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Implications of the America Invents Act for R&D Managers: Connecting the Patent Life Cycle with the Technology Development Process [Research Technology Management](Research Technology Management Via Acquire Media NewsEdge) The America Invents Act will require R&D managers to consider intellectual property issues in a different light. OVERVIEW: Protecting intellectual property is crucial for R&D managers. The Leahy-Smith America Invents Act (AIA), which overhauled the US patent system in order to reduce litigation and bring US patent practices into line with international systems, offers new opportunities and challenges in this arena. AIA focuses on improving efficiency, increasing transparency, and harmonizing with other national patent regimes. In pursuit of these aims, the law introduced several key changes: eliminating the requirement for "best mode" disclosure, expanding the definition of prior art, moving from first- to-invent to first-to-file as the key criteria for patent eligibility, and adding post-grant review, among others. Using two familiar frameworks, the patent life cycle and the Stage-Gate model for new product development, the paper explores how AIA impacts R&D managers' considerations around intellectual property. The law comes with added risks for R&D managers, who now must evaluate the commercial potential of innovation much earlier (with a larger set of stakeholders), while maintaining more secrecy than was required under the old regime. The demands of AIA require that R&D managers become more important members of the enterprise's strategic team. KEYWORDS: America Invents Act, Intellectual property, Patents, Patent life cycle The most extensive recent development in US patent law is the Leahy-Smith America Invents Act (AIA, Public Law 112- 29, 125 Stat. 284 [2011]).1 AIA, which took effect in March 2013, focuses on improving efficiency and increasing transpar- ency in the patent system, as well as harmonizing the Ameri- can patent system with international practice. Major areas of change include eliminating the requirement for "best mode" disclosure, expanding the definition and scope of prior art, changing from a first-to-invent to a first-to-file standard for determining patent eligibility, and adding post-grant review, among others (Lu, Uthaman, and Kowalski 2012). R&D managers must recognize the added risks presented by this new patent system and adapt and develop new protocols to mitigate these risks and exploit new opportunities. To make the implications of the AIA changes clear, this paper builds on two processes familiar to R&D managers: the patent life cycle (PLC) and the Stage-Gate model for new product development (Cooper, Edgett, and Kleinschmidt 2002). The PLC perspective demonstrates the need for proactive, strategic planners who recognize that patents, like chess, involve not only opening moves but also endgames. The Stage-Gate discussion reviews AIA's changes through the lens of technology development. This article is not intended to serve as a legal digest; rather, we offer a holistic view of the changes to provide innovators and R&D managers with a common framework around which to structure the strategic conversation about entering the market- place and help alleviate the concern voiced by Fisher and Oberholzer-Gee (2013), that intellectual property-related de- cisions might be delegated entirely to specialists. AIA's Reforms Across the Patent Life Cycle Prior to AIA, the PLC occurred in five distinct stages (Figure 1): concept, value analysis, filing, prosecution, and maintenance. This PLC starts with the concept phase, during which patentable elements, even entire technology platforms or processes, are identified. Next, during value analysis, related patents are re- viewed and patentability is determined. Once a favorable con- sensus is reached regarding value and patentability, the filing phase begins, during which a patent application is prepared and filed. Successful advocacy with the patent office results in an award during the prosecution phase. Maintenance includes activities such as payment of fees, discontinuation of fees on nonproductive patents, and identification of new revenue and product opportunities, as well as new patentable product fea- tures or process steps (IMA 2012). For R&D managers, main- tenance is synonymous with portfolio management. Under AIA, the PLC for successful patents is virtually un- changed, with the exception of one added phase-post-grant review. In addition to adding that sixth phase between pros- ecution and maintenance, AIA introduces important changes to each of the existing phases (Figure 2). In the figure, clouds highlight the important changes introduced by AIA as well as the relevant phases impacted most by them. Best Mode. Before AIA, patent applications had to disclose crucial details about the most valuable, commercial form of the invention-that is, the "best mode" of exploitation-or risk invalidation. The intention was to ensure that competi- tors could compete fairly with a patent owner following ex- piration of the patent by prohibiting the withholding of key aspects of the innovation. After AIA, the requirement, while technically still present, is effectively missing, since a patent can no longer be invalidated or ruled unenforceable simply because of an insufficient or inadequate explanation of its best potential application (Auvil 2011). To help clarify the implications of the practical elimination of best mode, consider the case of a process to obtain an herbal formulation to lower blood glucose and insulin levels. Imagine that a patent claims that a hot-water extract of seven differ- ent herbs (specified exactly by weight) when dried and ad- ministered orally will effectively treat non-insulin-dependent diabetes mellitus. The patent describes the best mode to ob- tain the product as a simple process in which the dried plant material is boiled in sterile water for three hours, then the extract is filtered and dried in a vacuum tank; the solids settle to the bottom of the tank to be collected as a powder, which patients dissolve in a green tea. For this process to be pat- ented, it must be judged by an examiner to be non-obvious and novel. Prior to AIA, a terse description could be judged to hinder possible replication by competitors, and the patent could be invalidated as a result. With AIA, inadequate expla- nation is no longer grounds for invalidating the claim.2 Although this change in AIA helps harmonize the United States with the rest of the world-other countries typically do not have a requirement for "best mode" disclosure- Petherbridge and Rantanen (2012) note possible concerns, including the argument that the change will skew the incentive structure for the patent system toward modest, incremental improvements. Furthermore, the elimination of "best mode" disclosures means that R&D managers must now gauge the hidden meanings, and unstated applications, in patent claims. Infringement Defense. AIA now allows for what is called an infringement defense based on historical use of the product across a wide variety of goods and services, not just business methods. This means that a business that puts into commer- cial use a novel idea, good, or service at least one year before the date used to establish the patentability of the invention by another entity can offer that historical use as a defense against infringement claims (Raich 2011). This defense pro- tects, for instance, an obscure startup that uses a trade secret to compete against larger enterprises; the startup cannot be sued for infringing a patent if it has had the technology or process in use for at least one year before the relevant date. This defense will affect R&D managers' considerations at the concept and value analysis stages of the PLC, as they identify potentially patentable elements of an invention and decide whether to pursue a patent at all-for all ideas, goods, and services, not just business methods. Prior Art. AIA expands the definition of prior art to include both foreign sales and public uses. With few exceptions, any prior disclosure of an invention, including "presentations and demonstrations at trade shows, official postings on company websites, and even unauthorized postings by company em- ployees on social networking sites," is now considered prior art (Villasenor 2012) . Furthermore, the actions of third parties unrelated to the inventor can invalidate patentability if they share with the public the particulars of a technology, thereby undermining the claim to novelty. Even though the defini- tion is extended in general, the wording in the act is un- clear about exactly what is included in the year-long grace period AIA provides inventors to file after a dis- closure without endanger- ing the novelty claim. AIA may, in some cases, limit the reach of prior art. For exam- ple, if "'available to the pub- lic' is read as 'on sale,' then private sales and offer-for- sales may no longer be con- strued as prior art" (Raich 2011). First-to-File. The change from first-to-invent to first- to-file as the criterion for pat- ent eligibility is the most widely discussed feature of AIA (Villasenor 2012).3 AIA simplifies the process and brings the US patent system more in line with the rest of the world by specifying that the first application retains rights to a patent, regardless of the date of invention. Be- fore AIA, if a second party filed for a patent for the same invention, expensive inter- ference proceedings were re- quired to identify the actual first inventor. The search for "first" focused on proof of "first thought" and a working model of the invention; under AIA, only the date of application is relevant. Reiter, Baker, and Fasse (2012) note just three exceptions, all related to the nature of disclosure of the invention, under which a second party may have rights to a patent. The first-to-file sys- tem is used in Brazil, China, the European Union, and South Korea. AIA also brings the United States into line with other coun- tries with regard to the public availability of patent documents, deferral of patent examination, and the actual patent time limit (about 20 years). This alignment helps reduce the com- plexity in the global IP system and somewhat simplifies the task of R&D managers since they no longer have to keep track of as many exceptions across different countries and regions. Reduced Fee Structure. Along with process changes, AIA sig- nificantly reduces fees for some. Small entities (generally those with fewer than 500 employees filing in the absence of any agreement to share the invention with a large or not-for-profit entity) qualify for fee reductions. These reductions apply to application fees, as well as fees for search, examination, issu- ance, and appeal of applications and patent maintenance. AIA goes further in its attempts to avoid adverse impacts on "micro-entities" (organizations perceived to lack the resources and established processes to handle the additional effort imposed by the first-to-file system, defined as those that have filed fewer than four applications and have a gross income less than three times the median US household income). Fees for these micro-entities are reduced by 75 percent from the norm. Post-Grant Review. AIA seeks to reduce litigation over pat- ents through a new post-grant review phase, which is in- tended to improve the cost-effectiveness of defending against infringement claims. Post-grant review is both a new phase in the life cycle and a significant change to the patent process itself. Post-grant review continues for nine months following the prosecution phase. If no challenges to the award are suc- cessful during this time, the awarded patent is assumed to be valid in a court of law. In the post-grant review phase, an opposing party may ask the United States Patent and Trademark Office (USPTO) to review a patent's validity on any of the usual grounds: novelty, utility, obviousness, or failure to provide an ade- quate written description (recall the example of the herbal formulation in the "best mode" discussion). This stage allows claimants to contest a patent's validity without having to go to court, reducing costs and minimizing litigation. For the patent owner, the costs associated with defending a claim through post-grant review are likely to be substan- tially lower than those associated with litigation, perhaps reducing the current practice of settling even claims that lack merit. For non-patent holders, winning an infringement claim during the post-grant review requires only a "prepon- derance of the evidence" (Lu, Uthaman, and Kowalski 2012); with this lowered standard, more opposition to a patent is to be expected. Also, patent validity is not assumed under post- grant review, as it is in court. Supplemental Review. AIA continues the fight against esca- lating patent costs with another reform that seeks to reduce litigation. AIA allows a patent owner, even after the nine- month post-grant review window has closed, to ask the USPTO to consider information that a competitor might raise against the patent in litigation. The request for supplemental review offers the patent owner the opportunity to "consider, reconsider, or correct information believed [by the patent owner] to be relevant to the patent" (Noonan 2011b). Because a court or agency cannot hold a patent unenforce- able based on information considered by the USPTO during a supplemental-examination proceeding (USPTO 2012), this re- view essentially enables a patent owner to prevent future in- validation of a patent based on information not included at the time of prosecution. Thus, supplemental review inoculates a patent owner against unforeseen technical issues discovered during detailed investigation of the technology. Implications for R&D Managers To understand fully the implications of these changes for R&D managers, it helps to analyze their likely impacts through the lens of the widely adopted Stage-Gate process for new product development (Cooper 1990). This concep- tual and operational model highlights the transition of a new product from idea to launch. While giving the appearance of a sequential process, the model emphasizes parallel process- ing; activities are anything but linear. The impression may be analogous to a relay race (Cooper 1990, 50), but, in practice, the desire to shorten cycle times while increasing effective- ness forces key tasks to be accomplished simultaneously. Our focus is the companion to this process: technology de- velopment, which feeds the fuzzy front end of innovation (Cooper 2006). Here, the Stage-Gate system breaks the pro- cess into three stages separated by four gates, with the accom- panying caveat of nonlinearity. Given the uncertainty and fragility surrounding these projects, customization is para- mount (Cooper 2006, 24), but generally the process begins with discovery of an invention and continues through the stages with expected time lines until a decision is made about the applications path at Gate 4 (Figure 3) . During the first stage, project scoping, the foundation of the project is laid out and the goals and scope of the project are defined; this stage may last only a couple of weeks. Technical assessment, which lasts about three or four months, is concerned with experi- mental work and the demonstration of technical feasibility under ideal conditions. The third and last stage involves de- tailed investigation to determine not only the practical feasibility of the technology but also its scope and value to the enterprise; implementation plans are developed to use the findings. This stage may require years of work, leading to Gate 4, and the decision point at which management meets with the project team to decide which applications path is appropriate for the technology in the context of the company's strategic goals. As in the PLC, AIA introduces changes at nearly every phase of the technology Stage-Gate process (Figure 4): Best Mode and Discovery. The loss of best mode makes the discovery stage more complex, and the tasks for R&D man- agers more diverse. With best mode disclosure no longer required, ideation becomes more difficult as R&D managers must have a more nuanced view of the possibilities em- bodied in technologies-not only their own but also those of possible competitors. Consider the previous example of a patent for a product to lower blood glucose and insulin levels. Some scientists argue that obesity is caused by an energy imbalance rather than a hormonal imbalance (Taubes 2013, 63); if that is the mental model in operation at an enterprise, then R&D managers may miss an opportu- nity to develop a product to encourage weight loss based on this patent. Thus, if managers rely on keyword searches of the technical literature, patents, and other intellectual prop- erty, constrained by myopia, they limit possibilities. In addi- tion, assessing competition and gauging the resource gaps in one's own enterprise (especially regarding the technol- ogy portfolio) is more complicated. From the perspective of his or her own enterprise, an R&D manager faces a key de- cision: when is the preferred embodiment of an innovation to be reported, if ever? Furthermore, the elimination of the requirement to disclose the best mode supports a trend toward patent applications at earlier stages in new product development (Takenaka 2012). This trend has several implications for R&D managers. On the one hand, not having to disclose the best mode offers the pos- sibility to patent several versions of a technology, which may help R&D managers diversify the product portfolio, building on a broader patent base. On the other hand, it underlines the need for R&D managers to encourage R&D staff (with the coopera- tion of the legal department or technology transfer office, if one exists) to remain focused on the enterprise's strategic intent. Infringement Defense, Discovery, and Project Scoping. Traditional submarine patents aimed at spoiling competitors are no longer possible to obtain. Still, R&D managers must remain cautious about the ones obtained in the mid-1990s. Assessing competi- tion and gauging resource gaps are more complicated because the specter of an infringement defense based on a trade secret means that even valid patents may be difficult to enforce. As a result, R&D managers must have a systemic perspective, especially about the technology as a platform, and exercise caution when considering a technology for a patent. Prior Art, Project Scoping, and Technical Assessment. The ex- panded definition of prior art means that almost any disclo- sure must be weighed carefully, whether it's an offering for sale to the public or a presentation by a graduate student. R&D managers must use caution in their involvement in educa- tional efforts, as well; a student thesis available in the library or a document posted on the Internet could be included in prior art under the new guidelines. This level of inclusiveness re- quires new vigilance, and new processes. Managers must track what could become ubiquitous nondisclosure agreements. They must focus more intensely on maintaining secrecy, and they must reflect more carefully on what and when to publish. Some promotional channels will have to be reevaluated, espe- cially social media, such as Twitter, Instagram, and Facebook, as well as poster displays at scientific meetings. When considering disclosure of information, R&D manag- ers should remember the caution from Lazar, Norton, and Panno (2013, 1): the new rules are less "robust" than before and can "trap . . . the unwary," as a nuance in the law would allow someone to build on an inventor's original ideas and cre- ate prior art via disclosures of those improvements, resulting in the denial of an application by the original inventor. In addi- tion, everyone should remember that most countries around the world fail to recognize a one-year grace period at all. This issue is even more important in today's connected world, where enterprises join with competitors, suppliers, users, or universities and research institutes. The increased secrecy demanded by AIA is counterproductive to collabora- tion and hinders outreach. R&D at startups especially could face more difficulties, as examiners will have an expanded scope of art from which to challenge applications for new patents. Larger enterprises will need to expend a significant amount of time on training to ensure that everyone who communicates with the outside world (including executives, managers, marketers, developers, and salespeople) is fully aware of the regulations based on the AIA (Villasenor 2012). R&D managers need to establish protocols to incorporate these new demands and reduce the accompanying risk of disclosure. The oversight role of the R&D manager will be- come even more important. First-to-File, Technical Assessment, and Detailed Investigation. Once a technology passes the "gentle screen" of Gate 2 (Cooper 2006, 26), first-to-file has important implications for R&D managers. The pressure that goes hand in hand with this new system is likely to start a race to the patent office for early-stage, conceptual analyses, feasibility experiments, and collaborative ventures: more and more patent applications will be prepared, especially by larger enterprises. As a conse- quence, R&D managers will find themselves advocating for provisional patents more often (Susie 2013), if for no other reason than to help establish a filing date for every idea with a likely, albeit hard to quantify, market potential. This added pressure changes the job description of R&D managers, leaving less time for innovating, for working with venture capitalists, or for refining business models. In- stead, managers will spend more time on legal issues and strategic thinking about the IP portfolio. Arguably, larger enterprises will have a competitive advantage since they will have the resources to deploy processes to speed applica- tions. But regardless of the size of the enterprise, attorneys will support the R&D team at an earlier stage to help man- age the portfolio of intellectual property and oversee patent applications. Reduced Fee Structure and Technical Assessment. The primary consideration for R&D managers is whether they are eligi- ble for the reduced fees. R&D managers must consider a couple of factors when attempting to claim micro-entity status. Most importantly, when the patent application names more than one entity (for example, a university and a startup), each applicant must meet the criteria (Neustel 2013). In the aggregate, AIA might increase total costs, as more patent applications are filed. Post-Grant Review and Detailed Investigation. The addition of post-grant review may reduce the direct cost of defending a patent, since administrative evaluation outside of court is en- couraged (Auvil 2011). At the same time, the notion of de- ceptive intent is eliminated. An applicant is no longer bound by a "duty of candor" during the prosecution of a patent (Noonan 2011a); this raises hidden costs for some, because it forces a more thorough review of a patent by potential com- petitors. Post-grant review obligates R&D managers to re- view potentially competitive patents soon after they are awarded, if for no other reason than to gather information about competitors' technology. The nine-month window for post-grant review favors or- ganizations with a large, well-paid legal staff and support from R&D personnel. Given the high reward that may result from a protest, more challenges are to be expected. With re- spect to the total cost of defending a patent, AIA may be neu- tral: a patent owner may benefit from the lower per-claim cost of the new administrative procedures but suffer from an ever-increasing number of claims. Most surely, beyond the costs of defense per se, the added processes and procedures to track competitors' patents in a timely fashion will add cost. Indeed, the burden of work in resolving disputes is largely shifted from federal district courts to the USPTO. Patent exam- iners, the act implies, will have to give more attention to dis- pute resolution and negotiation, shifting focus away from technical acumen and database expertise. And even though the AIA's reduced fee structure may ease the direct financial pain for some, resources must still be allocated internally to protect innovative products, especially after a patent is granted. Supplemental Review and Detailed Investigation. The pressure for patent filing, at least via a provisional application, will inevitably mount as the technology passes through Gate 3, since Stage 3 focuses not only on technical feasibility but also on value to the enterprise. Classically, this stage "could entail significant expenditures, potentially person-years of work" (Cooper 2006, 27). Because of the added pressure of first-to- file, time becomes even more important as a criterion for suc- cessful new product development. At the same time, AIA's supplemental review process offers R&D managers an oppor- tunity to refine any patent that may result from the exten- sive technical research accomplished in Stage 3, as well as other activities related to developing the commercial poten- tial of the technology. Applications Pathway. Reaching the applications pathway signals both a beginning and an end. The patent life cycle may begin anew if the management team (which now includes se- nior leaders, from R&D executives to managers of the strategic business units) decides to feed the new product development process in the classic way, by initiating multiple projects to commercialize the technology for a number of applications, or if the enterprise chooses to develop the technology as a plat- form for future products and focus on process development. A decision to support a joint venture with another enterprise to develop an industry standard, for example, may also require accompanying new patents. In any event, challenges from patent trolls should be expected at this juncture, even with the AIA reforms intended to reduce this threat.4 With AIA, the protocols used to manage the diffusion of innovative ideas, goods, and services become paramount. All modalities for technology transfer, from keeping the technology in-house (perhaps returning to discovery) to licensing or joint venturing, must be considered in order to craft a unique value proposition for the technology. Regard- less of choice, the focus of patent efforts must remain on the future value to the enterprise. In this context, it is critical that all patent-related decisions (from pursuing new ones and filing extensions for existing ones or discontinuing them to contesting possible infringements) align with the overall mission and vision of the enterprise, particularly as reflected by its business model. The dynamic nature of many markets, especially high- technology markets, which are characterized by fast-paced, continuous introductions of new technologies, platforms, and products and the rapid emergence of new businesses and markets, signals the need for proactive management of the IP portfolio, with an eye toward aligning patent decisions with strategic objectives. Such alignment will help match patent strategy with scarce enterprise resources, especially for smaller, less resource-rich enterprises, which some argue may be disproportionately affected by AIA's changes (see "AIA: How Will It Impact Innovation?," p. 49). Recognizing the PLC and its link to the Stage-Gate model can help the strategic team balance the tradeoffs associated with applying for and enforcing new patents versus extending patent pro- tection for existing technologies and products. Conclusion The America Invents Act is an attempt to improve the patent system, but it also signals a need for a more diverse skill set and an expanded job description for R&D managers. As a result of AIA, R&D managers will be required to take a more proactive role in enterprise decisions about IP strategies and technology portfolios, becoming even more important members of the en- terprise's strategic team. The consequences of AIA will force managers to become more strategic thinkers-about con- straints on technology development as well as about protecting intellectual property. AIA demands that R&D managers remain mindful of all options for protecting intellectual property and allocate resources wisely, recognizing the inherent feedback loop connecting intellectual property and market success (Bek- kers, Duysters, and Verspagen 2002). They must be prepared for more challenges to patent applications, via both litigation and administrative procedure, become more proactive during the post-grant review phase, and develop caution regarding grace periods, prior art, and unintentional disclosures. Consci- entious R&D managers will embrace the challenge and famil- iarize themselves with AIA's most critical aspects. Although this paper has focused on the impact AIA will have on R&D managers, the act will no doubt affect the decisions and behaviors of other stakeholder groups in- volved in technology development and commercialization, from "lone wolf" inventors tinkering in their home garages, to scientists working in federal laboratories, to joint-ven- ture partners working to develop an emerging technology. Crowd-sourced invention and myriad other collaborative arrangements will be reshaped by the provisions of the AIA. Successful R&D managers will actively manage the changes wrought by AIA. AIA brings the United States into line with other countries with regard to the public availability of patent documents, deferral of patent examination, and patent time limits. R&D managers need to establish protocols to incorporate these new demands and reduce the accompanying risk of disclosure. The burden of work in resolving disputes is largely shifted from federal district courts to the USPTO. AIA: How Will It Impact Innovation? The America Invents Act raises the specter of unintended con- sequences, for individuals, for enterprises, and for the national economy. These consequences are more than simple side ef- fects or tradeoffs. Rather, they are akin to what Tenner (1996) characterizes as unanticipated, yet harmful penalties that ac- company a change in a complex system. Unfortunately, the AIA may hinder innovativeness in various ways. Ideally, AIA is designed to support small and medium-size enterprises (SMEs) through reduced fees, among other pro- visions. Yet, as a group, smaller enterprises in particular may bear the burden of unintended consequences. Some believe that the reduced fees, which would seem to offer the great- est benefit to SMEs, are unlikely to materialize, particularly in light of two realities: first, under AIA the USPTO controls its own fees, raising the specter of continually increasing costs to meet operating needs and overcome staffing problems; and second, most of the cost of obtaining a patent is more closely related to attorney fees than to filing fees, mitigating the value of the reduced fee structures (Bianchi et al. 2012). The changes in best-mode disclosure rules may also lead to unintended consequences, namely, the development of new enterprises that specialize in searching for and patenting any- thing and everything around new technologies. These special- ists may deter someone with an original idea from developing the notion further because of the fear of unwarranted claims about patent infringement. AIA's first-to-file provision may affect all enterprises, regardless of size. R&D managers may experience the si- phoning of resources intended to support breakthrough innovation as time, treasure, and attention shift toward speedy filing of provisional applications. This, in turn, could cause smaller enterprises to miss strategic opportunities in their patent portfolios. At the same time, AIA may drive larger enterprises to file early and often, perhaps making a patent even more difficult to secure for smaller enterprises that lack dedicated patent teams-a classic example of a vicious feedback loop. But perhaps most worrisome from a societal perspective, AIA's first-to-file provision may change the overall focus of in- novation from breakthrough products to incremental improve- ments, as enterprises of all sizes struggle to win the race to patent offices. While a comparison between different patent systems is difficult, consider the impact of patent changes on Canada. Abrams and Wagner (2013) found a significant drop in the share of patents granted to individual inventors in Canada after that country shifted to a first-to-file system. If magnified across many technology sectors, these effects could cascade into undesirable outcomes for the US economy, including fewer startup formations, slower job creation, lower gross domestic product, and fewer exports. The newness of the AIA means that the actual magnitude of these outcomes is unknown, but the threat does exist. 1 The full text of the Leahy-Smith America Invents Act may be found at http://www.ipr.gov.cn/zhuanti/AIA/20110916-pub-l112-29.pdf. 2 The example given here is admittedly oversimplified, and such terseness may not, in fact, survive AIA's post-grant review. For more conceptual insight and a broader perspective, see Petherbridge and Rantanen (2012), who use the analogy of a sponge to explain the impact of best mode, arguing that the best-mode requirement helps define the legally required distance between bubbles of restricted information: "Specifically, it encourages a greater distance between bubbles . . . to limit the patentability of modest incremental improvements . . . which may adversely impact the incentive structure . . . The [previous] best mode requirement . . . cooperates with nonobviousness . . . to protect the public domain" (127). 3 Some believe that the first-to-file approach violates Article 1, Section 8, of the US Constitution, which specifies that "The Congress shall have Power . . . To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." This discussion puts aside constitutional issues to focus on the difficulties AIA presents as the technology moves through the PLC. 4 "Patent trolls . . . force companies . . . to waste time and energy fighting nuisance lawsuits" by acquiring strategic patents from small companies, then scouting for other companies to sue for using the technology (San Jose Mercury News 2014). On an annual basis, patent trolls cost the US economy an estimated $30 billion, hitting companies such as Apple and Google with more than 100 active patent claims. The impact of patent trolls is pervasive: 70 percent of venture capitalists, and one in three startup companies, are hit with patent challenges, many of them bogus; the average legal cost for a small firm is about $500,000 (Feldman 2013). Most are forced to settle, even when the challenge is spurious, diverting resources that could have been invested in inventing or hiring. References Abrams, D. S., and Wagner, R. P. 2013. Poisoning the next ap- ple? 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His research interests focus on the commercialization of products. His articles have appeared in IEEE Transactions on Engineering Management, International Journal of Technology Management, Journal of Technology Transfer, Journal of Product Innovation Management, and Research-Technology Management. [email protected] J. Michael Munson is an associate professor in the Department of Marketing at Santa Clara University, where he served nine years as department chair and three as associate dean of the Leavey School of Business MBA program. His research interests include technology transfer, innovation, consumer behavior, and decision making. His articles have appeared in a variety of marketing, psychology, engineering, and technology management journals, including Journal of Marketing Research, Journal of Retailing, Journal of Applied Psy- chology, Journal of Consumer Psychology, IEEE Transactions on Engineering Management, Industrial Marketing Management, Journal of Product Innova- tion Management, International Journal of Technology Management, and Re- search-Technology Management. [email protected] Bernd Wurth is a PhD candidate in management science at the University of Strathclyde, UK, and a Fulbright scholar. He holds a B.Eng. in mechanical engineering from South Westphalia University of Applied Sciences in Soest, Germany, as well as an MS in management of technology from the Univer- sity of Texas at San Antonio. His professional experience includes the com- pletion of a dual-track undergradaute career and degree program while working as a project coordinator in the automotive supply industry. His re- search interests include the dynamics of open innovation, technology trans- fer, technology-based entrepreneurship, and innovation ecosystems. [email protected] DOI: 10.5437/08956308X5705255 (c) 2014 Industrial Research Institute, Inc |