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Berkeley Law Survey Challenges Thinking About Startup Patents

A new survey of high-technology entrepreneurs conducted by the Berkeley Center for Law & Technology (BCLT) finds that while patents provide less incentive to innovate than popularly believed, they do offer benefits by limiting competition, attracting financing, and increasing the chances of an acquisition or IPO.

BCLT surveyed high-ranking officers of more than 1,300 software, biotech, medical devices, and computer hardware startup firms founded within the past decade. More information about the survey, titled High Technology Entrepreneurs and the Patent System, is available here.

The survey showed that patents are more widespread among startups than has been previously reported, but that the reasons for acquiring patents differ across industries. Although traditional theory holds that patents provide an incentive to invent, startups from all industries reported that patents provide only weak to moderate incentives to create, develop, and commercialize technology—and that a large share of software startups avoid the patent system entirely.

BCLT’s survey is the first major study about the impact of patents on entrepreneurship in the United States. While patent reform is a hot topic in legal and technology circles, little discussion has centered on how the proposed changes will affect entrepreneurship. Microsoft’s Horacio Gutierrez says the survey “illustrates the need to reform the patent system at all levels of government to make it truly accessible to high-tech entrepreneurs.”