Law Commons^™

Patents, Venture Capital, And Software Start-Ups, Ronald J. Mann, Thomas W. Sager

Faculty Scholarship

This paper analyzes the relation between the patenting behavior of startup firms and the progress of those firms through the venture capital cycle. Linking data relating to venture capital financing of software startup firms with data concerning the patents obtained by those firms, we find significant and robust positive correlations between patenting and several variables measuring the firm's performance (including number of rounds, total investment, exit status, receipt of late stage financing, and longevity). The data also show that (1) only about one in four venture-backed software firms acquired even one patent during the period of the study; (2) patenting …

Do Patents Facilitate Financing In The Software Industry?, Ronald J. Mann

Faculty Scholarship

This Article is the first part of a wide study of the role of intellectual property in the software industry. Unlike previous papers that focus primarily on software patents – which generally are held by firms that are not software firms – this Article provides a thorough and contextually grounded description of the role that patents play in the software industry itself.

The bulk of the Article considers the pros and cons of patents in the software industry. The Article starts by emphasizing the difficulties that prerevenue startups face in obtaining any value from patents. Litigation to enforce patents is …