Fast Company

Patents By The Numbers: Average Wait Time Is Down, But Trolls Cost Us $80 Billion A Year

Starting last fall and stretching through mid-2013, the U.S. has been overhauling the patent-approval process for the first time since 1952. The biggest change: our first-to-invent system, which favors creators, will become a first-to-file system, which favors . . . whoever files first. Uncle Sam says the reform will speed innovation. Our experts check the numbers.

NUMEROLOGY | The Real Cost Of Patent Reform Popup-Icon

GOOD FOR INNOVATION

Average patent wait time:
34 months
. . . and going down. Startups that qualify for the new fast-track option get their patents reviewed in as little as 12 months, which makes it easier to bring their products to market.

False-marking lawsuits
1000+ since 2010
. . . and going down. A new rule makes it tough for anyone but the government to sue companies for labeling products with outdated patent numbers (which happened to Frisbee and Wooly Willy).

U.S. Employment (nonfarm):
131.7 million
. . . and going up. If companies get patents more quickly, they can also start producing new products, which the White House says will generate jobs.

BAD FOR INNOVATION

Losses from "patent trolling"
$80 billion per year
. . . and going up. Because the new laws don't really crack down on patent trolls--those who buy patents solely to retroactively sue companies that have used them--the number of lawsuits will keep increasing, says Jim Bessen, who researched the phenomenon at Boston University.

VC Funding
$23.7 billion in 2010
. . . and going down. In a first-to-file system, inventors have to be more careful about sharing ideas with anyone--including potential investors. "There are too many opportunities to be knocked off," says Gary Lauder, a venture capitalist.

Patents issued to noncorporate inventors
31,923 in 2010
. . . and going down. When Canada switched to a first-to-file system in 1989, the race to file intensified--and individual inventors were put at a disadvantage (compared to big firms with lots of resources). A similar scenario could play out here.

Illustration by Romualdo Faura

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1 Comments

  • staff

    “Patent troll”

    Call it what you will...patent hoarder, patent troll, non-practicing entity, shell company, etc. It all means one thing: “we’re using your invention and we’re not going to pay or stop”. This is just dissembling by large infringers to kill any inventor support system. It is purely about legalizing theft.

    Prior to eBay v Mercexchange, small entities had a viable chance at commercializing their inventions. If the defendant was found guilty, an injunction was most always issued. Then the inventor small entity could enjoy the exclusive use of his invention in commercializing it. Unfortunately, injunctions are often no longer available to small entity inventors because of the Supreme Court decision so we have no fair chance to compete with much larger entities who are now free to use our inventions. Essentially, large infringers now have your gun and all the bullets. Worse yet, inability to commercialize means those same small entities will not be hiring new employees to roll out their products and services. And now some of those same parties who killed injunctions for small entities and thus blocked their chance at commercializing now complain that small entity inventors are not commercializing. They created the problem and now they want to blame small entities for it. What dissembling! If you don’t like this state of affairs (your unemployment is running out), tell your Congress member. Then maybe we can get some sense back in the patent system with injunctions fully enforceable on all infringers by all inventors, large and small.

    Those wishing to help fight big business giveaways should contact us as below and join the fight as we are building a network of inventors and other stakeholders to lobby Congress to restore property rights for all patent owners -large and small.

    For the truth about trolls, please see http://truereform.piausa.org/d....