Will the New Patent Law Kill the Garage Inventor and Startup? Congress got it wrong when it harmonized U.S. patent laws with the rest of the world. Now, startups and American inventors are at a disadvantage.
By Bernard Klosowski Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
What do Walt Disney Studios, Apple and Harley-Davidson all have in common?
They were all born in a garage.
The "garage inventor" has achieved iconic status on the American business landscape.
The image of a lone inventor toiling away late at night in his garage in the hope of discovering the next game-changing invention has become symbolic of American innovation and entrepreneurship. From Mattel toys and Yankee Candle to countless high-tech startups, the garage has been the laboratory and incubator for some of the world's most recognizable brands and innovative ideas – so much so, that the Palo Alto, Calif., garage where Bill Hewlett and Dave Packard first began tinkering in 1938 has been officially designated as the "Birthplace of Silicon Valley."
But the days of the garage inventor may soon be coming to an end – and with them, America's status as the global leader in innovation. Recent changes in U.S. patent law have led to a steady erosion in the rights of the individual in favor of large and foreign corporations, putting today's garage inventors at a distinct competitive disadvantage.
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Unlike other patent systems around the world – which favor the rights of the corporation or the state over the individual inventor – the U.S. patent system was designed from the start to encourage the individual ingenuity that would help spark the growth of a new nation.
Recognizing that giving individuals exclusive rights to their inventions for a limited time would incentivize them to share their ideas, the Founding Fathers established the patent system in the U.S. Constitution. And for more than 200 years, this system – designed expressly to foster individual innovation and entrepreneurship – fueled America's growth and prosperity.
In particular, the U.S.'s "first-to-invent" system was especially beneficial for both the individual inventor and small startups. Under first-to-invent, a garage inventor could secure a patent on an invention even if a large and well-financed corporation had already filed for a patent on the same invention – provided the individual could prove he invented it first. In this way, the first-to-invent system leveled the playing field for small inventors who lacked the staff, capital or other resources needed to pursue patent applications with the speed and agility of big business.
In 2011, however, at the behest of Congress and the president – and amid pressure from lobbyists representing large corporations tired of fighting patent-infringement lawsuits from garage inventors – the U.S. Patent & Trademark Office embarked on a campaign to "harmonize" U.S. patent law with patent systems around the world. "As innovators seek to tap into global markets, it is imperative that the international patent system provide consistent, cost-effective avenues to obtain reliable patent rights in multiple jurisdictions," the USPTO website states.
Instead of helping other countries adopt the clearly successful elements of U.S. patent law, Congress took the opposite tack, choosing to dumb down U.S. law by aligning it with foreign patent systems, many of which are little more than registration systems that favor the interests of the state or company over the individual inventor.
The result was the America Invents Act. The most significant change in U.S. patent law in decades, the law replaced the first-to-invent system with the European Union's "first-to-file" system, which awards a patent to the first person or company to file a patent application on an invention, regardless of who actually invented it first. It was a puzzling move, considering that the EU's patent system is struggling financially due in part to its excessive regulations that favor big corporations over the individual inventor.
Since various aspects of the America Invents Act have been phased in over the past two years – with some provisions only taking effect in the past few months – it's difficult to ascertain the immediate impact of this major policy shift away from America's constitutional preference for the rights of the individual and toward a European system favoring the state and big business.
Related: Is Intellectual Property Even Property at All?
It's safe to say, however, that the new law will make it much easier for major international corporations to fend off patent-infringement lawsuits filed by garage inventors, who must now race to patent their inventions before a business behemoth gets wind of their development and beats them to it. That will require individual inventors and startups to devote more time and resources to securing legal and professional representation to protect their inventions and less time to what they do best: inventing the new products and technologies that have made America a global innovator. In this way, the patent-law changes may very well hamper innovation at a time when the U.S. economy needs all the innovation and entrepreneurship it can get to drive the nation's recovery.
It's also more than a little ironic that the biggest supporters of the America Invents Act included Apple, Microsoft and Google – all of which were founded by individual inventors in a garage. Whether future entrepreneurs will enjoy the same opportunities as Steve Jobs, Bill Gates and Larry Page – without the patent system advantages that helped fuel their success – remains to be seen.
