Small businesses are an essential component to the U.S. economy, employing about half of the nation's private sector workforce and creating most of the nation's new jobs. Particularly in emerging industries, small businesses provide a significant share of technological innovation, reflected in quality patents.
Recognizing that high costs of obtaining patents should not discourage the significant innovative contributions of small business concerns, Congress allowed all small business concerns to pay reduced patent fees. 35 U.S.C. § 41(h). Today, however, the relief intended for small businesses is undermined by a confusing scheme of outdated regulations that force small business concerns to chose either (1) to risk the enforceability of their patents to obtain their entitled discounts in patent fees or (2) to pay higher fees to eliminate that risk. This article analyzes the history of the statutory and regulatory evolution of the small entity provisions for patenting, identifies a problem in the regulatory scheme, and offers a solution that would streamline determinations of small entity status: the elimination of any separate definition of a "small business" for paying reduced patent fees other than the basic definition in the Small Business Association's ("SBA") small business statute and generally applicable regulations.
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