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Jan 17, 2012

USPTO Balks at Grant/Loan Program to Help Startups Protect Patents

  • Smaller biotech startups in and outside the life sciences seeking help from Washington in gaining international patent protection shouldn’t expect new grant or loan programs any time soon. The U.S. Patent & Trademark Office (USPTO) has recommended against the idea in a report released January 13.

    In an effort to soften the blow, USPTO suggested instead that it join with the U.S. Small Business Administration (SBA) to expand several current intellectual property education and training programs. The report cited just one by name—USPTO’s Intellectual Property Awareness Campaign (IPAC), which according to the agency has been offered to more than 1,000 small businesses since 2005.

    USPTO also recommended ongoing talks with industry to investigate possible solutions, “including possibly public-private partnerships or other means of helping small businesses.” Additionally, the agency opened the door to collecting more information on the topic with SBA and other federal agencies, calling it “useful and informative as a next step.”

    However, the patent agency balked at creating a new program to address overseas protection of patents, citing opposition to the idea at public hearings last fall. “There is too little evidence upon which to base sound policy in this area: Neither the academic research nor public comment offered sufficient evidence to determine relative advantages, if any, of the U.S. government employing a loan versus a grant program to help defray the expenses of small businesses seeking international patent protection,” USPTO concluded.

    USPTO produced its 38-page report, International Patent Protection for Small Businesses, in consultation with SBA. USPTO was required to prepare the report for Congress as part of the Leahy-Smith America Invents Act, the overhaul of U.S. Patent law enacted in September by President Barack Obama.

    From testimony at public hearings and written statements this fall, the patent office concluded that patenting by small businesses is uncommon and confined to the life sciences and other tech sectors. While many small businesses may benefit from extending patent rights outside the U.S., too few know why they need to do so or how they can make these decisions accurately, then pursue them cost-effectively, USPTO said.

    In several instances, the report quoted testimony from Stanley C. Erck, president and CEO of Novavax, who testified for the Biotechnology Industry Organization (BIO). Erck noted that biotech companies that file a U.S. patent application today and a patent corporation treaty (PCT) application one year from now have only 30 months to decide whether to abandon the application if they want to avoid the cost of expanding into a number of foreign countries.

    “Thirty months may be enough in some other industries, but in biotech that’s too soon for an informed decision. Including translation costs, the aggregate expense of entering the national stage in Japan, Korea, Europe, Australia, and the NAFTA countries can easily exceed $100,000; if the BRIC countries are added, costs can double,” Erck testified.

    Erck suggested the federal government expand the services offered by its assistance programs for startups to patent rights for small businesses, “because IP business assets are at least as important as other, more tangible business assets.”


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