Potential effects of the America Invents Act for SMBs

October 5, 2011

This September, the America Invents Act (AIA) was signed into law. This bill will have several effects on small- and medium-sized businesses (SMBs), some that may be notably beneficial and others that could cause difficulties for businesses of this size, according to Inovia.

SMBs need to consistently develop innovative products to stay competitive against larger players in the market. As such, any changes to patent law affect them greatly.

One of the notable aspects of the act is a 15 percent increase for all patent fees. Conversely, any business qualifying for micro-entity status – particularly small companies, for example – will have certain filing fees reduced by 75 percent, up from the previous 50 percent reduction.

However, the most significant revision is the U.S. Patent and Trademark Office (USPTO) process changing to a "first-to-file" system. Previously, those who could prove their invention predated another could obtain exclusive patent rights, but now whoever files a patent first will have exclusive rights to it.

Additionally, the Office of Innovation Development will be offering counsel to independent inventors and small businesses as the AIA rolls into effect, with one pilot program already in place in Minnesota. The act provisions that the Director of the USPTO will "work with and support intellectual property law associations across the country in the establishment of pro bono programs designed to assist financially under-resourced independent inventors and small businesses."

Adverse consequences of this act may be minimized through certain cost-cutting practices. For example, inventors can perform the majority of patent-filing tasks on their own and rely less on costly legal counsel. 

As an example of the difference between small-entity and standard USPTO fees, prioritized examination of a patent costs $4,800 for standard applicants and $2,400 for small entities. Micro entities would pay $1,200.