Want to Create Jobs? Certainly Don't Rely on the USPTO

The Wall Street Journal


A patent myth is loose in the land about their importance to innovators and those that finance them. In, fact, recently the New York Times published an op-ed titled “Inventing Our Way Out of Joblessness.” The authors, Paul R. Michel and Henry R. Nothhaft, argued that the best way to jump-start our moribund economy was for the United States Patent and Trademark Office to get through its backlog of patents.  Their premise is that the more patents are granted, the more jobs will be created in the U.S.  Unfortunately, their logic is flawed and biased.

Mr. Michel and Mr. Nothhaft’s claim that “three-fourths of executives at venture capital-backed startups say patents are vital to getting financing, according to the 2008 Berkeley Patent Survey” is simply not true.

We believe this is taken completely out of context and does not tell the whole story of the real research. The number of respondents for this particular question was not as high as on many other questions, according to Pamela Sameulson, who was the co-principal investigator of the Berkeley Survey. So while it is true that of those who answered the question, the quoted percent indicated that they perceived patents were important to venture capitalists, it is not true that all venture-backed firms who responded to the survey or all respondents that negotiated with venture capitalists reported that patents were even an important factor in funding decisions. More than 10% of the venture-backed software firms, for instance, did not even answer this question, so the percent to whom patents were perceived as important is diluted to some extent.