Rai reflects on lessons learned during government service

November 2, 2010Duke Law News

Arti Rai, the Elvin R. Latty Professor of Law, has returned to her faculty position after serving as administrator of the Office of External Affairs at the U.S. Patent and Trademark Office. A leading scholar of patent law and policy, the biopharmaceutical industry, innovation policy, administrative law, and health care regulation, Rai directed the External Affairs office, which serves as the chief PTO liaison to Congress, other executive-branch agencies, and international institutions on matters of intellectual property and innovation policy.

In an interview, Rai reviewed some of the insights gleaned during her “highly educational” term of government service. Her service confirmed some of her prior ideas about the administrative process and called others into question.

Leadership matters
One somewhat unexpected lesson, she said, was the considerable impact individual appointments can have on the way an agency functions.

“As a scholar of the administrative process, I had been of the opinion that specific individuals were not necessarily important in the overall calculus,” she said. The appointment of David Kappos as under secretary of the U.S. Department of Commerce for intellectual property and PTO director changed her view.

“He is somebody who is unusually talented in three different spheres — the substantive sphere, the management sphere, and the political sphere,” she said of Kappos, who previously led the intellectual property law department at IBM, which has the largest patent portfolio in the United States. “In many situations, his specific abilities made a big difference.

“I don’t know whether his appointment was an exceptionally good choice on the part of the administration or whether an exceptionally good person just happened to be interested in the job at this particular point in time, but it represents a case where an individual has changed the stature of an agency,” said Rai.

White House engagement important for agency efficacy
She also was impressed by the importance of White House engagement in agencies’ work.

“It was interesting to note the extent to which the priorities of the White House and the administration become those of the agencies, and the extent to which an agency has to ‘sell’ its priorities to the White House. For an agency to be effective, the White House has to be affirmatively interested in what the agency does,” Rai said. In the case of the PTO, that meant demonstrating the importance of the patent system to the larger goal of innovation. Innovation is quite important for the current administration, even though the White House does not currently have an Office of Innovation Policy — something that Rai and Stuart Benjamin, Duke’s Douglas B. Maggs Professor of Law, advocated in a 2009 paper.

“There are people in various White House offices, such as the National Economic Council and the Office of Science Technology Review who view innovation as their major interest,” she said.

Congress has clout
Rai’s involvement in relations with Congress impressed upon her the importance of cultivating good relations with individual members on both sides of the aisle, particularly in the absence of a filibuster-proof Senate majority, said Rai.

“The power of individual members of Congress can be extraordinary,” she said, also noting the fact that even the budget allocations of the self-funded PTO are decided, in the first instance, by the House Appropriations Committee. “Having good relations with members of that committee is critical,” she said.

China’s rise of major significance
Rai observed that her PTO service helped refine her thinking on innovation as an engine of economic growth.

“Innovation is, by definition, a long-term endeavor and politicians concentrate on the short term. Indeed, we need a shorter-term fix right now to create jobs,” she said. “But new technologies can take time to emerge. Innovation cannot thrive if the focus is entirely short-term.”

It is in the innovation context that China’s meteoric economic rise most concerns her, she said. “China is not beset by short-term economic worries, as we currently are. They are thinking long and hard about how to secure a strong position in terms of innovation. For example, they are thinking strategically about the patent system, domestically and internationally, in order to boost Chinese-based innovation.” China’s two-tiered patent system allows “utility-model” patents to be filed with minimal examination, she explained.

“Chinese companies are filing hundreds and thousands of these patents and sometimes using them against U.S. companies to get significant judgments. Even though the patents are dubious, many defendants choose to settle rather than litigating them.” Chinese entities are behaving, in some cases, like “patent trolls,” filing and enforcing patents against alleged infringers, even through they are not manufacturing or marketing the patented inventions, she said.

The Chinese are also doing a lot of research — and filing a lot of patents — in the area of green technologies. She commended PTO Director Kappos for implementing and expanding a fast-track process for green patents.

A “stochastic” process
Contrasting her academic study of the administrative process to its real-time operation, Rai said she has a new-found appreciation of its stochastic, or random, nature. “Even if it’s a purely internal project, an administrative bureaucracy is very different from a corporate hierarchy,” she said. However well intentioned, attempts to make the government function with the efficiency of the private sector don’t acknowledge the “gauntlet of constituencies” that need to buy into any given agency’s initiative before it can move forward.

In the end, serving in a policy-making position in an agency “very heavily involved in the real world was hugely educational,” said Rai. “Coming from academia, I found it really interesting to be there.”