr. BURCHETT. Thank you.
Ma'am?
Ms. IPPOLITO. So I do not have any specifics from personal
experience, but in speaking with folks that have gone through
the patent process and that are repeat offenders, and I use
that in a positive way of those that are applying for more than
one patent, they hear these stories. And to Dr. Ray's point, if
they learn and hear of their colleagues and peers that have to
go to court and litigate which sometimes it can cost up to a
couple hundred thousand dollars if not more, then this deters
them from submitting more patents. So I think we need to fix
this. I believe there is a group of inventors that have the
Inventors Right Act and there is a lot of talk in this arena
from inventors who I have spoken with.
Mr. BURCHETT. I feel like we are the daggum Congress. We
ought to do better by working folks that come up with these
innovative ideas because I hear about them getting stolen. I
know this lady back here, I appreciate that. I have heard it
many times. So thank you all.
One quick question. I have got 17 seconds.
Ms. Griffin, where would you suggest folks go to obtain
funding for their patents? Banks?
Ms. GRIFFIN. Independent inventors, I think we are here.
They should come here. Well, no, so if we are looking at
funding that has already been allocated to help small business
owners, why are we not looking at allocating more funding to
actually help them within the patent ownership process? Data
shows that small business owners who actually own their patents
generate 16 jobs. Their sales go up 51 percent over 5 years.
And so if we are wanting to help small business owners, then we
need to help them in the ownership of their patents and be able
to help them exploit those as well.
Mr. BURCHETT. Thank you, ma'am.
Thank you, Chairlady. I appreciate your indulgence.
Chairwoman VELAZQUEZ. Thank you.
Mr. BURCHETT. Thank you, ma'am.
Chairwoman VELAZQUEZ. Now we recognize the gentlelady from
California, Ms. Chu, Chairwoman of the Subcommittee on
Investigation, Oversight, and Regulations.
Ms. CHU. Thank you.
I was certainly alarmed to see that women, especially
African Americans and Hispanics, obtain patents at lower rates
than men; that people of color obtain patents at much lower
rates than whites; that individuals from lower income
backgrounds are much less likely to obtain a patent than
children of wealthier families. And yet I know as Co-Chair of
the Congressional Creative Rights Caucus how important
intellectual property and IP protections impact our economy.
These protections are especially important for my district in
southern California which is home to countless of these small
business owners and innovators who hold IP in a wide variety of
fields from technology to art, music and movies. And so I
really feel strongly that as members of Congress we have a
responsibility to foster their innovation and ensure that the
U.S. is an environment where ingenuity and inventiveness can
thrive and prosper.
We need to make sure that we have robust and thorough
demographic data to understand how we can ensure the patent
system is working for traditionally underserved communities
like minorities, women, and veterans, and it means that we need
more data and better cooperation between Federal agencies,
including the U.S. Patent and Trademark Office.
Ms. Griffin, you have such a powerful story about how
patents changed your life. You testified to how patents can
unlock generational wealth. Can you expand on that statement
and explain why patents are a powerful tool in reducing
economic inequality and why it is so important that
historically disadvantaged Americans can fully benefit from
patent protections for their intellectual property?
Ms. GRIFFIN. Absolutely. So when we talk about patents, we
talk about generational wealth, right, and how intellectual
property is equitable to ownership which is also equitable to
generational wealth. And so if we are to own patents, then what
does that do for our economy, for our marginalized communities,
for our historically black college universities if they are to
actually start playing in the tech transfer spaces. And having
return on investments from R&D funding by producing patents and
then being able to exploit those by licensing those patents,
creating spinoff companies specifically around those
communities, utilizing the entrepreneurs within those
universities who are also minorities, to utilize those
technologies, to improve on those technologies, it becomes this
ecosystem in the cycle of event where you are now creating
generational wealth across generations. Specifically, when we
start talking about Federal Government, how can we actually be
using HBCUs as a conduit to do this? And so even with SBIR
funding, STTR funding, looking at nontraditional principal
investigators who are in our marginalized communities, they may
be small business owners who do not have a technical
background, but what we see is in the startup space you can
actually be a nontechnical CEO and then find a CTO to actually
help you push your company forward. And so if we are to do
that, then we could take small business owners with
nontechnical backgrounds, pair them with principal
investigators at historically black colleges and universities
or minority-serving institutions and then create generational
wealth through that way.
Ms. CHU. Thank you for that.
Ms. Ippolito, my district in southern California is home to
744 independent small business inventors and they have told me
personal stories about the prohibitive costs associated not
only with applying for a patent but also defending their
intellectual property rights from sometimes frivolous legal
challenges. In fact, they said that large companies are able to
exploit the USPTO system to overwhelm independent inventors and
small businesses with litigation and legal fees by endlessly
challenging the validity of their patent.
But I was struck about your case study of a female
entrepreneur expecting to pay between $4,000 to $8,000 in
filing and fees, and also, of course, she has childcare costs
that limit her financial resources. So how can the expectation
of high filing legal fees dissuade some innovators from
engaging in the patent process and how could this
disproportionately affect minority and female entrepreneurs?
Ms. IPPOLITO. Yeah, thank you for that question.
So the example that you mentioned is Dr. Sarah Reyes. She
recently obtained her doctoral degree at Cornell and she has a
countertop breast milk pasteurizer that she is currently going
through the filing process right now. She is about to be a
post-doc where you do not make a lot of money, and thankfully,
she is in programs like entrepreneurship lab or eLab at Cornell
and W.E. Cornell that provide her with a small stipend of
money, $5,000 to help cover those costs.
But if you do not provide those funds to cover those legal
fees and the patent fees itself, then folks like Dr. Reyes will
be limited even pursuing those patents. So providing these
small stipends as part of onramp programs like W.E. Cornell can
help increase the number of women and minorities that are
applying for patents. Or else it is just cost prohibitive and
we are not going to see this increase.
Ms. CHU. Thank you.
I yield back.
Chairwoman VELAZQUEZ. Time has expired.
Mr. Evans from Pennsylvania, Vice Chairman of the Committee
is recognized for 5 minutes.
Mr. EVANS. Thank you, Madam Chair. And as usual, I thank
you, Madam Chair, and the Ranking Member for your leadership on
these issues. This is really very important.
Women and minorities are less likely to receive venture
capital. In 2018, women entrepreneurs in tech brought in just
22 percent in U.S. venture capital investment. Just 1 percent
of venture backed founders were African Americans and 1.8 were
Hispanic. Further, nearly three-fourths of venture capital
firms have no female investors. Minorities represent just 3 to
4 percent of venture capital.
Now, this is a question to all of you so you will have your
chance since I only have 4 minutes and 16 seconds. To any of
the witnesses, can you explain the disparity in venture capital
expenditures and make suggestions on how we can increase the
chances of women and minority in tech of receiving venture
capital?
So I will go down the line and start with Mr. Wade.
Mr. WADE. Thanks. That is a very important issue, capital.
And one of the things we must understand is that investors are
attracted to patents.
Mr. EVANS. Yes.
Mr. WADE. And that is a very important variable in this
conversation of access to capital. I also believe that mentor-
protege programs, how do we build the kinds of relationships
between venture capitalists and other funders with innovators
and entrepreneurs from minority communities are very important.
That is one of the initiatives actually that we are developing
through the U.S. Chamber.
Mr. EVANS. Ms. Griffin?
Ms. GRIFFIN. So I would also like to comment on what he
said. I have the same sentiments. But as I was doing my
research it says the first patent granted increases the
probability of securing VC funding by 53 percent. So it is
very, very important that we get small business owners,
specifically black women, to start actually monetizing their IP
and actually patenting that intellectual property. We are the
most educated, the most entrepreneurial, and with that we need
to also have the most patents as well. So, yes.
Dr. RAY. I will just quickly say that the collection of
data becomes important by understanding what happened before
the application, during the application, and after the
application. So, what the SUCCESS Act is aiming to do is
commendable in a sense that essentially is doing the
longitudinal survey to ask people over time. That becomes
extremely, extremely key to figure out: where are the gaps in
the pipeline? Where are the leaks in the pipeline? Right now,
we simply only have data kind of on who is applying and who is
not and whether or not they are awarded that. But the pipeline
extends well beyond that and a collection of data will help
better address these questions so that resources can then be
allocated specifically to deal with social networks, to deal
with a lack of capital. I mean, we already know from minority
and women-owned businesses they are simply less likely to get
loans from banks and a lot of that is systemic. These are
things that can be prevented. This prevents them from bringing
their work to scale and that becomes extremely important for
individuals who are low income in urban and rural areas because
research shows that they are more likely to return to where
they are from. This means they are helping to generate jobs in
rural areas, urban areas, and low-income areas that previously
did not have any.
Ms. IPPOLITO. I want to agree with everything that has been
said so far. So we know that venture capitalists are
overwhelmingly white males, and if you talk to any venture
capitalist they say how they get to know entrepreneurs is
through introductions. So if you are not embedded in these
networks then you cannot get an introduction to venture
capitalists and then you cannot raise funding. And we know that
getting a patent helps get venture funding. So that is one
point.
Secondly, a lot of the process of pitching and getting
investment from venture capitalists frankly has been optimized
for men. An example of this is a study by Dr. Murray where she
looked at both male and female entrepreneurs and she recorded
their voice with the exact same content. And it was found that
men were seen as a more attractive investment. They even added
video and, of course, they saw the same thing. But as you can
see that it has been optimized for men to receive this funding
overall.
Mr. EVANS. I thank you.
Madam Chair, I hope with the question that I just asked,
yes, protecting patents are important and what we need to do,
but at the end of the day, if you are going to move these
patents to be commercialized to the marketplace and try to
address the problems in communities, the basis is they need
capital. They need access. So you, I know, have been conducting
sessions with tech-fins and other entities but that really
needs to be a discussion as a follow-up. So I only suggest that
in your thinking about that.
Thank you. I yield back.
Chairwoman VELAZQUEZ. The gentleman yields back.
Now we recognize the gentleman from Maine, Mr. Golden,
Chairman of the Subcommittee on Subcontracting and
Infrastructure for 5 minutes.
Mr. GOLDEN. Thank you, Madam Chair.
I am going to ask a question that I do not know the answer
to already so it is, you know, hopefully, one out of curiosity
but it is specific to some of my constituents in Maine.
Maine is I think per capital one of the least diverse,
whitest states that we have in the country, very large, very
rural. But in the last couple of decades we have had a sizeable
group of Somali Americans move in to the community as well as a
fair number of asylum seekers. And I found that because of
language barriers, for the first generation, anyway, what we
often see is a lot of people that become small business owners.
They bring a lot of skills with them. The language barrier kind
of stands in the way though. And as a result, it is hard for
them to get into whatever industries we have in that area. And
so they are very creative in how they find a way to make things
work and make a living, become entrepreneurs themselves. But
something we often see, particularly with, or technical issues
or having to deal with the bureaucracy of agencies like SBA is
that language barrier can be very frustrating and/or prevent
them from accessing the kind of assistance that they need to
really maximize their skills and become successful.
So I was just curious, particularly with patent at USPTO,
is there good resources there to help people overcome language
barriers or is that lacking? And if it is lacking, any
recommendations on where people can go to get help with that
kind of a challenge?
Ms. IPPOLITO. Not to my knowledge. I do not know of any
resources off the top of my head.
Mr. WADE. I do not as well but I would like to just make
one observation of the advantage of that language also. What we
do know is that minority firms, owned enterprises are more
likely to export, to do business in countries abroad. And so
how we also view language barriers could also be a language
opportunity in not just the patent process but as we seek to
grow more entrepreneurs, particularly who are exporting their
products abroad.
Dr. RAY. I just want to make one quick point that speaks to
this. When I did my analysis of patents over time with the data
that we have available, one big thing we know is that U.S.
patent recipients has decreased over time and foreign
recipients have increased. And a large percentage is coming
from Asia, particularly Japan. But one of the things that I was
thinking about in relation to demographic information as a
university professor, we have a lot of individuals, a lot of
international students who come to the U.S. But they might
actually return or a lot of them might actually want to stay
and they are being innovative while they are here. However, we
are not collecting information to know whether or not they are
even educated in the United States to begin with. So, when we
look at the demographic information currently, we see that they
are listed under a foreign inventor when, in fact, they might
have invented that at a U.S. university and then they might
actually need ways to think about scaling it to help the U.S.
economy grow. I think that is something that is missing. It
speak to language in a sense that a lot of international
students come over. There is a language barrier. They are
learning English in a lot of ways. But they are being
innovative. And we need to actually capture information on them
to figure out how they are contributing to the U.S. economy as
well.
Mr. GOLDEN. I appreciate that. And I agree wholeheartedly.
It is a huge potential asset in our community where we can
increase economic relations that we would not have had without
our Somali Americans.
I am not surprised that maybe you do not have an answer or
that you do not think that there are any resources like that
out there but something to point out, Madam Chair, I mean, I
have had meetings with SBA where it was a point of frustration
for people that there is no one to help translate, no one that
can help deal with some of the language barrier. And I am, of
course, thinking more specifically about that first generation
of immigrants who often have a lot of great ideas and are
running businesses. And when they come to the Federal
Government for help it is tough if there is no resources out
there to help with translation.
Chairwoman VELAZQUEZ. With that, let me thank all the
witnesses. I would like to make a closing statement.
The U.S. patent system provides inventors and small
businesses the ability to monetize life-changing ideas and
incentivizes advancement in technology. Because of its vital
role in protecting valuable intellectual property, a strong and
inclusive patent system is necessary to advance America's
economic growth and global competitiveness.
However, we have far to go in this journey. Women,
minorities, and low-income communities in urban and rural
America are still underrepresented in the patent, trademark,
and innovation ecosystem. Gathering information about patent
applicant demographics will drive better policy that ultimately
helps more women, people of color, moderate and low-income
communities, and other traditionally disadvantaged groups
obtain patents for their innovations. Closing the patent gap
will also drive economic growth and advance America's global
lead in innovation.
I look forward to working with my colleagues in Congress to
advance policies that foster an inclusive innovation ecosystem.
I will ask unanimous consent that members have 5
legislative days to submit statements and supporting materials
for the record.
Without objection, so ordered.
If there is no further business to come before the
Committee, we are adjourned. Thank you.
[Whereupon, at 12:45 p.m., the Committee was adjourned.]
A P P E N D I X
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