Are you small, American, IP-ish and in business? If so, read on ...

It's so strange to see a familiar problem when it's viewed from the other side.  European commentators and analysts have long made deeply concerned clucking noises about the fate of small (often but not exclusively British) businesses that set out bravely to trade in promising foreign markets, only to find that their IP rights -- which work quite well at home -- aren't particularly useful in countries where they don't actually have them.   Funnily enough, small American businesses that set out bravely to trade in promising foreign markets have many of the same problems.  This is apparent from a quick glance at the United States Patent and Trademark Office (USPTO) Small Business web pages, which are boldly, if not entirely fairly, decorated with the STOP-FAKES.GOV sign depicted on the right.  Why is it "not entirely fair"? Because a great deal of the loss is likely to derive from copying which isn't unlawful because it's done in a country in which local IP rights have not been secured -- though goods made lawfully in this manner can slip into markets where IP rights exist and, being sold on the cheap, cause damage to brand owners and product originators while racking up handsome profits for those who deal in them. Anyway, what does the USPTO have to say? Let's take a look at the site's front page:
"Are you a small business?

Success in a global economy depends more and more on intellectual property (IP) assets. In fact, IP-based businesses and entrepreneurs drive more economic growth in the United States than any other single sector [We like to take this as axiomatic, but a model that adequately accounts for vague variables like "IP-based", "businesses and entrepreneurs" and "growth" make sectoral comparisons hard within each jurisdiction, and as between jurisdictions].

Unfortunately, intellectual property has captured the attention of pirates and organized crime. Today, piracy, counterfeiting and the theft of intellectual property pose a serious threat to all U.S. businesses. Industry estimates of the cost of such theft range from $250 billion to 750,000 jobs per year. These threats to ongoing invention and innovation make it important to consider securing IP protection, whether you're a major multinational firm or a 1-person home business.

Small businesses. Big questions.
While every IP-based business is vulnerable to piracy and counterfeiting, small businesses can be at a particular disadvantage because they lack the resources and expertise available to larger corporations [apart, that is, from the lucky few who become trolls?]. Small businesses may also often lack the familiarity with the process of protecting intellectual property: research conducted in the spring of 2005 by the U.S. Patent and Trademark Office (USPTO) indicates that only 15 percent of small businesses that do business overseas know that that a U.S. patent or trademark provides protection only in the United States [The IPKat wonders whether this figure, low as it seems, is higher than in less commercially-savvy jurisdictions. It would be good to follow this up at regular intervals, with non-US comparators].

It has never been more essential for you to consider patenting your idea or registering your name as a trademark, especially if you are a small business owner or are starting a small business.

The USPTO has created this Web site to help small businesses consider the benefits of strong IP protection - both in the United States and overseas [not much use for Canada and Mexico, then, muses Merpel] - and decide whether it is right for them.

This site includes important information on whether and when to file for intellectual property protection, what type of protection to file for, where to file, and how to go about it".
Once you're into the heart of the site, the information is clear, crisp, largely US-centric (which is reasonable to expect if the website hadn't mentioned the "overseas" bit) and in some cases debatable. For example,
"A patent for an invention is the grant of a property right to the inventor. Patents are granted for new, useful and non-obvious inventions for a period of 20 years from the filing date of a patent application, and provide the right to exclude others from exploiting the invention during that period.".
The Kat wonders how many countries grant an outright 20 year protection.  In most jurisdictions with which he is familiar, many or most patents lapse, die or are revoked in around half that time.  Merpel adds, when this site is further developed, it would be good to see something about licensing on it.  She couldn't find the "l' word anywhere she looked and, because small businesses often lack the resources either to develop their own innovations or to sue others for infringing their rights, licence-based business models can be really valuable.

Thanks, Leason Ellis, for your Tweet which alerted the Kats to this item.
Are you small, American, IP-ish and in business? If so, read on ... Are you small, American, IP-ish and in business? If so, read on ... Reviewed by Jeremy on Wednesday, October 06, 2010 Rating: 5


  1. Although not strictly within the remit of the "patents and trademarks" office, it would have been helpful for the USPTO to mention the requirement that a copyright work be registered at the Copyright Office before any action to enforce the copyright can be commenced. Advantages of registration can also include statutory damages and recovery of attorneys' fees.

    While the USPTO site is a good start, politicians up for election in November have completely failed to identify IP as a vehicle for economic recovery among small businesses (preferring instead to claim that tax cuts automatically create jobs). Coincidentally, I blogged about this very topic yesterday:

  2. 15% does seem low, page 88 Gowers implies a whopping 30% of UK SMEs are savvy enough to know otherwise:

    "Businesses are particularly unaware of the international system of IP rights. The
    Confederation of British Industry (CBI) estimates that approximately 70 per cent of
    businesses are unaware that domestic IP does not provide protection abroad."

  3. @AJ: I don't know the basis on which the CBI came up with its estimation, but it's an organisation which in terms of its active membership is very much more likely to reflect the state of knowledge of larger businesses rather than smaller ones.

  4. I note that, while the USPTO web site does mention the fact that the 12 month grace period does not apply outside the US, it is not given particular prominence. Since prior self-publication will generally be fatal to a foreign patent, I would have thought it warranted greater emphasis.

    When I was an UK patent examiner in the 1980's it was not uncommon to find 100% anticipation of embodiments of inventions filed by some very large US applicants who really should have known better, in conference proceedings or reports thereon in US journals. Articles from the now-defunct journal "Electronics", and various IEEE proceedings formed a vital and fruitful part of my search material. Sometimes the drawings which illustrated an article were absolutely identical with those of the patent application, so no doubts about prior publication! Within the last 5 years I have seen an article on patents in a reputable US technical journal which referred to the 12 month grace period and made no mention whatsoever of patenting outside the US.


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