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New Study Confirms Patent Assertion Is a Growing and Costly Burden on Innovation Ecosystem
Date:10/29/2013

Washington, DC (PRWEB) October 29, 2013

The National Venture Capital Association (NVCA) and Robin Feldman, Professor of Law and Director of the Institute for Innovation Law at University of California Hastings, today released the findings of the survey “Patent Demands & Startup Companies: The View from the Venture Capital Community.” Among its objectives, the study sought quantitative data on the frequency of patent demands (sometimes known as patent assertions); whether those demands are made by entities whose core business involves the licensing or litigation of patents; and, the dollars spent in response to demands. The survey was distributed to members of the NVCA and the CEOs of member firms’ portfolio companies.

Patent Demands & Startup Companies finds that of the respondents, 70 percent of venture capitalists and one in three startup companies report having received patent assertions. Eighty percent of survey respondents indicated that the number of patent demands they have received has increased over the last five years, prompting growing concern for the innovation ecosystem.

“The economic and human toll of patent demands on startup companies is substantial. When startup companies must spend time and money thinking about patent demands, they are not inventing and they are not expanding,” said Robin Feldman, Professor of Law & Director of the Institute for Innovation Law at the University of California Hastings.

Other study findings include:

*Patent assertions impact various industry sectors unevenly. Seventy percent of VCs identified IT as the industry sector most impacted by patent demands, followed by life sciences (30 percent) and clean tech (10 percent). Additionally, 60 percent of VC respondents reported that patent demands came from entities whose core activity is licensing or litigating patents.

*Defending against patent assertions is costly. Sixty percent of V
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