Protecting American Innovators by Combating the Decline of Patents Granted to Small Entities

The new patent laws and recent economic trends indicate that there is a difficult time ahead for small entities. American entrepreneurs and small businesses have created several of the major technological innovations in the past forty years. However, statistics indicate that patents granted to small entities have declined. In the wake of this trend, the U.S. Patent system has undergone significant changes. Currently, the United States Patent and Trademark Office (“USPTO”) is in the process of implementing the policies and procedures outlined in its five-year strategic plan. Further, the Leahy-Smith America Invents Act (“AIA”), the largest patent reform law since 1952, was signed into law on September 16, 2011. Unfortunately, some of these new policies and the overall affect of the AIA may have a negative impact on the patenting efforts of small entities. For example, some scholars have argued that the AIA’s new “first-to-file” regime will result in a significant drop in the number of patents granted to small inventors. Accordingly, new patent policies in combination with the decline in small entity patenting may threaten the ability of small entities to continue to lead the country in innovation. There is some evidence to suggest that an increase in small entity patenting will correlate with a boost in American innovation. In response, this article proposes that the USPTO implement a prioritized examination program for small entities. In support of this program, this article examines policies that may affect a small entities’ ability to participate in patent. This article suggests that the patent prosecution process puts small entities at a disadvantage in comparison to large entities. Further, the new procedures implemented because of the AIA at best maintain the status quo regarding patent prosecution for small entities. Finally, this article proposes a patent valuation tool that would enable USPTO stakeholders to measure the effectiveness of the proposed program. The overall goal of these proposals is to balance the USPTO’s desire to optimize patent quality and timeliness with the goal of increasing the number of filed patent applications that are granted to small entities