Entrepreneurs Threatened By Ironically Named America Invents Act

So you’ve got a great idea for a business? Odds are, you’re not the only one that’s thought of it.

One of the biggest worries–and wastes of time–for new entrepreneurs is “what if someone else steals my idea?” They get very secretive, make people sign NDAs, and start talking to patent lawyers. As if you have the capital to litigate an infringer! What you really should be doing is going out and talking to customers and telling people your idea. You need to validate it in the marketplace!

Big companies couldn’t care less about what patents you hold, especially if you haven’t executed and produced the widget or service your patent describes. In the world we live in, it is usually wiser to act on attractive business opportunities if you have the means to execute on them than to worry about potential infringement. Android is a perfect example of this. Google entered the smartphone market and became a leader in two years. Now there’s a war being waged over smartphone patents, but Android marketshare continues to grow.

President Obama is about to sign a patent reform bill into law that will make it even harder for entrepreneurs to innovate and create jobs. The America Invents Act switches US patent law from a “first to invent” to a “first to file” system. This means that prior art no longer can invalidate a patent–unless it can be proven that the idea was directly stolen from the original inventor. This change will go into effect 18 months after enactment.

This change in the patent system, while more in line with the rest of the world, will simply cause an avalanche of patent filings by major corporations and patent trolls. Big companies who can afford full-time patent lawyers now have an even larger advantage over small entrepreneurs who often times cannot even afford the cost or time of filing a decent provisional patent.

Serious patent reform is necessary if America is to continue in it’s place as the world’s leader in economic power. We need to encourage innovation, and this patent “reform” bill does just the opposite. It places more power in the hands of large corporations, and consequentially places innovative start-ups at an even greater disadvantage.

This bill will make it harder for entrepreneurs to do what they do–innovate, and create jobs. Research by the Kauffman Foundation shows that new companies add 3 million jobs annually, while older companies lose 1 million. With unemployment at 9.1%, we really cannot afford to pass laws that give advantages to companies that, on balance, lose jobs each year.