The Investors Association of Manhattan meets on the second Monday of each month in the conference room of a Times Square law firm. The New York Times’ Adam Davidson attended a recent meeting to explore the question: are we really living in a golden age of the independent inventor?
Ron Reardon, a patent agent who was a guest speaker that evening explained that the odds of making money "aren't good -- 1 in 100, 1 in 1000, I'm not sure -- but they are better than the lottery."
America has always been the land of tinkerers, Davidson writes, from Benjamin Franklin and Henry Ford to Steve Jobs and the guy who created Flowbee. He also points out that today's inventors have it easy in ways their predecessors would never imagine.
In the past, someone with a new idea would have to build their prototype by themselves, search for a market and then find a way to mass-produce it. Today, inexpensive technology means that anyone can quickly transform an idea into a physical product.
Google SketchUp makes it easy for people to mock up a 3-D digital model and any inventor can contact a Chinese factory to create a prototype. Sites like Etsy.com allow a new inventor to reach a market, while others, like Quirky.com, allow users to suggest an idea and share royalties if it makes it to the market.
The United Inventors Association says their membership has tripled to 12,000 in the last 18 months, a spike that is likely due to the economic slowdown and high unemployment. But new tools seem to inspire a permanent increase in amateur inventing when the economy starts growing more aggressively.
However, the entrepreneurial landscape is not dominated by small investors, Davidson writes, and adds that the new-idea supply chain has some rough patches to overcome—perhaps more now than ever. Once there is a prototype, those products have to compete for space in a very narrow pipeline. Retail has become so concentrated that three companies -- Walmart, Kroger and Target -- control about a fifth of all in-store sales in the U.S.
Further, the patent system has become very costly. These days the average costs for a patent is about $10,000, which is small amount for a corporation but a considerable amount for home investors. Even after having spent that amount, they often see their patent application be rejected. And even if the patent is approved, rival companies can still swoop in and copy the product -- well, not completely of course, but just enough to steal some of the original's thunder.
Gary Clegg invented the Slanket before Allstar Products Group introduced its almost identical product: the Snuggie. The rest is history. It is because of stories like this that David Kappos, who took over the United States Patent and Trademark Office in 2009, has initiated several steps to help small inventors with cheaper patent filing fees, pro bono legal help and a more responsive patent office.
Paul Romer, an economist at N.Y.U., says that this will not matter. It costs about $1 million to defend a patent-infringement lawsuit, so even if a lone inventor has a legitimate patent claim, a large company can sue and force the person into bankruptcy. Romer further says that our patent- law system is one of the key barriers to progress, because wealth typically wins out.