OnLive CEO: New Patent Law 'Devastating To Ingenuity'

President Barack Obama signed into law the America Invents Act, a new measure meant to reform the U.S. patent system and encourage innovation, entrepreneurship and help fuel the country's ailing job market. But Steve Perlman, CEO of game streaming service OnLive, inventor of QuickTime and WebTV, and holder of over 100 patents told Gamasutra in a new feature that the act brings little reform, and actually will have a detrimental effect on innovation. "This America Invents Act only impacts small entities such as individual inventors and startups. It has virtually no impact on large entities or so-called 'patent trolls,' and does nothing to keep patent disputes out of court or reduce patent litigation," Perlman said. The reason for this, he said, is because the law brings the U.S. from a "first-to-invent" to a "first-to-file" patent system -- the latter of which is used by the U.S.'s major trade partners. So instead of Joe Inventor and Jane Ingenious arguing in front of a court over who first conceived the idea for a new holographic social game that charges microtransactions via brainwaves, a court can actually look at the date to determine who filed for the patent first. Whoever filed first, wins (i.e., is granted the patent). While this might streamline the patent process, Perlman argued that it favors major corporations over smaller, more innovative startups. He explained, "The act forces small entities to file far more patents far earlier in the development process prior to receiving the funding that would be needed to pay for such patents. And, even when such patents issue, it adds further cost because it makes it easier for larger entities to establish expensive barriers to small entities receiving patents." In his personal campaign against the act, Perlman has noted in past letters to senators [PDF] that with his companies, it "typically costs us $20,000-$30,000 to obtain a commercial-grade patent." That's pricey for a startup with no dedicated legal team. "It will have a devastating impact on ingenuity," Perlman argued. "The majority of patents are filed by small entities, and the vast majority of breakthrough ideas come from small entities. Large entities, by their nature, simply produce far fewer breakthrough ideas, and historically they have partnered, invested in or acquired small entities to drive innovation forward. This act will place an enormous damper on innovation." The full feature is now live on Gamasutra.