Abstract

http://ssrn.com/abstract=2346338
 
 

Citations (1)



 


 



Patent Demands & Startup Companies: The View from the Venture Capital Community


Robin Feldman


University of California Hastings College of the Law

October 28, 2013

UC Hastings Research Paper No. 75

Abstract:     
This paper presents a study of patent demands against venture-backed startups, conducted through members of the National Venture Capital Association and their portfolio companies. The results of surveying 200 venture capitalists and their portfolio companies provide strong indications of the impact that patent demands are having on the venture-backed community. Both the companies and the venture capitalists overwhelming believe that patent demands have a negative impact on the venture-backed community, with all or most of those assertions coming from entities whose core activity involves licensing or litigating patents. These impacts are described in terms of the specific costs expended by the companies and by the distraction to management, engineers, and other employees. Most important, participants described the human toll that patent demands have had on entrepreneurs. In addition, when making funding decisions, the vast majority of venture capitalists do not consider the potential for selling to assertion entities if the company fails. On the flip side, 100% of venture capitalists indicated that if a company had an existing patent demand against it, it could potentially be a major deterrent in deciding whether to invest.

Finally, one venture capitalist provided an excellent summary of the impact of patent demands on venture-backed companies. When companies spend money trying to protect their intellectual property position, they are not expanding; and when companies spend time thinking about patent demands, they are not inventing.

Number of Pages in PDF File: 63

Keywords: patent, patent troll, intellectual property, startups, venture capital

working papers series





Download This Paper

Date posted: October 28, 2013 ; Last revised: December 18, 2013

Suggested Citation

Feldman, Robin, Patent Demands & Startup Companies: The View from the Venture Capital Community (October 28, 2013). UC Hastings Research Paper No. 75. Available at SSRN: http://ssrn.com/abstract=2346338 or http://dx.doi.org/10.2139/ssrn.2346338

Contact Information

Robin Feldman (Contact Author)
University of California Hastings College of the Law ( email )
200 McAllister Street
San Francisco, CA 94102
United States

Feedback to SSRN


Paper statistics
Abstract Views: 4,278
Downloads: 740
Download Rank: 18,345
Citations:  1
Paper comments
No comments have been made on this paper

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo2 in 0.344 seconds