Transcript Document
The SME and the AIA “The empires of the future shall be empires of the mind” Churchill Douglas Graham ● (646) 742 1000 ● [email protected] Innovation and Economic Growth Innovation now accounts for 78% of corporate value* 75% of post WW2 US growth is attributable to innovation** Correlation with national R&D intensity (R&D/GDP) and future GDP growth between nations*** Correlation of R&D Intensity and GDP Growth within nations (with 1-2 year lag)**** Correlation between corporate R&D investment and future shareholder value***** Of the original Fortune 500 only 71 remain Schumpeter, Economics and Sociology of Capitalism, 1991 Kay, R&D and Economic Growth, Freeman, Systems of Innovation: 2008 Critical Role of SME’s and Gazelles 65% of net new US jobs (‘93-’09) are from SME’s (82% in Europe) 10% of new jobs are coming from Gazelles (high growth and typically innovation driven companies) that only account for 1% of companies Each gazelle on average generates an average 88 jobs per year compared with just two for the average company Collins, US Dept. of Commerce, 2012, Kaufmann Foundation, Fortune So how does IAI help the gazelle? It is not possible to please all the people all the time so naturally some trade offs are made. The SME benefits from several provisions: The Micro Fees are an excellent start but of course only a small part of the over all patent costs Inventor’s grace period can be used to attempt to raise financing to cover patent costs as well as reduction to practice The confidential sale leaves to door open for trade secret protection – an increasingly attractive option for SME’s particularly if reverse engineering is difficult or impossible Expanded prior user rights broadens the ‘Freedom to Operate’ . . . and how does AIA hinder gazelles? USPTO fee diversion serves no-one and acts as a surtax on innovation (USPTO has been making progress on pendency despite this) First Inventor to File which has been shown in other jurisdictions to increase the already difficult job of raising early stage funding Post grant review could be problematic and tends to favor large business Third party submission of prior art while ultimately good for overall patent quality could leave the resource constrained SME vulnerable But other stakeholders needs must be addressed and a compromise delivered A Non Scientific Survey by Stakeholder Provision USPTO Fee Diversion Fees 1st Inventor to File Inventor’s Grace Period Expanded Prior User rights Post Grant Review Fast track exam Tax strategy inventions False marking Filing by Asignee Best mode Confidential sale Fee setting New offices 3rd Party prior art SME’s Bad Large Bad Univ’s Bad NPE’s Good ROW Good Innovation IP Lawyers Bad Bad Good Bad OK Good Good Bad Good Bad Bad Good Good Bad Good OK Good Neutral Neutral Good Bad Good Neutral Excellent Bad Bad Good Bad Problematic Good Good Bad Bad Good Bad Good Good Good Neutral Bad Good Bad Irrelevant Irrelevant Irrelevant Irrelevant Good Irrelevant Irrelevant Neutral Good Neutral Neutral Neutral Good Bad Neutral Good Good Neutral Neutral Good Good Good Good Good Good Good Good Bad Bad Bad Bad Neutral Bad Sensible Convenient Bad Sensible Sensible Sensible Neutral Sensible Sensible Convenient Convenient Convenient Bad Convenient Convenient Bad Bad Bad Bad Good Neutral Good Good Neutral Good When these factors are scored, weighted and ranked we get: 191 189 163 170 158 156 144 Universities Innovation Rest of the World Large companies NPE's SME's IP Lawyers Relatively balanced but the SME’s are somewhat underrepresented – not surprising given their lack of a unified voice. However it is still, hopefully, possible to adjust their issues in the post signing review period. The lawyers will probably offset some losses to trade secret protection through the additional needs of helping clients understand the new rules.