Published by LawTechie - October 7, 2011 - LawTechie

IP Finance has published an excellent interview with Deborah Sweeney of MyCorporation.com discussing how the America Invents Act (AIA) will affect small businesses and start-ups. Ms. Sweeney’s take is that the AIA will help small businesses by providing the following:

  1. Legal Issues are less of a Deterrent for Investment
  2. Small Companies have a cheaper fast-track option
  3. Non-inventors are allowed to file without the inventor

As per Tony Handal’s interview with Inc.com, we are not so sure that we agree with #1 or the importance of #2: While the Act does purport to provide a level of certainty with its first-to-file provision, there is now the problem of requiring small businesses to invest additional resources in fully conceiving their inventions so that they could file ASAP, lest a richer, more resourceful company (who did not necessarily come up with the idea first) beats them to the punch.

Thus, while investors will pay less for legal issues, they will also be less likely to find small companies with that niche idea because bigger companies, while slower to innovate, will be faster at going from concept to patent filing. Certainly investors can invest in the bigger company — but seeing a 2-3% return on a public stock isn’t as lucrative an investment as betting money on a start-up and seeing an exponential return.

LawTechie is a blog focusing on trends in tech and digital media. Areas covered include intellectual property, cyberlaw, venture capital, transactions and litigation as they relate to the emerging sectors. The blog is edited by the firm's partner Tim Bukher with contributions from the firm's experts in their respective areas of law.

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