International Trade: Federal Action Needed to Help Small Businesses Address Foreign Patent Challenges
Highlights
Small and start-up businesses are principal sources of innovation and are vital to U.S. economic growth. Statistics show that small business created more than 5.5 million new jobs in the United States during the 1990s. In the current global economy, protecting innovations in the United States and abroad is an important component of small businesses' ability to develop overseas markets. The cost of obtaining, maintaining, and enforcing foreign patents is the most significant foreign patent impediment that small businesses encounter. GAO found that obtaining patents abroad is costly for several reasons: (1) companies typically seek patents in several other countries simultaneously and incur costs in each location, (2) some foreign patent office fees are substantially higher than corresponding U.S. Patent and Trademark Office fees, and (3) foreign patent laws and requirements are complex and difficult to understand causing companies to incur substantial U.S. and foreign legal fees. The businesses GAO surveyed said that the impediments they encounter have discouraged or prevented them from obtaining as much foreign patent protection as they would like. Large businesses are better equipped to deal with foreign patent impediments because they have more financial resources and foreign patent expertise and are better able to enforce their patents abroad. The small businesses and patent attorneys thought that certain federal actions could help small businesses overcome the impediments they face in seeking foreign patent protection.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Patent and Trademark Office | In order to address the impediments that small businesses face in obtaining foreign patents, the Director of the U.S. Patent and Trademark Office should obtain input from small businesses, experts in global patent issues, and other interested parties in order to assess the advantages and disadvantages of various options for achieving additional patent law harmonization. | In July 2002, GAO issued "International Trade: Federal Action Needed to Help Small Businesses Address Foreign Patent Challenges" (GAO-02-789). In this report, GAO recommended that the U.S. Patent and Trademark Office (USPTO) obtain input from small businesses, experts in global patent issues, and other interested parties in order to assess the advantages and disadvantages of various options for achieving additional patent law harmonization. The Under Secretary and Director, USPTO, informed Representatives Waxman, Manzullo, and Burton, as well as Senators Bond, Thompson, and Lieberman, in writing that, consistent with the GAO recommendation, USPTO would seek comments from small... businesses, experts in global patent issues, and other interested parties on additional harmonization of patent laws. A request for comment appeared on October 28, 2002, in the Federal Register (Volume 67, Number 208); comments could be provided in writing or at USPTO-hosted roundtables. A round table meeting was held on December 19, 2002, in Arlington, VA. Participants represented small businesses, major intellectual property and trade associations, intellectual property law firms, and one law school. They provided a range of views on the benefits or disadvantages of patent harmonization for small businesses and addressed questions on the obstacles that small businesses face in patenting abroad and the domestic actions that can be taken to help small businesses protect their intellectual property overseas.
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| Small Business Administration | In addition, the Administrator of the Small Business Administration, with assistance from the Director of the U.S. Patent and Trademark Office, should collect and make available information about key aspects of foreign patent laws, requirements, procedures, and costs that would be useful to small businesses that are considering whether to obtain foreign patent protection. | In July 2002, we recommended that the Administrator of the Small Business Administration (SBA), with assistance from the Director of the U.S. Patent and Trademark Office (USPTO), collect and make available information about key aspects of foreign patent laws, requirements, procedures, and costs that would be useful to small businesses that are considering whether to obtain foreign patent protection (International Trade: Federal Action Needed to Help Small Businesses Address Foreign Patent Challenges, GAO-02-789, July 17, 2002). In response to our recommendation, these agencies have undertaken efforts to educate small and medium-sized enterprises (SME) about protecting their intellectual...
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| Patent and Trademark Office | In addition, the Administrator of the Small Business Administration, with assistance from the Director of the U.S. Patent and Trademark Office, should collect and make available information about key aspects of foreign patent laws, requirements, procedures, and costs that would be useful to small businesses that are considering whether to obtain foreign patent protection. | In July 2002, we recommended that the Administrator of the Small Business Administration (SBA), with assistance from the Director of the U.S. Patent and Trademark Office (USPTO), collect and make available information about key aspects of foreign patent laws, requirements, procedures, and costs that would be useful to small businesses that are considering whether to obtain foreign patent protection (International Trade: Federal Action Needed to Help Small Businesses Address Foreign Patent Challenges, GAO-02-789, July 17, 2002). In response to our recommendation, these agencies have undertaken efforts to educate small and medium-sized enterprises (SME) about protecting their intellectual...
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