Statement of the Hon. Nydia M. Velázquez on 'Enhancing Patent Diversity for America’s Innovators'

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Statement of the Hon. Nydia M. Velázquez, Chair of the House Small Business Committee, dated January 15, 2020, for a hearing titled "Enhancing Patent Diversity for America's Innovators". The statement says women, minorities and low-income individuals are significantly underrepresented in the innovation ecosystem, citing a report from the Institute for Women's Policy Research that in 2016 less than 20 percent of U.S. patents listed one or more women as inventors. It describes the IDEA Act, which builds on the SUCCESS Act by collecting patent applicant demographic data on a voluntary basis and directing the USPTO to produce reports. It also says nearly 85% of SBA loan applicants voluntarily fill out the demographic data collected by SBA.

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Statement of the Hon. Nydia M. Velázquez on "Enhancing Patent Diversity for America’s Innovators"

January 15, 2020

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 eight 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 minorities 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 of staff on the obstacles inventors and tech founders face in building innovations 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, his legislation, the SUCCESS Act, required the USPTO to look at the 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 can’t measure it, you cannot improve it. And 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’ve mentioned many times that nearly 85% 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 three 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 position 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.

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