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.
GOOD FOR INNOVATION
Average patent wait time:
. . . 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.
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 A new rule makes it tough for anyone but the government to sue companies for labeling products with outdated patent numbers (which happened to Frisbee and Wooly Willy).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):
. . . 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.
$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.
A version of this article appeared in the February 2012 issue of Fast Company magazine.