Academic journal article Academy of Entrepreneurship Journal

The Effect of Legislation on the Intellectual Property Supply Chain for Entrepreneurs

Academic journal article Academy of Entrepreneurship Journal

The Effect of Legislation on the Intellectual Property Supply Chain for Entrepreneurs

Article excerpt


The United States Patent and Trade Organization (USPTO) defines intellectual property (IP) as imagination made real. The phrase "intellectual property" is fairly young. The earliest use occurs in the title of the United Nations' World Intellectual Property Organization, first assembled in 1967 (Vaidhyanathan, 2003). IP is the ownership of a dream, an idea, an improvement or, an emotion that we can touch, see, hear, and feel. The IP supply chain is comprised of multiple stakeholders that include: inventors, agents, assignees, examiners and patent assertion entities (PAEs). While many inventors have been awarded protection of their creations, the outcome for those unfamiliar with the IP supply chain has been daunting due to the process (see Figure 1) and stakeholders in the process.

Similar to other types of property, intellectual property needs to be protected from unauthorized use ( There are three ways to protect different types of intellectual property: patents, trademarks, and copyrights. Patents provide rights for up to 20 years for inventions. Trademarks protect words, names, symbols, sounds, or colors that distinguish goods and services. Trademarks, unlike patents, can be renewed forever as long as they are being used in business.

Copyrights protect works of authorship, such as writings, music, and works of art that have been tangibly expressed. The Library of Congress registers copyrights which last the life of the author plus 50 years. It is essential to understand that copyright in the American tradition was originally meant as a narrow federal policy that granted a limited trade monopoly in exchange for universal use and access (Vaidhyanathan, 2003).

In the context of IP law and policy, the term "innovation" is most often used during discussions of patents, while creativity is more typically mentioned along- side copyrights. This discourse results from the mistaken belief that patents are the most (or only) relevant IP right with respect to science and technology, while copyrights are the most (or only) important right in cultural industries.

The emerging reality is that patents, trade secrets, copyrights, trademarks and other forms of IP protection are relevant across sectors, and that most industries are impacted by all of these issues. A recent development in IP law will affect entrepreneurs.

President Barack Obama signed the Leahy-Smith America Invents Act (AIA) on September 16, 2011. The law represents the most significant change to the U.S. patent system since 1952 through its attempt to harmonize the U.S. patent law systems with the rest of the world (CITATION). AIA contains numerous facets that have changed the process and requirements for requesting and obtaining a U.S. patent. Some of the most salient facets are: first inventor to file; inventor grace period; and expanded definition of prior art.

The U.S. transitioned from a first to invent patent system to a system where priority is given to the first inventor to file (FITF) a patent application instead of the first to invent the claimed invention. Second, under the new inventor grace period, publication of a claimed invention by the inventor less than 1 year before the filing of a patent application may not act as prior art. Figure 1 shows the patent application process. Furthermore, the law expanded the definition of prior art; the scope of prior art to be applied against a claimed invention is simplified to make the U.S. patent system more consistent with its economic competitors.

The USPTO is now enforcing all aspects of AIA. From the most mundane (permitting the patent owner to file for a patent as the assignee and trivializing full compliance with the requirement for an "inventor's oath"), to the most profound (banishing the concept of "deceptive intention" from the patent statute and affording patent owners a remedy for correcting all errors and omissions made in the original examination of a patent through the new supplemental examination), to the most substantive (elimination of all subjective and non-transparent tests for patentability in favor of a patent law in which the validity of a patent is assessed through information available to the public), the AIA did not shirk from working reform where the consequence would be greater transparency, objectivity, predictability, and simplicity in the operation of the U. …

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