The Business of Government Hour

 

About the show

The Business of Government Hour features a conversation about management with a government executive who is changing the way government does business. The executives discuss their careers and the management challenges facing their organizations. Past government executives include Administrators, Chief Financial Officers, Chief Information Officers, Chief Operating Officers, Commissioners, Controllers, Directors, and Undersecretaries.

The interviews

Join the IBM Center for a weekly conversation about management with a government executive who is changing the way government does business.

James Rogan interview

Friday, May 23rd, 2003 - 20:00
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James Rogan
Radio show date: 
Sat, 05/24/2003
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Intro text: 
Missions and Programs; Leadership; Collaboration: Networks and Partnerships; Strategic Thinking; ...

Missions and Programs; Leadership; Collaboration: Networks and Partnerships; Strategic Thinking;

Complete transcript: 

Arlington, Virginia

Wednesday, March 26, 2003

Mr. Lawrence: Welcome to The Business of Government Hour. I'm Paul Lawrence, the co-chairman of The IBM Endowment for the Business of Government. We created The Endowment in 1998 to encourage discussion and research into new approaches to improving government effectiveness. Find out more about The Endowment by visiting us on the web at www.businessofgovernment.org.

The Business of Government Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is Jim Rogan, undersecretary of commerce for intellectual property, and director of the Patent and Trademark Office. Good morning, Jim.

Mr. Rogan: Good morning, Paul. Thank you for inviting me.

Mr. Lawrence: Thank you for being here. Joining us in our conversation is Tom Romeo. Good morning, Tom.

Mr. Romeo: Good morning.

Mr. Lawrence: Jim, let's start by some context-setting. Could you describe the mission and the activities of the Patent and Trademark Office for us?

Mr. Rogan: It probably is the one area of government that if you stand up at a Kiwanis Club and say I'm about to talk about my portfolio, you'll see everybody's eyes go into concentric circles. The idea of patents just strikes people as something extremely boring, and yet it is truly one of the great fascinations of the federal government, and, indeed, of our Founders. I marvel at the notion of the Founders sitting in Philadelphia crafting a government from scratch, and in the Constitution, which is not a very long document, they stuck in Article I, Section 8, the contemplation of a patent office. They did it before they put in free speech or free press or free religion.

So the question is why. Why did the Founders stick in this obscure area of law? It was because they understood that this agrarian colony could never grow into a technological and economic powerhouse if they did not build within the very foundation of law that notion of giving incentive for inventors to invent and for creators to create.

If you go back in time 150 years ago to Washington, D.C., or even 100 years ago, the top three attractions in Washington, D.C. were the White House, the Capitol, and the United States Patent Office. The reason was that you would get these people who would come from farms from all over the country, they would visit Washington, and in the old patent office, they had these two-story, huge glass windows where the examiners would sit there and examine these new inventions, these new-fangled gizmos, that people from the farms would come and look at and see what was going to change the quality of their lives forever. It was very much like going to the World's Fair. It was a World's Fair every day for tourists.

So that's the mission of the Patent and Trademark Office, and although we don't have the big glass windows anymore, long before any of you ever see the newest technologies, the latest inventions that are going to improve immeasurably the quality of our lives, we see it first at the Patent and Trademark Office. So that is a modern day expression of precisely what the Founders hoped this office would be.

Mr. Lawrence: Give us a sense of the size of your team or your agency, and the types of skills of the people that are going this work.

Mr. Rogan: It's huge. We have about 7,000 full-time government employees, or regular government employees, I should say, and about 4,000 contract employees. So we have about an 11,000-person team.

It is probably one of the most technical agencies in government. I like to joke that it's one of the few agencies where you can't put party hacks except in at the top. An entry-level job at the U.S. Patent and Trademark Office from a professional standpoint is a brand-new examiner. To be an examiner, entry-level, you have to be either a degreed scientist or a degreed engineer.

Mr. Romeo: Can you tell us a little bit about your role as the director of the Patent and Trademark Office, but also a little bit about the role as undersecretary for commerce for intellectual property?

Mr. Rogan: Yes. When I was first nominated for the position, the next day, I was taking a jog in my neighborhood and one of my neighbors that I recognized but didn't really know, I caught him staring out his window at me. He came running out and he said, "Hey, Jim Rogan, you're going to be my boss. I work at the Patent and Trademark Office." I said, "That's great. I hope so, if I get confirmed by the Senate." He said, "You know, I followed your whole career in Congress. I watched you on TV all the time because you were my neighbor, but I didn't know that you were a scientist." I said, "Well, I'm not." He said, "Engineer?" I said, "No." He started looking very befuddled, and I said, "Look, let me explain to you the way it works in government. If you want to be an entry-level employee, you have to go through the training, experience, and background, and when you get that training, experience, and background, we call you an employee. When you have no background, no training and experience, we call you the director. That's the way it works in the federal government."

My role as director is managing the 11,000 employees of the USPTO. But I also wear a separate hat which is a separate and distinct job. I am also the President's advisor on all matters of intellectual property, and that's everything from patents, trademarks, copyrights, pharmaceuticals, software, Napster, anything that involves intellectual property is within my portfolio. The undersecretary role has significant economic responsibilities, because over half of every American export relates to intellectual property, and most people don't know that.

I would walk through Congress when I served in Congress and ask some of my colleagues, "What's our biggest export," and I would always hear different answers: agriculture, aviation, textiles, autos, and the like. Intellectual property is greater than all of those combined. So the economic significance is great.

Mr. Romeo: Can you tell us a little bit about your career prior to joining the Department of Commerce?

Mr. Rogan: As you probably picked up from my initial comments, it didn't involve patent or trademark expertise. I'm a lawyer by profession. I'm a graduate of UC Berkley undergrad and UCLA law school. I took a job at a big law firm in L.A. right out of law school. I didn't have a lot of fun. So I quit, I took a big cut in pay, and I ended up as a gang murder prosecutor in Los Angeles in the Los Angeles County district attorney's office. I did that for a number of years, and then the governor appointed me to the bench at a pretty young age. I was the youngest judge in the state of California. I think I was only about 6 years out of law school.

I was on the bench for about 4 years. Then one day I came home and turned on the news and saw that my state representative had pled guilty that day to RICO violations and was going to federal prison. I looked at my wife and I said, "Gee, that's terrible. I wonder who's going to run to take his place?" And 9 weeks later, I was being sworn in. So I ended up in the state legislature.

I did a term as majority leader and then was elected to Congress when my congressman of 24 years retired in 1996. I served two terms in Congress. I was beaten for re-election for a third term. I was a Republican representing a fairly significantly Democratic district in Southern California; in fact, representing most of the Hollywood movie studios who not only ended up voting to impeach Bill Clinton, but I was picked as one of the prosecutors in the Senate trial, which was not good for my longevity as a member of Congress. The polls showed just before I voted to impeach the President, 75 percent of the people of my district would never vote for me again if I did. I proved the poll wrong. Only about 60 percent of them never voted for me again.

So I left Congress in January 2001, and a few months after that, the President asked me to do this job. I jumped at the chance because the reason I got on the judiciary committee in Congress was because I wanted to work on intellectual property matters. Those were the lifeblood not only of my district, but it was truly the lifeblood of the state of California economically at the time. So I really wanted to work on those matters. The day after I was put on the committee, the Monica Lewinsky story broke, and so that ended up being a huge distraction and diversion from why I wanted to be on the committee.

So the opportunity to serve the President in this capacity in the administration gave me the chance to work on those policy and legal areas that I cared most about in Congress but didn't get to spend all of my time on. So it's been a good fit for me.

Mr. Lawrence: Given your different jobs and different roles in public service, how would you contrast management styles and cultures in the different levels?

Mr. Rogan: Working within any administration is tough for people who have been in elective office. The reason is I think it's just very difficult for those of us who have stood before the public and asked for their votes and have given thousands of interviews, we are just organically used to hearing a question and answering it as we see fit. And as a member of the administration, one always has to remember when I'm asked a question, I have to filter it through the prism of remembering they're really asking what does the President think, and what I think tends to be irrelevant. So it's like putting back on my lawyer hat that sense and representing a client.

In this particular instance for me, that has not proved difficult, because the President and I are on the same wavelength on these issues, and so it's a privilege for me to be able to serve. But it is different. As a member of Congress, as a member of the legislature, you pretty much have the freedom and flexibility to say or do what you want, with the understanding, of course, that you live by the sword, you die by the sword.

As a member of any administration, one is a team member, and you are there to serve the President, just as when I was a congressman, I had a number of staff that were there to support and serve me. So that's a culture switch, but when you respect your boss and you think that they're on the right track, it makes it a lot easier.

Mr. Lawrence: How about the speed of activity, or the pace?

Mr. Rogan: Very slow. That's just the nature of any bureaucracy. This is sort of an aside to your question, but maybe you'll find it relevant. I used to always think as a conservative Republican, it was a good idea for people from business and the private sector to come into government because it brings that business perspective. I still think it's a good idea, but I think it's a good idea only if they come to me first. Because what normally will happen is somebody will come from, say, IBM, where you've been working through certain business principles to achieve an objective. Then one gets into government and one thinks that they can simply transpose those same common-sense businesslike principles and then bring rationality and sanity to government, and they run headlong into bureaucrats, into bureaucracy, Congress, appropriators, and all these various levels that are dealing with your common-sense agenda from a purely parochial standpoint.

What normally happens is businesspeople will come into government, see the way it works and they think it's broke, I have to fix it. Then after banging their heads against the wall for a year or two trying to work from a different paradigm, they usually end up becoming so frustrated that they leave thinking it's so broken it can never be fixed, and I don't want to be a part of it anymore. So I think it's good for Dr. Rogan to sit down with folks like that just for 20 minutes and kind of give them a road map, that it's a different paradigm, and these are the things that you have to work with, and if you understand that going into it, if you know that it operates like President Kennedy said, a fudge factory, and then work around that, one has a better chance for success.

Mr. Lawrence: That's a good stopping point. We have to go to a break. Rejoin us in a few minutes as we continue talking with Jim Rogan of PTO.

Do you know the difference between patents, trademarks, service marks, and copyrights? We'll ask Jim to explain this when The Business of Government Hour returns.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and today's conversation is with Jim Rogan. Jim is the undersecretary of Commerce for intellectual property, and the director of the Patent and Trademark Office.

Joining us in our conversation is Tom Romeo.

Mr. Romeo: Jim, can you explain to us the different rules and regulations regarding patents, trademarks, service marks, and copyrights?

Mr. Rogan: Yes. I'm going to do it not from a legal perspective, so I'm going to do it, if you'll allow me, fairly generally so that it will give your listeners an idea. Essentially, patents are issued for inventions or particular methods. It's essentially somebody is creating a process or an invention. It could be anything from the Wright Brothers' plane to one patent that issued before my time for Amazon One Click Method of Doing Business. But if you just allow me the generalization, patents basically relate to inventions.

Marks, whether trademarks or service marks, are basically a signal to the public that this was made by a certain company. For instance, Coca-Cola, that logo is a registered trademark, and so that sends a signal to somebody who is thirsty that if you buy the beverage with that logo, you have a certain expectation that it's made by a reputable company, you know what it's going to taste like. It's a mark through over the years this business has developed the loyalty of customers and the customers have developed a faith and loyalty in who has made it. So it's an identification that something is being made by a certain person.

Back in Revolutionary War days, Paul Revere was a silversmith, and Paul Revere would put a little mark on the cups and so forth that he made as a signal to people who were out there purchasing that if you wanted one made by Paul Revere, you looked for that particular mark. So that was an ancient expression of a mark.

A copyright is what attaches now to an author's creation. Back in the old days, I think you actually had to register with the copyright office to enforce a copyright. I don't think that's the law anymore. If you write a song, if you write a book, if you write a play, you're not going to trademark it because it's not a logo, you're not going to patent it because it's not an invention, and so you would seek protection for your song or your movie script by way of copyright. So that's a very broad generalization of the difference between the three.

Mr. Romeo: What are some of the current trends in the number and variety of applications for patents, trademarks, or copyrights that you see today?

Mr. Rogan: The trends are good in the sense that we get an awful lot of them. We see that the U.S. government gets an awful lot of them in all three of those areas. That's good for technology, for invention, and for creativity. It tells us that inventors are still inventing, and creative people are still creating.

From a practical perspective, it's hurting the U.S. Patent and Trademark Office to be able to accomplish our mission in a way in which our applicants deserve to know that we're doing it, and here's why. I'll just take patents for an example. We have about 3,500 patent examiners. We get about 350,000 applications per year. Because as the years go by, applications become longer, they become far more technical and far more complex as technology develops at the speed of light, it's taking longer and it's harder, and we've developing a backlog.

Twenty-two years ago, in 1981, "U.S. News and World Report" did a story on the U.S. Patent and Trademark Office. They said it's actually so sluggish and cumbersome, it's hurting technology. The reason they came to that conclusion is it was taking about 2 years to examine a patent, and the backlog was about 75,000 files. Now the backlog is about 45,000 files, and the average is 2 years still, but in some critical technologies, it's 3, 4, and 5 years, and it's estimated to go up to an average of 3 to 5 years by 2008 if we don't do something about it. So in a very real sense, we've become victims of our own success.

If you walk through the office of the director of the Patent and Trademark Office, up on the walls all through the suite of executive offices is lovely artwork framed on the wall, but it's not Picasso, Renoir, or Gauguin, the artwork that frames the walls of my office is old patent application artwork from the early 1800s, inventions that we take for granted now, but in their time changed the face of the world. Everything from McCormick's plow to the doorknob, to the bullet, to the tin can, and the list goes on and on and on, the Wright Brothers' airplane, Edison's light bulb, and so forth.

What's interesting -- aside from the historical artifact nature of the artwork, what's interesting about these magnificent inventions that changed the quality of life for humanity in their day is that you can frame them on the wall today. They were a sketch. McCormick's plow, it's a sketch of a plow, and a little description; this is a plow, it digs a hole, you plant the seed, it keeps the furrows straight. It makes farming better. It's a sketch and a little description. The USPTO date-stamped it, and there you go.

Now we get applications come in, genomic patents, biotech patent applications, they come in on CD ROMs. They have sometimes the equivalent of literally millions and millions of pages of data, and that's just one application. And if we get an application with 100 independent claims or 500 independent claims, sometimes 1,000 and 5,000 or more independent claims, many of those have to be treated like individual inventions within that one application. You take those applications, multiply those by 350,000, and throw on top of that the exponential increase of technology and difficulty in complexity, you can see it hurts our ability to do a timely and qualitative job. Because now the rush from a bureaucratic perspective is to get through these applications quickly, and the applications often don't lend themselves to quickness or speed, they require a lot of expertise, and they require a lot of time, and the faster we move, the more likely it is that we let something fall through the cracks.

If we let a mistake out the door, and we do; we let mistakes out the door, that has significant implications. If you've just invented the new widget, Tom, and now you're waiting for this piece of paper from our office that says what, that says you will have for a limited period of time the -- you will have exclusivity in your invention. You've invented this thing. Now you want to go to market with it. You found some financiers, you found some venture capitalists, you found people that want to help you out, but they're asking you, do you have a patent yet. Let us know when you get a patent.

So finally the big day comes, you get that piece of paper. It's got a seal on it, and so everybody invests in your company, you build the factories, you hire the employees, people quit their jobs to come to work for you, you get the production going, you bust your chops for a few years with this product. Now people are developing a sense of comfort in your product, like Coca-Cola, they know what they're getting and now you've spent all this time and resources to build up your name and product identification, you put market resources into it. Things are looking great. And somebody knocks on your door and says that patent that USPTO gave you, they gave me one 2 weeks earlier and it looks like they let yours fall through the door because yours infringes on mine, I'm first in time, and, therefore, I'll take 80 percent of all your earnings as my licensing fee or else I'm going to shut you down.

That has significant consequences. There are significant consequences if we make a mistake. So what I have attempted to do is pull back from the old model that we currently are operating under where we do our best and we'll do a quality survey at the end of the pipeline and hopefully we keep the mistakes down. I've tried to bring more of a business model to the operation of the USPTO in every sense except one; at the end of the day, business of course exists to turn a profit, we don't want to turn a nickel profit, we want to be able to charge for patents what they -- to the extent that we can get to a linear cost, what it really costs to do the job, what it really costs for us to hire more examines, to train them, to retain them, to develop more a market model, where the more work we do for somebody, the more we charge them; the less work we do, the less we charge them.

Right now, it really doesn't cost you that much more if you send us an application with one claim or 1,000 claims. So the temptation from the filing perspective is just to throw as much stuff against the wall, see what sticks, maybe something will, maybe something won't. So we want to bring market incentive in all areas to try to bring some sanity, and then let us be able to do the job from a quality perspective.

The focus politically tends to be on pendency, how long it takes, and the temptation for any director is to focus heavily on how long it takes because that can be measured. And quality is far more important than pendency, particularly if we're making a mistake on your patent, but quality is something that really doesn't lend itself to measurement. So in politics, of course, we always want to take the path of least resistance and claim victory somewhere.

So I'm trying to change the culture now to an office that is dominated more on a quality focus, with the understanding that in order to enhance quality, we may have to slow the process down a little bit. I've never had an applicant ever tell me, if I have to choose between quicker pendency and better quality, I'll take quicker pendency. Everybody understands if we make a mistake on their application, it can be a death knell for them. So we're shifting that paradigm to focus on quality, because it's the most important.

Mr. Lawrence: That's a good stopping point. Come back in a few minutes as we continue our discussion about management with Jim Rogan of PTO.

How is PTO handling the issues spotlighted in the President's Management Agenda? We'll ask Jim for his perspective when The Business of Government Hour returns.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and this morning's conversation is with Jim Rogan. Jim is the undersecretary of commerce for intellectual property, and the director of the Patent and Trademark Office.

Joining us in our conversation is Tom Romeo.

Mr. Romeo: Jim, we know that the PTO is a performance-based organization. What has that meant in terms of managerial flexibility for the agency?

Mr. Rogan: It's been difficult, quite frankly. The intent initially when it became a performance-based organization was to take the PTO off budget, if you will, so it is now an agency that does not receive a single dollar in taxpayer funds. It gets no tax money from the general fund. Where does the PTO get its revenue? It gets it from application fees. The entire PTO operation performs and exists on the fees paid for applications for patents and trademarks.

The idea behind that was that we would be able to set the fees based upon what the needs of the office would be. So if we needed to hire more examiners today, if we needed to train them better, if we needed to pay them more because we're losing too many of our skilled examiners to law firms and private practice, we would be able to just do a simple mathematical calculation and set the fees accordingly. But that has not been the way it has worked in real life, because what's happened in the real world is both administrations and Congress over the last 10 years have said Congress sets the application fees. Congress, let's just say, sets the fee at $100. That's not it, but I'm just using a round number, and we know we're going to get 300,000 applications this year, and so we can figure out what we can invest in this year as far as infrastructure, training, and so forth.

But then if Congress or the administration says, by the way, these are tough budget times and so we're going to take 20 percent of those fees and divert them to some unrelated aspect of government, whether it's highways, the general fund or whatever, that's what's been going on ever since it became a performance-based agency. That's really ticked off applicants because they feel like this is a tax on their technology. I'm already paying all my taxes as a citizen, these fees are supposed to go to getting my application reviewed as quickly as possible and getting an answer back to me, and now you're taking that money and you're throwing it in an unrelated pot. That's a tax.

President Bush recognizes that, and so he recently did something that I think the entire user community is grateful of. He not only cut the initial diversion in half, but he also announced through Secretary Evans the intent of the administration to end diversion. The war in Iraq has kept budget considerations a little bit iffy right now. Congress went ahead and matched the President even better, and cut it to where I think it's the lowest now it's been in 10 years. So it's my hope that in the near term we see that concept of diversion going away altogether.

Having said that, that doesn't necessarily fix the agency. The problems of the agency, if it were a private-sector corporation, would be fairly easy to fix. One doesn't have to be a patent or trademark genius to figure it out. It's basic math. How much do we need to pay qualified examiners to get them in, what do we have to pay them out to train them appropriately, what do we have to pay to retain them, what do we have to invest for e-government, for electronic filing and all of the IT needs to bring this out of this 18th century business model under which we still operate and bring it into a 21st century model? Figure out what all those costs are, and then set the application fee accordingly and adjust it as it need be.

We don't have the flexibility or the freedom to do that. The examiners are all federal employees, and so therefore, they're under the GS payment schedule. I think our top-level examiners, the ones who have the most seniority, the most experience, the most technical expertise, we pay them about 120,000 a year, and that's even after we've sent them to law school, and now they're lawyers, too. So law firms come in and just cherrypick these people and pay them double, so we lose them. We can't raise their salaries because we're stuck in this GS principle. So we can't do what we need to do to recruit or retain qualified examiners. So we're just stuck. We can't change our fees because Congress sets the application fee. Then if there's a diversion of 10, 20, or 30 percent, we don't get to make up for the loss by bumping up the fees.

The fee stays the same, we lose that 20 or 30 percent of our fees that year, and so what does that mean? Instead of hiring 800 new examiners to help attack the backlog, we hire 200, and with attrition, we end up with a net hire of 20. It means instead of going to e-government and e-filing this year, we have to push it off for 2 or 3 more years. So this has been the problem. Because we don't get to run it like a business, we end up short-changing the applicants on a regular basis. So to the extent that within the rules and parameters of government I can change that, that the Secretary of Commerce and the President can get these changes through, that's what we're working to as a team.

Mr. Lawrence: You talked about the complexities of the applications and the skills of the individuals to do them, and the fact that they generally can't be paid as much as some others. How do you keep the human capital pipeline full? I didn't see the math work out to anything but people leaving. So how are you addressing the human capital challenges?

Mr. Rogan: One shouldn't underestimate the psychic income that people get in working for government. It doesn't pay as much. I could make a lot more money in the private sector that I'm making now. I think I'm making as director of the USPTO what first- or second-year associate lawyers right out of law school are making at my old law firm. So most people aren't in government to get rich off of it. Most people are there because they enjoy public service or because it fulfills their needs in other ways.

They have flexibility in their hours. It tends to be more of a 9:00 to 5:00 job, and if they do their job during the week, most of them don't have to come in on the weekends. There is also in tougher economic times more security in federal government employment. So I guess there are as many reasons for people to stay in government as there are people in government.

But to the extent that we can make these jobs competitive with the private sector, survey after survey has shown that we don't have to compete dollar for dollar with the private sector. We just have to be within the range, we just have to be in the ballpark, because most people would prefer to work for a little less money or even a significantly less amount of money if the quality of life is infinitely better. We offer much quality of life and much more flexibility than one is going to get having to account for every 6 minutes of their day at a law firm. But if we can't compete with double the salary and so forth, we do lose a lot of our experienced people. It just makes it tough, and that's why the backlog continues to grow.

Mr. Lawrence: You also described some of the technology that's being brought to bear, electronic filing, for example. I wonder if you could speak more in terms of what that might hold.

Mr. Rogan: Electronic filing is really going to be the key to us being able to move into a 21st century business model. We have an electronic filing system right now at the USPTO. It's cumbersome, it's time-consuming, it's laborious. It interfaces with very little. So we only get 1 or 2 percent of our applications filed electronically. People don't like it. Then being government, when they do file electronically, the first thing we do is convert it to paper. So to me that just absolutely defeats the purpose of electronic filing.

As I traveled the country and met literally with thousands of our applicants from bit customers like IBM to independent inventors and garage inventors, most filers in America also file in Europe and Japan. Most filers in America also file for protection in Europe. Uniformly, I heard the European e-filing system is better. It's more user-friendly. It's easier to navigate. It interfaces more. The short answer is, people like their system better.

What was the governmental, bureaucratic response to that? Let's take tens of millions of dollars and come up with a different system that we will deploy in about 6 years. We've put the brakes on that. What I did was I went to the Europeans, actually intending to see if I could work out a licensing agreement with them. I guess I'm a better negotiator than I thought, because the deal we cut was they're giving their system to us, basically, and that we will now jointly maintain one system for both offices. A lot of companies are holding back. They didn't want to do e-filing because America was coming up with a brand-new system, and Europe was on a different system. They didn't want to make the IT investment until they knew where we were going. We are now going to be able to go out and say we're all on the same page here. You only have to adjust to one system. The Japanese are now interested in joining us in this.

I've been traveling around to different countries telling the heads of our sister offices we are developing this, why don't you get on board with us. I haven't had a single country tell me they're not interested. So if this works out the way I hope, very soon, most of the world or most of the major intellectual property offices at least will be on the same e-filing system. That will do a couple of things. It will allow American filers with the click of a mouse to click and file in multiple countries. It will also allow us, through work-sharing arrangements that we're trying to do with the major intellectual property offices, to share the results of our searches and use their searches that have already been done as the starting point of our searches. That will shave significant time off the overall application process here at home and deliver more quality so we can cut the pendency, improve quality, and save money all at the same time by just injecting some basic business common sense into what otherwise avoids common sense sometimes in government.

Mr. Lawrence: That's a good stopping point. We have to go to a break. Rejoin us in a few minutes as we continue our discussion about management with Jim Rogan of PTO.

Homeland security is on everyone's minds. What role will PTO play in the protection of our nation? We'll ask Jim for his thoughts when The Business of Government Hour continues.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and this morning's conversation is with Jim Rogan. Jim is the undersecretary of commerce for intellectual property, and the director of the Patent and Trademark Office.

Joining us in our conversation is Tom Romeo.

Mr. Romeo: Jim, what are some of the current trends that you anticipate in the patent and trademark applications?

Mr. Rogan: They'll continue coming in, if you're asking me trends in that perspective. We kind of flatlined since 9/11. I think the uncertainty of what was going on and people's shock and so forth, but they're actually ticking back up again. Not to the degree they were before 9/11, but we still have more than enough work to keep us busy.

If I can just expand on your question maybe a little beyond what you intended, what I foresee as a trend will be what all of my successors will be able to hopefully foresee, and that is inventions coming in that just boggle your mind. That has been the history of the U.S. Patent and Trademark Office, that long before anybody else ever gets to see this stuff, we get to see it. It's really just an amazing place to work, particularly if you have a love of invention and technology, it is the cutting edge. As long as we continue to see those inventions, and we will with the legal incentives and the protection that the Founders gave us, we can look forward to the future with great confidence.

Mr. Romeo: You've given us some great examples of some interesting patents that you've seen. Have there been any recently that really stick out for you?

Mr. Rogan: Yes, there's a whole bunch of them, but if I told you, I'd have to kill you because under federal law, until we publish, it's all secret. But hold onto your hat, there's some great stuff coming down the pike.

Mr. Lawrence: You've talked a lot about dealing with the Europeans and the Japanese in terms of patents and such. I don't know if it's part of your role or not, but I'd be curious in terms of adherence to patents and trademarks overseas, and then what happens when people don't.

Mr. Rogan: We don't have an army of police and prosecutors at the USPTO go out and enforce intellectual property rights. From a government perspective, we issue the patents, we issue the trademarks, or we deny patents and trademarks. But once they're in the hands of the private sector, if somebody is infringing on your patent or if you're infringing on somebody else's, that's the work of lawyers and the Judicial Branch. I have some ideas on tort reform in that regard, but that probably goes beyond the scope of this interview.

From the sense of my role as undersecretary for intellectual property, we do have a significant role to play with respect to foreign governments that are not protecting intellectual property rights. We have a lot of carrots and sticks. I co-chair an interagency group called NIPLEC, the National Intellectual Property Law Enforcement Coordination Council, and so between us, the State Department, the Justice Department, Customs, USTR and all the other players, we try to sing from the same song page, whether it's dealing with countries via special 301 processes for violating intellectual property rights, to incentives and so forth. There is a whole panoply of areas that the federal government does play, or there are a whole panoply of rights and opportunities that the federal government engages in, and we do engage very strongly.

One of the things our office does, we have a number of lawyers in our international section, we send them out, lawyers/professors, for instance, to China. They have gone many times and gone down into the provinces putting on seminars for local judges and prosecutors, showing them that their piracy isn't just hurting American property owners, which a lot of them I suspect probably don't care about, but it's also hurting investment in their provinces, because if people don't think that they can get their property rights protected, they're not going to put their investment in.

For a quick example, I've been to Italy a couple of times in the last several months. The Italian government noticed that only $2 billion of U.S. investment goes to Italy, $20 billion to France, and $60 billion to the U.K. We met with the chamber of commerce out there and other groups. It turned out, they came to the conclusion that the Italian courts were not enforcing intellectual property rights. If kids were pirating DVDs or CDs, the courts were letting them go, saying in published opinions it's better than them out selling dope.

So the Italian government wants more U.S. investment, and so they have just recently passed a bill to create a separate court to hear intellectual property cases, because they want to send that signal to private investors that if you come and you invest, we will protect your property rights. To the extent that we can be ombudsmen and evangelicals in this regard, we are, because we want to get that message out, stop doing this; not because it hurts us, but because it's hurting you.

Mr. Romeo: Jim, what role does the PTO play in homeland security?

Mr. Rogan: We play a significant role in homeland security, but it's an under-the-radar role. The key role we play is a lot of, of course, the invention and technology that will be adapted for homeland security at multiple levels typically starts by way of coming through our office.

Mr. Romeo: I think you've touched a lot on your vision for PTO in the future, but can you summarize that for us and give us a little idea of where you expect to see PTO in the next 5 to 10 years?

Mr. Rogan: Where I would like to see PTO, I would like to see it as an agency that appreciates its 18th century roots but moves away from the 18th century model of doing business. I'd like to see an agency that is market-oriented. My vision for the PTO that we're trying to implement through our strategic plan is a very simple one. I start it from this premise, what if the PTO did not exist, and what if we had to create a USPTO today in the 21st century, e-government, e-commerce, world? Would it look like what we have right now, or would it look like something different? And to the extent that we can make it look like something different that would make sense for this economy and for the future, then I think we've done our job, and that's what we're driving to.

Mr. Lawrence: What are the management challenges in achieving this vision? Earlier, you've described some of the constraints that are put on you by government, by the civil service system and the like. So I'm curious what's achievable through your efforts or what that will require.

Mr. Rogan: My standard rule of thumb is if I have everybody a little bit mad at me, then I'm probably on the right track. I found that was always true in politics, and I think that's true at the PTO.

I'll give you just one example. I heard from a lot of our user community that the problem is you have some of these examiners that basically get tenure, and then they don't keep up with technology. It's more complex than that, but this is one of the things that we're going to change at the PTO. I told all the examiners you're working in critical areas of technology, and once you get your full signatory authority, which means you can sign off right now a patent without any supervisory review, you basically are like a tenured professor. You can keep up if you want, but you don't have to keep up.

So we've told them you're all going to have to be certified and recertified. You have to maintain a certification in your technology or in the technology and the law in your relevant area every 2 or 3 years. Our managers all thought that was a great idea because they thought some of their examiners were slacking off. I told the managers I'm glad you agree, but we also want to make sure managers are keeping up, so you have to be certified. So now the managers are mad.

All the bar practitioners, the lawyers and the agents who practice before the USPTO, they all said this is great. You're going to straighten up all these examiners and managers that I've had to deal with that don't know what they're doing. This is going to make my job easy. I said you're right, although they tell me that there are a lot of lawyers who ship us a lot of junk and don't keep up with the law and we have to clean up your messes, and so guess what, you're going to have to be certified, too. So now I have examiners, managers, and the Bar all sore at me, but they're sore at me for the right reason. It's because we're going to improve the level of quality on all levels.

So that's kind of my rule of thumb. It's okay if everybody is mad at you as long as they're mad for you trying to get a good thing done, and quality is the key. So nothing changes easy in government. I learned a long time ago, you take as much flack and grief if you try to change one particle of an agency versus if you try to remake the entire agency. So that's why we're trying to remake the entire agency.

Mr. Lawrence: You've had such a varied career. I'm curious in terms of a public-sector career, what advice would you give to a young person interested in a career in government?

Mr. Rogan: I would just say that there is nothing like it. I've been out of law school now for almost 20 years, and I think I've spent all but a year or so in government. I'll just tell you, every single government job I've had whether prosecutor, judge, legislator, congressman, director of the USPTO, this was always the bottom line for me, if I were a billionaire, would I still show up for work every day? And the answer to every single one of those jobs has always been yes, because I love the work and I love the challenge. It wouldn't how much money I had in the bank, I would still come to work every day.

Whenever I worked at a private law firm, my colleagues were great, my partners were great, but if I were a billionaire, would I be showing up for work every day? I don't think so.

So if you want to have fun and serve your country and make a decent enough wage where you can pay the bills, you're never going to get rich on it as long as you're not corrupt, there's just nothing like it. I've loved every minute of my government service. Sometimes I've taken some knocks and I've got a few scars along the way, but on balance, it's just been a magnificent thing for me to participate in, and I would encourage anybody interested to pursue it.

Mr. Lawrence: Jim, I'm afraid we're out of time for today. Tom and I want to thank you for joining us this morning.

Mr. Rogan: Thank you, Paul.

Mr. Romeo: Thank you, Jim.

Mr. Lawrence: This has been The Business of Government Hour, featuring a conversation with Jim Rogan, the undersecretary of commerce for intellectual property, and the director of the Patent and Trademark Office. Be sure and visit us on the web at www.businessofgovernment.org. There, you can learn more about our programs and get a transcript of today's fascinating conversation. Once again, that's www.businessofgovernment.org.

This is Paul Lawrence. Thank you for listening.

James Rogan interview
05/24/2003
James Rogan

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