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Posts Tagged: "vc"

Open Letter Exaggerates the Benefits of Recent Patent Reforms

HTIA’s letter argues that venture capital funding and startup activity have grown in recent years, further proof of their view that the federal government has properly pursued patent system reforms. Using data tools available through PwC MoneyTree, the HTIA cites data indicating that venture capital investments in the U.S. have increased from $32.8 billion in 2012 up to $61 billion in 2016, representing an 86 percent increase in that time. Of course, the letter easily lets go of the fact that the graph shows that venture capital funding actually dropped significantly by about $15 billion between 2015 and 2016 alone, a point the HTIA’s own data graphs prove. As for startup activity, the HTIA collected data from the Kauffman Index of Startup Activity to make its argument that startup activity has increased by 194 percent between 2012 and 2016. Again, there’s no acknowledgement of a concerning recent data point, here the absolute stagnation of new startup activity between 2015 and 2016.

How the U.S. Can Inspire the Next Generation of Innovators

An unfounded belief persists that entrepreneurs are the primary innovators. However, in a study of the top 30 innovations of the last 30 years up through 2009, as judged by Wharton professors, shows innovations that most affected society were conceived by company workers, not entrepreneurs, according to Dr. Kaihan Krippendorff, a Wharton alum and self-described study author… So in order to encourage innovation, these characteristics of employee-innovators should be developed early on, according to Krippendorff. Logically, not only would that increase the level of innovation but also ease the task of innovation management.

How Can More Lawyers Become Tech Company CEOs?

Most CEOs won’t make a move without first consulting their general counsel or other legal adviser. But the general counsel seldom rises to the CEO spot. Why is that? Many corporate counsels work in large companies where each department—including legal—has very specific responsibilities and boundaries. Therefore, it’s harder for attorneys to get involved with key business, non-legal, initiatives that could demonstrate C-level potential. But the path from general counsel to CEO is becoming a lot more common.

How the U.S. is Killing Innovation and why it Matters for Entrepreneurs

The engine that made America a greatest economic power was a patent system that led to tremendous innovation by incentivizing entrepreneurial inventors.

What if we don’t have sufficient intellectual property rights?

Fundamentally, patents facilitate access to VC financing, market entry and job creation. Without patents and an effective IP environment, the process stalls and, in some cases, firms may never emerge. Without adequate IP protection, innovators are unable to attract investments, business creation is slowed and jobs lost. Evidence suggests that this same story plays out, albeit with differing dynamics, across all sorts of firms and all nations. Economic prosperity relies on job growth, and it is clear that strong, effective IP rights have a role to play in creating both.

To patent or not to patent? The market reality for software patents

If you have any software patent that is essentially a software version of a human practice — something that was done in human practice — and you decide to write up a patent, even if you automated it in such a way and did things that the human brain could never do it will be problematic. If you can look at the patent and then make an argument that humans were doing this outside the software realm before you implemented it in software, under Alice, I think you’ve got a big problem.

Does the law of innovation work against itself?

There is nothing wrong with academics obtaining research funding from corporate sponsors, and to Professor Tucker’s credit, she fully discloses her funding sources. It is important, however, to fully vet and scrutinize the resulting work product of such sponsored studies. The underlying data and methodology should be independently verified by subject-matter researchers and experts. Yet, no peer review of this paper had been made before Professor Tucker’s “results” were broadcast to the world. Because of the publicity this paper received, it is the purpose of my full paper to fill that void. Indeed, closer scrutiny of this article reveals that it can support none of the claims of the author or sponsors quoted above. This is because the study is fundamentally flawed and is fraught not only with methodology and analytical errors, but with fatal factual errors due to the assumption of false information.

Failing Your Way to Success

Consider, for example, the old axiom that entrepreneurs must be unwaveringly fixated on a single goal. Most startups are built around a single product or service that is assumed (but not yet proven) to meet a real consumer need and offer a lucrative market opportunity. The CEO of that startup is likewise singularly focused on getting a fully-baked product out the door as soon as possible in order to start generating revenues while at the same time building a pipeline for future offerings. Given the limited resources in most startups, this often means that the engineers are building Version 2 of the product before Version 1 has even been tested in the market.

What Does the LinkedIn IPO Mean for Economy, Jobs?

It is still early to know whether this is irrational exuberance or whether this is a meaningful event for the companies that follow LinkedIn to IPO. In all likelihood it is a little of both, namely a meaningful event that demonstrates at least some irrational exuberance. With the economy and the IPO market having been in the tank for so long a little zeal never hurt anyone, right? In any event, regardless of what LinkedIn does from here on out the fury of trading and interest suggests that good things are on the horizon for the economy and perhaps for job creation as well.

Industry Urges Congress to Continue Renewable Fuel Standard

While many people believe that alternative energy is at least several decades away, what is clear is that if we do not set out about making that future a reality it will never been the future we realize. There is tremendous research ongoing relative to battery technologies, solar energy, biofuels, geothermal energy, wind energy, hydroelectric energy and much more. In all likelihood no one, single solution will replace our dependence on fossil fuels, at least not in the foreseeable future, but there does seem to be a light at the end of the tunnel. We only need to choose the path to obtain that reality.

An Inconvenient Truth: Patents Do Not Deter Research

Carrier goes on to detail the comprehensive research of Professor John Walsh who in 2007 surveyed 1125 biomedical researchers in universities, government labs and nonprofit institutions. Walsh received 414 responses and the responses were overwhelmingly clear. Carrier explains that only 3% of respondents indicated that they stopped pursuit of a research agenda based on an excess of patents present in the space. Furthermore, Carrier explained that a mere 5% of respondents even regularly checked for patents related to their research and “no respondents reported that they had abandoned a line of research because of a patent.”

Winning the Future: How States Can Promote Innovation

One approach to promoting IP protection at the State/regional level would be for the State/incubators to create targeted “IP Protection Funds.” These Funds could be used to both educate the entrepreneurial community about IP protection and to finance protection for qualifying local startup companies. For example, the fund may directly pay IP legal fees, either as grants or convertible loans, on behalf of a startup, thereby ensuring that IP protection is an integral focus of the company. Administration of the Funds, along with company qualification, may be handled through the grass-roots incubator networks that are already actively counseling the startup community. Such a Fund may also serve to bridge the gap between the under-funded start-ups that desperately need IP protection (yet do not always value it), and the patent practitioner community that is sometimes reluctant to accept under-funded ventures as clients.

Start-Up Reality: No Patent = No Funding, No Business, No Jobs

The log jam in patents issuances is not the only impediment to start-up job creation. Although it is certainly a big one. Tax and regulatory burdens on start ups have reached a critical mass in the last 10 years. A fact recognized by President Obama when he signed an Executive order last Tuesday ordering the removal of burdensome regulatory rules on business. Also a problem are the post 9-11 immigration policies that are driving many of the world’s best and brightest scientists and engineers to other countries. But the biggest job killer beside the patent backlog is the systemic destruction of our high tech manufacturing capacity.

Why Patents Matter for Job Creation and Economic Growth

According to Pascal Levensohn, Managing Partner of Levensohn Venture Partners, the problem with the US economy is the lack of Initial Public Offerings. He opines that without an increase in IPOs in the United States it will be difficult, if not impossible, to see the economic growth that we want. Without economic growth there will be no job creation, and the sluggish US economy will continue on its anemic path. He suggests that the best way to increase IPOs is to increase venture capital and make it more attractive. He writes that is our leaders really wanted to fix the job problem in America “there would be no higher legislative priority than promoting regulatory and tax reform to stimulate new capital formation and venture capital in the U.S.”

Patents in the Real World

But looking back, what strikes me is the surprisingly-variable role that patents played in the growth and success of the half-dozen trailblazing startup companies that I helped lead. For these startups, which collectively created more than 2,500 jobs, I raised approximately $1 billion from strategic and venture investors (who ended up with $3 billion in returns). And in the majority of cases, owning patents proved to be crucial to the funding and commercial success of my startup. But this wasn’t always the case. In several startups, patents were almost completely irrelevant to either the financing or the ultimate fate of the company. Understanding why this was so may offer some insights into both the value and the limitations of patenting.