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Patenting and Innovative Startups: Putting the America Invents Act in a Broader Economic Context

June 26, 2015 Comments off

Patenting and Innovative Startups: Putting the America Invents Act in a Broader Economic Context (PDF)
Source: U.S. Small Business Administration

Patents are at the crux of innovation in the economy. Patents provide a framework by which innovative research can take place and new technologies can be disseminated. In particular, patents provide a clear economic incentive to undertake innovative research that has the potential to substantially grow startups.1 Patents protect researchers and investors with clear determinations of intellectual property rights while also providing a vehicle with which to share newly developed technologies without a fear of losing ownership of intellectual property.2

Given the significance of patents, any changes to the patenting system could potentially have widespread impacts—both positive and negative—to startups, small businesses, and by extension, to the economy as a whole. In recent years, the Leahy-Smith American Invents Act of 2011 (AIA) made significant changes to the U.S. patenting system. While it is too early to tell precisely what those impacts are, the AIA could affect the viability of innovative startups.3

The Leahy-Smith America Invents Act: A Preliminary Examination of Its Impact on Small Businesses

June 17, 2015 Comments off

The Leahy-Smith America Invents Act: A Preliminary Examination of Its Impact on Small Businesses
Source: U.S. Small Business Administration

The Leahy-Smith America Invents Act of 2011 (AIA) may be the largest change in U.S. patent policy in over half a century. Among other things, the AIA shifts the U.S. patenting system from a first-to-invent (FTI) to a first-inventor-to-file (FITF) basis. This eliminates the use of dates of invention in determining who receives a patent. This policy change has the potential to have widespread impacts on how patents are acquired, utilized, and protected.

The intricacies of the AIA and the complex way in which patents contribute to the broader economy mean that this change could yield different economic impacts to businesses of different sizes and industries. While the FITF shift took effect in 2013, only a modicum of post-AIA patenting data is available for analysis because of the length of the patenting process and expected legal challenges. As a result, the positive and negative economic outcomes of the FITF shift are still uncertain.

The magnitude of these outcomes is particularly important to small businesses since some rely on patents to raise capital, and intellectual property is central to some business plans. Given the uncertainty and importance of the economic outcomes resulting from the shift to the FITF system, the AIA included a provision directing the Office of Advocacy to study how this policy shift could affect small businesses. In 2014, the Bella Research Group was awarded a contract to carry out this study. Their report employs a literature review and three quantitative analyses to assess the potential small business impacts of policy changes resulting from the AIA.

Demographic Characteristics of Business Owners and Employees: 2013

May 4, 2015 Comments off

Demographic Characteristics of Business Owners and Employees: 2013 (PDF)
Source: U.S. Small Business Administration

Business owner characteristics and the economic and business environment are changing. Small business owners and entrepreneurs make important contributions to business creation and growth in the American economy. Understanding the characteristics of business owners and how they differ from employees is important for measuring the overall economic well-being of the economy including the economic incentives for entrepreneurship. This issue brief examines business owner demographic characteristics in 2013 and compares these characteristics to those of employees in the U.S. economy.

Equity-based Crowdfunding: Potential Implications for Small Business Capital

April 22, 2015 Comments off

Equity-based Crowdfunding: Potential Implications for Small Business Capital (PDF)
Source: U.S. Small Business Administration

For small business owners and entrepreneurs to build, grow, and support their business, it takes capital, and today, many of these individuals are choosing alternative forms of capital. One popular avenue is crowdfunding. “Crowdfunding systems enable users to make investments in various types of projects and ventures, often in small amounts, outside of a regulated exchange, using online social media platforms that facilitate direct interaction between investors as well as with the individual(s) raising funds.” There are three basic types of crowdfunding. Money is given in exchange for a clearly defined good (reward), a piece of the venture (equity), or a loan agreement (peer-to-peer). Typically, these three types of crowdfunding occur on different types of websites or platforms. Today, crowdfunding is steadily reaching critical mass as it is now estimated to be worth $3 billion to $5 billion worldwide.

Despite the growth of crowdfunding in the alternative lending landscape, one major crowdfunding method remains untapped. Equity-based crowdfunding was created under Title III of the Jumpstart Our Business Startups (JOBS) Act (2012), but the rule under Title III is still being written at the Securities and Exchange Commission (SEC) to expand the ability for entrepreneurs to sell equity to prospective investors online. Until the SEC issues final rules under Title III, equity-based crowdfunding for the vast majority of Americans remains off-limits.

Small Innovative Company Growth—Barriers, Best Practices and Big Ideas: Lessons from the 3D Printing Industry

March 11, 2015 Comments off

Small Innovative Company Growth—Barriers, Best Practices and Big Ideas: Lessons from the 3D Printing Industry
Source: U.S. Small Business Administration
From email:

Small Innovative Company Growth—Barriers, Best Practices and Big Ideas: Lessons from the 3D Printing Industry identifies 11 barriers that range from the individual level (e.g., academic debtload) to the systemic level (e.g., the reliable exchange of research advancements).

The report was written by Mark Harrison, the Office of Advocacy’s entrepreneur in residence, over a 12-month period. The report draws on input from numerous contributors and contains extensive links to news articles, research studies, and innovative programs. To plant it in the practical realm, the author examined the barriers specific to advanced manufacturing/3D printing, an emerging industry that has the potential to affect traditional economic patterns and produce breakthroughs in dozens of fields.

The Small Business Advocate — February 2015

February 22, 2015 Comments off

The Small Business Advocate — February 2015 (PDF)
Source: U.S. Small Business Administration
From e-mail:

The Office of Advocacy has released the February 2015 issue of The Small Business Advocate newsletter. This edition features Advocacy’s newly released Small Business Profiles for the States and Territories, and includes the United States profile in full. In addition, the newsletter contains regulatory news and a summary of the Report on the Regulatory Flexibility Act FY 2014.

Small Business Profiles for the States and Territories, 2014

February 5, 2015 Comments off

Small Business Profiles for the States and Territories, 2014
Source: U.S. Small Business Administration

The Office of Advocacy’s Small Business Profiles for the States and Territories are an annual analysis of each state’s small business activities. They provide information on small business employment, industry composition, small business borrowing, exporting, and survival rates, as well as business owner demographics. The profiles provide information for the 50 states, the District of Columbia, the U.S. territories and United States. Detailed historical data may be found in the Small Business Economy.

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