Tech Entrepreneurs Take Caution With Obama’s New Patent Law
- Posted on September 28, 2011 at 11:00pm by
Liz Klimas
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Earlier this month, President Obama signed the America Invents Act into law after it past in the House and Senate with strong support on both sides. This is the first major step in patent reform, according to some, since 1952.
The most notable reform is a change from “first to invent” system to a “first to file” system. This is the system that most of the world operates on, according to CNN, that prevents “investors from coming out of the woodwork and laying claim to a patent.” Obama and others tout that this new system will spur jobs. Business Insider guest writer Henry Nothhaft says it will do the opposite:
This will shift the advantage to large, deep-pocketed companies who, with their legions of lawyers and many millions of dollars in resources, can now swamp the USPTO’s inboxes with a tsunami of applications. Independent inventors and small start-ups who do not have the equivalent legal and financial resources to compete, meanwhile, will be forced to the back of line at the patent office.
He notes entrepreneurs saying in the 2008 Berkeley Patent Survey that getting a patent is the first set to getting financial backing. Without this patent, they will not be able to get the financing. Nothhaft also brings up the fact that 100 percent of job growth in the past 35 years, based on data from the U.S. Census Bureau, was from start-up companies, without which the country would have experienced negative job growth:
“These findings imply that America should be thinking differently about the standard employment policy paradigm,” said Robert E. Litan, vice president of Research and Policy at the Kauffman Foundation. “Policymakers tend to focus on changes in the national or state unemployment rate, or on layoffs by existing companies. But the data from this report suggest that growth would be best boosted by supporting start-up firms.”
In regard to the fact that the rest of the world operates on a similar first to file system, Nothhaft writes:
[...] less than 1 percent of patents are filed by job-creating small businesses and independent inventors compared to 28 percent in the U.S. [...] Our patent system is a big reason why almost every major technological breakthrough of the last 100 years — from autos and airplanes to semiconductors and PCs — originated in America rather than Europe or someplace else.
On a similar note, Forbes guest writer Gary Lauder reports several examples of how Europe is discontent with its own system:
In May, the U.K.’s Small Medium-sized Entity Innovation Alliance sent a letter to their prime minister complaining that they “know only too well the failure of the patent system and have given up.” Two years ago, a European research organization published a study titled “Lost property: The European patent system and why it doesn’t work.” In February, the EU declared an “innovation emergency” due to how far behind us they are falling in innovation and in R&D investments.
Some in the gaming industry also have misgivings over the law. Gaming Bus reports that the new patent system for this industry will result in favoritism of larger companies that file patents for everything they invent, while small businesses selectively choose patents they apply for due to cost.
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BeeAlert
Posted on September 30, 2011 at 11:13amI think that all we have to do to discern the intent of any Obama legislation is to tack the word “destroy” onto the front of it. As in “Destroy American Jobs Act”, “Destroy America’s Inventors Act”, etc.
Report Post »staggerlee32
Posted on September 30, 2011 at 12:30pmrofl…. that’s the way I hear everything that comes out of his mouth. It’s all lies, unless he goes of the teleprompter… then you sometimes hear the truth come from him…. which usually gets him in trouble.
Report Post »Damage6
Posted on September 30, 2011 at 7:03amGee Thanks Mr. President / Congress! In 2008 you crashed my small defense related R&D consulting business with 5 of 5 clients bailing on me citing your policies as the reason they were cutting back on R&D expenditures. Since then I’ve been killing myself doing manual labor and taking every menial job I can find to save my house while I rethought my business plan and spent thousands of hours inventing some really cutting edge new products. Since I‘m barely keeping my nose above water financially there’s no way I can afford the $7 to 10k per item it costs to secure a patent and now you virtually garantee that any big company I show them to in order to try and get some backing can simply steal my designs instead. REALLY WHY DON’T YOU JUST COME TO MY HOUSE AND KICK ME IN THE B@!!$ WHILE YOU’RE AT IT. As if you haven’t made starting a business hard enough as it is. Unless you want to make solar panels that couldn‘t possibly turn a profit it’s damn near impossible to get a manufacturing start up off the ground in Obamerica.
Report Post »CANADAUSAPATRIOT
Posted on September 30, 2011 at 1:07amYou will be lucky if your fundamental transformation is European socialism. My fear is it will be more like China‘s state capitalism or the former USSR’s communism.
Report Post »agameofthrones
Posted on September 30, 2011 at 10:36amWe’ve already started the process with the so-called “Super Committee.” A bunch of the president’s unelected yes men to carry out his wishes without those pesky voters getting in the way of everything.
Report Post »ConvoyUSA
Posted on September 29, 2011 at 2:13pmAs a small biz start up and being involved in patent development and filing THERE IS NO UPSIDE TO THIS BILL. What the hell was the House thinking??? 2012 cannot come soon enough to get rid of these moron’s who are not looking at the consequences of their decisions. Has it dawned on anyone that WHATEVER Obama puts forth is INTENDED to destroy this country?
Who is to say that the crony capitalists will not have a heads up from the patent office (and predate their filing) so they could end-run a patent filed by an independent that may have put years of sacrifice into their research? If they want to dry up innovation, then I guess they are on the right track.
Report Post »santramir
Posted on September 29, 2011 at 10:43ammore zionist legislation for the american enslavery consolidation
Report Post »svedka
Posted on September 29, 2011 at 9:18amI think Hyndesight may be right on this one folks.
Report Post »Surn
Posted on September 30, 2011 at 12:00amSvedka and hyndsyte2020 are gravely mistaken and I have to say that “simply proving you had the “idea” first by presenting the Judge” proof is the DEFINITION of INVENTION.
Report Post »JMorcan
Posted on September 29, 2011 at 8:52am“…Obama signed the America Invents Act into law after it past in the House and Senate…”
What we really need is a law that requires journalists to spell correctly.
Report Post »Squ33
Posted on September 29, 2011 at 4:38pmagreed
Report Post »marthasusan40
Posted on September 29, 2011 at 7:56amAnother nail in the coffin of small business in this country…..he is changing our country, our values, our traditions one thing at a time..Wake up America…Obama is Anti-American…..
Report Post »TexPat
Posted on September 29, 2011 at 7:47amMore examples of this administration leaning towards a socialist European style government. We must vote them out of office in 2012.
Report Post »grudgywoof
Posted on September 29, 2011 at 7:22amAnything Obama can do to damage this country he will do. What do you expect from a treasonous snake but to get bit over and over again. If he is re-elected we are done for.
Report Post »hyndsyte2020
Posted on September 29, 2011 at 4:46amContinued – 3
Report Post »Third – The new legislation creates a new “micro” entity fee structure that will make it vastly less expensive for independent inventors such as myself to get and maintain a patent. It also sets forth new procedures within the patent office for review of interference claims without going to court.
Does this mean the big boys will paper the walls with patent filings and not have to pay out near as much for settlements. Probably. But it cuts both ways, the days of the multinational mega corps filing for an injunction and then bleeding you dry with continuances will be numbered also.
Fourth – The enforceability of international patents will be greatly increased due to the much more similar standards of what constitutes what is called “reducing to practice” the invention.
and Finally – I have actually waited on filing for a couple of inventions because of this, and even though this may have been risky, I think the added protection from others claims will be clearly worth it.
Obama is a dismal failure, but the drone strikes and this legislation are things he got right.
hyndsyte2020
Posted on September 29, 2011 at 2:26amI have to say this is one of the few articles on the blaze that I think is slanted the wrong way.
Report Post »First – The Law was changed so that so called “Patent Trolls” (large company’s that buy up patents from individual or small entity inventors with no intention of producing a product and then using them to sue large deep pocket entities for infringement) would have a harder time using the legal system to extorting money from companies who due the math and see that the expense of going to court to defend their own patent from infringement claims is greater than just settling the case with some “go away” settlement. In many cases, an Inventor gets a small percentage of this settlement as a ‘royalty” for letting the troll pursue the action. This way, the inventor doesn’t have to invest any more effort or money into converting a patented idea into a real world product – he can simply profit from the threat of litigation by someone with deep enough pockets to pursue a claim of infringement, whether the claim is legitimate or not. Please remember that only 2% or so of all patents result in a real world product, with only a fraction of these becoming successful in the marketplace. BUT the few successes that do result are often the engines of creating entirely new sectors of the economy, along with the growth and job creation that goes along with it. Litigation results in rich lawyers and less trees due to paper consumption. Continued in Next Post
Chuck Stein
Posted on September 29, 2011 at 3:05amMy understanding as well.
Report Post »e7achh
Posted on September 29, 2011 at 3:51pmWhat is to stop somebody from getting a Patent for the “Hyperlink”?
There are a lot of existing ideas that cannot be patented today due to the “prior art” provision. What is to stop somebody from applying for a patent for these ideas?
You may find out that this was not what you thought it was. Unless you had some input (lobbyists), this bill was NOT written for your benefit. As with most legislation, this will provide an advantage to well positioned individuals or corporations. The government is not your friend.
“For the Snark was a Boojum, you see.”
Report Post »Chuck Stein
Posted on September 29, 2011 at 2:07amI looked into filing a patent a few months ago. Interesting pricing: if you are independent of a big corporation (and you have not assigned the patent to a big corporation), then your filing fee is much cheaper. I wonder if that remains.
Report Post »randy
Posted on September 29, 2011 at 12:29amWhen are we, the people of this country going to stand up and say ENOUGH
Report Post »to these GOD D@mn A$$ hole Politicians?
Cosmos102
Posted on September 29, 2011 at 1:05am@ Randy
Answer: In 2012
Report Post »ReviveOurNation
Posted on September 29, 2011 at 2:14amI called my “conservative” House Rep for weeks to vote against this GOP legislation that the Heritage Foundation warned them extensively about.
I told him that this bill does NOT protect the individual inventor and will crush the entrepreneurial spirit. He voted against the bill…reluctantly… even though he still does not understand why he did. Clueless!
Report Post »AOL_REFUGEE
Posted on September 29, 2011 at 12:02amI’ll bet the A hole in Chief stays up nights thinking of more ways he can screw us over.
Report Post »Mil Mom
Posted on September 29, 2011 at 12:55amre : This is the system that most of the world operates on,
Report Post »***
Again, “American Exceptionalism” gets a GIANT FLUSH!
Most of the world is nearing financial collapse, “We don’t dare come out of it!”
Most of the world, is nearing revolution, “How dare we remain stable”!
Most of the world, Is ruled by Despots, “Four more years!”
HumbleMan
Posted on September 29, 2011 at 6:41amAnything to drive out individualism. After all only “the most fortunate among us” get lucky and invent stuff.
Report Post »