Patents and Innovative Entrepreneurship

Chad Moutray

Innovation is the lifeblood for many entrepreneurial ventures. As William Baumol has written, innovative inventors help to push our economies forward in “revolutionary” ways, helping us to stay competitive and bring new ideas to the marketplace. Indeed, small businesses often base their own entire existence on a select number of patents which “push the envelope” and force their larger counterparts to innovate as well to stay competitive. Of course, Baumol’s comments were an overgeneralization, reflecting the importance of new inventions and their prevalence among small firms. We know that large firms innovate, too. For instance, Apple has been able to create an entirely new tablet segment of the computer market, selling nearly 15 million iPads in a market that did not exist one year ago.

Behind many of these innovations, of course, is a patent. Companies need to have a patent to protect their intellectual property and their overall investment in research and development. Yet, the U.S. Patent and Trademark Office currently has a backlog of 700,000 applications, or 24 months of processing time, according to its Director David Kappos, complicating the patenting process and frustrating inventors. Earlier this week, the Director went before the Commerce, Justice, Science, and Related Agencies Subcommittee of the House Appropriations Committee. The President’s FY 2012 budget proposes to use make PTO fully fundable through its projected $2.7 billion in user fee collections. With these funds, PTO plans to hire 1,500 new patent examiners this year, for a net increase of 1,000 new people. Further complicating this process, the Director said, is that patent applications are dramatically up this year by 7.5 percent, much higher than expected, with the majority of those coming from overseas. The agency is currently undertaking a major structural and technological revamping to improve its overall efficiencies, he added. Of course, in order for PTO to meet its strategic plans, its budget must be approved, as it is currently operating under the continuing resolution at FY 2010 spending levels.

One of the challenges of charging fees is that they might be prohibitive or too cumbersome for individual or small inventors. Director Kappos noted that PTO has reduced its fees for small and micro entities and provides help for these individuals through its Independent Investor Assistance Center. In addition, last year, the agency announced a pilot program for expedited processing for small businesses (for a fee) with two or more patent applications pending.

Moving forward, it will be essential for PTO to reduce its backlog of patent applications, as these transactions are often vital for many entrepreneurial businesses. While we are moving into a period where everyone’s budgets are being re-examined, we should not lose sight of the value of innovation to our nation’s economic growth. It is nice to see that PTO is recognizing the individual inventor and small business community, reducing their fees, and working with them to expedite the process where possible.

Add a Comment

Name:   Email:   Comment:   Submit  

1 Comments

RE: Patents and Innovative Entrepreneurship

Patrice McDonald said...

My name is Patrice McDonald of MsMac Designs, Inc. I am the patent owner and inventor of the first cake stand ever created to change the historical stacking of the three tier cake. Our patent number is D490, 657s. The manufacturing of this product will bring new display ideas to the food display industry. This product is also versatile that it will also promote “The Art of Food Display”. Visit our company web-site for viewing (msmacdesigns.com). Our product market (a 400billion dollar market) has been stagnated and has long for a change. I have exhibited the product at the RBA-Retails Bakers of America International Convention in Chicago at the McCormick Center. I had huge attention: 15 distributors (including the distributor of Las Vegas), a manufacturer, and the editor of the International Magazine Modern Baking. The editor is a fan of the product looking forward to me manufacturing the product to showcase in their magazine. He has displayed the product already once for note as a product that will be coming. I have been an exhibitor for dummies to the fact that I had huge orders and did not have machine manufacturing complete. I have now had engineered drawings, e-drawings, and a prototype done. I have had all the attention but the tool making is now the problem. I have gone to the Governor’s seminars to contract with the government but in order to receive the contracts the manufacturing has to be in place. I am hoping to partner with a Michigan manufacture to create jobs and a global product. If you can investigate the market you will see the baking industry is a silent unspoken market with huge sales. People never stop getting married (10,000,000 weddings a year), never stop celebrating; culinary artistic designs have never been displayed in the illumination this product brings. I have interviewed with Disney at Disney with an order but no manufacturing. This product can bring huge revenue to Michigan machine manufacturing. I have other products to patent. I have cake decorated for over 20years and know that this market is stagnated and ready for change. The three major catalogs of the United States (Deco Pac, Bakery Craft, Philef & Holding) display the same pictures year after year never even taking another picture because they know that there’s nothing to compete with. Comment: After you get the patent who will help bring the product to market. You need to know one will need tooling and machine manufacturing for huge market sales and catalogs. This product will be Global!!! Look forward to team up and manufacturing Michigan. I can be contacted by e-mail: patrice@msmacdesigns.com, phone: 313-804-7456. Thank You, Patrice McDonald, CEO MsMac Designs, Inc. .