Comment on 'Do Patents Facilitate Financing in the Software Industry,' A

Intellectual Property and Patents

Article Snapshot

Author(s)

James Bessen

Source

Boston Univ. School of Law Working Paper No. 06-13, June 2006

Summary

This paper argues that patents do not benefit small software firms.

Policy Relevance

Defenders of software patents have argued that they help small firms obtain financing, but the evidence does not support this. These arguments should not be given much weight in the debate about patent reform.

Main Points

  • Professor Ronald Mann argues that software patents benefit small firms more than large firms. The data does not support this argument.
 
  • Software patents are not widely used by software firms to get venture capital financing.
    • Mann’s own paper reports that 80% of venture-finances software startups had not acquired any patents within four years of financing.

  • Public software firms have a low propensity to patent compared to other firms.
 
  • Owners of software patents tend to be larger firms than owners of non-software patents.
 
  • Software firms that have just gone public, emerging from startup status, are less likely to obtain software patents than other firms.

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