Patent Lather

Inventors are hit hard as Clinton proposes to take $92 million from the Patent Office.
Magazine Contributor
6 min read

This story appears in the June 1997 issue of Entrepreneur. Subscribe »

In a material and psychological blow to inventors, President Clinton recently proposed to take $92 million out of the U.S. Patent and Trademark Office's (PTO) surcharge income of $119 million. Many believe the budget cut will result in delays in patent approvals and an increase in the fees charged to maintain patents over a 20-year period.

This reappropriation of funds will hamper automation efforts, contends Lisa-Joy Zgorski of the PTO, who says, "It's clear that, in the face of these cuts, patent pendency will increase."

And yet the damage comes not just in the injury but also in the insult. In 1991, set up the PTO to be a self-supporting agency and raised patent application fees by 69 percent to cover operating costs and improve services for inventors. Over the past few years, however, inventors have watched as the office's so-called surplus funds have been diverted to Commerce State Justice programs or used by Congress in an attempt to balance the federal budget. "These problems should be funded by taxpayers' money," says Robert Lougher, founder of the Inventors Awareness Group in Westfield, Massachusetts. "But they're financed by a small segment of our society: the inventor."

In essence, "people are paying taxes as individuals and corporations and then paying taxes when they file patent applications," says Joanne Hayes-Rines, president of the United Inventors Association of the USA. "[Members of Congress] could be honest and say there's a tax on patent applications, but they're not that honest."

Industry insiders feel the PTO can scarcely afford to see that money dispersed. With the number of patent applications growing by 10 percent every year, certain time-saving PTO programs are desperately needed, maintains Lougher.

Independent inventors are perhaps the hardest hit by the cuts. "Every time the government does this, the PTO is forced to raise its fees, and the ones hurt the most are the small, independ-ent inventors," says Lougher. "The PTO has priced itself out of range for many inventors."

While the PTO budget cut is not completely new--Congress diverted $54 million of the $115 million in the PTO's surcharge fund last year--the dig is that this latest, more severe proposal was handed down by Clinton himself. "The most important element in the president's [agenda] is to balance the federal budget," says Zgorski, "and therefore we'll grin and bear it."

Inventors' advocates are not as easily soothed. "The concept of covert double taxing would anger anybody," says Hayes-Rines, who urges inventors to write to their Congressional representatives and to align themselves with an organization that will keep them informed about the issues. "Inventors are easy [targets] because they're not part of a [formalized] group."

Lougher sees this as an injustice Americans should not permit. "Our is based on new products and new technologies, many of which come from the independent inventor," says Lougher. "If you interrupt that process, we're going to have fewer new products. Everyone [will feel] it down the line."

Born To Run

Birth order influences entrepreneurial style.

Apparently, whether you're an older or younger sibling determines much more than who can beat up whom. A recent study reveals that birth order influences everything from what type of companies entrepreneurs start to how they run their businesses. "I've looked at 256 predictors of behavior, including social class, national differences, age, social attitudes and patterns of friendship," says Frank Sulloway, author of Born to Rebel: Birth Order, Family Dynamics, and Creative Lives (Pantheon Books). "Birth order [accounts] for what 70 percent of the population will do. It's the best predictor of attitude toward change."

Sulloway, who has spent 26 years analyzing approximately 2,000 studies and profiles of more than 6,500 people, has given new life to the idea that your family niche determines your personality, a theory popularized in the 1970s and dismissed in the '80s. His conclusions: Because firstborns typically have a decent relationship with their parents and often act as surrogate parents, they tend to be more conforming, conscientious, obedient, assertive, perfectionistic, hard-driving and bossy. Later-borns, on the other hand, are more flexible, open to innovation, laid-back, sociable, and modest about their achievements.

These characteristics influence the entrepreneurial experience from the start. "Firstborns are creative but within the rules. They go for safe bets. Later-borns are more likely to undertake a drastic overhaul of their entire concept," Sulloway says. "So while firstborns would be more likely to, say, buy a franchise, later-borns might start a high-risk enterprise or try something quirky."

Each type faces its own problems when running a business. "When an idea is revolutionary, firstborns usually make the mistake of rejecting it too soon," says Sulloway. "Later-borns tend to accept theories that turn out to be incorrect."

An ideal solution, says Sulloway, would be to have firstborns and their siblings working together. "Each would counterbalance the weaknesses of the other," he explains. "You'd have an environment that is highly egalitarian and that encourages brainstorming. It's the best of both worlds." As long as they don't beat each other up.

Dial O For Opportunity

By Holly Celeste Fisk

AT&T offers laid-off employees a leg up.

Downsizing may be the dirty word of the '90s, but AT&T tried to ease the pain last March for some 4,000 workers who were offered a buyout package as part of AT&T's Force Management Program. The program, which started in January 1996, offers employees $10,000 each for retraining, relocation, or start-up capital for new businesses. About one in 10 employees took advantage of the offer.

To ensure that former employees know what they're getting into, AT&T offers courses on how to start a business. According to Burke Stinson of AT&T, 1,400 employees took the classes last year.

Barbara Mierisch was one employee who took the money and ran. Mierisch, 55, worked for AT&T for 35 years in various jobs before leaving to start her own marketing and public relations consulting business in West Orange, New Jersey, last February.

"There couldn't have been a more enlightened and concerned company," says Mierisch. "They had told people [to expect the layoffs] and made lots of resources available."

AT&T also provides career development courses, skills training and job hunting classes for employees. But Mierisch preferred to be her own boss: "I like the flexibility," she says. "You can manage your time better and do more of the things you really enjoy."

The point of the program, says Stinson, isn't so much to encourage entrepreneurship as to take care of employees. "Treat people shabbily," he says, "and you're going to have a morale problem for the people who remain."

The Force Management Program is expected to continue until December 1998.


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