{"id":14168,"date":"2011-10-19T00:27:14","date_gmt":"2011-10-19T04:27:14","guid":{"rendered":"http:\/\/www.iposgoode.ca\/?p=14168"},"modified":"2011-10-19T00:27:14","modified_gmt":"2011-10-19T04:27:14","slug":"amicrobenefitforsmallbusinessesundertheamericainventsact","status":"publish","type":"post","link":"https:\/\/www.yorku.ca\/osgoode\/iposgoode\/2011\/10\/19\/amicrobenefitforsmallbusinessesundertheamericainventsact\/","title":{"rendered":"A Micro-Benefit For Small Businesses Under The America Invents Act"},"content":{"rendered":"

Leslie Chong is a JD candidate at Osgoode Hall Law School, and is currently enrolled in Professor Ikechi Mgbeoji\u2019s Patents class, in Fall 2011. As part of the course\u00a0requirements, students are asked to write a blog on a topic of their choice.<\/em><\/p>\n

Touted as the most significant development in American patent law since 1952, the Leahy-Smith America Invents Act<\/a> (\u201cAIA\u201d) aims to reform the current U.S. patent system<\/a> in an effort to foster innovation by allowing \u201centrepreneurs and businesses to bring the inventions to market sooner, creating new businesses and new jobs\u201d.<\/p>\n

As the topic du jour shifts away from the U.S. becoming a \u201cfirst-to-file\u201d patent system and the introduction of a post-grant review process<\/a>, commentators begin to unravel the intricacies of the AIA and the impact they will have on patent-reliant industries. The dust has begun to settle, and commentators have started to question<\/a> whether the AIA will be effective in assisting small businesses and start-up companies.<\/p>\n

As a means to help ease the financial cost of patent applications for small businesses, the AIA has introduced the concept of \u201cmicro entities\u201d as new category of patent applicants. A \u201cmicro entity\u201d is defined under section 35 U.S.C. \u00a7 123. To qualify, the applicant must<\/a> \u201c(i) qualify as a small entity; (ii) be named as inventor on no more than four previously-filed patent applications; (iii) have less than three times the median household income in the previous calendar year; and (iv) have not granted a license or ownership interest in the application to an entity who does not meet criteria (iii)\u201d (see here <\/a>for a detailed discussion of criteria).<\/p>\n

Under the existing U.S. patent system<\/a>, qualifying \u201csmall entities\u201d received a 50% reduction in various fees as compared to \u201clarge entities\u201d in the patent application process. Under the newly unveiled AIA provisions, a patent applicant that meets the requirements to become a \u201cmicro entity\u201d is entitled to a 75% reduction in fees.<\/p>\n

While this provision appears to support the government\u2019s promise of reviving the U.S. economy by spurring innovation among entrepreneurs, these \u201cmicro entity\u201d discounts are not available until 2013. Rather, the immediate increase of 15% <\/a>to all patent fees actually makes the patent application process more expensive for small businesses \u2013 at least until the \u201cmicro entity\u201d provisions become operable. With no indication as to whether refunds or credits for overages will be granted to qualifying \u201cmicro entities\u201d who have made applications in this interim period, it is uncertain whether the AIA provision will provide any immediate stimulus to the U.S. economy.<\/p>\n

With support from the Coalition for Patent Fairness<\/a>, which represents well-established corporations like Google, Apple, Cisco and RIM, one might question whether the AIA is unintentionally helping big companies that already possess a sophisticated patent portfolio. Putting the issue of increased fees aside, groups representing small businesses and their investors have also argued<\/a> that these changes place larger companies with deep pockets and fleets of patent lawyers at a clear advantage in the \u201cfirst-to-file\u201d system.<\/p>\n

However, supporters of the AIA still believe that the changes will (in the end) benefit small businesses<\/a>. They have cited the Prioritized Examination<\/a> (\u201cPE\u201d) provision, for example, as a way of allowing smaller businesses to tailor their investments in a single area of expertise and to fast track the patent examination process. These provisions will allow businesses to reduce the average 3-4 year examination period to less than 12-months. This PE program is at a substantially reduced fee for smaller businesses, and allows them to \u201cquickly ramp up the size of their patent portfolio\u201d.<\/p>\n

Furthermore, AIA proponents point to new provisions that reduce the need to rely on patent lawyers<\/a>. For example, the AIA now reduces the need for opinions of counsel in order to establish a defense to willful patent infringement. While in the past these opinions of counsel were used as a defensive tactic to avoid the threat of excessive damages, they are very expensive to obtain and often put smaller businesses at a disadvantage. With the AIA, smaller businesses can operate without needing to incur costs in their defensive strategies since \u201cthe failure of an accused infringer to obtain an opinion of counsel\u2026 cannot be used to prove willful infringement\u201d. And while some surmise that the AIA is actually increasing reliance on patent lawyers<\/a>, it will be interesting to see if these changes (and others) will actually reduce the cost of the patent process for small businesses.<\/p>\n","protected":false},"excerpt":{"rendered":"

Leslie Chong is a JD candidate at Osgoode Hall Law School, and is currently enrolled in Professor Ikechi Mgbeoji\u2019s Patents class, in Fall 2011. As part of the course\u00a0requirements, students are asked to write a blog on a topic of their choice. Touted as the most significant development in American patent law since 1952, the […]<\/p>\n","protected":false},"author":2140,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","footnotes":""},"categories":[60,10,1140],"tags":[1149,1150,1004,1151],"class_list":["post-14168","post","type-post","status-publish","format-standard","hentry","category-ip","category-patents","category-patents-course-topic","tag-aia","tag-leahy-smith-america-invents-act","tag-leslie-chong-ipilogue-editor","tag-small-business"],"yoast_head":"\nA Micro-Benefit For Small Businesses Under The America Invents Act - IPOsgoode<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.yorku.ca\/osgoode\/iposgoode\/2011\/10\/19\/amicrobenefitforsmallbusinessesundertheamericainventsact\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"A Micro-Benefit For Small Businesses Under The America Invents Act - IPOsgoode\" \/>\n<meta property=\"og:description\" content=\"Leslie Chong is a JD candidate at Osgoode Hall Law School, and is currently enrolled in Professor Ikechi Mgbeoji\u2019s Patents class, in Fall 2011. 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