Who does the America Invents Act favor large companies or start-ups?

Does the American Invents Act that goes into effect in spring 2013 favor large companies or start-ups/inventors?

The most crucial consequence of the America Invents Act is that the United States is moving from a first to invent rule (current US standard) to a first to file rule (current standard everywhere else).  Essentially, this act creates a “race to the patent office,” where the first person to get a patent application on file with the USPTO will be presumed as the first inventor of a product.

Questions in the legal world have stemmed on who this act benefits more, large corporations or start-ups/entrepreneurs? I believe that this act will help start-ups more than large corporations for a couple of different reasons.

First, currently if a company had a filed a patent application before another company that first invented a product, the company that first invented the product could predate the invention via documentation of when the invented the product. This current factor, which will be partially eliminated in the America Invents Act benefits, large corporations more than start-ups because large corporations require that their engineers keep detailed records of their progress and ideas. When a large corporation initiates the patent process, an engineer will need to submit his invention to their development team, get their idea approved for a patent and then contact their patent attorney to obtain patent protection. These requirements create a large paper trail of when an invention was documented, which may not be required in smaller start-up companies. However, because of the first-to-file rule, this paper trail of determining when an invention was conceived may not be required.

A second reason I believe that the American Invents Act favors smaller start-ups is, as stated above when a large company desires to obtain patent protection, the patent idea must first be approved by a development team and then submitted to a patent attorney. Extra time is requiring for patentable ideas to be submitted and approved by a development team before submitting the idea to their patent attorney. This extra time could take a couple weeks, if a development team reviews their patent developments on a monthly or bi-weekly basis.  Smaller start-ups may only require a meeting between two people that have a comprehensive knowledge of what is important to their company.  Therefore, smaller companies may only need to have a few people approve an idea before it is submitted to a patent attorney for patent application drafting.

A third reason I believe that the America Invents Act favors smaller start-ups is that for larger companies a patent must be reviewed by both an engineer for the company and an in-house attorney. For a large company, once a patent is drafted by a patent attorney, the application must be approved by an engineer, and then by the managing in-house attorney.  Typically, when filing a patent application there is at least one back and forth between the patent attorney and engineer before the managing in-house attorney reviews the patent application. This can cause a lot of delay due to scheduling reasons. For example, the engineer may take a week to a month to review the patent and provide comments, and then it may take an additional week for the patent attorney to revise the patent application based on the engineer’s comments, and then another week for the managing in-house attorney to review the patent application before filing.  Typically, in start-up companies there is no managing attorney; therefore there is one less person who needs to make time in his schedule to review the patent application.  Further, when a small company decides to go forward with a patent each employee will have more invested in their product, rather than an inventor at a large company who may only receive a bonus upon obtaining a patent.

However, larger companies have one main advantage over start-up companies with regard to the race to filing a patent application. This is that larger companies probably have a patent attorney that they have previously used and trust. Therefore, larger companies can save time with regards to knowing who a patent attorney to file their patent application for them.

In view of the above, I feel like the red-tape associated with larger corporations will cause an extra week or two delay that may not be incurred by smaller start-ups.


By | 2012-11-13T15:52:31+00:00 November 13th, 2012|Blog|Comments Off on Who does the America Invents Act favor large companies or start-ups?