Patent Reform Bill Will Crush Small-Business Innovation

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Jun 22, 2011, 03:35 ET

WASHINGTON, June 22, 2011 /PRNewswire-USNewswire/ -- NSBA is urging the House to reject the America Invents Act (H.R. 1249). This legislation will irreversibly damage the ability of small-business owners and entrepreneurs to create, develop and commercialize their innovations.

"Small firms produce five times as many patents per revenue dollar as large firms and more small-business innovations are commercialized," stated NSBA President Todd McCracken. "Passage of this bill will have sweeping, negative implications not only on small business, but on job-creation and the overall economy."

The "reforms" in this bill, namely the provisions on post-grant patent challenges and its effective elimination of the American grace period, would put small firms at far greater risk than the current system. Currently, the grace period grants firms up to a year to raise capital, assemble partnerships, and perform field tests before filing a patent application. The new language would gut that grace period and force small firms—the ones that can afford it—to file applications early and often, even before good information was available.

The current U.S. patent system has played a fundamental role in helping the U.S. achieve its status as the global leader in technological innovation—something the America Invents Act would bring to a screeching halt.

"This bill is the epitome of 'hug 'em in public and mug 'em in private'," stated Larry Nannis, CPA, NSBA chair and shareholder at Levine, Katz, Nannis + Solomon, P.C. "If members of Congress truly stand behind small business, as they claim, they will reject this anti-small business bill."

NSBA does support the enactment of a stand-alone bill that ends fee diversion at the U.S. Patent and Trade Office (PTO). The PTO is woefully underfunded and its role in American innovation and the economy is too important to neglect.

Since 1937, NSBA has advocated on behalf of America's entrepreneurs. A staunchly nonpartisan organization, NSBA reaches more than 150,000 small businesses nationwide and is proud to be the nation's first small-business advocacy organization. For more information, please visit www.nsba.biz.

SOURCE National Small Business Association