The ‘Inventorpreneur’, America’s Economic Savior

By Robert N. Schmidt
September 16, 2020

“Small businesses inventors are America’s golden goose. But the very group that is most productive for wealth creation and job creation receives only about one-eighth of its fair share of federal dollars.”

Invenorpreneuer op-ed - https://depositphotos.com/31248541/stock-photo-opinion-business-concept.htmlAs we start to approach the apex of the COVID-19 pandemic, the next hurdle will be solving the economic crisis. Getting people back to work will be the next job for America’s leaders.

America’s small businesses have always been the backbone of the country’s economy, providing 64.9% of net new jobs. Main Street shops and restaurants play a very important part in providing paychecks. However, even more important are America’s inventors. The inventor/entrepreneur (“Inventorpreneur”) creates the technologies and jobs that stay in America and don’t move overseas to places like China. They usually do this by patenting their inventions and creating new companies. Intellectual property (IP) produces high paying jobs not only for scientists and engineers, but also for marketing and manufacturing managers, technicians, salespeople, artists, and others.

America’s Golden Goose

Patents (and their technologies) are strongly linked to both local economic growth and global competitiveness. IP-intensive industries support 27.9 million U.S. jobs and contribute $6.6 trillion dollars (38.2%) of the U.S. gross domestic product (GDP). They also have a 46% wage premium over non-IP-intensive industries. More importantly, intangible assets (mostly IP) account for about 80% of business equity and 84% of the value of the S&P 500.

More scientists and engineers work for small companies than for large companies, universities or federal labs. Small companies with fewer than 100 employees employ 35.7% of business’s scientists and engineers and 6% are self-employed; yet they receive less than 5% of the federal R&D dollars. Small businesses produce 20 times more patents per R&D dollar than universities and five times more than large businesses. This is important, as the Federal Reserve says that patents are the number one indicator of regional wealth, more important than education or industry specialization. Small businesses inventors are America’s golden goose. With 35.7% of the scientists and engineers, small businesses only receive about 4.5 % of the federal R&D dollars. Thus, the very group that is most productive for wealth creation and job creation receives only about one-eighth of its fair share of federal dollars.

There are currently about a million utility patent applications pending. Since about 22% of the U.S. patents are granted to micro and small business (including individual inventors), there are likely about 220,000 small business pending applications. Also, there were roughly about 400,000 utility patents issued to small business since 2015. However, recently, in part due to the Coronavirus pandemic, small business inventors are abandoning their patents at twice the normal rate.

Jumpstarting the Economy with ‘Inventorpreneur Grants’

As we look to jumpstart the economy, Congress and the White House should consider assisting small business and independent inventors. A $20,000 grant for each outstanding U.S. patent application (about $4.4 billion) and a $50,000 grant (about $20 billion) for each patent issued by the U.S. Patent and Trademark Office (USPTO) to American Inventorpreneurs since January 1, 2015, will provide about $24.4 billion to help create more high paying jobs, similar to those that Americans were used to before the creation of the “gig economy.”  These grants (or forgivable loans) would be used for patent work (attorneys, agents, draftspersons, fees, and other incidental costs in obtaining or continuing U.S. or international patents), further research and/or development, manufacturing, scale-up, marketing, sales, and distribution of the company’s technology.

These Inventorpreneur grants (to be called “The Inventorpreneur Jobs Act”) will help provide the jobs we have been missing in the last decade. However, the economy will also require the passage of the STRONGER Patents Act by Congress. This bill reverses the weakening of our patent system caused by: 1) the America Invents Act (which created the Patent Trial and Appeal Board (which some have dubbed the “Patent Death Squads”); 2) the U.S. Supreme Court decision in eBay v. MercExchange (which eliminated injunctions, making most patents unenforceable by small businesses); and 3) Alice v. CLS Bank (which made many new technologies unpatentable, allowing China to leap ahead of the United States in patenting new technologies). Enacting the STRONGER Patents Act is absolutely essential if America wants to become “Great Again”.

It is time to pass legislation that will help reinvigorate the economy after the pandemic: the STRONGER Patents Act and the Inventorpreneur Jobs Act. It is time to unleash America’s job creators: the inventors. The Inventorpreneurs.

Note: Schmidt, as an inventor on over 40 patents himself and principal in patent holding manufacturing companies with over 200 patent assets, stands to benefit from the proposed Inventorpreneur Jobs Act. However, Schmidt is Co-Chair of the Small Business Technology Council, part of the National Small Business Association, which advocates for the over 5,000 businesses that participate in the Small Business Innovation Research (SBIR) program. The SBIR program produces more patents than all of America’s universities combined.

Image Source: Deposit Photos
Author: tashatuvango
Image ID:31248541 

The Author

Robert N. Schmidt

Robert N. Schmidt , MS, MBA, JD, PE, is an entrepreneur, professional engineer, and patent attorney who has founded and operates six medical device and aerospace technology companies in the Cleveland, OH area. He is also the national Co-Chair of the Small Business Technology Council (SBTC.org) and advocates on behalf of small business inventors.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 6 Comments comments. Join the discussion.

  1. Jonathan Stroud September 16, 2020 10:50 am

    I like this idea. I think it should be tied to a restriction to not wholly sell your patents to others (particularly) so as to avoid profiteering, but the idea of encouraging small inventors through the use of grants is a good one. If you look at the license restrictions of the LOT (License-on-Transfer) program, they are sound. Let the patents be the economic drivers of small business collaboration agreements and sales; but restrict them to prevent fire-sale offloading to NPEs down the road.

  2. Josh Malone September 16, 2020 10:55 am

    Mr. Schmidt, I would point out that H.R. 5478 the Inventor Rights Act accomplishes much of what you propose. https://www.congress.gov/bill/116th-congress/house-bill/5478/text

  3. Anon September 16, 2020 12:55 pm

    Mr. Stroud,

    The view of removing the alienability of property is — and should be — anathema to any attorney understanding the fundamental nature of the US patent system.

    Your view here is a sheep’s clothing of the wolf’s “Oh Noes Tr011s” fallacy.

  4. Anon September 16, 2020 4:07 pm

    …and I would add – that it is unfortunate that many of the inventors-that-are-also-entrepreneurs appear to suffer from a myopia that would adversely affect them if rights were indeed LOCKED INTO the ‘who owns’ aspects of patents that were ALWAYS meant to be fully alienable.

  5. Benny September 20, 2020 1:02 pm

    “A $20,000 grant for each outstanding U.S. patent application…”
    No. Think it through, that would create the wrong incentives. Patent attorneys would encourage filing frivolous applications, hoping for a slice of the federal grant pie. Worse, inventors might file frivolous, meritless pro se applications just to get their hands on a grant.
    A better idea would be to refund filing fees for every granted parent ( but not continuation) application.

  6. Anon September 21, 2020 12:01 pm

    Hmm,

    A post by Benny with which I actually agree with. I think application alone does not merit a payout.

    I would grant for patents — but I would also include any patents that are themselves continuations of other patents. I see NO reason why exclusion of such should be countenanced. If the secondary patents are not proper patents, then they should not have been granted. The mere fact of one granted patent being a continuation of another has no nexus with the fact that the item earned a grant.

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