The next virtual research seminar in our Entrepreneurship and Innovation Policy series is on January 25, from 11:00-12:15 ET. Shivaram Devarakonda (Tilburg U.) - will present "Probabilistic Patents and Venture Capital Financing: Evidence from the Biopharmaceutical Industry" (with V Chila). Andrew Toole (USPTO) will discuss. Click HERE to register. Abstract is below.
We hope you join us.
- Tim Folta (UCONN) & Maryann Feldman (ASU)
Abstract: Patents play an important part in startups' success. The rights associated with patents are often probabilistic because patents' can be challenged in courts for the validity of their scope. We study the effect of uncertainty about the scope of startups' patents on their ability to attract Venture Capital (VC) financing. This effect has been difficult to study because of the challenges in measuring scope. We overcome this challenge by exploiting the context of genomic sequences. Since 1980, the USPTO has allowed patents on nucleotide sequences - the building blocks of the genome. This practice was disturbed in 2010 when the court system intervened in The Association for Molecular Pathology v. Myriad Genetics. Between 2010 and 2013, the lower courts issued a series of contradictory rulings based on inconsistent legal reasoning, casting doubts on the scope of thousands of granted patents on nucleotide sequences. We exploit this intervention to investigate the effects of patent scope uncertainty on VC investments in new biotech ventures. We employ a dataset of new biotech ventures founded between 1995 and 2013. The court system's intervention motivates a quasi-experimental approach that allows us to show the negative impact of patent scope uncertainty on VC investments in startups owning affected patents.
FYI, the Spring Entrepreneurship and Innovation Policy virtual research seminar schedule is available. Please visit this LINK to view and register for the different seminars. Our Elevator Pitch is listed immediately below.
Elevator Pitch: Governments around the world enact policies that affect technology, innovation, and entrepreneurship. An increasing number of scholars are investigating these topics, which has implications on policy design and program implementation. Yet, scholars lack a forum for presenting their work. This virtual seminar series will fill this gap-bringing together the insights from academia and policy application-thereby increasing our understanding of policy issues and build a forum for expressing these ideas and a supportive community to nourish them.