• Selected
• Entire List

Abstract:
Numerous scholars have proposed many different explanations for why inventors and innovative companies patent. Few scholars, however, have conducted empirical studies seeking to confirm or deny these theories. Furthermore, there are only a handful of studies examining how entrepreneurs and start-up companies use and are affected by the U.S. patent system, and none answers the question presented in our title. We first briefly survey the dominant theories of why innovators file for patents and why they forgo patenting, focusing on how well, if at all, these theories apply to start-up companies. Next, we examine the existing empirical data on the topic and find it generally inconclusive. Last, we describe the 2008 Berkeley Patent Survey, the first survey in the United States examining patents and entrepreneurship, which is currently underway at the direction of the authors and other investigators. In particular, we discuss the survey questions designed to answer why entrepreneurs and start-ups patent (or choose not to do so) and offer some hypotheses based on previous research.

patent, patenting, entrepreneur, start-up, early-stage, survey

Abstract:
We offer description and analysis of the 2008 Berkeley Patent Survey, summarizing the responses of 1,332 U.S.-based technology startups in the biotechnology, medical device, IT hardware, software, and Internet sectors. We discover that holding patents is more widespread among technology startups than has been previously reported, but that the patterns and drivers of holding patents are industry and context specific. Surprisingly, startup executives report in general that patents are providing relatively weak incentives for core activities in the innovation process. Our analysis uncovers that the drivers of startup patenting are often associated with capturing competitive advantage, and the associated goals of preventing technology copying, securing financing, and enhancing reputation - although again these and other motives depend on firm and industry factors. We also find substantial differences in the roles played by patents for startups in the biotechnology and medical device sectors - where patents are more commonly used and considered important - as compared to those operating in the software and Internet fields - where they are less useful. Interestingly, venture-backed IT hardware startups tend to resemble those in health-related fields in terms of their use of and motives for patenting. We generally find a wide disparity between the patenting behavior of venture-backed technology startups and those that are not funded with venture capital. We also discover that, when choosing not to patent major innovations, startups often cite to cost considerations, although again the motives to forgo patenting differ according to firm and industry characteristics. The respondents to our survey also generally report that checking the patent literature and licensing patents from others is reasonably common, although there too results differ according to the context. Other findings are discussed.

Entrepreneurship, Patents, Innovation, Intellectual Property

Abstract:
About half, probably more, of all patented inventions in the United States are never commercially exploited. Even many of the most commercially significant inventions take decades to come to market. In this article, I contend that the patent system is substantially retarding the commercialization of valuable inventions. This neglect should not come as a surprise -- the dominant framework undergirding patent law, the "reward" theory, is premised on providing incentives for nascent inventions, not commercialized end-products. Although more recent "prospect" theories properly recognize the importance of patent protection for commercializing inventions, they incorrectly conclude that strong, real property-like rights for inventors are necessary to spur robust commercialization -- sometimes, weaker rights are preferable. In analyzing these dominant theories of patent law, I conclude that it is effectively impossible to adjust the timing, duration, and scope of traditional patent rights in order to encourage substantial commercialization. In place of efforts to reform the traditional patent, whose quid pro quo is the disclosure of new and non-obvious information, I propose a new "commercialization" patent, granted in exchange for the commitment to make and sell a substantially novel product. Decoupling the invention and commercialization functions of patent law into dual rights would yield more commercialization than the existing system, without unduly decreasing competition, encouraging rent-seeking, or increasing administrative costs.

patent, invention, commercialization, innovation, reward theory, prospect theory

Abstract:
The patent statutes were wisely drafted with an expansive vision of patentable subject matter. Efforts to graft judicially created limitations onto that expansive scope in the past have proven fruitless and indeed counterproductive. In deciding Bilski v. Doll, the Supreme Court should not impose a requirement that patentable inventions require a machine or the physical transformation of some material. It should instead maintain the rule that patents are available for "anything under the sun made by man," including discoveries of ideas, laws of nature, or natural phenomena, so long as they are implemented in a practical application. In short, the test should be as it has been: where an idea is claimed as applied, it is eligible for patentability, but if it is claimed merely in the abstract it is not.

patentable subject matter, Bilski, patent eligibility, business method patents, software patents

Abstract:
Professors David Rosenberg and Steven Shavell recently proposed granting defendants an "option to bar settlement" to discourage frivolous suits filed for a mere "nuisance"-value settlement. By exercising the option, a defendant prevents judicial enforcement of any ensuing settlement agreement between the parties. Rosenberg and Shavell contend that if settlement were foreclosed, a plaintiff would drop its nuisance-value suit, because its costs of litigating to judgment would exceed its expected benefits. They conclude that because defendants would only exercise the option if faced with a nuisance-value suit, adopting it would be socially beneficial. Although an option to bar settlement is an innovative proposal and an important scholarly contribution, this article shows that it could be highly problematic. First, a defendant would often exercise the option in small-stakes, high-cost, meritorious suits, which would decrease social welfare. Second, the option would fail to prevent many high-stakes, low-cost, frivolous suits. Moreover, Rosenberg and Shavell's analysis depends on a problematic definition of "nuisance suit," questionable simplifying assumptions, and speculative empirical assertions. In sum, without additional investigation, it would be folly to adopt an option to bar settlement.

nuisance suits, frivolous suits, negative expected value suits, settlement, uncertainty, litigation