A major economic incentive that drives an investment in a startup company is the promise of exclusivity offered by a U.S. patent. This promise has been undermined by the new U.S. Patent Law modeled after the 19th century German patent law.

Over the past two decades I have personally contacted several members of Congress (in an effort to prevent enactment of the new patent law (click to read summary of major provisions of the new patent law). My objections to this new patent law are many. During the legislative process, I asked the Director Kappos of the United States Patent and Trademark Office if the Obama administration would consider an exception for patents granted to small entities. Director Kappos said the Obama administration would not consider any such exception at that time.

Under the new law a U. S. patent’s validity can be challenged in the patent office. This decision will be made by a panel of technical/legal experts rather than a jury. These proceeding in the patent office can take several years. Litigation to enforce the patent can be stayed pending a decision by these experts. Even if the patent’s validity is upheld by these experts, their decision can be appealed to the Court of Appeals for the Federal Circuit. Thus, the uncertainty of enforcing the patent is a huge obstacle to attracting capital in such a risky venture as a startup company. This is a barrier to entering the market with a new product coveted by a global corporation. The global corporation can copy the new product with impunity during the critical initial stages of establishing a market for this new product. Consequently, it will be highly improbable for a small entity startup company to compete successfully with the global corporation.

WOULD YOU INVEST IN A STARTUP COMPANY BASED ON AN INVENTION IN VIEW OF THIS NEW PATENT LAW?

SIGN THE PETITION BELOW TO CHANGE THE LAW EXEMPTING PATENTS OF A SMALL ENTITY STARTUP COMPANY FROM A VALIDITY CHALLENGE IN PROCEEDING IN THE PATENT OFFICE.

 

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