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Patenting by Entrepreneurs: An Empirical Study

70 Pages Posted: 4 Mar 2010 Last revised: 29 Oct 2015

Stuart J.H. Graham

Georgia Institute of Technology - Scheller College of Business

Ted M. Sichelman

University of San Diego School of Law

Date Written: September 6, 2010

Abstract

The 2008 Berkeley Patent Survey is the first comprehensive investigation in the United States of patenting by entrepreneurs. In this Article, we use the survey results to explain why entrepreneurs and startup companies patent (and choose not to do so). We first briefly explore the dominant theories in the literature of why entrepreneurs file for patents and why they forgo patenting. Next, we describe the previous - and very limited - empirical data on the topic. Finally, we examine the results of the 2008 Berkeley Patent Survey. In addition to confirming the importance of patents to the biotechnology and medical device industries, we also find that patents appear to play a more important role in preventing competition for software entrepreneurs than previously believed. Additionally, startup firms in all industries--but especially in the biotechnology and medical-device sectors - use patents for "strategic" reasons, such as gaining leverage in cross-licensing negotiations, as well as "signaling" reasons, such as improving their chances of securing investment. We also find that a large share of entrepreneurs forgo patenting their inventions because the cost of doing so is too high. We conclude by briefly discussing potential policy implications of our findings.

Keywords: Entrepreneurs, patents, startups, early-stage companies, venture capital

Suggested Citation

Graham, Stuart J.H. and Sichelman, Ted M., Patenting by Entrepreneurs: An Empirical Study (September 6, 2010). Michigan Telecommunications and Technology Law Review, Vol. 17, pp. 111-180, 2010. Available at SSRN: https://ssrn.com/abstract=1562678

Stuart J.H. Graham

Georgia Institute of Technology - Scheller College of Business ( email )

800 West Peachtree St. NW
Atlanta, GA 30308
United States
404-385-0953 (Phone)
404-894-6030 (Fax)

HOME PAGE: http://https://www.scheller.gatech.edu/graham

Ted M. Sichelman (Contact Author)

University of San Diego School of Law ( email )

5998 Alcala Park
San Diego, CA 92110-2492
United States
(619) 260-7512 (Phone)
(619) 260-2748 (Fax)

HOME PAGE: http://https://www.sandiego.edu/law/faculty/profiles/bio.php?ID=795

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